Document:

Exhibit 10.53

 

	
  Datapak
  Services Corporation

  	
  New Hudson ··· Phoenix ··· Reno

  

 

MASTER SERVICES
AGREEMENT

 

                This MASTER SERVICES AGREEMENT
(this “Agreement”) is made effective as of January 1, 2008, by and between
Datapak Services Corporation, a Michigan corporation (“Datapak”), and Bare
Escentuals Beauty , Inc. a Delaware corporation (“Bare Escentuals”).

 

RECITALS

 

                WHEREAS, Datapak provides
comprehensive inventory warehousing, order fulfillment, call center and
administrative services; and

 

                WHEREAS, Datapak desires to
provide such services to Bare Escentuals, and Bare Escentuals wishes to
purchase such services from Datapak, upon the terms and conditions set forth in
this Agreement.

 

AGREEMENT

 

                NOW, THEREFORE, in consideration
of the foregoing recitals and the mutual promises hereinafter set forth, the
parties hereto agree as follows:

 

1.             SERVICES. 
Datapak shall provide to Bare Escentuals all services (the “Services”)
set forth on the Schedule of Work (“SOW”) attached as Schedule 1 to this
Agreement.  The SOW may be amended or
modified at any time during the Term (as defined in Section 4 of
this Agreement) upon the mutual agreement of the parties, which shall be set
forth in writing and executed by an authorized representative of each party.

 

PRICING; PAYMENT.  In
consideration of the provision of services set forth on the SOW and otherwise
in this Agreement, Bare Escentuals agrees to make payment to Datapak in
accordance with the “Pricing Schedule” set forth on Schedule 1 to this
Agreement. All payments shall be due within thirty (30) days of receipt by Bare
Escentuals of an invoice from Datapak, except for invoices related solely to
transportation costs, which invoices shall be paid within ten (10) days of
receipt.

 

2.             AUDIT. 
Datapak agrees to maintain complete records of each transaction
involving the purchase, sale, or shipping of any Bare Escentuals merchandise by
Datapak for a period of two (2) years following the transaction.  Upon reasonable notice, Bare Escentuals (or a
certified public accountant appointed by Bare Escentuals in its sole
discretion) shall have the right to audit Datapak’s invoices and business
processes to verify that they are in compliance with the Pricing Schedule.  In the event that such audit indicates that
Datapak has overcharged Bare Escentuals by more than two percent (2%), then
such overpaid amount plus the costs of such audit, shall be immediately paid by
Datapak to Bare Escentuals.

 

 

                TERM.  This Agreement shall become
effective on January 1, 2008, and shall continue in effect until
terminated by either party on 30 days written notice to the other.

 

3.             OWNERSHIP OF INVENTORY/CUSTOMER DATA.

 

a.             Bare Escentuals’
Proprietary Rights.  The Bare
Escentuals’ merchandise warehoused or otherwise held by Datapak, and any and
all customer data or other Confidential Information (as defined in Section 7
of this Agreement) obtained or learned by Datapak pursuant to this Agreement
involve valuable patent, copyright, trade secret, trade name, trademark and
other proprietary rights of Bare Escentuals. 
No title to or ownership of any such proprietary right is transferred to
Datapak under this Agreement or by use of any trademark, patent or other
proprietary right.  Bare Escentuals
reserves all such proprietary rights. 
Datapak will not infringe, misappropriate or violate any proprietary
rights of Bare Escentuals.  Without
limiting the generality of the foregoing, Datapak will not register or attempt
to register, directly or indirectly, any such patents, copyrights, trade names,
trademarks or other proprietary rights other than in the name of Bare
Escentuals.  Bare Escentuals shall own
all of the merchandise and other inventory it deposits in Datapak’s warehouses
(collectively, the “Inventory), and all of the customer data.

 

b.             Datapak’s Proprietary
Rights.  Datapak is not authorizing,
selling, transferring, licensing or permitting the use of any of its
intellectual property, including but not limited to proprietary data, formulas,
database structures, database format, computer applications, programming and
software owned, licensed or developed by Datapak.  All computer applications, programming and
software, either purchased, owned, licensed or developed by Datapak in
connection with any services rendered by Datapak under this Agreement shall
remain exclusive property of Datapak and the Bare Escentuals shall never have
any right, entitlement or claim to said property, and Bare Escentuals disclaims
all rights, claims, or entitlement to same.

 

4.             CONFIDENTIALITY.  “Confidential Information”
means information that is provided by or on behalf of either party (the “Discloser”)
to the other party (the “Recipient”), or to which a party otherwise gains
access, in the course of or incidental to the performance of this Agreement, is
of value to the Discloser and is not generally known to others, including,
without limitation, customer lists, customer information, employee lists,
technology, processes, marketing techniques, price lists, pricing policies,
business methods, contracts and contractual relations with the Discloser’s
customers and suppliers, know-how, software, future and proposed products and
services, financial information, business forecasts, sales and merchandising,
and marketing plans and information. 
Confidential Information may be disclosed in written or other tangible
form (including on magnetic media) or by oral, visual or other means.  The terms, conditions and provisions of this
Agreement shall be deemed by the parties hereto to be 

 

2

 

Confidential
Information of both parties hereto.  The
Recipient of Confidential Information shall use the Confidential Information
only for the purposes of this Agreement or as otherwise expressly permitted by
this Agreement.  Recipient of
Confidential Information shall protect such Confidential Information from
disclosure to others, using the same degree of care used to protect its own
confidential or proprietary information of like importance, but in any case
using no less than a reasonable degree of care. 
Recipient may disclose Confidential Information received hereunder (a) to
its affiliates, (b) to Recipient’s employees and independent contractors,
and (c) to Recipient’s affiliate’s employees and independent contractors,
and who in all of the foregoing cases have a need to know such information and
are bound to protect the received Confidential Information from unauthorized
use and disclosure under terms no less restrictive than those contained in this
Agreement.  Confidential Information
shall not otherwise be disclosed by Recipient to any third party without the
prior written consent of the Discloser. 
The restrictions herein on the use and disclosure of Confidential
Information shall not apply to information that:  (i) was publicly known at the time of Discloser’s
communication thereof to Recipient or becomes publicly known through no fault
of Recipient subsequent to the time of such communication; (ii) was in
Recipient’s possession free of any obligation of confidence at the time of
Discloser’s communication to Recipient; (iii) is developed by Recipient
independently of and without reference to any of Discloser’s Confidential
Information or other information that Discloser disclosed in confidence to any
third party; (iv) is rightfully obtained by Recipient from third parties
authorized to make such disclosure without restriction; (v) is identified
in writing by the Discloser as no longer proprietary or confidential.  In the event Recipient is required by law,
regulation or court order to disclose any of Discloser’s Confidential
Information, Recipient will promptly notify Discloser in writing prior to
making any such disclosure and shall reasonably cooperate in any efforts of
Discloser to seek a protective order or other appropriate remedy from the
proper authority.  If Discloser is not
successful in precluding the requested disclosure, Recipient will furnish only
that portion of the Confidential Information that is legally required and will
exercise all reasonable efforts to obtain reliable assurances that confidential
treatment will be accorded the Confidential Information.  All Confidential Information disclosed under
this Agreement (including information in computer software or held in
electronic storage media) shall be and remain the property of Discloser or its
licensors. All such information in any computer memory or data storage
apparatus shall be erased or destroyed, and all such information in tangible
form in the possession or under the control of the Recipient shall, at the
discretion of the Recipient, either be destroyed or returned to the Discloser
promptly upon the earlier of: (i) the written request of the Discloser or (ii) termination
or expiration of this Agreement, and in any of such events and to the
applicable extent shall not thereafter be retained in any form by or through
Recipient unless otherwise expressly permitted hereunder.

 

5.             INSURANCE/RISK OF LOSS.

 

a.             Insurance.  Datapak shall maintain in full force and
effect policies of insurance for the full replacement cost of all Bare Escentuals’
merchandise located in Datapak’s warehouses. Datapak shall likewise maintain in
full force and effect policies of insurance on buildings and equipment at
Datapak’s facilities, including commercial general liability insurance,
property damage and personal injury insurance and fire and theft coverage with
limits (in combination with excess liability insurance) of Two Million Dollars
($2,000,000) per occurrence combined single limit and Four Million Dollars
($4,000,000) in the aggregate, and shall maintain 

 

3

 

workers’
compensation coverage as required by applicable law.  Such policies of insurance shall be issued by
a responsible insurer satisfactory to Bare Escentuals, shall include Bare
Escentuals as an additional insured, shall provide Bare Escentuals not less
than thirty (30) days advance notice of cancellation or material change in the
policy, and shall not include a policy deductible in excess of $10,000.  Upon Bare Escentuals’ request, Datapak shall
provide (i) a copy of the insurance policies required to be carried under
this Section 8.a of this Agreement, and (ii) a certificate of
insurance from the insurer certifying that such coverage is in place.

 

b.             Risk of Loss.  Bare Escentuals shall be fully responsible
for the Inventory until it is physically received at Datapak’s warehouses.  Datapak shall be responsible for the
Inventory once delivered to its warehouses until such time as such Inventory is
delivered by Datapak and accepted by a shipping company pursuant to an order
for shipment.  Thereafter, Bare
Escentuals shall bear the risk of loss unless and until such Inventory is
returned to the custody of Datapak.

 

6.             INDEMNIFICATION.

 

a.             Datapak Indemnity.  Datapak shall defend, indemnify and hold Bare
Escentuals harmless against all claims, losses, damages, costs, and expenses,
including reasonable attorneys’ fees, arising out of or related to (i) Datapak’s
breach or default under this Agreement; (ii) any personal injury, death or
property damage, sustained by any person arising out of or resulting from
Datapak’s activities contemplated by this Agreement, (iii) the negligence
or misconduct of Datapak, or its employees, agents or contractors in the
provision of call center services.

 

b.             Bare Escentuals Indemnity.  Bare Escentuals shall
defend, indemnify and hold Datapak harmless against all claims, losses,
damages, costs, and expenses, including reasonable attorneys’ fees, arising out
of or related to Bare Escentuals’ products, provided that (i) Datapak notifies
Bare Escentuals in writing within thirty (30) days of Datapak’s receipt of
notice of the claim, (ii) Bare Escentuals has sole control of the defense
and all related settlement negotiations, and (iii) Datapak provides Bare
Escentuals with the assistance, information and authority necessary to perform
the above.

 

7.             DATAPAK’S REPRESENTATIONS AND
WARRANTIES.  Datapak
represents and warrants to Bare Escentuals that (i) it has the full
capacity and authority and all necessary licenses, permits and consents to
enter into and to provide the services under this Agreement and any other
documents to be entered into by it hereunder, (ii) all statements and
representations in this Agreement are true and accurate, (iii) it will
perform its obligations under this Agreement in good faith, (iv) its
employees, agents and or contractors are appropriately qualified to perform
their duties and responsibilities contemplated herein and will perform their
obligations with all due skill, care and diligence, including without
limitation all call center related activities, and (v) it will perform its
obligations under this Agreement in compliance with all applicable laws and
regulations now in effect or hereinafter promulgated or enacted.

 

8.             LIMITATION OF LIABILITY.  NEITHER PARTY WILL BE HELD LIABLE FOR ANY
INDIRECT, SPECULATIVE, CONSEQUENTIAL, INCIDENTAL, AND/OR SPECIAL DAMAGES
INCLUDING, BUT NOT LIMITED TO, LOSS OF USE, BUSINESS INTERRUPTIONS, AND LOSS OF
PROFITS, REGARDLESS OF WHETHER SUCH PARTY HAS ADVANCE NOTICE OF THE POSSIBILITY
OF SUCH DAMAGES.

