Document:

Exhibit 10.19

 

NBTY, INC. RETIREMENT PROFIT SHARING PLAN

 

(Amended and Restated Effective January 1, 2011)

 

 

NBTY, Inc. Retirement Profit Sharing Plan

(amended and restated effective January 1, 2011)

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
TITLE,   HISTORY AND CERTAIN GOVERNING PROVISIONS
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
DEFINITIONS
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
PARTICIPATION
    	
8
    
	
 
    	
 
    	
 
    
	
Section 3.1.
    	
Eligibility
    	
8
    
	
Section 3.2.
    	
Transfers   to Affiliates
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE 4   
    	
CONTRIBUTIONS
    	
9
    
	
 
    	
 
    	
 
    
	
Section 4.1.
    	
Profit   Sharing Contributions
    	
9
    
	
Section 4.2.
    	
Deposit   of Contributions
    	
9
    
	
Section 4.3.
    	
Contributions   by Participants
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE 5   
    	
LIMITATIONS   ON CONTRIBUTIONS
    	
10
    
	
 
    	
 
    	
 
    
	
Section 5.1.
    	
Maximum   Annual Additions under Section 415 of the Code
    	
10
    
	
Section 5.2.
    	
Other   Limitations on Employer Contributions
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE 6   
    	
TRUST   AND INVESTMENTS
    	
12
    
	
 
    	
 
    	
 
    
	
Section 6.1.
    	
Trust
    	
12
    
	
Section 6.2.
    	
Investment   Funds
    	
13
    
	
Section 6.3.
    	
Valuation   of Funds and Plan Accounts
    	
13
    
	
Section 6.4.
    	
Trust   Fund to Be Applied Exclusively for Participants and their Beneficiaries, Etc.
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 7   
    	
PARTICIPANT   ACCOUNTS, INVESTMENT ELECTIONS, ETC.
    	
14
    
	
 
    	
 
    	
 
    
	
Section 7.1.
    	
Participant   Accounts
    	
14
    
	
Section 7.2.
    	
Vesting
    	
14
    
	
Section 7.3.
    	
Investment   Elections
    	
15
    
	
Section 7.4.
    	
Short-Term   Investments
    	
16
    
	
Section 7.5.
    	
Allocation   of Contributions
    	
16
    
	
Section 7.6.
    	
Allocation   of Forfeitures
    	
17
    
	
Section 7.7.
    	
Correction   of Error
    	
17
    
	
Section 7.8.
    	
Transfers   from Other Plans
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 8   
    	
WITHDRAWALS   AND DISTRIBUTIONS
    	
17
    
	
 
    	
 
    	
 
    
	
Section 8.1.
    	
Distribution   of Account
    	
17
    
	
Section 8.2.
    	
Payment   of Small Account Balances
    	
19
    
	
Section 8.3.
    	
Direct   Rollover Option
    	
20
    
	
Section 8.4.
    	
Designation   of Beneficiary
    	
21
    
	
Section 8.5.
    	
Missing   Persons
    	
23
    
	
Section 8.6.
    	
Distributions   to Minor and Disabled Distributees
    	
24
    

 

 

Table of Contents

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
SPECIAL   PARTICIPATION AND DISTRIBUTION RULES
    	
24
    
	
 
    	
 
    	
 
    
	
Section 9.1.
    	
Reemployment
    	
24
    
	
Section 9.2.
    	
Employment   by Affiliates
    	
26
    
	
Section 9.3.
    	
Qualified   Military Service
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
ADMINISTRATION
    	
26
    
	
 
    	
 
    	
 
    
	
Section 10.   l.
    	
The   Administrator
    	
26
    
	
Section 10.2.
    	
Named   Fiduciary
    	
28
    
	
Section 10.3.
    	
Allocation   and Delegation of Responsibilities
    	
28
    
	
Section 10.4.
    	
Professional   and Other Services
    	
28
    
	
Section 10.5.
    	
Claims   Procedure
    	
28
    
	
Section 10.6.
    	
Notices   to Participants, Etc.
    	
31
    
	
Section 10.7.
    	
Notices   to Administrator or Employers
    	
31
    
	
Section 10.8.
    	
Records
    	
32
    
	
Section 10.9.
    	
Reports   of Trustee and Accounting to Participants
    	
32
    
	
 
    	
 
    	
 
    
	
ARTICLE 11
    	
PARTICIPATION   BY EMPLOYERS
    	
32
    
	
 
    	
 
    	
 
    
	
Section 11.1.
    	
Adoption   of Plan
    	
32
    
	
Section 11.2.
    	
Withdrawal   from Participation
    	
33
    
	
Section 11.3.
    	
Company,   Administrator and Recordkeeper as Agents for Employers
    	
33
    
	
Section 11.4.
    	
Continuance   by a Successor
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE l2
    	
MISCELLANEOUS
    	
34
    
	
 
    	
 
    	
 
    
	
Section   12.1.
    	
Expenses
    	
34
    
	
Section 12.2.
    	
Legal   Fees
    	
34
    
	
Section 12.3.
    	
Statute   of Limitations for Actions under the Plan
    	
35
    
	
Section 12.4.
    	
Non-Assignability
    	
36
    
	
Section 12.5.
    	
Employment   Non-Contractual
    	
37
    
	
Section 12.6.
    	
Merger   or Consolidation with Another Plan
    	
37
    
	
Section 12.7.
    	
Gender   and Plurals
    	
37
    
	
Section 12.8.
    	
Applicable   Law
    	
37
    
	
Section 12.9.
    	
Forum   for Legal Actions under the Plan
    	
37
    
	
Section 12.10.
    	
Severability
    	
38
    
	
Section 12.11.
    	
No   Guarantee
    	
38
    
	
Section 12.12.
    	
Plan   Voluntary
    	
38
    
	
 
    	
 
    	
 
    
	
ARTICLE 13
    	
TOP-HEAVY   PLAN REQUIREMENTS
    	
38
    
	
 
    	
 
    	
 
    
	
Section 13.1.
    	
General   Rule
    	
38
    
	
Section 13.2.
    	
Definitions
    	
38
    
	
Section 13.3.
    	
Minimum   Allocation
    	
40
    
	
Section 13.4.
    	
Minimum   Vesting for Top-Heavy Years
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE 14
    	
AMENDMENT,   ESTABLISHMENT OF SEPARATE PLAN, AND PLAN TERMINATION 
    	
41
    

 

ii

 

Table of Contents

(continued)

 

	
 
    	
 
    	
Page
    
	
Section 14.1.
    	
Amendment
    	
41
    
	
Section 14.2.
    	
Establishment   of Separate Plan
    	
41
    
	
Section 14.3.
    	
Termination
    	
41
    

 

iii

 

Retirement Profit Sharing Plan

 

ARTICLE 1

 

TITLE, HISTORY AND CERTAIN GOVERNING PROVISIONS

 

This document, entitled the “NBTY, Inc. Retirement Profit Sharing Plan” (the “Plan”), is an amendment and restatement of the NBTY, Inc. Profit Sharing Plan, which, prior to October 4, 2010, was known as the NBTY, Inc. Associate Stock Ownership Plan and was an employees’ stock ownership plan designed to invest primarily in qualifying employer securities. The NBTY, Inc. Associate Stock Ownership Plan prior to January 1, 2007 was part of the former NBTY, Inc. Retirement Savings and Employees’ Stock Ownership Plan (the “Prior Plan”). The Prior Plan became effective on January 3, 2005 as a result of the merger of the NBTY, Inc. 401(k) Savings Plan (the “NBTY 401(k) Plan”) and the Rexall Sundown, Inc. 401(k) Employee Savings Plan (the “Rexa1l 401(k) Plan”) into the NBTY, Inc. Employees’ Stock Ownership Plan (the “Prior ESOP”). Effective December 31, 2006, 11:59 p.m., the portion of the Prior Plan that related to the Prior ESOP were split-off to form the NBTY, Inc. Associate Stock Ownership Plan and the remaining portions of the Prior Plan that related to the NBTY 401(k) Plan and the Rexall 401(k) Plan were amended and restated as the NBTY, Inc. 401(k) Savings Plan.

 

Effective October 4, 2010, the Plan became a “profit sharing plan” within the meaning of U.S. Treasury Regulation § 1.401-1(a)(2)(ií). The Company may make contributions to the Plan at the Company’s sole discretion. The Plan is intended to meet the requirements of section 404(c) of ERISA, and the Plan shall be construed and interpreted to meet such requirements. The provisions of this amendment and restatement shall be effective January 1, 2011, except that any provision that specifies a different effective date shall be effective as of the date specified.

 

 

The rights and benefits of any Participant (as defined in Article 2) whose employment with all Employers and Affiliates terminates on or after January 1, 2011, and the rights and benefits of any Beneficiary of any such Participant, shall be determined solely by reference to the terms of the Plan as amended and restated herein, as it may be amended from time to time. The rights and benefits of any Participant whose employment with all Employers and Affiliates terminated before January 1, 2011 and who is not reemployed by an Employer or any Affiliate after such date, and the rights and benefits of any Beneficiary of any such Participant, shall be determined solely by reference to the terms of the Prior Plan or any relevant predecessor plan that was in effect on the date of such Participant’s termination of employment, except as otherwise required by law.

 

ARTICLE 2

 

DEFINITIONS

 

As used herein, the following words and phrases shall have the following respective meanings when capitalized:

 

2.1                                 Account. A Participant’s subaccounts described in Section 7.1 and such other subaccounts that may be established from time to time on behalf of such Participant to which contributions made on his or her behalf are credited, adjusted for earnings and losses, and from which expenses and distributions to the Participant are debited.

 

2.2                                 Administrator. The Company, as the administrator of the Plan. 

 

2.3                                 Affiliate. (a) A corporation that is a member of the same controlled group of corporations (within the meaning of section 414(b) of the Code) as an Employer, (b) a trade or business (whether or not incorporated) under common control (within the meaning of section 414(c) of the Code) with an Employer, (c) any organization (whether or not incorporated) that is a member of an affiliated service group (within the meaning of section 414(m) of the Code) that includes an Employer, a corporation described in clause (a) of this Section 2.3 or a trade or business described in clause (b) of this Section 2.3, or (d) any other entity that is required to be aggregated with an Employer pursuant to U.S. Treasury regulations promulgated under section 414(o) of the Code.

 

2.4                                 Associate. An individual whose relationship with an Employer is, under common law, that of an employee.

 

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2.5                                 Beneficiary. A person entitled under Section 8.4 to receive benefits in the event of the death of a Participant.

 

2.6                                 Board. The board of directors of the Company.

 

2.7                                 Code. The Internal Revenue Code of 1986, as amended.

 

2.8                                 Committee. The Compensation Committee of the Board.

 

2.9                                 Company. NBTY, Inc., a Delaware corporation, and any successor thereto.

 

2.10                           Compensation. Remuneration paid for services performed by a Participant (including remuneration paid for services performed by an Associate prior to becoming a Participant, but only to the extent services are performed during the payroll period in which the Associate becomes a Participant) for an Employer in a Plan Year while the Participant is an Associate that is wages, tips and other compensation reported on such Participant’s Form W-2 in the box that indicates compensation that is taxable for Federal income tax purposes (but determined without regard to any rules that limit remuneration included in wages based upon the nature or location of the employment), and compensation that is not currently includible in such Participant’s gross income by reason of the application of sections 125 (cafeteria plan), 132(f)(4) (qualified transportation fringe), and 402(e)(3) (salary reduction deferrals to a 401(k) plan) of the Code, reduced by the aggregate of the following amounts included on such Form W-2:

 

(i)                                     amounts resulting from the grant of stock awards, stock bonuses, restricted stock, stock appreciation rights, phantom stock, stock options, stock units, stock equivalences or similar arrangements;

 

(ii)                                  amounts imputed in income as a result of, or are paid in the nature of or in relation to life insurance, short-term disability (other than salary continuation payments), long-term disability, medical and other welfare benefits;

 

(iii)                               separation, severance or supplemental unemployment benefits;

 

(iv)                              reimbursements or expense allowances (including moving expenses, housing allowances), and

 

(v)                                 payments that are nonrecurring in nature (other than a payment identified by the Company as a “mystery shopper bonus” and payments designated on the Company’s payroll as “associate of the month”, “associate referral”, “associate suggestion award”, “operator of the month” or “ticket of the month” payments).

