Exhibit 10.1
FIRST AMENDMENT TO THE
PLAYBOY ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated January 1, 2005)
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WHEREAS, Playboy Enterprises, Inc. (the "Company") has established and
maintains the Playboy Enterprises, Inc. Deferred Compensation Plan (the "Plan"),
as last amended and restated effective January 1, 2005; and
WHEREAS, pursuant to its reserved powers under Section 7.01, the Company
desires to further amend the Plan, effective as of January 1, 2008, to comply
with final regulations under Section 409A of the Internal Revenue Code (the
"Code") and in certain other respects;
NOW, THEREFORE, the Plan is hereby amended, effective as of January 1,
2008, in the following respects:
1. The definition of "Agreement" in Section 2.03 is amended by adding
the following sentence to the end of that Section:
"Each Agreement shall be irrevocable as of the last date on
which it could be made under the Plan for the Plan Year to
which it applies, except as otherwise permitted by the Plan or
applicable law and consistent with IRC Section 409A."
2. The definition of "Disability" in Section 2.12 is amended by adding
the following sentence to the end of that Section:
"Notwithstanding the foregoing, to the extent required by
regulations under Code Section 409A, where a Participant has
not been determined to have a disability prior to January 1,
2008 and such Participant is receiving disability income
benefits thereafter under any Company-maintained short or
long-term disability plan, the Participant shall not be
considered to have a Disability for purposes of this Plan as
of any date that comes before such disability income benefits
have been paid to the Participant, or on the Participant's
behalf, for a period of three consecutive months."
3. The definition of "Termination of Services" in Section 2.24 is
amended by inserting the following three sentences between the current first and
last sentences in that Section:
"For this purpose, in accordance with regulations under IRC
Section 409A, a leave of absence shall be considered bona fide
only if, and for so long as, there is a reasonable expectation
that the Participant will resume performing services for the
Company. In addition, on or after January 1, 2008, when a
leave of absence is due to a medically determinable physical
or mental impairment that is expected to result in death or
can be expected to last for a continuous period of at least
six (6) months, and such impairment causes the Participant to
be unable to perform the duties of his
or her position with the Company or any substantially similar
position, then the Committee shall be permitted to extend the
foregoing six (6) month maximum period of leave to up to
twenty-nine (29) months of continuous absence, but not for
longer than the maximum period of continuous disability
allowed under the Company's employment policies before
terminating the employment of a similarly situated employee on
disability leave. Whether a Termination of Service has
occurred shall be determined by the Committee (other than in
instances where the duration of a disability leave triggers a
termination of employment under the Company's employment
policies) based on whether the facts and circumstances
indicate that the Participant and the Company reasonably
anticipate that no further services will be performed by the
Participant for the Company after a certain date."
4. Section 3.02, Deferral of Salary and Incentive Award or Sales
Commissions, is rewritten in its entirety, to read as follows:
(a) Plan Year First Eligible. An eligible employee who first
becomes eligible to participate in the Plan on or after
the first day of a Plan Year may elect to participate in
the Plan for the balance of that Plan Year, provided
that (i) the eligible employee is not already
participating in any other similar type of deferred
compensation plan that is maintained by the Company and
would be aggregated with this Plan for purposes of IRC
Section 409A, and (ii) the eligible employee files an
Agreement with the Company within thirty (30) days from
the date he or she first becomes eligible to participate
in the Plan. If either of the conditions of (i) or (ii)
above are not met, then the eligible employee shall not
be allowed to participate in the Plan until the start of
the next (or any future) Plan Year, when the eligible
employee may commence participation by filing an
Agreement in advance of that subsequent Plan Year in
accordance with the procedures set forth in Section
3.02(b) below. If both conditions of (i) and (ii) are
met, the eligible employee shall commence participation
during his or her initial (partial) Plan Year of
eligibility in accordance with the further provisions of
this Section 3.02.
A timely initial Agreement under the preceding paragraph
to defer Salary, Incentive Award or Sales Commissions
will not apply to any payroll period that commences on
or before the date such Agreement was filed. The
Committee may require that the Agreement be filed a
reasonable number of days before the start of any
payroll period to which it shall apply, in order to
accommodate the processing of such Agreement.
