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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |||||
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PROPOSAL NO. 2 — RATIFICATION OF AUDIT COMMITTEE’S SELECTION OF KPMG LLP | ||||
Vote Required and Board of Directors’ Recommendation (Proposal No. 2) | 59 | |||
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| Annex A-1 | ||||
| Annex B-1 |
This summary highlights information contained elsewhere in this Proxy Statement. The following description is only a summary; for more information, you should carefully read and consider the entire Proxy Statement, as well as the Company’s 2012 Annual Report, before voting on the matters presented in this Proxy Statement.
| 2013 Annual Meeting of Stockholders | ||
Time & Date | 10:00 a.m., June 6, 2013 | |
Place | Revlon Research Center 2121 Route 27 Edison, NJ 08818 | |
Record Date | April 12, 2013 | |
Voting | Each share of the Company’s Class A Common Stock and Series A Preferred Stock is entitled to one vote, and each share of the Company’s Class B Common Stock is entitled to ten votes. | |
Admission | Stockholders of record on the Record Date may attend the 2013 Annual Meeting upon presentation of appropriate admission materials; pre-registration is encouraged; see the “Questions and Answers About the Annual Meeting and Voting” section of this Proxy Statement for more information. | |
Meeting Agenda | 1. Election of Directors. 2. Ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2013. 3. Transact such other business that may properly be brought before the meeting. | |
| Voting Matters | ||
| Item | Board Vote Recommendation | |
1. Election of Directors | For each Director nominee. | |
2. Ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2013 | For. | |
Board Nominees
The following table provides summary information about each Director nominee. Each Director nominee is a current standing Director of the Company (other than Ms. Cantor, who is a new nominee). Each Director is elected annually by a plurality of votes cast.
| Name | Revlon Director Since | Independent | Committee Memberships | Committee Chairman | ||||
Ronald O. Perelman (Chairman) | 1992 | |||||||
Alan S. Bernikow | 2003 | X | Audit; Compensation | Audit; Compensation | |||||
Diana F. Cantor | — | X | |||||||
Viet D. Dinh | 2012 | X | Nominating & Corporate Governance | ||||||
Alan T. Ennis | 2009 | ||||||||
Meyer Feldberg | 1997 | X | Audit; Nominating & | Nominating & Corporate Governance | |||||
David L. Kennedy | 2006 | ||||||||
Cecelia Kurzman | 2013 | X | |||||||
Debra L. Lee | 2006 | X | Nominating & Corporate Governance | ||||||
Tamara Mellon | 2008 | X | |||||||
Barry F. Schwartz | 2007 | Compensation | |||||||
Kathi P. Seifert | 2006 | X | Audit; Compensation | ||||||
Auditors
As a matter of good corporate practice, the Company is asking its stockholders to ratify the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2013. Set forth below is a summary of information with respect to KPMG LLP’s fees for services provided in 2012 and 2011 (dollars are in millions).
Types of Fees | 2012 | 2011 | ||||||
Audit Fees | $ | 3.9 | $ | 3.8 | ||||
Audit-Related Fees | 0.2 | 0.2 | ||||||
Tax Fees | 0.2 | 0.2 | ||||||
All Other Fees | — | — | ||||||
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TOTAL FEES | $ | 4.3 | $ | 4.2 | ||||
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| Q. | |
| Why am I receiving these proxy materials? | |
| A. | Our Board of Directors is providing this Proxy Statement and other materials to you in connection with the Company’s |
| Q. | Why did I receive a notice regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials? |
In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission, instead of mailing a printed copy of our proxy materials to all stockholders entitled to vote at our 20112013 Annual Meeting, we are making the proxy materials and our 20102012 Annual Report available to our stockholders electronically via the Internet. On or about April 19, 2011,25, 2013, we are sending to our stockholders a Notice of Internet Availability of Proxy Materials (the “Internet Notice”). The Internet Notice contains instructions on how stockholders may access and review our proxy materials and our 20102012 Annual Report over the Internet and vote electronically, as well as instructions on how stockholders can receiverequest a paper copy of our proxy materials, including the 20112013 Proxy Statement, the 20102012 Annual Report and a form of proxy card. Otherwise, you will not receive a printed copy of the proxy materials (unless you already had a request for paper copies on file with our transfer agent or your broker). Instead, the Internet Notice will instruct you as to how you may access and review the proxy materials and submit your vote via the Internet. If you would like to receive a printed copy of the proxy materials, please follow the instructions included in the Internet Notice for requesting printed materials.
