AMERIPRISE FINANCIAL

DEFERRED SHARE PLAN
FOR OUTSIDE DIRECTORS

 

As Amended and Restated Effective January 1, 2009

 

Purpose

 

The purpose of the Plan is to (a) provide for the crediting of Deferred Share Units to Eligible Directors in respect of services rendered by such individuals as members of the Board, (b) permit Eligible Directors to elect to receive a portion of their Eligible Compensation on a deferred basis, and (c) promote a greater alignment of interests between Eligible Directors and the stockholders of the Company.  The Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

 

Article 1

Definitions

 

For purposes of the Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the meanings indicated in this Article 1:

 

1.01.        “ Account ” shall mean, collectively, a Participant’s Stock Account and a Participant’s Cash Account, in each case as established under the terms and conditions of the Plan.

 

1.02.        “ Affiliate ” shall mean any entity other than the Company with whom the Company would be considered a single employer under Sections 414(b) or 414(c) of the Code; provided, however, that for determining whether a Termination of Service has occurred, the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in such Code Sections.

 

1.03.      “ Aggregate Vested Balance ” shall mean, with respect to the Accounts of any Participant as of a given date, the sum of the amounts that have become vested under the Participant’s Accounts, as adjusted to reflect all applicable dividends and all prior withdrawals and distributions, in accordance with Article 3 and Article 4 and the provisions of the applicable Annual Enrollment Materials.

 

1.04.        “ Amended Distribution Election Form ” shall mean the written form required by the Committee to be signed and submitted by a Participant to effect a permitted change in the Distribution Election previously made by the Participant with respect to an Account of the Participant.

 

1.05.        “ Annual DSU Grant ” shall mean the annual grant to an Eligible Director of DSUs, which will be credited to a Director’s Stock Account on an annual basis in accordance with Article 3.01.

 

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1.06.        “ Annual Election Form ” shall mean the written form required by the Committee to be signed and submitted by a Participant in connection with the Participant’s deferral election with respect to a given Plan Year.

 

1.07.        “ Annual Elective Deferral ” shall mean the aggregate amount electively deferred by a Participant in respect of a particular Plan Year under Article 4.

 

1.08.        “ Annual Enrollment Forms ” shall mean, with respect to the portion of any Account that relates to a Participant’s Annual Elective Deferrals under the Plan, the Annual Election Form and the Distribution Election Form (or the Amended Distribution Election Form last signed and submitted by the Participant) with respect to that Account.

 

1.09.        “ Annual Enrollment Materials ” shall mean, for any Plan Year, the Annual Enrollment Forms and any other forms, documents or materials concerning the terms of any Annual DSU Grant or Annual Elective Deferral for such Plan Year.

 

1.10.        “ Annual Fee ” shall mean, with respect to an Eligible Director, such Eligible Director’s annual cash retainer fee.

 

1.11.        “ Beneficiary ” shall mean one natural person designated in accordance with Article 7, whom is entitled to receive the distribution of a Participant’s Account under the Plan in the event of the Participant’s death.

 

1.12.        “ Beneficiary Designation Form ” shall mean the Beneficiary Designation Form or amended Beneficiary Designation Form last signed and submitted by a Participant and accepted by the Committee.

 

1.13.        “ Board ” shall mean the board of directors of the Company.

 

1.14.        “ Cash Account ” shall mean a notional, bookkeeping account established under the Plan for a Participant to measure the value of any portion of a Participant’s Annual Elective Deferral for a Plan Year that is not deemed to be invested in DSUs.

 

1.15.        “ Cash Account Interest Rate ” shall mean Moody’s Composite Yield on Seasoned Aaa Corporate Bonds.

 

1.16.        “ Change in Control ” shall have the meaning set forth in the Ameriprise Financial 2005 Incentive Compensation Plan; provided, that notwithstanding anything to the contrary therein, a Change in Control shall not be deemed to occur under the Plan as a result of any event or transaction to the extent that treating such event or transaction as a Change in Control under the Plan would cause any tax to become due under Section 409A.

 

1.17.        “ Claimant ” shall have the meaning set forth in Article 11.01.

