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TEREX CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
TEREX CORPORATION
AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The purpose of this Amended and Restated
Supplemental Executive Retirement Plan (the "Plan"), which was
originally effective as of October 1, 2002 (the "Effective Date"),
is to provide a further means whereby Terex Corporation (the
"Company") may afford financial security to a select group of
executives of the Company who render valuable services to the
Company. The Plan constitutes an important contribution toward such
executives' continued growth and success by providing for
additional future compensation so that such executives may be
retained and their productive efforts encouraged, all as provided
herein. The Plan is intended to be an unfunded plan maintained for
a "select group of management or highly compensated employees" as
defined in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of
the Employee Retirement Income Security Act of 1974, as amended.
The Plan is hereby amended and restated, effective January 1, 2005,
to comply with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations
thereunder ("Section 409A"). The Plan is frozen as to new
Participants effective December 31, 2008.
I
DEFINITIONS
1. As
used in the Plan, terms defined parenthetically immediately after
their use shall have the respective meanings provided by such
definitions, and the following words and phrases shall have the
meanings specified below (in either case, such terms shall apply
equally to both the singular and plural forms of the terms
defined), unless a different meaning is plainly required by the
context:
Actuarial Equivalent . "Actuarial
Equivalent" means a benefit of equivalent value to a benefit or
benefits payable to a Participant hereunder, calculated in
accordance with (a) the "applicable mortality table", as defined in
Section 417(e)(3) of the Code and (b) an interest rate of 8%
compounded annually, provided that for purposes of Section 3.3(b)
the interest rate shall be the applicable federal mid-term rate
under Section 1274(d) of the Code on the Benefit Commencement
Date.
Beneficiary . "Beneficiary" shall mean
the person or persons designated by a Participant pursuant to
Section 8.1 to receive the benefits to which a Participant is
entitled upon the death of the Participant or, upon the death of
such designated person or persons, the estate of a
Participant.
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Benefit Commencement Date . "Benefit
Commencement Date" means the date a Participant receives or first
begins to receive payment of benefits under the Plan, as
applicable.
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Board . "Board" means the Board of
Directors of the Company.
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Cause . "Cause" shall have the
definition set forth in the Participant's employment agreement with
the Company, or, absent an employment agreement defining Cause,
Cause shall mean the Participant’s (i) continuing and
material failure to fulfill his or her employment obligations or
willful misconduct or gross neglect in the performance of his or
her duties as an officer or employee of the Company, (ii)
commission of fraud, misappropriation or embezzlement in the
performance of his or her duties as an officer or employee of the
Company or (iii) conviction of a felony, which, as determined in
good faith by the Board, constitutes a crime that may result in
material harm to the Company.
Change of Control . "Change of Control"
means (i) the consummation of an acquisition by any person (as such
term is defined in Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended) or group (as described in
regulations under Section 409A of the Code) of 40 percent or more
of the combined voting power of the Company’s then
outstanding securities; (ii) a change in the composition of the
Board occurring within any twelve-month period, as a result of
which fewer than a majority of the directors are Incumbent
Directors ("Incumbent Directors" shall mean directors who either
(A) are members of the Board as of the Effective Date or (B) are
elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors
at the time of such election or nomination, but shall not include
an individual not otherwise an Incumbent Director whose election or
nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Board); or
(iii) the consummation of (A) a complete liquidation or dissolution
of the Company or (B) a merger or consolidation with the Company or
in which securities of the Company are issued or the sale of all or
substantially all of the Company’s assets (collectively,
a "Business Combination") other than a Business Combination
immediately after which (x) the stockholders of the Company
immediately before the Business Combination beneficially own,
directly or indirectly, more than 80 percent of the combined voting
power of the voting securities of the corporation or other business
entity resulting from the Business Combination (which in the case
of a sale of substantially all of the Company's assets means the
corporation or other business entity acquiring such assets) (the
"Resulting Corporation"), (y) at least a majority of the Board of
directors of the Resulting Corporation or the direct or indirect
parent corporation of the Resulting Corporation are Incumbent
Directors and (z) no individual, entity or group (excluding the
Resulting Corporation or any employee benefit plan of the Resulting
Corporation) beneficially owns, directly or indirectly, 20 percent
or more of the combined voting power of the securities of
the
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Resulting Corporation, who did not own such
securities immediately before the Business Combination; provided
that, in any case, the event constitutes a "change in the ownership
or effective control" of the Company or a "change in the ownership
of a substantial portion of the assets" of the Company, in each
case, within the meaning of Section 409A.
