| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
NU SKIN ENTERPRISES, INC.
|
|
|
(Exact name of registrant as specified in its charter)
|
|
Delaware
|
|
87-0565309
|
(State or other jurisdiction of incorporation or organization)
|
75 WEST CENTER STREET
PROVO, UTAH 84601
|
(IRS Employer Identification No.)
|
|
(Address of principal executive offices, including zip code)
|
|
Title of each class
|
Name of exchange on which registered
|
Class A common stock, $.001 par value
|
New York Stock Exchange
|
Large accelerated filer
☑
|
Accelerated filer
☐
|
|
Non-accelerated filer
☐
(Do not check if a smaller reporting company)
|
Smaller Reporting Company
☐
|
PART I
|
-1-
|
||
ITEM 1.
|
-1-
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||
-2-
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|||
-6-
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|||
-9-
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|||
-10-
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|||
-17-
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|||
-17-
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|||
-17-
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|||
-18-
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|||
ITEM 1A.
|
-19-
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||
ITEM 1B.
|
-42-
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ITEM 2.
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-42-
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||
ITEM 3.
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-42-
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||
ITEM 4.
|
-44-
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||
PART II
|
-45-
|
||
ITEM 5.
|
-45-
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||
ITEM 6.
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-48-
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||
ITEM 7.
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-49-
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||
ITEM 7A.
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-70-
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||
ITEM 8.
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-71-
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||
ITEM 9.
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-108-
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||
ITEM 9A.
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-108-
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||
ITEM 9B.
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-109-
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||
PART III
|
-110-
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||
ITEM 10.
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-110-
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ITEM 11.
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-110-
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ITEM 12.
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-110-
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ITEM 13.
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-110-
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ITEM 14.
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-110-
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PART IV
|
-110-
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||
ITEM 15.
|
-110-
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||
-115-
|
•
|
Our
ageLOC Youth
nutritional supplement supports vital aging-defense mechanisms and consists of a blend of natural ingredients that are difficult to obtain through diet alone.
|
•
|
Ou
r ageLOC Me
personalized skin care system enables consumers to personalize a daily regimen based on individual preferences and skin care needs. This system consists of a variety of anti-aging serums and moisturizers and a proprietary hands-free dispenser.
|
•
|
Our essential oil products will be marketed under our Epoch and ageLOC brands.
|
Year Ended December 31,
|
||||||||||||||||||||||||
Product Category
|
2012
|
2013
|
2014
|
|||||||||||||||||||||
Nu Skin
|
$
|
1,158.2
|
54.3
|
%
|
$
|
1,641.6
|
51.7
|
%
|
$
|
1,562.6
|
60.8
|
%
|
||||||||||||
Pharmanex
|
966.6
|
45.3
|
1,529.2
|
48.1
|
1,000.3
|
38.9
|
||||||||||||||||||
Other
(2)
|
7.5
|
0.4
|
5.9
|
0.2
|
6.6
|
0.3
|
||||||||||||||||||
$
|
2,132.3
|
100.0
|
%
|
$
|
3,176.7
|
100.0
|
%
|
$
|
2,569.5
|
100.0
|
%
|
(1) | In 2014, 91% of our sales were transacted in foreign currencies that were then converted to U.S. dollars for financial reporting purposes at weighted-average exchange rates. Foreign currency fluctuations negatively impacted reported revenue by approximately 3% in both 2014 compared to 2013 and 2013 compared to 2012. |
(2) | We currently offer a limited number of other products and services, including household products and technology services. |
• | our sales force can educate consumers about our products face-to-face, which we believe is more effective for differentiating our products than using traditional mass-media advertising; |
• | our distribution channel allows for actual product demonstrations and trial by potential consumers; |
• | our distribution channel allows our sales force to provide personal testimonials of product efficacy; and |
• | as compared to other distribution methods, our sales force has the opportunity to provide consumers higher levels of service and encourage repeat purchases. |
|
As of December 31, 2012
|
As of December 31, 2013
|
As of December 31, 2014
|
|||||||||||||||||||||
Actives
|
Sales Leaders
|
Actives
|
Sales Leaders
|
Actives
|
Sales Leaders
|
|||||||||||||||||||
Greater China
|
216,000
|
18,527
|
490,000
|
61,546
|
393,000
|
24,537
|
||||||||||||||||||
North Asia
|
349,000
|
17,395
|
409,000
|
19,816
|
391,000
|
17,478
|
||||||||||||||||||
Americas
|
164,000
|
6,352
|
193,000
|
8,274
|
186,000
|
7,471
|
||||||||||||||||||
South Asia/Pacific
|
98,000
|
4,988
|
120,000
|
7,992
|
124,000
|
8,458
|
||||||||||||||||||
EMEA
|
119,000
|
4,528
|
123,000
|
4,489
|
114,000
|
4,065
|
||||||||||||||||||
Total
|
946,000
|
51,790
|
1,335,000
|
102,117
|
1,208,000
|
62,009
|
• | by reselling products purchased from the company to consumers; and |
• | through commissions earned on the sale of products under our global sales compensation plan. |
Year Ended December 31,
|
||||||||||||||||||||||||
(U.S. dollars in millions)
|
2012
|
2013
|
2014
|
|||||||||||||||||||||
Greater China
|
$
|
550.7
|
26
|
%
|
$
|
1,363.2
|
43
|
%
|
$
|
948.5
|
37
|
%
|
||||||||||||
North Asia
|
785.3
|
37
|
869.4
|
27
|
783.0
|
30
|
||||||||||||||||||
Americas
|
285.3
|
13
|
370.1
|
12
|
329.0
|
13
|
||||||||||||||||||
South Asia/Pacific
|
328.6
|
15
|
379.0
|
12
|
328.4
|
13
|
||||||||||||||||||
EMEA
|
182.4
|
9
|
195.0
|
6
|
180.6
|
7
|
||||||||||||||||||
$
|
2,132.3
|
100
|
%
|
$
|
3,176.7
|
100
|
%
|
$
|
2,569.5
|
100
|
%
|
•
|
require order cancellations and product returns, inventory buy-backs and cooling-off rights;
|
•
|
require us, or our sales force, to register with government agencies;
|
•
|
impose reporting requirements; and
|
• | require that we ensure, among other things, that our sales force maintains levels of product sales to qualify to receive commissions and that our sales force is compensated for sales of products and not for recruiting others. |
Name
|
Age
|
Position
|
||
Steven J. Lund
|
61
|
Executive Chairman of the Board
|
||
M. Truman Hunt
|
55
|
President and Chief Executive Officer
|
||
Ritch N. Wood
|
49
|
Chief Financial Officer
|
||
Joseph Y. Chang
|
62
|
Chief Scientific Officer and Executive Vice President, Product Development
|
||
Daniel R. Chard
|
50
|
President, Global Sales and Operations
|
||
D. Matthew Dorny
|
50
|
General Counsel and Secretary
|
||
Scott E. Schwerdt
|
57
|
President, Americas Region
|
•
|
any adverse publicity regarding us, our products, our distribution channel, or our competitors;
|
•
|
lack of interest in, dissatisfaction with, or the technical failure of, existing or new products;
|
•
|
lack of a compelling product or income opportunity that generates interest;
|
•
|
any negative public perception of our products and their ingredients;
|
•
|
any negative public perception of our sales force and direct selling businesses in general;
|
•
|
our actions to enforce our policies and procedures;
|
•
|
any regulatory actions or charges against us or others in our industry;
|
•
|
general economic and business conditions; and
|
•
|
potential saturation or maturity levels in a given country or market which could negatively impact our ability to attract and retain our sales force in such market.
|
•
|
impose order cancellations, product returns, inventory buy-backs and cooling-off rights for our sales force and consumers;
|
•
|
require us, or our sales force, to register with government agencies;
|
•
|
impose limits on the amount of sales compensation we can pay;
|
•
|
impose reporting requirements; and
|
•
|
require that we ensure, among other things, that our sales force maintain levels of product sales to qualify to receive commissions and that our sales force is compensated for selling products and not for recruiting others.
|
•
|
suspicions about the legality and ethics of network marketing;
|
•
|
continued media or regulatory scrutiny regarding our business in Mainland China;
|
•
|
recent government fines in Mainland China;
|
•
|
the safety or effectiveness of ingredients in our or our competitors' products;
|
•
|
regulatory investigations of us, our competitors and our respective products;
|
•
|
the actions of our current or former members of our sales force and employees; and
|
•
|
public perceptions of the direct selling industry or the nutritional or personal care industry generally.
|
•
|
the possibility that a foreign government might ban or severely restrict our business method of direct selling, or that local civil unrest, political instability or changes in diplomatic or trade relationships might disrupt our operations in an international market;
|
•
|
the lack of well-established or reliable legal systems in certain areas where we operate;
|
•
|
the presence of high inflation in the economies of international markets in which we operate;
|
•
|
the possibility that a government authority might impose legal, tax or other financial burdens on us or our sales force, due, for example, to the structure of our operations in various markets;
|
•
|
the possibility that a government authority might challenge the status of our sales force as independent contractors or impose employment or social taxes on our sales force; and
|
•
|
the possibility that governments may impose currency remittance restrictions limiting our ability to repatriate cash.
|
•
|
difficulties in assimilating acquired operations or products, including the loss of key employees from acquired businesses and disruption to our direct selling channel;
|
•
|
diversion of management's attention from our core business;
|
•
|
adverse effects on existing business relationships with our suppliers, sales force or consumers; and
|
•
|
risks associated with entering markets in which we have limited or no prior experience.
|
•
|
fluctuations in our operating results;
|
•
|
government investigations of our business;
|
•
|
adverse publicity related to our business, products, industry or competitors;
|
•
|
the sale of shares of Class A common stock by significant stockholders;
|
•
|
general trends in the market for our products;
|
•
|
acquisitions by us or our competitors;
|
•
|
economic or currency exchange issues in markets in which we operate;
|
•
|
changes in estimates of our operating performance or changes in recommendations by securities analysts;
|
•
|
speculative trading, including short selling and options trading; and
|
•
|
general business and political conditions.
|
ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Quarter Ended
|
High
|
Low
|
||||||
March 31, 2013
|
$
|
47.36
|
$
|
36.85
|
||||
June 30, 2013
|
63.57
|
43.00
|
||||||
September 30, 2013
|
99.60
|
60.77
|
||||||
December 31, 2013
|
139.81
|
88.80
|
Quarter Ended
|
High
|
Low
|
||||||
March 31, 2014
|
$
|
140.50
|
$
|
67.51
|
||||
June 30, 2014
|
89.69
|
71.25
|
||||||
September 30, 2014
|
74.38
|
40.06
|
||||||
December 31, 2014
|
54.41
|
38.12
|
(a)
|
(b)
|
(c)
|
(d)
|
|||||||||||||
Period
|
Total Number
of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in millions)
(1)
|
||||||||||||
October 1 – 31, 2014
|
-
|
N/A
|
|
-
|
$
|
369.5
|
||||||||||
November 1 – 30, 2014
|
350,000
|
$
|
40.73
|
350,000
|
355.3
|
|||||||||||
December 1 – 31, 2014
|
150,000
|
43.11
|
150,000
|
348.8
|
||||||||||||
Total
|
500,000
|
$
|
41.43
|
500,000
|
(1) | In July 1998, our board of directors approved a plan to repurchase $10.0 million of our Class A common stock on the open market or in private transactions. Our board has from time to time increased the amount authorized under the plan, and the most recent increase of $400.0 million was announced in August 2013. As of December 31, 2014, a total amount of approximately $1,135.0 million was authorized, and we had repurchased approximately $786.2 million of shares under the plan. There has been no termination or expiration of the plan since the initial date of approval. |
Measured Period
|
Nu Skin
|
S&P 500 Index
|
Peer Group Index
|
|||||||||
December 31, 2009
|
100.00
|
100.00
|
100.00
|
|||||||||
December 31, 2010
|
114.64
|
115.06
|
121.65
|
|||||||||
December 31, 2011
|
186.85
|
117.49
|
130.31
|
|||||||||
December 31, 2012
|
145.05
|
136.30
|
125.91
|
|||||||||
December 31, 2013
|
551.21
|
180.44
|
176.76
|
|||||||||
December 31, 2014
|
178.88
|
205.14
|
144.09
|
Year Ended December 31,
|
||||||||||||||||||||
2010
|
2011
|
2012
|
2013
|
2014
|
||||||||||||||||
(U.S. dollars in thousands, except per share data and cash dividends)
|
||||||||||||||||||||
Income Statement Data
:
|
||||||||||||||||||||
Revenue
|
$
|
1,517,759
|
$
|
1,719,588
|
$
|
2,132,257
|
$
|
3,176,718
|
$
|
2,569,495
|
||||||||||
Cost of sales
|
272,431
|
322,624
|
(1)
|
353,152
|
505,806
|
478,434
|
(2) | |||||||||||||
Gross profit
|
1,245,328
|
1,396,964
|
1,779,105
|
2,670,912
|
2,091,061
|
|||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Selling expenses
|
626,848
|
727,045
|
932,812
|
1,476,772
|
1,116,572
|
|||||||||||||||
General and administrative expenses
|
401,418
|
436,177
|
505,449
|
640,028
|
622,301
|
|||||||||||||||
Total operating expenses
|
1,028,266
|
1,163,222
|
1,438,261
|
2,116,800
|
1,738,873
|
|||||||||||||||
Operating income
|
217,062
|
233,742
|
340,844
|
554,112
|
352,188
|
|||||||||||||||
Other income (expense), net
|
(9,449
|
)
|
(6,973
|
)
|
4,398
|
2,828
|
(53,681
|
)
(3)
|
||||||||||||
Income before provision for income taxes
|
207,613
|
226,769
|
345,242
|
556,940
|
298,507
|
|||||||||||||||
Provision for income taxes
|
71,562
|
73,439
|
123,597
|
192,052
|
109,331
|
|||||||||||||||
Net income
|
$
|
136,051
|
$
|
153,330
|
$
|
221,645
|
$
|
364,888
|
$
|
189,176
|
||||||||||
Net income per share:
|
||||||||||||||||||||
Basic
|
$
|
2.18
|
$
|
2.47
|
$
|
3.66
|
$
|
6.23
|
$
|
3.20
|
||||||||||
Diluted
|
$
|
2.11
|
$
|
2.38
|
$
|
3.52
|
$
|
5.94
|
$
|
3.11
|
||||||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||||||||||
Basic
|
62,370
|
62,066
|
60,600
|
58,606
|
59,073
|
|||||||||||||||
Diluted
|
64,547
|
64,546
|
63,025
|
61,448
|
60,887
|
|||||||||||||||
Balance Sheet Data
(at end of period)
:
|
||||||||||||||||||||
Cash and cash equivalents and current investments
|
$
|
230,337
|
$
|
290,701
|
$
|
333,403
|
$
|
547,127
|
$
|
300,208
|
||||||||||
Working capital
|
206,078
|
288,916
|
268,500
|
341,542
|
416,338
|
|||||||||||||||
Total assets
|
892,224
|
990,956
|
1,124,807
|
1,821,062
|
1,614,434
|
|||||||||||||||
Current portion of long-term debt
|
27,865
|
28,608
|
39,019
|
67,824
|
82,770
|
|||||||||||||||
Long-term debt
|
133,013
|
107,944
|
154,963
|
113,852
|
164,567
|
|||||||||||||||
Stockholders' equity
|
471,249
|
574,236
|
590,612
|
858,619
|
942,438
|
|||||||||||||||
Cash dividends declared
|
0.50
|
0.59
|
0.80
|
1.20
|
1.38
|
|||||||||||||||
Supplemental Operating Data
(at end of period)
:
|
||||||||||||||||||||
Approximate number of Actives
(4)
|
799,000
|
855,000
|
946,000
|
1,335,000
|
1,208,000
|
|||||||||||||||
Number of Sales Leaders
(5)
|
35,676
|
41,816
|
51,790
|
102,117
|
62,009
|
(1) | Includes $32.8 million related to an adverse decision in the Japan customs litigation. |
(2) |
Includes a $50.0 million write-down of inventory, primarily in Mainland China.