 

4

 

9.             NOTICES. 
All notices and other communications required or permitted hereunder
will be in writing and will be mailed, hand delivered, sent by Federal Express
or other recognized overnight courier service, or sent by facsimile
transmission, to the parties as follows:

 

	
  If to Datapak:

  	
   

  	
  Datapak Services
  Corporation

  55353 Lyon
  Industrial Drive

  New Hudson,
  Michigan 48165

  Attention:Larry
  W. Kinney, President

  Telephone: (517)
  552-1400

  Facsimile: (517)
  552-0400

  Email:
  lkinney@datapakservices.com

   

  
	
  With copy to:

  	
   

  	
  Datapak Services
  Corporation

  55353 Lyon
  Industrial Drive

  New Hudson,
  Michigan 48165

  Attention:Robert
  G. Lahiff, General Counsel

  Telephone: (517)
  552-1400

  Facsimile: (517)
  552-0400

  Email:
  rlahiff@datapakservices.com

   

  
	
   

  	
   

  	
   

  
	
  If to Bare
  Escentuals:

  	
   

  	
  Bare
  Escentuals, Inc.

  71 Stevenson
  Street, 16th Floor

  San Francisco,
  California 94105

  Attention: Myles
  McCormick, EVP, CFO and COO

  Telephone: (415)
  489-5558

  Facsimile: (415)
  489-5999

  Email:
  mmcormick@bareescentuals.com

   

  
	
  With a copy to:

  	
   

  	
  Bare
  Escentuals, Inc.

  71 Stevenson
  Street, 22nd Floor

  San Francisco,
  California 94105

  Attention:
  Deanna Chechile, VP and General Counsel

  Telephone: (415)
  489-5260

  Facsimile: (415)
  520-9795

  Email: dchechile@bareescentuals.com

   

  

 

Any
party may from time to time, by written notice to the others, designate a
different address or additional persons that will be substituted for and/or
added to the address(es) above specified. 
Notices by mail will be sent by United States certified or registered
mail, return receipt requested, postage prepaid, and will be deemed given and
effective upon receipt or refusal of receipt. 
Notices by hand delivery will be deemed given and effective upon the
delivery thereof.  Notices by overnight
courier will be deemed given and effective on the first business day following
the delivery thereof to Federal Express or another recognized overnight courier
service.  Notices by electronic mail or
facsimile will be deemed given upon transmission (provided, in the case of
facsimile transmission, a send confirmation is received and retained by the
sending party).

 

5

 

10.          MISCELLANEOUS.

 

a.             Assignment.  Datapak will
not assign this Agreement, in whole or in part, directly, by operation of law,
or otherwise, except with the prior written consent of Bare Escentuals.

 

b.             Attorneys’ Fees.  If any action will be instituted between
Datapak and Bare Escentuals in connection with this Agreement or in connection
with the enforcement of any indemnity under this Agreement (including appeals),
the party prevailing in such action will be entitled to recover from the other
party all of its costs of action, including actual consultants’ and attorneys’
fees and attorneys’ costs.  For purposes
of this Agreement, the terms “attorneys’ fees” and “attorneys’ costs” will
include the fees and expenses of counsel to the prevailing party, which may
include printing, photocopying, duplicating and other expenses, air freight charges
and fees billed for law clerks, paralegals and other persons not admitted to
the bar but performing services under the supervision of an attorney.

 

c.             Construction.  This Agreement will not be construed more
strictly against any party merely by virtue of the fact that the same has been
prepared by such party or its counsel, it being recognized both of the parties
hereto have contributed substantially and materially to the preparation of this
Agreement.  All words in this Agreement
that are expressed in the neuter gender will be deemed to include the
masculine, feminine and neuter genders and any word in this Agreement that is
expressed in the singular or plural will be deemed, whenever appropriate in the
context, to include the plural and the singular.

 

d.             Counterparts.  This Agreement
may be executed in any number of counterparts, each of which will be deemed an
original, but all of which when taken together will constitute one and the same
instrument.  The signature page of
any counterpart may be detached therefrom without impairing the legal effect of
the signature(s) thereon provided such signature page is attached to
any other counterpart identical thereto except having additional signature pages executed
by the other party or parties to this Agreement attached thereto.

 

e.             Governing Law/Venue.  This Agreement will be governed in all
respects by the laws of the State of California.  The United Nations Convention on Contracts
for the International Sale of Goods shall have no application whatsoever to this
Agreement.  The parties submit to the
personal jurisdiction of the Courts (Federal and State) in the State of
California, with respect to all matters related to or arising out of this
Agreement, including post judgment proceedings. 
The parties agree that the venue for all disputes, claims or litigation
arising out of or related to this contract shall be exclusively in the State or
Federal Courts in the City and County of San Francisco, California.

 

6

 

f.              Headings.  Headings of Sections are for convenience of
reference only, and will not be construed as a part of this Agreement.

 

g.             No Third Party Beneficiary.  This Agreement is solely for the benefit of
the parties hereto and, to the extent provided in this Agreement, their
respective partners, directors, officers, employees, agents and
representatives, and no provision of this Agreement will be deemed to confer
upon other third parties any remedy, claim, liability, reimbursement, cause of
action or other right.

 

h.             Partial Invalidity.  In the event that any provision of this
Agreement will be unenforceable in whole or in part, such provision will be
limited to the extent necessary to render the same valid, or will be excised
from this Agreement, as circumstances require, and this Agreement will be
construed as if said provision had been incorporated in this Agreement as so
limited, or as if said provision has not been included in this Agreement, as
the case may be.

 

i.              Waiver.  No waiver of any provision or condition of
this Agreement by any party will be valid unless in writing signed by such
party.  No such waiver will be taken as a
waiver of any other or similar provision or of any future event, act, or
default.

 

j.              Relationship of
the Parties.  Datapak is
an independent contractor and not an agent, employee, franchisee or partner of
Bare Escentuals, and is acting in the ordinary course of business.  Datapak has no authority to create or assume
any obligation, express or implied, on behalf of Bare Escentuals.  This Agreement does not create or evidence
any joint venture or partnership of the parties.

 

k.            Entire Agreement.  This Agreement, including all schedules and
exhibits attached hereto and documents to be delivered pursuant hereto, will
constitute the entire agreement and understanding of the parties from the
effective date of this agreement (January 1, 2008) going forward, but only
for the purposes of this Agreement.  The
parties have entered into prior agreements. 
The most recent prior agreement between the parties had an effective
date of January 3, 2006, with an expiration date of December 31,
2007, along with continuing obligations after the December 31, 2007
expiration date.  This Agreement does not
in any way affect the terms, conditions, validity or enforceability of any
prior agreement nor affect the continuing obligations under any prior
agreements between the parties. Each agreement shall be applied and enforced
separately between the parties.   This
Agreement may be amended only by a written amendment executed by both of the
parties hereto.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

7

 

IN WITNESS WHEREOF, the
parties have executed this Order Fulfillment and Administrative Services
Agreement as of the date first set forth above:

 

	
  DATAPAK
  SERVICES CORPORATION,

  	
   

  	
  BARE
  ESCENTUALS BEAUTY, INC.,

  
	
  A Michigan
  corporation:

  	
   

  	
  A Delaware
  corporation:

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
									

 

8

 

SCHEDULE 1

 

Statement of Work

 

WAREHOUSING AND ORDER FULFILLMENT SERVICES

 

Datapak shall provide to Bare Escentuals a customized order fulfillment
and administrative program in connection with the sale of Bare Escentuals’
products. This shall include the following:

 

(a)                                  Establishing
customized programs and services to meet Bare Escentuals’ storage and order
fulfillment needs related to the Bare Escentuals’ spa/professional markets and
international distributor sales and infomercial business;

 

(b)                                 Processing orders daily via
electronic transfer, email, fax and telephone; the orders will include among
other things, the name of the customer, the shipping address, the goods to be
shipped, the freight carrier to be used for shipping and any special packing
instructions (the “Shipping Order”).

 

(c)                                  Arranging for the shipment
of the ordered merchandise on behalf of the Bare Escentuals to customers, with
Bare Escentuals customer invoices included for orders taken on account, and
providing avenues for invoice payment and collections with an Aged Accounts
Receivable (AAR) Report;

 

(d)                                 Providing adequate warehouse
space for Bare Escentuals’ inventory, including appropriate temperature and
humidity controls so as to avoid damage or mutation of the Inventory. Bare
Escentuals shall (i) specifically identify each such SKU that requires
particular temperature and humidity controls, and (ii) specify the
specific temperature and humidity controls for each such SKU, and the parties will
reach mutually agreeable price additions or modifications required for Datapak
to implement such additional controls, which additions or modifications shall
be reflected in a written amendment to the Pricing Schedule signed by both
parties.

 

(e)                                  Providing to Bare Escentuals
on a daily basis via electronic transfer, email, fax and telephone, tracking
information and confirmation of shipping of all packages sent on behalf of Bare
Escentuals.

 

(f)                                    Offering to
Bare Escentuals full access to its program at Datapak through electronic data
transfers, email or report facsimile.

 

 

(g)                                 Providing to Bare Escentuals
on a monthly basis a complete detailed report on all project activity. This
monthly report shall include:

 

(i)                         Inventory value
status;

 

(ii)                      Aging accounts
receivable status:

 

(iii)                   Item sales analysis:

 

(iv)                  Bank transaction report
reconciliation:

 

(v)                     Sales tax information.

 

(vi)                  Other reports periodically
requested by Bare Escentuals.

 

CALL CENTER SERVICES

 

I.              Datapak will provide Bare
Escentuals with inbound customer contact services as follows:

 

(a)                                  Answer all inquiries
received from Bare Escentuals customers via multiple communication methods
(e.g., telephone, email, fax, voice message, web chat, etc.), including:

 

(i)            taking orders;

 

(ii)           checking the status of orders;

 

(iii)          processing credits;

 

(iv)          changing or canceling continuity
shipment membership;

 

(v)           updating customer profile
information;

 

(vi)                              addressing customers’ issues
with their online accounts at bareminerals.com (or other web sites);

 

(vii)         providing product information;

 

(viii)        answering general questions about the
company and its retail outlets;

 

(ix)                                or providing any other
customer service related to Bare Escentuals’ products;

 

(x)                                   provide friendly, courteous
customer service in accordance with Bare Escentuals’ customer service
philosophy

 

II.            Datapak will provide Bare Escentuals
with outbound customer contact services as follows:

 

(a)                                  Contact Bare Escentuals’
customers in order to rectify order issues such as incorrect address or declined
credit card, etc.; and

 

(b)                                 Initiate
outbound telephone and/or email campaigns as directed by Bare Escentuals.

 

 

SCHEDULE 1

 

Pricing Schedule(ii)           Specific reference to pertinent provisions of
this Plan on which such denial of the appeal is based;

 

(iii)          A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant to the Claimant’s
benefits claim (and a document, record or other information shall be considered
“relevant” to the benefits claims as provided in Department of Labor Regulation
Section 2560.503-1(m)(8); and

 

(iv)          A statement describing
the Claimant’s right to bring an action under ERISA Section 502(a).

 

(e)           Review Committee.  The Plan Administrator may from time to time
appoint a review panel that may consist of two or more individuals who may, but
need not, be employees of the Plan Sponsor (the “Review
Committee”).  If no such
Review Committee is named, the Board of Directors of the Plan Sponsor shall be
deemed the Review Committee for purposes of this Section 8.2.  The Review Committee shall be the named
fiduciary that has the authority to act with respect to any appeal from a
denial of benefits or a determination of benefit rights.

