AMERIPRISE FINANCIAL SENIOR EXECUTIVE SEVERANCE PLAN

 

AMERIPRISE FINANCIAL SENIOR EXECUTIVE SEVERANCE PLAN

 

INTRODUCTION

 

The Board of Directors of Ameriprise Financial, Inc. established the Ameriprise Financial Senior Executive Severance Plan (hereinafter referred to as the “Plan”), effective as of September 30, 2005 and restated as of November 14, 2005, to provide for severance benefits for certain eligible senior executives of Ameriprise Financial, Inc. and its participating subsidiaries whose employment is terminated under certain conditions. Severance benefits under the Plan are to be provided to such eligible executives in exchange for a signed agreement that includes a release of all claims.

 

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ARTICLE ONE

DEFINITIONS

 

1.1.                               “Affiliated Company” means any corporation which is a member of a controlled group of corporations (determined in accordance with Section 4l4(b) of the Code) of which the Company is a member and any other trade or business (whether or not incorporated) which is controlled by, or under common control (determined in accordance with Section 4l4(c) of the Code) with the Company, but which is not an Employing Company.

 

1.2.                               “Base Salary” means the regular basic cash remuneration before deductions for taxes and other items withheld, payable to an Employee for services rendered to an Employing Company, but not including pay for bonuses, incentive compensation, special pay, awards or commissions.

 

1.3.                               “Board of Directors” means the board of directors of the Company.

 

1.4.                               “Bonus” means the greater of:  (1) the largest of any one of the last three annual incentive compensation amounts paid to an Employee over and above Base Salary earned and paid in cash or otherwise under any executive bonus or sales incentive plan or program of an Employing Company or (2) the Employee’s designated target bonus.

 

1.5.                               “Change in Control” has 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 this Plan as a result of any event or transaction to the extent that treating such event or transaction as a Change in Control would cause any tax to become due under Section 409A of the Code.

 

1.6.                               “Code” means the Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.

 

1.7.                               “Committee” means the Compensation and Benefits Committee of the Board of Directors or any committee established and appointed by the Board of Directors or by a committee of the Board of Directors, or any successor committee appointed by the Board of Directors to administer the Plan.

 

1.8.                               “Company” means Ameriprise Financial, Inc., a Delaware corporation, its successors and assigns.

 

1.9.                               “Comparable Position” means a job with the Company, an Employing Company, an Affiliated Company or successor company at the same or higher Total Cash Compensation as an Employee’s current job and at a work location within reasonable commuting distance from an Employee’s home, as determined by such Employee’s Employing Company. For Employees in a qualifying international

 

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expatriate program adopted by an Employee’s Employing Company, “Comparable Position” means a job with an Employing Company, an Affiliated Company or successor company at the same or higher Total Cash Compensation as an Employee’s current job and at a work location in the Employee’s country of assignment, home country or career base country.

 

1.10.                         “Completed Years of Service” means the number of full one-year periods that have transpired since the Employee’s original date of hire or, in the case of someone who has incurred a break in service as defined in the Ameriprise Financial Retirement Plan, the adjusted date of hire, through the Employee’s last day of active employment with the Company. The determination of Completed Years of Service will take into account years of service with American Express Company if and to the extent, and in accordance with, the provisions of the Employee Benefits Agreement by and between American Express Company and Ameriprise Financial, Inc., dated as of September 30, 2005 (the “Employee Benefits Agreement”).

 

1.11.                         “Constructive Termination” means resignation or other employment termination by an Employee from an Employing Company as a result of one or more of the following without the Employee’s written consent within two (2) years after a Change in Control:

 

(a)           a reduction in Base Salary, except for across-the-board changes similarly affecting all Employees of the Employing Company and all Employees of any Person in control of the Employing Company, or any material reduction in the aggregate of the Employee’s annual target bonus and long term incentive opportunity, in each case from that in effect immediately prior to the Change in Control,

 

(b)           the Employing Company’s requirement that the Employee be based more than fifty (50) miles from the location at which the Employee was based immediately prior to the Change in Control and which location is more than thirty-five (35) miles from the Employee’s residence,

 

(c)           the assignment to the Employee of any duties that are materially inconsistent with the Employee’s duties prior to the Change in Control, or

 

(d)           a significant reduction in the Employee’s position, duties, or responsibilities from those in effect prior to the Change in Control.