|
(3) | Includes $46.3 million of foreign currency charges related to the devaluation of the Venezuelan currency. |
(4) | "Actives" are persons who purchased products directly from the company during the previous three months. |
(5) | "Sales Leaders" are independent distributors, and sales employees, contractual sales promoters and independent marketers in China, who achieve certain qualification requirements. |
• | providing compelling initiatives and strong support; and |
• | offering an attractive sales compensation structure. |
Year Ended December 31,
|
||||||||||||||||||||||||
(U.S. dollars in millions)
|
2012
|
2013
|
2014
|
|||||||||||||||||||||
Greater China
|
$
|
550.7
|
26
|
%
|
$
|
1,363.2
|
43
|
%
|
$
|
948.5
|
37
|
%
|
||||||||||||
North Asia
|
785.3
|
37
|
869.4
|
27
|
783.0
|
30
|
||||||||||||||||||
Americas
|
285.3
|
13
|
370.1
|
12
|
329.0
|
13
|
||||||||||||||||||
South Asia/Pacific
|
328.6
|
15
|
379.0
|
12
|
328.4
|
13
|
||||||||||||||||||
EMEA
|
182.4
|
9
|
195.0
|
6
|
180.6
|
7
|
||||||||||||||||||
$
|
2,132.3
|
100
|
%
|
$
|
3,176.7
|
100
|
%
|
$
|
2,569.5
|
100
|
%
|
Year Ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Cost of sales
|
16.6
|
15.9
|
18.6
|
|||||||||
Gross profit
|
83.4
|
84.1
|
81.4
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
43.7
|
46.5
|
43.5
|
|||||||||
General and administrative expenses
|
23.7
|
20.2
|
24.2
|
|||||||||
Total operating expenses
|
67.4
|
66.7
|
67.7
|
|||||||||
Operating income
|
16.0
|
17.4
|
13.7
|
|||||||||
Other income (expense), net
|
0.2
|
0.1
|
(2.1
|
)
|
||||||||
Income before provision for income taxes
|
16.2
|
17.5
|
11.6
|
|||||||||
Provision for income taxes
|
5.8
|
6.0
|
4.2
|
|||||||||
Net income
|
10.4
|
%
|
11.5
|
%
|
7.4
|
%
|
2013
|
2014
|
Change
|
||||||||||
Mainland China
|
$
|
1,005.4
|
$
|
675.1
|
(33%)
|
|
||||||
Taiwan/Hong Kong
|
357.8
|
273.4
|
(24%)
|
|
||||||||
Greater China total
|
$
|
1,363.2
|
$
|
948.5
|
(30%)
|
|
2013
|
2014
|
Change
|
||||||||||
South Korea
|
$
|
466.8
|
$
|
467.7
|
*
|
|||||||
Japan
|
402.6
|
315.3
|
(22%)
|
|
||||||||
North Asia total
|
$
|
869.4
|
$
|
783.0
|
(10%)
|
|
2013
|
2014
|
Change
|
||||||||||
United States/Canada
|
$
|
311.1
|
$
|
272.4
|
(12%)
|
|
||||||
Latin America
|
59.0
|
56.6
|
(4%)
|
|
||||||||
Americas total
|
$
|
370.1
|
$
|
329.0
|
(11%)
|
|
2013
|
2014
|
Change
|
||||||||||
South Asia/Pacific
|
$
|
379.0
|
$
|
328.4
|
(13%)
|
|
2013
|
2014
|
Change
|
||||||||||
EMEA
|
$
|
195.0
|
$
|
180.6
|
(7%)
|
|
2012
|
2013
|
Change
|
||||||||||
Mainland China
|
$
|
256.8
|
$
|
1,005.4
|
292%
|
|
||||||
Taiwan/Hong Kong
|
293.9
|
357.8
|
22%
|
|
||||||||
Greater China total
|
$
|
550.7
|
$
|
1,363.2
|
148%
|
|
2012
|
2013
|
Change
|
||||||||||
South Korea
|
$
|
296.0
|
$
|
466.8
|
58%
|
|
||||||
Japan
|
489.3
|
402.6
|
(18%)
|
|
||||||||
North Asia total
|
$
|
785.3
|
$
|
869.4
|
11%
|
|
2012
|
2013
|
Change
|
||||||||||
United States/Canada
|
$
|
251.1
|
$
|
311.1
|
24%
|
|
||||||
Latin America
|
34.2
|
59.0
|
73%
|
|
||||||||
Americas total
|
$
|
285.3
|
$
|
370.1
|
30%
|
|
2012
|
2013
|
Change
|
||||||||||
South Asia/Pacific
|
$
|
328.6
|
$
|
379.0
|
15
|
%
|
2012
|
2013
|
Change
|
||||||||||
EMEA
|
$
|
182.4
|
$
|
195.0
|
7%
|
|
• | purchase of tooling and manufacturing equipment related to the development of new products; and |
• | the build-out and upgrade of leasehold improvements in our various markets, including retail stores and service centers in Mainland China. |
Total
|
2015
|
2016-2017
|
2018-2019
|
Thereafter
|
||||||||||||||||
Long-term debt obligations
(1)
|
$
|
252,791
|
$
|
82,770
|
$
|
34,232
|
$
|
135,789
|
$ ─
|
|||||||||||
Interest payable
|
22,864
|
7,000
|
9,175
|
6,689
|
─
|
|||||||||||||||
Operating lease obligations
|
106,904
|
29,382
|
46,376
|
30,468
|
678
|
|||||||||||||||
Purchase obligations
|
219,262
|
175,643
|
29,297
|
8,647
|
5,675
|
|||||||||||||||
Other long-term liabilities reflected
on the balance sheet
(2)
|
89,100
|
16,930
|
24,786
|
2,528
|
44,856
|
|||||||||||||||
Total
|
$
|
690,921
|
$
|
311,725
|
$
|
143,866
|
$
|
184,121
|
$
|
51,209
|
(1) | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.5 million. |
(2) | The timing of the commitments in Other long-term liabilities reflected on the balance sheet is uncertain and represents management's best estimate. |
As of December 31, 2012
|
As of December 31, 2013
|
As of December 31, 2014
|
||||||||||||||||||||||
Actives
|
Sales Leaders
|
Actives
|
Sales Leaders
|
Actives
|
Sales Leaders
|
|||||||||||||||||||
Greater China
|
216,000
|
18,527
|
490,000
|
61,546
|
393,000
|
24,537
|
||||||||||||||||||
North Asia
|
349,000
|
17,395
|
409,000
|
19,816
|
391,000
|
17,478
|
||||||||||||||||||
Americas
|
164,000
|
6,352
|
193,000
|
8,274
|
186,000
|
7,471
|
||||||||||||||||||
South Asia/Pacific
|
98,000
|
4,988
|
120,000
|
7,992
|
124,000
|
8,458
|
||||||||||||||||||
EMEA
|
119,000
|
4,528
|
123,000
|
4,489
|
114,000
|
4,065
|
||||||||||||||||||
Total
|
946,000
|
51,790
|
1,335,000
|
102,117
|
1,208,000
|
62,009
|
2013
|
2014
|
|||||||||||||||||||||||||||||||
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
|||||||||||||||||||||||||
Revenue
|
$
|
541.3
|
$
|
671.3
|
$
|
908.3
|
$
|
1,055.8
|
$
|
671.1
|
$
|
650.0
|
$
|
638.8
|
$
|
609.6
|
||||||||||||||||
Gross profit
|
451.3
|
560.0
|
768.5
|
891.1
|
564.4
|
494.0
|
529.5
|
503.1
|
||||||||||||||||||||||||
Operating income
|
82.6
|
114.6
|
168.3
|
188.6
|
101.2
|
54.7
|
105.0
|
91.3
|
||||||||||||||||||||||||
Net income
|
54.3
|
74.4
|
110.9
|
125.3
|
54.9
|
19.5
|
68.3
|
46.5
|
||||||||||||||||||||||||
Net income per share:
|
||||||||||||||||||||||||||||||||
Basic
|
0.93
|
1.27
|
1.89
|
2.13
|
0.93
|
0.33
|
1.15
|
0.79
|
||||||||||||||||||||||||
Diluted
|
0.90
|
1.22
|
1.80
|
2.02
|
0.90
|
0.32
|
1.12
|
0.77
|
2013
|
2014 | |||||||||||||||||||||||||||||||
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
|||||||||||||||||||||||||
Australia/New Zealand
|
1.0
|
1.0
|
1.1
|
1.1
|
1.1
|
1.1
|
1.1
|
1.2
|
||||||||||||||||||||||||
Canada
|
1.0
|
1.0
|
1.0
|
1.0
|
1.1
|
1.1
|
1.1
|
1.1
|
||||||||||||||||||||||||
Colombia
|
1,799.4
|
1,863.6
|
1,908.8
|
1,913.0
|
2,010.6
|
1,911.1
|
1,908.9
|
2,181.3
|
||||||||||||||||||||||||
Hong Kong
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
||||||||||||||||||||||||
Indonesia
|
9,679
|
9,793
|
10,589
|
11,559
|
11,734
|
11,611
|
11,781
|
12,254
|
||||||||||||||||||||||||
Japan
|
92.6
|
98.7
|
98.9
|
100.1
|
102.7
|
102.1
|
104.1
|
115.3
|
||||||||||||||||||||||||
Mainland China
|
6.2
|
6.2
|
6.1
|
6.1
|
6.1
|
6.2
|
6.2
|
6.1
|
||||||||||||||||||||||||
Malaysia
|
3.1
|
3.1
|
3.2
|
3.2
|
3.3
|
3.2
|
3.2
|
3.4
|
||||||||||||||||||||||||
Philippines
|
40.7
|
41.9
|
43.7
|
43.6
|
44.9
|
44.1
|
43.7
|
44.8
|
||||||||||||||||||||||||
Singapore
|
1.2
|
1.2
|
1.3
|
1.2
|
1.3
|
1.3
|
1.2
|
1.3
|
||||||||||||||||||||||||
South Korea
|
1,086.2
|
1,122.7
|
1,108.4
|
1,063.6
|
1,070.0
|
1,029.3
|
1,027.7
|
1,087.4
|
||||||||||||||||||||||||
Taiwan
|
29.5
|
29.9
|
29.9
|
29.6
|
30.3
|
30.1
|
30.1
|
30.9
|
||||||||||||||||||||||||
Thailand
|
29.8
|
29.9
|
31.5
|
31.8
|
32.6
|
32.5
|
32.1
|
32.7
|
||||||||||||||||||||||||
Venezuela
|
5.7
|
6.3
|
6.3
|
6.3
|
10.5
|
10.7
|
50.0
|
50.0
|
1.
|
Financial Statements
. Set forth below is the index to the Financial Statements included in this Item 8:
|
|
|
Page
|
||
Consolidated Balance Sheets at December 31, 2013 and 2014
|
72
|
|
Consolidated Statements of Income for the years ended December 31, 2012, 2013 and 2014
|
73
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2012, 2013 and 2014
|
74
|
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2013 and 2014
|
75
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013 and 2014
|
76
|
|
Notes to Consolidated Financial Statements
|
77
|
|
Report of Independent Registered Public Accounting Firm
|
107
|
2. | Financial Statement Schedules : Financial statement schedules have been omitted because they are not required or are not applicable, or because the required information is shown in the financial statements or notes thereto. |
December 31,
|
||||||||
2013
|
2014
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
525,153
|
$
|
288,415
|
||||
Current investments
|
21,974
|
11,793
|
||||||
Accounts receivable
|
68,652
|
35,834
|
||||||
Inventories, net
|
339,669
|
338,491
|
||||||
Prepaid expenses and other
|
162,886
|
160,134
|
||||||
1,118,334
|
834,667
|
|||||||
Property and equipment, net
|
396,042
|
464,783
|
||||||
Goodwill
|
112,446
|
112,446
|
||||||
Other intangible assets, net
|
83,168
|
75,062
|
||||||
Other assets
|
111,072
|
127,476
|
||||||
Total assets
|
$
|
1,821,062
|
$
|
1,614,434
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
82,684
|
$
|
34,712
|
||||
Accrued expenses
|
626,284
|
300,847
|
||||||
Current portion of long-term debt
|
67,824
|
82,770
|
||||||
776,792
|
418,329
|
|||||||
Long-term debt
|
113,852
|
164,567
|
||||||
Other liabilities
|
71,799
|
89,100
|
||||||
Total liabilities
|
962,443
|
671,996
|
||||||
Commitments and contingencies (Notes 10 and 20)
|
||||||||
Stockholders' equity
|
||||||||
Class A common stock – 500 million shares authorized, $.001 par value, 90.6 million shares issued
|
91
|
91
|
||||||
Additional paid-in capital
|
397,383
|
414,394
|
||||||
Treasury stock, at cost – 31.6 million shares
|
(826,904
|
)
|
(862,608
|
)
|
||||
Accumulated other comprehensive loss
|
(46,228
|
)
|
(51,521
|
)
|
||||
Retained earnings
|
1,334,277
|
1,442,082
|
||||||
858,619
|
942,438
|
|||||||
Total liabilities and stockholders' equity
|
$
|
1,821,062
|
$
|
1,614,434
|
Year Ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Revenue
|
$
|
2,132,257
|
$
|
3,176,718
|
$
|
2,569,495
|
||||||
Cost of sales
|
353,152
|
505,806
|
478,434
|
|||||||||
Gross profit
|
1,779,105
|
2,670,912
|
2,091,061
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
932,812
|
1,476,772
|
1,116,572
|
|||||||||
General and administrative expenses
|
505,449
|
640,028
|
622,301
|
|||||||||
Total operating expenses
|
1,438,261
|
2,116,800
|
1,738,873
|
|||||||||
Operating income
|
340,844
|
554,112
|
352,188
|
|||||||||
Other income (expense), net (Note 23)
|
4,398
|
2,828
|
(53,681
|
)
|
||||||||
Income before provision for income taxes
|
345,242
|
556,940
|
298,507
|
|||||||||
Provision for income taxes
|
123,597
|
192,052
|
109,331
|
|||||||||
Net income
|
$
|
221,645
|
$
|
364,888
|
$
|
189,176
|
||||||
Net income per share:
|
||||||||||||
Basic
|
$
|
3.66
|
$
|
6.23
|
$
|
3.20
|
||||||
Diluted
|
$
|
3.52
|
$
|
5.94
|
$
|
3.11
|
||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||
Basic
|
60,600
|
58,606
|
59,073
|
|||||||||
Diluted
|
63,025
|
61,448
|
60,887
|
Year Ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Net income
|
$
|
221,645
|
$
|
364,888
|
$
|
189,176
|
||||||
Other comprehensive income:
|
||||||||||||
Foreign currency translation adjustment, net of taxes of $(3,949), $(650) and $420, respectively
|
7,843
|
6,251
|
(5,113
|
)
|
||||||||
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of $(1,870), $(1,470) and $(869), respectively
|
3,299
|
2,650
|
1,578
|
|||||||||
Less: Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $222, $1,842 and $968, respectively
|
(399
|
)
|
(3,307
|
)
|
(1,758
|
)
|
||||||
10,743
|
5,594
|
(5,293
|
)
|
|||||||||
Comprehensive income
|
$
|
232,388
|
$
|
370,482
|
$
|
183,883
|
|
Class A
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2012
|
$
|
91
|
|
$
|
292,240
|
|
$
|
(522,162)
|
|
$
|
(62,565)
|
|
$
|
866,632
|
|
$
|
574,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221,645
|
|
|
221,645
|
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,743
|
|
|
—
|
|
|
10,743
|
Repurchase of Class A common stock (Note 11)
|
|
—
|
|
|
—
|
|
|
(201,471)
|
|
|
—
|
|
|
—
|
|
|
(201,471)
|
Exercise of employee stock options (0.8 million shares)/vesting of stock awards
|
|
—
|
|
|
(4,214)
|
|
|
8,780
|
|
|
—
|
|
|
—
|
|
|
4,566
|
Excess tax benefit from equity awards
|
|
—
|
|
|
7,909
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,909
|
Stock-based compensation
|
|
—
|
|
|
21,358
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,358
|
Cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,374)
|
|
|
(48,374)
|
Balance at December 31, 2012
|
|
91
|
|
|
317,293
|
|
|
(714,853)
|
|
|
(51,822)
|
|
|
1,039,903
|
|
|
590,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
364,888
|
|
|
364,888
|
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,594
|
|
|
—
|
|
|
5,594
|
Repurchase of Class A common stock (Note 11)
|
|
—
|
|
|
—
|
|
|
(140,865)
|
|
|
—
|
|
|
—
|
|
|
(140,865)
|
Exercise of employee stock options (2.2 million shares)/vesting of stock awards
|
|
—
|
|
|
5,556
|
|
|
28,814
|
|
|
—
|
|
|
—
|
|
|
34,370
|
Excess tax benefit from equity awards
|
|
—
|
|
|
41,914
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,914
|
Stock-based compensation
|
|
—
|
|
|
32,620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,620
|
Cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,514)
|
|
|
(70,514)
|
Balance at December 31, 2013
|
|
91
|
|
|
397,383
|
|
|
(826,904)
|
|
|
(46,228)
|
|
|
1,334,277
|
|
|
858,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189,176
|
|
|
189,176
|
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,293)
|
|
|
—
|
|
|
(5,293)
|
Repurchase of Class A common stock (Note 11)
|
|
—
|
|
|
—
|
|
|
(45,724)
|
|
|
—
|
|
|
—
|
|
|
(45,724)
|
Exercise of employee stock options (0.8 million shares)/vesting of stock awards
|
|
—
|
|
|
(12,440)
|
|
|
10,020
|
|
|
—
|
|
|
—
|
|
|
(2,420)
|
Excess tax benefit from equity awards
|
|
—
|
|
|
11,947
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,947
|
Stock-based compensation
|
|
—
|
|
|
17,504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,504
|
Cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81,371)
|
|
|
(81,371)
|
Balance at December 31, 2014
|
$
|
91
|
|
$
|
414,394
|
|
$
|
(862,608)
|
|
$
|
(51,521)
|
|
$
|
1,442,082
|
|
$
|
942,438
|
Year Ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
221,645
|
$
|
364,888
|
$
|
189,176
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
33,412
|
34,923
|
54,924
|
|||||||||
Foreign currency (gains)/losses
|
(3,874
|
)
|
(1,077
|
)
|
53,828
|
|||||||
Stock-based compensation
|
21,358
|
32,620
|
17,504
|
|||||||||
Deferred taxes
|
4,692
|
(41,748
|
)
|
10,399
|
||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
(7,884
|
)
|
(34,304
|
)
|
30,766
|
|||||||
Inventories, net
|
(22,605
|
)
|
(207,436
|
)
|
(16,518
|
)
|
||||||
Prepaid expenses and other
|
(2,358
|
)
|
(23,317
|
)
|
(25,167
|
)
|
||||||
Other assets
|
(11,579
|
)
|
(22,619
|
)
|
(16,219
|
)
|
||||||
Accounts payable
|
15,831
|
32,643
|
(45,953
|
)
|
||||||||
Accrued expenses
|
62,056
|
389,093
|
(309,180
|
)
|
||||||||
Other liabilities
|
282
|
6,510
|
(24
|
)
|
||||||||
Net cash provided by (used in) operating activities
|
310,976
|
530,176
|
(56,464
|
)
|
||||||||
Cash flows from investing activities:
|
||||||||||||
Purchases of property and equipment
|
(96,645
|
)
|
(185,103
|
)
|
(101,476
|
)
|
||||||
Proceeds on investment sales
|
20,086
|
13,075
|
27,328
|
|||||||||
Purchases of investments
|
(15,737
|
)
|
(21,671
|
)
|
(17,522
|
)
|
||||||
Acquisition (Note 24)
|
(12,562
|
)
|
-
|
-
|
||||||||
Net cash used in investing activities
|
(104,858
|
)
|
(193,699
|
)
|
(91,670
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Payment of cash dividends
|
(48,374
|
)
|
(70,514
|
)
|
(81,371
|
)
|
||||||
Repurchase of shares of common stock
|
(201,471
|
)
|
(140,865
|
)
|
(45,724
|
)
|
||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
4,565
|
34,370
|
(2,420
|
)
|
||||||||
Income tax benefit of equity awards
|
7,750
|
45,187
|
11,801
|
|||||||||
Payments on long-term debt
|
(28,279
|
)
|
(37,903
|
)
|
(333,803
|
)
|
||||||
Payment of debt issuance costs
|
-
|
-
|
(5,739
|
)
|
||||||||
Proceeds from long-term debt
|
101,922
|
49,000
|
416,180
|
|||||||||
Net cash used in financing activities
|
(163,887
|
)
|
(120,725
|
)
|
(41,076
|
)
|
||||||
Effect of exchange rate changes on cash
|
4,820
|
(10,624
|
)
|
(47,528
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
47,051
|
205,128
|
(236,738
|
)
|
||||||||
Cash and cash equivalents, beginning of period
|
272,974
|
320,025
|
525,153
|
|||||||||
Cash and cash equivalents, end of period
|
$
|
320,025
|
$
|
525,153
|
$
|
288,415
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Raw materials
|
$
|
117,982
|
$
|
101,479
|
||||
Finished goods
|
221,687
|
237,012
|
||||||
$
|
339,669
|
$
|
338,491
|
December 31, | ||||||||||||
2012
|
2013
|
2014
|
||||||||||
Beginning balance, adjustments to inventory carrying value
|
$
|
7.1
|
$
|
5.5
|
$
|
5.9
|
||||||
Additions
|
11.6
|
12.3
|
77.4
|
|||||||||
Write-offs
|
(13.2
|
)
|
(11.9
|
)
|
(27.3
|
)
|
||||||
Ending balance, adjustments to inventory carrying value
|
$
|
5.5
|
$
|
5.9
|
$
|
56.0
|
Buildings
|
20 - 39 years
|
|
Furniture and fixtures
|
5 - 7 years
|
|
Computers and equipment
|
3 - 5 years
|
|
Leasehold improvements
|
Shorter of estimated useful life or lease term
|
|
Scanners
|
3 years
|
|
Vehicles
|
3 - 5 years
|
2012
|
2013
|
2014
|
||||||||||
Gross balance at January 1
|
$
|
7,387
|
$
|
9,045
|
$
|
7,484
|
||||||
Increases related to current year tax positions
|
2,430
|
1,188
|
2,700
|
|||||||||
Settlements
|
-
|
(1,671
|
)
|
-
|
||||||||
Decreases due to lapse of statutes of limitations
|
(854
|
)
|
(1,086
|
)
|
(4,106
|
)
|
||||||
Currency adjustments
|
82
|
8
|
(91
|
)
|
||||||||
Gross balance at December 31
|
$
|
9,045
|
$
|
7,484
|
$
|
5,987
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Deferred tax assets
|
$
|
73,456
|
$
|
40,840
|
||||
Intercompany deferred charges
|
15,108
|
26,776
|
||||||
Prepaid income taxes
|
-
|
37,113
|
||||||
Prepaid inventory and import costs
|
43,755
|
21,060
|
||||||
Prepaid rent, insurance and other occupancy costs
|
11,486
|
10,400
|
||||||
Prepaid promotion and event cost
|
6,030
|
4,275
|
||||||
Prepaid other taxes
|
3,340
|
3,037
|
||||||
Forward contracts
|
1,939
|
1,661
|
||||||
Deposits
|
1,081
|
1,244
|
||||||
Other
|
6,691
|
13,728
|
||||||
$
|
162,886
|
$
|
160,134
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Land
|
$
|
34,442
|
$
|
34,087
|
||||
Buildings
|
156,734
|
230,934
|
||||||
Construction in progress
|
78,556
|
63,941
|
||||||
Furniture and fixtures
|
56,160
|
61,643
|
||||||
Computers and equipment
|
115,551
|
118,248
|
||||||
Leasehold improvements
|
87,635
|
110,539
|
||||||
Scanners
|
18,408
|
14,594
|
||||||
Vehicles
|
2,226
|
2,725
|
||||||
549,712
|
636,711
|
|||||||
Less: accumulated depreciation
|
(153,670
|
)
|
(171,928
|
)
|
||||
$
|
396,042
|
$
|
464,783
|
Carrying Amount at
December 31,
|
||||||||
Goodwill and indefinite life intangible assets:
|
2013
|
2014
|
||||||
Goodwill
|
$
|
112,446
|
$
|
112,446
|
||||
Trademarks and trade names
|
24,599
|
24,599
|
||||||
$
|
137,045
|
$
|
137,045
|
December 31, 2013
|
December 31, 2014
|
||||||||||||||||
Finite life intangible assets:
|
Gross Carrying Amount
|
Accumulated Amortization
|
Gross Carrying Amount
|
Accumulated Amortization
|
Weighted-average
Amortization Period
|
||||||||||||
Scanner technology
|
$
|
46,482
|
$
|
27,533
|
$
|
46,482
|
$
|
30,557
|
18 years
|
||||||||
Developed technology
|
22,500
|
15,909
|
22,500
|
16,734
|
20 years
|
||||||||||||
Distributor network
|
11,598
|
10,093
|
11,598
|
10,594
|
15 years
|
||||||||||||
Trademarks
|
14,086
|
11,660
|
14,404
|
12,461
|
15 years
|
||||||||||||
Other
|
53,540
|
24,442
|
45,006
|
19,181
|
8 years
|
||||||||||||
$
|
148,206
|
$
|
89,637
|
$
|
139,990
|
$
|
89,527
|
15 years
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Deferred taxes
|
$
|
5,174
|
$
|
15,128
|
||||
Deposits for noncancelable operating leases
|
24,406
|
29,957
|
||||||
Deposit for customs assessment (Note 20)
|
40,181
|
31,825
|
||||||
Cash surrender value for life insurance policies
|
23,172
|
26,280
|
||||||
Other
|
18,139
|
24,286
|
||||||
$
|
111,072
|
$
|
127,476
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Accrued sales force commissions and other payments
|
$
|
330,870
|
$
|
167,914
|
||||
Accrued income taxes
|
46,006
|
-
|
||||||
Accrued other taxes
|
63,823
|
32,246
|
||||||
Accrued payroll and other employee expenses
|
68,695
|
29,220
|
||||||
Accrued payable to vendors
|
42,447
|
28,341
|
||||||
Accrued royalties
|
17,673
|
10,475
|
||||||
Sales return reserve
|
10,734
|
10,118
|
||||||
Deferred revenue
|
13,596
|
6,160
|
||||||
Other
|
32,440
|
16,373
|
||||||
$
|
626,284
|
$
|
300,847
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Deferred tax liabilities
|
$
|
13,952
|
$
|
16,017
|
||||
Reserve for other tax liabilities
|
8,786
|
7,324
|
||||||
Reserve for customs assessment
|
9,810
|
4,727
|
||||||
Liability for deferred compensation plan
|
28,544
|
32,398
|
||||||
Pension plan benefits reserve
|
6,176
|
5,844
|
||||||
Build to suit – financing obligation
|
-
|
10,421
|
||||||
Deferred rent and deferred tenant incentives
|
-
|
7,102
|
||||||
Asset retirement obligation
|
4,090
|
4,611
|
||||||
Other
|
441
|
656
|
||||||
$
|
71,799
|
$
|
89,100
|
Facility or
Arrangement
|
Original Principal Amount
|
Balance as of
December 31, 2014
(1)(2)
|
Interest Rate
|
Repayment terms
|
||||
Credit Agreement term loan facility:
|
||||||||
U.S. dollar
denominated:
|
$127.5 million
|
$125.9 million
|
Variable 30 day: 2.9117%
|
One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term.