Committee . The "Committee" shall mean
the Compensation Committee of the Board.
Compensation . "Compensation" means,
for any calendar year, the sum of a Participant's base salary and
annual cash bonus earned during such calendar year (including any
base salary or bonus amounts deferred at the direction of the
Participant).
Disability . A Participant will be
considered to have a "Disability" if the Participant is unable to
engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment that can be expected to
result in death or last for a continuous period of not less than 12
months. "Disabled" shall refer to a Participant who has been
determined to have a Disability.
Early Retirement . "Early Retirement"
means the Termination of Employment on or after his or her Early
Retirement Date and prior to his or her Normal Retirement
Date.
Early Retirement Age . "Early
Retirement Age" means the date on which a Participant attains age
55.
Early Retirement Benefit . "Early
Retirement Benefit" means a benefit calculated under Section
3.2(b).
Early Retirement Date . "Early
Retirement Date" shall be the first day of the month next following
the attainment by a Participant of Early Retirement Age.
Employment . "Employment" refers to
full-time or substantially full-time employment by the Company or
any of its subsidiaries.
Final Average Compensation . "Final
Average Compensation" is an amount equal to a Participant's average
Compensation during his or her final 5 Years of Service.
Good Reason . "Good Reason" shall have
the definition set forth in the Participant's employment agreement
with the Company, or, absent an employment agreement defining Good
Reason, Good Reason shall mean the occurrence of one or more of the
following, without the Participant's prior written consent: (i) a
material change, adverse to the Participant, in his or her
position, title or office, status, rank, nature of responsibilities
or
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authority within the Company, except in
connection with termination of his or her employment for Cause or
Disability or as a result of action by the Participant, (ii)
assignment of duties to the Participant that are materially
inconsistent with and adverse to his or her duties, status, rank,
responsibilities or authority, (iii) decrease in the Participant's
base salary, annual bonus opportunity or benefits (other than any
such decrease applicable to executives of the Company generally),
and (iv) relocation of the Participant's principal place of
business to a location more than 50 miles from its location on the
date when he or she first became a Participant.
Normal Form . "Normal Form" means a
monthly benefit payable in the form of a single life annuity for
the life of Participant with payment guaranteed for 120
months.
Normal Retirement Age . "Normal
Retirement Age" means the date on which a Participant attains age
65.
Normal Retirement Benefit . "Normal
Retirement Benefit" means a benefit calculated under Section
3.2(a).
Normal Retirement Date . "Normal
Retirement Date" shall be the first day of the month next following
the attainment by a Participant of Normal Retirement Age.
Participant . A "Participant" is any
senior officer or other key employee of the Company who has become
a participant in the Plan pursuant to Article II.
Participant Notice . "Participant
Notice" means the written notice that shall be provided by the
Company to a Participant notifying him or her of his or her
participation in the Plan and specifying any special terms or
conditions applicable to such Participant's participation in the
Plan.
Primary Insurance Amount . "Primary
Insurance Amount" means the primary insurance amount payable on a
monthly basis to the Participant on his or her Normal Retirement
Date (excluding any benefit payable on behalf of a spouse or other
dependent) as provided under the Federal Social Security Act or any
other similar applicable national benefit program as in effect on
such date. The Primary Insurance Amount shall be determined on the
following assumptions, notwithstanding facts to the
contrary:
(1) The
Participant's salary history shall begin with calendar year 1951 or
the calendar year he or she attains age 22, whichever is later, and
end with the calendar year preceding the calendar year in which
occurs the later of his or her Benefit Commencement Date or his or
her Normal Retirement Date (including years when he or she was not
employed by the Company) (the "Salary History Period").
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(2) The
Participant will be deemed to have earned wages in excess of the
Social Security Act wage base during each year of the Salary
History Period.
(3) The
Participant will be deemed to have been employed in the United
States during each year of the Salary History Period.
(4) The
Participant's Primary Insurance Amount under the Social Security
Act will commence payment with the month in which the Participant
attains his or her Normal Retirement Date or if his or her
Termination of Employment occurs thereafter, the month in which
occurs his or her Termination of Employment.
In the case of any Participant who may be
entitled to government provided retirement benefits payable by a
government or a government sponsored retirement program other than
the United States, such benefits shall be included in the
Participant's Primary Insurance Amount and shall be calculated on a
basis and using assumptions that are comparable to the
foregoing.
Supplemental Retirement Benefit .