 

1.18.        “ Code ” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.

 

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1.19.        “ Committee ” shall mean the Compensation and Benefits Committee of the Company or such other committee designated by the Board to administer the Plan.   Any reference herein to the Committee shall be deemed to include any person to whom any duty of the Committee has been delegated pursuant to Article 10.02.

 

1.20.        “ Company ” shall mean Ameriprise Financial, Inc., a Delaware corporation, and any successor to all or substantially all of its assets or business.

 

1.21.        “ Company Stock ” shall mean the common stock, par value $0.01 per share, of the Company.

 

1.22.        “ Deferred Share Unit ” or “ DSU ” shall mean a unit credited to a Participant’s Stock Account in accordance with the terms and conditions of the Plan.  Each DSU shall represent the right to receive one share of Company Stock at the time or times designated in the Plan.

 

1.23.        “ Disability ” shall mean, with respect to a Participant, the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.  In making its determination, the Committee shall be guided by the prevailing authorities applicable under Section 409A.

 

1.24.        “ Distribution Election ” shall mean an election made in accordance with Article 6.01.

 

1.25.        “ Distribution Election Form ” shall mean the written form required by the Committee to be signed and submitted by a Participant with respect to a Distribution Election.

 

1.26.        “ Eligible Compensation ” shall mean the Annual Fees, annual chair retainer fees and any other cash compensation payable to Eligible Directors, designated by the Committee in the applicable Annual Enrollment Materials as eligible for deferral under the Plan for such Plan Year.

 

1.27.        “ Eligible Director ” shall mean a member of the Board who is not also an employee of the Company or any of its Affiliates.

 

1.28.        “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.

 

1.29.        “ Market Value ” of a share of Company Stock shall mean the fair market value thereof, which shall be the price per common share which is equal to the average closing price for a board lot of Company Stock on the New York Stock Exchange (the “NYSE”) during the five trading days immediately preceding the date of determination.  If at any time the Company Stock is no longer listed or traded on the NYSE, the Market Value shall be calculated in such manner as may be determined by the Committee in its good faith judgment from time to time.

 

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1.30.        “ Newly Eligible Director ” shall mean a member of the Board who becomes eligible to participate in the Plan during a Plan Year and who has not previously participated in the Plan or an elective or non-elective account-balance deferred compensation arrangement (as defined for purposes of Section 409A) of the Company or any Affiliate, to the extent permissible under Section 409A.

 

1.31.        “ Participant ” shall mean any Eligible Director who commences participation in the Plan and whose participation in the Plan has not terminated.  A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

 

1.32.        “ Plan ” shall mean the Ameriprise Financial Deferred Share Plan for Outside Directors, which shall be evidenced by this instrument and by the Annual Enrollment Materials, as they may be amended from time to time.

 

1.33.        “ Plan Year ” shall mean the 12-month period beginning on January 1 of each calendar year and ending on December 31 of such calendar year.

 

1.34.        “ Pro Rata Annual DSU Grant ” shall have the meaning set forth in Article 3.01(c).

 

1.35.        “ Pro Rata Annual Fee ” shall mean, with respect to an Eligible Director, the product obtained by multiplying such Eligible Director’s Annual Fee by a fraction, the numerator of which is the number of full months in the applicable Service Period that follow the date on which such Eligible Director first becomes an Eligible Director under the Plan and the denominator of which is 12.

 

1.36.        “ Quarter ” shall mean any of the four quarters of any financial year of the Company as may be adopted from time to time and, unless and until the financial year of the Company is changed, shall mean the quarters ending March 31, June 30, September 30 and December 31.