 

Notwithstanding any provision herein to the contrary, remuneration in excess of $245,000 (for 2011) (or such other amount provided pursuant to section 401(a)(17) of the Code) shall be disregarded. If a determination period consists of fewer than twelve (12) months, the annual limit on Compensation referenced in the previous sentence shall be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is twelve (12).

 

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2.11                           Disability. A Participant has a Disability if he or she has been determined under Title II or XVI of the Social Security Act to be disabled.

 

2.12                           Diversification Account. The portion of a Participant’s Legacy ESOP Account that the Participant had elected to diversify prior to the Merger Effective Time.

 

2.13                           Effective Date. The effective date of this amendment and restatement of the Plan, with respect to any Employer as of January 1, 2011, shall be January 1, 2011, and, with respect to an entity that becomes an Employer after January 1, 2011, shall be the date as of which the Company approves such entity’s adoption of the Plan.

 

2.14                           Employer. The Company or any Affiliate that, with the consent of the Company, elects to participate in the Plan in the manner described in Section 11.1. If an Employer withdraws from participation in the Plan pursuant to Section 11.2 or terminates its participation in the Plan pursuant to Section 14.3, it shall thereupon cease to be an Employer. An entity shall cease being an Employer as of the date it ceases to be an Affiliate, unless the Company consents to such entity’s continued participation in the Plan.

 

2.15                           ERISA. The Employee Retirement Income Security Act of 1974, as amended.

 

2.16                           Fiscal Year. The twelve-month period ending September 30.

 

2.17                           Highly Compensated Employee. For any Plan Year, any Associate who (i) is a 5%-owner (as determined under section 416 (i)(1) of the Code) at any time during such Plan Year or the immediately preceding Plan Year or (ií) for the immediately preceding Plan Year, was paid compensation in excess of $110,000 (for 2011) (as adjusted in accordance with section 414(q)(1)(B) of the Code) from an Employer or Affiliate and was a member of the “top-paid group” (as defined in section 414(q)(3) of the Code).

 

2.18                           Hour of Service. (1) Each hour for which an Associate is directly or indirectly compensated or entitled to compensation by an Employer for the performance of duties during the applicable computation period; (2) each hour for which an Associate is directly or indirectly compensated or entitled to compensation by an Employer (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, incapacity (including disability), jury duty, lay-off, military duty or leave of absence) during the applicable computation period (calculated and credited pursuant to Department of Labor regulation § 2530.200b-2(b) and (c) which is incorporated herein by reference); (3) each hour for which back pay is awarded or agreed to by an Employer without regard to mitigation of damages (credited to the Associate for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made). The same Hours of Service shall not be credited both under (1) or (2), as the case may be, and under (3).

 

Notwithstanding (2) above, (i) no more than 501 Hours of Service are required to be credited to an Associate on account of any single continuous period during which the Associate performs no duties (whether or not such period occurs in a single computation period); (ii) an hour for which an Associate is directly or indirectly paid, or entitled to payment, on

 

4

 

account of a period during which no duties are performed is not required to be credited to the Associate if such payment is made or due under a plan maintained solely for the purpose of complying with applicable workers’ compensation, or unemployment compensation or disability insurance laws; and (iií) Hours of Service are not required to be credited for a payment which solely reimburses an Associate for medical or medically related expenses incurred by the Associate.

 

Individuals who were employees of Wyeth performing services solely in its Solgar Vitamin and Herb operating unit at the Wyeth Effective Time shall be credited with Hours of Service under the Plan for their hours of service with Wyeth and its affiliates, and individuals who were employees of Wyeth at such Wyeth Effective Time but who were on an approved leave of absence from the Solgar Vitamin and Herb operating unit shall be credited with Hours of Service under the Plan for their hours of service with Wyeth and its affiliates. Associates who (a) were employees of Wyeth performing services in its Solgar Vitamin and Herb operating unit prior to such Wyeth Effective Time, (b) were hired by an Employer after such Wyeth Effective Time but on or before December 31, 2006, and (c) the Company determines have exceptional institutional knowledge of the Solgar Vitamin and Herb operating unit such that their prior employment with Wyeth will prove valuable to the Company, shall be credited with Hours of Service under the Plan for their hours of service with Wyeth and its affiliates.

 

2.19                           Ineligible Individual. Notwithstanding any provision of the Plan to the contrary, an individual who renders services for an Employer shall not be a Participant if (i) the terms of his or her employment are subject to a collective bargaining agreement which does not provide for the participation of such individual in the Plan; (ii) the individual renders services pursuant to an agreement or arrangement (written or oral) (a) that such services are to be rendered as an independent contractor; (b) with an entity, including a leasing organization within the meaning of section 414(n)(2) of the Code, that is not an Employer or Affiliate; or (c) that contains a waiver of participation in the Plan; or (iii) he or she is not treated as an employee of an Employer on an Employer’s payroll records (notwithstanding any determination by a court or administrative agency that such individual is an employee). Furthermore, if it comes to the Administrator’s attention that any individual has provided an Employer with a social security number or other form of identification which has not been legally issued to such individual by an appropriate government agency, such individual shall then be considered an Ineligible Individual until such time as the individual provides the Employer with a valid, legally issued form of identification sufficient to permit the Company to report such individual’s income to all appropriate government agencies.

 

2.20                           Investment Funds. The investment funds referenced in Section 6.2.

 

2.21                           Legacy ESOP Account. A Participant’s subaccount described in Section 7.1, adjusted for earnings and losses, and debited by expenses and distributions to the Participant or his or her Beneficiary. Legacy ESOP Accounts are the continuation of the Accounts as of the Merger Effective Time. As of the Merger Effective Time, the Accounts were credited with a portion of the proceeds received by the Plan in connection with the transactions contemplated by the Merger Agreement. The portion credited to a Participant’s Profit Sharing Account was equal to the product of (a) the number of shares of common capital stock of NBTY, Inc. allocated to

 

5

 

such Participant’s Account immediately prior to the Merger Effective Time, multiplied by (b) the per share consideration paid for each share of common capital stock of NBTY, Inc. in connection with the transactions contemplated by the Merger Agreement.

 

2.22                           Merger Agreement. The Agreement and Plan of Merger among NBTY, Inc., Alphabet Holding Company, Inc. and Alphabet Merger Sub, Inc. dated as of July 15,2010.

 

2.23                           Merger Effective Time. The “Effective Time” as defined in Section 1.3 of the Merger Agreement.

 

2.24                           1-Year Break in Service. The applicable computation period during which an Associate or former Associate has not completed more than 500 Hours of Service. Solely for the purpose of determining whether an Associate or former Associate has incurred a 1-Year Break in Service, Hours of Service shall be recognized for any “authorized leave of absence” and any “maternity or paternity leave of absence.” For this purpose, Hours of Service shall be credited for the computation period in which the absence from work begins, only if credit therefore is necessary to prevent the Associate from incurring a 1-Year Break in Service, and, in any other case, in the immediately following computation period. The Hours of Service credited for a “maternity or paternity leave of absence” shall be those which would normally have been credited but for such absence, or, in any case in which the Administrator is unable to determine such hours normally credited, eight (8) Hours of Service per day. The total Hours of Service required to be credited for a “maternity or paternity leave of absence” shall not exceed the number of Hours of Service needed to prevent the Associate from incurring a 1- Year Break in Service.

 

“Authorized leave of absence” means an unpaid, temporary cessation from active employment with the Employer pursuant to an established nondiscriminatory policy, whether occasioned by illness, Qualified Military Service, or any other reason.

 

A “maternity or paternity leave of absence” means an absence from work for any period by reason of the Associate’s pregnancy, birth of the Associate’s child, placement of a child with the Associate in connection with the adoption of such child, or any absence for the purpose of caring for such child for a period immediately following such birth or placement.

 

2.25                           Participant. An Associate who has satisfied the requirements of Section 3.1. An individual who is a Participant shall remain a Participant until the individual’s Account has been forfeited or completely distributed.

 

2.26                           Plan. The NBTY, Inc. Retirement Profit Sharing Plan set forth herein, as the same may be amended from time to time.

 

2.27                           Plan Year. The calendar year.

 

2.28                           Profit Sharing Account. A Participant’s subaccount described in Section 7.1, adjusted for earnings and losses, and debited by expenses and distributions to the Participant or his or her Beneficiary. Profit Sharing Accounts were established after the Merger Effective Time for the purpose of allocations of any discretionary Employer contributions that may be

 

6

 

made to the Plan thereafter, except to the extent such contributions are made to Top-Heavy Plan Accounts. 

 

2.29                           Qualified Military Service. An individual’s “service in the uniformed services” (as defined in 38 U.S.C.§ 4303) or any other service deemed to be “service in the uniformed services” for purposes of Chapter 43 of Title 38 of the United States Code if such individual is entitled to reemployment rights under or pursuant to USERRA with respect to such service.

 

2.30                           Recordkeeper. Fidelity Investments Institutional Operations Company, Inc.

 

2.31                           Top-Heavy Plan Account. The subaccount established pursuant to Section 7.1 to which any contributions made for the benefit of a Participant pursuant to Section 13.3, and earnings and losses thereon, are credited.

 

2.32                           Trust. The trust described in Section 6.1 and established pursuant to an agreement between the Company and the Trustee.

 

2.33                           Trust Fund. All money and property of every kind of the Trust held by the Trustee pursuant to the terms of the agreement governing the Trust and attributable to the Plan. 

 

2.34                           Trustee. The person or entity appointed by the Company and serving as trustee of the Trust or, if there is more than one such trustee acting at a particular time, all of such trustees collectively. 

 

2.35                           USERRA. The Uniformed Services Employment and Reemployment Rights Act of 1994, as amended.

 

2.36                           Valuation Date. Each day on which the New York Stock Exchange is open for trading.

 

2.37                           Wyeth Effective Time. The “Effective Time” as defined in the Purchase Agreement by and between Wyeth and NBTY, Inc. dated as of June 6, 2005.

 

2.38                           Year of Service. The computation period of twelve (12) consecutive months, herein set forth, and during which an Associate has completed at least 1,000 Hours of Service. For all purposes, including vesting, the computation period shall be the Plan Year.

 

An Associate shall be credited for service with Nutrition Headquarters, Inc. and Nutro Laboratories, Inc.

 

For an Eligible Associate, years of service with Wyeth as reflected on the records of the Wyeth Savings Plan – United States on the Wyeth Effective Time shall be recognized as Years of Service hereunder for eligibility and vesting purposes.

 

7

 

For vesting purposes, each Associate who was performing services for Zila Nutraceuticals, Inc. as of October 2, 2006 shall be credited with one Year of Service for the Plan Year ending December 31, 2006.

 

ARTICLE 3

 

PARTICIPATION

 

Section 3.1.  Eligibility. Each person who was a “Participant” in the NBTY, Inc. Profit Sharing Plan (as “Participant” was defined therein) immediately before January 1, 2011, shall be a Participant in the Plan on January 1, 2011. Each other Associate shall become a Participant upon the later to occur of: (i) the Associate’s 21st birthday (or, in the case of an Associate hired before January 1, 2007, the date he or she attains age 201/2), and (ií) the one-year anniversary of the day the Associate first performs an Hour of Service, provided that the Associate is not an Ineligible Individual. Notwithstanding the foregoing, with respect to any Associate whose most recent date of hire is earlier than January 1, 2010 and who is not a Participant pursuant to the first sentence of this Section, he or she shall become a Participant on the later to occur of (x) the Associate’s 21st birthday (or, in the case of an Associate hired before January 1, 2007, the date he or she attains age 20 1/2), and (y) January 1, 2011, provided that the Associate is not an Ineligible Individual. An Associate shall be credited for service with Rexall Sundown, Inc. or any subsidiary thereof, but only for purposes of determining eligibility to participate in the Plan.

