Exhibit 10 (p)
Alberto-Culver
Company
Executive Deferred Compensation
Plan
Table of
Contents
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I.
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Preamble, Definitions and
Purpose
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1
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1.1
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Preamble
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1
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1.2
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Definitions
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1
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1.3
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Purpose
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3
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1.4
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Bonus Deferrals
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3
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II.
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Participation
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4
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2.1
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Participation, Notification and
Election
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4
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2.2
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Deferral Procedure
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4
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2.3
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Intentionally Omitted
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5
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2.4
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Establishment of
Accounts
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5
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2.5
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Account Valuation and
Earnings
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5
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2.6
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Benefit Payments
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5
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2.7
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Intentionally Omitted
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6
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2.8
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Additional Company
Contributions
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6
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2.9
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Change in Control
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8
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III.
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General
Provisions
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8
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3.1
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Funding
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8
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3.2
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Vesting
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8
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3.3
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In-Service Withdrawals
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9
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3.4
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Beneficiary
Designation
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9
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3.5
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Death Benefits
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10
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3.6
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Administration
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10
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3.7
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Administrative Fees and
Expenses
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10
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3.8
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Claims Procedure
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10
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3.9
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Tax Liability
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11
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IV.
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Exempt Status
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12
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V.
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Indemnification
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12
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VI.
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Amendment and
Termination
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12
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VII.
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Miscellaneous
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12
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7.1
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Nonassignability
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12
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7.2
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No Contract of
Employment
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12
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7.3
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Participant Litigation
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13
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7.4
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Participant and Beneficiary
Duties
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13
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7.5
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Governing Law
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13
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7.6
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Validity
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13
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7.7
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Notices
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13
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7.8
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Successors
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13
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I.
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Preamble, Definitions and
Purpose
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Pursuant to this plan document,
Alberto-Culver Company will maintain an unfunded deferred
compensation plan, to be established as of the date that the
Delaware corporation having the name or previously having the name
New Sally Holdings, Inc. (“New Sally”) distributes the
then outstanding Common Stock of the Company to holders of common
stock $.01 par value per share of New Sally (“Effective
Date”), and to be known as the Alberto-Culver Company
Executive Deferred Compensation Plan (“Plan”). Under
the terms of the Plan, eligible employees of the Alberto-Culver
Company and certain of its domestic subsidiaries are allowed to
defer a portion of their Compensation. Participants and their
beneficiaries shall have no interest in any Company assets as a
source of funds to satisfy the benefit obligations under the Plan.
The Plan constitutes an unsecured promise by the Company to make
benefit payments in the future and Participants shall have the
status of general unsecured creditors of the Company.
The Plan was approved by the
stockholders of the Company on November 13, 2006. At the time
of approval by the stockholders of the Company, the name of the
Company was New Aristotle Holdings, Inc. Following the time of
adoption, the name of the Company will be changed to Alberto-Culver
Company. At the time of adoption of the Plan by the Company, a plan
with the same name was maintained by Alberto-Culver Company, as
then constituted (EIN: 36-2257936) (the “Prior Plan”).
As of the Effective Date, (i) all amounts that were deferred
or became vested under the Prior Plan on or after January 1,
2005 with respect to current or former employees of the Company
shall be credited to Participant accounts and be paid pursuant to
the terms of this Plan, and (ii) all amounts that were
deferred or became vested prior to January 1, 2005 with
respect to current or former employees of the Company shall
continue to be governed by the Prior Plan.
Capitalized terms are generally
defined in the Section where used. The following terms appear in
several Sections and are defined below for convenient
reference:
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(a)
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“Beneficiary” -One or
more individuals, trusts or other entities that are designated in
the most recent writing by the Participant to receive a benefit in
the event of the Participant’s death. If more than one
Beneficiary survives the Participant, such benefit payments shall
be made equally to all such Beneficiaries, unless otherwise
indicated by the Participant on the beneficiary form.