 

1.37.        “ Reference Date ” shall mean the date used to determine the Market Value of a share of Company Stock for purposes of determining the number of DSUs to be credited to a Participant’s Stock Account.  Unless otherwise determined by the Committee and approved by the Board, the Reference Date shall be:  (a) with respect to an Annual DSU Grant, the date of the Company’s Annual Meeting of Stockholders at which the stockholders elect directors to the Board; (b) with respect to a Pro Rata Annual DSU Grant, the fifth trading day following the release by the Company of its financial statements for the Quarter in which the applicable Eligible Director first becomes an Eligible Director; (c) with respect to the portion of a Participant’s Annual Elective Deferral that is notionally invested in DSUs in respect of any Quarter, the fifth trading day following the release by the Company of its financial statements for such Quarter; and (d) with respect to an Eligible Director’s election pursuant to Article 5.01 to notionally invest a portion of the funds in his or her Cash Account in DSUs, the fifth trading day following the release by the Company of its financial statements for the applicable Quarter to which the election relates.

 

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1.38.        “ Section 409A ” shall mean Section 409A of the Code, and the Treasury Regulations promulgated and other official guidance issued thereunder.

 

1.39.        “ Service Period ” shall mean the 12-month period between the Company’s Annual Meetings of Stockholders at which the stockholders elect directors to the Board.

 

1.40.        “ Settlement Date ” shall mean, unless otherwise determined by the Committee, the date on which shares of Company Stock shall be delivered in settlement of DSUs in accordance with Article 6.

 

1.41.        “ Stock Account ” shall mean a notional, bookkeeping account established under the Plan for a Participant to measure the value of (a) any portion of a Participant’s Annual Elective Deferral for a Plan Year that is deemed to be invested in DSUs and (b) all DSUs credited to the Participant in connection with his or her Annual DSU Grant or Pro Rata Annual DSU Grant.

 

1.42.        “ Termination of Service ” shall mean a “separation from service” as defined under Section 409A, as determined in accordance with the Company’s Policy Regarding Section 409A Compliance.

 

1.43.        “ Trust ” shall mean a trust established in accordance with Article 12.

 

1.44.        “ Trustee ” shall mean the trustee of the Trust.

 

1.45.        “ Unforeseeable Emergency ” shall mean, with respect to a Participant, a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  In making its determination, the Committee shall be guided by the prevailing authorities applicable under Section 409A.

 

Article 2

Eligibility

 

2.01.        Eligibility .  All Eligible Directors shall participate in the Plan.  An Annual DSU Grant or Pro Rata Annual DSU Grant will be credited to the Stock Account of each Eligible Director on an annual basis pursuant to Article 3.01.  In addition, each Eligible Director may elect to make an Annual Elective Deferral in respect of each Plan Year in accordance with Article 4.

 

Article 3
Annual DSU Grants

 

3.01.        Annual DSU Grants .

 

(a)           Establishment of Stock Account .  A Stock Account will be established under the Plan for each Eligible Director at the time that he or she becomes an Eligible Director.

 

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(b)           Crediting of Annual DSU Grant .  An Annual DSU Grant will be made at the commencement of each Service Period to all persons who are Eligible Directors on the Reference Date for such Annual DSU Grant; provided, however, that in the event of a contested election, a member of the Board who is not re-elected to the Board at the Company’s Annual Meeting of Stockholders shall not be treated as an Eligible Director as of the Reference Date.  The Annual DSU Grant will equal the quotient determined by dividing: (a) the Eligible Director’s Annual Fee by (b) the Market Value of a share of Company Stock on the Reference Date for such Annual DSU Grant.  Fractional DSUs will be credited to an Eligible Director’s Stock Account rounded to three decimal places.

 

(c)            Crediting of Pro Rata Annual DSU Grant.   An Eligible Director who first becomes an Eligible Director in a Service Period after the Reference Date for the Annual DSU Grant made in respect of such Service Period has occurred will be eligible to receive a “Pro Rata Annual DSU Grant” for such Service Period.  The Pro Rata Annual DSU Grant will be credited to the Eligible Director’s Stock Account on the Reference Date for such Pro Rata Annual DSU Grant and will equal the quotient determined by dividing: (a) the Eligible Director’s Pro Rata Annual Fee by (b) the Market Value of a share of Company Stock on the Reference Date for such Pro Rata Annual DSU Grant.  Fractional DSUs will be credited to an Eligible Director’s Stock Account rounded to three decimal places .

 

(d)           Revocability of Annual DSU Grant .  An Annual DSU Grant by the Committee is revocable until the date upon which the Committee actually credits the DSUs to the Participant’s Stock Account.