 

Section 3.2.  Transfers to Affiliates. If the employment of a Participant is transferred from an Employer to an Affiliate that is not an Employer, the employment transfer shall not cause such Participant’s participation in the Plan to terminate, and he or she shall continue to participate in the Plan until an event occurs which would entitle such Participant to a complete distribution of his or her Account balance had he or she continued to be employed by an Employer until the occurrence of such event. Notwithstanding the foregoing, contributions

 

8

 

shall not be allocated to a Participant’s Account during any period of the Participant’s employment by an Affiliate that is not an Employer, and periods of the Participant’s employment by an Affiliate that is not an Employer shall be taken into account only to the extent set forth in Section 9.2.

 

ARTICLE 4

 

CONTRIBUTIONS

 

Section 4.1.           Profit Sharing Contributions.  Subject to the limitations of Article 5, the Company, on behalf of the Employers, shall contribute to the Trust for a Plan Year an amount, if any, that the Board, in its sole discretion, may authorize and direct to be contributed. The contributions shall be made in cash and shall be allocated to the Profit Sharing Accounts of Participants (i) who have completed at least 1,000 Hours of Service during the Plan Year for which the amount is contributed and (ii) who are employed by an Employer on the last day of such Plan Year. The amount of the contribution for a Plan Year, if any, that will be allocated to each Participant’s Profit Sharing Account shall be in the same proportion as the Participant’s Compensation for the Plan Year bears to the aggregate Compensation of all Participants eligible for an allocation for such Plan Year pursuant to this Section 4.1.

 

Section 4.2.           Deposit of Contributions.  The Company shall cause to be delivered to the Trustee the profit sharing contributions made pursuant to Section 4.1 at the time(s) and in the manner the Company in its sole discretion determines, provided that all such contributions for a Plan Year shall be delivered to the Trustee on or before the due date (including extensions thereof) for filing the Federal income tax return of the Company for its Fiscal Year ending immediately after or contemporaneously with the end of such Plan Year. Such contributions shall not be credited with any earnings or losses prior to the date the contributions are delivered to the Trustee.

 

9

 

Section 4.3.           Contributions by Participants.  No Participant is permitted to make any contributions to his or her Account.

 

ARTICLE 5

 

LIMITATIONS ON CONTRIBUTIONS

 

Section 5.1.           Maximum Annual Additions under Section 415 of the Code. Notwithstanding any other provision of the Plan, the amounts allocated to the Account of each Participant for any Plan Year shall be limited so that the aggregate annual additions for such year to such a Participant’s Account and to the Participant’s accounts in all other defined contribution plans (including the NBTY, Inc. 401(k) Savings Plan) maintained by any Employer or Affiliate shall not exceed the lesser of:

 

(a)          $49,000 (for 2011) (as adjusted pursuant to section 415(d) of the Code), and

 

(b)         100% of his or her compensation for such Plan Year (or such other percentage of compensation set forth in section 415(c) of the Code).

 

The “annual additions” for a Plan Year to a Participant’s Account and to his or her accounts in any other defined contribution plan of an Employer or Affiliate is the sum for such Plan Year of:

 

(a)          the amount of employer contributions (including elective deferrals) allocated to his or her accounts, excluding, however, any elective deferrals that (i) are Catch-up Contributions, (ii) are excess deferrals that are distributed in accordance with U.S. Treasury Regulation § 1.402(g)-1(e)(2) or (3) or (iíi) are made under section 414(v) of the Code,

 

(b)         the amount of forfeitures allocated to his or her accounts,

 

(c)          the amount allocated to any individual medical benefit account (as defined in section 415(1) of the Code) maintained on his or her behalf, or if the Participant is a key employee within the meaning of section 419A(d)(3) of the Code, the amount attributable to medical benefits

 

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allocated to any post-retirement medical benefit account established for him or her pursuant to section 419A(d)(1) of the Code, and 

 

(d)         the amount of his or her contributions, excluding rollover contributions, to any such plan.

 

For purposes of this Section, the term “compensation” shall have the meaning set forth in U.S. Treasury Regulation § 1.415(c)-2(d)(2), except that in the case of an Associate whose employment is transferred from an Employer to an Affiliate that is not an Employer, such term shall exclude any compensation received by such Associate from such Affiliate, and the term “defined contribution plan” shall have the meaning set forth in U.S. Treasury Regulation § 1.415(c)-1(a)(2). Effective for compensation paid after December 31,2008, the term “compensation” for purposes of this Section 5.1 shall include any differential wage payments paid to Associates who are called to active duty in the U.S. military service.

 

Section 5.2.           Other Limitations on Employer Contributions.  The contributions of the Employers for a Plan Year shall not exceed the maximum amount for which a deduction is allowable to such Employers for Federal income tax purposes for the fiscal year of such Employers that ends with such Plan Year.

 

Any contribution made by an Employer by reason of a good faith mistake of fact, or the portion of any contribution made by an Employer that exceeds the maximum amount for which a deduction is allowable to such Employer for Federal income tax purposes by reason of a good faith mistake in determining the maximum allowable deduction, shall upon the request of such Employer be returned by the Trustee to an Employer. An Employer’s request and the return of any such contribution must be made within one year after such contribution was mistakenly made or after the deduction of such excess portion of such contribution was

 

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disallowed, as the case may be. The amount to be returned to an Employer pursuant to this paragraph shall be the excess of (i) the amount contributed over (ií) the amount that would have been contributed had there not been a mistake of fact or a mistake in determining the maximum allowable deduction. Earnings attributable to the mistaken contribution shall not be returned to an Employer, but losses attributable thereto shall reduce the amount to be so returned. If the return to an Employer of the amount attributable to the mistaken contribution would cause the balance of any Participant’s Account as of the date such amount is to be returned (determined as if such date coincided with the close of a Plan Year) to be reduced to less than what would have been the balance of such Account as of such date had the mistaken amount not been contributed, the amount to be returned to an Employer shall be limited so as to avoid such reduction.

 

ARTICLE 6

 

TRUST AND INVESTMENTS

 

Section 6.1.           Trust.  A Trust has been established by the execution of a trust agreement between the Company (acting on behalf of the Employers) and the Trustee. All contributions under the Plan shall be paid to the Trustee. The Trustee shall hold all monies and property that the Trustee receives and invest and reinvest the same, together with the income thereon, on behalf of the Participants in accordance with the provisions of the Trust agreement and the investment elections of the Participants pursuant to Section 7.3, except that amounts allocated to a Participant’s Account for which no investment election has been received by the Plan shall be invested in the age-appropriate Target Retirement Date Fidelity Freedom Fund (determined assuming the Participant will retire at age sixty-five (65)). The Trustee shall make distributions from the Trust Fund at such time or times to such person or persons and in such amounts as the Administrator or the Recordkeeper directs in accordance with the Plan.

 

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Section 6.2.           Investment Funds.  The Company shall cause the Trustee to establish, operate and maintain Investment Funds for the purpose of the investment of Participants’ Legacy ESOP Accounts, Profit Sharing Accounts and Top-Heavy Plan Accounts, if any. Unless the Company determines otherwise, the Investment Funds shall be identical to the investment funds available under the NBTY, Inc. 401(k) Savings Plan from time to time. The Administrator and the Recordkeeper shall establish procedures setting forth how often changes among Investment Funds may be made and any other limitations and provisions that the Administrator and the Recordkeeper may impose on a Participant’s (or Beneficiary’s) right to direct the investments of his or her Account.

 

Section 6.3.           Valuation of Funds and Plan Accounts.  The value of an Investment Fund as of any Valuation Date shall be determined in accordance with Section 7.3 of the NBTY, Inc. 401(k) Savings Plan (or its successor provision). The value of a Participant’s Account as of any Valuation Date shall be the sum of the values of his or her Legacy ESOP Account, Profit Sharing Account and Top-Heavy Plan Account, if any. Each Participant shall be provided, not less frequently than annually, a statement setting forth the balance in his or her Account.

 

Section 6.4.           Trust Fund to Be Applied Exclusively for Participants and their Beneficiaries, Etc.  Subject only to the provisions of Article 5 and Sections 12.1 and 12.2(b) and (c), and any other provision of the Plan to the contrary notwithstanding, no part of the Trust Fund shall be used for or diverted to any purpose other than for the exclusive benefit of the Participants and their Beneficiaries.

 

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ARTICLE 7

 

PARTICIPANT ACCOUNTS,

INVESTMENT ELECTIONS, ETC.

 

Section 7.1.           Participant Accounts.  The Administrator shall establish and maintain, or cause to be established and maintained, a separate Account for each Participant.

 

Each Account shall consist of the following subaccounts:

 

(i)             with respect to each Participant who had an Account as of the Merger Effective Time, a Legacy ESOP Account, to which was credited as of the Merger Effective Time (x) the share of the proceeds received by the Plan in connection with the transactions contemplated by the Merger Agreement that were allocable to the Participant’s Account as of the Merger Effective Time, if any, and (y) the balance, if any, of the Participant’s Diversification Account as of the Merger Effective Time, and earnings and losses thereon;

 

(ií)          a Profit Sharing Account to which shall be credited contributions made pursuant to Section 4.1 and forfeitures allocated pursuant to Section 7.1 and earnings and losses thereon; and

 

(iii)       if contributions are made for the benefit of a Participant at a time when the Plan is a top-heavy plan within the meaning of Section 13.1, a Top-Heavy Plan Account to which shall be credited such contributions and earnings and losses thereon. 

 

Unless the context otherwise requires, a Participant’s “Account” or “Account balance” shall mean the aggregate value of all separate subaccounts maintained on his or her behalf pursuant to the Plan and Trust agreement.

 

Section 7.2.           Vesting

 

(a)          In General. A Participant shall become vested in his or her Account on the date the Participant has completed three Years of Service. For purposes of this Section 7.2(a), a Participant will be deemed to have completed three Years of Service after he or she completes two Years of Service and then completes 1,000 Hours of Service before any break in service that would result in the Participant not being credited for two Years of Service.

 

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(b)         Accelerated Vesting.  A Participant shall become vested in his or her Account on the first to occur of the following events while the Participant is an Associate:

 

(i)             the Participant’s death;

 

(ii)          the Participant’s Disability; or

 

(iii)       the Participant’s attainment of age 65.

 

(c)          Merger Effective Time.  A Participant who was an Associate as of the Merger Effective Time became vested in the assets allocated to his or her Account as of the Merger Effective Time (which assets are now credited to the Participant’s Legacy ESOP Account).

 

(d)         Certain Sales or Dispositions.  In the event of the sale or disposition of a business or a sale of substantially all of the assets of a trade or business, a Participant affected by such sale may be vested in his or her Account, irrespective of the Participant’s Years of Service, if expressly provide in the documents effecting the transaction or otherwise authorized by the Company.

 

Section 7.3.           Investment Elections.

 

(a)          Investment Election.  Each Participant may make an investment election that shall apply to the investment of contributions made or allocated for_the Participant’s benefit to his or her Legacy ESOP Account, Profit Sharing Account and Top-Heavy Plan Account, if any, and any earnings thereon, subject to such limitations as the Committee may from time to time impose. Such election shall specify the whole percentage of the contributions (and earnings thereon) that shall be invested in one or more of the Investment Funds. During any period in which no investment direction is on file with the Committee, contributions made or allocated for a Participant’s benefit to his or her Account (and earnings thereon) shall be invested in the age-

 

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appropriate Target Retirement Date Fidelity Freedom Fund (determined assuming the Participant will retire at age sixty-five (65)).

 

(b)         Change of Investment Election.  A Participant may elect to change his or her investment election as of any Valuation Date, subject to such limitations as the Administrator may from time to time impose. Such change shall be limited to the Investment Funds then offered under the Plan. A change in investment election made pursuant to this Section shall apply to the existing balances of a Participant’s Legacy ESOP Account, Profit Sharing Account and Top-Heavy Plan Account, if any, or to contributions made or allocated for the benefit of the Participant (and earnings thereon) to such accounts after such change, or both. Any change in investment elections shall specify the whole percentage of the balances of such accounts or of the contributions (and earnings thereon) that shall be invested in one or more of the Investment Funds. A Participant’s change of investment election must be made in the manner prescribed by the Administrator. The Administrator shall prescribe rules regarding the time by which such an election must be made in order to be effective for a particular Valuation Date.

 

Section 7.4              Short-Term Investments.  Notwithstanding any election of any Participant, the Trustee shall have the right to hold invested in a short-term investment fund any amounts intended for investment or reinvestment until such time as investment or reinvestment may be made in accordance with the Plan and Trust. 