 

8.3           Arbitration.  Any claim or controversy between the parties
which the parties are unable to resolve themselves, and which is not resolved
through the claims procedure set forth in Section 8.2, including any claim
arising out of a Participant’s employment or the termination of that
employment, and including any claim arising out of, connected with, or related
to the formation, interpretation, performance or breach of any provision of
this Plan, and any claim or dispute as to whether a claim is subject to
arbitration, shall be submitted to and resolved exclusively by expedited
arbitration by a single arbitrator in accordance with the following procedures:

 

(a)           In the event of a claim or controversy subject to this arbitration
provision, the complaining party shall promptly send written notice to the
other party identifying the matter in dispute and the proposed remedy.  Following the giving of such notice, the
parties shall meet and attempt in good faith to resolve the matter. In the
event the parties are unable to resolve the matter within 21 days, the parties
shall meet and attempt in good faith to select a single arbitrator acceptable
to both parties.  If a single arbitrator
is not selected by mutual consent within 10 business days following the giving
of the written notice of dispute, an arbitrator shall be selected from a list
of nine persons each of whom shall be an attorney who is either engaged in the
active practice of law or a recognized arbitrator and who, in either event, is
experienced in serving as an arbitrator in disputes between employers and
employees, which list shall be provided by the office of the American
Arbitration Association (“AAA”) or of
the Federal Mediation and Conciliation Service. If, within three business days
of the parties’ receipt of such list, the parties are unable to agree upon an
arbitrator from the list, then the parties shall each strike names alternatively
from the list, with the first to strike being determined by the flip of a
coin.  After each party has had four
strikes, the remaining name on the list shall be the arbitrator.  If such person is unable to serve for any
reason, the parties shall repeat this process until an arbitrator is selected.

 

(b)           Unless the parties agree otherwise, within 60 days of the selection of
the arbitrator, a hearing shall be conducted before such arbitrator at a time
and a place agreed upon 

 

20

 

by
the parties.  In the event the parties
are unable to agree upon the time or place of the arbitration, the time and
place shall be designated by the arbitrator after consultation with the
parties.  Within 30 days of the
conclusion of the arbitration hearing, the arbitrator shall issue an award,
accompanied by a written decision explaining the basis for the arbitrator’s
award.

 

(c)           In any arbitration hereunder, the Plan Sponsor shall pay all
administrative fees of the arbitration and all fees of the arbitrator, except
that the Participant or Beneficiary may, if he wishes, pay up to one-half of
those amounts.  Each party shall pay its
own attorneys’ fees, costs, and expenses, unless the arbitrator orders
otherwise.  The prevailing party in such
arbitration, as determined by the arbitrator, and in any enforcement or other
court proceedings, shall be entitled, to the extent permitted by law, to
reimbursement from the other party for all of the prevailing party’s costs
(including but not limited to the arbitrator’s compensation), expenses, and
attorneys’ fees; provided, however, that the prevailing party
shall be reimbursed for such costs, expenses and fees within 45 days following
any such award, but in no event later than the last day of the Executive’s
taxable year following the taxable year in which the costs, expenses or fees
were incurred; provided, further, that the parties’ obligations
pursuant to this sentence shall terminate on the 10th anniversary of
the date of the Participant’s Separation from Service.  The arbitrator shall have no authority to add
to or to modify this Plan, shall apply all applicable law, and shall have no
lesser and no greater remedial authority than would a court of law resolving
the same claim or controversy. The arbitrator shall, upon an appropriate
motion, dismiss any claim without an evidentiary hearing if the party bringing
the motion establishes that it would be entitled to summary judgment if the
matter had been pursued in court litigation. 
The parties shall be entitled to reasonable discovery subject to the
discretion of the arbitrator.

 

(d)           The decision of the arbitrator shall be final, binding, and
non-appealable, and may be enforced as a final judgment in any court of
competent jurisdiction.

 

(e)           This arbitration provision of the Plan shall extend to claims against
any parent, subsidiary, or affiliate of each party, and, when acting within
such capacity, any officer, director, shareholder, Participant, Beneficiary, or
agent of each party, or of any of the above, and shall apply as well to claims
arising out of state and federal statutes and local ordinances as well as to
claims arising under the common law or under this Plan.

 

Notwithstanding the
foregoing, and unless otherwise agreed between the parties, either party may,
in an appropriate manner, apply to a court for provisional relief, including a
temporary restraining order or preliminary injunction, on the ground that the
arbitration award to which the applicant may be entitled may be rendered ineffectual
without provisional relief.

 

Any arbitration hereunder
shall be conducted in accordance with the employee benefit plan claims rules and
procedures of the AAA then in effect; provided, however, that, (i) all
evidence presented to the arbitrator shall be in strict conformity with the
legal rules of evidence, and (ii) in the event of any inconsistency
between the employee benefit plan claims rules and procedures of the AAA
and the terms of this Plan, the terms of this Plan shall prevail.

 

If any of the provisions of
this Section 8.3 are determined to be unlawful or otherwise unenforceable,
in whole or in part, such determination shall not affect the validity of the
remainder of this Section  8.3, and this Section  8.3 shall be
reformed to the extent necessary to carry out its provisions to the greatest
extent possible and to insure that the resolution of all conflicts between the
parties, including those arising out of statutory claims, shall be resolved by 

 

21

 

neutral,
binding arbitration.  If a court should
find that the provisions of this Section  8.3 are not absolutely binding,
then the parties intend any arbitration decision and award to be fully
admissible in evidence in any subsequent action, given great weight by any
finder of fact, and treated as determinative to the maximum extent permitted by
law.

 

8.4           Notice.
Any notice, consent or demand required or permitted to be given under the
provisions of this Plan shall be in writing and shall be signed by the party
giving or making the same.  If such
notice, consent or demand is mailed, it shall be sent by United States
certified mail, postage prepaid, addressed to the addressee’s last known
address as shown on the records of the Plan Sponsor.  The date of such mailing shall be deemed the
date of notice consent or demand.  Any
person may change the address to which notice is to be sent by giving notice of
the change of address in the manner aforesaid.

 

ARTICLE NINE

 

AMENDMENT
OR TERMINATION

 

9.1           Termination. 
Although each Employer anticipates that it will continue the Plan for an
indefinite period of time, there is no guarantee that any Employer will
continue the Plan or will not terminate the Plan at any time in the future.  Accordingly, each Employer reserves the right
to discontinue its sponsorship of the Plan and/or to terminate the Plan at any
time with respect to any or all of its participating Employees, by action of
its Board of Directors or other similar governing body.  Upon the termination of the Plan with respect
to any Employer, the participation of the affected Participants who are
employed by that Employer shall terminate. 
However, after the Plan termination the Account Balances of such
Participants shall continue to be credited with Participant Annual Deferral
Amounts attributable to a deferral election that was in effect prior to the
Plan termination to the extent deemed necessary to comply with Section 409A
of the Code and related Treasury Regulations, and additional amounts shall
continue to credited or debited to such Participants’ Account Balances pursuant
to Section 3.4.  The Measurement Funds available to
Participants following the termination of the Plan shall be comparable in
number and type to those Measurement Funds available to Participants in the
Plan Year preceding the Plan Year in which the Plan termination is effective.  In
addition,  following a Plan
termination, Participant Account Balances shall remain in the Plan and shall
not be distributed until such amounts become eligible for distribution in
accordance with the other applicable provisions of the Plan.  Notwithstanding
the preceding sentence, to the extent permitted by Section 1.409A-3(j)(4)(ix) of the Treasury
Regulations, the Employer may provide that upon termination of the Plan,
all Account Balances of the Participants shall be distributed, subject to and
in accordance with any rules established by such Employer deemed necessary
to comply with the applicable requirements and limitations of Section 1.409A-3(j)(4)(ix) of the Treasury
Regulations.

 

9.2           Amendment.

 

(a)           An Employer may, at any time, amend or modify the
Plan in whole or in part with respect to that Employer by the action of its
Board of Directors or similar governing body; provided, however, that no
amendment or modification shall be effective to decrease or restrict the value
of a Participant’s Account Balance in existence at the time the amendment or
modification is made or to cause the Plan to fail to meet the requirements of Section 409A
of the Code with respect to any Participant without such Participant’s
consent.  The amendment or 

 

22

 

modification of the Plan shall not affect any
Participant or Beneficiary who has become entitled to the payment of benefits
under the Plan as of the date of the amendment or modification.  Notwithstanding any provisions of this Section 9.2
to the contrary, the Board may amend the Plan at any time, in any manner, if
the Board determines any such amendment is required to ensure that the Plan is
characterized as providing deferred compensation for a select group of
management or highly compensated employees and as described in ERISA Sections
201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to
the provisions of any applicable law, including ERISA and the Code.

 

(b)           Notwithstanding anything to the contrary in the
Plan, if and to the extent the Plan Administrator shall determine that the
terms of the Plan may result in the failure of the Plan, or amounts deferred by
or for any Participant under the Plan, to comply with the requirements of Section 409A
of the Code, or any applicable regulations or guidance promulgated by the
Secretary of the Treasury in connection therewith, the Plan Administrator shall
have authority to take such action to amend, modify, cancel or terminate the
Plan (effective with respect to all Employers) or distribute any or all of the
amounts deferred by or for a Participant, as it deems necessary or advisable,
including without limitation:

 

(i)            Any amendment or modification of the Plan to conform
the Plan to the requirements of Section 409A of the Code or any
regulations or other guidance thereunder (including, without limitation, any
amendment or modification of the terms of any applicable to any Participant’s
Accounts regarding the timing or form of payment).

 

(ii)           Any cancellation or termination of any unvested
interest in a Participant’s Accounts without any payment to the Participant.

 

(iii)          Any cancellation or termination of any vested
interest in any Participant’s Accounts, with immediate payment to the
Participant of the amount otherwise payable to such Participant.

 

(iv)          Any such amendment, modification, cancellation, or
termination of the Plan that may adversely affect the rights of a Participant
without the Participant’s consent.

 

9.3           Effect of Payment.  The full payment of the applicable benefit
under Article 5 of the Plan shall completely discharge all obligations to
a Participant and his or her designated Beneficiaries under this Plan.

 

ARTICLE  TEN

 

THE
TRUST

 

10.1         Establishment of Trust.  The Plan Sponsor may establish a grantor
trust, of which the Plan Sponsor is the grantor, within the meaning of subpart
E, part I, subchapter J, subtitle A of the Code, to pay benefits under this
Plan (the “Trust”).  If the Plan Sponsor establishes a Trust, all benefits payable under
this Plan to a Participant shall be paid directly by the Employer(s) from
the Trust.  To the extent such benefits
are not paid from the Trust, the benefits shall be paid from the general assets
of the Employer(s).  The Trust, if any,
shall be an irrevocable grantor trust which conforms to the terms of the model
trust as described in IRS Revenue Procedure 92-64, I.R.B. 1992-33.  If the Plan Sponsor establishes a Trust, the
assets of the Trust will be subject to the claims of each Employer’s creditors
in the event of its insolvency.  

 

23

 

Except
as may otherwise be provided under the Trust, neither the Plan Sponsor nor any
Employer shall be obligated to set aside, earmark or escrow any funds or other
assets to satisfy its obligations under this Plan, and the Participant and/or
his or her designated Beneficiaries shall not have any property interest in any
specific assets of the Plan Sponsor or an Employer other than the unsecured
right to receive payments from the Employer, as provided in this Plan.

 

10.2         Interrelationship of the Plan and
the Trust.  The
provisions of the Plan shall govern the rights of a Participant to receive distributions
pursuant to the Plan.  The provisions of
the Trust (if established) shall govern the rights of the Participant and the
creditors of the Employers to the assets transferred to the Trust. Each
Employer shall at all times remain liable to carry out its obligations under
the Plan.  Each Employer’s obligations
under the Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust.

 

10.3         Contribution to the Trust.  Amounts may be contributed by an Employer to
the Trust in the sole discretion of the Employer.

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

11.1         Entire Agreement. 
The Plan and each
executed Election Form, Beneficiary Designation Form, and other administrative
forms shall constitute the total agreement between the Employers and the
Participant. No oral statement regarding the Plan may be relied upon by the
Participant. In the event that there is a discrepancy between the Plan and the
administrative forms, summary descriptions, the Plan will control.

 

11.2         Invalidity of Provisions.  If
any provision of this Plan shall be for any reason invalid or unenforceable,
the remaining provisions shall nevertheless be carried into effect.