Important Notice Regarding the Availability of Proxy Materials for the June 2, 20116, 2013 Annual
Stockholders’ Meeting:
Our 20112013 Proxy Statement, including the Notice of Annual Meeting of Stockholders, and 20102012 Annual Report to Stockholders are available atwww.proxyvote.com (where stockholders may also vote their shares, via the Internet) and atwww.revloninc.com..
| Q. | |
| How can I request paper copies of proxy materials? | |
| A. | |
| Q. | When and where is the |
| A. | The |
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| Q. | |
| What is the purpose of the | |
| A. | At the |
the election of the following persons as members of the Company’s Board of Directors to serve until the next annual stockholders’ meeting and until such directors’ successors are elected and shall have
been qualified: Ronald O. Perelman, Alan S. Bernikow, | ||
the ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2013; and
the transaction of such other business as may properly come before the 2013 Annual Meeting.
| Q. | |
| What are the voting recommendations of the Board? | |
| A. | The Board recommends the following votes: |
FOR each of the director nominees; and
FORthe ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2013.
| Q. | ||
| What is the difference between holding shares as a stockholder of record and as a beneficial owner? | |
| A. | Many holders of the Company’s voting capital stock hold such shares through a broker or other nominee (i.e., a beneficial owner) rather than directly in their own name (i.e., a stockholder of record). As summarized below, there are some distinctions between shares held of record and those owned beneficially. |
Stockholder of Record. If your shares are registered in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, as of 5:00 p.m., Eastern Time, on the April 12, 2013 record date, you are considered the stockholder of record with respect to those shares, and these proxy materials are being made available, electronically or otherwise, directly to you by the Company. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or a third party, or to vote in person at the 2013 Annual Meeting. The Company has made available a proxy card or electronic voting means for you to use for voting purposes.
Reverse Stock Split. As previously disclosed, in September 2008, the Company effected a | ||
Beneficial Owner. If your shares are held in a brokerage account or by another nominee as of 5:00 p.m., Eastern Time, on the April 12, 2013 record date, you are considered the beneficial owner of shares held in “street name,” and these proxy materials are being made available, electronically or otherwise, by the Company to your broker, nominee or trustee and they should forward these materials to you, together with a voting instruction form if furnished via paper copy to your broker, trustee or nominee. |
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| Q. | ||
| How do I vote? | |
| A. | You may vote using one of the following methods: |
Internet. For all holders of our voting capital stock (whether a stockholder of record or a beneficial owner), to vote through the Internet, log on to the Internet and go towww.proxyvote.com and follow the steps on the secure website (have your Internet Notice or your proxy card available as you will need to reference your assigned Control Number(s)). You may vote on the Internet up until 11:59 p.m. Eastern Time on June 1, 2010,5, 2013, which is the dateday before the June 2, 20116, 2013 Annual Meeting. If you vote by the Internet, you need not return your proxy card (if you received one), unless you wish to change your Internet vote.
Telephone. You may vote by telephone by calling the toll-free number on your proxy card up until 11:59 p.m., Eastern Time, on June 1, 2010,5, 2013, which is the dateday before the June 2, 20116, 2013 Annual Meeting, and following the pre-recorded instructions (have your Internet Notice or your proxy card available when you call as you will need to reference your assigned Control Number(s)). If you vote by telephone, you should not return your proxy card (if you received one), unless you wish to change your Internettelephone vote.
Mail. If you received your proxy materials by mail, due to having a request for paper copies on file with our transfer agent or your broker, you may vote by mail by appropriately marking your proxy card, dating and signing it, and returning it in the postage-prepaid envelope provided, or to Vote Processing (Revlon),c/o Broadridge, 51 Mercedes Way, Edgewood, NJ 11717, for receipt prior to the closing of the voting polls for the June 2, 20116, 2013 Annual Meeting.
In Person.Person. You may vote your shares in person by attending the 20112013 Annual Meeting and submitting a valid proxy at the 20112013 Annual Meeting. If you are a “registered owner” or “record holder” (i.e., you are listed as a stockholder on the books and records of our transfer agent), you may vote in person by submitting your previously furnished proxy or casting a voting capital stock ballot furnished by the Company at the Meeting prior to the closing of the polls; if you are a “beneficial owner” (i.e., your shares are held by a nominee, such as a bank or broker or in “street name”), you may not vote your shares in person at the 20112013 Annual Meeting unless you obtain and present to the Company an original (copies will not be accepted) legal proxy from your bank or broker authorizing you to vote the shares (“Requests for Admission” will not be accepted).