|
||||
Japanese yen
denominated:
|
6.6 billion yen
|
6.5 billion yen ($54.4 million as of December 31, 2014)
|
Variable 30 day: 2.8243%
|
One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term.
|
||||
Credit Agreement revolving credit facility:
|
||||||||
$72.5 million
|
Variable 30 day: 2.9117%
|
Revolving line of credit expires October 2019.
|
||||||
Korean subsidiary loan:
|
$20.0 million
|
─
|
2.5%
|
Paid in full.
|
(1) | As of December 31, 2014, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $79.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility and $3.1 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility. The Company has classified the amounts borrowed under the revolving line of credit as short term because it is the Company's intention to use the line of credit to borrow and pay back funds over short periods of time. |
(2) | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.5 million, which is not reflected in this table. |
Facility or
Arrangement
|
Original Principal Amount
|
Balance as of
December 31, 2013
|
Interest Rate
|
Repayment terms
|
||||
Multi-currency uncommitted
shelf facility: |
||||||||
U.S. dollar
denominated:
|
$40.0 million
|
$17.1 million
|
6.2%
|
Paid in full on October 10, 2014.
|
||||
|
$20.0 million
|
$11.4 million
|
6.2%
|
Paid in full on October 10, 2014.
|
||||
Japanese yen
denominated:
|
3.1 billion yen
|
0.4 billion yen ($4.1 million as of December 31, 2013)
|
1.7%
|
Paid in full on October 10, 2014.
|
||||
|
2.3 billion yen
|
1.3 billion yen ($12.3 million as of December 31, 2013)
|
2.6%
|
Paid in full on October 10, 2014.
|
||||
|
||||||||
|
2.2 billion yen
|
1.2 billion yen ($11.8 million as of December 31, 2013)
|
3.3%
|
Paid in full on October 10, 2014.
|
||||
|
8.0 billion yen
|
8.0 billion yen ($75.8 million as of December 31, 2013)
|
1.7%
|
Paid in full on October 10, 2014.
|
||||
Revolving credit facilities
|
||||||||
2010
|
|
$35.0 million
|
Variable 30 day: 0.670%
|
Revolving line of credit paid in full prior to August 8, 2014.
|
||||
2013
|
|
$14.0 million
|
Variable 30 day: 0.5933%
|
Revolving line of credit paid in full on October 10, 2014.
|
Year Ending December 31,
|
||||
2015
|
$
|
82,770
|
||
2016
|
14,834
|
|||
2017
|
19,398
|
|||
2018
|
23,963
|
|||
2019
|
111,826
|
|||
Thereafter
|
-
|
|||
Total
(1)
|
$
|
252,791
|
|
(1) | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.5 million, which is not reflected in this table. |
Year Ending December 31,
|
Operating
Leases
|
Financing
Obligations
|
||||||
2015
|
$
|
29,382
|
$
|
386
|
||||
2016
|
24,980
|
673
|
||||||
2017
|
21,396
|
693
|
||||||
2018
|
18,285
|
714
|
||||||
2019
|
12,183
|
735
|
||||||
Thereafter
|
678
|
4,382
|
||||||
Total minimum lease payments
|
$
|
106,904
|
$ |
7,583
|
Year Ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Basic weighted-average common shares outstanding
|
60,600
|
58,606
|
59,073
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Stock awards and options
|
2,425
|
2,842
|
1,814
|
|||||||||
Diluted weighted-average common shares outstanding
|
63,025
|
61,448
|
60,887
|
December 31,
|
||||||||
Stock Options:
|
2012
|
2013
|
2014
|
|||||
Weighted average grant date fair value of grants
|
$
|
13.31
|
$
|
22.10
|
$
|
23.01
|
||
Risk-free interest rate
(1)
|
0.8%
|
1.4%
|
1.7%
|
|||||
Dividend yield
(2)
|
2.7%
|
3.1%
|
1.9%
|
|||||
Expected volatility
(3)
|
46.8%
|
41.7%
|
45.4%
|
|||||
Expected life in months
(4)
|
58 months
|
62 months
|
62 months
|
(1) | The risk-free interest rate is based upon the rate on a zero coupon U.S. Treasury bill, for periods within the contractual life of the option, in effect at the time of the grant. |
(2) | The dividend yield is based on the average of historical stock prices and actual dividends paid. |
(3) | Expected volatility is based on the historical volatility of the Company's stock price, over a period similar to the expected life of the option. |
(4) | The expected term of the option is based on the historical employee exercise behavior, the vesting terms of the respective option, and a contractual life of either seven or ten years. |
Shares
(in thousands)
|
Weighted-average Exercise Price
|
Weighted- average Remaining Contractual Term
(in years)
|
Aggregate Intrinsic Value
(in thousands)
|
|||||||||||||
Options activity – service based
|
||||||||||||||||
Outstanding at December 31, 2013
|
2,159.8
|
$
|
26.01
|
|||||||||||||
Granted
|
90.6
|
65.43
|
||||||||||||||
Exercised
|
(326.2
|
)
|
18.83
|
|||||||||||||
Forfeited/cancelled/expired
|
-
|
-
|
||||||||||||||
Outstanding at December 31, 2014
|
1,924.2
|
29.08
|
2.31
|
$
|
39,897
|
|||||||||||
Exercisable at December 31, 2014
|
1,618.5
|
21.22
|
1.70
|
39,310
|
||||||||||||
Options activity – performance based
|
||||||||||||||||
Outstanding at December 31, 2013
|
4,483.1
|
$
|
57.25
|
|||||||||||||
Granted
|
68.8
|
65.70
|
||||||||||||||
Exercised
|
(425.0
|
)
|
22.42
|
|||||||||||||
Forfeited/cancelled/expired
|
(88.6
|
)
|
78.10
|
|||||||||||||
Outstanding at December 31, 2014
|
4,038.3
|
60.61
|
4.60
|
$
|
18,790
|
|||||||||||
Exercisable at December 31, 2014
|
1,459.2
|
31.21
|
2.92
|
18,680
|
||||||||||||
Options activity – all options
|
||||||||||||||||
Outstanding at December 31, 2013
|
6,642.9
|
$
|
47.10
|
|||||||||||||
Granted
|
159.4
|
65.55
|
||||||||||||||
Exercised
|
(751.2
|
)
|
20.86
|
|||||||||||||
Forfeited/cancelled/expired
|
(88.6
|
)
|
78.10
|
|||||||||||||
Outstanding at December 31, 2014
|
5,962.5
|
50.43
|
3.86
|
$
|
58,657
|
|||||||||||
Exercisable at December 31, 2014
|
3,077.7
|
25.95
|
2.28
|
57,989
|
December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Cash proceeds from stock options exercised
|
$
|
8.0
|
$
|
37.9
|
$
|
11.1
|
||||||
Tax benefit realized for stock options exercised
|
6.3
|
41.9
|
11.9
|
|||||||||
Intrinsic value of stock options exercised
|
10.6
|
241.7
|
17.2
|
Number of Shares
(in thousands)
|
Weighted-average Grant Date Fair Value
|
|||||||
Nonvested at December 31, 2013
|
729.6
|
$
|
42.48
|
|||||
Granted
|
289.9
|
82.66
|
||||||
Vested
|
(325.8
|
)
|
40.74
|
|||||
Forfeited
|
(19.9
|
)
|
58.55
|
|||||
Nonvested at December 31, 2014
|
673.8
|
60.14
|
Fair Value at December 31, 2013
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
61,136
|
$
|
-
|
$
|
-
|
$
|
61,136
|
||||||||
Forward contracts
|
-
|
1,939
|
-
|
1,939
|
||||||||||||
Life insurance contracts
|
-
|
-
|
23,172
|
23,172
|
||||||||||||
Total
|
$
|
61,136
|
$
|
1,939
|
$
|
23,172
|
$
|
86,247
|
Fair Value at December 31, 2014
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
86,574
|
$
|
-
|
$
|
-
|
$
|
86,574
|
||||||||
Forward contracts
|
-
|
1,661
|
-
|
1,661
|
||||||||||||
Life insurance contracts
|
-
|
-
|
26,280
|
26,280
|
||||||||||||
Total
|
$
|
86,574
|
$
|
1,661
|
$
|
26,280
|
$
|
114,515
|
Life Insurance Contracts
|
2013
|
2014
|
||||||
Beginning balance at January 1
|
$
|
18,605
|
$
|
$23,172
|
||||
Actual return on plan assets:
|
||||||||
Relating to assets still held at the reporting date
|
2,568
|
1,249
|
||||||
Purchases and issuances
|
3,408
|
2,798
|
||||||
Sales and settlements
|
(1,409
|
)
|
(939
|
)
|
||||
Transfers into Level 3
|
-
|
-
|
||||||
Ending balance at December 31
|
$
|
23,172
|
$
|
26,280
|
2012
|
2013
|
2014
|
||||||||||
U.S.
|
$
|
259,309
|
$
|
307,994
|
$
|
184,476
|
||||||
Foreign
|
85,933
|
248,946
|
114,031
|
|||||||||
Total
|
$
|
345,242
|
$
|
556,940
|
$
|
298,507
|
2012
|
2013
|
2014
|
||||||||||
Current
|
||||||||||||
Federal
|
$
|
70,727
|
$
|
81,871
|
$
|
37,402
|
||||||
State
|
2,425
|
361
|
2,095
|
|||||||||
Foreign
|
45,851
|
148,310
|
48,904
|
|||||||||
119,003
|
230,542
|
88,401
|
||||||||||
Deferred
|
||||||||||||
Federal
|
12,918
|
(2,831
|
)
|
(380
|
)
|
|||||||
State
|
656
|
551
|
444
|
|||||||||
Foreign
|
(8,980
|
)
|
(36,210
|
)
|
20,866
|
|||||||
4,594
|
(38,490
|
)
|
20,930
|
|||||||||
Provision for income taxes
|
$
|
123,597
|
$
|
192,052
|
$
|
109,331
|
Year Ended December 31,
|
||||||||
2013
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Inventory differences
|
$
|
2,927
|
$
|
12,362
|
||||
Foreign tax credit and other foreign benefits
|
120,534
|
116,603
|
||||||
Stock-based compensation
|
18,132
|
17,211
|
||||||
Accrued expenses not deductible until paid
|
88,465
|
48,189
|
||||||
Foreign currency exchange
|
13,734
|
10,774
|
||||||
Net operating losses
|
10,808
|
17,530
|
||||||
Capitalized research and development
|
6,202
|
3,362
|
||||||
Exchange gains and losses
|
-
|
41,542
|
||||||
Other
|
739
|
841
|
||||||
Gross deferred tax assets
|
261,541
|
268,414
|
||||||
Deferred tax liabilities:
|
||||||||
Exchange gains and losses
|
9,924
|
-
|
||||||
Intangibles step-up
|
16,375
|
15,106
|
||||||
Overhead allocation to inventory
|
2,523
|
10,781
|
||||||
Amortization of intangibles
|
17,360
|
18,374
|
||||||
Foreign outside basis in controlled foreign corporation
|
76,470
|
100,016
|
||||||
Other
|
63,409
|
48,187
|
||||||
Gross deferred tax liabilities
|
186,061
|
192,464
|
||||||
Valuation allowance
|
(10,803
|
)
|
(35,999
|
)
|
||||
Deferred taxes, net
|
$
|
64,677
|
$
|
39,951
|
Year Ended December 31,
|
||||||||
2013
|
2014
|
|||||||
Net current deferred tax assets
|
$
|
73,456
|
$
|
40,840
|
||||
Net noncurrent deferred tax assets
|
5,174
|
15,128
|
||||||
Total net deferred tax assets
|
78,630
|
55,968
|
||||||
Net current deferred tax liabilities
|
1
|
-
|
||||||
Net noncurrent deferred tax liabilities
|
13,952
|
16,017
|
||||||
Total net deferred tax liabilities
|
13,953
|
16,017
|
||||||
Deferred taxes, net
|
$
|
64,677
|
$
|
39,951
|
Year Ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Income taxes at statutory rate
|
35.00
|
%
|
35.00
|
%
|
35.00
|
%
|
||||||
Indefinitely invested earnings of non-U.S. subsidiaries
|
–
|
(0.76
|
)
|
–
|
||||||||
Non-deductible expenses
|
0.12
|
0.12
|
0.12
|
|||||||||
Controlled foreign corporation losses
|
–
|
–
|
1.48
|
|||||||||
Other
|
0.68
|
0.12
|
0.03
|
|||||||||
35.80
|
%
|
34.48
|
%
|
36.63
|
%
|
Year Ended December 31,
|
||||||||||||
Revenue:
|
2012
|
2013
|
2014
|
|||||||||
Greater China
|
$
|
550,690
|
$
|
1,363,182
|
$
|
948,523
|
||||||
North Asia
|
785,302
|
869,400
|
782,985
|
|||||||||
Americas
|
285,283
|
370,087
|
329,027
|
|||||||||
South Asia/Pacific
|
328,597
|
378,988
|
328,388
|
|||||||||
EMEA
|
182,385
|
195,061
|
180,572
|
|||||||||
Total
|
$
|
2,132,257
|
$
|
3,176,718
|
$
|
2,569,495
|
Year Ended December 31,
|
||||||||||||
Revenue:
|
2012
|
2013
|
2014
|
|||||||||
Nu Skin
|
$
|
1,158,213
|
$
|
1,641,618
|
$
|
1,562,595
|
||||||
Pharmanex
|
966,572
|
1,529,211
|
1,000,279
|
|||||||||
Other
|
7,472
|
5,889
|
6,621
|
|||||||||
Total
|
$
|
2,132,257
|
$
|
3,176,718
|
$
|
2,569,495
|
Year Ended December 31,
|
||||||||||||
Revenue:
|
2012
|
2013
|
2014
|
|||||||||
Japan
|
$
|
489,302
|
$
|
402,580
|
$
|
315,265
|
||||||
Mainland China
|
256,833
|
1,005,395
|
675,082
|
|||||||||
South Korea
|
296,000
|
466,820
|
467,720
|
|||||||||
United States
|
227,872
|
268,232
|
230,767
|
December 31,
|
||||||||
Long-lived assets:
|
2013
|
2014
|
||||||
Japan
|
$
|
9,970
|
$
|
13,768
|
||||
Mainland China
|
82,726
|
103,445
|
||||||
South Korea
|
14,345
|
46,626
|
||||||
United States
|
273,388
|
287,103
|
2013
|
2014
|
|||||||||||||||||||||||||||||||
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
|||||||||||||||||||||||||
Revenue
|
$
|
541.3
|
$
|
671.3
|
$
|
908.3
|
$
|
1,055.8
|
$
|
671.1
|
$
|
650.0
|
$
|
638.8
|
$
|
609.6
|
||||||||||||||||
Gross profit
|
451.3
|
560.0
|
768.5
|
891.1
|
564.4
|
494.0
|
529.5
|
503.1
|
||||||||||||||||||||||||
Operating income
|
82.6
|
114.6
|
168.3
|
188.6
|
101.2
|
54.7
|
105.0
|
91.3
|
||||||||||||||||||||||||
Net income
|
54.3
|
74.4
|
110.9
|
125.3
|
54.9
|
19.5
|
68.3
|
46.5
|
||||||||||||||||||||||||
Net income per share:
|
||||||||||||||||||||||||||||||||
Basic
|
0.93
|
1.27
|
1.89
|
2.13
|
0.93
|
0.33
|
1.15
|
0.79
|
||||||||||||||||||||||||
Diluted
|
0.90
|
1.22
|
1.80
|
2.02
|
0.90
|
0.32
|
1.12
|
0.77
|
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of management and directors; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
• | implemented controls over the analysis and accounting, including documentation, for Venezuela as a hyper-inflationary market; and |
• | implemented controls to monitor and account for markets that could become hyper-inflationary in the future. |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
1. | Financial Statements . See Index to Consolidated Financial Statements under Item 8 of Part II. |
2. | Financial Statement Schedules . N/A |
3. | Exhibits . References to the "Company" shall mean Nu Skin Enterprises, Inc. Unless otherwise noted, the SEC file number for exhibits incorporated by reference is 001-12421. |
3.1
|
Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 filed September 16, 1996, file no. 333-12073).
