THE TORO COMPANY SUPPLEMENTAL BENEFIT PLAN

Exhibit 10(d)

Amended and Restated Effective January 1, 2009

 

 

TABLE OF CONTENTS

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Amended and Restated Effective January 1, 2009

The Toro Company hereby amends and restates its Supplemental Benefit Plan originally effective as of August 1, 1989.  This amendment and restatement is effective for all amounts deferred on or after January 1, 2005 that remain unpaid as of January 1, 2009.  All grandfathered amounts earned and vested as of December 31, 2004 shall continue to be governed by the 2004 Plan document in accordance with then applicable IRS guidance.  All amounts earned or vested from January 1, 2005 through December 31, 2008 shall continue to be governed by this amendment and restatement, as modified by the operations of the Plan during such period in accordance with Code Section 409A and then applicable IRS guidance (including transition relief).  The Plan is maintained by the Company for the purpose of providing benefits for a select group of management or highly compensated employees, in excess of the limitations on benefits and contributions imposed by Sections 401(a)(17) and 415 of the Code.  The Plan is unfunded for purposes of Title I of ERISA.

When used in the Plan, the following terms have the meanings indicated unless a different meaning is plainly required by the context.

" 2004 Plan " means the terms of the Plan in place as of December 31, 2004.

" Actuarial Equivalent " means, prior to January 1, 2006, calculations based upon 7% interest and the 1971 Group Annuity Table male rates.  On or after January 1, 2006, it means the calculations based upon 6% interest and the "applicable mortality table" prescribed by the Secretary of the Treasury in accordance with Section 417(e)(3) of the Code and regulations and rulings issued thereunder (which on or after December 31, 2002 is based on the table in Revenue Ruling 2001-62).  However, when determining an Actuarial Equivalent benefit under the Plan, that benefit shall not be less than an amount determined when the assumptions stated in the first sentence of this definition are applied with respect to a Participant's benefit accumulated through December 31, 2006.

" Beneficiary " means the person or persons selected by the Participant to receive benefits under the Plan in the event of the Participant's death.

" Board " means the Board of Directors of the Toro Company.

" Change of Control " means:

(a)           The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership

 

 

(within the meaning of Rule 13d-3 under the Exchange Act) of 15% or more of either (i) the then-outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by the Company, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (z) any acquisition by any corporation pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subsection (c) of this definition; or

(b)            Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c)           Consummation of a reorganization, merger or consolidation of the Company or sale or other disposition of all or substantially all of the assets of the Company or the acquisition by the Company of assets or stock of another entity (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such

 

 

Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

" Code " means the Internal Revenue Code of 1986, as amended.

" Committee " means the Compensation and Human Resources Committee of the Board or any successor committee and its delegates with respect to the Plan.

" Common Stock " means the Company's common stock, par value $1.00 per share, and related preferred share purchase rights.

" Company " means The Toro Company, a Delaware corporation.  Except as used in Articles VII and VIII, "Company" also includes any Participating Subsidiary.

" Compensation " means all amounts received by a Participant from the Company that are subject to federal income tax withholding: provided that (a) Compensation shall not include any amount received by an employee on account of the grant or exercise of an option to purchase Common Stock of the Company, and (b) Compensation shall include an amount equal to any reductions in a Participant's gross income as a result of salary reductions under Section 125, 132(f)(4) or 402(e)(3) of the Code.  Compensation shall include only amounts paid or deferred in connection with the Company's annual base salary and the annual cash incentive plans.

" Disability " means the Participant is (a) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12  months; (b) receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Company employees because of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (c) determined to be totally disabled by the Social Security Administration or Railroad Retirement Board; or (d) determined to be disabled in accordance with the Company's Long Term Disability Plan, provided that such plan's definition complies with Treasury Regulation Section 1.409A-3(i)(4).

" Distribution Election Form " means a form provided by the Company through which a Participant makes the distribution elections provided for in Articles III, IV, V and VI.

" Early Retirement Date " means the first day of any month before the Participant's Normal Retirement Date that is on or after the date on which the Participant has attained 55 years of age, completed 10 years of credited service under the Pension Plan, incurred a

 

 

termination of employment and elected to receive an early retirement benefit under the Pension Plan.

" ERISA " means the Employee Retirement Income Security Act of 1974, as amended.

" Exchange Act " means the Securities Exchange Act of 1934, as amended.

" IRS " means the Internal Revenue Service.

" Normal Retirement Age " has the meaning set forth in the Pension Plan as of December 31, 2008.

" Participant " means any employee of the Company or a Participating Subsidiary who meets the conditions described in Article II of the Plan.

" Participating Subsidiary " means a Subsidiary of the Company to which the Plan has been extended by action of the Board or by action of the Committee, if the Board of Directors has authorized the Committee to so act.

" Pension Plan " means The Toro Company Retirement Plan for Office and Hourly Employees or any successor or replacement plan.

" Plan " means the Supplemental Benefit Plan, as amended.

" Plan Year " means the calendar year.

" Retirement Plan " means The Toro Company Investment, Savings and Employee Stock Ownership Plan or any successor or replacement plan.

" Specified Employee " means a Participant who, as of the date of the Participant's termination of employment for any reason and unless the Company has designated otherwise, is an elected officer of the Company.  If a Participant is an elected officer as of December 31, the Participant shall be treated as a Specified Employee for the entire 12-month period beginning on the next following April 1.

" Stable Return Fund Measure " means the earnings rate paid or credited from time to time on assets held in the Stable Return Fund under the Retirement Plan.

