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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Addendum or Modifications

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN | Document Parties: WADDELL  REED FINANCIAL INC You are currently viewing:
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WADDELL REED FINANCIAL INC

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Title: SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Governing Law: Kansas     Date: 2/27/2009
Industry: Investment Services     Sector: Financial

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Exhibit 10.11

 

 

WADDELL & REED FINANCIAL, INC.

 

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

 

 

As Amended and Restated Effective as of January 1, 2005

 


 

WADDELL & REED FINANCIAL, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
As Amended and Restated Effective January 1, 2005

 

 

PURPOSE

 

The purpose of the Waddell & Reed Financial, Inc. Supplemental Executive Retirement Plan is to provide deferred compensation that otherwise would be paid currently to a select group of management or highly compensated employees of the Company (as defined below) and any subsidiaries or affiliates of the Company that may adopt this Plan (as defined below) with the consent of the Board of Directors of the Company.  This Plan is designed to constitute a nonqualified deferred compensation arrangement.  This amendment and restatement, effective January 1, 2005, is intended to bring the Plan into compliance with section 409A of the Code (as defined below) and guidance issued pursuant thereto.

 

ARTICLE I
DEFINITION OF TERMS

 

The following words and phrases when used herein, unless the context clearly requires otherwise, will have the following respective meanings:

 

1.1                                “Administrator” means the Compensation Committee.

 

1.2                                “Approved Domestic Relations Order” means a Domestic Relations Order that is determined by the Administrator, in its sole discretion, to be an Approved Domestic Relations Order in accordance with the provisions of Section 6.2.

 

1.3                                “Aggregate Contribution Amount” means the amount, if any, determined by the Compensation Committee in its sole discretion, to be credited as a Supplemental Executive Retirement Benefit among Participants’ Deferred Compensation Accounts for a Plan Year in accordance with the provisions of Section 4.2(b).

 

1.4                                “Base Pay” means a Participant’s base salary for a Plan Year, excluding extraordinary pay such as bonuses, commissions, incentive payments, benefits, expense allowances, expense reimbursements, or income from restricted stock or stock option awards, as designated by the Compensation Committee in its sole discretion.

 

1.5                                “Claim for Benefits” has the meaning specified in Section 6.6(a).

 

1.6                                “Code” means the Internal Revenue Code of 1986, as amended.

 

1.7                                “Company” means Waddell & Reed Financial, Inc., a Delaware corporation.

 

1.8                                “Compensation Committee” means the Compensation Committee of the Board of Directors of Waddell & Reed Financial, Inc.

 

 

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1.9                                “Deferred Compensation Account” means the memorandum account established pursuant to Section 4.1 and maintained for each Participant on the Company’s books and records.

 

1.10                         “Domestic Relations Order” means a final judgment, decree, order, or property settlement agreement made pursuant to a state domestic relations law.

 

1.11                         “Effective Date” means January 1, 2005.  The Plan was originally effective December 10, 1998 and was subsequently amended and restated effective July 14, 2004.

 

1.12                         “Employee” means a common-law employee of the Company or a Participating Employer who is a member of a select group of management or highly compensated employees.

 

1.13                         “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

1.14                         “Notice of Denial” has the meaning specified in Section 6.6(b).

 

1.15                         “401(k) Plan” means the Waddell & Reed Financial, Inc. 401(k) and Thrift Plan, as such plan may be amended from time to time, or any similar plan in which a Participating Employer participates.

 

1.16                         “Participant” means an Employee who has satisfied the requirements for eligibility under Article III and is participating in the Plan.

 

1.17                         “Participating Employer” means a subsidiary or affiliate of the Company that adopts this Plan by a properly executed document evidencing such intent with the consent of the Board of Directors of the Company.

 

1.18                         “Plan” means the Waddell & Reed Financial, Inc. Supplemental Retirement Benefit Plan, as may be amended, modified or supplemented from time to time.

