Exhibit 10.28
AFFINION GROUP
AMENDED AND RESTATED DEFERRED
COMPENSATION PLAN
Affinion Group, Inc., and its
participating subsidiaries and affiliates, hereby adopt this
Affinion Group Deferred Compensation Plan (the “
Plan ”) for the benefit of a select group of
management or highly compensated employees. The Plan is an unfunded
arrangement and is intended to be exempt from the participation,
vesting, funding, and fiduciary requirements set forth in
Title I of the Employee Retirement Income Security Act of
1974, as amended (and all rulings and regulations thereunder)
(“ ERISA ”). The Plan is intended to
comply with Section 409A of the Internal Revenue Code of 1986,
as amended, and the Final Treasury Regulations promulgated
thereunder. The Plan, as amended and restated on November 20,
2008, is effective July 1, 2006 (the “ Effective
Date ”).
Article 1
Definitions
The bookkeeping account established
for each Participant as provided in Section 5.1 hereof,
consisting of the Retirement Account and the In-Service
Account(s).
An administrative committee
appointed by the Company, said committee to include at least three
individuals. The Administrator shall serve as the agent for the
Employers with respect to the Trust.
Any person or entity that directly
or indirectly controls, is controlled by or is under common control
with an Employer and/or to the extent provided by the
Administrator, any person or entity in which an Employer has a
significant interest. The term “control” (including,
with correlative meaning, the terms “controlled by” and
“under common control with”), as applied to any person
or entity, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such person or entity, whether through the ownership of
voting or other securities, by contract or otherwise;
provided , however , with respect to any Account
subject to Section 409A of the Code, the term
“Affiliate” shall mean any member of an
Employer’s control group within the meaning of Final Treasury
Regulations Section 1.409A-1(h)(3), as such may be modified or
amended from time to time, by applying the “at least 50
percent” provisions thereof.
The Board of Directors of the
Company.
Bonus shall mean the amount, if any,
awarded to a Participant under an Employer’s performance
bonus program, long-term bonus program or other Employer bonus
program.
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A “Change-in-Control” of
Parent, the Company, Affinion Group, LLC or an Employer, as the
case may be, shall mean the first to occur of any of the
following:
(a) a change in the ownership of
Parent, the Company, Affinion Group, LLC or an Employer, occurring
when a person or group acquires more than 50% of the total fair
market value or voting power of Parent’s, the
Company’s, Affinion Group, LLC’s or an Employer’s
stock or other equity interests;
(b) a change in Parent’s, the
Company’s, Affinion Group, LLC’s or an Employer’s
effective control, occurring: (i) when a person or group
acquires or has acquired during the preceding 12-month period 35%
or more of the total voting power of Parent’s, the
Company’s, Affinion Group, LLC’s or an Employer’s
stock or other equity interests; or (ii) a majority of members
of Parent’s, the Company’s, Affinion Group, LLC’s
or an Employer’s board of directors or members, as the case
may be, is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the
members of the pre-existing board; or
(c) a change in ownership of a
substantial portion of Parent’s, the Company’s,
Affinion Group, LLC’s or an Employer’s assets,
occurring when a person or group acquires or has acquired in a
series of transactions during the preceding 12-month period assets
totaling more than 40% of the gross fair market value of all of
Parent’s, the Company’s, Affinion Group, LLC’s or
an Employer’s assets.
All determinations of a
Change-in-Control shall be made by the Administrator and shall be
final and binding on all parties.
Shall have the meaning set forth in
Section 9.2 hereof.
The Internal Revenue Code of 1986,
as amended, and all legally binding rulings and regulations
thereunder.
An amount of Employer remuneration
allocated to a Participant during the Plan Year as a reflection of
a percentage of sales or other commission-generating endeavor
undertaken by such Participant on behalf of his or her Employer
and, for purposes of Deferrals, that is paid to or received by his
or her Employer during the Plan Year. “Commission”
shall not include any amounts deferred by a Participant under an
Employer’s qualified 401(k) plan in which such Participant
participates with respect to the Plan Year.
Company shall mean Affinion Group,
Inc., a wholly-owned subsidiary of Parent.