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(b)
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“Code” -The Internal
Revenue Code of 1986, as amended.
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(c)
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“Compensation” -The
salary and commissions, where applicable, and bonuses of an
employee as set by the Company for a Plan Year, exclusive of any
amounts payable under severance plans, option plans, and any other
benefit or welfare plan of the Company now or hereafter existing;
provided, that Compensation shall also include incentive pay under
the Company’s management incentive plans, middle management
bonus plans and sales incentive plans, but expressly excluding any
incentive pay under the Company’s 1994 Shareholder Value
Incentive Plan. The Plan Administrator shall have the discretion to
determine which type of incentive pay are included in
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Compensation under the foregoing
definition, which includes the authority to add or delete incentive
plans of the Company.
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(d)
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“Compensation
Committee” -the Compensation and Leadership Development
Committee of the Board of Directors of Alberto-Culver
Company.
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(e)
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“Company”
-Alberto-Culver Company and any direct or indirect domestic
subsidiaries which, with the consent of Alberto-Culver Company,
adopts this Plan by resolution of its board of directors. On the
date hereof , Alberto-Culver (P.R.) Inc., Alberto-Culver USA, Inc.,
St. Ives Laboratories, Inc., Pro-Line International, Inc.,
Alberto-Culver Overseas, Inc., and Alberto-Culver International,
Inc. have adopted this Plan with the consent of Alberto-Culver
Company.
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(f)
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“Deferral Agreement
Form” -A written agreement between a Participant and the
Company to defer receipt of future Salary Compensation and/or Bonus
Compensation. The Plan Administrator may amend this form from time
to time. The Plan Administrator may adopt procedures providing for
the Deferral Agreement Form to consist of elections made by a
Participant using a website, telephone voice response system, or
other electronic means.
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(g)
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“Disability” –
A 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, and which entitles
the Participant to receive disability benefits for a period of not
less than 3 months under the Alberto-Culver Company Long Term
Disability Plan or any other plan maintained by the
Company.
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(h)
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“Eligible
Compensation” -The salary and commissions, where applicable,
of an employee as set by the Company for a Plan Year, exclusive of
any amounts payable under bonus and incentive plans, severance
plans, option plans, and any other benefit or welfare plan of the
Company now or hereafter existing.
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(i)
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“Excess Compensation”
-Compensation that cannot be taken into account under the 401(k)
Plans or the Profit-Sharing Plan because such Compensation exceeds
the limit on maximum includable compensation established under
Section 401(a)(17) of the Code.
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(j)
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“ERISA” -The Employee
Retirement Income Security Act of 1974, as amended.
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(k)
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“401(k) Plan” -The
Alberto-Culver 401(k) Savings Plan and, if so determined by the
Compensation Committee, any other plan sponsored by a participating
Company that provides a cash or deferred election under
Section 401(k) of the Code.
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(l)
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“Highly Compensated
Employee” -an employee of the Company whose Eligible
Compensation is greater than the dollar amount set forth in Code
Section 414(q) (or any successor provision), as adjusted by
the Internal Revenue Service from time to time.
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(m)
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“Key Employee”
– A Participant who is a “specified employee” as
defined in Section 409A of the Code. The status of
Participants as Key Employee shall be determined as of the last day
of each Plan Year, and shall apply for the 12-month period
beginning on the following April 1.
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(n)
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“Bonus Compensation”
– The annual cash bonus paid under either the Alberto-Culver
Company Management Incentive Plan (“MIP”) or Management
Bonus Plan (“MBP”).
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(o)
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Intentionally Omitted
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(p)
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“Salary Compensation”
– Salary and commissions, where applicable, of any employee
as set by the Company for a Plan Year.
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(q)
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“Participant” -A
Highly Compensated Employee who meets the participation
requirements set forth in Section 2.1 and either elects to
participate in the Plan in accordance herewith or is credited with
additional contributions pursuant to Section 2.8.
