EXHIBIT 10.1
JAFRA COSMETICS INTERNATIONAL, INC.
SUPPLEMENTAL SAVINGS PLAN
1. Purpose. The Jafra Cosmetics International, Inc. Supplemental Savings Plan
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(the "Plan") has been adopted by Jafra Cosmetics International, Inc. (the
"Company") to provide additional benefits to certain employees of the
Company and those of its affiliates selected by the Committee to be
participating employers hereunder (the "Participating Affiliates"), whose
benefits under the Jafra Cosmetics International 401(k) Savings Plan (the
"Savings Plan") have been limited by the provisions of the Internal Revenue
Code of 1986, as amended (the "Code").
The Plan is intended, to the extent possible, to constitute an "excess
benefit plan" within the meaning of Section 3(36) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and otherwise to
constitute an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees as described in Sections 201(2), 301(a) and 401(a)(1)
of ERISA.
2. Eligible Employees. Employees eligible to participate in this Plan for any
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calendar year shall be those employees of the Company and Participating
Subsidiaries who are eligible to participate in the Savings Plan and (i)
whose Annual Additions, as defined in Section 415(c)(2) of the Code, are
limited as described in Sections 4(a) and 4(d) below, or (ii) who are
determined by the "Committee", as that term is defined below, to be
management or highly compensated employees for such year and whose
contributions or Compensation taken into account under the Savings Plan are
limited for such year by reason of another provision of the Code, based on
actual participation in the Savings Plan ("Participants"). The Committee may
establish guidelines to determine which employees are eligible to
participate in the Plan, or may make individual eligibility determinations
or both, as it shall decide in its sole discretion.
3. Participants. Participants are Eligible Employees who elect to participate
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in the Plan, at such time and in such manner as may be prescribed by the
Committee, by executing and delivering to the Company a participation and
salary deferral agreement, in such form and at such time as prescribed by
the Committee. Participation in the Plan may be discontinued only as
permitted by the Committee. Any individual who has previously participated
in the Plan shall be considered a Participant for the purposes of the Plan,
other than Section (4)(a) and (b) below, until final distribution is made of
amounts credited to the individual's accounts under the Plan.
4. Deferrals and Additional Credits.
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(a) Election to Defer. A Participant may elect to defer hereunder any
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portion of the Compensation from the Company which the Participant
would contribute to the Savings Plan for a calendar year, but which
cannot be contributed as a direct or indirect result of the application
of the limitations set forth in Section 4(d) below. The amount a
Participant has elected to defer hereunder (the "Participant's
Deferral") will be recorded in an account, entitled the "Supplemental
Savings Account," maintained for each Participant on the books of the
Company, and shall be subject to all the terms and conditions set forth
below. A Participant shall always have a fully vested right in amounts
credited to the Supplemental Savings Account maintained for such
Participant.
A deferral election shall apply to amounts which would constitute
either "tax-deferred" or "after-tax", as described in the Savings Plan.
However, all amounts contributed hereunder shall, to the extent
consistent with applicable Federal and state tax laws, rulings and
regulations as in effect from time to time, be treated by the Company
as not includable in the Participant's income for Federal income tax
purposes.
(b) Company Matching Contribution. The Committee shall determine the
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amount of the Company Matching Contribution that would have been made
to the Savings Plan in respect of any Participant Deferral, and shall
be recorded by the Company in an account on its books, entitled the
"Supplemental Company Contribution Account," maintained for such
Participant. Amounts credited to a Participant's Supplemental Company
Contribution Account shall become vested at the same time the
Participant becomes vested in his Employer Matching Contributions under
the Savings Plan.
(c) Income, Gains and Losses.
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(i) Subject as provided in clause (ii) below, amounts recorded in a
Participant's Supplemental Savings Account and Supplemental
Company Contribution Account (collectively, the "Participant's
Investment Account") shall be credit with income, gains and losses
as follows:
(A) The Company may, but is not required to, establish a trust
(the "Trust"), with an independent trustee (the "Trustee"),
for the purpose of segregating and investing amounts deferred
hereunder, provided that any such Trust shall be structured
so that the assets of the Trust are treated as assets of the
Company for Federal income tax purposes. If a Trust is
created, the Trustee shall invest Trust assets in accordance
with the Participant elections as described below
(B) The Committee shall make one or more investment choices (the
"Investment Choices") available to Participants from time to
time. The Investment Choices shall reflect actual investments
available to the Trustee, if applicable, or otherwise be
available to the public for investment of like amounts.
(C) Participants shall be given the opportunity to have their
Investment Accounts treated as if invested in one or more of
these Investment Choices. The Committee will then increase or
decrease the Participant's Investment Account based on the
actual income, gains and losses reported with respect to the
Investment Choice or Choices a Participant has made
(determined without regard to applicable Federal, state or
local income taxes).
(ii) In the alternative, the Committee may adopt guidelines adding to
the provisions of clause (i) set forth above, and providing an
alternate method for determining the value of part or all of a
Participant's Investment Accounts; provided, the Committee shall
give Participants written notice of any such alternate investments
and shall make any guidelines available to Participants upon
request.