Voting, Generally.Generally. All shares that have been voted properly by an unrevoked proxy will be voted at the 20112013 Annual Meeting in accordance with your instructions. In relation to how your proxy will be voted, see “How will my proxy be voted?” below.
If you are a “beneficial owner” because your brokerage firm, bank, broker-dealer or other similar organization is the holder of record of your shares (i.e., your shares are held in “street name”),you will receive instructions on how to vote from your bank, broker or other record holder. You must follow these instructions in order for your shares to be voted. You should instruct your nominee on how to vote your shares. Your broker is required to vote those shares in accordance with your instructions. If you do not give instructions to your broker, the broker may vote your shares only with respect to Proposal No. 2 (the ratification of the appointmentAudit Committee’s selection of the Company’s independent registered public accounting firm), which is considered a “routine” matter, and not with respect to Proposal Nos.No. 1 3 and 4.
| Q. | |
| Who can vote? | |
| A. | Only stockholders of record of Revlon, Inc. Class A and Class B Common Stock and Revlon, Inc. Series A Preferred Stock at 5:00 p.m., Eastern Time, on April |
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| those who have been granted and present an original, signed, valid legal proxy in appropriate form from a holder of record of Revlon, Inc. Class A or Class B Common Stock or Revlon, Inc. Series A Preferred Stock as of 5:00 p.m., Eastern Time, on April |
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As noted above, the Company has determined that stockholders who have not yet surrendered their old shares of Class A Common Stock to the Company’s transfer agent for exchange in connection with the Reverse Stock Split will be considered stockholders of record and will be permitted to receive these proxy materials, vote their shares (after giving effect to the1-for-10 Reverse Stock Split) and attend the 20112013 Annual Meeting.
| Q. | |
| How will my proxy be voted? | |
| A. | Your proxy, when properly submitted to us, and not revoked, will be voted in accordance with your instructions. If you sign and return your proxy card without indicating how you would like your shares to be voted, the persons designated by the Company as proxies will vote in accordance with the recommendations of the Board of Directors on Proposal No. 1 (the election of directors) |
Although we are not aware of any other matter that may be properly presented at the 20112013 Annual Meeting, if any other matter is properly presented, the persons designated by the Company as proxies may vote on such matters in their discretion.
| Q. | |
| Can I change or revoke my vote? | |
| A. | Yes. If you are a stockholder of record, you can change or revoke your vote at any time before it is voted at the |
executing and delivering a proxy bearing a later date, which must be received by the Company’s Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, before the original proxy is voted at the 2013 Annual Meeting;
filing a written revocation or written notice of change, as the case may be, which must be received by the Company’s Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, before the original proxy is voted at the 2013 Annual Meeting; or
attending the 2013 Annual Meeting and voting in person.
If you are a beneficial owner, please follow the voting instructions sent to you by your broker, trustee or nominee to change or revoke your vote.
To revoke a vote previously submitted electronically through the Internet or by telephone, you may simply vote again at a later date, using the same procedures, in which case the later submitted vote will be recorded and the earlier vote revoked.
| Q. | |
| What if I am a participant in the Revlon 401(k) Plan? | |
| A. | This Proxy Statement is being furnished to you if Revlon, Inc. Class A Common Stock is allocated to your account within the Revlon Employees’ Savings, Investment and Profit Sharing Plan (the “401(k) Plan”). The trustee of the 401(k) Plan, as the record holder of the Company’s shares held in the 401(k) Plan, will vote the |
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| shares allocated to your account under the 401(k) Plan in accordance with your instructions. If the trustee of the 401(k) Plan does not otherwise receive voting instructions for shares allocated to your 401(k) Plan Account, the trustee, in accordance with the 401(k) Plan trust agreement, will vote any such shares in the same proportion as it votes those shares allocated to 401(k) Plan participants’ accounts for which voting instructions were received by the trustee.401(k) Plan participants must submit their voting instructions to the trustee of our 401(k) Plan in accordance with the instructions included with the proxy card or Internet Notice so that they are received by 11:59 p.m. Eastern Time on May |
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| Q. | |
| Who can attend the | |
| A. | Anyone who was a stockholder of the Company as of 5:00 p.m., Eastern Time, on April |
To attend the 20112013 Annual Meeting, please follow these instructions:
If you are a stockholder of record on the April 12, 2013 record date, check the appropriate box on the proxy card (or indicate that you will attend when prompted by electronic voting means which you may access) indicating that you plan on attending the 2013 Annual Meeting, and please present at the meeting a valid picture identification, such as a driver’s license or passport.