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(r)
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“Plan Administrator”
-An individual selected from time to time by the Compensation
Committee to administer the Plan and perform all accounting and
administrative functions in connection therewith. All or a portion
of the accounting and administrative functions may be delegated by
the Plan Administrator to a third party.
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(s)
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“Plan Year” -Each 12
consecutive month period commencing on January 1 and ending on
December 31.
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(t)
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“Profit-Sharing Plan”
-The Alberto-Culver Company Employees’ Profit Sharing
Plan.
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(u)
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“Termination of
Employment” –Any “separation from service”
within the meaning of Section 409A of the Code.
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Alberto-Culver Company and certain
of its domestic subsidiaries sponsor the 401(k) Plans for the
benefit of their U.S. employees and their beneficiaries. Each of
the 401(k) Plans operate as a “qualified plan”, as
defined under the Code, and therefore are subject to deferral
limitations contained therein. The Plan is established to mitigate
the effect of these limitations by allowing Participants to defer a
greater portion of their Compensation and the earnings thereon than
is permitted solely under the 401(k) Plans, and to provide for
certain other forms of deferred compensation for
Participants.
Participants under the MIP and MBP
will be entitled to defer a portion of their Bonus Compensation
under the terms of this Plan, provided such participants qualify as
a Highly Compensated Employee. All such amounts deferred hereunder
shall be governed by the terms of this Plan and not by the terms of
the MIP or MBP. In no event shall any deferral of Bonus
Compensation exceed the actual cash bonus paid under the MIP or
MBP, less all amounts withheld therefrom.
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2.1
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Participation, Notification
and Election
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The Plan Administrator shall provide
notification to the Highly Compensated Employees of their
eligibility to participate in the Plan. The determination of
whether an employee is a Highly Compensated Employee will be
calculated based upon such employee’s applicable Eligible
Compensation in the preceding calendar year. The determination of
whether a new hire is a Highly Compensated Employee will be
calculated based upon such new hire’s initial annual salary
(without regard to commissions, if any) at the time of hire. The
Plan Administrator shall further provide eligible employees with a
Deferral Agreement Form. Eligible employees shall elect on the
Deferral Agreement Form for the applicable Plan Year, the
(i) percentage of Salary Compensation and/or Bonus
Compensation to be deferred in that Plan Year,
(ii) commencement date of distributions with respect to
deferrals made in such Plan Year, (iii) method of distribution
which may be either a single-sum distribution or annual
distribution installments which can be no more than ten, and
(iv) any other elections required by the Plan Administrator
and set forth on the Deferral Agreement Form. In the case of annual
installments, each installment shall be equal to the balance in the
Participant’s account immediately prior to the installment
divided by the number of remaining installments, and if any
distribution to a Key Employee is required to be deferred until six
months after his termination of employment, such deferral shall
apply only to the first installment and the remaining installments
shall be paid in accordance with the original schedule. A
Participant is not permitted to (i) defer Salary Compensation
or Bonus Compensation for a pay period which has commenced prior to
the date on which the Deferral Agreement Form is signed by the
Participant and delivered to the Plan Administrator and
(ii) with the exception of the Participant’s termination
of employment with the Company or a Change in Control as set forth
in Section 2.9, defer Salary Compensation or Bonus
Compensation for a period of time less than three years from the
commencement date of such deferrals.
Upon receipt of a properly completed
and timely executed Deferral Agreement Form, the Company will
withhold from each paycheck, the designated percentage of the
Participant’s Salary Compensation and/or Bonus Compensation.