 

(e)           Effective of Subsequent Employment .  A Participant who becomes an employee of the Company or any of its Affiliates, or who, as a result of a determination by the Committee, shall no longer be eligible to continue to participate in the Plan, shall not be entitled to receive any additional Annual DSU Grants under this Article 3.01 in respect of any of his or her future services.  DSUs already credited to any such Participant’s Stock Account in respect of past Annual DSU Grants shall remain governed by the Plan and the Annual Enrollment Forms on file for such Participant, and such Participant shall be entitled to continue to have DSUs credited to such Participant’s Stock Account under Articles 5.03 and 5.04 until such Participant’s Settlement Date.

 

3.02.        Vesting .  A Participant shall be vested in his or her Annual DSU Grant in respect of each given Plan Year as set forth in the Annual Enrollment Materials for such Plan Year.  The vesting terms of the Annual DSU Awards set forth in the Annual Enrollment Materials shall be established by the Committee in its sole discretion and may vary for each Participant and each Plan Year.  Notwithstanding anything to the contrary contained in the Plan or any of the Annual Enrollment Materials, the Committee shall have the authority, exercisable in its sole discretion, to accelerate the vesting of any amounts credited to any Account of any Participant.

 

Article 4

Annual Elective Deferrals

 

4.01.        Enrollment Requirements for Annual Elective Deferrals .  As a condition to being eligible to make an Annual Elective Deferral for any Plan Year, each Eligible Director shall be

 

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required to complete, execute and return to the Committee each of the required Annual Enrollment Forms no later than the last day of the immediately preceding Plan Year or such earlier date as the Committee may establish from time to time, and in accordance with the requirements of Section 409A.  Notwithstanding the foregoing, in the case of a Newly Eligible Director, such Eligible Director shall complete, execute and return to the Committee or its designee each of the required Annual Enrollment Forms no later than 30 days following the date on which such Eligible Director first becomes eligible to participate in the Plan or such earlier date as the Committee may establish from time to time.  If an Eligible Director fails to meet all such requirements within the specified time period with respect to any Plan Year, the Eligible Director shall not be eligible to make any deferrals for that Plan Year.  An Eligible Director’s Annual Election Form shall be irrevocable once filed with the Committee, and may only be suspended pursuant to Article 4.07.

 

4.02.        Annual Elective Deferrals .

 

(a)           Deferral Election .  The Committee shall have sole discretion to determine the terms and conditions applicable to the Annual Elective Deferral.  To the extent permitted by the Committee and subject to the terms and conditions provided by the Committee, a Participant for a given Plan Year may make an election to defer the receipt of all or a portion of his or her Eligible Compensation for services rendered during that Plan Year.  The Participant’s election shall be evidenced by an Annual Election Form completed and submitted to the Committee in accordance with the procedures as may be established by the Committee in its sole discretion.

 

(b)           Minimum and Maximum Deferrals .  The Committee may from time to time designate in the Annual Enrollment Materials for a given Plan Year a minimum or maximum amount or percentage of Eligible Compensation that an Eligible Director may elect to defer under the Plan with respect to that Plan Year.

 

(c)         Deferral Deductions .  Annual Elective Deferral shall be deducted from the items of Eligible Compensation as follows:  (i) for periodic payments (e.g., meeting fees), in substantially equivalent amounts from each periodic payment during the Plan Year; and (ii) for one-time payments (e.g., annual retainers), at the time the compensation would otherwise have been paid to the Participant.

 

4.03.        Commencement of Participation .  Provided an Eligible Director has met all enrollment requirements set forth in the Plan in respect of a particular Plan Year and any other requirements imposed by the Committee, including signing and submitting all Annual Enrollment Forms to the Committee within the specified time period, the Eligible Director’s designated deferrals shall commence as of the first day of the particular Plan Year.  In the case of a Newly Eligible Director, designated deferrals shall commence as of the date such Newly Eligible Director’s Annual Enrollment Forms are received by the Committee, which shall be no later than 30 days following the date on which such individual first became eligible to participate in the Plan, and such Annual Election Form shall apply only with respect to the Eligible Compensation earned for services performed subsequent to the time such Annual Election Form is received by the Committee.