If you are a stockholder whose shares are held in a brokerage account or by another nominee, please present at the meeting valid picture identification, such as a driver’s license or passport, as well as original proof of ownership of shares of Revlon, Inc. voting capital stock as of 5:00 p.m., Eastern Time, on the April 12, 2013 record date, in order to be admitted to the 2013 Annual Meeting. As noted, you will need to present original evidence of stock ownership, such as an original of a legal proxy from your bank or broker (“Requests for Admission” will not be accepted), your brokerage account statement, demonstrating that you held Revlon, Inc. voting capital stock in your account as of 5:00 p.m., Eastern Time, on the April 12, 2013 record date, or, if you did not already return it to your bank or broker, an original voting instruction form issued by your bank or broker, demonstrating that you held Revlon, Inc. voting capital stock in your account as of 5:00 p.m., Eastern Time, on the April 12, 2013 record date.
In order to ensure the safety and security of our meeting attendees, packages and bags may be inspected and may have to be checked and, in some cases, may not be permitted. We thank you in advance for your cooperation with these security measures.
| Q. | |
| Should I pre-register for the | |
| A. | In order to expedite the admission registration process required for you to enter the |
| Q. | Can I bring a guest to the |
| A. | Yes.If you plan to bring a guest to the |
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| present valid picture identification to gain access to the |
| Q. | |
| Can I still attend the | |
| A. | Yes. Attending the |
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| Q. | What shares are covered by my proxy card or electronic voting form? |
| A. | The shares covered by your proxy card or electronic voting form represent all of the shares of the Company’s voting capital stock that you own in the account referenced on the proxy card. Any shares that may be held for your account by the 401(k) Plan or another account will be represented on a separate proxy card and/or by a separate Control Number. |
| Q. | What does it mean if I get more than one proxy card? |
| A. | It means you have multiple accounts at our transfer agentand/or with banks or stockbrokers. Please vote all of your shares. |
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Annual Meeting of Stockholders
to be held on June 2, 20116, 2013
This Proxy Statement is being furnished on or about April 19, 201125, 2013 by and on behalf of the Board of Directors (the “Board of Directors” or the “Board”) of Revlon, Inc. (the “Company” or “Revlon”) in connection with the solicitation of proxies to be voted at the 20112013 Annual Meeting of Stockholders (the “2011“2013 Annual Meeting”) to be held at 10:00 a.m., Eastern Time, on Thursday, June 2, 2011,6, 2013, at Revlon’s Research Center at 2121 Route 27, Edison, NJ 08818, and at any adjournments thereof. The 20102012 Annual Report furnished with our Proxy Statement does not form any part of the material for the solicitation of proxies.
Pursuant to the rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we are required to provide our stockholders with access to our proxy materials over the Internet, rather than only in paper form.Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Internet Notice”), rather than a printed copy of the proxy materials, to our stockholders of record as of April 8, 2011.12, 2013. You will not receive a printed copy of the proxy materials unless you already had a request for paper copies on file with our transfer agent or your broker. If you want to receive paper copies of the proxy materials, you must request them through one of the methods identified elsewhere in this Proxy Statement or in the Internet Notice.There is no charge imposed by the Company for requesting paper copies. Our proxy materials, including the Internet Notice, are being made available to stockholders entitled to vote at the 20112013 Annual Meeting on or about April 19, 2011.
At the 20112013 Annual Meeting, the Company’s stockholders will be asked to: (1) elect the following persons (all of whom currently are directors of the Company) as directors of the Company until the Company’s next annual stockholders’ meeting and until each such director’s successor is duly elected and has been qualified: Ronald O. Perelman, Alan S. Bernikow, Paul J. Bohan,Diana F. Cantor, Viet D. Dinh, Alan T. Ennis, Meyer Feldberg, David L. Kennedy, Cecelia Kurzman, Debra L. Lee, Tamara Mellon, Richard J. Santagati, Barry F. Schwartz and Kathi P. Seifert; (2) ratify the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011;2013; and (3) provide their non-binding, advisory approval of the Company’s executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in this Proxy Statement(“say-on-pay”); (4) consider and submit their non-binding, advisory vote on the future frequency of the“say-on-pay” vote on executive compensation(“say-on-frequency”); and (5) take such other action as may properly come before the 20112013 Annual Meeting or any adjournments thereof.
The Company’s principal executive offices are located at 237 Park Avenue, New York, NY 10017, and its main telephone number is(212) 527-4000.
