Exhibit 10.23
PHYSICIANS FORMULA HOLDINGS,
INC.
AMENDED AND
RESTATED
2005 NONQUALIFIED DEFERRED
COMPENSATION PLAN
Section 1
Definitions
1.1 “ Board
of Directors ” and “ Board ” mean the
board of directors of the Company.
1.2 “
Cause ” means the occurrence of one or more of the
following events:
(a) Conviction of a
felony or any crime or offense lesser than a felony involving the
property of the Company or a Subsidiary;
(b) Conduct that has
caused demonstrable and serious injury to the Company or a
Subsidiary, monetary or otherwise; or
(c) Willful refusal to
perform or substantial disregard of duties properly assigned, as
determined by the Company; or
(d) Breach of duty of
loyalty to the Company or a Subsidiary or other act of fraud or
dishonesty with respect to the Company or a Subsidiary.
1.3 “ Change
in Control ” means:
(a) If any
“person” or “group” as those terms are used
in Sections 13(d) and 14(d) of the Exchange Act or any successors
thereto, other than an Exempt Person, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act or any successor thereto), directly or indirectly, of
securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding
securities; or
(b) Consummation of a
merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in all or a
portion of the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
or
(c) A sale or
disposition by the Company of all or substantially all the
Company’s assets, other than a sale to an Exempt
Person.
1.4 “
Code ” means the Internal Revenue Code of 1986, as
amended. Any reference to a Code Section shall also
include reference to any Treasury regulations promulgated
thereunder.
1.5 “
Committee ” means the Compensation Committee of the
Board, which shall consist solely of two or more members of the
Board.
1.6 “
Company ” means Physicians Formula Holdings, Inc., a
Delaware corporation.
1.7 “
Compensation ” means total taxable salary, bonuses and
commissions paid to a Participant by the Employer (determined
without regard to any amounts in the Participant’s Deferred
Compensation Account).
1.8 “
Deferred Compensation Account ” means the book-keeping
account maintained under the Plan in the Participant’s name
to reflect amounts deferred under the Plan pursuant toSection 3 (as
adjusted under Section 4).
1.9 “
Deferral Election ” means a written notice filed by
the Participant with the Employer specifying the Compensation to be
deferred by the Participant.
1.10 “
Disabled ” means, with respect to a Participant, any
medically determinable physical or mental impairment (a) 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 (b) that causes
the Participant (i) to be unable to engage in any substantial
gainful activity or (ii) to be eligible to receive income
replacement benefits for a period of not less than 3 months under
an accident and health plan of the Company that covers the
Participant. Whether a Participant is Disabled shall be
determined by the Committee, and in making such determination, the
Committee may rely on the opinion of a physician (or physicians)
selected by the Committee for such purpose; provided that in such
event the Participant is also “disabled” as defined in
Code Section 409A.
1.11 “
Distribution Date ” means the date a Participant first
becomes entitled to receive payment of the Participant’s
Deferred Compensation Account pursuant to Subsection
5.1.
1.12 “
Effective Date ” means January 1, 2005.
1.13 “
Exchange Act ” means the Securities Exchange Act of
1934, as amended.
1.14 “
Employee ” means an employee of an Employer who meets
the eligibility criteria set forth in Subsection 3.1 of the Plan
and who is a member of a select group of management or highly
compensated employees as defined under ERISA or the regulations
thereunder.
1.15 “
Employer ” means, individually, the Company and each
Subsidiary of the Company that adopts the Plan in accordance with
Subsection 7.1. The Company and any Subsidiaries that adopt the
Plan are sometimes collectively referred to herein as the
“Employers.”
1.16 “
ERISA ” means the Employee Retirement Income Security
Act of 1974, as amended from time to time. Any reference to a
section of ERISA includes any comparable section or sections of any
future legislation that amends, supplements or supersedes that
section.
1.17 “ Exempt
Person ” means (i) Summit Master Company, LLC, Summit
Partners, LLC, Summit Partners, L.P. or any of their affiliates,
(ii) any person, entity or group under the control of any party
included in clause (i), or (iii) any employee benefit plan of the
Company or a trustee or other administrator or fiduciary holding
securities under an employee benefit plan of the
Company.