 

11.3         Unclaimed Benefits.  In
the case of a benefit payable on behalf of such Participant, if the Plan Administrator
is unable to locate the Participant or beneficiary to whom such benefit is
payable, such Plan benefit may be forfeited to the Plan Sponsor upon the Plan
Administrator’s determination. 
Notwithstanding the foregoing, if, subsequent to any such forfeiture,
the Participant or beneficiary to whom such Plan benefit is payable makes a
valid claim for such Plan benefit, such forfeited Plan benefit shall be paid by
the Plan Administrator to the Participant or beneficiary, without interest from
the date it would have otherwise been paid.

 

11.4         Offset For Obligations To
Plan Sponsor.  If,
at such time as the Plan Participant becomes entitled to benefit payments
hereunder, the Plan Participant has any debt, obligation or other liability
representing an amount owing to the Plan Sponsor or an Affiliate of Plan
Sponsor, and if such debt, obligation, or other liability is due and owing at
the time benefit payments are payable hereunder, the Plan Sponsor may offset
the amount owing it or an Affiliate against the amount of benefits otherwise
distributable hereunder.

 

11.5         Governing Law.  The
Plan and the rights and obligations of all persons hereunder shall be governed
by and construed in accordance with the laws of the State of California, other
than its laws regarding choice of law, to the extent that such state law is not
preempted by federal law.

 

24

 

11.6         Status
of Plan.  The Plan is
intended to be a plan that (i) is not qualified within the meaning of Section 401(a) of
the Code, (ii) “is unfunded and is maintained by an employer primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of ERISA Sections 201(2),
301(a)(3) and 401(a)(1), and (iii) is intended to comply with the
requirements of Section 409A of the Code. 
The Plan shall be administered and interpreted to the extent possible in
a manner consistent with that intent.

 

11.7         Tax
Withholding.

 

(a)           Annual Deferral Amounts.  For
each Plan Year in which a Participant Annual Deferral Amount is being withheld
from a Participant, the Participant’s Employer(s) shall be entitled to
require payment by the Participant of any sums required by federal, state or
local tax law to be withheld with respect to the deferral, in amounts and in a
manner to be determined in the sole discretion of the Employer(s).

 

(b)           Corporate Contributions.  When
a Participant becomes vested in a portion of his or her Corporate Contribution
Account, the Participant’s Employer(s) shall be entitled to require
payment by the Participant of any sums required by federal, state or local tax
law to be withheld with respect to the deferral, in amounts and in a manner to
be determined in the sole discretion of the Employer(s).

 

(c)           Distributions.  The Participant’s Employer(s), or the trustee
of the Trust, shall withhold from any payments made to a Participant under this
Plan all federal, state and local income, employment and other taxes required
to be withheld by the Employer(s), or the trustee of the Trust, in connection
with such payments, in amounts and in a manner to be determined in the sole
discretion of the Employer(s) and the trustee of the Trust.

 

(d)           Satisfaction of Tax Obligations.  There shall be deducted from
each payment made under the Plan or any other compensation payable to the
Participant (or Beneficiary) all taxes which are required to be withheld by the
Employer(s) in respect to such payment or this Plan.  The Company shall have the right to reduce
any payment (or compensation) by the amount of such of cash sufficient to
provide the amount of said taxes.  In
addition, to the extent a Participant does not pay any sums required by
federal, state or local tax law to be withheld with respect to any deferral or
distribution hereunder, the Company shall be entitled to deduct such amounts
from the Participant’s Accounts.

 

11.8         Coordination with Other Benefits.  The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits
available to such Participant under any other plan or program for Employees of
the Participant’s Employer(s).  The Plan
shall supplement and shall not supersede, modify or amend any other such plan
or program except as may otherwise be expressly provided.

 

11.9         Compliance.  A
Participant shall have no right to receive payment with respect to the
Participant’s Account Balance until all legal and contractual obligations of
the Employer(s) relating to establishment of the Plan and the making of
such payments shall have been complied with in full.

 

25

 

11.10       Successors.  The provisions of this Plan shall bind and
inure to the benefit of the Participant’s Employer and its successors and
assigns and the Participant and the Participant’s designated Beneficiaries.

 

11.11       Court Order.  The Plan Administrator is authorized to make
any payments directed by court order in any action in which the Plan or the
Plan Administrator has been named as a party. 
In addition, if a court determines that a spouse or former spouse of a
Participant has an interest in the Participant’s benefits under the Plan in
connection with a property settlement or otherwise, the Plan Administrator, in
its sole discretion, shall have the right, notwithstanding any election made by
a Participant, to immediately distribute the spouse’s or former spouse’s
interest in the Participant’s benefits under the Plan to that spouse or former
spouse.

 

11.12       Section 409A.

 

(a)           To the extent applicable, this Plan shall be interpreted in accordance
with Section 409A of the Code and Department of Treasury regulations and
other interpretive guidance issued thereunder.

 

(b)           If
any portion of a Participant’s Account Balance under this Plan is required to
be included in income by the Participant prior to receipt due to a failure of
this Plan to comply with the requirements of Section 409A of the Code and
related Treasury Regulations, the Plan Administrator may determine that such
Participant shall receive a distribution from the Plan in an amount equal to
the lesser of (i) the portion of his or her Account Balance required to be
included in income as a result of the failure of the Plan to comply with the
requirements of Section 409A of the Code and related Treasury Regulations,
or (ii) the unpaid vested Account Balance.

 

26

 

IN WITNESS WHEREOF, the Plan Sponsor has executed this Plan as
of the day and year first written above.

 

	
   

  	
  For:

  	
  STB Beauty, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Myles
  McCormick

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  COO

  

 

27

Exhibit 10.54

 

STB BEAUTY, INC.

 

DEFERRED COMPENSATION PLAN

 

Effective as of March 12, 2008

 

The purpose of this STB
Beauty, Inc. Deferred Compensation Plan (the “Plan”)
is to provide additional retirement benefits and income tax deferral
opportunities for a select group of management and highly compensated employees
of the Plan Sponsor and certain of its Affiliates.  The Plan was originally effective as of July 1,
2005.   This Plan is intended to be a “top
hat plan,” exempt from certain requirements of ERISA, pursuant to Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA; and the Plan Sponsor
intends that the Plan shall at all times be administered and interpreted in
such a manner as to constitute an unfunded nonqualified deferred compensation
plan for tax purposes and for purposes of Title I of ERISA.  This Plan is not intended to qualify for
favorable tax treatment pursuant to Section 401(a) of the Code or any
successor section or statute.

 

STB Beauty, Inc., a Delaware Corporation (the “Plan Sponsor”), now wishes to amend
and restate the Plan on the terms and conditions set  forth herein. 
This amendment and restatement of the Plan incorporates the Plan and the
prior amendments thereto (except as further amended herein) and constitutes a
complete amendment, restatement and continuation of the Plan.  This amendment and restatement of the Plan is
intended to comply with the requirements of Sections 409A(a)(2), (3) and (4) of
the Code and the Treasury Regulations thereunder.  As provided in Notice 2007-86, with respect
to an election or amendment to change a time and form of payment under the Plan
made on or after January 1, 2008 and on or before December 31, 2008,
the election or amendment shall apply only to amounts that would not otherwise
be payable in 2008 and shall not cause an amount to be paid in 2008 that would
not otherwise be payable in 2008.

 

Pursuant to
approval by the Board of the Plan Sponsor, the Plan is hereby amended, restated
and continued, effective as of March 12, 2008, as follows:

 

ARTICLE ONE

 

DEFINITIONS

 

DEFINITION OF TERMS.  Certain words and phrases are defined when
first used in later Articles of this Plan. 
Whenever any words are used herein in the
masculine, they shall be construed as though they were in the feminine in all
cases where they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they would
so apply.  In addition, the following
words and phrases when used herein, unless the context clearly requires
otherwise, shall have the following respective meanings:

 

1.1.          Account
Balance. With respect to a Participant, a credit on
the records of the Employer equal to the sum of (i) the Participant’s
Deferral Account balance, and (ii) the Corporate Contributions Account
balance.  The Account
Balance, and each other specified account balance, shall be a bookkeeping entry
only and shall be utilized solely as a device for the 

 

 

measurement and determination of the amounts to be paid to a
Participant, or his or her designated Beneficiary, pursuant to this Plan.

 

1.2           Accounts. With
respect to a Participant, as the context indicates, any or all of his or her
Deferral Account and Corporate Contribution Account.

 

1.3.          Affiliate.
Any corporation, partnership, joint venture, association, or similar
organization or entity, which is a member of a controlled group of companies
which includes, or which is under common control with, the Plan Sponsor under Section 414
of the Code.

 

1.4.          Annual Corporate Contribution
Amount.  For any one Plan Year, the amount determined
in accordance with Section 3.4(b).

 

1.5.          Base Salary.
The annual cash compensation (excluding bonuses, commissions, overtime,
incentive payments, non-monetary awards, directors fees and other fees, stock
options and grants and any other form of equity-based compensation, and car
allowances) paid to a Participant for services rendered during the Plan Year,
before reduction for compensation deferred pursuant to all qualified,
non-qualified and Code Section 125 plans of any Employer.

 

1.6.          Beneficiary. The Beneficiary designated by a Participant
under Article 7, or, if the Participant has not designated a Beneficiary
under Article 7, the person or persons entitled to receive distributions
of benefits under Article 5.

 

1.7.          Beneficiary Designation Form.  The
form established from time to time by the Plan Administrator that a Participant
completes, signs and returns to the Plan Administrator to designate one or more
Beneficiaries.

 

1.8.          Board.  The
Board of Directors of the Plan Sponsor.

 

1.9.          Bonus.  Any
cash compensation, in addition to Base Salary, paid in respect of a Plan Year
to a Participant as an Employee, as a bonus paid by the Employer.

 

1.10.        Cause.  For purposes of this Plan, “Cause” shall mean any of the
following acts or circumstances:  (i) willful
destruction by the Participant of property of the Plan Sponsor or an Affiliate
having a material value to the Plan Sponsor or such Affiliate; (ii) fraud,
embezzlement, theft, or comparable dishonest activity committed by the
Participant (excluding acts involving a de minimis dollar
value and not related to the Plan Sponsor or an Affiliate); (iii) the
Participant’s conviction of or entering a plea of guilty or nolo contendere to any crime constituting a felony or any
misdemeanor involving fraud, dishonesty or moral turpitude; (iv) the
Participant’s breach, neglect, refusal, or failure to materially discharge the
Participant’s duties (other than due to physical or mental illness)
commensurate with the Participant’s title and function or the Participant’s
failure to comply with the lawful directions of the Board or the Chief
Executive Officer of the Plan Sponsor, or of the Board of Directors or the
Chief Executive Officer of the Affiliate that employs the Participant, in any
such case that is not cured within 15 days after the Participant has received
written notice thereof from such Board or Chief Executive Officer; (v) any
willful misconduct by the Participant which may cause economic or reputational
injury to the Plan Sponsor or an Affiliate, including, but not limited to,
sexual harassment, or (vi) a willful and knowing material
misrepresentation to the Board or the Chief Executive Officer of the Plan
Sponsor or to the Board of Directors or the Chief Executive Officer of the
Affiliate that employs the Participant.

 

2

 

1.11.        Change in Control.  “Change in Control” shall mean the occurrence of any of the following:

 

(a)           Any “Person” or “Group,”
as such terms are defined in Section 13(d) of the Securities Exchange
Act of 1934 (the “Exchange Act”)
and the rules and regulations promulgated thereunder, excluding any
Excluded Stockholder, who is or becomes the “Beneficial
Owner” (within the meaning of Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Plan Sponsor, or of any
entity resulting from a merger or consolidation involving the Plan Sponsor,
representing more than 50% of the combined voting power of the then outstanding
securities of the Plan Sponsor or such entity.