 

Section 7.5.           Allocation of Contributions.  Any contribution made when the Plan is a top-heavy plan within the meaning of Section 13.1 shall be allocated to the Top-Heavy Account of the Participant for whom such contribution is made as soon as practicable after the Valuation Date coinciding with or next following the date on which such contribution is

 

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delivered to the Trustee and shall be credited to such Participant’s Account as of such Valuation Date.

 

Section 7.6.           Allocation of Forfeitures.  The total amount forfeited during the Plan Year pursuant to Section 8.1(c) and Section 8.5, reduced by the amount of such forfeitures credited to Accounts pursuant to Section 8.5, shall be applied first to reduce expenses related to Plan administration and then shall be treated as a profit sharing contribution pursuant to Section 4.1.

 

Section 7.7.           Correction of Error.  If it comes to the attention of the Administrator that an error has been made in any of the allocations prescribed by this Article 7, appropriate adjustment shall be made to the accounts of all Participants and Beneficiaries that are affected by such error, except that no adjustment need be made with respect to any Participant or Beneficiary whose account has been distributed in full prior to the discovery of such error.

 

Section 7.8.           Transfers from Other Plans.  The Trustee of the Plan shall not permit any amounts to be transferred to the Plan from any other plan.

 

ARTICLE 8

 

WITHDRAWALS AND DISTRIBUTIONS

 

Section 8.1.           Distribution of Account.  (a) No Withdrawals or Loans. A Participant shall not be permitted to withdraw any portion of his or her Account while he or she remains in employment with an Employer or Affiliate or to take a loan on his or her Account at any time.

 

(b)         Termination of Employment Under Circumstances Entitling Participant to Full Distribution of Account.  If a Participant’s employment with all Employers and Affiliates terminates when he or she is vested in all or a portion of his Account in accordance with Section

 

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7.1, then the Participant or his or her Beneficiary, as the case may be, shall be entitled to receive one hundred percent (100%) of the vested portion of such Account.

 

(c)          Other Termination of Employment.  If a Participant terminates employment with his or her Employer and is not vested in his or her Account, then such Participant shall be deemed to have received a distribution of his or her Account and the balance of the Account shall be forfeited. If such former Paricipant is reemployed prior to incurrng five consecutive 1-Year Breaks in Service, then any forfeiture shall be reinstated.

 

(d)         Time of Distribution.  The distribution of an Account shall commence no later than one year after the close of the Plan Year in which the Participant terminates employment with his or her Employer due to death, Disability or after the attainment of age 65 and no later than five years after the close of the Plan Year in which a Participant terminates employment for any other reason, unless the Participant (or Beneficiary) elects otherwise; provided, however, that:

 

(i)             if a Participant dies before the commencement of distribution of his or her Account, distributions paid or commencing after the Participant’s death shall be completed no later than December 31 of the calendar year which contains the fifth anniversary of the Participant’s death, except that (1) if the Participant’s Beneficiary is the Participant’s spouse, distribution may be deferred until December 31 of the calendar year in which the Participant would have attained age 701⁄2 and (2) if the Participant’s Beneficiary is a person other than the Participant’s spouse and distributions commence on or before December 31 of the calendar year immediately following the calendar year in which the Participant died, such distributions may be made over a period not longer than the life expectancy of such Beneficiary;

 

(ii)          if at the time of a Participant’s death, distribution of his or her Account has commenced, the remaining portion of the Participant’s Account shall be paid at least as rapidly as under the method of distribution being used prior to the Participant’s death, as determined pursuant to U.S. Treasury Regulation § 1.401(a)(9)-2;

 

(iíi)       unless a Participant files a written election to defer distribution, distribution shall be made to a Participant by payment in a single lump sum payment no later than 60 days after the end of the Plan Year which contains the latest of (i) the date of the Participant’s termination of employment, (ii) the tenth anniversary of the date the Participant commenced participation in the Plan and (iii) the Participant’s 65th birthday;

 

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provided, however, that if the Participant does not elect a distribution prior to the latest to occur of the events listed above, the Participant shall be deemed to have elected to defer such distribution until a date no later than April 1 of the calendar year following the calendar year in which the Participant attains age 701⁄2; and

 

(iv)      with respect to a Participant who continues in employment after attaining age 701⁄2, distribution of the Participant’s vested Account shall commence no later than the Participant’s required beginning date. For purposes of this paragraph, the term “required beginning date” shall mean (A) with respect to a Participant who is a 5%-owner (within the meaning of section 416(i) of the Code), April 1 of the calendar year following the calendar year in which the Participant attains age 701⁄2 and (B) with respect to any other Participant, April 1 of the calendar year following the calendar year in which the Participant terminates employment with all Employers and Affiliates. Distributions made under this paragraph shall be made in accordance with Section 8.1(e). A Participant is treated as a 5%-owner for purposes of this Section if such Participant is a 5%-owner as defined in section 416(i) of the Code (determined in accordance with section 416 of the Code but without regard to whether the Plan is a top-heavy plan) at any time during the Plan Year in which such owner attains age 661⁄2 or any subsequent year. Once distributions have begun to a 5%-owner under this Section, they must continue to be distributed, even if he or she ceases to be a 5%-owner.

 

Notwithstanding any provisions of the Plan to the contrary, all distributions will be made in accordance with section 401(a)(9) of the Code and Treasury regulations promulgated of thereunder, including the minimum distribution incidental death benefit requirement thereof.

 

(e)          Form and Method of Distribution.  Any distribution from an Account to which a Participant (or in the event of the Participant’s death, his or her Beneficiary) becomes entitled shall be made in the form of a lump sum in cash or in the form of cash in annual installments over a period not to exceed 15 years. A Participant (or Beneficiary) may change his or her election as to the form of distribution at any time before the distribution is made or commences.

 

(f)            Order of Distribution.  Any distribution shall be charged against a Participant’s subaccounts in the order determined by the Administrator or Recordkeeper.

 

Section 8.2.           Payment of Small Account Balances.  Notwithstanding any provision of Section 8.1 to the contrary and subject to Section 8.3, if the aggregate value of a

 

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Participant’s Account at any time following his or her termination of employment does not exceed $1,000, then such amount shall be distributed in a lump sum payment to the Participant or his or her Beneficiary, as the case may be. The distributions of such amounts shall be made at the time determined by the Administrator and the Recordkeeper.

 

Section 8.3.           Direct Rollover Option.  In the case of a distribution that is an “eligible rollover distribution,” a Participant, a Beneficiary who is a surviving spouse of a Participant, or a spouse or former spouse of a Participant who is an alternate payee under a qualified domestic relations order, as defined in section 414(p) of the Code, may elect that all or any portion of such distribution to which he or she is entitled shall be directly transferred from the Plan to (i) an individual retirement account or annuity described in section 408(a) or (b) or 408A of the Code, or (ií) if the terms of which permit the acceptance of eligible rollover distributions, to another retirement plan qualified under section 401(a) of the Code, to a qualified annuity plan described in section 403(a) of the Code, to an annuity contract described in section 403(b) of the Code or to an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to account separately for amounts transferred into such plan from this Plan. In the case of a distribution that is an eligible rollover distribution, a Beneficiary who is not the Participant’s spouse or former spouse and who is a “designated beneficiary” pursuant to Section 8.4 may elect that all or any portion of a distribution to which he or she is entitled shall be directly transferred from the Plan to an individual retirement account or annuity described in Section 408(a) or (b) or 408A of the Code that was established for the purpose of receiving such distribution. For purposes of this Section 8.3, the term “eligible rollover distribution” shall mean any distribution to an Associate of all or any portion of the

 

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balance to the credit of the Associate in a qualified trust, except that such term shall not include (i) any distribution which is one of a series of substantially equal periodic payments (not less frequently than annually) made (a) for the life (or life expectancy) of the Associate or the joint lives (or joint life expectancies) of the Associate and the Associate’s designated beneficiary, or (b) for a specified period of 10 years or more; (ií) any distribution to the extent such distribution is required under section 401(a)(9) of the Code; and (iií) any distribution which is made upon hardship of the Associate.

 

Section 8.4. Designation of Beneficiary. (a) In General. Each Participant shall have the right to designate one or more persons (including a legal entity, such as a trust) (designations may be made contingently or successively) to be his or her Beneficiary to receive a distribution to be made under this Article upon the death of the Participant or, in the case of a Participant who dies after his or her termination of employment but before the distribution of the entire amount to which he or she is entitled under the Plan, any undistributed balance to which he or she would have been entitled. No designation of a Beneficiary, other than a Participant’s spouse, shall be effective if the Participant was married through the one-year period ending on the date of his or her death unless the designation at the time it was made was consented to in writing (or by such other method permitted by the Internal Revenue Service) by the individual who was then the Participant’s spouse, acknowledging the effect of such consent and witnessed by a notary public or a Plan representative, or it is established to the satisfaction of the Administrator or Recordkeeper that such consent could not be obtained because such spouse could not be located or because of the existence of other circumstances as the Secretary of the Treasury may prescribe as excusing the requirement of such consent. Subject to the immediately preceding sentence, a Participant may from time to time, without the consent of any Beneficiary,

 

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change or cancel any such designation. Such designation and each change thereof shall be made in the manner prescribed by the Administrator and shall be field with the Administrator or Recordkeeper. If (i) no person has been designated by a Participant to be his or her Beneficiary under the Plan or (ií) a designation is not effective for the reason described in the second sentence of this Section 8.4(a), then the Participant’s Beneficiary shall be (1) the deceased’s surviving spouse, if any, (2) if there is no surviving spouse, the person designated by the Participant to receive a benefit upon his or her death under the NBTY, Inc. 401(k) Savings Plan, or if no person is so designated under the NBTY, Inc. 401(k) Savings Plan, the person most recently designated to receive a benefit upon the Participant’s death under any predecessor plan as reflected in the records of an Employer or the Recordkeeper, (3) if there is no surviving spouse and no persons are so designated, then living descendants, if any, of the deceased, per stirpes, or (4) if there is no surviving spouse, if no persons are so designated and there are no living descendants, the executor or administrator of the estate of the deceased. Unless otherwise set forth in the applicable beneficiary designation form or the instructions thereto, if a Beneficiary predeceases the Participant, then any undistributed balance of the Account of the deceased shall be distributed by the Trustee in the order prescribed by the immediately preceding sentence.

 

(b) Successor Beneficiaries. A Beneficiary may, in the manner prescribed by the Administrator or Recordkeeper, designate a person (a “successor beneficiary”) to receive any undistributed balance upon the death of the Beneficiary to which such Beneficiary would have been entitle to receive. Unless otherwise set forth in the applicable form pursuant to which a Participant designates a Beneficiary or the instructions thereto, if the Beneficiary dies after the Participant and before distribution of the entire amount of the benefit under the Plan in which the

 

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Beneficiary has an interest, then any remaining amount shall be distributed, as soon as practicable after the death of such Beneficiary, in the form of a lump sum payment to the successor beneficiary, or, if there is no such successor beneficiary, to the executor or administrator of the estate of such deceased Beneficiary.

 

Section 8.5. Missing Persons. If following the date on which a Participant’s Account may be distributed without the Participant’s consent pursuant to Section 8.1(c) or 8.2, the Administrator or Recordkeeper in the exercise of reasonable diligence has been unable to locate the person or persons entitled to the Participant’s Account (after sending a registered letter, return receipt requested, to the last known address, and after utilizing certified mail, checking records of related employee benefit plans maintained by the Company, contacting such designated beneficiaries, and using a letter forwarding service (of the Internal Revenue Service or Social Security Administration) and any further effort deemed prudent by the Administrator or Recordkeeper to ascertain the whereabouts of such Participant or Beneficiary), then the Participant’s Account may be forfeited; provided, however, that to the extent required by law the Plan shall reinstate and pay to such person or persons the amount so forfeited upon a claim for such amount made by such person or persons. The amount to be so reinstated shall be obtained from the total amount that shall have been forfeited pursuant to this Section and Section 8.1(c) during the Plan Year in which the claim for such forfeited benefit is made and shall not include any earnings or losses from the date of the forfeiture. If the amount to be reinstated exceeds the amount of the forfeitures under this Section and Section 8.1(c), then each Employer shall make a contribution in an amount equal to such Employer’s pro-rata share of such excess. Any such contribution shall be made regardless of whether the limitations set forth in Article 5 will be exceeded by such contribution. An Employer’s pro rata share shall be determined by

 

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multiplying the amount of such forfeitures by a fraction, the numerator of which is equal to the number of Associates employed by such Employer who made a claim for such forfeited benefits and the denominator of which is the number of all Associates who made a claim for such forfeited benefits. To the extent the forfeitures under this Section exceed any claims for forfeited benefits made pursuant to this Section and Section 9.1(b), such excess shall be applied in accordance with Section 7.6. Notwithstanding the foregoing, all amounts forfeited under this Section on March 8, 2011 shall be allocated to the Profit Sharing Accounts of Participants who were Associates on December 31, 2010 and worked 1,000 Hours of Service during 2010.