Compensation shall mean the sum of a
Participant’s Salary, Bonus and Commission, as
applicable.
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The portion of Compensation that a
Participant elects to defer in accordance with
Article 3 hereof.
The separate written agreement,
submitted to the Administrator, by which an Eligible Employee
agrees to participate in the Plan and make Deferrals
thereto.
For purposes of
Section 4.4 and Section 6.5 , a Participant
shall be considered disabled if the Participant would be considered
disabled under his or her Employer’s long term disability
plan, determined without regard to any waiting periods imposed by
such plan; provided that the Participant is receiving income
replacement benefits for not less than three (3) months by
reason of any 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 twelve (12) months.
In the event such Employer no longer maintains a long term
disability plan, Disability shall mean that a Participant is unable
to engage in any substantial gainful activity by reason of any
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 twelve
(12) months.
The date as set forth in the
preamble hereof.
An Employee shall be considered an
Eligible Employee if such Employee is designated as an Eligible
Employee by the Administrator. The designation of an Employee as an
Eligible Employee in any year shall not confer upon such Employee
any right to be designated as an Eligible Employee in any future
year.
Any person employed by an
Employer.
Each of the Company and any of its
subsidiaries and affiliates that are designated by the
Administrator as participating in the Plan. A list of all Employers
will be maintained as an appendix to this Plan.
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1.19
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Employer
Discretionary Contribution.
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A discretionary contribution made by
or on behalf of a Participant’s Employer that is credited to
such Participant’s Retirement Account and/or In-Service
Account(s), as applicable, in accordance with the terms of
Section 3.6 hereof.
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1.20
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Employer
Matching Contribution.
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A discretionary matching
contribution made by or on behalf of a Participant’s Employer
that is credited to such Participant’s Retirement Account
and/or In-Service Account(s), as applicable, in accordance with the
terms of Section 3.5 hereof.
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Shall have the meaning set forth in
the preamble hereof.
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1.22
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Final
Treasury Regulations.
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Final Treasury Regulations shall
mean the Final Treasury Regulations and all legally binding rulings
promulgated under Section 409A of the Code.
One or more bookkeeping subaccounts
established pursuant to Section 5.1(b)
hereof.
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1.24
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Investment
Fund or Index.
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Each investment(s) that serves as a
means to measure value, increases or decreases with respect to a
Participant’s Retirement Account and/or In-Service
Account(s), as applicable.
Parent shall mean Affinion Group
Holdings, Inc., which wholly owns the Company.
An Eligible Employee who is a
participant in the Plan as provided in Article 2
.
The Affinion Group Amended and
Restated Deferred Compensation Plan, as may be amended from time to
time.
The initial Plan Year shall be
July 1, 2006 to December 31, 2006. All future Plan Years
shall be a calendar year beginning on January 1 and ending on
December 31.
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1.29
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Re-deferral
Election.
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Shall have the meaning set forth in
Section 6.7 hereof.
Retirement means a
Participant’s Separation from Service for any reason with his
or her Employer on or after attaining age 55.
A bookkeeping subaccount established
pursuant to Section 5.1(a) hereof.
Participant’s base salary paid
at the rate in effect from time to time during a Plan Year,
including any pre-tax elective deferrals thereof to any
Employer-sponsored plan that includes amounts deferred under a
deferral election or a qualified cash or deferred arrangement under
Code Section 401(k) or cafeteria plan under Code
Section 125.
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1.33
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Separation
from Service.
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A Separation from Service shall mean
a “separation from service” with an Employer and its
Affiliates within the meaning of Final Treasury Regulations
Section 1.409A-1(h) under Code Section 409A, including
the default presumptions thereof.
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1.34
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Special
Performance Based Compensation.
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Shall have the meaning set forth in
Section 3.2(c)(i) hereof.
The agreement, if any, between one
or more Employers and the Trustee under which some or all of the
assets of the Plan are held, administered and managed, which shall
conform to the terms of IRS Rev. Proc. 92-64 and IRS
Notice 2000-56.
The trustee of the Trust.