In order to be admitted to the 20112013 Annual Meeting20112013 Annual Meeting in person, you should check the appropriate box on your proxy card (or indicate that you will attend when prompted by electronic voting means which you may access) indicating that you intend to attend in person and you will need to presentvalid picture identification, such as a driver’s license or passport, as well as originalproof of ownershipof shares of Revlon, Inc. Class A Common Stock, Class B Common Stock or Series A Preferred Stock as of 5:00 p.m., Eastern Time, on the April 8, 201112, 2013 record date. If your shares are held other than as a stockholder of record (such as beneficially through a brokerage, bank or other nominee account), you will need to present original documents (copies will not be accepted) to evidence your stock ownership as of 5:00 p.m., Eastern Time, on the April 8, 201112, 2013 record date, such as an original of a legal proxy from your bank or broker (“Requests for Admission” will not be accepted) or your brokerage account statement demonstrating that you held Revlon, Inc. voting capital stock in your account as of 5:00 p.m., Eastern Time, on the April 8, 201112, 2013 record date, or, if you did not already return it to your bank or broker, an original voting instruction form issued by your bank or broker, demonstrating that you held Revlon, Inc. voting capital stock in your account as of 5:00 p.m., Eastern Time, on the April 8, 201112, 2013 record date.
In order to ensure the safety and security of our annual meeting2013 Annual Meeting attendees, packages and bags may be inspected and may have to be checked and, in some cases, may not be permitted. We thank you in advance for your cooperation with these security measures.
All proxies properly submitted to the Company, unless such proxies are properly revoked before they are voted at the Additionally, pursuant to the Company’s By-laws, in order for business to be properly brought before the The submission of a signed or validly submitted electronic proxy will not affect a stockholder’s right to change 20112013 Annual Meeting, will be voted on all matters presented at the 20112013 Annual Meeting in accordance with the instructions given by the person executing (or electronically submitting) the proxy or, in the absence of instructions, will be voted (1) FORthe election to the Board of Directors of each of the 1112 nominees identified in this Proxy Statement (all of whom currently are directors of the Company);Statement; and (2) FORthe ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011; (3) FORthe non-binding, advisory approval of the Company’s executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in this Proxy Statement; and (4) for the non-binding, advisory recommendation of conducting future non-binding, advisory votes on executive compensation everyTHREE (3) YEARS(see2013 (see below for discussion of broker non-votes). The Company has no knowledge of any other matters to be brought before the meeting. The deadline for receipt by the Company of stockholder proposals for inclusion in the proxy materials for presentation at the 20112013 Annual Meeting was December 22, 2010.25, 2012. The Company did not receive any proposals required to be included in these proxy materials.20112013 Annual Meeting (other than stockholder proposals included in the proxy statement pursuant toRule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and business specified in this Proxy Statement), notice of such business must have been received by the Company between March 5, 20119, 2013 and April 4, 20118, 2013 (and not subsequently withdrawn) and such notice must have included, among other things: (i) information regarding the proposed business to be brought before such meeting; (ii) the identity of the stockholder proposing the business; and (iii) the class of the Company’s shares which are owned beneficially or of record by such stockholder. The Company did not receive notification of any such matters. If any other matters are properly presented before the 20112013 Annual Meeting for action, however, in the absence of other instructions, it is intended that the persons named by the Company and acting as proxies will vote in accordance with their discretion on such matters.theirhis, her or its vote, attendand/or vote in person at the 20112013 Annual Meeting. Stockholders who execute a proxy or validly submit an electronic vote may revoke it at any time before it is voted at the 20112013 Annual Meeting by: (i) filing a written revocation or written notice of change, as the case may be, which must be received by the Company’s Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, before the original proxy is voted at the 20112013 Annual Meeting; (ii) executing and delivering a proxy bearing a later date, which must be received by the Company’s Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, before the original proxy is voted at the 20112013 Annual Meeting; or (iii) attending the 20112013 Annual Meeting and voting in person. To revoke a proxy previously submitted electronically through the Internet or by telephone, you may simply vote again at a later date, using the sameeither of those electronic procedures, in which case the later submitted vote will be recorded and the earlier vote revoked.2
Only holders of record of shares of the Company’s Class A common stock, par value $0.01 per share (the “Class A Common Stock”), Class B common stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), and Series A Preferred Stock, par value $0.01 per share (the “Preferred Stock” and, together with the Common Stock, the “Voting Capital Stock”), at 5:00 p.m., Eastern Time, on April 8, 201112, 2013 (the “Record Date”) will be entitled to notice of and to vote at the 20112013 Annual Meeting or any adjournments thereof. On the Record Date, there were issued and outstanding: (i) 49,050,62849,231,798 shares of the Company’s Class A Common Stock, each of which is entitled to one vote, (ii) 3,125,000 shares of the Company’s Class B Common Stock, each of which is entitled to 10 votes, and (iii) 9,336,905 shares of the Company’s Preferred Stock, each of which is entitled to one vote. Of that Voting Capital Stock, Mr. Ronald O. Perelman, Chairman of the Board of Directors, directly and indirectly through MacAndrews & Forbes Holdings Inc., of which Mr. Perelman is the sole stockholder (together with certain of its affiliates (other than the Company or its subsidiaries), “MacAndrews & Forbes”), beneficially owned approximately 77% of the combined voting power of the outstanding shares of the Company’s Voting Capital Stock as of the Record Date that are entitled to vote at the 20112013 Annual Meeting.