 

Section 8.6. Distributions to Minor and Disabled Individuals. Any distribution that is payable to an individual who is a minor or to an individual who has been legally determined to be unable to manage his or her affairs by reason of illness or mental incompetency may be made to, or for the benefit of, any such individual at such time consistent with the provisions of the Plan and in such of the following ways as the legal representative of such individual shall direct: (a) directly to any such minor individual if, in the opinion of such legal representative, such minor is able to manage his or her affairs, (b) to such legal representative, (c) to a custodian under a Uniform Gifts to Minors Act for any such minor individual, or (d) as otherwise directed by such legal representative. Neither the Administrator nor the Trustee shall be required to oversee the application by any third party other than the legal representative of an individual of any distribution made to or for the benefit of such individual pursuant to this Section.

 

ARTICLE 9

 

SPECIAL PARTICIPATION AND DISTRIBUTION RULES

 

Section 9.1. Reemployment. (a)  Participation. If an Associate whose employment with the Employers terminated before the Associate satisfied the service

 

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requirement set forth in Section 3.1 is reemployed by an Employer, then the Associate’s prior service shall be disregarded unless the period between the date the Associate’s employment terminated and the date he or she is reemployed is not greater than thirty (30) days. If an individual who was a Participant terminated employment with his or her Employer and is reemployed by an Employer, then the individual shall again become a Participant as of his or her reemployment date. If a Participant whose employment with the Employers is terminated is receiving installment payments pursuant to Section 8.1(e), such payments shall be suspended upon such Participant’s reemployment unless he or she has attained age 591/2 on or before the date of such reemployment.

 

(b) Restoration of Forfeitures. If a Participant who terminated employment with the Employers is reemployed prior to incurring five consecutive 1-Year Breaks in Service, and, at or after the Participant’s termination of employment, his or her Account was forfeited pursuant to Section 8.1(c), then an amount equal to the forfeited amount shall be credited to the Participant’s Account as soon as administratively practicable after he or she is reemployed. Any amount to be restored pursuant to this subsection shall be obtained from the total amounts that have been forfeited pursuant to Sections 8.1(c) and 8.5, as applicable, during the Plan Year in which such Participant is reemployed from the Accounts of Participants employed by the same Employer as the reemployed Participant, as the case may be. If the aggregate amount to be so restored to the Accounts of Participants who are Associates of a particular Employer exceeds the amount of such applicable forfeitures, such Employer shall make a contribution in an amount equal to the excess. Any such contribution shall be made regardless of whether the limitations set forth in Article 5 will be exceeded by such contribution.

 

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(c) Service. If an individual who was previously employed by an Employer or an Affiliate is re-employed by an Employer or an Affiliate, any service attributable to his or her prior period of employment shall be reinstated as of the date of his or her participation or reparticipation, as the case may be, to the extent such service was recognized at the time of his or her prior termination of employment.

 

Section 9.2. Employment by Affiliates. If an individual is employed by an Affiliate that is not an Employer, then any period of employment with such Affiliate shall be taken into account under the Plan solely for the purposes of (i) measuring such individual’s Hours of Service and Years of Service and (ii) determining when such individual has terminated his or her employment for purposes of the Plan, to the same extent it would have been had such period of employment been as an Associate.

 

Section 9.3. Qualified Military Service. Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to Qualified Military Service shall be provided in accordance with section 414(u) of the Code. The Beneficiaries of a Participant who dies on or after January 1, 2007 while performing Qualified Military Service shall be entitled to receive the Participant’s entire Account.

 

ARTICLE 10

 

ADMINISTRATION

 

Section 10.1. The Administrator. (a) The Administrator shall be the “administrator” of the Plan within the meaning of such term as used in ERISA and shall be responsible for the administration of the Plan.

 

(b) No individual employed by the Administrator who is a Participant shall take part in any action of the Administrator or any matter involving solely his or her rights under the Plan.

 

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(c) The Administrator shall have the duty and authority to interpret and construe, in its sole discretion, the terms of the Plan in all respects, including, but not limited to, all questions of eligibility, the status and rights of Participants, distributees and other persons under the Plan, and the manner, time and amount of payment of any distribution under the Plan. All determinations and actions of the Administrator shall be conclusive and binding upon all affected parties, except that the Administrator may revoke or modify a determination or action that it determines to have been in error. Benefits will be paid under the Plan only if the Administrator decides in its sole discretion that the applicant is entitled to the benefits.

 

(d) The Administrator shall direct the Trustee to make payments of amounts to be distributed from the Trust under Article 8.

 

(e) The Administrator may adopt such rules, regulations, and procedures as it deems necessary for the conduct of its affairs and the administration of the Plan, provided that any such rules, regulations, and procedures shall be consistent with the provisions of the Plan and ERISA, and such rules, regulations, and procedures shall be binding upon all Participants and Beneficiaries.

 

(f) The Administrator shall discharge its duties as administrator with respect to the Plan (i) solely in the interest of the Participants and Beneficiaries, (ii) for the exclusive purpose of providing benefits to the Participants and Beneficiaries and of defraying reasonable expenses of administering the Plan and (iii) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. The Employers hereby jointly and severally indemnifies and holds harmless the Trustee from the effects and consequences of its acts, omissions and conduct in its official capacity, except to the

 

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extent that such effects and consequences result from its own gross negligence, willful misconduct or criminal acts.

 

Section 10.2. Named Fiduciary. The Company shall be a “named fiduciary” of the Plan within the meaning of such term as used in ERISA solely with respect to its powers specifically set forth herein.

 

Section 10.3. Allocation and Delegation of Responsibilities. The Administrator, the Company, and any Employer may allocate their responsibilities and may delegate to any person, partnership, corporation or a committee to carry out any of their responsibilities with respect to the Plan. Any such allocation or designation shall be in writing and shall be kept with the records of the Plan.

 

Section 10.4. Professional and Other Services. Each of the Administrator, the Company, and the Employers may employ counsel (who may be counsel for an Employer), specialists, advisers, and agents (including non-fiduciaries) to advise it and its agents or delegates and may arrange for clerical and other services as the Administrator, the Company or the Employer and its agents may require in carrying out its duties hereunder. The Trustee may compensate such agents or advisers from the assets of the Plan as fiduciary expenses (but not including any business (settlor) expenses of an Employer) to the extent not paid by any Employer.

 

Section 10.5. Claims Procedure. Any Participant or distributee (or his or her duly authorized representative) who believes that he or she is entitled to benefits in an amount greater than those which he or she has been notified he or she is entitled to receive, is receiving or has received may file a claim with the Administrator. Such a claim shall be in writing and state the nature of the claim, the facts supporting the claim, the amount claimed and the address of the

 

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claimant. No claim may be filed by any Participant or distributee more than two years after the person filing the claim knew, or had reason to know, of the circumstances giving rise to the claim. The Administrator shall review the claim and, within 90 days after receipt of the claim, give written notice to the claimant of its decision with respect to the claim. If special circumstances require an extension of time, the claimant shall be so advised in writing or by electronic means within the initial 90-day period and in no event shall such an extension exceed 90 days. The notice of the decision of the Administrator with respect to the claim shall be written in a manner calculated to be understood by the claimant and, if the claim is wholly or partially denied, shall set forth the specific reasons for the denial, specific references to the pertinent Plan provisions on which the denial is based, a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and an explanation of the claim review procedure under the Plan and the time limits applicable to such procedure (including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following the final denial of a claim). Such notice shall also include (a) a statement that, as required by Section 12.3 of the Plan, any legal or equitable action may be commenced under section 502 of ERISA later than one year after the claimant receives a final decision from the Administrator in response to the claimant’s request for review of the adverse benefit determination and (b) a statement that, as required by Section 12.9 of the Plan, any legal or equitable action brought under section 502 of ERISA or any other action involving the Plan brought under any other state law shall be litigated in the federal courts located in the Eastern District of New York and no other federal or state court.

 

The claimant (or his or her duly authorized representative) may request a hearing of the denial by filing with the Administrator a written request for such hearing within 60 days

 

29

 

after notice of the denial has been received by the claimant. Within the same 60-day period, the claimant may submit to the Administrator written comments, documents, records and other information relating to the claim. Upon request and free of charge, the claimant also may have reasonable access to, and copies of, documents, records and other information relevant to the claim. If a request for review is so filed, then the Administrator shall then conduct a hearing within the same 60-day period, at which the claimant may be represented by an attorney or any other representative of such claimant’s choosing and expense and at which the claimant shall have an opportunity to submit written and oral evidence and arguments in support of the claim. At the hearing (or prior thereto upon five (5) business days’ written notice to the Administrator) the claimant or the claimant’s representative shall have an opportunity to review all documents in the possession of the Administrator which are pertinent to the claim at issue and its disallowance. Either the claimant or the Administrator may cause a court reporter to attend the hearing and record the proceedings. In such event, a complete written transcript of the proceedings shall be furnished to both parties by the court reporter. The full expense of any such court reporter and such transcripts shall be borne by the party who requests or requested the court reporter to attend the hearing. A final, written decision as to the allowance of the claim shall be made by the Administrator within sixty (60) days of receipt of the appeal request unless special circumstances require an extension of time provided that the delay and the special circumstances are communicated in writing to the claimant within the 60-day period. If the appeal of the claim is wholly or partially denied, the notice of the Administrator’s final decision shall include specific reasons for the denial, specific references to the pertinent Plan provisions on which the denial is based and a statement that the claimant is entitled, upon request and free of charge, to reasonable access to, and copies of, all relevant documents, records and information. The notice shall be

 

30

 

written in a manner calculated to be understood by the claimant and shall notify the claimant of his or her right to bring a civil action under section 502(a) of ERISA. The claimant must file a civil action with respect to the denied claim not later than one hundred eighty (180) days following the date of the Administrator’s final determination.

 

In making determinations regarding claims for benefits, the Administrator shall consider all of the relevant facts and circumstances, including, without limitation, governing plan documents, consistent application of Plan provisions with respect to similarly situated claimants and any comments, documents, records and other information with respect to the claim submitted by the claimant (the “Claimant’s Submissions”). The Claimant’s Submissions shall be considered by the Administrator without regard to whether the Claimant’s Submissions were submitted or considered by the Administrator in the initial benefit determination.

 

Section 10.6. Notices to Participants, Etc. All notices, reports and statements given, made, delivered or transmitted to a Participant or distributee or any other person entitled to or claiming benefits under the Plan shall be deemed to have been duly given, made, delivered or transmitted when provided via such written or other means as may be permitted by applicable regulations promulgated by the U.S. Treasury Department. A Participant, distributee or other person may record any change of his or her address by written notice filed with his or her Employer.

 

Section 10.7. Notices to Administrator or Employers. Written directions and notices and other written or electronic communications from Participants, distributees or other persons entitled to or claiming benefits under the Plan to the Administrator or the Employers shall be deemed to have been duly given, made, delivered or transmitted when given, made,

 

31

 

delivered or transmitted in the manner and to the location prescribed by the Administrator or the Employers for the giving of such directions, notices and other communications.

 

Section 10.8. Records. The Administrator shall keep a record of all of its proceedings with respect to the Plan and shall keep or cause to be kept all books of account, records and other data as may be necessary or advisable in its judgment for the administration of the Plan.