 

1.19                         “Plan Year” means the period commencing January 1 and ending December 31.

 

1.20                         “Request for Review” has the meaning specified in Section 6.6(d).

 

1.21                         “Separation from Service” has the definition of the same term in Treasury Regulation Section 1.409A-1(h), and will be determined by analyzing all of the facts and circumstances surrounding the separation, but in no event, however, shall a Participant be considered to have separated from service if the amount of services provided to the Company (or a Participating Employer) has not decreased to 20% or less of the services the Participant was providing to the Company (or a Participating Employer) during the previous 36-month period (or the full period of services provided to the Company (or a Participating Employer) in the event that the Participant has not been employed for 36 months).  The Participant shall not be considered to have separated from service if the amount of services that Participant is still providing to the Company (or a Participating Employer) is 50% or more of the services the Participant was providing to the Company (or a Participating Employer) during the previous 36-month period (or the full period of services provided to the Company (or a Participating

 

 

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Employer) in the event that the Participant has not been employed for 36 months). In the event that the Participant is providing services to the Company (or a Participating Employer) in the amount of 21% to 49% of the services the Participant was providing to the Company (or a Participating Employer) during the previous 36-month period (or the full period of services provided to the Company (or a Participating Employer) in the event that the Participant has not been employed for 36 months), the Administrator shall retain the sole discretion to determine whether or not all of the facts and circumstances surrounding the decrease in services constitute a separation from service in accordance with Treasury Regulation Section 1.409A-1(h).

 

1.22                         “Supplemental Executive Retirement Benefit” means the allocations, if any, made pursuant to Section 4.2(b).

 

1.23                         “Total Disability” means a Participant is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve months, receiving long-term disability benefits under the Company’s (or his or her Participating Employer’s) long-term disability insurance plan.

 

1.24                         “Valuation Date” means December 31 and such other or additional dates as provided herein or otherwise designated by the Administrator as Valuation Dates for the purpose of making valuation adjustments to the Deferred Compensation Accounts in accordance with Section 4.2(c).

 

ARTICLE II
ADMINISTRATION

 

The Plan will be administered by the Administrator and benefits under the Plan will be paid only if the Administrator decides, in its sole discretion, that a Participant is entitled to them.  The decision of a majority of the members of the Compensation Committee will control; provided, however, that a member will not be entitled to participate in discretionary decisions directly related to such person’s own participation in the Plan.

 

The Administrator will have full power and authority to adopt rules, regulations, and practices governing the administration of the Plan, to interpret and apply the provisions of the Plan in its sole discretion, to alter, amend, or revoke any rules and regulations so adopted, to enter into contracts on behalf of the Company with respect to the Plan, and to make discretionary decisions under the Plan, except where that authority is retained by the Company under the Plan.  The Administrator will administer this Plan and render decisions in a uniform and consistent manner so that all Participants in similar circumstances are generally treated similarly.  The Administrator’s decision as to all aspects of Plan operations, including but not limited to, the eligibility of persons to participate in this Plan, the benefits payable under this Plan, and the interpretation of this Plan, cannot be overturned unless it has no foundation.

 

ARTICLE III
ELIGIBILITY

 

An Employee who has been designated by the Administrator as eligible for participation in the Plan will be eligible for participation beginning in the Plan Year with respect to which the designation is made.  A Participant will continue to participate in the Plan until he or she ceases

 

 

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to be a member of a select group of management or highly compensated employees, or until the Administrator in its sole discretion determines otherwise.

 

ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS

 

4.1                                Establishment of Deferred Compensation Accounts .  At the time an Employee becomes a Participant in the Plan, the Company will establish a Deferred Compensation Account for the Participant on its books.