 

(b)           The
individuals who, as of the Effective Date, are members of the Board (the “Existing Directors”), cease, for
any reason, to constitute more than 50% of the number of authorized directors
of the Plan Sponsor as determined in the manner prescribed in the Plan Sponsor’s
Certificate of Incorporation and Bylaws; provided, however, that if the
election, or nomination for election, by the Plan Sponsor’s stockholders of any
new director was approved by a vote of at least 50% of the Existing Directors,
such new director shall be considered an Existing Director; provided further,
however, that no individual shall be considered an Existing Director if such individual
initially assumed office as a result of either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies by or on behalf of anyone other than the Board (a “Proxy Contest”), including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or

 

(c)           The
consummation of (x) a merger, consolidation or reorganization to which the
Plan Sponsor is a party, whether or not the Plan Sponsor is the Person
surviving or resulting therefrom, or (y) a sale, assignment, lease,
conveyance or other disposition of all or substantially all of the assets of
the Plan Sponsor, in one transaction or a series of related transactions, to any
Person other than the Plan Sponsor, where any such transaction or series of
related transactions as is referred to in clause (x) or clause (y) above
in this subparagraph (c) (singly or collectively, a “Transaction”)
does not otherwise result in a “Change in Control”
pursuant to subparagraph (a) of this definition of “Change in
Control”; provided, however, that no such Transaction shall
constitute a “Change in Control” under this
subparagraph (c) if the Persons who were the stockholders of the Plan
Sponsor immediately before the consummation of such Transaction are the
Beneficial Owners, immediately following the consummation of such Transaction,
of 50% or more of the combined voting power of the then outstanding voting
securities of the Person surviving or resulting from any merger, consolidation
or reorganization referred to in clause (x) above in this subparagraph (c) or
the Person to whom the assets of the Plan Sponsor are sold, assigned, leased,
conveyed or disposed of in any transaction or series of related transactions
referred in clause (y) above in this subparagraph (c), in substantially
the same proportions in which such stockholders held voting stock in the Plan
Sponsor immediately before such Transaction.

 

1.12.        Code.  The Internal Revenue Code of 1986, as amended
from time to time. 
Reference to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes such section.

 

1.13.        Compensation.
The Base Salary and Bonus paid to a Participant for the relevant period.

 

3

 

1.14.        Corporate
Contribution.  Any contribution made and credited to
Corporate Contribution Accounts by the Plan Sponsor in accordance with Section 3.4(b).

 

1.15.        Corporate
Contribution Account. The sum of (i) all of a
Participant’s Annual Corporate Contribution Amounts, plus (ii) the
hypothetical deemed investment earnings and losses credited or charged in
accordance with all the applicable provisions of this Plan that relate to the
Participant’s Corporate Contribution Account, less (iii) all distributions
made to the Participant or his or her Beneficiary pursuant to this Plan that
relate to the Participant’s Corporate Contribution Account.  A Participant’s Corporate Contribution
Account shall be divided into subaccounts as determined by the Plan
Administrator to properly account for distribution elections attributable to a
Participant’s Annual Corporate Contribution Amounts, and the deemed investment
earnings and losses attributable thereto.

 

1.16.        Deferral
Account. The sum of (i) all of a Participant’s
Participant Annual Deferral Amounts, plus (ii) the
hypothetical deemed investment earnings and losses credited or charged in
accordance with all the applicable provisions of this Plan that relate to the
Participant’s Deferral Account, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to his
or her Deferral Account.  A Participant’s
Deferral Account shall be divided into subaccounts as determined by the Plan
Administrator to properly account for distribution elections attributable to a
Participant Annual Deferral Amount, and the deemed investment earnings and
losses attributable thereto.

 

1.17.        Disability.  A
Participant shall be considered disabled if the Participant: (i) is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an accident
and health plan, if any, covering employees of the Participant’s employer.

 

1.18.        Disability
Date shall mean the date
on which the Plan Administrator confirms that the Participant has a qualifying
Disability and is eligible to receive payment hereunder.

 

1.19.        Effective
Date  March 12, 2008.

 

1.20.        Election
Form.  The
form established from time to time by the Plan Administrator that a Participant
completes, signs and returns to the Plan Administrator.

 

1.21.        Eligible Employee.  Any employee of the Plan Sponsor or an
Affiliate who is selected to participate herein in accordance with the
provisions of Section 2.1 hereof, and one of a select group of management
or highly compensated employees, as defined by ERISA.

 

1.22.        Employer(s).

 

(a)           Except as otherwise
provided in part (b) of this Section 1.23, any of the Plan Sponsor’s
subsidiaries or Affiliates (now in existence or hereafter formed or acquired)
that have been selected by the Board to participate in the Plan and have
adopted the Plan as a sponsor, and

 

4

 

(b)           For the purpose of determining whether a Participant has
experienced a Separation from Service:

 

(i)            the
entity for which the Participant performs services and with respect to which
the legally binding right to compensation deferred or contributed under this
Plan arises; and

 

(ii)           all other
entities with which the entity described above would be aggregated and treated
as a single employer under Section 414(b) of the Code, or as
applicable, however substituting 50% for wherever 80% appears in, and otherwise
must be used when applying, the applicable provisions of (A) Section 1563
of the Code for determining a controlled group of corporations under Section 414(b) of
the Code, and (B) Section 1.414(c)-2 of the Treasury Regulations for
determining the trades or businesses that are under common control under Section 414(c) of
the Code.

 

1.23.        ERISA.  The
Employee Retirement Income Security Act of 1974, as amended from time to
time.  Reference to a
section of ERISA shall include that section and any comparable section or
sections of any future legislation that amends, supplements or supersedes such
section.

 

1.24.        Good Reason means the occurrence, on or after the
occurrence of a Change in Control, of any of the following:

 

(a)           The
Plan Sponsor or any of its Affiliates materially reduces the Participant’s Base
Salary.

 

(b)           The
Plan Sponsor discontinues its bonus plan in which the Participant participates
as in effect immediately before the Change in Control without immediately
replacing such bonus plan with a plan that is the substantial economic
equivalent of such bonus plan, or a successor to the Plan Sponsor fails or
refuses to assume the obligations of the Plan Sponsor under such bonus plan as
in effect immediately before the Change in Control or under a plan that is the
substantial economic equivalent of such bonus plan.

 

(c)           Without
the Participant’s express written consent, the Plan Sponsor or any of its
Affiliates requires the Participant to change the location of the Participant’s
job or office, so that the Participant will be based at a location more than
100 miles from the former location of the Participant’s job or office.

 

(d)           Without
the Participant’s express written consent, the Plan Sponsor or any of its
Affiliates reduces the Participant’s responsibilities or directs the
Participant to report to a person of lower rank or responsibilities than the
person to whom the Participant reported before the Change in Control.

 

1.25.        Measurement
Fund. The investment fund or funds selected by the Plan
Administrator from time to time.

 

1.26.        Participant.  Any
Employee (i) who is selected to participate in the Plan, (ii) who
elects to participate in the Plan, (iii) who signs an Election Form, (iv) whose
signed Election Form is accepted by the Administrator, and (v) who
commences participation in the Plan.  A
spouse or former spouse of a Participant shall not be treated as a Participant
in the Plan or have an account balance under the Plan, even if he or she has an
interest in the Participant’s benefits 

 

5

 

under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce.

 

1.27.      Participant.  An Eligible Employee designated as a
participant by the Plan Administrator.

 

1.28.      Participant Annual
Deferral Amount.  The
portion of a Participant’s Compensation, which he or she elects to defer, and
is deferred, for the Plan Year in question. In the event
of a Participant’s termination from participation in the Plan prior to the end
of a Plan Year, such year’s Participant Annual Deferral Amount shall be the
actual amount withheld prior to such event.

 

1.29.      Plan.  This Plan, together with any and all
amendments or supplements thereto.

 

1.30.      Plan Administrator. The
Board or its designee. A Participant in the Plan should
not serve as a singular Plan Administrator. If a Participant is part of a group
or committee designated as Plan Administrator, then the Participant may not
participate in any activity or decision relating solely to his or her
individual benefits under the Plan; matters solely affecting the applicable
Participant will be resolved by the remaining committee members or by the
Board.

 

1.31.        Plan
Retirement Date.  The
date the Participant attains 65 years of age.

 

1.32.        Plan Year.  The calendar year.

 

1.33.        Quarterly
Installment Method.  A
quarterly installment payment over two, five or ten years selected by the
Participant in accordance with this Plan, calculated as follows:  the Account Balance of the Participant
determined immediately prior to the date the distribution is to be made under Section 5.1
shall be multiplied by a fraction, the numerator of which is one, and the
denominator of which is the remaining number of quarterly payments due the
Participant.  By way of example, if the
Participant elects a two year Quarterly Installment Method, the first payment
shall be 1/8 of the Account Balance, calculated as described in this
definition.  The following quarter, the
payment shall be 1/7 of the Account Balance, calculated as described in this
definition.  Each quarterly installment
shall be paid within 60 days following each anniversary of the day the
distributions are scheduled to commence.

 

1.34.        Retirement.
A Participant’s Separation from Service after the Participant has reached his
or her Plan Retirement Date.

 

1.35.        Separation
from Service.  With
respect to a Service Provider, his or her “separation from service,” as defined
in Section 1.409A-1(h) of the Treasury Regulations, with respect to
the Service Recipient.  The Plan
Administrator shall have full and final authority, which shall be exercised in
its discretion, to determine conclusively whether a Participant has had a “Separation
from Service,” and the date of such “Separation from Service.”

 

1.36.        Service
Provider.  A Participant or any other “service provider,”
as defined in Section 1.409A-1(f) of the Treasury Regulations.

 

1.37.        Service
Recipient.  With respect to a Participant, the Employer
and all persons considered part of the “service recipient,”
as defined in Section 1.409A-1(g) of the Treasury Regulations,
as determined from time to time.  As
provided in Section 1.409A-1(g) of the Treasury Regulations,
the “Service Recipient” shall mean the person for whom the services are 

 

6

 

performed and with respect to whom the
legally binding right to compensation arises, and all persons with whom such
person would be considered a single employer under Section 414(b) or
414(c) of the Code.

 

1.38.      Specified Employee.  A Service Provider who, as of the date of the
Service Provider’s “separation from service,”
as defined in Section 1.409A-1(h) of the Treasury Regulations, is a “Key
Employee” of the Service Recipient any stock of which is
publicly traded on an established securities market or otherwise.  For purposes of this definition, a Service
Provider is a “Key Employee”
if the Service Provider meets the requirements of Section 416(i)(1)(A)(i),
(ii) or (iii) of the Code (applied in accordance with the Treasury
Regulations thereunder and disregarding Section 416(i)(5) of the
Code) at any time during the Testing Year. 
If a Service Provider is a “Key Employee” (as defined above) as of a
Specified Employee Identification Date, the Service Provider shall be treated
as “Key Employee” for the entire twelve
(12) month period beginning on the Specified Employee Effective Date.  For purposes of this definition, a Service
Provider’s compensation for a Testing Year shall mean such Service Provider’s
compensation, as determined under Section 1.415(c)-2(a) of the Treasury Regulations (and
applied as if the Service Recipient were not using any safe harbor provided in Section 1.415(c)-2(d) of the Treasury Regulations, were not
using any of the elective special timing rules provided in Section 1.415(c)-2(e) of the Treasury Regulations, and were
not using any of the elective special rules provided in Section 1.415(c)-2(g))
of the Treasury Regulations,
from the Service Recipient for such Testing Year.  The “Specified Employees”
shall be determined in accordance with Section 409A(a)(2)(B)(i) of
the Code and Section 1.409A-1(i) of the Treasury Regulations.

 

1.39.        Specified
Employee Effective Date.   The first day of the fourth month following
the Specified Employee Identification Date. 
The Specified Employee Effective Date may be changed by the Service
Recipient, in its discretion, in accordance with Section 1.409A-1(i)(4) of
the Treasury Regulations.