 

Section 10.9. Reports of Trustee and Accounting to Participants. The Administrator shall keep on file, in such form as it shall deem convenient and proper, all reports concerning the Trust Fund received by it from the Trustee, and, as soon as practicable after the close of each Plan Year, each Participant and Beneficiary shall be provided a written benefit statement indicating the balance credited to any Account for such individual as of the close of such Plan Year. Any Participant or Beneficiary claiming that an error has been made with respect to such balance shall notify the Administrator in writing within ninety (90) days following the delivery of such benefit statement. If no notice of error timely is provided, the benefit statement shall be presumed to be correct.

 

ARTICLE 11

 

PARTICIPATION BY EMPLOYERS

 

Section 11.1. Adoption of Plan. With the consent of the Company, any entity may become an Employer under the Plan by (a) taking such action as shall be necessary to adopt the Plan and (b) executing and delivering such instruments and taking such other action as may be necessary or desirable to put the Plan and Trust into effect with respect to such entity, as prescribed by the Administrator. The powers and control of the Company, as provided in the Plan and the trust agreement, shall not be diminished by reason of participation of any such adopting entity in the Plan.

 

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Section 11.2. Withdrawal from Participation. An Employer may withdraw from participation in the Plan at any time by filing with the Company a duly certified copy of a written instrument duly adopted by an Employer to that effect and giving notice of its intended withdrawal to the Company, the Employers and the Trustee prior to the effective date of withdrawal.

 

Section 11.3. Company, Administrator and Recordkeeper as Agents for Employers. Each entity which becomes an Employer pursuant to Section 11.1 or Section 11.4 by so doing shall be deemed to have appointed the Company, the Administrator and the Recordkeeper as its agents to exercise on its behalf all of the powers and authorities conferred upon the Company, the Administrator and the Recordkeeper by the terms of the Plan. The authority of the Company, the Administrator and the Recordkeeper to act as such agent shall continue unless and until the portion of the Trust Fund held for the benefit of Associates of the particular Employer and their Beneficiaries is set aside in a separate Trust Fund as provided in Section 14.2.

 

Section 11.4. Continuance by a Successor. In the event that an Employer other than the Company is reorganized by way of merger, consolidation, transfer of assets or otherwise, so that another entity other than an Employer succeeds to all or substantially all of such Employer’s business, such successor entity may, with the consent of the Company, be substituted for such Employer under the Plan by adopting the Plan. Contributions by such Employer automatically shall be suspended from the effective date of any such reorganization until the date upon which the substitution of such successor entity for an Employer under the Plan becomes effective. If, within 90 days following the effective date of any such reorganization, such successor entity shall not have elected to adopt the Plan, the Company fails

 

33

 

to consent to such adoption, or an Employer adopts a plan of complete liquidation other than in connection with a reorganization, the Plan automatically shall be terminated with respect to employees of such Employer as of the close of business on the 90th day following the effective date of such reorganization or as of the close of business on the date of adoption of such plan of complete liquidation, as the case may be, and the Administrator shall direct the Trustee to distribute the portion of the Trust Fund applicable to such Employer in the manner provided in Section 14.3.

 

If such successor entity is substituted for an Employer as described above, then, for all purposes of the Plan, employment of each Associate with such Employer, including service with and compensation paid by such Employer, shall be considered to be employment with such successor entity.

 

ARTICLE 12

 

MISCELLANEOUS

 

Section 12.1. Expenses. All costs and expenses of administering the Plan and the Trust, including the expenses of Employer and the Administrator, the fees of counsel and of any agents for an Employer, investment advisory and record keeping fees, the fees and expenses of the Trustee, the fees of counsel for the Trustee and other administrative expenses, shall be paid out of the Trust Fund unless paid by an Employer. The Administrator, in its sole discretion, having regard to the nature of a particular expense, shall determine the portion of such expense that is to be borne by each Employer. An Employer may seek reimbursement of any expense paid by such Employer that the Administrator determines is properly payable from the Trust Fund. Until paid, expenses shall constitute a liability of the Plan.

 

Section 12.2. Legal Fees. Any award of legal fees in connection with an action involving the Plan shall be calculated pursuant to a method that results in the lowest amount of

 

34

 

fees being paid, which amount shall be no more than the amount that is reasonable. In no event shall legal fees be awarded for work related to (a) administrative proceedings under the Plan, (b) unsuccessful claims brought by a Participant, Beneficiary or any other person, or (c) actions that are not brought under ERISA. In calculating any award of legal fees, there shall be no enhancement for the risk of contingency, nonpayment or any other risk nor shall there be applied a contingency multiplier or any other multiplier. In any action brought by a Participant, Beneficiary or any other person against the Plan, the Administrator, any Plan fiduciary, any Plan administrator, the Company, its affiliates or their respective officers, directors, employees, or agents (the “Plan Parties”), legal fees of the Plan Parties in connection with such action shall be paid by the Participant, Beneficiary or other person bringing the action, unless the court specifically finds that there was a reasonable basis for the action.

 

Section 12.3. Statute of Limitations for Actions under the Plan. Except for actions to which the statute of limitations prescribed by Section 413 of ERISA applies, (a) no legal or equitable action relating to a claim for benefits under Section 502 of ERISA may be commenced later than one year after the claimant receives a final decision from the Administrator in response to the claimant’s request for review of the adverse benefit determination (or, if later, one year after the effective date of this provision) and (b) no other legal or equitable action involving the Plan may be commenced later than two years from the time the person bringing an action knew, or had reason to know, of the circumstances giving rise to the action (or, if later, two years after the effective date of this provision). This provision shall not bar the Plan or its fiduciaries from recovering overpayments of benefits or other amounts incorrectly paid to any person under the Plan at any time or bringing any legal or equitable action against any party.

 

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Section 12.4. Non-Assignability.

 

(a)          In General. No right or interest of any Participant or Beneficiary in the Plan shall be assignable or transferable in whole or in part, either directly or by operation of law or otherwise, including, but not by way of limitation, execution, levy, garnishment, attachment, pledge or bankruptcy, but excluding devolution by death or mental incompetency, and any attempt to do so shall be void, and no right or interest of any Participant or Beneficiary in the Plan shall be liable for, or subject to, any obligation or liability of such Participant or Beneficiary, including claims for alimony or the support of any spouse, except as provided below.

 

(b)         Exception for Qualified Domestic Relations Orders. Notwithstanding any provision of the Plan to the contrary, if a Participant’s Account under the Plan, or any portion thereof, is the subject of one or more qualified domestic relations orders (as defined in section 414(P) of the Code), such Account or portion of either shall be paid to the individual, at the time and in the manner specified in any such order. The Administrator shall adopt rules and procedures, in accordance with section 414(p) of the Code, relating to its (i) review of any domestic relations order for purposes of determining whether the order is a qualified domestic relations order and (ii) administration of a qualified domestic relations order. A domestic relations order shall not fail to constitute a qualified domestic relations order solely because such order provides for distribution to an alternate payee of the benefit assigned to the alternate payee under the Plan prior to the applicable Participant’s earliest retirement age (as defined in section 414(p) of the Code) under the Plan.

 

(c)          Other Exception. Notwithstanding any provision of the Plan to the contrary, if a Participant is ordered or required to pay an amount to the Plan pursuant to (i) a judgment in a

 

36

 

criminal action, (ii) a civil judgment in connection with a violation (or alleged violation) of Part 4 of Subtitle B of Title I of ERISA or (iii) a settlement agreement between the Secretary of Labor and the Participant or the Pension Benefit Guaranty Corporation and the Participant in connection with a violation (or alleged violation) of Part 4 of Subtitle B of Title I of ERISA, the Participant’s Account may, to the extent permitted by law, be offset by such amount.

 

Section 12.5. Employment Non-Contractual. The Plan confers no right upon an Associate to continue in employment.

 

Section 12.6. Merger or Consolidation with Another Plan. A merger or consolidation with, or transfer of assets or liabilities to, any other plan shall not be effected unless the terms of such merger, consolidation or transfer are such that each Participant, distributee, Beneficiary or other person entitled to receive benefits from the Plan would, if the Plan were to terminate immediately after the merger, consolidation or transfer, receive a benefit equal to or greater than the benefit such person would be entitled to receive if the Plan were to terminate immediately before the merger, consolidation, or transfer.

 

Section 12.7. Gender and Plurals. Wherever used in the Plan, words in the masculine gender shall include the masculine or feminine gender, and, unless the context otherwise requires, words in the singular shall include the plural, and words in the plural shall include the singular.

 

Section 12.8. Applicable Law. The Plan and all rights hereunder shall be governed by and construed in accordance with the laws of New York to the extent such laws have not been preempted by applicable Federal law.

 

Section 12.9. Forum for Legal Actions under the Plan. Any legal action involving the Plan that is brought by any Participant, any Beneficiary or any other person shall

 

37

 

be litigated in the Federal courts located in the Eastern District of New York and no other Federal or state court.

 

Section 12.10. Severability. If any provision of the Plan is held illegal or invalid, the illegality or invalidity shall not affect the remaining provisions of the Plan and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included in the Plan.

 

Section 12.11. No Guarantee. None of the Company, the Employers, the Administrator or the Trustee in any way guarantees the Trust from loss or depreciation nor the payment of any benefit that may be or become due to any person from the Trust Fund. Nothing in the Plan shall be deemed to give any Participant, distributee or Beneficiary an interest in any specific part of the Trust Fund or any other interest except the right to receive benefits from the Trust Fund in accordance with the provisions of the Plan and the trust agreement.

 

Section 12.12. Plan Voluntary. Although it is intended that the Plan shall be continued and that contributions shall be made as herein provided, the Plan is entirely voluntary on the part of the Employers and the continuance of the Plan and the contributions hereunder are not and shall not be regarded as contractual obligations of the Employers.

 

ARTICLE 13

 

TOP-HEAVY PLAN REQUIREMENTS

 

Section 13.1. General Rule. If the Plan is or becomes top-heavy in any Plan Year, the provisions of this Article 13 will supersede any conflicting provision in the Plan.

 

Section 13.2. Definitions.

 

(a)          Key Employee. Key Employee shall mean any Associate or former Associate (or any Beneficiary of such Associate) who at any time during the Plan Year that includes the Determination Date was (i) an officer of an Employer having annual compensation greater than $160,000 (for 2011) (as adjusted under section 416(i)(1) of the Code for Plan Years beginning

 

38

 

after December 31, 2002), (ii) a five percent (5%) owner of an Employer, or (iií) a one percent (1%) owner of an Employer having annual compensation of more than $150,000.

 

(b)         Top-Heavy Plan: For any Plan Year, the Plan is top-heavy if any of the following conditions exist:

 

(i)             If, as of the Determination Date, the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part of any Required Aggregation Group or Permissive Aggregation Group.

 

(ii)          If the Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group exceeds 60 percent.

 

(iií)       If the Plan is a part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent.

 

(c)          Top-Heavy Ratio: The aggregate of the account balances of Key Employees under the Plan compared to the aggregate of the account balances of all Associates who are Participants. Effective January 1, 2002, the aggregate of the account balances of all Associates shall be increased by the distributions made with respect to the Associate under the Plan and any plan aggregated with the Plan under section 416(g)(2) of the Code during the 1-year period ending on the Determination Date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under section 416(g)(2)(A) of the Code. In the case of a distribution made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting “5-year period” for “I-year period.” Effective January 1, 2002, the accrued benefits and accounts of any individual who has not performed services for an Employer during the 1-year period ending on the Determination Date shall not be taken into account.

 

(d)         Permissive Aggregation Group: The Required Aggregation Group, plus any other plan or plans of the Employer which, when considered as a group with the Required

 

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Aggregation Group, would continue to satisfy the requirements of sections 401(a)(4) and 410 of the Code.

 

(e)          Required Aggregation Group: (i) Each qualified plan of the Employer in which at least one (1) Key Employee participates and (ii) any other qualified plan of the Employer that enables a plan described in Section 13.2(d) to meet the requirements of section 401(a)(4) or 410 of the Code.

 

(f)            Determination Date: For any Plan Year after the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan, the last day of such Plan Year.

 

(g)         Compensation: Compensation shall have the meaning set forth in U.S. Treasury Regulation § 1.415(c)-2.