The presence, in person or by duly submitted proxy, of the holders of a majority in total number of votes of the issued and outstanding shares of Voting Capital Stock entitled to vote at the 20112013 Annual Meeting is necessary to constitute a quorum in order to transact business at such meeting. Abstentions and, as there is at least one “routine” matter (under applicable NYSE rules) for consideration at the 20112013 Annual Meeting, “broker non-votes,” if any, will be included in the calculation of the number of shares present at the 20112013 Annual Meeting for the purposes of determining a quorum. “Broker non-votes” are shares held by a broker, trustee or nominee that are not voted because the broker, trustee or nominee does not have discretionary voting power on a particular proposal and does not receive voting instructions from the beneficial owner of the shares. Brokers will not be allowed to vote shares as to which they have not received voting instructions from the beneficial owner with respect to Proposal Nos.No. 1 (the election of directors), 3(“say-on-pay”) or 4(“say-on-frequency”). Accordingly, broker non-votes will not be counted as a vote for or against these proposals.this proposal. For shares as to which they have not received voting instructions from the beneficial owner, brokers will be able to vote on Proposal No. 2 (ratification of the Company’sAudit Committee’s selection of its independent registered public accounting firm for 2011)2013), as this is considered a “routine” matter under applicable NYSE rules for which brokers have discretionary voting power.
MacAndrews & Forbes has informed the Company that it will duly submit proxies (1)FORthe election to the Board of Directors of each of the 1112 nominees identified in this Proxy Statement (all of whom currently are directors of the Company);Statement; and (2) FORthe ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011; (3) FORthe non-binding, advisory approval of the Company’s executive compensation; and (4) for recommending, on a non-binding, advisory basis, conducting future non-binding, advisory votes on executive compensation everyTHREE (3) YEARS.2013. Accordingly, there will be a quorum and the affirmative vote of MacAndrews & Forbes is sufficient, without the concurring vote of any of the Company’s other stockholders, to approve and adopt Proposal Nos. 1 2, 3 and 42 to be considered at the 20112013 Annual Meeting, as aforesaid.
If shares of Class A Common Stock are held as of the Record Date for the account of participants under the Revlon Employees’ Savings, Investment and Profit Sharing Plan (the “401(k) Plan”), the trustee for the 401(k) Plan will vote those shares pursuant to the instructions given by the 401(k) Plan participants on their respective voting instruction forms. If the trustee does not otherwise receive voting instructions for shares held on account of a 401(k) Plan participant, the trustee, in accordance with the 401(k) Plan trust agreement, will vote any such unvoted shares in the same proportion as it votes those shares allocated to 401(k) Plan participants’ accounts for which voting instructions were received by the trustee. 401(k) Plan participants must cast their votes in accordance with the instructions provided in the proxy materials so that they are received by 11:59 p.m. Eastern Time on May 26, 201124, 2013 to allow the trustee time to receive such voting instructions and vote on behalf of participants in the 401(k) Plan. Voting instructions received from 401(k) Plan participants after this deadline, under any method, will not be considered timely and will be voted by the trustee at the 20112013 Annual Meeting in the manner described in this paragraph above.
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The accompanying form of proxy is being solicited on behalf of the Company’s Board of Directors. WeThe Company will bear all costs in connection with preparing, assembling and furnishing this Proxy Statement and related materials, including reimbursing banks, brokerage houses and other custodians, nominees, agents and fiduciaries for their reasonableout-of-pocket expenses for forwarding proxy and solicitation materials to stockholders. The Company has hired Broadridge to assist in the distribution and on-line hosting of proxy materials (including the provision of electronic voting methods) for the 20112013 Annual Meeting. The estimated fee is approximately $10,500,$11,000, plusout-of-pocket expenses, such as postage.