Changes in salary during the Plan Year shall be subject to the same
Compensation deferral percentage as previously elected and
indicated on the Deferral Agreement Form. Subject to applicable
law, the deferral amount shall not be included as wages subject to
federal income tax on the Participant’s federal income tax
withholding statement. Participant deferrals shall be subject to
employment taxes, including Federal Insurance Contributions Act
contributions, and any state or local taxes as required. The
Participant must elect to defer not less than 1% and not more than
100% of his/her Salary Compensation and/or Bonus Compensation,
provided that under no circumstances shall the amount of
(i) Bonus Compensation deferred exceed 100% of the
Participant’s Bonus Compensation less all amounts withheld
therefrom or (ii) Salary Compensation deferred exceed 100% of
the Participant’s Salary Compensation less all amounts
withheld therefrom. Such deferral percentages must be in 1%
increments.
All elections shall be made before
the beginning of the Plan Year in which the services are to be
performed with the exception of a new hire. A new hire will be
allowed to participate in the Plan
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provided such employee submits a Deferral
Agreement Form within 30 days of the date of hire. In such an
event, the new employee shall become a Participant on the first day
of the first payroll period beginning in the next calendar quarter
following the date on which the Deferral Agreement Form is
submitted to the Plan Administrator. If the new employee is
eligible to receive, and elects to defer, Bonus Compensation for
the year in which he is hired, the deferral election shall apply
only to the portion of his Bonus Compensation attributable to the
period after the date of the Deferral Agreement Form, determined by
daily proration. If a new employee fails to submit a Deferral
Agreement Form within such 30 day period, the new employee will not
be allowed to participate in the Plan until the beginning of the
next Plan Year. Each Plan Year, Participants will be required to
complete a new Deferral Agreement Form prior to the commencement of
such Plan Year if they wish to defer income for that Plan
Year.
If in any Plan Year the Company
determines that incentive pay, or any portion thereof, cannot be
included in Compensation under the Profit-Sharing Plan or any
401(k) Plan without adversely affecting the tax qualified status of
such Plan, the Plan Administrator may adopt procedures consistent
with Section 409A of the Code to permit each Participant who
is otherwise a Highly Compensated Employee to elect to defer a
percentage of the net amount of such incentive pay.
Notwithstanding the foregoing,
deferrals under this Plan for the 2006 Plan Year shall be governed
by deferral elections made for the 2006 plan year under the Prior
Plan.
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2.3
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Intentionally
Omitted.
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2.4
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Establishment of
Accounts
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Each Participant shall have an
account established by the Plan Administrator and Participant
statements will be distributed to Participants in the Plan on not
less than a quarterly basis. The Company will maintain an accrual
for the aggregate amount of deferred benefits under the Plan on the
Company’s accounting records. A Participant’s account
may be divided into subaccounts as necessary to reflect different
payment or vesting terms, or for other purposes as the Plan
Administrator may determine.
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2.5
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Account Valuation and
Earnings
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The account established for each
Participant under Section 2.4 will be valued on not less than
a quarterly basis. Such account shall be adjusted quarterly to
reflect a reasonable fixed annual rate of interest as determined by
the Compensation Committee. This rate may be prospectively adjusted
on an annual or more frequent basis as deemed appropriate by the
Compensation Committee. The rate chosen by the Compensation
Committee from time to time shall apply to the entire balance of
all Participants’ accounts.
Except as otherwise provided in
Sections 2.7 and 2.8, the account established for each Participant
under Section 2.4 shall be payable to the Participant as
provided in the Deferral Agreement Form (or, in the case of a
Participant who is allocated a contribution without having entered
into a Deferral Agreement Form, in such manner as the Participant
may elect upon commencing participation in accordance with
procedures established by the Plan Administrator). The Plan
Administrator may allow, in its discretion, for amendments by
Participants to his
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Deferral Agreement Form with respect to the
timing of deferred payments thereunder, provided such amendments to
the timing of deferred payments are in accordance with
Section 409A of the Code, and provided further that for
purposes of Section 409A of the Code all installment payments
shall be treated as a single payment. In the event of any of the
following occurrences, the vested portion of the account
established for each Participant under Section 2.4 shall be
payable to the P