(b) Subsequent Years of Eligibility. For any Plan Year
subsequent to the Plan Year in which an individual first
becomes eligible to participate in the Plan, that
Participant or eligible employee may file an Agreement
with the Company to defer Salary, Incentive
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Award or Sales Commissions for the upcoming Plan Year
only if such Agreement is filed prior to the first day
of that upcoming Plan Year (or within thirty (30) days
after the date he or she first became eligible to
participate in the Plan, if later, but such Agreement
will not take effect before the first payroll period in
the new Plan Year which begins after the Agreement is
filed). Subject to the limitations of this Section 3.02
and the eligibility requirements of Section 3.01 above,
a Participant or eligible employee who does not file a
timely and effective deferral Agreement for a particular
Plan Year may nevertheless file an Agreement hereunder
for any subsequent Plan Year.
(c) Filing Method. The filing of deferral Agreements and
other Participant elections under the Plan shall be made
using the Plan's website or web link as designated by
the Administrative Committee, or by such telephonic
process as the Committee may approve, in lieu of filing
hard copy paper documents. Exceptions to the approved
election and filing processes may be allowed by the
Committee in its sole discretion on a case by case basis
considering the particular circumstances, but exceptions
to the election timing requirements cannot be allowed
where the exception would violate IRC Section 409A.
(d) Transition Elections. In accordance with transition
guidance issued by the Internal Revenue Service with
respect to IRC Section 409A, a Participant shall be
permitted, no later than December 31, 2008, to file new
elections regarding the distribution of the portion of
such Participant's Accounts accrued through December 31,
2008. Such election may also apply to accruals for
future Plan years, subject to any subsequent
distribution elections made with respect to such future
accruals. Any such transition election filed under this
Section 3.02(d) shall supersede any prior distribution
election, or the application of any default distribution
rule previously applicable to the pre-election portion
of such Participant's Accounts, to the extent the new
election is not consistent therewith. New transition
elections may apply to the form and timing of payments
under Section 4.05(a), and whether and in what form to
receive a Change in Control distribution under Section
4.09, regardless of any conditions in Section 3.02(e)
below (other than the prohibition on acceleration
therein, which shall continue to apply) regarding the
timing and effect of distribution election changes.
However, a transition election under this Section
3.02(d) shall not apply to amounts distributable during
the Plan Year in which the election is filed, nor shall
any transition election be permitted to cause any
distribution to be made in the Plan Year in which the
election is filed.
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(e) Distribution Elections and Changes. In the Agreement for
each Plan Year the Participant also shall designate any
distribution elections, including a Change in Control
distribution election, to apply to amounts deferred for
that Plan Year and subsequent Plan Years unless and
until such election is changed pursuant to Section
3.02(d) or this Section 3.02(e). A Participant may
change the form of distribution (i.e., lump sum or
installments), the period during which installments will
be paid, and/or the timing of a distribution, as
previously in effect pursuant to any election made under
Section 3.02 or (absent such election) by operation of
the Plan. Any such subsequent distribution election
shall not take effect until the one year anniversary
from the date it is filed with the Committee pursuant to
Section 3.02(c) above; consequently, the new election
must be filed not less than one year before the date as
of which the payment is scheduled to be paid (or, in the
case of installments, the date as of which the first
installment payment is scheduled). For purposes of the
preceding sentence, installment payments shall be
treated like a lump sum payable as of the scheduled date
of the first installment payment. In addition, if the
new election involves a change in the timing or form of
a benefit distributable for reasons other than the
Participant's death, Disability or Hardship, then any
new distribution commencement date must be at least five
(5) years later than the date as of which the benefit
distribution had been scheduled to commence.
Furthermore, if a Participant has elected to receive
distribution of his or her Deferred Compensation
Accounts upon a Change in Control pursuant to Sections
3.02(d) above or this Section 3.02(e), he or she may
subsequently elect to (i) defer the full balance of his
or her Deferred Compensation Accounts otherwise payable
upon a Change in Control to a subsequent Determination
Date and/or (ii) change the form of such distribution
among the forms available under Section 4.05 below;
provided that any such election change must be made at
least one year before the effective date of the Change
in Control, and must specify a Determination Date at
least five (5) years after the effective date of the
Change in Control. Changes in election failing to comply
with such requirements shall not be valid, and
distributions shall be made in accordance with the
Participant's previous election and applicable Plan
provisions. Notwithstanding the foregoing, no
acceleration of benefit payments may be permitted,
except to the extent permitted by the Administrative
Committee pursuant to Treas. Reg. Section
1.409A-3(j)(4)."