A Participant’s “Years
of Service” shall be measured by employment for the duration
of a 12 month period commencing with the Participant’s date
of hire and anniversaries thereof.
Article 2
Participation
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2.1
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Commencement
of Participation.
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Each Eligible Employee shall become
a Participant at the earlier of the date on which his or her
Deferral Election first becomes effective or the date on which an
Employer contribution is first credited to his or her Retirement
Account and/or In-Service Account(s), as applicable.
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2.2
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Loss of
Eligible Employee Status.
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A Participant who is no longer an
Eligible Employee shall not be permitted to submit a Deferral
Election for a Plan Year following the loss of Eligible Employee
status, and all Deferrals for such Participant shall cease as of
the completion of the Deferral Election for the current Plan Year.
Amounts credited to a Participant’s Account described in
Section 5.1 shall continue to be held, pursuant to the
terms of the Plan and shall be distributed as provided in
Article 6 .
Article 3
Elections and
Contributions
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3.1
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Deferral
Elections - General.
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A Participant’s Deferral
Election for a Plan Year is irrevocable for that applicable Plan
Year; provided , however , that a termination of such
Deferral Election shall be allowed with respect to deferrals after
the date of such termination if required by the terms of his or her
Employer’s qualified 401(k) plan in order for the Participant
to obtain a hardship withdrawal from the 401(k) plan and any later
Deferral Election will be subject to the provisions governing
initial deferral elections under Final Treasury Regulations
Section 1.409A-2(a), that is, any later Deferral Election to
defer Compensation must be made prior to the Plan Year to which
such Compensation relates unless the rules applicable to Special
Performance Based Compensation apply. Any amounts already deferred
under the Plan shall not be made available to such Participant,
except as provided in Article 6 , and shall reduce such
Participant’s Compensation from the Employer in accordance
with the provisions of the applicable Deferral Election;
provided , however , that all such amounts shall be
subject to the rights of the general creditors of
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the Employer as provided in
Article 8 . The Deferral Election, in addition to the
requirements set forth below, must designate: (i) the amount
of Compensation to be deferred; (ii) the time of the
distribution; and (iii) the form of the
distribution.
A Deferral Election shall be void if
it is not made in a timely manner as follows:
(a) A Deferral Election with respect
to any Compensation must be submitted to the Administrator before
the beginning of the Plan Year during which the amount of
Compensation to be deferred will be earned.
(b) Notwithstanding the foregoing
and in the discretion of the Administrator, in a year in which an
Employee is first eligible to participate in the Plan (taking into
account all plans required under Code Section 409A to be
aggregated with the Plan), such Deferral Election shall be filed
within 30 days after the date on which such Employee is first
designated as an Eligible Employee, and shall apply only with
respect to Compensation to be earned during the remainder of the
Plan Year after such election is made, subject to those
restrictions provided for in Final Treasury Regulations
Section 1.409A-2(a)(7); provided , however ,
that if such Employee is eligible to participate in any such plan
required to be aggregated for purposes of Code Section 409A
with the Plan, then this S ection 3.2(b) shall not
apply unless otherwise permitted by Code
Section 409A.
(c) Notwithstanding anything to the
contrary, the Administrator may provide for a Special Performance
Based Compensation (as defined below) deferral election in any Plan
Year the Administrator determines such deferral election is
appropriate. For purposes of this Plan:
(i) As amended from
time to time by Code Section 409A and the Final Treasury
Regulations, “ Special Performance Based
Compensation ” shall mean compensation based on
services performed over a period of at least twelve
(12) months that is contingent on organizational or
performance criteria that are not substantially certain to be met
at the beginning of the service period. To the extent provided for
by the Administrator, in its sole and absolute discretion, a
Special Performance Based Compensation election shall be made no
later than six (6) months prior to the end of the applicable
service period in which the Special Performance Based Compensation
is earned ( e.g ., June 30 th with respect to a calendar year
performance period); provided , that , in no event
may such an election be made after such Special Performance Based
Compensation has become “readily ascertainable” within
the meaning of Final Treasury Regulations
Section 1.409A-2(a)(8). Subjective criteria are permissible,
provided the criteria relate to individual performance or
performance of a group that includes the Participant and that
assessment of whether the subjective criteria have been met is not
made by the Participant or a Participant’s family
member.