|
3.2
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2009, filed March 1, 2010).
|
3.3
|
Certificate of Designation, Preferences and Relative Participating, Optional and Other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions Thereof (incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2004, filed March 15, 2005).
|
3.4
|
Third Amended and Restated Bylaws of Nu Skin Enterprises, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed February 12, 2015).
|
4.1
|
Specimen Form of Stock Certificate for Class A Common Stock (incorporated by reference to Exhibit 4.1 to the Company's Amendment No. 1 to Registration Statement on Form S-3 filed July 8, 2002, file no. 333-90716).
|
4.2
|
Specimen Form of Stock Certificate for Class B Common Stock (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-1 filed September 16, 1996, file no. 333-12073).
|
10.1
|
Loan Agreement, dated as of September 5, 2013, among the Company and Bank of America, N.A. (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed August 12, 2014).
|
10.2
|
Amendment No. 1 to Loan Agreement, dated as of September 5, 2013, among the Company and Bank of America, N.A., dated as of August 15, 2014 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, filed November 10, 2014).
|
10.3
|
Loan Agreement, dated as of April 9, 2014, among the Company and Bank of America, N.A. (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed August 12, 2014).
|
10.4
|
Credit Agreement among the Company, various financial institutions, and Bank of America, N.A. as administrative agent, dated as of October 9, 2014 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K October 15, 2014).
|
*#10.5
|
Amended and Restated Nu Skin Enterprises, Inc. Deferred Compensation Plan, effective as of January 1, 2015.
|
#10.6
|
Second Amended and Restated Nu Skin Enterprises, Inc. 1996 Stock Incentive Plan (incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year ended December 31, 2005, filed March 16, 2006).
|
#10.7
|
Amendment No. 1 to the Second Amended and Restated Nu Skin Enterprises, Inc. 1996 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003, filed May 15, 2003).
|
#10.8
|
Amendment to the Second Amended and Restated Nu Skin Enterprises, Inc. 1996 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, filed August 5, 2013).
|
#10.9
|
Form of Master Stock Option Agreement (1996 Plan) (incorporated by reference to Exhibit 10.49 to the Company's Annual Report on Form 10-K for the year ended December 31, 2007, filed February 29, 2008).
|
#10.10
|
Form of Stock Option Agreement for Directors (1996 Plan) (incorporated by reference to Exhibit 10.43 to the Company's Annual Report on Form 10-K for the year ended December 31, 2006, filed March 1, 2007).
|
#10.11
|
Nu Skin Enterprises, Inc. 2006 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 1, 2006).
|
#10.12
|
Amendment to the 2006 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, filed August 5, 2013).
|
#10.13
|
Form of Master Stock Option Agreement (2006 Plan) (incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006, filed November 9, 2006).
|
#10.14
|
Form of Master Stock Option Agreement (2006 Plan Performance Option (U.S.)) (incorporated by reference to Exhibit 10.54 to the Company's Annual Report on Form 10-K for the year ended December 31, 2007, filed February 29, 2008).
|
#10.15
|
Form of Master Stock Option Agreement for Directors (2006 Plan) (incorporated by reference to Exhibit 10.59 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008, filed February 27, 2009).
|
#10.16
|
Form of Director Restricted Stock Unit Agreement (2006 Plan) (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, filed August 9, 2007).
|
#10.17
|
Form of Master Restricted Stock Unit Agreement (2006 Plan) (incorporated by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006, filed November 9, 2006).
|
#10.18
|
Amended and Restated Nu Skin Enterprises, Inc. 2010 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 7, 2013).
|
#10.19
|
Form of 2010 Plan U.S. Stock Option Master Agreement and Grant Notice (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 2, 2010).
|
#10.20
|
Form of 2010 Plan U.S. Restricted Stock Unit Master Agreement and Grant Notice (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on July 2, 2010).
|
#10.21
|
Form of 2010 Plan U.S. Performance Stock Option Master Agreement and Grant Notice (incorporated by reference to Exhibit 10.54 to the Company's Annual Report on Form 10-K for the year ended December 31, 2010, filed February 23, 2011).
|
#10.22
|
Form of 2010 Plan U.S. Performance Restricted Stock Unit Master Agreement and Grant Notice (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on July 2, 2010).
|
#10.23
|
Form of 2010 Plan Director Stock Option Master Agreement and Grant Notice (incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, filed August 9, 2010).
|
#10.24
|
Form of 2010 Plan Director Restricted Stock Unit Master Agreement and Grant Notice (incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, filed August 9, 2010).
|
*#10.25
|
Form of Amended & Restated 2010 Plan Stock Option Grant Agreement.
|
*#10.26
|
Form of Amended & Restated 2010 Plan Restricted Stock Unit Grant Agreement.
|
*#10.27
|
Form of Amended & Restated 2010 Plan Performance Stock Option Grant Agreement.
|
*#10.28
|
Form of Amended & Restated 2010 Plan Performance Restricted Stock Unit Grant Agreement.
|
*#10.29
|
Form of Amended & Restated 2010 Plan Director Stock Option Grant Agreement.
|
*#10.30
|
Form of Amended & Restated 2010 Plan Director Restricted Stock Unit Grant Agreement.
|
#10.31
|
Nu Skin Enterprises, Inc. 2009 Key Employee Death Benefit Plan (incorporated by reference to Exhibit 10.58 to the Company's Annual Report on Form 10-K for the year ended December 31, 2010, filed February 23, 2011).
|
#10.32
|
Form of Indemnification Agreement to be entered into between the Company and certain of its officers and directors (incorporated by reference to Exhibit 10.48 to the Company's Annual Report on Form 10-K for the year ended December 31, 2008, filed February 27, 2009).
|
#10.33
|
Employment Agreement, effective as of August 1, 2012, between the Company and M. Truman Hunt (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012, filed August 7, 2012).
|
NU SKIN ENTERPRISES, INC.
|
||
By:
|
/s/ M. Truman Hunt
|
|
M. Truman Hunt
|
||
President and Chief Executive Officer
|
Signatures
|
Capacity in Which Signed
|
|
/s/ Steven J. Lund
|
Executive Chairman of the Board
|
|
Steven J. Lund
|
||
/s/ M. Truman Hunt
|
President, Chief Executive Officer and Director
|
|
M. Truman Hunt
|
(Principal Executive Officer)
|
|
/s/ Ritch N. Wood
|
Chief Financial Officer
|
|
Ritch N. Wood
|
(Principal Financial Officer and Accounting Officer)
|
|
/s/ Daniel W. Campbell
|
Director
|
|
Daniel W. Campbell
|
||
/s/ Andrew D. Lipman
|
Director
|
|
Andrew D. Lipman
|
||
/s/ Patricia A. Negrón
|
Director
|
|
Patricia A. Negrón
|
||
/s/ Thomas R. Pisano
|
Director
|
|
Thomas R. Pisano
|
||
/s/ Nevin N. Andersen
|
Director
|
|
Nevin N. Andersen
|
||
/s/ Neil H. Offen
|
Director
|
|
Neil H. Offen
|
ARTICLE 1.
|
DEFINITIONS
|
1
|
ARTICLE 2.
|
ELIGIBILITY
|
6
|
2.1.
General
|
||
2.2 .
Participation
|
||
2.3.
Timing of Participation
|
||
2.4.
Discontinuance of Participation
|
||
ARTICLE 3.
|
DEFERRAL ELECTIONS
|
7
|
3.1.
Elections to Defer Compensation
|
||
3.1.1.
Deferral of Base Salary
|
||
3.1.2.
Deferral of Bonuses
|
||
3.1.3.
Limitations of Deferrals
|
||
3.1.4.
Duration of Compensation Deferral Election
|
||
3.1.5.
Elections Other Than Initial Election
|
||
3.2.
Company Contribution
|
||
3.3.
Investment Elections
|
||
ARTICLE 4.
|
DEFERRAL ACCOUNTS
|
9
|
4.1.
Deferral Accounts
|
||
4.2.
Company Contribution Account
|
||
4.3.
Schedule a Accounts for Pre Existing Deferred Compensation
|
||
4.4.
Accounting
|
||
4.5.
Preservation of Accounts
|
||
ARTICLE 5.
|
VESTING
|
11
|
5.1.
Vesting in Deferral Account
|
||
5.2.
Vesting in Company Contribution Account
|
||
5.3.
Competing Business
|
ARTICLE 6.
|
DISTRIBUTION OF BENEFITS
|
13
|
6.1.
Separation From Service
|
||
6.2.
Disability Retirement
|
||
6.3.
Death
|
||
6.4.
Change of Control
|
||
6.5.
Time and Method of Distribution of Benefits
|
||
6.6.
Designation of Beneficiary
|
||
6.7.
Payments of Disabled
|
||
6.8.
Underpayment or Overpayment of Benefits
|
||
6.9.
Inability to Locate Participant
|
||
ARTICLE 7.
|
WITHDRAWALS
|
17
|
7.1.
Scheduled Withdrawals
|
||
7.2.
Hardship
|
||
7.3.
Acceleration of Benefits
|
||
7.4.
Crediting of Withdrawals
|
||
ARTICLE 8.
|
ADMINISTRATION OF THE PLAN
|
19
|
8.1.
Adoption of Trust
|
||
8.2.
Powers of the Plan Administrator
|
||
8.3.
Creation of Committee
|
||
8.4.
Chairman and Secretary
|
||
8.5
Appointment of Agents
|
||
8.6.
Majority Vote and Execution of Instruments
|
||
8.7.
Allocation of Responsibilities
|
||
8.8.
Conflict of Interest
|
||
8.9.
Indemnity
|
||
ARTICLE 9.
|
ADOPTION OF PLAN BY AFFILIATES
|
22
|
ARTICLE 10.
|
CLAIM REVIEW PROCEDURE
|
23
|
10.1.
Initial Claim
|
||
10.2.
Appeal of Adverse Benefit Determination
|
||
10.3.
Right to Examine Plan Documents and to Submit Materials
|
||
10.4.
Relevance
|
||
10.5.
Decisions Final; Procedures Mandatory
|
||
10.6.
Time for Filing Legal or Equitable Action
|
||
ARTICLE 11.
|
LIMITATION OF RIGHTS, CONSTRUCTION
|
26
|
11.1.
Limitation of Rights
|
||
11.2.
Construction
|
ARTICLE 12.
|
LIMITATION ON ASSIGNMENT; PAYMENTS TO LEGALLY INCOMPETENT DISTRIBUTEE
|
27
|
12.1.
Anti-Alienation Clause
|
||
12.2.
Permitted Arrangements
|
||
12.3.
Payment to Minor or Incompetent
|
||
ARTICLE 13.
|
AMENDMENT, MERGER, AND TERMINATION
|
28
|
13.1.
Amendment
|
||
13.2.
Merger or Consolidation of Company
|
||
13.3.
Termination of Plan or Discontinuance of Contributions
|
||
13.4.
Limitation of Company's Liability
|
||
ARTICLE 14.
|
GENERAL PROVISIONS
|
29
|
14.1.
Status of Participants
|
||
14.2.
Uniform Administration
|
||
14.3.
Heirs and Successors
|
||
14.4.
409A
|
|
1.1. "
Account
" means all of such accounts as are established under this Plan from time to time.
|
|
1.2. "
Affiliate
" means (a) a corporation that is a member of the same control group of corporations (within the meaning of Section 414(b) of the Code) as is the Company, (b) any other trade or business (whether or not incorporated) controlling, controlled by, or under common control (within the meaning of Section 414(c) of the Code) with the Company, and (c) any other corporation, partnership, or other organization that is a member of an affiliated service group (within the meaning of Section 414(m) of the Code) with the Company or which is otherwise required to be aggregated with the Company under Section 414(o) of the Code.
|
|
|
|
|
|
|
|
|
1.3. "
Base Salary
" means a Participant's annual base salary, excluding bonuses, commissions, incentive and all other remuneration for services rendered to the Company and prior to reduction for any salary deferrals, including but not limited to, deferrals under plans established pursuant to Section 125 of the Code or qualified pursuant to Section 401(k) of the Code.
|
|
1.4."
Beneficiary
" means the person or entity that a Participant, in his most recent written designation filed with the Plan Administrator has designated to receive his benefit under the Plan in the event of his death. Changes in designations of Beneficiaries may be made upon written notice to the Plan Administrator in any form as the Plan Administrator may prescribe.
|
|
1.5. "
Board of Directors
" or "
Board
" means the Board of Directors of the Company.
|
|
1.6. "
Bonus
" means the additional cash compensation paid to a Participant by the Company or an Affiliate pursuant to any incentive or bonus plan, program, or practice of the Company or an Affiliate.
|
|
1.7. "
Cause
"" Termination of employment or service for "Cause" shall mean the termination of a Participant's employment with or service to the Company (for purposes of this Section 1.7, "Company" shall refer to the Company and any affiliates or subsidiaries of the Company) because of:
|
|
1.8. "
Change of Control
" means a "change in the ownership of the Employer," a "change in effective control of the Employer," and/or a "change in the ownership of a substantial portion of the Employer's assets" as defined under Treasury Regulation § 1.409A‑3(i)(5).
|
|
1.9. "
Code
" means the Internal Revenue Code of 1986, as amended.
|
|
1.10. "
Company
" means NU SKIN ENTERPRISES, INC. and any successor corporations.
|
|
1.11. "
Company Contribution
" means contributions by the Company pursuant to Section 3.2 of this Plan.
|
|
1.12. "
Company Contribution Account
" means the bookkeeping account maintained by or for the Company for each Participant that is credited with an amount equal to the Company Contributions Amount, if any, and earnings and losses credited on such amounts pursuant to Section 4.2.
|
|
1.13. "
Compensation
" means Base Salary or Director Fees payable in such Plan Year, and Bonuses earned in such Plan Year (whether payable during such Year or the following Year), that the Participant is entitled to receive for services rendered to the Company.
|
|
1.14. "
Compensation Committee
" means the compensation committee appointed by the Board of Directors, which includes select members of the Board of Directors.
|
|
1.15. "
Deferral Account
" means the bookkeeping account maintained by or for the Plan Administrator for each Participant, which account is credited with amounts equal to the portion of the Participant's Compensation that he or she elects to defer, and the earnings and losses pursuant to Section 4.1.
|
|
1.16. "
Deferral Contributions
" means contributions by a Participant pursuant to Section 3.1 of this Plan.
|
|
1.17. "
Director
" means a non‑employee director of the Company.
|
|
1.18. "
Director Fees
" means all Board and committee meeting fees payable to a Director, and any annual retainer payable for a Plan Year beginning after the Effective Date, determined in each case before reduction for amounts deferred under the Plan. Director Fees do not include expense reimbursements, incentive stock awards or any form of noncash compensation or benefits.
|
|
1.19. "
Disability
" means any illness or other physical or mental condition of a Participant that renders the Participant 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 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 and in which Participant is receiving income replacement benefits for a period of not less than 3 months under and accident and health plan covering employees. The Plan Administrator may require such medical or other evidence as it deems necessary to judge the nature and permanency of the Participant's condition.
|
|
1.20. "
Distributable Amount
" means the vested balance in Participant's Deferral Account.
|
|
1.21. "
Effective Date
" means the effective date of this restatement, which shall be January 1, 2015. The original effective date of the Plan was December 14, 2005.
|
|
1.22. "
Employee
" means (1) each person receiving remuneration, or who is entitled to remuneration, for services rendered to the Company or an Affiliate as a common‑law employee, or (2) a Director of the Company or an Affiliate.
|
|
1.23. "
ERISA
" means the Employee Retirement Income Security Act of 1974, as amended.
|
|
1.24. "
Fund
" means one or more of the investment funds selected by the Plan Administrator pursuant to Section 3.3.
|
|
1.25. "
Interest Rate
" means, for each Fund, an amount equal to the net gain or loss on the assets of such Fund during each month, as determined by the Plan Administrator.
|
|
1.26. "
Participant
" means an Employee who has been selected to participate under Section 2.1, who has elected to participate under Section 2.2, and whose participation has not been terminated. If indicated by the context, the term Participant also includes former Participants whose active participation in the Plan has terminated but who have not received all amounts to which they are entitled under the Plan.
|
|
1.27. "
Participation Agreement
" means the agreement entered into by the Company and a Participant as set forth in Section 2.2.
|
|
1.28. "
Plan
" means the Nu Skin Enterprises, Inc. Deferred Compensation Plan, as amended from time to time.
|
|
1.29. "
Plan Administrator
" means the Compensation Committee or its designated agents (to the extent such authority has been designated by the Compensation Committee).
|
|
1.30. "
Plan Year
" shall mean the calendar year.
|
|
1.31. "
Reasonable Time
" shall mean any date within the same calendar year as the applicable distribution event (
e.g
., Separation from Service) or, if later, by the 15th day of the third calendar month following the occurrence of such distribution event.
|
|
1.32. "
Scheduled Withdrawal
" means the distribution date elected by the Participant for an in‑service withdrawal from such Accounts deferred in a given Plan Year, and earnings and losses attributable thereto, as set forth on the election form for such Plan Year.
|
|
1.33. "
Separation from Service
" means a severance of a participant's employment relationship with the Company and all Affiliates for any reason other than the participant's death. Whether a Separation from Service has occurred is determined under Section 409A of the Code and Treasury Regulation 1.409A‑1(h) (
i.e
., whether the facts and circumstances indicate that the Employer and the employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the employee would perform after such date (whether as an employee or independent contractor) would permanently decrease to no more than 20% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36 month period (or the full period of services to the employer if the employee has been providing services to the employer less than 36 months)). Separation from Service shall not be deemed to occur while the employee is on military leave, sick leave or other bona fide leave of absence if the period does not exceed six (6) months or, if longer, so long as the employee retains a right to reemployment with the Company or an affiliate under an applicable statute or by contract. For this purpose, a leave is bona fide only if, and so long as, there is a reasonable expectation that the employee will return to perform services for the Company or an affiliate. Notwithstanding the foregoing, a 29 month period of absence will be substituted for such 6 month period if the leave is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of no less than 6 months and that causes the employee to be unable to perform the duties of his or her position of employment.
|
|
1.34. "
Trust Agreement
" means any trust agreement established pursuant to Section 8.1 between the Company and the Trustee or any trust agreement hereafter established.
|
|
1.35. "
Trustee
" means the Trustee under the Trust Agreement.
|
|
1.36. "
Trust Fund
" means all assets of whatsoever kind or nature held from time to time by the Trustee pursuant to the Trust Agreement and forming a part of this Plan, without distinction as to income and principal and without regard to source, i.e., Participant contributions, earnings, or forfeitures.
|
|
2.1.