"Supplemental Retirement Benefit" means for any Participant a
benefit payable in the Normal Form, commencing on the Participant's
Normal Retirement Date or, if later, the date on which his or her
Termination of Employment occurs, and equal to the excess of (a)
one-twelfth of the product of 2% times the Participant's Years of
Service (not to exceed 20) times the Participant's Final Average
Compensation over (b) an amount payable in the Normal Form equal to
the Actuarial Equivalent of the sum of the following amounts: (i)
50% of the Participant's Primary Insurance Amount and (ii) the
Participant's accrued benefit under any other qualified (under
Section 401(a) of the Code) defined benefit pension plan maintained
by the Company or any of its subsidiaries.
Termination of Employment .
"Termination of Employment" means the ceasing of the Participant's
Employment for any reason whatsoever, whether voluntarily or
involuntarily.
Years of Service . "Years of Service"
shall mean the calendar years during which a Participant was
employed by the Company (or any company acquired by the Company or
any of its subsidiaries), commencing with the calendar year
commencing on the January 1 nearest his or her date of hire and
ending with the calendar year in which his or her Termination of
Employment occurs, if such Termination of Employment occurs after
the June 30th of that year, or the prior calendar year if such
Termination of Employment occurs prior to the July 1st of the year
in which such Termination of Employment occurs. The Committee may,
in the Participant Notice or at any time thereafter, provide a
Participant
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with credit for additional Years of Service in
respect of periods for which he or she would not otherwise receive
credit under the previous sentence.
II
ELIGIBILITY AND
PARTICIPATION
2.1
Eligibility . Any senior officer or other key employee of
the Company shall be eligible to participate in the
Plan.
2.2
Participation . An eligible officer or key employee shall
become a Participant in the Plan upon approval by the Committee and
notification by Company's Chief Executive Officer that he or she
has been selected to participate in the Plan. The effective date of
a Participant's participation in the Plan shall be the date he or
she receives the Participant Notice or such other date as may be
determined by the Committee and as set forth in the Participant
Notice. Notwithstanding the above to the contrary, no senior
officer or other employee of the Company shall be selected to
participate in the Plan after December 31, 2008.
2.3 Terms and
Conditions of Participants . Unless specified by the Committee
in the Participant Notice, a Participant's participation in the
Plan shall be as set forth in the terms of the Plan. The Committee
may determine in the case of any Participant that the terms and
conditions of his or her participation in the Plan shall be
different than those set forth in the Plan (e.g., additional Years
of Service); provided that such determination shall be made and
applied in a manner that complies with Section 409A of the Code.
However, unless set forth in the Participant Notice, no special
terms and conditions applicable to any Participant shall be less
favorable to the Participant than those provided for by the terms
of the Plan.
2.4 Cessation of
Participation . An individual shall cease to be a Participant
in the Plan once he or she has received from the Company all
benefits to which he or she is entitled under the Plan.
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III
RETIREMENT BENEFITS
3.1 Vesting and
Timing of Retirement Benefit . A Participant will vest in his
or her right to receive a benefit under this Plan on the earlier of
(a) the Participant’s attainment of Normal Retirement Age
during Employment and (b) the date on which the Participant has
completed ten Years of Service (such earlier date, the
“Vesting Date”). Except as provided in Section
3.3(b) or Article IV, a Participant will be entitled to commence
receiving a benefit under this Plan, to the extent vested, on the
Participant’s Benefit Commencement Date, which shall be
the later of (i) the first day of the month next following the
Participant’s Termination of Employment and (ii) the
Participant’s Early Retirement Date.
3.2 Amount of
Retirement Benefit . Except as provided in Section 3.4 or
Article IV,
(a) in the event
that a Participant's Termination of Employment occurs on or after
the Participant’s Normal Retirement Age, the Participant
shall be entitled to receive a benefit payable in the Normal Form
in an amount that is equal to the Participant's Supplemental
Retirement Benefit.
(b) in the event
that a Participant’s Termination of Employment occurs (i)
prior to his or her Normal Retirement Age and (ii) after the date
on which the Participant has completed ten Years of Service, the
Participant shall be entitled to receive a benefit payable in the
Normal Form in an amount that is equal to the Actuarial Equivalent
of the Participant’s accrued Supplemental Retirement
Benefit, determined as of his or her Benefit Commencement
Date.
3.3 Termination
Without Cause or for Good Reason . In the event of a
Participant's Termination of Employment by the Company without
Cause or by the Participant for Good Reason,
(a) except as
provided in Section 3.3(b), if such Termination of Employment
occurs prior to the Participant's Vesti
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