Exhibit 10.27

COTY INC.

ANNUAL PERFORMANCE PLAN

(As Amended and Restated April 8, 2013)


	
  

 	
  

 
	
 SECTION 1. Purpose.
 The purpose of the Coty Inc. Annual Performance Plan, as Amended and Restated
 on April 8, 2013 (the “Plan”) is to promote the profitability of Coty Inc.,
 its subsidiaries and affiliates (the “Company”) by providing senior
 executives and top line managers with incentive awards based on the
 achievement of annual goals that are aimed at increasing shareholder value.
 The effective date of this Plan is the Effective Date. 

 
	
  

 
	
 SECTION 2. Definitions.
 For the purposes of the Plan, the following terms shall have the meanings
 indicated: 

 
	
  

 
	
  

 	
           “Affiliate”
 shall mean (i) any entity that, directly or indirectly, controls or is
 controlled by the Company and (ii) any entity in which the Company has a
 significant equity or other ownership interest, in either case as determined
 by the Committee.

 
	
  

 	
  

 
	
  

 	
           “Award”
 shall mean the grant of an award by the Committee to a Participant. An Award
 shall represent the opportunity to qualify for an Incentive Award in
 accordance with the terms of the Plan. 

 
	
  

 	
  

 
	
  

 	
           “Award Year”
 shall mean any fiscal year with respect to the Company’s performance in which
 an Award is granted, or such other 12-month period as determined by the
 Committee. The first Award Year for which an Incentive Award may be earned
 under this Plan is with respect to the Company’s fiscal year beginning July
 1, 2013 and ending June 30, 2014. 

 
	
  

 	
  

 
	
  

 	
           “Base
 Salary” shall mean a Participant’s annual salary rate in effect at the end of
 an Award Year.

 
	
  

 	
  

 
	
  

 	
           “Board”
 shall mean the Board of Directors of the Company.

 
	
  

 	
  

 
	
  

 	
           “Cause”
 shall have the meaning set forth in any employment, severance or other
 agreement between the Company or an Affiliate and the Participant. If there
 is no employment, severance or other agreement between the Company or an
 Affiliate and the Participant, or if such agreement does not define “Cause,”
 then “Cause” shall mean the occurrence of any of the following, as determined
 by the Committee in its sole discretion: 

 






	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (A)
 a Participant’s willful and continued failure substantially to perform his
 duties (other than as a result of total or partial incapacity due to physical
 or mental illness or as a result of voluntary termination of employment by
 such Participant) which failure continues for more than 30 days after receipt
 by the Participant of written notice setting forth the facts and
 circumstances identified by the Company as constituting adequate grounds for
 termination under this clause (A),

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (B)
 any willful act or omission by a Participant constituting dishonesty, fraud
 or other malfeasance, and any act or omission by a Participant constituting 

 
	
  

 	
  

 	
  

 


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 immoral
 conduct, which in any such case is injurious to the financial condition or
 business reputation of the Company or any of its Affiliates,

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (C)
 a Participant’s indictment for a felony under the laws of the United States
 or any state thereof or a similar event in any other jurisdiction in which
 the Company or its Affiliates conduct business, or 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (D)
 a Participant’s breach of any restrictive covenants by which he or she is
 bound. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           For
 purposes of this definition, no act or failure to act shall be deemed
 “willful” unless effected by a Participant not in good faith and without a
 reasonable belief that such action or failure to act was in or not opposed to
 the Company’s best interests.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
“Change in
 Control” shall be deemed to have occurred if:

 






	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)

 	
 Any Person
 or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange
 Act) that is not the Majority Shareholder is or becomes the “beneficial
 owner” (as defined below), directly or indirectly, of securities representing
 either (i) more than 50% of the combined voting power of the Company’s then
 outstanding securities, or (ii) 20% or more of the combined voting power of
 the Company’s then outstanding securities at a time when the Majority
 Shareholder holds less than 30% of such combined voting power. For purposes
 of this clause (A), “beneficial owner” has the meaning given that term in
 Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be
 the “beneficial owner” of all shares that any such Person has the right to
 acquire pursuant to any agreement or arrangement or upon exercise of
 conversion rights, warrants, options or otherwise, without regard to the
 60-day period referred to in such Rule;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)