General
. For purposes of Title I of ERISA, the Plan is intended to be an unfunded plan of deferred compensation covering a select group of management, highly compensated employees, and Directors. As a result, participation in the Plan shall be limited to Employees who are properly included in one or all of these categories. The Plan Administrator shall designate the individuals who are eligible to participate in the Plan. The Plan Administrator, in the exercise of its discretion, may exclude an Employee who otherwise meets the requirements of this Section 2.1 from participation in the Plan if it concludes that excluding the Employee is necessary to satisfy these requirements. The Plan Administrator also may exclude an Employee who otherwise meets the requirements of this Section 2.1 for any other reason, or for no reason, as the Plan Administrator deems appropriate.
|
|
2.2.
Participation
. Each Employee who is designated as eligible to participate in the Plan by the Plan Administrator may become a Participant by completing and signing an enrollment form provided by the Plan Administrator and delivering the form to the Plan Administrator. The Employee must designate on the form the amount of his Deferral Contributions and must authorize the Company or an Affiliate to reduce his Compensation in an amount equal to his Deferral Contributions.
|
|
2.3.
Timing of Participation
. After an Employee has been selected by the Plan Administrator to participate in the Plan for the first time (and does not participate in or has not previously participated in another voluntary deferral plan of the Company or an Affiliate), the Employee has 30 days to notify the Plan Administrator whether he will participate in the Plan. If the Employee timely notifies the Plan Administrator of his intent to participate in the Plan, the Employee's participation will commence on the first payroll period following or coinciding with the first day of the calendar month after the Plan Administrator is so notified. If the Employee does not timely notify the Plan Administrator of his intent to participate in the Plan, the Employee's participation may commence on the first payroll period following or coinciding with the first day of any later Plan Year by notifying the Plan Administrator prior to the first day of such Plan Year and provided further that the Plan Administrator determines that the Employee remains eligible to participate in the Plan under Section 2.1.
|
|
2.4.
Discontinuance of Participation
. Once an Employee is designated as a Participant, he will continue as such for all future Plan Years unless the Plan Administrator specifically discontinues his participation. The Plan Administrator may discontinue an individual's participation in the Plan at any time for any or no reason. If an individual's participation is discontinued, the individual will no longer be eligible to make future deferral elections or receive Company Contributions. The Employee will not be entitled to receive a distribution, however, until the occurrence of one of the events listed in Article VI, or as permitted in Article VII.
|
3.1.
|
Elections to Defer Compensation
.
|
3.2.
|
Company Contribution
. On or before the end of each fiscal year of the Company, the Compensation Committee shall determine, in its sole discretion, an amount, if any, to be credited to each Participant's Account.
|
3.3.
|
Investment Elections
.
|
(a)
|
At the time of making the deferral elections described in Section 3.1, Participant shall designate, on a form provided by the Plan Administrator, the types of investment funds in which Participant's Account will be deemed to be invested for purposes of determining the amount of earnings and losses to be credited to that Account. In making the designation pursuant to this Section 3.3, Participant may specify that all or any percentage of his Account is to be deemed invested, in whole percentage increments, in one or more of the types of investment funds deemed to be provided under the Plan, as communicated from time to time by the Plan Administrator. A Participant may change the designation made under this Section 3.3 by filing an election, on a form provided by the Plan Administrator, on a daily basis (limited to 4 per month)
.
If a Participant fails to elect a type of fund under this Section 3.3, he or she shall be deemed to have elected the money market type of investment fund.
|
(b)
|
Although a Participant may designate the type of investments, the Plan Administrator shall not be bound by such designation. The Plan Administrator may select from time to time, in its sole and absolute discretion, commercially available investments of each of the types communicated by the Plan Administrator to the Participant pursuant to Section 3.3(a) above to be the Funds. The Interest Rate of each such commercially available investment fund shall be used to determine the amount of earnings or losses to be credited to Participant's Account under Article IV.
|
|
4.1.
Deferral Accounts
. The Plan Administrator shall establish and maintain a Deferral Account for each Participant under the Plan. Each Participant's Deferral Account shall be further divided into separate subaccounts ("investment fund subaccounts"), each of which corresponds to an investment fund elected by the Participant pursuant to Section 3.3(a). A Participant's Deferral Account shall be credited as follows:
|
(a)
|
Within a reasonable time after amounts are withheld and deferred from a Participant's Compensation, the Plan Administrator shall credit the investment fund subaccounts of the Participant's Deferral Account with an amount equal to Compensation deferred by the Participant in accordance with the Participant's election under Section 3.3(a); that is, the portion of the Participant's deferred Compensation that the Participant has elected to be deemed to be invested in a certain type of investment fund shall be credited to the investment fund subaccount corresponding to that investment fund;
|
(b)
|
Each business day, each investment fund subaccount of a Participant's Deferral Account shall be credited with earnings or losses in an amount equal to that determined by multiplying the balance credited to such investment fund subaccount as of the prior day plus contributions credited that day to the investment fund subaccount by the Interest Rate for the corresponding fund selected by the Company pursuant to Section 3.3(b).
|
(c)
|
In the event that a Participant elects for a given Plan Year's deferral of Compensation to have a Scheduled Withdrawal, all amounts attributed to the deferral of Compensation for such Plan Year shall be accounted for in a manner which allows separate accounting for the deferral of Compensation and investment gains and losses associated with such Plan Year's deferral of Compensation.
|
|
4.2.
Company Contribution Account
. The Plan Administrator shall establish and maintain a Company Contribution Account for each Participant under the Plan. Each Participant's Company Contribution Account shall be further divided into separate investment fund subaccounts corresponding to the investment fund elected by the Participant pursuant to Section 3.3(a). A Participant's Company Contribution Account shall be credited as follows:
|
(a)
|
On the third business day after a Company Contribution, the Plan Administrator shall credit the investment fund subaccounts of the Participant's Company Contribution Account with an amount equal to the Company Contribution, if any, applicable to that Participant, that is, the proportion of the Company Contribution, if any, which the Participant elected to be deemed to be invested in a certain type of investment fund shall be credited to the corresponding investment fund subaccount; and
|
(b)
|
Each business day, each investment fund subaccount of a Participant's Company Contribution Account shall be credited with earnings or losses in an amount equal to that determined by multiplying the balance credited to such investment fund subaccount as of the prior day plus contributions credited that day to the investment fund subaccount by the Interest Rate for the corresponding Fund selected by the Company pursuant to Section 3.3(b).
|
|
4.3.
Schedule a Accounts for Pre‑Existing Deferred Compensation Obligations
. Prior to the Effective Date of the Plan, the Company and/or certain of its Affiliates had entered into non‑qualified deferred compensation arrangements with certain Participants employed by the Company and/or its Affiliates. The terms of such arrangements are set forth in individual "plans" or agreements signed by the Company and/or an Affiliate and the employee. The deferred compensation arrangements identified on Schedule A attached hereto ("Schedule A Arrangements") are incorporated herein by reference. It is intended that the Schedule A Arrangements will comply with Code Section 409A . Effective January 1, 2005, the rights and obligations of the parties to those arrangements will be governed by the terms of this Plan, and will not be governed by the terms of the Schedule A Arrangements, except as otherwise provided hereafter. The Plan Administrator will establish and maintain under this Plan a "Schedule A Account" for each Participant who is party to a Schedule A Arrangement ("Schedule A Participant') and will credit to such Schedule A Account for each Schedule A Participant the value as of January 1, 2006 of the respective Schedule A Participant's Compensation Account(s) as established under the applicable Schedule A Arrangement. For greater clarity, generally the Compensation Accounts under the Schedule A Arrangements are divided into two sub‑accounts (Employee Compensation Sub‑Account and Company Compensation Sub‑Account), and this distinction will be maintained under the Schedule A Accounts. The Company Compensation Sub‑Account will continue to vest in accordance with the terms of the applicable Schedule A Arrangement. In addition, the Plan Administrator may further divide the sub‑accounts under the Schedule A Accounts into separate investment fund sub‑accounts corresponding to the investment fund elected by the Participant pursuant to Section 3.3(a). Schedule A Participants will elect, prior to December 31, 2006, the form of distribution for their Schedule A Accounts and such elections will comply with IRC Section 409A and applicable guidance thereunder. If a Schedule A Participant has not designated a form or payment for his or her Schedule A Account on or before December 31, 2006, the form of payment designated in the applicable Schedule A Arrangement will be the default form of payment for such Schedule A Account(s). After December 31, 2006, any change in the form of payment as to a Schedule A Account must be in accordance with the requirements of Section 6.5(f) of this Plan respecting election changes for forms of payment. The timing of distributions of Schedule A Accounts will be governed by the terms of this Plan.
|
|
4.4.
Accounting
. At the end of each quarter, the Company shall notify each Participant as to the amount, if any, of Participant's Deferral Account and Company Contribution Account. The accounting shall specify the vested portion of amounts held pursuant to the Plan.
|
|
4.5.
Preservation of
Accounts
. A Participant shall not be deemed to have had a Separation from Service for purposes of preservation of all Deferral Accounts and Company Contribution Accounts in the event of a bona fide approved leave of absence from the Company for a prolonged period of time for:
|
(a)
|
Service as a full‑time missionary for any legally recognized ecclesiastical organization, or
|
(b)
|
United States Military duty.
|
|
5.1.
Vesting in
Deferral Account
.
Subject to Section 5.3, Participant shall be 100% vested in his Deferral Account at all times.
|
|
5.2.
Vesting in
Company Contribution Account
. Subject to Section 5.3, each Participant shall become vested in his Company Contribution Account in accordance with the following schedule:
|
When the Participant Has Completed the Following Years of Employment
|
The Vested Portion of Participant's Company Contribution Account Will Be:
|
||
Less than 10 years
|
0%
|
||
10 years but less than 11 years
|
50%
|
||
11 years but less than 12 years
|
55%
|
||
12 years but less than 13 years
|
60%
|
||
13 years but less than 14 years
|
65%
|
||
14 years but less than 15 years
|
70%
|
||
15 years but less than 16 years
|
75%
|
||
16 years but less than 17 years
|
80%
|
||
17 years but less than 18 years
|
85%
|
||
18 years but less than 19 years
|
90%
|
||
19 years but less than 20 years
|
95%
|
||
20 years or more
|
100%
|
(a)
|
Participant attains 60 years of age;
|
(b)
|
Participant's death or Disability as defined in the Plan.
|
(c)
|
The Plan Administrator may, in its discretion, accelerate vesting of a Participant in his Company Contribution Account.
|
|
5.3.
Forfeiture
. Notwithstanding Sections 5.1 and 5.2 above, Participant shall forfeit all amounts in the Company Contribution Account (and none of such amounts shall be distributed pursuant to Section 6 below) if the Administrator elects to terminate Participant's rights to those amounts upon the occurrence of the following events:
|
|
6.1.
Separation From Service
. A Participant who incurs a Separation from Service with the Company and all Affiliates for any reason other than death or Disability is entitled to distribution of amounts vested and credited to his Account at the time and in the manner provided in Section 6.5.
|
|
6.2.
Disability Retirement
. A Participant who separates from service with the Company or an Affiliate due to Disability and who has satisfied all of the covenants, conditions and promises contained in this Plan (to the extent applicable) is entitled to a distribution of amounts vested and credited to his Account as provided in Section 6.5. Subject to Section 6.5, the payments may commence as of his date of Separation from Service due to Disability.
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6.3.
Death
.
|
(a)
|
Benefit
. If a Participant dies before the day on which his benefit payments commence, the Participant's Beneficiary is entitled, at the time and in the manner provided in Section 6.5, the following:
|
(1)
|
the amount of Participant's Deferral Account, including any earnings thereon; and
|
(2)
|
for Participants that have been credited with Company Contributions pursuant to Section 3.2, the
greater
of (i) the vested portion of Participant's Company Contribution Account, including any earnings thereon, as of the date of Participant's death; or (ii) an amount equal to five times the average of Participant's Base Salary for the three most recent years.
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(b)
|
Death After Commencement of Benefits
. If a former Participant dies after the day on which his benefit payments commence, but prior to the complete distribution of all amounts to which such Participant is entitled, the Participant's Beneficiary is entitled to receive any remaining amounts to which Participant would have been entitled had the Participant survived at the time and in the manner provided in Section 6.5. The Plan Administrator may require and rely upon such proofs of death and the right of any Beneficiary to receive benefits under this Section 6.3 as the Plan Administrator may reasonably determine, and its determination of death and the right of such Beneficiary to receive payment is binding and conclusive upon all persons.
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6.4.
|
Change of
Control
. In the event of a Change of Control, the Plan Administrator may, in its discretion, accelerate vesting of a Participant in his Company Contribution Account.
|
6.5.
|
Time and Method of Distribution of Benefits
. Payment shall commence within a Reasonable Time following the earliest to occur of the following events in (a), (b) or (c) below:
|
(a)
|
Termination
.
|
(1)
|
Distribution of Deferral Account
. Payment of amounts vested and credited in a Deferral Account to a Participant who is entitled to benefits under Section 6.1 will commence within a Reasonable Time following the Participant's Separation from Service (except that, in the event that the Participant is a "Specified Employee," as defined under Treasury Regulation § 1.409A‑1(i), payment to the Participant will begin no earlier than six months following Participant's Separation from Service (or upon the Participant's death, if earlier)).
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(2)
|
Distribution of Company Contribution Account
. Payment of amounts vested and credited in a Company Contribution Account to a Participant who is entitled to benefits under Section 6.1 (subject to any forfeiture under Section 5.3) will commence within a Reasonable Time following the one-year anniversary of the Participant's Separation from Service. Notwithstanding the foregoing, if the Participant's Separation from Service occurs at or after the Participant's attainment of age 60 or after the Participant has completed twenty years of employment, then payment will commence within a Reasonable Time following the Participant's Separation from Service (except that, in the event that the Participant is a "Specified Employee," as defined under Treasury Regulation § 1.409A‑1(i), payment to the Participant will begin no earlier than six months following Participant's Separation from Service (or upon the Participant's death, if earlier)).
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(b)
|
Disability
. Payment to a Participant who is entitled to benefits under Section 6.2 will commence within a Reasonable Time after the Participant's Separation from Service due to a Disability. In the event that Participant is a "Specified Employee," as defined under Treasury Regulation § 1.409A‑1(i), payment to Participant will begin no earlier than six months following Participant's Separation from Service (or upon the Participant's death, if earlier).
|
(c)
|
Death
. Payment to the Beneficiary of a Participant who is entitled to benefits under Section 6.3 will commence within a Reasonable Time after the Participant's death.
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(d)
|
Death After Commencement of Payments
. If a Participant dies after the day on which his benefit payments commence but before the complete distribution to such Participant of the benefits payable to him under the Plan, any remaining benefits will continue to be distributed to the Participant's Beneficiary in the same manner as elected by the Participant under Section 6.5(e). Payments to the Beneficiaries entitled to payments pursuant to Section 6.3 will be made within a Reasonable Time following the death of Participant.
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(e)
|
Form of Payment
. Any distribution paid from the Plan to a Participant or Beneficiary from a Participant's Account will be paid in cash. Except as otherwise provided in Section 6.4, such distribution will be paid in either a lump sum payment or in monthly, quarterly, or annual installments over a period not to exceed 15 years; provided that if the value of the Participant's Account at the time of distribution is less than $50,000, such distribution shall be paid in the form of a lump sum distribution. With respect to each annual deferral amount (including both Participant deferrals and Company contribution amounts for such Plan Year), a Participant must elect which form of payment to receive in his initial or annual deferral election form, which election may be changed by the Participant at any time so long as (i) the election does not take effect until at least 12 months after the date in which the election is made, (ii) the first payment for which the election is made will be deferred for a period of 5 years from the date such payment would otherwise have been made, and (iii) the change is received by the Plan Administrator at least 12 months prior to the Participant's first scheduled payment date. In the absence of a Participant making a distribution election, the default form of payment shall be lump sum.
Participant's Account shall continue to be credited with earnings pursuant to Sections 4.1 and 4.2 of the Plan until all amounts credited to his Account under the Plan have been distributed.
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6.6.
Designation of
Beneficiary
. Each Participant has the right to designate, on forms supplied by and delivered to the Plan Administrator, a Beneficiary or Beneficiaries to receive his benefits in the event of his death. For each Participant who is married, his Beneficiary will be deemed to be his spouse, unless the Participant's spouse consents to the Participant's Beneficiary designation to the contrary. Such consent must be in writing, must acknowledge the effect of the Beneficiary designation and the spouse's consent thereto. Subject to the foregoing, each Participant may change his Beneficiary designation from time to time in the manner described above and the change will be effective upon receipt by the Plan Administrator, whether or not the Participant is living at the time the notice is received. There is no liability on the part of the Plan Administrator with respect to any payment authorized by the Plan Administrator in accordance with the most recent valid Beneficiary designation of the Participant in the Plan Administrator's possession before receipt of a more recent and valid Beneficiary designation. If no designated Beneficiary is living when benefits become payable, or if there is no designated Beneficiary, the Beneficiary will be Participant's spouse; or if no spouse is then living, such Participant's issue, including any legally adopted child or children, in equal shares by right of representation; or if no such designated Beneficiary and no such spouse or issue, including any legally adopted child or children, is living upon the death of a Participant, or if all such persons die prior to the full distribution of such Participant's benefits, then the Beneficiary shall be the estate of the Participant.
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6.7.
Payments to
Disabled
. If a person entitled to any payment is under a legal disability, or in the sole judgment of the Plan Administrator is otherwise unable to apply such payment to his own interest and advantage, the Plan Administrator in the exercise of its discretion may make any such payment in any one or more of the following ways: (a) directly to such person, (b) to his legal guardian or conservator, or (c) to his spouse or to any person charged with the legal duty of his support, to be expended for his benefit. The decision of the Plan Administrator will in each case be final and binding upon all persons in interest.
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6.8.
Underpayment or
Overpayment of
Benefits
. In the event that, through misstatement or computation error, benefits are underpaid or overpaid, there is no liability for any more than the correct benefit sums under the Plan. Overpayments may be deducted from future payments under the Plan, and underpayments may be added to future payments under the Plan, subject to applicable limitations under Section 409A of the Code.
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6.9.
Inability to
Locate Participant
. In the event that the Plan Administrator is unable to locate a Participant or Beneficiary within two years following the required payment date, the amount allocated to the Participant's Account shall be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or earnings.
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7.1.
Scheduled Withdrawals
.
|
(a)
|
In the case of a Participant who has elected a Scheduled Withdrawal for a distribution while still in the employ of the Company, such Participant shall receive his Distributable Amount, but only with respect to those vested deferrals and earnings thereon that have been elected by Participant to be subject to the Scheduled Withdrawal in accordance with this Section 7.1(a) of the Plan. A Participant's Scheduled Withdrawal can be no earlier than two years from the last day of the Plan Year for which Participant's deferrals are made. Any distribution made pursuant to a Scheduled Withdrawal shall be made in either a lump‑sum payment or annual installment payments up to 5 years. These payments will be made in February of the year(s) selected.
|
(b)
|
A Participant may extend the Scheduled Withdrawal for any Plan Year, provided such extension occurs at least one year before the Scheduled Withdrawal and is for a period of not less than five years from the Scheduled Withdrawal. In the event a Participant separates from service with the Company prior to a Scheduled Withdrawal for any reason, then the portion of Participant's Account associated with a Scheduled Withdrawal that has not occurred prior to such separation, shall be distributed, along with any remaining portion of the annual deferral amount not subject to the Scheduled Withdrawal, in the form selected by the Participant in accordance with Section 6.5. If no such election was made under Section 6.5 for such annual deferral amount, such Scheduled Withdrawal shall be paid in a lump sum.
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7.2.