 

1.40.        Specified
Employee Identification Date.  For purposes of Section 1.409A-1(i)(3) of
the Treasury Regulations, shall mean December 31.  The “Specified Employee
Identification Date” shall apply to all “nonqualified
deferred compensation plans” (as defined in Section 1.409A-1(a) of
the Treasury Regulations) of the Service Recipient and all affected Service
Providers.  The “Specified
Employee Identification Date” may be changed by the Company, in
its discretion, in accordance with Section 1.409A-1(i)(3) of the
Treasury Regulations.

 

1.41.        Testing
Year.  The twelve (12) month period ending on the
Specified Employee Identification Date, as determined from time to time.

 

1.42.        Year of Plan Participation.  Each twelve (12) month period during which
the Participant is employed on a full-time basis by an Employer, with a minimum
of 1,000 hours of service, inclusive of any approved leaves of absence,
beginning on the Participant’s date of entry into this Plan.

 

7

 

ARTICLE TWO

 

ELIGIBILITY AND PARTICIPATION

 

2.1           Selection.  Participation in the Plan shall be limited to
each Employee of the Employers who for any Plan Year is expected to be a “highly compensated employee” as
defined in Section 414(q) of the Code and a member of a “select group of management and highly compensated
employees” within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA, as determined by the Plan Administrator in its sole
discretion.

 

2.2           Enrollment Requirements.  As a condition to participation, each
selected Employee shall complete, execute and return to the Plan Administrator
an Election Form.  In addition, the Plan
Administrator shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary.

 

2.3           Eligibility; Commencement of Participation.  Provided an Employee selected to participate
in the Plan has met all enrollment requirements set forth in this Plan and required
by the Plan Administrator, including returning all required documents to the
Plan Administrator within the specified time period, that Employee shall
commence participation in the Plan on the day on which his or her Election Form first
becomes effective.

 

2.4           Termination of Participation and/or Deferrals.  Once an Employee is designated as a
Participant, he or she shall continue as such for all future Plan Years unless
and until:  (a) the Participant
terminates from employment with the Employer and receives a full distribution
of his Accounts, (b) is no longer categorized as an individual entitled to
participate in the Plan pursuant to Section 2.1 above, or (c) the
Plan Administrator specifically acts to discontinue the Participant’s
participation.  If a Participant’s
participation is discontinued, to the extent permissible under Section 409A
of the Code, the Plan Administrator shall (i) terminate any deferral
election the Participant has made for the remainder of the Plan Year in which
the Participant’s membership status changes, (ii) prevent the Participant
from making future deferral elections and/or (iii) immediately distribute
the balance of the Participant’s Accounts and terminate the Participant’s
participation in the Plan.  If
distribution of the balance of the Participant’s Accounts is not permissible
under Section 409A of the Code, then such Accounts shall be held until
distributable under the terms of Article 5 as originally elected by the
Participant.

 

2.5           Reemployment.   If a former Employee is rehired by an
Employer and is again selected as eligible to participate in the Plan, he or
she shall reenter the Plan on the first day of any Plan Year commencing after
the date he or she is selected in accordance with the provisions of Section 2.1,
provided that he or she will be treated as initially eligible to participate in
the Plan pursuant to Section 1.409A-2(a)(7) of the Treasury
Regulations as of such reentry date. 
Such Employee’s reentry into the Plan shall have no impact on any
distributions that have been made or are being made in accordance with Article 5.  Any amounts previously forfeited from the
Participant’s Accounts pursuant to this Plan shall not be restored or
reinstated upon the Participant’s subsequent reentry into the Plan.

 

8

 

ARTICLE THREE

 

CONTRIBUTIONS AND CREDITS

 

3.1           Election
to Defer.

 

(a)           In
General.  Except as otherwise provided in this Section 3.1,
in order for a Participant to make a valid election to defer Base Salary or Bonus
the Participant must submit an Election Form on or before the deadline established by the Plan Administrator, which
in no event shall be later than the December 31st
preceding the Plan Year in which such compensation will be earned.  Any deferral election made in accordance with
this Section 3.1(a) shall be irrevocable; provided, however, that if
the Plan Administrator permits or requires Participants to make a deferral
election by the deadline described above for an amount that qualifies as
Performance-Based Compensation (as defined in Section 3.1(c) below),
the Plan Administrator may permit a Participant to subsequently change his or
her deferral election for such compensation by submitting a new Election Form in
accordance with Section 3.1(c) below.  If no
Election Form is timely delivered for a Plan Year, no Participant Annual
Deferral Amount shall be withheld for that Plan Year.

 

(b)           Timing
of Deferral Elections for Newly Eligible Participants. 
Notwithstanding anything to the contrary in this Section 3.1, an
Eligible Employee who first becomes eligible to participate in the Plan on or after
the beginning of a Plan Year may be
permitted to make an election to defer Base Salary and Bonus attributable to services to be performed
after such election, provided that the Participant submits an Election Form on or before the deadline established by the
Plan Administrator, which in no event shall be later than 30 days after the
Participant first becomes eligible to participate in the Plan.  Any deferral election made in
accordance with this Section 3.1(b) shall become irrevocable no later
than the 30th day after the
date the Participant becomes eligible to participate in the Plan.

 

(c)           Timing
of Deferral Elections for Performance-Based Compensation. 
Notwithstanding anything to the contrary in this Section 3.1, and
subject to the limitations below and any terms and conditions imposed by the
Plan Administrator, in the case of any Bonus that constitutes performance-based
compensation (within the meaning of Section 409A(a)(4)(b)(iii) of the
Code) (“Performance-Based Compensation”)
deferrable under this Plan, which Bonus is based on services performed over a
period of at least 12 months, an election to defer such Bonus compensation may
be made by timely completing and submitting to the Plan Administrator an
Election Form no later than six (6) months before the end of the
service period during such period as may be established by the Plan
Administrator in its discretion for such elections.

 

In order for a Participant to be eligible to make a deferral election
for Performance-Based Compensation in accordance with the deadline established
pursuant to this Section 3.1(c), the Participant must have performed
services continuously from the later of (i) the beginning of the performance
period for such compensation, or (ii) the date upon which the performance
criteria for such compensation are established, through the date upon which the
Participant makes the deferral election for such compensation.  In no event shall a deferral election
submitted under this Section 3.1(c) be permitted to apply to any
amount of Performance-Based Compensation that has become readily ascertainable.

 

9

 

3.2           Minimum
Participant Annual Deferral Amount.  For each Plan Year, the
aggregate minimum Participant Annual Deferral Amount for each Participant is
$2,500.  If an election is made for less
than such minimum amount, or if no election is made, the amount deferred shall
be zero.

 

3.3           Maximum
Deferral.  For
each Plan Year, a Participant may elect to defer, as his or her
Participant Annual Deferral Amount, up to 50% of his or her Base Salary and up
to 100% of his or her Bonus, subject to the limitations set forth in this Section 3.3.  Notwithstanding the foregoing, a Participant
Annual Deferral Amount shall be limited in any Plan Year, if necessary, to
satisfy the Participant’s income and employment tax withholding obligations
(including Social Security, unemployment and Medicare), and the Participant’s
employee benefit plan contribution requirements, determined on the first day of
the election period for such Plan Year, as determined by the Plan
Administrator.

 

3.4           Accounts;
Crediting of Deferrals.  Solely for record keeping purposes, the Plan
Administrator shall establish a Deferral Account and a Corporate Contributions
Account for each Participant.  A
Participant’s Accounts shall be credited with the deferrals made by him or her
or on his or her behalf by his or her Employer under this Article 3 and
shall be credited (or charged, as the case may be) with the hypothetical or
deemed investment earnings and losses determined pursuant to Article 4,
and charged with distributions made to or with respect to him or her.

 

(a)           Participant Annual Deferral Amounts.  For each Plan Year, the Base Salary portion
of the Participant Annual Deferral Amount shall be withheld from each payroll
period in equal amounts from the Participant’s Base Salary.  The Bonus portion of the Participant Annual
Deferral Amount shall be withheld at the time the Bonus is or would otherwise
be paid to the Participant.  The
Participant Annual Deferral Amount shall be credited to the Participant’s
Deferral Account.

 

(b)           Corporate Contributions.  Each Plan Year, the Plan Sponsor may make
contributions (either discretionary, matching or both) to the Plan as it may
determine from time to time and may direct that such contributions be allocated
among the Corporate Contribution Accounts of those Participants that it may
select.  The amount so credited to a
Participant may be smaller or larger than the amount credited to any other
Participant, and the amount credited to any Participant for a Plan Year may be
zero.  The Corporate Contribution, if
any, shall be credited as of the last day of a Plan Year.  If a Participant is not employed by an
Employer as of the last day of a Plan Year other than by reason of his or her
Retirement, Disability or death while employed, the Discretionary Company
Contribution for such Participant for that Plan Year shall be zero.  In the event of Retirement, Disability or
death, a Participant shall be credited with the Corporate Contribution(s) (if
any) for the Plan Year in which he or she Retires, becomes Disabled or
dies.  A Corporate Contribution, if any,
shall be credited to Participants’ Corporate Contribution Accounts on the date
declared by the Plan Sponsor.  No
Participant shall have a right to compel the Plan Sponsor to make a
contribution under this Section 3.4(b) and no Participant shall have
the right to share in the allocation of any such contribution for any Plan Year
unless selected by the Plan Sponsor, in its sole discretion.

 

3.5           Vesting.

 

(a)           Deferral Account.  A Participant shall at all times be 100%
vested in his or her Deferral Account.

 

10

 

(b)           Corporate Contribution Account.  Plan Sponsor contributions credited to a
Participant’s Corporate Contribution Account under Section 3.4(b) of
the Plan and any hypothetical or deemed investment earnings and losses
attributable to these contributions shall become vested or nonforfeitable based
on the Participant’s Years of Plan Participation according to the following
schedule:

 

	
  Years of Plan Participation

  	
   

  	
  Percentage Vested

  	
   

  
	
  Less than 2

  	
   

  	
  0

  	
  %

  
	
  2 but less than
  3

  	
   

  	
  25

  	
  %

  
	
  3 but less than
  4

  	
   

  	
  50

  	
  %

  
	
  4 but less than
  5

  	
   

  	
  75

  	
  %

  
	
  5 or more

  	
   

  	
  100

  	
  %

  

 

Notwithstanding the foregoing, a Participant’s Corporate Contribution
Account shall be fully vested and nonforefeitable upon (i) the Participant’s
attainment of the Plan Retirement Age, (ii) the Participant’s death, (iii) the
Participant’s Disability, or (iv) termination of the Plan.

 

(c)           Forfeiture.  A Participant shall forfeit any unvested
portion of his or her Corporate Contribution Account determined as of the most
recent determination date preceding his or her termination of employment with
the Employers.  Any portion of a
Participant’s Corporate Contribution Account which is not vested shall be
forfeited and shall cease to be liabilities of the Employer or the Plan.  All forfeited amounts shall be immediately
deducted from the Participant’s Corporate Contribution Accounts and credited to
such Employer.

 

ARTICLE FOUR

 

ACCOUNTS AND ALLOCATION OF FUNDS

 

4.1           Earnings Credits or Losses.  In accordance with, and subject to, the rules and
procedures that are established from time to time by the Plan Administrator, in
its sole discretion, amounts shall be credited or debited to a Participant’s
Account Balance in accordance with the following rules:

 

(a)           Measurement Funds.  The Plan Administrator shall from time to time select one or more types of
Measurement Funds and one or more specific Measurement Funds for deemed
investment designation by Participants for the purpose of crediting or charging
hypothetical or deemed investment earnings and losses to his or her Account
Balance.  As necessary, the Plan
Administrator may, in its sole discretion, discontinue, substitute or add a
Measurement Fund.  The Plan Administrator
shall notify the Participants of the types of Measurement Funds and the
specific Measurement Funds selected from time to time.