 	
 Individuals
 who constitute the Board on the Restatement Effective Date (the “Incumbent
 Board”) cease for any reason to constitute at least a majority thereof, provided, that
 any Person becoming a director subsequent to such date whose election, or
 nomination for election by the Company’s shareholders, was approved by a vote
 of at least three-quarters of the directors then comprising the Incumbent
 Board shall be, for purposes of this clause (B), considered as though such
 Person were a member of the Incumbent Board; and provided, further,
 that this clause (B) shall not apply as long as the Majority Shareholder is
 the beneficial owner of a majority of the Company’s Common Stock;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (C)

 	
 The Majority
 Shareholder enters into any joint venture, joint operating arrangement,
 partnership, standstill agreement or other 

 


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 arrangement
 similar to any of the foregoing with any other Person or group, pursuant to
 which such Person or group assumes significant operational or managerial
 control of the Company; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (D)

 	
 The
 shareholders of the Company approve a plan or agreement providing (i) for a
 merger or consolidation of the Company other than with a wholly owned
 subsidiary and other than a merger or consolidation that would result in 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 51% of
 the combined voting power of the voting securities of the Company or such
 surviving entity outstanding immediately after such merger or consolidation,
 or (ii) for a sale, exchange or other disposition of all or substantially all
 of the business or assets of the Company. If any of the events enumerated in
 this clause (D) occurs, the Board shall determine the effective date of the
 Change in Control resulting therefrom for purposes of this Plan.

 






	
  

 	
  

 
	
  

 	
           “Committee”
 shall mean the Remuneration and Nominating Committee of the Board or any
 successor committee with responsibility for compensation, or any
 subcommittee, as long as the number of Committee members and their
 qualifications shall at all times be sufficient to meet the independence
 requirements of the New York Stock Exchange, Inc. or any other applicable
 exchange on which the Company’s common equity is at the time listed. With
 respect to any Incentive Award that is intended to qualify as
 “performance-based compensation” for purposes of Section 162(m), the
 Committee shall be constituted to comply with the applicable requirements for
 “outside directors” under Section 162(m). 

 
	
  

 	
  

 
	
  

 	
           “Determination
 Date” shall mean the date that is 90 days after the beginning of an Award
 Year or, if earlier, the date on which no more than 25% of the Award Year has
 elapsed. 

 
	
  

 	
  

 
	
  

 	
           “Disability”
 shall mean either (i) disability as defined for purposes of the Company’s
 disability benefit plan, or (ii) a Participant’s inability, as a result of
 physical or mental incapacity, to perform the duties of his or her
 position(s) for a period of six consecutive months or for an aggregate of six
 months in any consecutive 12-month period. 

 
	
  

 	
  

 
	
  

 	
           “Effective
 Date” means the day immediately prior to the date of the underwritten initial
 public offering of the Company’s Common Stock pursuant to a registration
 statement that is declared effective by the SEC, 2013.

 
	
  

 	
  

 
	
  

 	
           “Employment
 Agreement” shall mean, with respect to a Participant, any employment
 agreement by and between the Company and such Participant as in effect from
 time to time.

 


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           “Executive
 Officer” means any Company employee who is an “executive officer” as defined
 in Rule 3b-7 promulgated under the Securities Exchange Act of 1934, as
 amended.

 
	
  

 	
  

 
	
  

 	
           “Incentive
 Award” shall mean the incentive compensation payable to a Participant, as
 determined by the Committee pursuant to the terms of the Plan. 

 
	
  

 	
  

 
	
  

 	
           “Majority
 Shareholder” means (i) the Company’s majority shareholder as of the Effective
 Date or (ii) a Benckiser Permitted Holder as defined in the Company’s
 Certificate of Incorporation effective on the Effective Date or any other
 similarly situated Person as determined by the Committee.

 
	
  

 	
  

 
	
  

 	
           “Maximum
 Award” means, with respect any Participant for any Performance Period,
 $8,000,000. 

 
	
  

 	
  

 
	
  

 	
 “Participant”
 shall mean an Executive Officer or other key employee of the Company selected
 by the Committee in accordance with Section 4 who receives an Award.