(ii) All deferrals made pursuant to
this Section shall be allocated to the subaccount(s) to which the
Participant directs his or her Deferrals.
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3.3
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Distribution
Elections.
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At the time a Participant makes a
Deferral Election, he or she must also elect the time of the
distribution by establishing a Retirement Account and/or one or
more In-Service Account(s), as applicable, as provided in
Section 5.1 .
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3.4
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Additional
Requirements.
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The Deferral Election, subject to
the limitations set forth in Section 3.1 and
Section 3.2 hereof, shall comply with the following
additional requirements:
(a) Deferrals may be made in whole
percentages or stated dollar amounts with such limitations as
determined by the Administrator. The minimum amount of Compensation
deferred in any single Plan Year to a Participant’s Account
shall be $5,000.
(b) The maximum amount of Salary
that may be deferred each Plan Year to a Participant’s
Account is fifty percent (50%) of the Participant’s
Salary, subject to Section 10.16 hereof.
(c) The maximum amount of Bonus that
may be deferred each Plan Year to a Participant’s Account is
one-hundred percent (100%) of a Participant’s Bonus,
subject to Section 10.16 hereof.
(d) The maximum amount of Commission
that may be deferred each Plan Year to a Participant’s
Account is one-hundred percent (100%) of a Participant’s
Commission, subject to Section 10.16 hereof.
(e) As applicable, the maximum
amount of Special Performance Based Compensation, as defined herein
above, that may be deferred each Plan Year to a Participant’s
Account is one-hundred percent (100%) of a Participant’s
Special Performance Based Compensation, subject to
Section 10.16 hereof.
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3.5
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Employer
Matching Contribution.
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An Employer may credit Employer
Matching Contribution(s) to the Retirement Account and/or
In-Service Account(s), as applicable, of each Participant employed
by such Employer who makes Deferrals. The amount and timing of any
Employer Matching Contribution(s) shall be decided by such Employer
in its sole and absolute discretion at the time of such
contribution. Such Employer shall proportionately credit the
Employer Matching Contribution(s) to the same Retirement Account
and/or In-Service Account(s), as applicable, to which a Participant
directs his or her Deferrals according to Section 3.3
above.
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3.6
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Employer
Discretionary Contribution.
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An Employer has the right to make
Employer Discretionary Contribution(s) to the Retirement Account
and/or In-Service Account(s), as applicable, of some or all
Participants employed by such Employer in such amount and in such
manner as may be determined by such Employer. The Employer shall
proportionately credit the Employer Discretionary Contribution(s)
to the same Retirement Account and/or In-Service Account(s), as
applicable, to which a Participant directs his or her Deferrals
according to Section 3.3 above.
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3.7
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Crediting of
Contributions.
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(a) Deferrals shall be credited to a
Participant’s Retirement Account and/or In-Service
Account(s), as applicable, and if applicable, transferred to the
Trust as soon as administratively feasible following each payroll
period.
(b) Employer Matching
Contribution(s), if any, shall be credited to a Participant’s
Retirement Account and/or In-Service Account(s), as applicable, and
if applicable, transferred to the Trust at such time as the Company
shall determine.
(c) Employer Discretionary
Contribution(s), if any, shall be credited to a Participant’s
Retirement Account and/or In-Service Account(s), as applicable, and
if applicable, transferred to the Trust at such time as the Company
shall determine.
Article 4
Vesting
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4.1
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Vesting of
Deferrals.
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A Participant shall be one-hundred
percent (100%) vested in his or her Retirement Account and/or
In-Service Account(s), as applicable, attributable to Deferrals and
any earnings or losses on the investment of such
Deferrals.
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4.2
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Vesting of
Employer Matching Contribution.
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Except as otherwise provided for
herein, a Participant shall have a vested right to the portion of
his or her Retirement Account and/or In-Service Account(s), as
applicable, attributable to Employer Matching Contribution(s) and
any earnings or losses on the investment of such Employer Matching
Contribution(s) according to such vesting schedule as his or her
Employer shall determine at the time the Employer Matching
Contribution(s) is made.