 

Section 13.3. Minimum Allocation. The sum of contributions and forfeitures (as referred to in U.S. Treasury Regulation § 1.416-1, M-10) allocated under Section 7.6 on behalf of any Participant who is not a Key Employee shall not be less than three percent (3%) of such Participant’s compensation. The minimum allocation (to be known as the “Employer Top-Heavy Contribution”) is determined without regard to any Social Security contribution. The Employer Top-Heavy Contribution shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the Participant’s failure to complete 1,000 Hours of Service or (ii) the Participant’s compensation for such year is less than a stated amount.

 

The provisions of this Section shall not apply to any Participant who was not employed by an Employer on the last day of the Plan Year. Notwithstanding anything herein to the contrary, with respect to any Participant who is not a Key Employee and who is a participant in the NBTY, Inc. 401(k) Savings Plan, the NBTY, Inc. 401(k) Savings Plan shall be the plan

 

40

 

designated to satisfy the minimum allocation requirement. To the extent any minimum allocation is made under the NBTY, Inc. 401 (k) Savings Plan, a minimum allocation shall not be made under the Plan.

 

Section 13.4. Minimum Vesting for Top-Heavy Years. Any portion of an Account that a Participant is not entitled to receive pursuant to this Section shall be charged to the relevant account and forfeited as of the earlier of (i) the date the Participant receives a distribution of his or her vested account and (ii) the date the Participant incurs five consecutive 1-Year Breaks in Service.

 

ARTICLE 14

 

AMENDMENT, ESTABLISHMENT OF

SEPARATE PLAN, AND PLAN TERMINATION

 

Section 14.1. Amendment. The Committee may, at any time and from time to time, amend or modify the Plan. Any such amendment or modification shall become effective as of such date provided therein upon its execution, including retroactively to the extent permitted by law, and may apply to Participants in the Plan at the time thereof as well as to future Participants.

 

Section 14.2. Establishment of Separate Plan. If an Employer terminates its participation in the Plan pursuant to Section 14.3, then the Administrator shall determine the portion of each of the funds of the Trust Fund that is applicable to the Participants employed by such Employer and their Beneficiaries and direct the Trustee to segregate such portion in a separate trust. Such separate trust thereafter shall be held and administered as a part of the separate plan of such Employer.

 

Section 14.3. Termination. The Board at any time may terminate the Plan or any portion of the Plan by delivery to the Administrator of written notice of such termination. An

 

41

 

Employer at any time may terminate its participation in the Plan by resolution of its board of directors. In the event of any such termination, or in the event of the partial termination of the Plan with respect to a group of Participants (or any combination thereof), the Accounts of the group with respect to whom the Plan is terminated shall become fully vested and thereafter shall not be subject to forfeiture. Unallocated amounts, including Forfeitures, shall be allocated to the applicable Accounts. The Administrator shall direct the Trustee to distribute the vested Accounts to such group.

 

A complete discontinuance of contributions by an Employer to the Plan shall be deemed a termination of such Employer’s participation in the Plan for purposes of this Section 14.3.

 

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IN WITNESS WHEREOF, the Employee Benefits Committee of the Compensation Committee of NBTY, Inc. has caused this amendment to be adopted the Company this 3 day of May, 2011.

 

 

	
 
    	
By:
    	
/s/   Harvey Kamil
    
	
 
    	
 
    	
Harvey   Kamil
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Irene Fisher
    
	
 
    	
 
    	
Irene   Fisher
    

 

43Exhibit 10.27

 

	
 
    
	
NBTY, INC.
    
	
 
    
	
EXECUTIVE SEVERANCE PAY PLAN
    
	
 
    

 

Section 1                Purpose

 

The Company established the Plan to make available severance benefits to a select group of key management employees if and when employment with the Company and its Subsidiaries in the United States is terminated under the circumstances and subject to the conditions described below.  The Plan is intended to be a welfare benefit plan as defined by section 3(1) of ERISA.  The terms of the Plan may not be modified or amended, except as described below.

 

Section 2                Definitions

 

Capitalized terms used in the Plan and not elsewhere defined herein shall have the meanings set forth in this Section:

 

(a)           “Base Salary” shall mean one-twelfth of the Participant’s stated annual rate of base salary, excluding any employer contributions towards employee benefits, bonuses, equity compensation or other incentive pay, determined as of the date immediately prior to the date of such Participant’s Termination of Employment.

 

(b)           “Board” shall mean the Board of Directors of the Company.

 

(c)           “Cause” shall mean  (i) a Participant’s willful misconduct with regard to the Company; provided that no act or failure to act on Participant’s part will be considered “willful” (x) unless done, or omitted to be done, by Participant not in good faith or without reasonable belief that his or her action or omission was in, or not opposed to, the best interests of the Company or (y) if it is done, or omitted to be done, in reliance on the informed advice of the Company’s outside counsel or independent accountants or at the express direction of the Board; (ii) a Participant being indicted for, convicted of, or pleading nolo contendere to, a felony or intentional crime involving material dishonesty other than, in any case, any indictment, conviction or pleading based entirely on vicarious liability or traffic violations; (iii) a Participant’s conduct involving the use of illegal drugs; (iv) a Participant’s failure to attempt in good faith (other than when absent because of physical or mental incapacity) to follow a lawful directive of the Board or Participant’s supervisor within ten (10) days after written or electronic notice of such failure (to the extent that, in the reasonable judgment of the Board or such Participant’s supervisor, such failure can be cured by Participant); (v) a Participant’s material violation of either (x) the

 

1

 

Company’s or any of its affiliates’ Code of Business Conduct  (including the corporate policies referenced therein) which would constitute grounds for immediate termination of employment or (y) any statutory or common law duty of loyalty to the Company or any of its affiliates; or (vi) a Participant’s breach of any restrictive covenant under any agreement between the Participant and the Company or any Subsidiary relating to disclosure of confidential information, solicitation of employees or customers, or competition, and such breach continues beyond ten (10) days after written or electronic demand for substantial performance is delivered to Participant by the Company (to the extent that, in the reasonable judgment of the Board or such Participant’s supervisor, such breach can be cured by Participant), so long as the breach (which shall be deemed to refer to all breaches in this paragraph) is (A) material and (B) results in a significant adverse impact on the Company.

 

(d)           “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

 

(e)           “Company” shall mean NBTY, Inc.

 

(f)            “Disability” shall have occurred when a Participant has been unable to perform his or her material duties because of a physical or mental incapacity for a period of at least 180 days in any 365 day period, as determined by a physician selected by the Company or its insurers and acceptable to the Participant or the Participant’s legal representative, with such agreement as to acceptability not to be unreasonably withheld or delayed.  Notwithstanding the foregoing, a Disability termination shall be deemed to occur earlier if, as a result of physical or mental incapacity, Executive experiences a “separation from service” within the meaning of Section 409A of the Code.

 

(g)           “ERISA” shall mean the U.S. Employee Retirement Income Security Act of 1974, as amended.

 

(h)           “Participant” shall mean any employee of the Company or a Subsidiary designated as an eligible employee pursuant to Section 3.

 

(i)            “Plan” shall mean the NBTY, Inc. Executive Severance Pay Plan, as set forth herein, and as the same may from time to time be amended.

 

(j)            “Plan Committee” shall mean the committee designated to administer the Plan pursuant to Section 7.

 

(k)           “Severance Period” for a Participant shall mean 12 months unless the  Plan Committee notifies in writing the Participant that a greater period shall apply.

 

(l)            “Subsidiary” shall mean an entity that is, either directly or through one or more intermediaries, controlled by the Company.

 

(m)          “Termination of Employment” shall mean a Participant’s “separation from service,” within the meaning of section 409A of the Code, from the Company and its

 

2

 

Subsidiaries due to a termination of employment by the Company or a Subsidiary other than on account of Cause, Disability or death.

 

Section 3                Eligibility

 

Only those employees of the Company or any Subsidiary who are on the Company’s or a Subsidiary’s U.S. payroll and who have been selected by the Plan Committee and notified in writing of such selection shall participate in the Plan.

 

Section 4                Severance Payments

 

(a)           Cash Severance. In the event of a Participant’s Termination of Employment, the Company or a Subsidiary employer, as applicable, shall pay the Participant his or her Base Salary for each month during the Severance Period consistent with the Company’s normal payroll practices applicable to the Participant immediately prior to his or her Termination of Employment.  Payment shall begin on the first regularly scheduled payroll date occurring on or after the sixtieth (60th) day following the Termination of Employment date, and the first payment shall include the first two months of the severance payments.

 

(b)           Prior Year’s Bonus.  In the event of a Participant’s Termination of Employment after the end of a fiscal year but prior to the date annual bonus are to be paid for such year, the Company shall pay the Participant the annual cash bonus to which the Participant would have been entitled, if any, had he or she remained employed by the Company or a Subsidiary until the date bonuses for such fiscal year would have been paid.  Any bonus paid pursuant to this Section 4(b) shall be  paid at the same time as when bonuses are normally paid to participants in the Company’s annual bonus plan (but in any event no later than March 15th immediately following the fiscal year in which such bonus was earned).

 

Section 5                Conditions

 

Notwithstanding anything in the Plan to the contrary, no benefits shall be paid or provided under the Plan, unless (i) the Participant timely executes a release of claims in favor of the Company and its Subsidiaries in substantially the form attached hereto as Appendix A and (ii) such release becomes irrevocable pursuant to the terms of such release prior to the fifty-ninth (59th) day following the Participant’s Termination of Employment.  In addition, a Participant shall not be entitled to receive or continue to receive any benefits under the Plan if such Participant has breached any restrictive covenant under any agreement between the Participant and the Company or any Subsidiary relating to non-competition, disclosure of confidential information, solicitation of employees or customers.  In the event of such a breach, the Participant shall repay to the Company, within ten (10) business days of the Company’s written demand, all amounts previously paid to him or her under the Plan.

 

3

 

Section 6                Administration

 

(a)           Plan Committee.  The Plan shall be administered by the Compensation Committee of the Board, unless the Board shall appoint a different committee to administer the Plan.  Other provisions of the Plan notwithstanding, the Board may perform any function of the Plan Committee under the Plan, and to the extent authority is specifically reserved to the Board under the terms of the Plan, the Company’s Certificate of Incorporation or By-Laws, or applicable law, such authority shall be exercised by the Board and not by the Plan Committee.

 

(b)           Powers and Duties of Plan Committee.  In addition to the powers and duties specified elsewhere in the Plan (including, but not limited to, Section 8(g)), the Plan Committee shall have full authority and discretion to:

 

(i)            adopt, amend, suspend, and rescind such rules and regulations and appoint such agents as the Plan Committee may deem necessary or advisable to administer the Plan;

 

(ii)           correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan or other instrument hereunder;

 

(iii)          make determinations relating to eligibility for and entitlements to benefits under the Plan, and to make all factual findings related thereto; and

 

(iv)          make all other decisions and determinations as may be required under the terms of the Plan or as the Plan Committee may deem necessary or advisable for the administration of the Plan.

 

(c)           Delegation by Plan Committee.  Except to the extent prohibited by applicable law or any applicable stock exchange rules, the Plan Committee may delegate to any individual or individuals selected by the Plan Committee, who may or may not be members of the Board, all or any part of the Plan Committee’s responsibilities and powers set forth in the Plan, in which case every reference herein made to the Plan Committee shall be deemed to mean or include the appointed individual(s) as to matters within their scope of authority.  Any such delegation may be revoked by the Plan Committee at any time.  Except as notified in writing to the contrary by the Plan Committee, in the event of such delegation, the Plan Committee’s delegates shall have all of the powers vested in the Plan Committee necessary to fulfill the functions delegated.

 

Section 7                Claims Procedure

 

(a)           Generally.  This Section 7 describes the Plan’s procedures pursuant to which an individual can make a claim for benefits under the Plan and appeal a denied claim for benefits.  A request for benefits is a “claim” subject to these procedures only if it is filed by an individual or his or her authorized representative in accordance with rules

 

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and procedures established by the Plan Committee.  All claims must be filed with the Employee Benefits Committee of the Board (the “Employee Benefits Committee”) in writing (to the attention of “Employee Benefits Committee” and addressed to the General Counsel of the Company at its corporate headquarters).  An individual may designate an authorized representative to file a claim under the Plan on his or her behalf so long as the individual provides written notice of such designation to the Employee Benefits Committee identifying such authorized representative.