(d) Limitations. For the purposes of Section 4(a) above, the applicable
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limitations set forth in the Code are (i) the limitations on Annual
Additions set forth in Section 415 of the Code, (ii) the limitation on
elective deferrals under Section 402(g) of the Code, (iii) the
limitation on Compensation set forth in Section 401(a)(17), and (iv) if
and to the extent determined by the Committee for a given year, the
limitations on contributions by and on behalf of Highly Compensated
Employees set forth in Sections 401(k) and 401(m) of the Code.
5. Payments from Accounts.
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(a) Payment Generally. Except as otherwise provided in this Section, no
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amounts shall be payable under the Plan to any Participant while he is
employed by the Company or any Participating Affiliate. While employed,
a Participant may request a payment of amounts credited to the
Supplemental Savings Account maintained for such Participant on the
basis of an immediate and heavy financial hardship for which no other
resources are available to the Participant and following the
Participant's withdrawal of all amounts then available for withdrawal
from the Savings Plan. Such request shall be subject to the approval of
the Committee or its delegate. A hardship distribution shall be debited
against the Participants accounts in such manner as is prescribed by
the Committee. Unless an election is made in accordance with Section 5
(b) below or unless Section 5 (c) below applies, all vested amounts
credited to a Participant's accounts under the Plan shall be paid
within 30 days following termination of the Participant's employment.
The
value of such accounts shall be determined, with respect to each
Investment Choice, the most recent valuation date on or prior to the
date the Participant's employment terminates.
(b) Installments. Notwithstanding Section 4(a) above, a Participant may
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elect to receive payment of his accounts under the Plan in the form of
annual installments of from two to ten years commencing in the calendar
year following the year of the Participant's termination of employment
with the Company and all Participating Subsidiaries, provided (i) the
Participant's termination of employment is on account of retirement or
total or permanent disability (such terms having the same meanings as
used under the Savings Plan), (ii) the value of the Participant's
vested account balance under the Plan as of the close of the date of
termination is at least $25,000, and (iii) the Participant's
installment payment election is made at least twelve months prior to
the date of such termination. The amount of each installment shall be
determined by multiplying (i) the aggregate value of the Participant's
accounts as of the day of the installment, determined in a manner
consistent with Section 5(a) above, by (ii) a fraction the numerator of
which is 1 and the denominator of which is the number of installments
remaining to be paid, inclusive of the installment being valued.
Pending final distribution, the remaining balance in the Participant's
accounts shall continue to be credited or debited with amounts as
described in Section 4 (c) above.
(c) Special Rule: Plan Termination. Upon the termination of this plan or
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the Savings Plan, all unvested accounts under this Plan shall vest and
all accounts shall be paid to Participants as provided under Section
4(a) as if the date of Plan termination constituted the date of
termination of employment.
(d) Reference to Savings Plan. All determinations of value of the
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Participant's accounts under the Plan, and not disposed of under
Section 4( c) above, shall be made in accordance with the relevant
provisions of the Savings Plan.
(e) Tax Withholding. All payments under the Plan shall be subject to any
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required withholding of Federal, state and local taxes.
6. Source of Payments. All amounts payable under the Plan shall be paid by the
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Company and Participating Subsidiaries from general assets. Notwithstanding
the maintenance of records on its books as described in Section 4 above, no
Participant shall have any right or interest in any assets of the Company or
any Participating Affiliate other than as an unsecured general creditor, and
no separate fund shall be established in which any Participant has any right
or interest. The foregoing shall not prevent the Company or any
Participating Affiliate from establishing the Trust, or any other fund from
which to satisfy its payment obligations under the Plan.
7. Plan Amendment and Termination. The plan may be amended or terminated by
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the Company at any time and in any manner, provided that no amendment or
termination shall adversely affect the rights and benefits of Participants
with respect to Compensation deferred or deducted pursuant to the Plan prior
to such action.
8. No Right of Employment. The adoption and operation of this Plan shall not
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create in any Participant a right of continued employment with the Company
or any Participating Affiliate.
9. Administration. The Plan shall be administered by the Savings Plan
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Committee appointed by the Board of Directors of the Company (the
"Committee"), which shall have the discretionary power and authority to
construe and interpret the provisions of the Plan, to determine the
eligibility of employees to participate in the Plan and the amount and
timing of payment of any benefits due under the Plan, and to determine all
other matters in carrying out the intended purposes of the Plan. In
administering this Plan, including but not limited to considering appeals
from the denial of claims for benefits and issuing decisions thereon, rules
and procedures substantially similar to those set forth in the Savings Plan
shall govern.
10. No Assignment of Interest. The interest of any Participant under the Plan
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may not be assigned, alienated, encumbered or otherwise transferred, and
shall not be subject to attachment, garnishment, execution or levy;
and any attempted assignment, alienation, encumbrance, transfer, attachment,
garnishment, execution or levy shall be void and of no force or effect.
11. Securities Law Savings Provision. Nothing contained in this Plan or in the
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administration or operation thereof shall be interpreted or effectuated that
would cause interests in the Plan to be treated as "derivative securities"
under the Exchange Act and the rules and regulations promulgated thereunder.
12. Construction of Terms. Except as expressly provided in this Plan to the
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contrary, capitalized terms referenced, but not separately defined herein
shall have the same meanings as are applied to such terms in the Savings
Plan as in effect from time to time.
JAFRA COSMETICS INTERNATIONAL, INC.
Date: October 27, 1998 By: /S/ Ralph S. Mason, III
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Ralph S. Mason, III
Vice Chairman and General Counsel