 

1.12.                         “Defined Termination” means a termination of employment of an Employee within two (2) years after a Change in Control that occurs as a result of either:

 

(a)           an Involuntary Termination, or

 

(b)           a Constructive Termination.

 

1.13.                         “Disability” shall have the meaning set forth in Section 409A of the Code.

 

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1.14.                         “Employee” means any person, at the senior executive level as defined by the Committee, paid through the payroll function of the Employing Company (as opposed to the accounts payable function of the Employing Company) and employed on a regular full-time basis ( i.e. , an employee whose scheduled workweek is consistent with the standard workweek schedule of a business unit or department) or regular part time basis ( i.e. , an employee who is scheduled to work at least twenty (20) hours per week, but fewer than the hours of a regular full-time employee) by an Employing Company, who receives from an Employing Company a regular stated compensation and an annual IRS Form W-2; provided, however, that an Employing Company or operating business unit thereof, due to business, marketplace or employee relations reasons, may, in its sole discretion, by policy exclude from the definition of Employee under the Plan any category or level of Employee employed in a non-exempt, exempt or executive level position or in an initial probationary or trial period of employment. The term “Employee” shall not include any person who has entered into an independent contractor agreement, consulting agreement, franchise agreement or any similar agreement with an Employing Company, nor the employees of any such person, regardless of whether that person (including his or her employees) is later found to be an employee by any court of law or regulatory authority.

 

1.15.                         “Employing Company” means each of the Company and the subsidiary and affiliated companies of the Company listed on Schedule A attached hereto, as such Schedule A may be amended by the Committee, in its sole discretion, from time to time.

 

1.16.                         “ERISA” means the Employee Retirement Income Security Act of l974, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.

 

1.17.                         “Good Cause” means a discontinuance of an Employee’s employment by an Employing Company upon one of the following:

 

(a)           an Employee’s Willful and continued failure to adequately perform substantially all of the Employee’s duties with an Employing Company,

 

(b)           an Employee’s Willful engagement in conduct which is demonstrably and materially injurious to an Employing Company or an affiliate thereof, monetarily or otherwise, or

 

(c)           an Employee’s conviction of, or entering a plea of guilty or nolo contendere to (i) a felony or (ii) any misdemeanor that disqualifies an Employee from employment with an Employing Company.

 

1.18.                         “Involuntary Termination” means any involuntary discontinuance of an Employee’s employment by an Employing Company for reasons other than Good Cause within two (2) years after a Change in Control.

 

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1.19.                         “Leave of Absence” means the period during which an Employee is absent from work pursuant to a leave of absence granted by an Employing Company.

 

1.20.                         “Person” means a “person” as such term is used in Section 13(d) and 14(d) of the Securities and Exchange Act of 1934 (the “Exchange Act”), including any “group” within the meaning of Section 13(d)(3) under the Exchange Act.

 

1.21.                         “Plan” means the Ameriprise Financial Senior Executive Severance Plan, as set forth herein and as hereafter amended from time to time.

 

1.22.                         “Retirement” means early, normal or deferred retirement as defined in and meeting the terms and conditions of the Ameriprise Financial Retirement Plan, as amended, or any successor plan thereto.

 

1.23.                         “Separation Period” means the period of time over which an Employee receives severance benefits under the Plan in biweekly or other installment payments.

 

1.24.                         “Specified Employee” means a key employee (as defined for purposes of Section 409A of the Code) of an Employing Company, as determined by the Committee in its sole discretion.

 

1.25.                         “Termination of Active Employment” means the date on which an Employee ceases performing services for an Employing Company.

 

1.26.                         “Total Cash Compensation” means an Employee’s Base Salary and any Bonus.

 

1.27.                         “Willful” means that an act or failure to act on an Employee’s part is done, or omitted to be done, by the Employee in a manner that is not in good faith, and that is without reasonable belief that such action or omission was in the best interests of an Employing Company.

 

1.28.                         The masculine pronoun shall be construed to mean the feminine and the singular shall be construed to mean the plural, wherever appropriate herein.

 

1.29.                         Headings in this document are for identification purposes only and do not constitute a part of the Plan.