5. Section 3.04(b), is amended by replacing the second and third
sentences thereof with the following:
"In the event an individual who has elected to suspend
participation in the Plan during his or her period of
temporary employment outside the United States resumes
employment as an eligible employee within the United States on
or after January 1, 2008, and such foreign employment had
continued for at least 24 months, then such eligible employee
shall be
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treated as if a new hire so that such employee may qualify to
make deferral elections for the current Plan Year under
Section 3.02(a) within thirty (30) days after such return to
eligible employment in the United States. Any individual whose
participation is in suspended status hereunder and who returns
to employment in the United States on or after January 1, 2008
as an eligible employee after less than 24 months of foreign
service shall be eligible to resume participation in the Plan
by filing a new deferral Agreement effective as of the start
of any subsequent Plan Year in accordance with the election
procedures of Section 3.02(b) above. The rules of the
preceding two sentences regarding when participation may
resume after a period of suspension shall also apply to any
individual who resumes eligible employee status after a period
of at least 24 consecutive months during which the individual
was not eligible to contribute to the Plan, regardless of the
reason for that period of ineligibility."
6. The first sentence of Section 4.02, Distribution on Death, is
clarified to read as follows:
"Upon the death of a Participant prior to the distribution of
any vested portion of his or her Deferred Compensation Amount,
including during the six (6) month delays otherwise required
under Sections 4.01 and 4.03, distribution of the unpaid
balance of such vested portion of the Deferred Compensation
Account shall be made, or continue to be made, to such
Participant's surviving Beneficiary in accordance with this
Section 4.02 notwithstanding any delay in distribution
otherwise required by Section 4.01 or 4.03."
7. Section 4.05, Method and Timing of Distribution, is amended by (i)
deleting Section 4.05(b) and renumbering Section 4.05(c) as (b), and (ii) adding
the following new paragraph to the end of Section 4.05(a) thereof:
"Notwithstanding any provisions of this Article IV to the
contrary, distributions scheduled to be made, or commence, as
soon as practicable after a particular Determination Date
shall be made not later than the last day of the Plan Year in
which the distribution event occurs which triggers such
payment or, if later, by the fifteenth (15th) day of the third
calendar month after the date of the distribution event. If
any period during which payments are due to commence in
respect to a distribution event would span two Plan Years,
then the Participant (or surviving Beneficiary) shall have no
role or influence in determining in which of the two Plan
Years payment shall commence. Payment shall not be considered
in violation of the distribution timing provisions of the Plan
if the payment is delayed because the calculation of the
payment amount is not administratively practicable due to
events beyond the control of the Participant or surviving
Beneficiary, or for any other reason permitted under
applicable regulations or Internal Revenue Service guidance
under IRC Section 409A, provided that the delayed payment is
made as promptly as practicable during the
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first Plan Year thereafter for which the permitted reason for
such delay no longer applies."
8. Section 4.07, Hardship Distributions; Cessation of Deferrals, is
amended by adding the following new sentence to the end of that Section:
"Notwithstanding the foregoing, on and after January 1, 2008
Beneficiaries shall not be permitted to petition for Hardship
withdrawals under this Section 4.07. In addition, in the
Committee's discretion, hardship distributions or other
amounts available under any other nonqualified deferred
compensation plan or any tax-qualified retirement plan of the
Company need not be considered in determining a Participant's
eligibility for, and the amount of, a Hardship withdrawal
under this Section, in accordance with Treasury Regulation
Section 1.409A-3(i)3(ii)."
9. Section 4.09, Change in Control Distribution Election, is amended by
replacing Section 4.09(b) therein with the following new paragraph:
(a) If the Participant continues employment after the Change
in Control, then his/her Deferred Compensation Amount
shall become 100% vested as of the date of the Change in
Control and:
(i) shall be valued and distributed as elected
pursuant to Section 3.01(d) or (e) above, provided
that a single lump sum payable as of the
Determination Date coincident with or next
following the date of such Change in Control shall
be the default form of distribution unless a
different form and time of distribution has been
elected; or
(ii) if no Change in Central distribution election is
in effect pursuant to Sections 3.01(d) and (e)
above, shall be valued and distributed upon any
subsequent distributable event as provided in
Article IV without regard to this Section 4.07."
IN WITNESS WHEREOF, this First Amendment, having been first duly adopted,
is hereby executed by a duly authorized officer on behalf of the Company on this
17th day of September, 2008.
PLAYBOY ENTERPRISES, INC.
By: /s/ Robert D.Campbell
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Name: Robert D.Campbell
Its: SVP, Treasurer
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