 

(b)           Time Periods for Responding to Initial Claims.  The Employee Benefits Committee shall respond to an initial claim for benefits under the Plan within 90 days after receipt of the claim.  If the Employee Benefits Committee determines that an extension is necessary due to special circumstances, the Employee Benefits Committee shall notify the individual within the initial 90-day period that the Employee Benefits Committee needs up to an additional 90 days to review his or her claim.

 

(c)           Notice and Information Contained in Notice Denying Initial Claim.  If the Employee Benefits Committee denies an individual’s claim (in whole or in part), the Employee Benefits Committee shall provide the individual with written notice of the denial.  Such notice shall (i) include the specific reason or reasons for the denial, (ii) refer to the specific provisions in the Plan upon which the denial is based, (iii) provide a description of any additional material or information necessary for the individual to perfect his or her claim  and an explanation as to why such information is necessary, and (iv) provide a description of the Plan’s appeals procedures and the time limits applicable for such procedures (such description to include a statement that the individual is eligible to bring a civil action in U.S. Federal court under section 502(a) of ERISA to appeal any adverse decision on appeal.

 

(d)           Appealing a Denied Claim for Benefits.  If an individual’s initial claim for benefits is denied, the individual may appeal the denial by filing a written request to the attention of Plan Committee and addressed to the General Counsel of the Company at its corporate headquarters, within 60 days after the date of the notice denying his or her initial claim for benefits.  If the individual decides to appeal a denied claim for benefits, the individual shall be able to submit written comments, documents, records, and other information relating to his or her claim for benefits (regardless of whether such information was considered in his or her initial claim for benefits) for review and consideration.  Such individual shall also be entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information that is relevant (within the meaning of ERISA) to his or her appeal.

 

(e)           Time Periods for Responding to Appealed Claims.  If an individual appeals a denied claim for benefits under the Plan, the Plan Committee shall respond to the individual within 60 days after receipt of the appeal.  If the Plan Committee determines that an extension is necessary due to special circumstances, the Plan Committee shall notify the individual within the initial 60-day period that the Plan Committee needs up to an additional 60 days to review his or her appeal and such

 

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notification shall indicate the special circumstances requiring an extension of time and the date by which the Plan Committee expects to render the determination on appeal.

 

(f)            Notice and Information Contained in Notice Denying Appeal.  If the Plan Committee denies an individual’s appeal (in whole or in part), the Plan Committee shall provide the individual with written notice of the denial.  Such notice shall (i) include the specific reason or reasons for the denial, (ii) refer to the specific provisions in the Plan upon which the denial is based, (iii) provide a statement that the individual is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information that is relevant (within the meaning of ERISA) to his or her claim and/or appeal for benefits, and (iv) include a statement that the individual is entitled to bring a civil action in U.S. Federal court under section 502(a) of ERISA to pursue his or her claim for benefits.

 

(g)           Plan Interpretation and Benefit Determination.  The Plan shall be administered by the Plan Committee, which has complete authority, in its sole and absolute discretion, to construe the terms of the Plan (and any related or underlying documents or policies), and to determine the eligibility for, and amount of, benefits due under the Plan to Participants and their beneficiaries.  All such interpretations and determinations of the Plan Committee shall be final and binding upon all parties and persons affected thereby.

 

Section 8                Successor to the Company

 

The Company may require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company expressly to assume the Plan and agree to perform the obligations of the Company hereunder in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.

 

Section 9                Amendment; Termination; Removal from Participation

 

The Compensation Committee of the Board retains the right to amend, suspend or terminate the Plan in whole or in part for any reason, so long as such action does not materially and adversely affect the rights of any Participant who has already been notified in writing of the Participant’s selection to participate in the Plan.

 

Section 10              General Provisions

 

(a)           No Mitigation.  A Participant shall not be required to mitigate the amount of any payment or benefit provided for in the Plan by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

 

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(b)           Non-Exclusivity of Rights.  Nothing in the Plan shall prevent or limit the Participant’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan provided by the Company and for which the Participant may qualify.  Notwithstanding anything herein to the contrary, any individual selected for participation in the Plan in accordance with Section 3 shall not be eligible to participate in any other Company or Subsidiary sponsored severance plan, policy, arrangement or agreement, unless determined otherwise by the Company.

 

(c)           Nonalienation of Benefits.  None of the payments, benefits or rights of any Participant shall be subject to any claim of any Participant’s creditors, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment, trustee’s process, or any other legal or equitable process available to any creditor of such Participant.  No Participant shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which he or she may expect to receive, contingently or otherwise, under the Plan.

 

(d)           No Contract of Employment.  Neither the establishment of the Plan, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Participant the right to be retained in the service of the Company or any Subsidiary, and all Participants shall remain subject to discharge to the same extent as if the Plan had never been adopted.

 

(e)           Death.  In the event of a Participant’s death following his or her Termination of Employment and after having become entitled to benefits under the Plan, any amounts not yet paid pursuant to Section 4(a) shall be paid in accordance with Section 4 to the person(s) or trust(s) which have been designated by the Participant in his or her most recent written beneficiary designation filed with the Company’s Director of Human Resources (the “Designated Beneficiary).  If, upon a Participant’s death, there is no Designated Beneficiary or surviving Designated Beneficiary, then the term Designated Beneficiary means the person(s) or trust(s) entitled by will or the laws of descent and distribution to receive such amounts.

 

(f)            Tax Withholding.  The Company and each Subsidiary shall have the right to withhold from any payment to be made pursuant to the Plan such amount the Company or such Subsidiary deems is required to be withheld under applicable laws.

 

(g)           Severability of Provisions.  If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provision had not been included.

 

(h)           Unfunded Plan.  The Plan shall not be funded.  No Participant shall have any right to, or interest in, any assets of the Company or any Subsidiary which may be applied by the Company to the payment of benefits under the Plan.

 

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(i)            Controlling Law.  The Plan shall be construed and enforced according to the laws of the state of New York, except to the extent preempted by United States Federal law.

 

(j)            Section 409A.  The Plan is intended to comply with or be exempt from the requirements of section 409A of the Codeand shall be interpreted and construed consistently with such intent; provided, however, that in no event shall the Company or any Subsidiary or any of its directors, officers, employees or advisors be responsible for any tax, interest or related tax penalties that may arise as a result of section 409A of the Code.  For purposes of section 409A of the Code, the right to a series of installment payments under the Plan shall be treated as a right to a series of separate payments.  Notwithstanding any other provision in the Plan, if a Participant is a “specified employee,” as defined in section 409A of the Code as of the date of the Participant’s Termination of Employment, then to the extent any amount payable to the Participant (i) constitutes the payment of nonqualified deferred compensation within the meaning of section 409A of the Code, (ii) is payable upon the Participant’s Termination of Employment and (iii) under the terms of the Plan would be payable prior to the six-month anniversary of the Participant’s Termination of Employment, such payment shall be delayed until the earlier to occur of (a) the first business day following the six-month anniversary of the Termination of Employment and (b) the date of the Participant’s death.  In no event may a Participant, directly or indirectly, designate the calendar year of payment.

 

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Appendix A

 

Form of Release

 

This Agreement and Release (“Agreement”) is made by and between NBTY, Inc., a Delaware corporation (together with any successor thereto, the “Company”), and                          (the “Employee”) (collectively, referred to as the “Parties” or individually referred to as a “Party”).  Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Severance Plan (as defined below).

 

WHEREAS, the Employee has been designated as a Participant in the NBTY, Inc. Executive Severance Plan (the “Severance Plan”); and

 

WHEREAS, in connection with Employee’s Termination of Employment effective                 , 20     (the “Date of Termination”), the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that Employee may have against the Company and any of the Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to Employee’s employment with or separation from the Company or its subsidiaries or affiliates.

 

NOW, THEREFORE, in consideration of the severance payments described in Section 4 of the Severance Plan, which, pursuant to the Severance Plan, are conditioned on Employee’s execution and non-revocation of this Agreement, and in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

 

1.             Severance Payments.  The Company agrees to provide Employee with the severance payments described in Section 4 of the Severance Plan, payable at the times set forth in, and subject to the terms and conditions of, the Severance Plan. In addition, to the extent not already paid and subject to Section 10(b) of the Severance Plan, the Company shall pay or provide to Employee :  (i) the portion of Employee’s Base Salary earned through the Date of Termination, but not yet paid to Employee; (ii) any accrued vacation owed to Employee under the Company’s vacation policy; (iii) any expenses owed to Employee pursuant to the Company’s expense reimbursement policy; and (iv) any amount accrued and arising from Employee’s participation in, or benefits accrued under any employee benefit plans, programs or arrangements, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements.  Employee agrees that Employee shall comply with the terms of any agreement Employee has entered into with the Company or any of its affiliates relating to restrictions as to disclosure of confidential information, solicitation of employees or customers or competition.

 

2.             Release of Claims.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company, any of their direct or indirect subsidiaries and affiliates (including, without limitation, Alphabet Holding Company, Inc. and its affiliated entities), and, in their capacities related to the foregoing, any of their current and former officers, directors,

 

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equity holders, managers, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries and predecessor and successor corporations and assigns (collectively, the “Releasees”).  Employee, on Employee’s own behalf and on behalf of any of Employee’s affiliated companies or entities and any of their respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement (as defined below), including, without limitation:

 

(a)           any and all claims relating to or arising from Employee’s employment  or service relationship with the Company or any of its direct or indirect subsidiaries or affiliates and the termination of that relationship;

 

(b)           any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of any shares of stock or other equity interests of the Company or any of its affiliates, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

 

(c)           any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

 

(d)           any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the New York City Human Rights Law;

 

(e)           any and all claims for violation of the federal or any state constitution;

 

(f)            any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

 

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(g)           any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

 

(h)           any and all claims for attorneys’ fees and costs.

 

Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not release claims to payments that arise under this Agreement or that cannot be released as a matter of law, including, but not limited to, Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding that Employee’s release of claims herein bars Employee from recovering such monetary relief from the Company or any Releasee), claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law, claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA, claims to any benefit entitlements vested as the date of separation of Employee’s employment, rights with regard to any vested equity (including under any stockholders agreement governing such equity and any side letter relating thereto), and any rights to indemnity, advancement of legal fees and coverage under the Company’s directors and officers insurance policies.

 

3.             Acknowledgment of Waiver of Claims under ADEA.  Employee understands and acknowledges that Employee is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary.  Employee understands and agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Employee understands and acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled.  Employee further understands and acknowledges that Employee has been advised by this writing that:  (a) Employee should consult with an attorney prior to executing this Agreement; (b) Employee has at least 21 days within which to consider this Agreement; (c) Employee has 7 days following Employee’s execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.  In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that Employee has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.

 

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4.             California Civil Code Section 1542.  If Employee resides in California, Employee acknowledges that he/she has been advised to consult with legal counsel and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Employee, being aware of said code section, agrees to expressly waive any rights he/she may have thereunder, as well as under any statute or common  law principles of similar effect.

 

5.             Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

 

6.             No Oral Modification.  This Agreement may only be amended in a writing signed by Employee and a duly authorized officer of the Company.

 

7.             Governing Law.  This Agreement shall be subject to the provisions of Section 10(i) of the Severance Plan.

 

8.             Effective Date.  If Employee has attained or is over the age of 40 as of the Date of Termination of employment, then the Employee has seven days after Employee signs this Agreement to revoke it and this Agreement will become effective on the eighth day after Employee signed this Agreement, so long as it has been signed by the Parties and has not been revoked by the Employee before that date (the “Effective Date”).  If the Employee has not attained the age of 40 as of the Date of Termination, then the “Effective Date” shall be the date on which Employee signs this Agreement.

 

9.             Voluntary Execution of Agreement.  Employee understands and agrees that Employee executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of Employee’s claims against the Company and any of the other Releasees.  Employee acknowledges that Employee:  (a) has read this Agreement; (b) has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement; (c) has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of Employee’s own choice or has elected not to retain legal counsel; (d) understands the terms and consequences of this Agreement and of the releases it contains; and (e) is fully aware of the legal and binding effect of this Agreement.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

 

 

	
Dated:
    	
 
    	
 
    	
COMPANY (or any successor thereto)
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
EMPLOYEE
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    

 

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