 

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ARTICLE TWO

ELIGIBILITY TO RECEIVE BENEFITS

 

2.1.                               Eligibility to Receive Benefits . Each Employee shall be eligible to receive benefits under the Plan in the event his employment is terminated by an Employing Company for one of the following reasons:

2.1.1.                      Reduction in force;

2.1.2.                      Position elimination;

2.1.3.                      Office closing;

2.1.4.                      Poor performance;

2.1.5.                      Mutually satisfactory resignation;

2.1.6.                      Relocation of an Employee’s current position that does not meet the definition of Comparable Position;

2.1.7.                      Defined Termination, as defined in Section 1.12, (applicable only within two (2) years after a Change in Control), and notwithstanding any provision of Section 2.3.

 

The Committee may, in its sole discretion, grant eligibility to receive benefits under the Plan to any Employee or group of Employees employed in a business unit of the Company or an Employing Company who terminate employment due to a sale of such business unit not later than six (6) months following such sale.

 

2.2.                               Limitations on Eligibility . In the event an Employee who is otherwise eligible to receive benefits under the Plan is offered a Comparable Position (whether the position is accepted or rejected by the Employee), he will not be eligible to receive benefits under the Plan. In addition, an Employee is not eligible to receive benefits under the Plan if the Employee accepts any position in the Employing Company, an Affiliated Company or successor company (regardless of whether it is a Comparable Position). An Employee who is offered or placed on a temporary layoff status (often referred to as a furlough) with reduced or no pay for a period of less than six (6) months during which time the Employee continues to participate in certain benefit plans as determined by the Company is not eligible to receive benefits under the Plan.

 

2.3.                               Ineligibility to Receive Benefits . An Employee is ineligible to receive benefits under the Plan in the event his employment by an Employing Company terminates for a reason other than those enumerated in Section 2.1 above, including, but not limited to, the following:

2.3.1.                      Voluntary resignation;

2.3.2.                      Failure to report for work;

2.3.3.                      Failure to return from leave;

2.3.4.                      Return from a Leave of Absence which extends beyond the policy reinstatement period, if applicable, and no position is available;

2.3.5.                      Excessive absenteeism or lateness;

 

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2.3.6.                      Merger, acquisition, sale, transfer, outsourcing or reorganization of all or part of the Employing Company that does not constitute a Change in Control where either (i) a Comparable Position is offered with, or (ii) the Employee accepts any position (regardless of whether it is a Comparable Position) with, a successor company, whether affiliated or unaffiliated with the Employing Company, including an outside contractor, and whether or not the successor company participates the Plan.

2.3.7.                      Violation of a policy or procedure of the Employing Company, insubordination, unwillingness to perform the duties of a position, or other misconduct;

2.3.8.                      Retirement, including the acceptance of any Employing Company sponsored retirement incentive; provided, however, that in the event an Employee is otherwise eligible for a severance pay benefit in accordance with Section 2.1 above and also eligible for Retirement, the Employee shall be eligible to receive benefits under the Plan in accordance with Article 3 below;

2.3.9.                      Death; or

2.3.10.                Disability.

 

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ARTICLE THREE
AMOUNT OF BENEFITS

 

3.1                                  Amount of Benefits. The severance benefit payable to an eligible Employee under the Plan shall be based on his Completed Years of Service and position with the Company, Employing Company or an Affiliated Company. The formula for determining an Employee’s severance benefit payment shall be calculated by first adding together (i) the Employee’s annual Base Salary in effect immediately prior to the date of Termination of Active Employment; provided that, in the case of an Employee whose employment is terminated pursuant to 1.11(a), then the Base Salary that was in effect immediately before such reduction in Base Salary, and (ii) the Employee’s Bonus. The sum of subsections (i) and (ii) above shall then be divided by fifty-two (52) to calculate the weekly severance benefit. The amount of the total severance benefit to which an Employee may be entitled is set out in Schedule B.

 

Notwithstanding the foregoing and in accordance with the terms of the Employee Benefits Agreement, any Employee who was eligible to receive severance benefits under the American Express Company Senior Executive Severance Plan immediately prior to the Distribution Date (as defined in the Employee Benefits Agreement) and becomes eligible to receive severance benefits pursuant to the Plan during the period commencing on the Distribution Date (as defined in the Employee Benefits Agreement) and ending on the first anniversary of the Distribution Date, shall receive an amount of severance benefit that is not less than the number of weeks of pay that such Employee would have received under the American Express Company Senior Executive Severance Plan as in effect immediately prior to the Distribution Date.