Hardship
. In the event of an unforeseeable financial emergency, a Participant may make a written request to the Plan Administrator for a hardship withdrawal from his Account. For purposes of this Plan, an "unforeseeable financial emergency" is defined as a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or a dependent (as such term is defined in Section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The granting of a Participant's request for a hardship withdrawal shall be left to the absolute discretion of the Plan Administrator and the Plan Administrator may deny such request even if an unforeseeable financial emergency clearly exists. A request for a hardship withdrawal must be made in writing at least 30 days in advance, on a form provided by the Plan Administrator, and must be expressed as a specific dollar amount. The amount of a hardship withdrawal may not exceed the lesser of the amount required to meet Participant's unforeseeable financial emergency or Participant's vested Account balance. A hardship withdrawal will not be permitted to the extent that the hardship is or may be relieved through reimbursement or compensation by insurance or otherwise, liquidation of the Participant's assets to the extent that such liquidation would not itself cause a severe financial hardship, or by the cessation of Deferral Contributions.
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7.3.
Acceleration of
Benefits
. The Plan Administrator may accelerate the distribution of a Participant's vested Account balance in order to (a) satisfy a domestic relations order; (b) pay employment taxes on amounts deferred under the Plan; (c) permit an automatic lump sum payment of not more than $10,000 upon the termination of a Participant's entire interest in the Plan; or (d) any other permitted acceleration under Section 409A of the Code and the regulations thereof, including a Change of Control. In the event an accelerated distribution is requested by a Participant to satisfy a domestic relations order, the Plan Administrator shall make payments to someone other than Participant, as directed by the qualified domestic relations order.
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7.4.
Crediting of Withdrawals
. Withdrawals and other distributions shall be charged pro rata to the Funds in which the Account of the Participant is invested, pursuant to his designation under Sections 4.1 and 4.2 hereof.
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8.1.
Adoption of
Trust
. The Company may enter into a Trust Agreement with the Trustee, to which the Company or any adopting Affiliate may, in its sole discretion, contribute cash or other property to provide for the payment of benefits under the Plan. The provisions of the Plan shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust Agreement shall govern the rights of the Company, adopting Affiliates, Participants and the creditors of the Company and adopting Affiliates to the assets transferred to the Trust Fund. All obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust Agreement, and any such distribution shall reduce the obligations under the Plan.
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8.2.
Powers of the Plan Administrator
.
|
(a)
|
The Plan Administrator shall have the power and discretion to perform the administrative duties described in this Plan or required for proper administration of the Plan and shall have all powers necessary to enable it to properly carry out such duties. Without limiting the generality of the foregoing, the Plan Administrator shall have the power and discretion to construe and interpret this Plan, to hear and resolve claims relating to this Plan, and to decide all questions and disputes arising under this Plan. The Plan Administrator shall determine, in its discretion, the status and rights of a Participant, and the identity of the Beneficiary or Beneficiaries entitled to receive any benefits payable hereunder on account of the death of a Participant.
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(b)
|
Except as is otherwise provided hereunder, the Plan Administrator shall determine the manner and time of payment of benefits under this Plan. All benefit disbursements by the Trustee shall be made upon the instructions of the Plan Administrator.
|
(c)
|
The decision of the Plan Administrator upon all matters within the scope of its authority shall be binding and conclusive upon all persons.
|
(d)
|
The Plan Administrator shall file all reports and forms lawfully required to be filed by the Plan Administrator and shall distribute any forms, reports or statements to be distributed to Participants and others.
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(e)
|
The Plan Administrator shall keep itself advised with respect to the investment of the Trust Fund and shall report to the Company regarding the investment and reinvestment of the Trust Fund not less frequently than annually.
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8.3.
Creation of
Committee
. The Compensation Committee may appoint a separate committee to perform its duties as Plan Administrator by the adoption of appropriate Compensation Committee Board of Directors resolutions. The committee must consist of at least two (2) members, and they shall hold office during the pleasure of the Compensation Committee. The committee members shall serve without compensation but shall be reimbursed for all expenses by the Company. The committee shall conduct itself in accordance with the provisions of this Article VIII. The members of the committee may resign with 30 days notice in writing to the Company and may be removed immediately at any time by written notice from the Company.
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8.4.
Chairman and
Secretary
. The committee shall elect a chairman from among its members and shall select a secretary who is not required to be a member of the committee and who may be authorized to execute any document or documents on behalf of the committee. The secretary of the committee or his designee shall record all acts and determinations of the committee and shall preserve and retain custody of all such records, together with such other documents as may be necessary for the administration of this Plan or as may be required by law.
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8.5.
Appointment of
Agents
. The committee may appoint such other agents, who need not be members of the committee, as it may deem necessary for the effective performance of its duties, whether ministerial or discretionary, as the committee may deem expedient or appropriate. The compensation of any agents who are not employees of the Company shall be fixed by the committee within any limitations set by the Board of Directors.
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8.6.
Majority Vote and
Execution of
Instruments
. In all matters, questions and decisions, the action of the committee shall be determined by a majority vote of its members. They may meet informally or take any ordinary action without the necessity of meeting as a group. All instruments executed by the committee shall be executed by a majority of its members or by any member of the committee designated to act on its behalf.
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8.7.
Allocation of
Responsibilities
. The committee may allocate responsibilities among its members or designate other persons to act on its behalf. Any allocation or designation, however, must be set forth in writing and must be retained in the permanent records of the committee.
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8.8.
|
Conflict of
Interest
. No member of the committee who is a Participant shall take any part in any action in connection with his participation as an individual. Such action shall be voted or decided by the remaining members of the committee.
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8.9.
Indemnity
. To the extent permitted by applicable state law, the Company shall indemnify and hold harmless the Plan Administrator, the committee and each member thereof, the Board of Directors, and any delegate of the committee or Plan Administrator who is an employee of the Company against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising our of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.
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10.1.
Initial Claims
. A Participant or Beneficiary entitled to benefits need not file a written claim to receive benefits. If a Participant, Beneficiary or any other person (all of whom are referred to in this Section as a "Claimant") is dissatisfied with the determination of his benefits, eligibility, participation or any other right or interest under this Plan, such person may file a written statement setting forth the basis of the claim with the Plan Administrator. The Plan Administrator will notify the Claimant of the disposition of the claim within 90 days after the request is filed with the Plan Administrator. The Plan Administrator may have an additional period of up to 90 days to decide the claim if the Plan Administrator determines that special circumstances require an extension of time to decide the claim and the Plan Administrator advises the Claimant in writing of the need for an extension (including an explanation of the special circumstances requiring the extension) and the date on which it expects to decide the claim. If, following the review, the claim is denied, in whole or in part, the notice of disposition shall set forth:
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(a)
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the specific reason(s) for denial of the claim;
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(b)
|
reference to the specific Plan provisions upon which the determination is based;
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(c)
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a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and
|
(d)
|
an explanation of the Plan's appeal procedures, and an explanation of the time limits applicable to the Plan's appeal procedures.
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10.2.
Appeal of Adverse Benefit Determination
.
|
(a)
|
Within 60 days after receiving the written notice of the disposition of the claim described in paragraph (a), the Claimant, or the Claimant's authorized representative, may appeal such denied claim. The Claimant may submit a written statement of his claim (including any written comments, documents, records and other information relating to the claim) and the reasons for granting the claim to the Plan Administrator. The Plan Administrator shall have the right to request of and receive from the Claimant such additional information, documents or other evidence as the Plan Administrator may reasonably require. If the Claimant does not request an appeal of the denied claim within 60 days after receiving written notice of the disposition of the claim as described in paragraph (a), the Claimant shall be deemed to have accepted the disposition of the claim and such written disposition will be final and binding on the Claimant and anyone claiming benefits through the Claimant, unless the Claimant shall have been physically or mentally incapacitated so as to be unable to request review within the 60‑day period. The appeal shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such documents, records or other information were submitted or considered in the initial benefit determination or the initial review.
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(b)
|
A decision on appeal to the Plan Administrator shall be rendered in writing by the Plan Administrator ordinarily not later than 60 days after the Claimant requests review. A written copy of the decision shall be delivered to the Claimant. If special circumstances require an extension of the ordinary period, the Plan Administrator shall so notify the Claimant of the extension with such notice containing an explanation of the special circumstances requiring the extension and the date by which the Plan Administrator expects to render a decision. Any such extension shall not extend beyond 60 days after the ordinary period. The period of time within which a benefit determination on review is required to be made shall begin at the time an appeal is filed in accordance with the provisions of paragraph (b)(1) above, without regard to whether all the information necessary to make a decision on appeal accompanies the filing.
|
(1)
|
the specific reason(s) for denial of the claim;
|
(2)
|
reference to the specific Plan provisions upon which the determination is based;
|
(3)
|
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 claim for benefits; and
|
(4)
|
a statement of the Claimant's right to bring a civil action.
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10.3.
Right to Examine Plan Documents and to Submit Materials.
. In connection with the determination of a claim, or in connection with review of a denied claim or appeal pursuant to this Section, the Claimant may examine this Plan and any other pertinent documents generally available to Participants relating to the claim and may submit written comments, documents, records and other information relating to the claim for benefits. The Claimant also will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits with such relevance to be determined in accordance with Section 10.4 (
Relevance
).
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10.4.
Relevance
. For purpose of this Section, documents, records, or other information shall be considered "relevant" to a Claimant's claim for benefits if such documents, records or other information:
|
(a)
|
were relied upon in making the benefit determination;
|
(b)
|
were submitted, considered, or generated in the course of making the benefit determination, without regard to whether such documents, records or other information were relied upon in making the benefit determination; or
|
(c)
|
demonstrate compliance with the administrative processes and safeguards required pursuant to this Section regarding the making of the benefit determination.
|
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10.5.
Decisions Final; Procedures Mandatory
. To the extent permitted by law, a decision on review or appeal shall be binding and conclusive upon all persons whomsoever. To the extent permitted by law, completion of the claims procedures described in this Section shall be a mandatory precondition that must be complied with prior to commencement of a legal or equitable action in connection with the Plan by a person claiming rights under the Plan or by another person claiming rights through such a person. The Plan Administrator may, in its sole discretion, waive these procedures as a mandatory precondition to such an action.
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10.6.
Time for Filing Legal or Equitable Action
. Any legal or equitable action filed in connection with the Plan by a person claiming rights under the Plan or by another person claiming rights through such a person must be commenced not later than the earlier of: (1) the shortest applicable statute of limitations provided by law; or 2 years from the date the written copy of the Plan Administrator's decision on review is delivered to the Claimant in accordance with Section 10.2 (
Appeal of Adverse Benefit Determination
).
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11.1.
Limitation of
Rights
. Neither this Plan, any Trust Agreement, nor membership in the Plan shall give any employee or other person any right except to the extent that the right is specifically fixed under the terms of the Plan. The establishment of the Plan shall not be construed to give any individual a right to be continued in the service of the Company or as interfering with the right of the Company to terminate the service of any individual at any time.
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11.2.
Construction
. The masculine gender, where appearing in the Plan, shall include the feminine gender (and vice versa), and the singular shall include the plural, unless the context clearly indicates to the contrary. Headings and subheadings are for the purpose of reference only and are not to be considered in the construction of this Plan. If any provision of this Plan is determined to be for any reason invalid or unenforceable, the remaining provisions shall continue in full force and effect. All of the provisions of this Plan shall be construed and enforced in accordance with the laws of the State of Utah.
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12.1.
Anti‑Alienation Clause
. No benefit which shall be payable under the Plan to any person shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of the same shall be void. No benefit shall in any manner be subject to the debts, contracts, liabilities, engagements or torts of any person, nor shall it be subject to attachment or legal process for or against any person, except to the extent as may be required by law.
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12.2.
Permitted Arrangements
. Section 12.1 shall not preclude arrangements for the withholding of taxes from benefit payments, arrangements for the recovery of benefit overpayments, arrangements for the transfer of benefit rights to another plan, or arrangements for direct deposit of benefit payments to an account in a bank, savings and loan association or credit union (provided that such arrangement is not part of an arrangement constituting an assignment or alienation). Additionally, Section 12.1 shall not preclude arrangements for the distribution of the benefits of a Participant or Beneficiary pursuant to the terms and provisions of a "domestic relations order" in accordance with such procedures as may be established from time to time by the Plan Administrator.
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12.3.
Payment to
Minor or
Incompetent
. Whenever any benefit which shall be payable under the Plan is to be paid to or for the benefit of any person who is then a minor or determined by the Plan Administrator to be incompetent by qualified medical advice, the Plan Administrator need not require the appointment of a guardian or custodian, but shall be authorized to cause the same to be paid over to the person having custody of the minor or incompetent, or to cause the same to be paid to the minor or incompetent without the intervention of a guardian or custodian, or to cause the same to be paid to a legal guardian or custodian of the minor or incompetent if one has been appointed or to cause the same to be used for the benefit of the minor or incompetent.
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13.1.
Amendment
. The Company shall have the right at any time, by an instrument in writing duly executed, acknowledged and delivered to the Plan Administrator, to modify, alter or amend this Plan, in whole or in part, prospectively or retroactively; provided, however, that the duties and liabilities of the Plan Administrator and any Trustee hereunder shall not be substantially increased without its written consent; and provided further that the amendment shall not reduce any Participant's interest in the Plan, calculated as of the date on which the amendment is adopted. If the Plan is amended by the Company after it is adopted by an Affiliate, unless otherwise expressly provided, it shall be treated as so amended by such Affiliate without the necessity of any action on the part of the Affiliate. Any Affiliate or other corporation adopting this Plan hereby delegates the authority to amend the Plan to the Company. An Affiliate or other corporation that has adopted this Plan may terminate its future participation in the Plan at any time.
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13.2.
Merger or
Consolidation of
Company
. The Plan shall not be automatically terminated by the Company's acquisition by or merger into any other employer, but the Plan shall be continued after such acquisition or merger if the successor employer elects and agrees to continue the Plan. All rights to amend, modify, suspend, or terminate the Plan shall be transferred to the successor employer, effective as of the date of the merger.
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13.3.
Termination of
Plan or
Discontinuance of
Contributions
. It is the expectation of the Company that this Plan and the payment of contributions hereunder will be continued indefinitely. However, continuance of the Plan is not assumed as a contractual obligation of the Company, and the right is reserved at any time to terminate this Plan or to reduce, temporarily suspend or discontinue contributions hereunder; provided, however, that the termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination. Section 409A of the Code generally prohibits the acceleration of the payment of benefits under the Plan. As a result, except as otherwise permitted by Treasury Regulation Section 1.409A-3(j)(4)(ix), the termination of this Plan may not result in the acceleration of any payment to any Participant or Beneficiary.
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13.4.
Limitation of
Company's Liability
. The adoption of this Plan is strictly a voluntary undertaking on the part of the Company and shall not be deemed to constitute a contract between the Company and any employee or Participant or to be consideration for, an inducement to, or a condition of the employment of any employee. A Participant, employee, or Beneficiary shall not have any right to retirement or other benefits except to the extent provided herein.
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14.1.
Status of
Participants as
Unsecured Creditors
. All benefits under the Plan shall be the unsecured obligations of the Company as applicable, and, except for those assets which may be placed in any Trust Fund established in connection with this Plan, no assets will be placed in trust or otherwise segregated from the general assets of the Company or each Company, as applicable, for the payment of obligations hereunder. To the extent that any person acquires a right to receive payments hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.
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14.2.
Uniform Administration
. Whenever in the administration of the Plan any action is required by the Plan Administrator, such action shall be uniform in nature as applied to all persons similarly situated.
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14.3.
Heirs and
Successors
. All of the provisions of this Plan shall be binding upon all persons who shall be entitled to any benefits hereunder, and their heirs and legal representatives.
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14.4.
Section 409A
. Under no circumstances may the time or schedule of any payment made or benefit provided pursuant to this Plan be accelerated or subject to a further deferral except as otherwise permitted or required pursuant to regulations and other guidance issued pursuant to Section 409A of the Code and the provisions of this Plan. If a payment is not made due to a dispute with respect to such payment, the payment may be delayed in accordance with Treasury Regulation Section 1.409A-3(g). If the Company fails to make any payment under this Plan, either intentionally or unintentionally, within the time period specified in the Plan, but the payment is made within the same calendar year, such payment will be treated as made within the time period specified in the Plan pursuant to Treasury Regulation Section 1.409A-3(d). This Plan shall be operated in compliance with Section 409A of the Code and each provision of the Plan shall be interpreted, to the extent possible, to comply with Section 409A of the Code. Nevertheless, the Company cannot, and does not, guarantee any particular tax effect or treatment of the amounts due under the Plan. Except for the Company's responsibility to withhold applicable income and employment taxes from compensation paid or provided to the Participants, the Company will not be responsible for the payment of any applicable taxes on compensation paid or provided to any Participant.
|
(a)
|
Acknowledges receipt of the Plan and represents that Participant is familiar with the provisions of the Plan, and that Participant enters into this Agreement subject to all of the provisions of the Plan;
|
(b)
|
Recognizes that the Committee has been granted complete authority to administer the Plan in its sole discretion, and agrees to accept all decisions related to the Plan and all interpretations of the Plan made by the Committee as final and conclusive upon Participant and upon all persons at any time claiming any interest through Participant in the Options or the Shares subject to this Agreement; and
|
(c)
|
Acknowledges and understands that the establishment of the Plan and the existence of this Agreement are not sufficient, in and of themselves, to exempt Participant from the requirements of Section 16(b) of the Exchange Act and any rules or regulations promulgated thereunder, and that Participant (to the extent Section 16(b) applies to Participant) shall not be exempt from such requirements pursuant to Rule 16b-3 unless and until Participant shall comply with all applicable requirements of Rule 16b-3, including without limitation, the possible requirement that Participant must not sell or otherwise dispose of any Shares acquired pursuant to Options unless and until a period of at least six months shall have elapsed between the date upon which such Options were granted to Participant and the date upon which Participant desires to sell or otherwise dispose of such Shares.
|
(a)
|
withholding from proceeds of the sale of Shares acquired upon exercise of the Options either through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant's behalf pursuant to this authorization);
|
(b)
|
withholding from Participant's wages or other cash compensation paid to Participant by the Company and/or the Employer; or
|
(c)
|
withholding in Shares to be issued upon exercise of the Options.
|
(a)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Options is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options even if Options have been granted in the past;
|
(c)
|
nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in the employment or service of the Employer, the Company or any Subsidiary or be interpreted as forming an employment or services contract with the Employer, the Company or any Subsidiary and shall not interfere with or restrict any way the ability of the Employer, the Company or any Subsidiary, as applicable, to terminate Participant's employment or service relationship, if any;
|
(d)
|
all decisions with respect to future grants of Options or other grants, if any, will be at the sole discretion of the Company;
|
(e)
|
Participant's participation in the Plan is voluntary;
|
(f)
|
in the event of the termination of Participant's Continuous Service (as defined above) (for any reason whatsoever, whether or not later to be found invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any), unless otherwise determined by the Company, Participant's right to vest in the Options under the Plan, if any, will terminate as of the date Participant is no longer actively rendering services and will not be extended by any notice period (
e.g.
, Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any); similarly, any right to exercise Options after termination of Participant's Continuous Service will be measured from the date Participant is no longer actively rendering services and will not be extended by any notice period; the Committee shall have the exclusive discretion to determine when Participant is no longer providing Continuous Service for purposes of this Agreement, including whether Participant may still be considered to be providing active service while on a leave of absence; and
|
(g)
|
if Participant is providing services outside the United States, the following additional provisions shall apply:
|
Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant's personal data, as described in this Agreement and any other Option grant materials by and among, as applicable, the Employer, the Company and Subsidiaries for the exclusive purpose of implementing, administering and managing Participant's participation in the Plan.
Participant understands that the Employer, the Company and Subsidiaries may hold certain personal information about Participant, including, but not limited to, Participant's name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant's favor, for the exclusive purpose of implementing, administering and managing the Plan ("Data"). The Data is supplied by the Employer and also by me through information collected in connection with the Agreement and the Plan.