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4.3
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Vesting of
Employer Discretionary Contribution.
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Except as otherwise provided for
herein, a Participant shall have a vested right to the portion of
his or her Retirement Account and/or In-Service Account(s), as
applicable, attributable to Employer Discretionary Contribution(s)
and any earnings or losses on the investment of such Employer
Discretionary Contribution(s) according to such vesting schedule as
his or her Employer shall determine at the time an Employer
Discretionary Contribution(s) is made.
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4.4
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Vesting in
Event of Retirement, Disability, Death or
Change-in-Control.
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(a) A Participant who has a
Separation from Service due to Retirement shall be fully vested in
the amounts credited to his or her Account as of the date of
Retirement.
(b) A Participant who has a
Separation from Service due to Disability shall be fully vested in
the amounts credited to his or her Account as of the date of such
Separation from Service due to Disability.
(c) A Participant who dies prior to
a Separation from Service shall be fully vested in the amounts
credited to his or her Account as of the date of death.
(d) Upon a Change-in-Control with
respect to a Participant (i.e., a Change-in-Control of (i) the
Employer that employs such Participant, (ii) Affinion Group,
LLC, (iii) the Company, or (iv) the Parent), the
Participant shall be fully vested in the amounts credited to his or
her Account as of the date of such Change-in-Control.
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Except as provided for in
Section 4.4 , any amounts credited to a
Participant’s Account that are not vested at the time of his
or her Separation from Service shall be forfeited.
Any forfeitures from a
Participant’s Account shall continue to be held in the Trust,
if applicable, shall be separately invested and shall be used to
reduce succeeding Employer Matching Contributions and/or Employer
Discretionary Contributions until such forfeitures have been
entirely so applied. If an Employer advises the Trustee that no
further Employer Matching Contributions and/or Employer
Discretionary Contributions will be made or such Employer does not
utilize a Trust, then such forfeitures shall be returned to such
Employer.
Article 5
Accounts
The Administrator shall establish
and maintain a bookkeeping Account and subaccounts ( i.e. ,
a Retirement Account and In-Service Account(s), as the case may be)
in the name of each Participant as provided in
subsection (a) and subsection (b) below,
as elected by the Participant pursuant to Article 3. A
Participant may have a maximum of 15 subaccounts at any
time.
(a) A Participant may establish a
Retirement Account by designating such in the Participant’s
Deferral Election. Each Participant’s Retirement Account
shall be credited with Deferrals as specified in the
Participant’s Deferral Election, any Employer Matching
Contributions allocable thereto, any Employer Discretionary
Contribution(s) allocable thereto, and the Participant’s
allocable share of any earnings or losses on the foregoing. Each
Participant’s Retirement Account shall be reduced by any
distributions made in addition to any federal and state tax
withholding and any social security withholding tax as may be
required by law at the time of the deferral or vesting, as
applicable.
(b) A Participant may elect to
establish one or more In-Service Account(s) by designating in such
Participant’s Deferral Election the taxable year in which
payment shall be made at the time the subaccount is initially
established. The minimum initial deferral period for an In-Service
Account shall be three (3) years; provided ,
however , that if a Participant has elected to receive a
distribution of an Employer Matching Contribution or Employer
Discretionary Contribution prior to the year in which such Employer
Matching Contribution or Employer Discretionary Contribution has
become vested then, notwithstanding the Participant’s
election, he or she shall be deemed to have elected to defer such
Employer Matching Contribution or Employer Discretionary
Contribution until the first year in which such Employer Matching
Contribution or Employer Discretionary Contribution has become
vested pursuant to the schedule established on or before the date
such contribution is made. Each of the Participant’s
In-Service Accounts shall be credited with Deferrals as specified
in the Participant’s Deferral Election, any Employer Matching
Contributions allocable thereto, any Employer Discretionary
Contributions allocable thereto, and the Participant’s
allocable share of any
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earnings or losses on the foregoing. Each of the
Participant’s In-Service Accounts shall be reduced by any
distributions made in addition to any federal and state tax
withholding and any social security withholding tax as may be
required by