 

3.2                                  Special Retirement Program Contributions . An Employee eligible for benefits under the Plan due to a Defined Termination resulting from a Change in Control shall, in addition to the benefits provided above in Article 3.1, receive the value of Company contributions that would have been made to the Ameriprise Financial Retirement Plan, Ameriprise Financial
401(k) Plan, Ameriprise Financial Supplemental Retirement Plan or other similar plans adopted by the Company, for the period during which the Employee is receiving weekly severance payments under this Plan. Effective on the date of the Defined Termination, this amount will be credited to the Employee’s book reserve account in the Ameriprise Financial Supplemental Retirement Plan, consistent with the terms of such plan.

 

3.3                                  Limitations on Amount of Severance Benefits . Severance benefits payable under the Plan shall be inclusive of and offset by any other severance, redundancy or termination payment made by an Employing Company to an Employee, including, but not limited to, any amounts paid pursuant to federal, state, local or foreign government worker notification ( e.g. , Worker Adjustment and Retraining Notification Act) or office closing requirements, any amounts owed the Employee pursuant to a contract with the Employing Company (unless the contract specifically provides otherwise) and amounts paid to an Employee placed in a temporary layoff status (often referred to as a furlough) which immediately precedes the commencement of the severance payments.

 

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3.4                                  Reemployment . In the event an Employee is reemployed by the Employing Company or an Affiliated Company within the period covered by the schedule of severance benefits in Section 3.1 above, the severance benefits, if any, that are in excess of the number of weeks between the Termination of Active Employment and the rehire date shall be repaid by the Employee or withheld by the Employing Company, as the case may be. In the further event an eligible Employee who is receiving severance benefits under the Plan is later rehired by an Employing Company or an Affiliated Company, and employment later terminates under conditions making such Employee eligible for severance benefits under the Plan, the amount of the second severance benefit will be based on such Employee’s actual date of reemployment and not the original date of employment; provided, however, that any benefits withheld or repaid in accordance with the preceding sentence that are in excess of one (1) year shall be additionally paid to the terminating Employee.

 

3.5                                  Withholding Tax . The Employing Company shall deduct from the amount of any severance benefits payable under the Plan, any amount required to be withheld by the Employing Company by reason of any law or regulation, for the payment of taxes or otherwise to any federal, state, local or foreign government. In determining the amount of any applicable tax, the Employing Company shall be entitled to rely on the number of personal exemptions on the official form(s) filed by the Employee with the Employing Company for purposes of income tax withholding on regular wages.

 

3.6                                  Requirement of Signed Agreement . Receipt of severance benefits under the Plan is conditioned upon the Employee signing an agreement with the Employee’s Employing Company in a form satisfactory to the Company and in accordance with the requirements of applicable law (the “Agreement”). The Agreement must include a release of claims and may include whatever other terms the Employing Company deems appropriate, including restrictive covenants. If the terms of the Agreement are found to be legally unenforceable, the Employee must return any severance benefits paid pursuant to Section 3.1 of the Plan plus the value of any long term incentive awards which vested during the Separation Period; provided, however, that in the event the Employee has a Defined Termination, such restrictive covenants shall: (a) be reasonable under the applicable facts and circumstances; (b) include the following (i) non-solicitation of customers and employees; (ii) confidentiality of business data; (iii) full release of claims; and (iv) non-denigration of the Company and its affiliates, and their officers, directors and agents and (c) not include any non-competition limitations. Notwithstanding anything herein to the contrary, the Company shall, for a period of two (2) years and one (1) day following a Change in Control, be prohibited from entering into any agreement with an Employee, which contains a more expansive Competitor List (as provided in Paragraph 2 of the Consent to the Application of Forfeiture and Detrimental Conduct Provisions to Long-Term Incentive Awards relating to awards issued under the Ameriprise Financial 2005 Incentive Compensation Plan) than that which was in effect for such Employee immediately prior to the date of such Change in Control. If an Employee has already signed an Agreement as required by Section 3.6 prior to the date of a Change in Control, the Employee is not eligible to receive any benefits that would otherwise be triggered by a Change in Control, except as provided by Section 4.2.

 

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3.7           Excise Tax .

 

(a)           Section 3.7 shall apply in the event of a Change in Control, as defined in Section 1.5 hereof.

 

(b)           In the event that any payment or benefit received or to be received by an Employee from the Company, an Employing Company or any Affiliated Company in connection with a Change in Control or termination of such Employee’s employment (such payments and benefits, excluding any Gros