1.18 “
Participant ” means an Employee who meets the
eligibility criteria set forth in Subsection 3.1 and who has made a
Deferral Election in accordance with the terms of the
Plan.
1.19 “
Plan ” means this 2005 Nonqualified Deferred
Compensation Plan, as amended effective August 30, 2006, and as
amended and restated effective December 30, 2008.
1.20 “ Plan
Year ” means the calendar year.
1.21 “
Unforeseeable Financial Emergency ” means a severe
financial hardship of the Participant resulting from:
(a) A sudden and
unexpected illness or accident of the Participant or of a dependent
of the Participant;
(b) Loss of the
Participant’s principal residence due to casualty;
or
(c) Such other similar
extraordinary and unforeseeable circumstances resulting from events
beyond the control of the Participant;
provided that
such Unforeseeable Financial Emergency is an “Unforeseeable
Emergency” as such phrase is defined for purposes of Code
Section 409A. Whether a Participant has an
Unforeseeable Financial Emergency shall be determined in the sole
discretion of the Committee.
1.22 Other
Definitions . In addition to the terms defined in this Section
1, other terms are defined when first used in later Sections of
this Plan.
Section 2
Purpose and
Administration
2.1 Purpose
. The Company has established the Plan primarily for the
purpose of providing deferred compensation to a select group of
management or highly compensated employees of the Employers, The
Plan is intended to be a top-hat plan described in Section 201(2)
of ERISA. The Company intends that the Plan (and each
Trust under the Plan (as described in Subsection 6.1)) shall be
treated as unfunded for tax purposes and for purposes of Title I of
ERlSA. An Employer’s obligations hereunder, if
any, to a Participant (or to a Participant’s beneficiary)
shall be unsecured and shall be a mere promise by the Employer to
make payments hereunder in the future. A Participant (or
the Participant’s beneficiary) shall be treated as a general
unsecured creditor of the Employer.
2.2
Administration . The Plan shall be administered by the
Committee. The Committee shall have the powers, rights,
and duties set forth in the Plan and shall have the power, in the
Committee’s sole and absolute discretion, to determine all
questions arising under the Plan, including the determination of
the rights of all persons with respect to the Plan and to interpret
the provisions of the Plan and remedy any ambiguities,
inconsistencies, or omissions. Any decisions of the
Committee shall be final and binding on all persons with respect to
the Plan and the benefits provided under the Plan. The
Committee may delegate the Committee’s authority under the
Plan to one or more directors, officers, or key employees of the
Company; provided, however, that (a) such delegation must be in
writing, and (b) the officers or directors of the Company to whom
the Committee is delegating authority must accept such delegation
in writing. If a Participant is serving as a member of
the Committee, the Participant may not decide or determine any
matter or question concerning such Participant’s benefits
under the Plan that the Participant would not have the right to
decide or determine if the Participant were not serving as a member
of the Committee.
Section 3
Eligibility, Participation and
Deferral Elections
3.1 Eligibility
. Participation in the Plan shall be limited to
Employees (a) having the title of Chief Executive Officer,
President, or Chief Financial Officer or Senior Vice President and
(b) receiving total Compensation of at least $200,000 per Plan
Year. Participation in the Plan may be expanded to
Employees having other titles or limited to Employees having
certain titles by action of the Employer. An Employee
shall become a Participant in the Plan upon the execution and
filing with the Committee of a written election to defer a portion
of the Employee’s Compensation. A Participant
shall remain a Participant until the entire balance of the
Participant’s Deferred Compensation Account has been
distributed
3.2 Rules for
Deferral Elections . Any person identified in
Subsection 3.1 may make a Deferral Election to defer receipt of
Compensation he or she otherwise would be entitled to receive for a
Plan Year in accordance with the rules set forth below:
(a) All Deferral
Elections must be made in writing on the form prescribed by the
Committee and will be effective only when filed with the Committee
no later than the date specified by the
Committee. Except as set forth in Subsection 3.2(c), in
no event may a Deferral Election be made later than the last day of
the Plan Year preceding the Plan Year in which the amount being
deferred would otherwise be made available to the Participant,
provided that in the case of a Participant’s initial year of
employment or association with an Employer, the Participant may
make a Deferral Election with respect to com