 

(b)           Election of Measurement
Funds.  A Participant may elect one or more
Measurement Fund(s) (as described in Section 4.1(c) below) to be
used to determine the additional amounts to be credited (or charged, as the
case may be) to his or her Account Balance, in accordance with such rules as
the Plan Administrator may provide.

 

(c)           Crediting or Debiting Method.  The
performance of each elected Measurement Fund (either positive or negative) will
be determined by the Plan Administrator, in its sole discretion, based on the
performance of the Measurement Funds themselves.  A 

 

11

 

Participant’s Account
Balance shall be credited or debited as frequently as is administratively
feasible, but no less often than monthly, based on the performance of each
Measurement Fund selected by the Participant, as determined by the Plan
Administrator in its sole discretion.

 

(d)           No Actual Investment. 
Notwithstanding any other provision of this Plan that may be interpreted
to the contrary, the Measurement Funds are to be used for measurement purposes
only, and a Participant’s election of any such Measurement Fund, the allocation
to his or her Account Balance thereto, the calculation of additional amounts
and the crediting or debiting of such amounts to a Participant’s Account
Balance shall  not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such Measurement
Fund.  In the event that the Company, in
its own discretion, decides to invest funds in any or all of the Measurement
Funds, no Participant shall have any rights in or to such investments
themselves.  Without limiting the
foregoing, a Participant’s Account Balance shall at all times be a bookkeeping
entry only and shall not represent any investment made on his or her behalf by
any Employer or the Trust; the Participant shall at all times remain an
unsecured creditor of the Employers.  Any
liability of an Employer to any Participant, former Participant, or Beneficiary
with respect to a right to payment shall be based solely upon contractual
obligations created by the Plan.  The
Plan Sponsor, the Board, the Plan Administrator, any Employer and any
individual or entity shall not be deemed to be a trustee of any amounts to be
paid under the Plan.  Nothing contained
in the Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship, between
the Plan Sponsor and an Employer and a Participant, former Participant,
Beneficiary or any other individual or entity. 
Neither the Plan Sponsor nor any Employer in any way guarantees any
Participant’s Account Balance against loss or depreciation, whether caused by
poor investment performance, insolvency of a deemed investment or by any other
event or occurrence.  In no event shall
any Employee, officer, director or stockholder of the Plan Sponsor or any
Employer be liable to any individual or entity on account of any claim arising
by reason of the Plan provisions or any instrument or instruments implementing
its provisions, or for the failure of any Participant, Beneficiary or other
individual or entity to be entitled to any particular tax consequences with
respect to the Plan or any credit or payment hereunder.

 

4.2           Distributions  .  Any
distribution with respect to a Participant’s Account Balance shall be charged
to the appropriate account as of the date such payment is made by the Employer
or the trustee of any Trust which may be established for the Plan.

 

ARTICLE FIVE

 

ENTITLEMENT TO BENEFITS

 

5.1           Retirement Benefit:

 

(a)           In
the event of a Participant’s Retirement, the Plan Administrator shall
thereafter cause to be paid to the Participant his or her Accrued Benefit,
valued as of the date of such Retirement. 
Such benefits shall be payable in the manner and frequency previously
elected by the Participant on his or her Election Form(s).  A Participant may select distribution of his
or her Retirement benefit in the form of a lump sum payment, or a two, five or
ten year Quarterly Installment Method. 
The first installment payment shall be due on or about the first day of
the first month following the date of Participant’s Retirement.  If such Participant fails to select a form of
distribution for purposes of distributions from such Participant’s Accounts for
a Plan 

 

12

 

Year, such distributions shall be made in a lump sum payment within 90
days following the date of the Participant’s Retirement.

 

(b)           Notwithstanding
the foregoing, in accordance with Section 1.409A-3(j)(4)(v) of the
Treasury Regulations, a Participant’s Retirement benefit may be distributed in
one lump sum not later than 90 days after the date of the Participant’s
Retirement rather than in installments if the Participant’s Account Balance as
of the date of his or her Retirement is less than the applicable dollar amount
under Section 402(g)(1)(B) of the Code.

 

(c)           A
Participant may not change his or her election with respect to the form of
distribution of his or her Account Balance pursuant to this Section 5.1
for a Plan Year.

 

5.2           Disability Retirement Benefit.  The Participant shall be entitled to receive
payments hereunder prior to his or her Separation from Service if he or she is
Disabled. If a Participant has a qualifying Disability the benefit payable
hereunder shall be equal to the Participant’s Accrued Benefit, valued as of his
or her Disability Date.  Such
benefit shall be payable in a lump sum within 45 days following the Participant’s
Disability Date.

 

5.3           Death Benefits:

 

(a)           Death Benefit Prior to Commencement of Benefits.  If the Participant dies while in the
employment of the Plan Sponsor or an Affiliate prior to the commencement of
benefit payments, the Plan Administrator shall cause a survivor benefit to be
paid in an amount based on the Participant’s Accrued Benefit at the date of
death. The death benefit payable under this Section 5.3 shall be
distributed to the Participant’s Beneficiary pursuant to the payment method
previously elected by the Participant for payment of his or her Separation from
Service Benefit. Payment(s) shall commence on or about the first day of
the third month following the Participant’s date of death and based on the last
Beneficiary designation received by the Plan Sponsor from the Participant prior
to his or her death.  If no such designation has been received by
the Plan Sponsor, such payment shall be made to the Participant’s
surviving legal spouse.  If the
Participant is not survived by a legal spouse, the said payment(s) shall
be made to the then living children of the Participant, if any, in equal
shares.  If there are no surviving
children, the balance of the Accrued Benefit shall be paid to the estate of the
Participant. If the total amount of benefits payable at the time of the Participant’s
death is less than $10,000.00, the Plan Administrator may elect to pay the
benefit in a lump sum rather than in installments.

 

(b)           Death Benefit After Commencement of Benefits.  In the event of the Participant’s death after
the commencement of benefit payments, but prior to the completion of such
payments due to and owing hereunder, the Plan Administrator shall cause such
payments to continue  in installments
over the remainder of the period and in the same amounts as that benefit would
have been paid to the Participant had he or she survived.  Such continuing payments shall be made to the
Participant’s designated Beneficiary in accordance with the last such
designation received by the Plan Sponsor from the Participant prior to his
death.  If no such designation has been
received by the Plan Sponsor, such payments shall be made to the Participant’s
surviving legal spouse.  If such spouse
dies before receiving all payments to which he or she is entitled hereunder,
then the balance of the Accrued Benefit shall be paid to the spouse’s
estate.  If the Participant is not
survived by a legal spouse, then the said payments shall be made to the then
living children of the Participant, if any, in equal shares.  If there are no surviving children, the
balance of the Accrued Benefit shall be paid to the estate of the
Participant.  Notwithstanding the 

 

13

 

foregoing, in accordance with Section 1.409A-3(j)(4)(v) of
the Treasury Regulations, a Participant’s Accrued Benefit may be distributed in
one lump sum not later than 90 days after the date of the Participant’s death
rather than in installments if the Participant’s Account Balance as of the date
of his or her death is less than the applicable dollar amount under Section 402(g)(1)(B) of
the Code.

 

5.4           Separation from Service Benefits:

 

(a)           In
the event of the Participant’s Separation from Service for any reason other
than for Cause, Disability, Retirement or Death, the Plan Administrator shall
cause to be paid to the Participant a Separation from Service Benefit based on
the Participant’s vested Account Balance. 
Such benefit shall be payable in a lump sum within 90 days following the
date of the Participant’s Separation from Service.

 

(b)           In
the event the Participant’s Separation from Service is as a result of the
termination of his or employment by an Employer for Cause, no benefits of any
kind will be due or payable under the terms of this Plan from amounts credited
to the Participant’s Corporate Contribution Account , and all rights of the
Participant, his or her designated Beneficiary, executors, or administrators,
or any other person, to receive payments thereof shall be forfeited.

 

(c)           If a Participant is a
Specified Employee on the date of Participant’s Separation from Service, the
payment of such Participant’s vested Account Balance shall be delayed to the
extent necessary to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of
the Code, and such payments shall be paid or distributed to the Participant on
the earlier of (a) the expiration of the six-month period measured from
the date of the Participant’s Separation from Service or (b) the date of
Employee’s death.  Upon the expiration of
the applicable six (6) month period under Section 409A(a)(2)(B)(i) of
the Code, all payments deferred pursuant to this Section 5.4(c) shall
be paid in a lump sum payment to the Participant.

 

5.5           Distribution Upon Unforeseeable Emergency:

 

(a)           Unforeseeable Emergency.  In the event that the Plan
Administrator, following a written request by a Participant, determines, in its
sole discretion, that the Participant has suffered an Unforeseeable Emergency,
the Plan Administrator shall cause to be paid to the Participant, within 30
days following such determination, an amount necessary to meet the
Unforeseeable Emergency, but not exceeding the vested balance of such
Participant’s Accounts as of the date of such payment.  For purposes of this Section 5.5(a), an “Unforeseeable Emergency” shall mean
a severe financial hardship to the Participant resulting from (a) an
illness or accident of the Participant, the Participant’s spouse, the
Participant’s Beneficiary or the Participant’s dependent (as defined in Code Section 152
without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (b) a
loss of the Participant’s property due to casualty, or (c) such other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, all as determined by the Plan
Administrator based on the relevant facts and circumstances.  The
payout, if any, from the Plan shall not exceed the lesser of (i) the
Participant’s vested Account Balance, calculated as of the close of business on
or around the Distribution Date for such payout, as determined by the Plan
Administrator in accordance with provisions set forth below, or (ii) the
amount necessary to satisfy the Unforeseeable Emergency, plus amounts necessary to pay Federal, state, or local income taxes
or penalties reasonably anticipated as a result of the distribution.  A Participant shall not be eligible to
receive a payout 

 

14

 

from the Plan to the
extent that the Unforeseeable Emergency is or may be relieved (A) through
reimbursement or compensation by insurance or otherwise, (B) by
liquidation of the Participant’s assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship or (C) by
cessation of deferrals under this Plan.

 

(b)           Rules Adopted by Plan Administrator.  The Plan Administrator shall have the
authority to adopt additional rules relating to hardship
distributions.  In administering these
rules, the Plan Administrator shall act in accordance with the principle that the
primary purpose of this Plan is to provide additional retirement income, not
additional funds for current consumption.

 

(c)           Limit on Number of Distributions.  No Participant may receive more than one
distribution on account of an Unforeseeable Emergency in any Plan Year.

 

(d)           Prohibition of Further Deferrals. A
Participant who receives a distribution on account of an Unforeseeable
Emergency, and who is still employed by an Employer, shall be prohibited from
making deferrals under Article 3.1 for the remainder of the Plan Year in
which the distribution is made, to the extent required under Section 409A(a)(2)(B)(ii) of
the Code.

 

(e)           Account
Adjustments.  A Participant’s withdrawal upon the
occurrence of Unforeseeable Emergency shall be charged on a pro rata basis to
the Participant’s vested interests in such Participant’s Accounts.

 

5.6             Effect of Change in Control.  A Participant shall become fully vested in
his or her Corporate Contribution Account if, within one year after the occurrence of a Change in Control,
his employment is involuntarily terminated by all Employers for any reason
other than Cause or his death or Disability, or he voluntarily terminates his
employment with all Employers for Good Reason. 
From and after the occurrence of a Change in Control,
the Plan Administrator shall consist of a committee of the individuals who were
members of the Board 90 days before the occurrence of the Change in Control,
with any vacancy in such the Plan Administrator occurring thereafter being
filed with a person or persons selected by the other members of the Plan
Administrator.