 

4.2                                Additions to Deferred Compensation Accounts .

 

(a)                                   401(k) Plan Benefit Restoration .  For each Plan Year, the Administrator will credit the Deferred Compensation Account of each Participant with an amount equal to four percent (4%) of his or her Base Pay, less the amount of the maximum employer matching contribution that could be made pursuant to the terms of the 401(k) Plan on the Participant’s behalf under the 401(k) Plan with respect to that Plan Year.

 

(b)                                  Supplemental Executive Retirement Benefit .  For each Plan Year, the Compensation Committee will credit the Aggregate Contribution Amount among the Deferred Compensation Accounts of Participants in proportion to their Base Pay for the Plan Year.

 

(c)                                   Valuation and Adjustments .  As of each Valuation Date, the Administrator will also credit (or charge) the Participant’s Deferred Compensation Account with valuation adjustments determined in accordance with this Section 4.2(c).  The valuation adjustment to be credited (or charged) to the Participant’s Deferred Compensation Account as of any Valuation Date will be an amount equal to the performance of certain hypothetical investments or investment vehicles since the last preceding Valuation Date as described below.  The performance of such hypothetical investments or investment vehicles taken into account for purposes of this Section 4.2(c) will include, but not be limited to, in the sole discretion of the Administrator, interest, expenses, and realized and unrealized gains and losses.  The crediting (or charging) of amounts under this Section 4.2(c) will occur so long as there is a balance in the Participant’s Deferred Compensation Account; provided, however, the crediting (or charging) of amounts under this Section 4.2(c) will cease as close as reasonably practicable (as determined by the Administrator in its sole discretion) prior to the date a complete distribution of a Participant’s benefit under this Plan is made.  The value of the Participant’s Deferred Compensation Account as of the relevant Valuation Date will be determined as if the balance of the Deferred Compensation Account as of the preceding Valuation Date, together with any amounts subsequently credited to (less any amounts distributed from) such Deferred Compensation Account, had been invested since the preceding Valuation Date or the date credited to the Deferred Compensation Account, as the case may be, in the hypothetical investments or investment vehicles specified for the Participant’s Deferred Compensation Account.

 

 

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(d)                                  Investments .  Each Participant, in a manner prescribed by the Administrator, may designate the hypothetical investments or investment vehicles in which his or her Deferred Compensation Account is to be deemed invested under the investment options permitted by the Administrator.  Notwithstanding any other provision of this Plan, a Participant may not designate the hypothetical investment of his or her Deferred Compensation Account in stock or other securities of the Company or a Participating Employer.  The Administrator (or trustee of a grantor trust if a grantor trust is used in connection with this Plan), in its sole discretion, may determine whether any Deferred Compensation Accounts will, in fact, be invested according to the hypothetical investments or investment vehicles or will be invested otherwise.  Such hypothetical investment designations may be made up to two times per calendar year for each Participant by making an election with the Administrator, in a manner prescribed by the Administrator.  The designation will continue until changed by the submission of a new designation, which change will be effective as soon as administratively feasible.

 

4.3                                Forfeiture .  All amounts credited to, and not withdrawn from, a Participant’s Deferred Compensation Account are nonforfeitable, except as otherwise provided in this Section 4.3 and Sections 6.1 and 6.4.

 

Notwithstanding any other provision of this Plan, a Participant’s Deferred Compensation Account will be forfeited in its entirety if the Administrator determines that the Participant has engaged in any activity that is (a) illegal and involves fraud, dishonesty, or theft, or (b) intentionally detrimental to the Company, a Participating Employer, or any subsidiary or affiliate thereof.

 

ARTICLE V
DISTRIBUTION OF BENEFITS

 

5.1                                Distribution on Termination of Employment .  Subject to the limitations described in Section 5.5 and unless otherwise elected pursuant to Section 5.4, amounts credited to, and not withdrawn from, a Participant’s Deferred Compensation Account (less applicable tax and other withholdings pursuant to Section 5.6) will be distributed in a single lump sum payment in cash, other property, or both, in the Administrator’s sole discretion, within 90 days after the Participant’s Separation from Service with the Co


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