 
	
  

 	
  

 
	
  

 	
           “Performance
 Criteria” shall mean objective criteria selected by the Committee, which may
 be based on the relative or
 comparative attainment of one or more of the following criteria during an
 Award Year, whether in absolute terms or relative to the performance of one
 or more similarly situated companies or a published index covering the
 performance of a number of companies: total stockholder return (inclusive or
 exclusive of dividends paid); stock price; gross, operating or net earnings
 or margins; approved rate increases; earnings before interest and taxes;
 earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA
 excluding traditional working media; earnings
 per share; economic value added; ratio of operating earnings to capital
 spending; net sales; sales growth; return on assets, capital or equity;
 income; market share; level of expenses; revenue; revenue growth; cash flow;
 increases in customer base; capital expenditures; cost reductions and expense
 control objectives; compliance with environmental or regulatory goals or
 requirements; conservation; budget objectives; working capital; mergers,
 acquisitions and divestitures; attainment of objectives measured in terms of
 quality or safety; talent management; customer complaints or customer
 satisfaction; and improvements in financial controls; and, in the case of
 persons who are not Executive Officers, such other criteria as may be
 determined by the Committee. Performance Criteria may be established on a
 Company-wide basis or with respect to one or more business units, divisions,
 subsidiaries, or geographic locations, or on an individual basis.

 
	
  

 	
  

 
	
  

 	
           At the
 time the Committee establishes Performance Criteria for an Award Year, the
 Committee may exclude any or all “extraordinary items” as determined under
 U.S. generally accepted accounting principles including, without limitation,
 the charges or costs associated with restructurings of the Company or any
 subsidiary, discontinued operations, other unusual or non-recurring items,
 the cumulative effects of accounting changes or such other objective factors
 as the Committee deems appropriate. Unless otherwise explicitly stated by the
 Committee at the time Performance Criteria are established, each
 applicable performance goal shall be appropriately adjusted for one or 

 


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 more of the
 following items: (i) asset impairments or write downs; (ii) litigation
 judgments or claim settlements; (iii) the effect of changes in tax law,
 accounting principles or such laws or provisions affecting reported results;
 (iv) accruals for reorganization and restructuring programs; (v) any
 extraordinary nonrecurring items as described in Accounting Standards
 Codification (ASC) 225-20 and/or in management’s discussion and analysis of
 financial condition and results of operations appearing in the Company’s
 annual report to shareholders for the applicable year; (vi) the operations of
 any business acquired by the Company or any affiliate or of any joint venture
 in which the Company or affiliate participates; (vii) the divestiture of one
 or more business operations or the assets thereof; or (viii) the costs
 incurred in connection with such acquisitions or divestitures; and (ix)
 charges for stock based compensation.

 
	
  

 	
  

 
	
  

 	
           Except in
 the case of Awards to Executive Officers intended to be ‘performance-based
 compensation’ under Section 162(m), the Committee may at any time adjust the
 Performance Criteria for any Award Year as it deems equitable. The
 Committee shall have no obligation to treat Participants uniformly.

 
	
  

 	
  

 
	
  

 	
 “Person”
 means any individual, partnership, corporation, limited liability company,
 association, joint stock company, trust, joint venture, unincorporated
 organization or any other entity, whether foreign or domestic, including any
 governmental entity or any department, agency or political subdivision
 thereof.

 
	
  

 	
  

 
	
  

 	
           “Retirement”
 shall mean a termination of
 employment (other than a termination of employment for Cause):

 
	
  

 	
  

 
	
  

 	
           (A) after
 attaining age 60, but only if the Company or the employing Affiliate consents
 to the treatment of such termination as a “Retirement” for purposes of this
 Plan; or

 
	
  

 	
  

 
	
  

 	
           (B)
 qualifying as a retirement at normal retirement age under the laws and/or
 arrangements applicable to the Participant, as reasonably determined by the
 Committee.

 
	
  

 	
  

 
	
  

 	
           “Section
 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as
 amended, and any regulations or governing authority promulgated thereunder,
 as in effect from time to time. 

 
	
  

 	
  

 
	
 SECTION 3. Administration.
 

 
	
  

 
	
           (a)
 The Plan shall be administered by the Committee, which shall have full
 authority to interpret the Plan and from time to time to adopt such rules and
 regulations for carrying out the Plan as it may deem best. 

 
	
  

 	
  

 
	
           (b) All
 determinations by the Committee shall be made by the affirmative vote of a
 majority of its members, but any determination reduced to writing and signed
 by a majority of the members shall be fully as effective as if it had been
 made at a meeting duly called and held. All decisions by the Committee (or if
 applicable, the Board) pursuant to the provisions of the Plan shall be final,
 conclusive and binding on all persons, including the Participants, the
 Company 

 
			


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and
shareholders. The Committee may delegate to the Company’s Executive Committee
its authority under the Plan with respect to Participants who are not Executive
Officers; provided that all such Awards and payments in the aggregate do not
exceed the total Awards and payments approved by the Committee for such
Participants for the Award Year.