 

5.7           Excise Tax Limitation:  Notwithstanding
anything contained in this Plan to the contrary, in the event that any payment
or benefit (within the meaning of Section  280G(b)(2) of the Code) to
the Participant or for the Participant’s benefit paid or payable or distributed
or distributable (including, but not limited to, the acceleration of the time
for the vesting or payment of such benefit or payment) pursuant to the terms of
this Plan or otherwise in connection with, or arising out of, the Participant’s
employment with the Plan Sponsor or any of its Affiliates or a change of
control within the meaning of Section 280G of the Code (a “Payment” or “Payments”),
would be subject to the excise tax imposed by Section  4999 of the Code
(the “Excise Tax”), then the Payments
shall be reduced (but not below zero) but only to the extent necessary that no
portion thereof shall be subject to the excise tax imposed by Section  4999
of the Code (the “Section  4999 Limit”).  Unless the Participant shall have given prior
written notice specifying a different order to the Plan Sponsor to effectuate
the limitations described in the preceding sentence, the Plan Sponsor shall
reduce or eliminate the Payments by first reducing or eliminating those
Payments or benefits 

 

15

 

which are not payable in cash and then by reducing or eliminating cash
Payments, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time. 
Any notice given by the Participant pursuant to the preceding sentence
shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Participant’s rights and entitlements to any benefits
or compensation.

 

5.8           Benefits Not Transferable.  No Participant or Beneficiary under this Plan
shall have any power or right to transfer, assign, anticipate, hypothecate or
otherwise encumber any part of all the amounts payable hereunder.  No part of the amounts payable shall, prior
to actual payment, be subject to seizure or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or
any other person, nor be transferable by operation of law in the event of a
Participant’s or any other person’s bankruptcy or insolvency, or dissolution of
marriage. Any such attempted assignment shall be void.  The benefits which a Participant may accrue
under this Plan are not subject to the terms of any Qualified Domestic
Relations Order (as that term is defined in Section 414(p) of the
Code) with respect to any Participant, and the Plan Administrator, the Board,
the Plan Sponsor and any Employer shall not be required to comply with the
terms of such order in connection with this Plan.  Notwithstanding the foregoing, the
withholding of taxes from Plan payments, the recovery of Plan overpayments of
benefits made to a Participant or Beneficiary, the transfer of Plan benefit
rights from the Plan to another plan, or the direct deposit of Plan payments to
an account in a financial institution (if not actually a part of an arrangement
constituting an assignment or alienation) shall not be construed as an
assignment or alienation under this Section 5.8 and shall be permitted
under the Plan.

 

5.9           No Trust Created.  Nothing contained in this Plan, and no action
taken pursuant to its provisions by any person shall create, or be construed to
create, a trust of any kind, or a fiduciary relationship between the Plan Sponsor
or any Employer and any other person.

 

ARTICLE SIX

 

DISTRIBUTION OF BENEFITS

 

6.1           Benefits Payable Only From General Corporate
Assets: Unsecured General Creditor Status of Participant:

 

(a)           Payment
to the Participant or any Beneficiary hereunder shall be made from assets which
shall continue, for all purposes, to be part of the general, unrestricted
assets of the Employers; no person shall have any interest in any such asset by
virtue of any provision of this Plan.  An
Employer’s obligation hereunder shall be an unfunded and unsecured promise to
pay money in the future.  To the extent
that any person acquires a right to receive payments from an Employer under the
provisions hereof, such right shall be no greater than the right of any
unsecured general creditor of the Employer; no such person shall have or
acquire any legal or equitable right, interest or claim in or to any property
or assets of the Employer.

 

(b)           In
the event that, in its discretion, an Employer purchases an insurance policy or
policies insuring the life of a Participant or Employee, to allow the Employer
to recover or meet the cost of providing benefits in whole or in part,
hereunder, no Participant or Beneficiary shall have any rights whatsoever
therein or in said policy or the proceeds therefrom.  The Employer shall be the sole owner and
beneficiary of any such insurance policy or property and shall possess and may
exercise all incidents of ownership therein.

 

16

 

(c)           In
the event that an Employer purchases an insurance policy or policies on the
life of a Participant or an  Employee as
provided for above, then all of such policies shall be subject to the claims of
the creditors of the Employer.

 

(d)           If
an Employer chooses to obtain insurance on the life of a Participant in
connection with its obligations under this Plan, the Participant hereby agrees
to take such physical examinations and to truthfully and completely supply such
information as may be required by the Employer or the insurance company(ies)
designated by the Employer. If a Participant submits information to any such
insurance company(ies) and if the Participant makes a material
misrepresentation in an application for any insurance that may be used to
insure any of the Employer’s obligations under this Plan, and if as a result of
that material misrepresentation an insurance company is not required to pay all
or any part of the benefit provided under that insurance, the Participant’s
right to a benefit under this Plan will be reduced by the amount of the benefit
that is not paid by the insurance company because of such material
misrepresentation if applicable.

 

6.2           Facility of Payment.  If a distribution is to be made to a minor,
or to a person who is otherwise incompetent, then the Plan Administrator may,
in its discretion, make such distribution (i) to the legal guardian, or if
none, to a parent of a minor payee with whom the payee maintains his or her
residence, or (ii) to the conservator or committee or, if none, to the
person having custody of an incompetent payee. Any such distribution shall
fully discharge the Employer, the Plan Sponsor and Plan from further liability
on account thereof.

 

ARTICLE SEVEN

 

BENEFICIARIES

 

7.1           Beneficiary Designation.  A Participant shall have the right, at any
time, to submit a Beneficiary Designation Form designating of primary and
secondary Beneficiaries to whom payment under this Plan shall be made in the
event of his or her death prior to complete distribution of the benefits
payable.  Each Beneficiary Designation Form shall
become effective only when receipt thereof is acknowledged in writing by the
Plan Administrator. The Plan Administrator shall have the right, in its sole
discretion, to reject any Beneficiary Designation Form.  Any attempt to designate a Beneficiary,
otherwise than as provided in this Article shall be ineffective.

 

7.2           Spouse’s Interest. A
Participant’s Beneficiary designation shall be deemed automatically revoked if
the Participant names a spouse as Beneficiary and the marriage is later
dissolved or the spouse dies. Without limiting the generality of the foregoing,
the interest in the benefits hereunder of a spouse of a Participant who has
predeceased the Participant or whose marriage with the Participant has been
dissolved shall automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including but not limited to such
spouse’s will, nor shall such interest pass under the laws of intestate
succession.

 

7.3           Doubt as to Beneficiary.  If the Plan Administrator has any doubt as to
the proper Beneficiary to receive payments pursuant to this Plan, the Plan
Administrator shall have the right, exercisable in its discretion, to cause the
Participant’s Employer to withhold such payments until this matter is resolved
to the Plan Administrator’s satisfaction.

 

17

 

7.4           Discharge of Obligations.  The
payment of benefits under this Plan to a Beneficiary shall fully and completely
discharge all Employers and the Plan Administrator from all further obligations
under this Plan with respect to the Participant, and that Participant’s
Election of Deferral shall terminate upon such full payment of benefits.

 

ARTICLE EIGHT

 

PLAN ADMINISTRATION

 

8.1           Responsibility of Administration of the Plan:

 

(a)           The
Plan Administrator shall be responsible for the management, operation and
administration of the Plan.  The Plan
Administrator may employ others to render advice with regard to its
responsibilities under this Plan.  It may
also delegate all or a portion of its responsibilities as Plan Administrator to
others and may exercise any other powers necessary for the discharge of its
duties.  The Plan Administrator shall be
entitled to rely conclusively upon all tables, valuations, certifications,
opinions and reports furnished by any actuary, accountant, controller, counsel
or other person employed or engaged by the Plan Administrator with respect to
the Plan.

 

(b) The primary responsibility of the Plan
Administrator is to administer the Plan for the benefit of the Participants and
their Beneficiaries, subject to the specific terms of the Plan.  The Plan Administrator shall administer the
Plan in accordance with its terms and shall have the power to determine all
questions arising in connection with the administration, interpretation, and
application of the Plan.  Any such
determination shall be conclusive and binding upon all persons and their heirs,
executors, beneficiaries, successors and assigns.  The Plan Administrator shall have all powers
necessary or appropriate to accomplish its duties under the Plan.  The Plan Administrator shall also have the
discretion and authority to make, amend, interpret, and enforce all appropriate
rules and regulations for the administration of this Plan and decide or
resolve any and all questions, including but not limited to, interpretations of
this Plan and entitlement to or amount of benefits under this Plan, as may
arise in connection with the Plan.

 

8.2           Claims Procedure.

 

(a)           Claim.  A person who believes that he or she is being
denied a benefit to which he or she is entitled under the Plan (hereinafter
referred to as a “Claimant”) may file a written request for such benefit with
the Plan Administrator, setting forth his or her claim.  The request must be addressed to the Plan
Administrator at the Plan Sponsor’s then principal place of business.  The claims procedure of this Section 8.2
shall be applied in accordance with Section 503 of ERISA and Department of
Labor Regulation Section 2560.503-1.

 

(b)           Claim Decision.
Upon receipt of a claim, the Plan Administrator shall advise the Claimant that
a reply will be forthcoming within 90 days after the receipt of the benefits
claim by the Plan Administrator and that the Plan Administrator shall, in fact,
deliver such reply within such period. 
The Plan Administrator may, however, extend the reply period for an
additional 90 days, unless the Plan Administrator determines that special
circumstances require an extension of time for making a determination with
respect to the benefits claim.  If the
Plan Administrator determines that an extension of time for making a
determination with respect to the benefits claim is required, the Plan
Administrator shall provide the Claimant with written 

 

18

 

notice of such extension prior to the end of the initial 90 day
period.  The extension notice shall
indicate the special circumstances requiring the extension of time and the date
by which the Plan Administrator expects to render the benefit
determination..  If the claim is denied
in whole or in part, the Plan Administrator shall adopt a written opinion,
using language calculated to be understood by the Claimant, setting forth:

 

(i)            The
specific reasons for such denial;

 

(ii)           Specific
reference to pertinent provisions of this Plan on which such denial is based;

 

(iii)          A description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation why such material or such information is necessary; and

 

(iv)          A
description of the Plan’s appeal procedures and the time limits applicable to
such procedures, including a statement of the Claimant’s right to bring a civil
action under Section 502(a) of ERISA following a denial of the appeal
of the denial of the benefits claim.

 

(c)           Request for Review.  Within 60 days after receipt by the Claimant
of the written opinion described above, the Claimant may request in writing
that the Review Committee (as defined below)review the Plan Administrator’s
determination.  Such request must be
addressed to the Plan Administrator at the Plan Sponsor’s then principal place
of business.  The Claimant shall be
afforded the opportunity to submit written comments, documents, records, and
other information relating to the benefits claim, and the Claimant shall be
provided, upon request and free of charge, reasonable access to all documents,
records and other information relevant to the Claimant’s benefits claim.  A document, record or other information shall
be considered “relevant” to the benefits claim as provided in Department of
Labor Regulation Section 2560-503-1(m)(8). 
The review on appeal by the Board of Directors of the Plan Sponsor shall
take into account all comments, documents, records and other information
submitted by the Claimant, without regard to whether such information was
submitted or considered in the Plan Administrator’s initial determination with
respect to the benefits claim.  If the
Claimant does not request a review of the determination within such 60-day
period, he or she shall be barred and estopped from challenging the
determination.

 

(d)           Review of Decision.  The Review Committee shall advise the
Claimant in writing of the Review Committee’s determination of the appear
within 60 days of the Review Committee’s receipt of Claimant’s written request
for review, unless special circumstances (such as a hearing) would make the
rendering of a determination within the 60 day period infeasible, but in no
event shall the Review Committee render a determination regarding the denial of
a claim for benefits later than 120 days after its receipt of a request for
review.  If an extension of time for
review is required because of special circumstances, written notice of the
extension shall be furnished to the Claimant prior to the date the extension
period commences.  If the Claimant’s
appeal of the denial of the Claimant’s benefits claim is denied in whole or in
part, the Review Committee shall adopt a written opinion, using language
calculated to be understood by the Claimant, setting forth:

 

(i)            The specific reasons for such denial of the
appeal;

 

19

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