Participant understands that Data will be transferred to Morgan Stanley, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients' country (e.g., the United States) may have different data privacy laws and protections than Participant's country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources
representative at +60-03-2170-7700. Participant authorizes the Company, Morgan Stanley and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant's participation in the Plan, including any transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon exercise of Options may be deposited. Participant understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. Participant understands that if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant's consent is that the Company may not be able to grant Participant Options or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant's ability to participate in the Plan. For more information on the consequences of
his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
|
Peserta dengan ini secara eksplisit dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi Peserta seperti yang diterangkan dalam Perjanjian dan apa-apa bahan Opsyen yang lain oleh dan di antara, seperti yang berkenaan, Majikan, Syarikat dan Anak-anak Syarikat untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan.
Peserta memahami bahawa Majikan, Syarikat and Anak-anak Syarikat mungkin memegang maklumat peribadi tertentu tentang Peserta, termasuk, tetapi tidak terhad kepada, nama Peserta, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa Syer atau jawatan pengarah yang dipegang dalam Syarikat, butir-butir semua Opsyen, atau apa-apa hak lain atas Syer yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah Peserta, untuk tujuan eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut ("Data"). Data tersebut dibekalkan oleh Majikan dan juga oleh saya berkenaan dengan Perjanjian dan Pelan.
Peserta memahami bahawa Data ini akan dipindahkan kepada Morgan Stanley, atau mana-mana pembekal perkhidmatan pelan saham lain sebagaimana yang dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dengan pelaksanaan, pentadbiran dan pengurusan Pelan. Peserta memahami bahawa penerima-penerima Data mungkin berada di Amerika Syarikat atau mana-mana tempat lain, dan bahawa negara penerima-penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Peserta. Peserta memahami bahawa sekiranya Peserta menetap di luar Amerika Syarikat, Peserta boleh meminta satu senarai yang mengandungi nama-nama dan alamat-alamat penerima-penerima Data yang berpotensi dengan menghubungi wakil sumber manusia tempatan peserta di +60-03-2170-7700. Peserta memberi kuasa kepada Syarikat, Morgan Stanley dan mana-mana penerima-penerima kemungkinan lain yang mungkin akan membantu Syarikat (pada masa sekarang atau pada masa depan) dengan melaksanakan, mentadbir dan menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, bagi tujuan melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan, termasuk segala pemindahan Data tersebut sebagaimana yang dikehendaki kepada broker, egen eskrow atau pihak ketiga dengan siapa Saham diterima semasa peletakhakan Opsyen mungkin didepositkan. Peserta memahami bahawa Data hanya akan disimpan selagi ia adalah diperlukan untuk melaksanakan, mentadbir, dan menguruskan penyertaan peserta dalam Pelan. Peserta memahami bahawa sekiranya peserta menetap di luar Amerika Syarikat, peserta boleh, pada bila-bila masa, melihat Data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan. Selanjutnya, Peserta memahami bahawa peserta memberikan persetujuan di sini secara sukarela semata-mata. Sekiranya Peserta tidak bersetuju, atau sekiranya Peserta kemudian membatalkan persetujuannya, status pekerjaan atau perkhidmatan dan kerjaya Peserta dengan Majikan tidak akan terjejas; satu-satunya akibat buruk sekiranya Peserta tidak bersetuju atau menarik balik persetujuan Peserta adalah bahawa Syarikat tidak akan dapat memberikan Opsyen atau anugerah ekuiti lain atau mentadbir atau mengekalkan anugerah-anugerah tersebut kepada Peserta. Oleh itu, Peserta memahami bahawa keengganan atau penarikan balik persetujuan peserta boleh menjejaskan keupayaan Peserta untuk mengambil bahagian dalam Pelan. Untuk maklumat lebih lanjut mengenai akibat-akibat keengganan Peserta untuk memberikan keizinan atau penarikan balik keizinan, Peserta memahami bahawa Peserta boleh menghubungi wakil sumber manusia tempatan.
|
(a) | a material breach by Participant of the Company's Key Employee Covenants or any employment agreement, which breach is not cured within any applicable cure period set forth the Company's Key Employee Covenants or employment agreement; |
(b) | any willful violation by Participant of any material law or regulation applicable to the business of the Company or any of its Subsidiaries; |
(c) | Participant's conviction of, or a plea of guilty or nolo contendere to, a felony or any willful perpetration of common law fraud (or analogous violation of law in a jurisidiction outside the United States); or |
(d) | any other willful misconduct by Participant that is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or any of its Subsidiaries. |
(a)
|
Acknowledges receipt of the Plan and represents that Participant is familiar with the provisions of the Plan, and that Participant enters into this Agreement subject to all of the provisions of the Plan;
|
(b)
|
Recognizes that the Committee has been granted complete authority to administer the Plan in its sole discretion, and agrees to accept all decisions related to the Plan and all interpretations of the Plan made by the Committee as final and conclusive upon Participant and upon all persons at any time claiming any interest through Participant in the Restricted Stock Units or the Shares subject to this Agreement; and
|
(c)
|
Acknowledges and understands that the establishment of the Plan and the existence of this Agreement are not sufficient, in and of themselves, to exempt Participant from the requirements of Section 16(b) of the Exchange Act and any rules or regulations promulgated thereunder, and that Participant (to the extent Section 16(b) applies to Participant) shall not be exempt from such requirements pursuant to Rule 16b-3 unless and until Participant shall comply with all applicable requirements of Rule 16b-3, including without limitation, the possible requirement that Participant must not sell or otherwise dispose of any Shares acquired pursuant to Restricted Stock Units unless and until a period of at least six months shall have elapsed between the date upon which such Restricted Stock Units were granted to Participant and the date upon which Participant desires to sell or otherwise dispose of such Shares.
|
(a)
|
withholding from proceeds of the sale of Shares acquired upon settlement of the Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant's behalf pursuant to this authorization);
|
(b)
|
withholding from Participant's wages or other cash compensation paid to Participant by the Company and/or the Employer; or
|
(c)
|
withholding in Shares to be issued upon settlement of the Restricted Stock Units.
|
(a)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been awarded in the past;
|
(c)
|
nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in the employment or service of the Employer, the Company or any Subsidiary or be interpreted as forming an employment or services contract with the Employer, the Company or any Subsidiary and shall not interfere with or restrict any way the ability of the Employer, the Company or any Subsidiary, as applicable, to terminate Participant's employment or service relationship, if any;
|
(d)
|
all decisions with respect to future grants of Restricted Stock Units or other grants, if any, will be at the sole discretion of the Company;
|
(e)
|
Participant's participation in the Plan is voluntary;
|
(f)
|
in the event of the termination of Participant's Continuous Service (as defined above) (for any reason whatsoever, whether or not later to be found invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any), unless otherwise determined by the Company, Participant's right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of the date Participant is no longer actively rendering services and will not be extended by any notice period (
e.g.
, Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any); the Committee shall have the exclusive discretion to determine when Participant is no longer providing Continuous Service for purposes of this Agreement, including whether Participant may still be considered to be providing active service while on a leave of absence; and
|
(g)
|
if Participant is providing services outside the United States, the following additional provisions shall apply:
|
(1)
|
Restricted Stock Units and the Shares subject to Restricted Stock Units, and the income and value of same, are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculation of any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
|
(2)
|
Restricted Stock Units and the Shares subject to Restricted Stock Units, and the income and value of same, are not intended to replace any pension rights or compensation;
|
(3)
|
Restricted Stock Units are an extraordinary item that does not constitute compensation of any kind for service of any kind rendered to the Company or to the Employer, and Restricted Stock Units are outside of the scope of Participant's employment agreement, if any;
|
(4)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of Restricted Stock Units resulting from termination of Participant's Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any), and in consideration of the grant of Restricted Stock Units to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company,
any of its Subsidiaries or the Employer, waives his or her ability, if any, to bring any such claim, and releases the Company,
its Subsidiaries
and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim; and
|
(5)
|
neither the Company, the Employer nor any Subsidiary of the Company
shall be liable for any foreign exchange rate fluctuation between Participant's local currency and the United States Dollar that may affect the value of Restricted Stock Units or of any amounts due to Participant pursuant to the settlement of the Restricted Stock Units or the subsequent sale of any Shares acquired upon settlement.
|
Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant's personal data, as described in this Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the Employer, the Company and Subsidiaries for the exclusive purpose of implementing, administering and managing Participant's participation in the Plan.
Participant understands that the Employer, the Company and Subsidiaries may hold certain personal information about Participant, including, but not limited to, Participant's name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant's favor, for the exclusive purpose of implementing, administering and managing the Plan ("Data"). The Data is supplied by the Employer and also by me through information collected in connection with the Agreement and the Plan.
Participant understands that Data will be transferred to Morgan Stanley, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients' country (e.g., the United States) may have different data privacy laws and protections than Participant's country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative at +60-03-2170-7700. Participant authorizes the Company, Morgan Stanley and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant's participation in the Plan, including any transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon vesting of Restricted Stock Units may be deposited. Participant understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. Participant understands that if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant's consent is that the Company may not be able to grant Participant Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant's ability to participate in the Plan. For more information on the consequences of his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative
.
|
Peserta dengan ini secara eksplisit dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi Peserta seperti yang diterangkan dalam Perjanjian dan bahan-bahan geran Unit Saham Terbatas yang lain oleh dan di antara, seperti yang berkenaan, Majikan, Syarikat dan Anak-anak Syarikat untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan.
Peserta memahami bahawa Majikan, Syarikat and Anak-anak Syarikat mungkin memegang maklumat peribadi tertentu tentang Peserta, termasuk, tetapi tidak terhad kepada, nama Peserta, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa Syer atau jawatan pengarah yang dipegang dalam Syarikat, butir-butir semua Unit Saham Terbatas, atau apa-apa hak lain atas Syer yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah Peserta, untuk tujuan eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut ("Data"). Data tersebut dibekalkan oleh Majikan dan juga oleh saya berkenaan dengan Perjanjian dan Pelan.
Peserta memahami bahawa Data ini akan dipindahkan kepada Morgan Stanley, atau mana-mana pembekal perkhidmatan pelan saham lain sebagaimana yang dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dengan pelaksanaan, pentadbiran dan pengurusan Pelan. Peserta memahami bahawa penerima-penerima Data mungkin berada di Amerika Syarikat atau mana-mana tempat lain, dan bahawa negara penerima-penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Peserta. Peserta memahami bahawa sekiranya Peserta menetap di luar Amerika Syarikat, Peserta boleh meminta satu senarai yang mengandungi nama-nama dan alamat-alamat penerima-penerima Data yang berpotensi dengan menghubungi wakil sumber manusia tempatan peserta di +60-03-2170-7700. Peserta memberi kuasa kepada Syarikat, Morgan Stanley dan mana-mana penerima-penerima kemungkinan lain yang mungkin akan membantu Syarikat (pada masa sekarang atau pada masa depan) dengan melaksanakan, mentadbir dan menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, bagi tujuan-tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan, termasuk segala pemindahan Data tersebut sebagaimana yang dikehendaki kepada broker, egen eskrow atau pihak ketiga dengan siapa Saham diterima semasa peletakhakan Unit Saham Terbatas mungkin didepositkan. Peserta memahami bahawa Data hanya akan disimpan selagi ia adalah diperlukan untuk melaksanakan, mentadbir, dan menguruskan penyertaan peserta dalam Pelan. Peserta memahami bahawa sekiranya peserta menetap di luar Amerika Syarikat, peserta boleh, pada bila-bila masa, melihat Data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan. Selanjutnya, Peserta memahami bahawa peserta memberikan persetujuan di sini secara sukarela semata-mata. Sekiranya Peserta tidak bersetuju, atau sekiranya Peserta kemudian membatalkan persetujuannya, status pekerjaan atau perkhidmatan dan kerjaya Peserta dengan Majikan tidak akan terjejas; satu-satunya akibat buruk sekiranya Peserta tidak bersetuju atau menarik balik persetujuan Peserta adalah bahawa Syarikat tidak akan dapat memberikan Unit Saham Terbatas atau anugerah ekuiti lain atau mentadbir atau mengekalkan anugerah-anugerah tersebut kepada Peserta. Oleh itu, Peserta memahami bahawa keengganan atau penarikan balik persetujuan peserta boleh menjejaskan keupayaan Peserta untuk mengambil bahagian dalam Pelan. Untuk maklumat lebih lanjut mengenai akibat-akibat keengganan Peserta untuk memberikan keizinan atau penarikan balik keizinan, Peserta memahami bahawa Peserta boleh menghubungi wakil sumber manusia tempatan.
|
(a)
|
Acknowledges receipt of the Plan and represents that Participant is familiar with the provisions of the Plan, and that Participant enters into this Agreement subject to all of the provisions of the Plan;
|
(b)
|
Recognizes that the Committee has been granted complete authority to administer the Plan in its sole discretion, and agrees to accept all decisions related to the Plan and all interpretations of the Plan made by the Committee as final and conclusive upon Participant and upon all persons at any time claiming any interest through Participant in the Performance Options or the Shares subject to this Agreement; and
|
(c)
|
Acknowledges and understands that the establishment of the Plan and the existence of this Agreement are not sufficient, in and of themselves, to exempt Participant from the requirements of Section 16(b) of the Exchange Act and any rules or regulations promulgated thereunder, and that Participant (to the extent Section 16(b) applies to Participant) shall not be exempt from such requirements pursuant to Rule 16b-3 unless and until Participant shall comply with all applicable requirements of Rule 16b-3, including without limitation, the possible requirement that Participant must not sell or otherwise dispose of any Shares acquired pursuant to Performance Options unless and until a period of at least six months shall have elapsed between the date upon which such Performance Options were granted to Participant and the date upon which Participant desires to sell or otherwise dispose of such Shares.
|
(a)
|
withholding from proceeds of the sale of Shares acquired upon exercise of the Performance Options either through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant's behalf pursuant to this authorization);
|
(b)
|
withholding from Participant's wages or other cash compensation paid to Participant by the Company and/or the Employer; or
|
(c)
|
withholding in Shares to be issued upon exercise of the Performance Options.
|
(a)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Performance Options is voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Options, or benefits in lieu of Performance Options even if Performance Options have been granted in the past;
|
(c)
|
nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in the employment or service of the Employer, the Company or any Subsidiary or be interpreted as forming an employment or services contract with the Employer, the Company or any Subsidiary and shall not interfere with or restrict any way the ability of the Employer, the Company or any Subsidiary, as applicable, to terminate Participant's employment or service relationship, if any;
|
(d)
|
all decisions with respect to future grants of Performance Options or other grants, if any, will be at the sole discretion of the Company;
|
(e)
|
Participant's participation in the Plan is voluntary; and
|
(f)
|
in the event of the termination of Participant's Continuous Service (as defined above) (for any reason whatsoever, whether or not later to be found invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any), unless otherwise determined by the Company, Participant's right to vest in the Performance Options under the Plan, if any, will terminate as of the date Participant is no longer actively rendering services and will not be extended by any notice period (
e.g.
, Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any); similarly, any right to exercise Performance Options after termination of Participant's Continuous Service will be measured from the date Participant is no longer actively rendering services and will not be extended by any notice period; the Committee shall have the exclusive discretion to determine when Participant is no longer providing Continuous Service for purposes of this Agreement, including whether Participant may still be considered to be providing active service while on a leave of absence.
|
(g)
|
[Reserved].
|
(a)
|
Acknowledges receipt of the Plan and represents that Participant is familiar with the provisions of the Plan, and that Participant enters into this Agreement subject to all of the provisions of the Plan;
|
(b)
|
Recognizes that the Committee has been granted complete authority to administer the Plan in its sole discretion, and agrees to accept all decisions related to the Plan and all interpretations of the Plan made by the Committee as final and conclusive upon Participant and upon all persons at any time claiming any interest through Participant in the Performance Restricted Stock Units or the Shares subject to this Agreement; and
|
(c)
|
Acknowledges and understands that the establishment of the Plan and the existence of this Agreement are not sufficient, in and of themselves, to exempt Participant from the requirements of Section 16(b) of the Exchange Act and any rules or regulations promulgated thereunder, and that Participant (to the extent Section 16(b) applies to Participant) shall not be exempt from such requirements pursuant to Rule 16b-3 unless and until Participant shall comply with all applicable requirements of Rule 16b-3, including without limitation, the possible requirement that Participant must not sell or otherwise dispose of any Shares acquired pursuant to Performance Restricted Stock Units unless and until a period of at least six months shall have elapsed between the date upon which such Performance Restricted Stock Units were granted to Participant and the date upon which Participant desires to sell or otherwise dispose of such Shares.
|
(a)
|
withholding from proceeds of the sale of Shares acquired upon settlement of the Performance Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant's behalf pursuant to this authorization);
|
(b)
|
withholding from Participant's wages or other cash compensation paid to Participant by the Company and/or the Employer; or
|
(c)
|
withholding in Shares to be issued upon settlement of the Performance Restricted Stock Units.
|
(a)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Performance Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Performance Restricted Stock Units, or benefits in lieu of Performance Restricted Stock Units even if Performance Restricted Stock Units have been awarded in the past;
|
(c)
|
nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in the employment or service of the Employer, the Company or any Subsidiary or be interpreted as forming an employment or services contract with the Employer, the Company or any Subsidiary and shall not interfere with or restrict any way the ability of the Employer, the Company or any Subsidiary, as applicable, to terminate Participant's employment or service relationship, if any;
|
(d)
|
all decisions with respect to future grants of Performance Restricted Stock Units or other grants, if any, will be at the sole discretion of the Company;
|
(e)
|
Participant's participation in the Plan is voluntary; and
|
(f)
|
in the event of the termination of Participant's Continuous Service (as defined above) (for any reason whatsoever, whether or not later to be found invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any), unless otherwise determined by the Company, Participant's right to vest in the Performance Restricted Stock Units under the Plan, if any, will terminate as of the date Participant is no longer actively rendering services and will not be extended by any notice period (e.g., Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant's employment agreement, if any); the Committee shall have the exclusive discretion to determine when Participant is no longer providing Continuous Service for purposes of this Agreement, including whether Participant may still be considered to be providing active service while on a leave of absence.
|
(g)
|
[Reserved].
|
(a)
|
an act of fraud or intentional misrepresentation related to Participant's services;
|
(b)
|
disclosure or use of confidential information in a manner detrimental to the Company;
|
(c)
|
competing with the Company; or
|
(d)
|
any other willful misconduct by Participant that is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company. The Committee, in its sole discretion, may waive at any time in writing this forfeiture provision and release Participant from liability hereunder.
|
(a)
|
Acknowledges receipt of the Plan and represents that Participant is familiar with the provisions of the Plan, and that Participant enters into this Agreement subject to all of the provisions of the Plan;
|
(b)
|
Recognizes that the Committee has been granted complete authority to administer the Plan in its sole discretion, and agrees to accept all decisions related to the Plan and all interpretations of the Plan made by the Committee as final and conclusive upon Participant and upon all persons at any time claiming any interest through Participant in the Options or the Shares subject to this Agreement; and
|
(c)
|
Acknowledges and understands that the establishment of the Plan and the existence of this Agreement are not sufficient, in and of themselves, to exempt Participant from the requirements of Section 16(b) of the Exchange Act and any rules or regulations promulgated thereunder, and that Participant (to the extent Section 16(b) applies to Participant) shall not be exempt from such requirements pursuant to Rule 16b-3 unless and until Participant shall comply with all applicable requirements of Rule 16b-3, including without limitation, the possible requirement that Participant must not sell or otherwise dispose of any Shares acquired pursuant to Options unless and until a period of at least six months shall have elapsed between the date upon which such Options were granted to Participant and the date upon which Participant desires to sell or otherwise dispose of such Shares.