" Subsidiary " means any corporation that is a component member of the controlled group of corporations of which the Company is the common parent.  Controlled group shall be determined by reference to Section 1563 of the Code but shall include any corporation described in Section 1563(b) (2) thereof.

" Surviving Spouse " means a person who is married to a Participant at the date of the Participant's death and for at least one year prior thereto.

 

 

" Trust " means the trust established or maintained by the Company that is used in connection with the Plan to assist the Company in meeting its obligations under the Plan.

" Trustee " means the corporation or individual selected by the Company to serve as trustee for the Trust.

" Unforeseeable Emergency "  means a severe financial hardship to a Participant resulting from an illness or accident of the Participant, the Participant's spouse, the Participant's Beneficiary or the Participant's dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Participant's property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  For example, (a) imminent foreclosure of or eviction from the Participant's primary residence may constitute an Unforeseeable Emergency; (b) the need to pay for medical expenses, including nonrefundable deductibles, as well as for the costs of prescription drug medications, may constitute an Unforeseeable Emergency; (c) the need to pay for the funeral expenses of a spouse, a Beneficiary or a dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)) may also constitute an Unforeseeable Emergency; and (d) the purchase of a home and the payment of college tuition are not Unforeseeable Emergencies.

An employee who satisfies the conditions of this Article II and whose benefits under the Pension Plan or the Retirement Plan are or will be reduced because of the limitations on contributions and benefits imposed by Section 401(a)(17) or 415 of the Code shall be a Participant in the Plan.

A Participant in the Plan must be an employee of the Company or of a Participating Subsidiary receiving annual Compensation at a rate equal to or greater than the limitation established pursuant to Section 401(a)(17) of the Code, as such amount may be adjusted from time to time by the Secretary of the Treasury ($230,000 for 2008).

Once an employee becomes a Participant, the Participant's account under the Plan will remain in effect until distributed as provided herein, even if for any subsequent Plan Year or portion thereof the employee is ineligible to be a Participant or ceases to be a Participant for any other reason.

 

 

 

III.           SUPPLEMENTAL ACCOUNT

The Company shall establish and maintain an Article III account for each Participant and shall credit such account for each Plan Year with an amount equal to the amount described in Section 3.2.

The amount credited to a Participant's Article III account for each Plan Year or portion thereof during which the employee is a Participant shall equal the difference between:

(a)           the aggregate amount of contributions and forfeitures that would have been allocated or reallocated to the Participant under the Retirement Plan, based on the Participant's Compensation, and without regard to the limitations imposed by Sections 401(a)(l7) or 415 of the Code, and

(b)           the aggregate amount of contributions and forfeitures actually allocated or reallocated to the Participant under the Retirement Plan plus any credits made under any nonqualified deferred compensation plan maintained by the Company (other than the Plan) to replace amounts that would have been credited under the Retirement Plan had the Participant not deferred Compensation under such nonqualified plans.

Amounts credited to a Participant's Article III account for any Plan Year shall be credited as of the end of such Plan Year.

Amounts credited to a Participant's Article III Account shall be credited with earnings at a rate and in a manner authorized by the Committee from time to time; provided that the earnings rate for all Participants shall be based on a Participant's selection from any fund made available by the Committee from time to time.  Earnings shall be credited as of the end of each business day that the Committee authorizes the Plan's recordkeeping system to determine the value of gains and losses.  Notwithstanding the foregoing, for Participants who did not make a one-time election as of October 31, 2006 to allocate all funds in all accounts, past and future, so that earnings are based on the rate of return from one or more of the funds provided above, the earnings shall be determined based on the Stable Return Fund Measure.

Subject to Section 6.8, a supplemental retirement benefit shall be payable to a Participant under this Article IV commencing on the Participant's Normal Retirement Age.

 

 

The amount of that benefit, which shall not be less than zero, shall equal the difference between:

(a)           the amount that the Participant would have been entitled to receive under the Pension Plan if such amount was determined (for each Plan Year or portion thereof in which the individual was a Participant) without regard to the limitations on benefits imposed by Section 401(a)(17) or 415 of the Code on the Pension Plan, reduced by the Defined Contribution Plan Offset, as defined in the Pension Plan, but including as an additional part of such Defined Contribution Plan Offset the sum of (i) amounts credited to the Participant under Article III of the Plan (including interest and other credits thereto) and (ii) amounts credited to the Participant under any other nonqualified deferred compensation plan maintained by the Company to replace amounts that would have been credited under such qualified plans had the Participant not deferred compensation under such a nonqualified deferred compensation plan; provided, however, that the determination of the amount that the Participant would have been entitled to receive under the Pension Plan shall be made without regard to any compensation paid or accrued in connection with the Company's stock option, performance share and other stock-based compensation plans or agreements, and

(b)           the amount of the benefit actually payable to the Participant under the Pension Plan.

(a)           The amount described in Section 4.1 will be computed as of the date of the Participant's retirement or termination of employment with the Company, in the form of a straight life annuity payable monthly over the lifetime of the Participant commencing on the Participant's Normal Retirement Date.

(b)           If the benefit under this Article IV is payable in any form other than a straight life annuity over the lifetime of the Participant, or if it commences at any time other than the Participant's Normal Retirement Date, the amount of the benefit shall be the Actuarial Equivalent of the benefit described in Section 4.2(a).

If the Pension Plan is terminated by the Company, the benefit payable to a Participant under this Article IV, if any, shall be determined as of the termination date of the Pension Plan and no other benefit shall be provided under this Article IV.

If a Participant dies prior to commencement of payment of the Participant's benefit under the Pension Plan under circumstances in which a Pre-Retirement Death Benefit is

 

 

payable to the Participant's Surviving Spous