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” stockholder materials, such as proxy statements, information statements and annual reports. This means that only one copy of our Internet Notice or proxy materials, as the case may be, may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of our Internet Notice or the 20112013 proxy materials, as the case may be, to you if you write us at the following address: Revlon, Inc., Investor Relations Department, 237 Park Avenue, New York, NY 10017; or our proxy distributor at the following address: Broadridge, 51 Mercedes Way, Edgewood, NJ 11717. If you want to receive separate copies of the stockholder materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address. In the interest of reducing costs and promoting environmental responsibility, we encourage our stockholders to review electronic versions of our proxy materials, via the Internet.
The Company’s Board of Directors, pursuant to the Company’s By-laws, has fixed the number of directors at The Board of Directors has been informed that all of the nominees are willing to serve as directors, but if any of them should decline or be unable to serve, the Board of Directors may by resolution provide for a lesser number of directors or designate substitute nominees, in which event the individuals appointed as proxies will vote as directed as to the election of any such substitute nominee. The Board of Directors has no reason to believe that any nominee will be unable or unwilling to serve.eleven (11),12, effective as of the date of the 20112013 Annual Meeting. The 1112 directors nominated for election by the Board of Directors, upon recommendation of the Board’s Nominating and Corporate Governance Committee, will be elected at the 20112013 Annual Meeting to serve until the Company’s next Annual Meetingannual stockholders’ meeting and until their successors are duly elected and shall have been qualified. All of the nominees currently are members of the Board of Directors.Directors (other than Ms. Cantor who is a new director nominee for the Company). All director nominees, if elected, are expected to serve until the next annual stockholders’ meeting. The Company has been advised that, for personal reasons and not as a result of any disagreement with the Company on any matter relating to its operations, policies or practices, each of Messrs. Paul Bohan and Richard Santagati will not stand for re-election at the 2013 Annual Meeting.
for which they have not received voting instructions from the beneficial owner. In light of the application of plurality voting to the electionVOTE REQUIRED AND BOARD OF DIRECTORS’ RECOMMENDATION1112 nominees identified in this Proxy Statement requires the affirmative vote of a plurality of the votes cast by the holders of shares of Voting Capital Stock present in person or represented by proxy at the 20112013 Annual Meeting and entitled to vote. With respect to Proposal No. 1, all proxies properly submitted to the Company, unless such proxies are revoked, will be voted in accordance with the instructions given by the person submitting such proxy or, in the absence of such instructions, will be votedFORthe election to the Board of Directors of each of the 1112 nominees identified in this Proxy Statement. Brokers do not have the ability to vote on “non-routine” matters, including the election of directors, as to shares4
The Board of Directors unanimously recommends that stockholders vote FOR the election to the Board of Directors of each of the 1112 nominees identified below.
The name, age (as of December 31, Mr. Perelman Mr. Bernikow (72) has been a Director of the Company and of Products Corporation since September 2003. Mr. Bernikow has served on the Board of Directors of Premier American Bank, N.A. since January 2010 as well as on the Board of Directors of such bank’s parent holding company, Bond Street Holdings, Inc., since October 2010. From 1998 until his retirement in May 2003, Mr. Bernikow served as the Deputy Chief Executive Officer of Deloitte & Touche LLP (“ Ms. Cantor (55), who is a new director nominee for the Company, is a Partner of Alternative Investment Management, LLC, an independent privately-held investment management firm (“Alternative Investment Management”), a position she has held since January 2010. In addition, Ms. Cantor is the co-founder and Managing Director of Hudson James Group LLC, a strategic advisory firm providing consulting services in the public and private sectors. Ms. Cantor also serves as the Chairman of the Board of Trustees of the Virginia Retirement System, for which she is a member of its Audit and Compliance Committee. Ms. Cantor served as a Managing Director of the New York Private Bank & Trust (the wealth management division of Emigrant Bank) from January 2008 through December 2009. From 1996 to January 2008, she served as the Founder and Executive Director of the Virginia College Savings Plan, an independent agency of the Commonwealth of Virginia. Ms. Cantor served from 1990 to 1997 as Vice President of Richmond Resources, Ltd. and from 1985 to 1990 as Vice President of Goldman, Sachs & Co. She previously was an associate at Kaye Scholer LLP from 1983 to 1985. Ms. Cantor has served on the boards of