|
(a)
|
withholding from proceeds of the sale of Shares acquired upon exercise of the Options either through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant's behalf pursuant to this authorization);
|
(b)
|
withholding from Participant's wages or other cash compensation paid to Participant by the Company; or
|
(c)
|
withholding in Shares to be issued upon exercise of the Options.
|
(a)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Options is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options even if Options have been granted in the past;
|
(c)
|
nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in the service of the Company as a member of the Board of Directors of the Company or in any other capacity;
|
(d)
|
all decisions with respect to future grants of Options or other grants, if any, will be at the sole discretion of the Company;
|
(e)
|
Participant's participation in the Plan is voluntary; and
|
(f)
|
in the event of the termination of Participant's Continuous Service, and unless otherwise expressly provided in this Agreement or determined by the Company, Participant's right to vest in the Options under the Plan, if any, will terminate as of the date Participant's Continuous Service terminated, as determined by the Committee in its sole discretion; similarly, any right to exercise Options after termination of Participant's Continuous Service will be measured from the date Participant is no longer providing Continuous Service, as determined by the Committee in its sole discretion.
|
(g)
|
[Reserved].
|
(a)
|
an act of fraud or intentional misrepresentation related to Participant's services;
|
(b)
|
disclosure or use of confidential information in a manner detrimental to the Company;
|
(c)
|
competing with the Company; or
|
(d)
|
any other willful misconduct by Participant that is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company. The Committee, in its sole discretion, may waive at any time in writing this forfeiture provision and release Participant from liability hereunder.
|
(a)
|
Acknowledges receipt of the Plan and represents that Participant is familiar with the provisions of the Plan, and that Participant enters into this Agreement subject to all of the provisions of the Plan;
|
(b)
|
Recognizes that the Committee has been granted complete authority to administer the Plan in its sole discretion, and agrees to accept all decisions related to the Plan and all interpretations of the Plan made by the Committee as final and conclusive upon Participant and upon all persons at any time claiming any interest through Participant in the Restricted Stock Units or the Shares subject to this Agreement; and
|
(c)
|
Acknowledges and understands that the establishment of the Plan and the existence of this Agreement are not sufficient, in and of themselves, to exempt Participant from the requirements of Section 16(b) of the Exchange Act and any rules or regulations promulgated thereunder, and that Participant (to the extent Section 16(b) applies to Participant) shall not be exempt from such requirements pursuant to Rule 16b-3 unless and until Participant shall comply with all applicable requirements of Rule 16b-3, including without limitation, the possible requirement that Participant must not sell or otherwise dispose of any Shares acquired pursuant to Restricted Stock Units unless and until a period of at least six months shall have elapsed between the date upon which such Restricted Stock Units were granted to Participant and the date upon which Participant desires to sell or otherwise dispose of such Shares.
|
(a)
|
withholding from proceeds of the sale of Shares acquired upon settlement of the Restricted Stock Units either through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant's behalf pursuant to this authorization);
|
(b)
|
withholding from Participant's wages or other cash compensation paid to Participant by the Company; or
|
(c)
|
withholding in Shares to be issued upon settlement of the Restricted Stock Units.
|
(a)
|
the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
|
(b)
|
the grant of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been awarded in the past;
|
(c)
|
nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in the service of the Company as a member of the Board of Directors of the Company or in any other capacity;
|
(d)
|
all decisions with respect to future grants of Restricted Stock Units or other grants, if any, will be at the sole discretion of the Company;
|
(e)
|
Participant's participation in the Plan is voluntary; and
|
(f)
|
in the event of the termination of Participant's Continuous Service, and unless otherwise expressly provided in this Agreement or determined by the Company, Participant's right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of the date Participant's Continuous Service terminated, as determined by the Committee in its sole discretion.
|
(g)
|
[Reserved].
|
1. | Conflict of Interest : During employment with Company, Employee shall not have any personal interest that is incompatible with the loyalty and responsibility owed to the Company. Employee must discharge his/her responsibility solely on the basis of what is in the best interest of Company and independent of personal considerations or relationships. Employee shall maintain impartial relationships with vendors, suppliers and distributors. Should Employee have any questions regarding this matter, Employee should consult with his/her director or supervisor. If any conflict of interest or potential conflict of interest arises, the Employee must notify his director or supervisor and seek an appropriate waiver or resolution of such conflict of interest. Although it is difficult to identify every activity that might give rise to a conflict of interest, and not by way of making an all-inclusive list, the following provisions apply to common areas for potential conflicts of interests: |
1.1 | Related Party Transactions. Employees should not have a direct or indirect ownership or financial interest in vendors of Company nor any company doing or seeking to do business with Company. Employees should also not have a financial or other interest in any transaction involving the Company. In the event such a conflict arises, the Employee must notify his/her director or supervisor and the Company many not do business with such vendor or enter into any such transaction unless it has been approved in accordance with the Company's policy with respect to related party transactions. |
1.2 | Non-Competition. Employee shall not provide services to, or have a direct or indirect ownership in, any company which competes with Company in any product category or any direct selling or multilevel marketing company; provided, however, Employee may own publicly-traded securities of a company's whose securities are publicly traded on either the NYSE, American or NASDAQ stock exchanges if the Employee's ownership interest is less than 1% of the total outstanding securities of such company. |
1.3 | Other Employment. Employee shall not perform services of any kind for any entity doing or seeking to do business with Company. As to employment with or service to another company, Employee shall not allow any such activity to detract from his/her job performance, use Company's time, resources, or personnel, or require such long hours to affect his/her physical or mental effectiveness. |
1.4 | Distributorships. While employed by Company and for a period of three (3) months after termination of an employment relationship with Company, Employee shall not directly or indirectly own any interest in a Company distributorship. Additionally, during the course of employment, neither the Employee, nor the Employee's spouse or an immediate family member living in the same household shall own any interest in, or otherwise be associated with, a Company distributorship or any other multilevel distributorship. Employee's spouse or immediate family member living in the same household will not, without the prior written consent of the Company, own any interest in, or otherwise be affiliated with, another direct sales distributorship or be employed by another direct sales or multilevel marketing company. Any pre-existing ownership interests or employment covered in this paragraph must be disclosed to the Company at the time of the execution of this Agreement. Employee shall disclose to his/her immediate director or supervisor any and all areas posing a potential or actual conflict of interest. Said disclosure shall be made as promptly as possible after such conflict arises. |
2.
|
Work Product
:
|
2.1
|
Company shall have the sole proprietary interest in the work product of Employee created during his/her employment with Company ("Work Product"), and Employee expressly assigns to Company or its designee all rights, title and interest in an to all copyrights, patents, trade secrets, improvements, inventions, sketches, models and all documents related thereto, manufacturing processes and innovations, special calibration techniques, software, service cod, systems designs and any other Work Product developed by Employee, either solely or jointly with others, where said Work Product relates to any business activity or research and development activity in which Company is involved or plans to be involved at the time of or prior to Employee's creating such Work Product, or where such Work Product is developed with the use of Company's time, material, or facilities; and Employee further agrees to disclose any and all such Work Product to Company without delay.
|
2.2
|
Employee will promptly disclose to the Company all Work Product, whether or not patentable or registrable under patent, copyright or similar statutes, made or conceived or reduced to practice or learned by Employee, either alone or jointly with others, during the period of his/her employment that (i) at the time of conception or reduction to practice are related to the actual or demonstrably anticipated business of the Company, (ii) result from tasks performed by Employee for the Company, or (iii) are developed on any amount of the Company's time or result from the use of premises or property (including computer systems and engineering facilities) owned, leased, or contracted for by the Company (collectively, "Inventions").
|
3.
|
Non-Disclosure and Assignment
:
|
3.1
|
Employee acknowledges that during the term of employment with Company he/she may develop, learn and be exposed to information about Company and its business, including but not limited to formulas, business plans, financial data, vendor lists, product and marketing plans, distributor lists, and other trade secrets which information is secret, confidential and vital to the continued success of Company ("Confidential Information"). All Confidential Information and/or Inventions, as well as all intellectual property rights therein, shall be the sole property of the Company. Employee hereby assigns and agrees to assign to the Company any rights he or she may have or acquire in such Confidential Information and/or Inventions.
|
3.2
|
During and after Employee's employment, Employee shall hold the Confidential Information and/or Inventions in confidence and shall protect them with utmost care. Employee shall not disclose, copy, remove the Company's premises, or permit any person to disclose or copy any of the Confidential Information and/or Inventions, and Employee shall not use any of the Confidential Information and/or Inventions, except as necessary to perform his/her duties as an employee of Company. In the event that Employee has or has had access to any confidential information belonging to any third party, including but not limited to any of Employee's previous employers, Employee shall hold all such confidential information in confidence and shall comply with the terms of any and all agreements between Employee or Company and the third party with respect to such confidential information.
|
3.3
|
This Agreement will not be interpreted to prevent the use or disclosure of information that (i) is required by law to be disclosed, but only to the extent that such disclosure is legally required, (ii) becomes a part of the public knowledge other than by a breach of an obligation of confidentiality, or (iii) is rightfully received from a third party not obligated to hold such information confidential.
|
3.4
|
Upon Company's request, and in any event upon termination of Employee's employment for any reason, Employee shall promptly return to Company all materials in his/her possession or control that represent, contain or reasonably could contain Confidential Information and/or Inventions, including but not limited to documents, drawings, diagrams, flow charts, computer programs, memoranda, notes, and every other medium, and all copies thereof.
|
3.5
|
During and after Employee's employment, regardless of the circumstances of Employee's termination, Employee shall not communicate to, or use for his/her benefit, or for the benefit of any person, firm, or other entity, without the prior approval of the Company, any Confidential Information or information about Inventions; provided, however, that Employee may communicate such information as required pursuant to law or as necessary or appropriate in connection with any suit or action, or any potential suit or action, brought by Employee against the Company in connection with his/her employment relationship with the Company. Employee will return to Company all Company-owned materials including, without limitation, computer and office equipment, supplies and internal Company manuals, customer lists and information, and marketing materials.
|
4.
|
Future Inventions
: Employee recognizes that Inventions relating to his/her activities while working for Company and conceived or made by Employee, whether alone or with others, within one year after termination of Employee's employment may have been conceived in significant part while employed by Company. Accordingly, Employee agrees that such Inventions shall be presumed to have been conceived during Employee's employment with Company and are to be, and hereby are, assigned to Company unless and until Employee has established the contrary.
|
5.
|
Cooperation
: Employee shall assist Company in every way deemed necessary or desirable by the Company (but at the Company's expense) to obtain and enforce patents, copyrights, trademarks and other rights and protections relating to any Confidential Information and Inventions in any and all countries, and to that end Employee will execute all documents for use in obtaining and enforcing such patents, copyrights, trademarks and other rights and protections as Company may desire, together with any assignments thereof to Company or persons designated by it. If Company is unable for any reason to secure Employee's signature to any document required to apply for or execute any patent, copyright, mask work or other applications with respect to any Inventions (including improvements, renewals, extensions, continuations, divisions or continuations in part thereof), Employee hereby irrevocably designates Company and its duly authorized officers and agents as Employee's agents and attorneys-in-fact for and on Employee's behalf to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, mask works or other rights thereon with the same legal force and effect as if executed by Employee. Employee's obligation to assist Company shall continue beyond the termination of his/her employment, but Company shall compensate him/her at a reasonable rate after his/her termination for time actually spent by Employee at Company's request on such assistance.
|
6.
|
Ethical Standards
: Employee agrees to maintain the highest ethical and legal standards in his/her conduct, to be scrupulously honest and straight-forward in all of his/her dealings and to avoid all situations which might project the appearance of being unethical or illegal.
|
7.
|
Product Resale
: As an employee of Company, Employee may receive Company products and materials either at no charge or at a discount as specified from time to time by Company in its sole discretion. Employee agrees that the products received from Company are strictly limited to Employee's personal use and that of Employee's family and may not be resold, given or disposed of to any other person or entity, or otherwise disposed of in a manner inconsistent with the personal use herein described.
|
8.
|
Gratuities
: Employee shall neither seek nor retain gifts, gratuities, entertainment or other forms of compensation, benefit, or persuasion from suppliers, distributors, vendors or their representatives without the consent of a Company Vice President with the exception of meals provided in the ordinary course of business on an infrequent basis.
|
9.
|
Non-Solicitation
: Employee shall not in any way, directly or indirectly, at any time during employment or within two (2) years after either a voluntary or involuntary employment termination: (a) solicit, divert, or take away Company's distributors; (b) in any manner Company's employees, or vendors; or (c) assist any other person in any manner or persons in an attempt to do any of the foregoing.
|
10.
|
Non-Disparagement
: Employee shall not in any way, directly or indirectly at any time during employment or after either voluntary or involuntary employment termination, disparage Company, Company products or Company Distributors.
|
11.
|
Non-Endorsement
: Employee shall not in any way, directly or indirectly, at any time during employment or within one (1) year after either a voluntary or involuntary employment termination endorse any product that competes with products of Company, promote or speak on behalf of any company whose products compete with those of Company, allow Employee's name or likeness to be used in any way to promote any company or product that competes with Company or any products of Company.
|
12.
|
Non-Competition
: In exchange for the benefits of continued employment by Company, Employee shall not accept employment with, engage in or participate, directly or indirectly, individually or as an officer, director, employee, shareholder, consultant, partner, joint venturer, agent, equity owner, distributor or in any other capacity whatsoever, with any direct sales or multilevel marketing company including any direct or indirect affiliate or subsidiary of such company that competes with the business of Company whether for market share of products or for independent distributors in a territory in which Company is doing business. The restrictions set forth in this paragraph shall remain in effect during the Employee's employment with Company and during a period of six months following the Employee's termination
of
employment. Within fifteen days of termination of Employee's employment, Company shall notify Employee whether it elects to enforce the Employee's obligation set forth in this paragraph. In the event Company decides to enforce employees non-competition obligation set forth herein, Company shall pay Employee a sum equal to seventy-five percent of the Employee's base salary at termination of employment, less applicable withholding taxes and excluding all incentive compensation and other benefit payments for the period following the termination of employment during which the restrictive covenants in this paragraph remain in effect. Unless other arrangements are made, payment shall be made in periodic installments in accordance with Company's regular payroll practices. Such ongoing payments shall be contingent upon Employee's ongoing compliance with his/her continuing obligations under this Agreement.
|
13.
|
Acknowledgement
: Employee acknowledges that his/her position and work activities with the Company are "key" and vital to the on-going success of Company's operation in each product category and in each geographic location in which Company operates. In addition, Employee acknowledges that his/her employment or involvement with any other direct selling or multilevel marketing company in particular would create the impression that Employee has left Company for a "better opportunity," which could damage Company by this perception in the minds of Company's employees or independent distributors. Therefore, Employee acknowledges that his/her confidentiality, non-solicitation, non-disparagement, non-endorsement and non-competition covenants are fair and reasonable and should be construed to apply to the fullest extent possible by applicable laws. Employee has carefully read this Agreement, has consulted with independent legal counsel to the extent Employee deems appropriate, and has given careful consideration to the restraints imposed by the Agreement. Employee acknowledges that the terms of this Agreement are enforceable regardless of the manner in which Employee's employment is terminated, whether voluntary or involuntary. In the event that Employee is to be employed as an attorney for a competitive business, Company and Employee acknowledge that paragraph 12 is not intended to restrict the right of the Employee to practice law in violation of any applicable rules of professional conduct.
|
14.
|
Return of Equipment and Information upon Termination
: Upon termination of employment, Employee shall return to company all assets and equipment of Company along with any Confidential Information and Work Product including any distributor and vendor contact information and notes or summaries of all of the above.
|
15.
|
Remedies
: Employee acknowledges: (a) that compliance with the restrictive covenants contained in this Agreement are necessary to protect the business and goodwill of Company and (b) that a breach will result in irreparable and continuing damage to Company, for which money damages may not provide adequate relief. Consequently, Employee agrees that, in the event that he/she breaches or threatens to breach these restrictive covenants, Company shall be entitled to both: (1) a preliminary or permanent injunction to prevent the continuation of harm and (2) money damages insofar as they can be determined. Nothing in this Agreement shall be construed to prohibit Company from also pursuing any other remedy, the parties having agreed that all remedies are cumulative. It is further recognized and agreed that the covenants set forth herein are for the purpose of restricting Employee's activities to the extent necessary for the protection of the legitimate business interests of Company and that Employee agrees that said covenants do not and will not preclude him/her from engaging in activities sufficient for the purposes of earning a living.
|
16.
|
Attorney's Fees
: If any party to this Agreement breaches any of the terms of this Agreement, then that party shall pay to the non-defaulting party all of the non-defaulting party's costs and expenses, including reasonable attorney's fees, incurred by that party in enforcing the terms of this Agreement.
|
17.
|
Court's Right to Modify Restriction
: The parties have attempted to limit the Employee's right to compete only to the extent necessary to protect Company from unfair competition. The parties recognize, however, that reasonable people may differ in making such a determination. Consequently, the parties agree that, if the scope or enforceability of the restrictive covenants contained in this Agreement is in any way disputed at any time, a court or other trier of fact may modify and enforce the covenants to the extent that it believes to be reasonable under the circumstances existing at that time.
|
18.
|
Severability
: If any provision, paragraph, or subparagraph of this Agreement is adjudged by any court or administrative agency to be void or unenforceable in whole or in part, this adjudication shall not affect the validity of the remainder of the Agreement, including any other provision, paragraph, or subparagraph. Each provision, paragraph, and subparagraph of this Agreement is severable from every other provision, paragraph, and subparagraph and constitutes a separate and distinct covenant.
|
19.
|
Governing Law and Forum
: This Agreement shall be governed and enforced in accordance with the laws of the State of Utah, and any litigation between the parties relating to this Agreement shall be conducted in the courts of Utah County or Salt Lake City where necessary for federal court matters.
|
20.
|
Employment At Will
: Employee understands that employment with Company is at-will, meaning that employment with Company is completely voluntary and for an indefinite term and that either Employee or Company is free to terminate the employment relationship at any time, with or without cause or advance notice, provided that termination is not done for an unlawful or discriminatory purpose.
|
21.
|
Employment Subject to Company's Policies and Procedures
: The Parties acknowledge and agree that Company has established, and may establish, various workplace policies and procedures, which the Company may modify in its sole discretion from time to time. Employee acknowledges such policies and procedures, and agrees to abide by such policies and procedures as they may be implemented or modified from time to time.
|
22.
|
Entire Agreement
: Company and Employee understand and agree that this Agreement shall constitute the entire agreement between them regarding the subject matter contained herein, and that all prior understandings or agreements regarding these matters are hereby superseded and replaced, including, without limitation, the Key-Employee Covenants Agreement previously signed by the parties. Any amendment to or modification of this Agreement must be in writing signed by the parties hereto and stating the intent of the parties to amend or modify this Agreement.
|
23.
|
Survivability of Obligations
: This Agreement sets forth several obligations which continue after the termination of Employee's employment with Company, including without limitation those obligations set forth in paragraphs 1, 2, 3, 4, 5, 6, 9, 10, 11, and 12, and the Parties specifically acknowledge and agree that such obligations shall survive the termination of Employee's employment for any reason.
|
|
Dated:
|
|
Employee
|
|
|
|
|
|
Date: February 27, 2015
|
/s/ M. Truman Hunt
|
|
|
M. Truman Hunt
|
|
|
Chief Executive Officer
|
|
Date: February 27, 2015
|
/s/ Ritch N. Wood
|
|
|
Ritch N. Wood
|
|
|
Chief Financial Officer
|
|