SECTION 4. Eligibility.
Subject to the provisions of the Plan, the Committee may select at the outset
of each Award Year those Executive Officers, officers or employees (including
those who are also directors) of the Company who will be granted Awards under
the Plan with respect to such Award Year. No member of the Committee shall be
eligible to receive an Award under the Plan. 


          SECTION
5. Amount and Payment of Incentive Award


          (a)
No later than the Determination Date, the Committee shall establish the
applicable Performance Criteria and relevant levels of achievement that will be
used to calculate an Incentive Award, if any, based on a percentage of the
Participant’s Base Salary. Such performance levels may be expressed as a target
level, minimum level, maximum level, or such other levels as determined by the
Board and communicated in writing to the Participant. For avoidance of doubt,
electronic transmission shall be considered in writing for all purposes under
the Plan.


          (b)
Within a reasonable time after the close of an Award Year, the Committee (or
solely with respect to Participants who are not Executive Officers, the
Committee’s delegate, if any) shall determine whether the objective Performance
Criteria and applicable levels of achievement established for that Award Year
have been met by the respective Participants. If the objective Performance
Criteria and any other material terms established by the Committee have been
met by a Participant, the Committee shall so certify in writing with respect to
such Participant.


          (c)
If the Committee has made the written certification under Section 5(a) for an
Award Year, each Participant to whom the certification applies shall be
eligible for an Incentive Award for the Award Year. The Incentive Award for
each such Participant shall not exceed the Maximum Award. For any Award Year,
however, the Committee shall have sole and absolute discretion to adjust the
amount of, or eliminate entirely, the Incentive Award to one or more of the
Participants based upon the Committee’s review of the objective performance
goals for each Participant; provided, however, that for any Incentive Award
that is intended to qualify as “performance-based compensation” under Section
162(m), the Committee shall have discretion to reduce the amount of such
Incentive Award or eliminate the Incentive Award entirely, but not to increase
the amount of any Award. 


          (d)
Any amounts a Participant has qualified to receive in respect of an Award as
determined by the Committee (or, as applicable, its delegate) shall be paid to
Participants on or before March 15 of the year immediately following the Award
Year. Payment shall be in cash or in shares of Company or Affiliate stock
pursuant to a long term incentive compensation plan that has been approved by
shareholders. 


          (e)
Participation in the program ends when Participant’s employment ends. Except as
otherwise provided in Section 5(f) or in an Employment Agreement or as
determined by the


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Committee, the
Participant must be actively employed by the Company on the payment date in
order to qualify for payment with respect to an Award. 


          (f)
If a Participant’s employment terminates by reason of Retirement, Disability or
death, the Participant shall be entitled to payment, at the same time as
payment to other Award holders is made, of a prorated Award reflecting the
portion of the Award Year during which he or she was employed, based on actual
results achieved for such Award Year. 


          (g)
With respect to any Award or portion of an Award that is not to an Executive
Officer or not intended to qualify as “performance-based compensation” under
Section 162(m), the Committee may determine an Incentive Award based on factors
other than Performance Criteria. 


SECTION 6. General
Provisions. 


          (a) No portion
of any Award under the Plan may be assigned or transferred prior to the payment
thereof.


          (b) All
payments made pursuant to the Plan shall be subject to withholding in respect
of income and other taxes required by law to be withheld or to withholding and
offset by the Company in respect of any other amounts due and owing the Company
by a Participant, in accordance with procedures to be established by the
Committee.


          (c) The
selection of an individual for participation in the Plan shall not give such
Participant any right to be retained in the employ of the Company, and the
right of the Company to dismiss or discharge any such Participant, or to
terminate any arrangement pursuant to which any such Participant provides
services to the Company, is specifically reserved. The benefits provided for
Participants under the Plan shall be in addition to, and shall in no way
preclude, the payment of other forms of compensation to or in respect of such
Participants.


          (d) The Board
and the Committee shall be entitled to rely on the advice of counsel and other
experts, including the independent public accountants for the Company. No
member of the Board or of the Committee or any officers of the Company shall be
liable for any act or failure to act under the Plan.


          (e) Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other compensation arrangements, which arrangements may
be either generally applicable or applicable only in specific cases.