 

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4.04.        Crediting of Account .  The amounts deferred by a Participant in respect of services rendered during a Plan Year shall be referred to collectively as the “Annual Elective Deferral.”  The Annual Elective Deferral shall be credited on a quarterly basis to the Participant’s Stock Account and/or Cash Account, as determined in accordance with the Participant’s investment election pursuant to Article 5.01, with such crediting to occur on the Reference Date in respect of each Quarter.

 

4.05.        Subsequent Plan Year Annual Elective Deferrals .  The Annual Enrollment Forms submitted by a Participant in respect of such Participant’s elective deferrals for a particular Plan Year will not be effective with respect to any subsequent Plan Year.  If an Eligible Director is eligible to make elective deferrals under the Plan for a subsequent Plan Year and the required Annual Enrollment Forms are not timely delivered for the subsequent Plan Year, the Participant shall not be eligible to make any elective deferrals with respect to such subsequent Plan Year.

 

4.06.        Vesting .  A Participant shall be vested in her or her Annual Elective Deferrals as of the date such amounts are credited to such Participant’s Stock Account and/or Cash Account.  Notwithstanding anything to the contrary contained in the Plan or any of the Annual Enrollment Materials, the Committee shall have the authority, exercisable in its sole discretion, to accelerate the vesting of any amounts credited to any Account of any Participant.

 

4.07.      Suspension of Deferrals .

 

(a)           Unforeseeable Emergencies .  If a Participant experiences an Unforeseeable Emergency, the Participant may petition the Committee to suspend any deferrals required to be made by the Participant.  A petition shall be made on the form required by the Committee to be used for such request and shall include all financial information requested by the Committee in order to make a determination on such petition, as determined by the Committee in its sole discretion.  The Committee shall determine, in its sole discretion, whether to approve the Participant’s petition.  If the petition for a suspension is approved, suspension shall take effect upon the date of approval.  Notwithstanding the foregoing, the Committee shall not have any right to approve a request for suspension of deferrals if such approval (or right to approve) would cause the Plan to fail to comply with, or cause a Participant to be subject to a tax under the provisions of Section 409A.

 

(b)           Disability .  From and after the date that a Participant is deemed have suffered a Disability, any standing deferral election of the Participant shall automatically be suspended and no further deferrals shall be made with respect to the Participant.

 

(c)           Resumption of Deferrals .  If deferrals by a Participant have been suspended during a Plan Year due to an Unforeseeable Emergency or a Disability, the Participant will not be eligible to make any further deferrals in respect of that Plan Year.  The Participant may be eligible to make deferrals for subsequent Plan Years provided the Participant is selected to make deferrals for such subsequent Plan Years and the Participant complies with the election requirements under the Plan.

 

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Article 5

Investment Elections

 

5.01.        Initial Investment Elections .  Each Eligible Director who elects to make an Annual Elective Deferral under the Plan will be required to designate, at the time that he or she makes an Annual Elective Deferral, the portion of the Annual Elective Deferral that will be notionally invested in DSUs, which may be zero.  If a Participant elects to notionally invest a portion of his or her Annual Elective Deferral in DSUs, the number of DSUs that will be credited to a Participant’s Stock Account in respect of his or her Annual Elective Deferral will be determined quarterly on the Reference Date and credited to such Participant’s Stock Account as of such date, and will be equal to the quotient obtained by dividing (a) the amount of the Annual Elective Deferral for such Quarter that the Participant has notionally elected to invest in DSUs by (b) the Market Value of a share of Company Stock on the Reference Date for such Quarter.  Any portion of the Participant’s Annual Elective Deferral that is not notionally invested in DSUs will be credited to the Participant’s Cash Account, where it will earn interest at the Cash Account Interest Rate.

 

5.02.        Changes to Investment Elections .  A Participant may, on a Quarterly basis, elect to notionally invest a portion of the funds notionally invested in his or her Cash Account in DSUs at such times as