          (f) No member
of the Committee or the Board shall participate in any action of the Committee
or the Board involving that member.


          (g)
The Committee may cancel, withhold, defer or reduce the amount to be paid under
any Award, and no Participant shall have any contractual right under the Plan
to the Award of any amount hereunder, if the Committee determines to do so, in
its absolute discretion, for any reason, including but not limited to a breach
by a Participant of any agreement with or obligation to the Company.


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          (h)
Notwithstanding any provision in the Plan to the contrary, Awards granted or
paid under the Plan will be subject to recoupment by the Company pursuant to
any “clawback” or similar compensation recoupment policy that may be
established by the Company.


          SECTION 7. Change
in Control. Upon a Change in Control of the Company, the Board may, in its
discretion, deem Performance Criteria to have been achieved at such level of
performance as designated by the Committee with respect to any applicable
Performance Criteria under any outstanding Award relating to the Award Year in
which the Change in Control occurs. Any such Award shall be paid within five
business days following such Change in Control; provided, however, that any
such Award shall be reduced by the amount of any comparable benefit to which
the Participant would be entitled under applicable law upon termination of
employment.


          SECTION 8. Amendment
and Termination of the Plan. The Board may, at any time or from time to
time, terminate, in whole or in part, or amend the Plan. In the event of such
termination, in whole or in part, of the Plan, the Board may in its sole
discretion direct the payment to Participants of any Awards not theretofore
paid out prior to the respective dates upon which payments would otherwise be
made hereunder to such Participants, in a lump sum or installments as the Board
shall prescribe with respect to each such Participant, as permitted under
Section 409A of the Code. 


          SECTION 9. Governing
Law. The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan and any Award shall be determined in
accordance with the laws of the State of New York, without regard to its
conflicts of laws principles. 


          SECTION
10. Application of Section 162(m).


          (a)
The Plan is intended to be administered, interpreted and construed so that
Incentive Award payments remain tax deductible to the Company and unlimited by
Section 162(m), which restricts under certain circumstances the Federal income
tax deduction for compensation paid by a public company to Executive Officers
in excess of $1 million per year. As of the Plan’s effective date, the
exemption is based on Treasury Regulation Section 1.162-27(f), which generally
exempts from the application of Section 162(m) compensation paid pursuant to a
plan that existed before a company becomes publicly held. Under such Treasury
Regulation, this exemption is available to the Plan for the duration of the
period that lasts until the earlier of the expiration or material modification
of the Plan or the first meeting of stockholders at which directors are to be
elected that occurs after the close of the third calendar year following the
calendar year in which the Company first becomes subject to the reporting
obligations of Section 12 of the Exchange Act. 


          (b)
To the extent that the Committee determines that the exemption described in
Section 10(a) above is no longer available with respect to an Incentive Award,
such Incentive Award shall be intended to satisfy the applicable requirements
for the performance-based compensation exception under Section 162(m) and shall
be contingent upon shareholder approval of the Plan in accordance with Section
162(m), the regulations thereunder and other applicable U.S. Treasury
regulations. Unless and until such stockholder approval is obtained, no
Incentive Award shall be made under the Plan after the expiration of the
exemption described in Section 10(a) above. 


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          SECTION
11. Duration of the Plan. The Plan is effective as of the Effective Date
and shall remain in effect until all Incentive Awards made under the Plan have
been paid or forfeited under the terms of the Plan, and all Award Years related
to Awards made under the Plan have expired. No Incentive Awards may be made
under the Plan for any Award Year that would end after the expiration of the
exemption referred to in Section 10, unless the Board, subject to any
stockholder approval that may then be required to continue to qualify the Plan
as a performance-based plan under Section 162(m), extends this Plan.


          SECTION
12. Application of Section 409A. Incentive Awards payable under the Plan
are intended to qualify for exemption from or, in the alternative, comply with,
Section 409A. The Plan shall be construed and interpreted in accordance with
such intent. If any provision of the Plan needs to be revised to satisfy the
requirements of Section 409A, then such provision shall be modified or
restricted to the extent and in the manner necessary to be in compliance with
such requirements of Section 409A and any such modification shall attempt to
maintain the same economic results as were intended under the Plan. The Company
makes no guarantee that payments under the Plan will satisfy all applicable
requirements for exemption from Section 409A. Payments made to a participant
under the Plan in error shall be returned to the Company and do not create a
legally binding right to such payments.


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