directors of the following public reporting companies within the last five (5) years: Media General, Inc. (“Media General”) (2005 — present), for which she also currently serves as chair of its audit committee; Domino’s Pizza, Inc. (“Domino’s Pizza”) (2005 — present), for which she also currently serves as chair of its audit committee; The Edelman Financial Group Inc. (2011 — 2012); and Universal Corporation (2012 — present), for which she also currently serves as a member of its audit committee. Mr. Dinh (44) has been a Director of the Company since June 2012. Mr. Dinh is the founding partner of Bancroft PLLC, a law and strategic consulting firm which he founded in 2003, and a tenured law professor at the Georgetown University Law Center, where he has taught since 1996. In addition, Mr. Dinh serves as the General Counsel and Corporate Secretary of Strayer Education, Inc., an education services holding company that owns Strayer University, which holding company he joined in 2010. From 2001 to 2003, Mr. Dinh served as Assistant Attorney General for Legal Policy at the U.S. Department of Justice. Mr. Dinh serves as a member of the Company’s Nominating and Corporate Governance Committee. Mr. Dinh has served on the Boards of Directors of the following public reporting companies within the last five years: News Corporation (2004 — present); M & F Worldwide (2007 — 2011 (note, M & F Worldwide ceased being a public reporting company under the Exchange Act in December 2011)); The Orchard, Inc. (2007 — 2010); and the Company (2012 — present). Mr. Ennis 2010)2012), principal occupation for the last five years, public company board service for the last five years, selected biographical information and period of service as a Director of the Company of each of the nominees for election as a director are set forth below.(67) (69)has been Chairman of the Board of Directors of the Company and of Revlon Consumer Products Corporation, the Company’s wholly-owned operating subsidiary (“Products Corporation”), since June 1998 and a Director of the Company and of Products Corporation since their respective formations in 1992. Mr. Perelman has been Chairman of the Board and Chief Executive Officer of MacAndrews & Forbes, Holdings Inc. (“MacAndrews & Forbes”), a diversified holding company, and certain of its affiliates since 1980. Mr. Perelman has served on the Boards of Directors of the following companies which were required to file reports under the Exchange Act or were registered investment companies under the Investment Company Act of 1940 (the “1940 Act”) (in either case, referred to herein as “public reporting companies”) within the last five years: the Company (1992 — present); Products Corporation (1992 — present); REV Holdings LLC (2002 — 2006); Scientific Games Corporation (“Scientific Games”) (2003 — present); Allied Security Holdings LLC (“Allied Security”) (2004 — 2008); and M&F & F Worldwide Corp. (1995 — present), a holding company that owns and operates various businesses (“M & F Worldwide”), for which Mr. Perelman has served as Chairman of the Board of Directors since 2007 and as a director since 1995 (note, M & F Worldwide ceased being a public reporting company under the Exchange Act in December 2011).M&F Worldwide”D&T”).(40)(42) has beenserved as the Company’s and Products Corporation’s President and Chief Executive Officer since May 2009. Mr. Ennis has served as a Director of the Company and of Products Corporation since March 2009. Mr. Ennis served as President, Revlon International from May 2008 to March 2009. Mr. Ennis served as the Company’s and Products Corporation’s Executive Vice President and Chief Financial Officer from November 2006 to May 2009, Treasurer from June 2008 to May 2009, and Corporate Controller and Chief Accounting Officer from September 2006 to March 2007. From March 2005 to September 2006, Mr. Ennis served as the Company’s Senior Vice President, Internal Audit. From 1997 through 2005, Mr. Ennis held several senior financial positions with Ingersoll-Rand Company Limited, a NYSE-listed company, where his duties included regional responsibility for Internal Audit in Europe and global responsibility for financial planning and analysis. Mr. Ennis began his career in 1991 with Arthur Andersen in Ireland. Mr. Ennis is a Chartered Accountant and member of the Institute of Chartered Accountants in Ireland. Mr. Ennis has served as a director of the Ireland — U.S. Council, a non-profit organization that seeks to build business links between America and Ireland, since November 2009. Mr. Ennis has a Bachelor of Commerce Degree from University College, Dublin, Ireland, and a Master of Business Administration Degree from New York University, New York, NY. Mr. Ennis has served on the Boards of Directors of the following public reporting companies which were required to file reports under the Exchange Act within the last five years: the Company (2009 — present) and Products Corporation (2009 — present).Mr. Kennedy (64) has been the Company’s and Products Corporation’s Vice Chairman since May 2009. Mr. Kennedy has served as a Director of the Company and of Products Corporation since September 2006. Mr. Kennedy has also served as Senior Executive Vice President of MacAndrews & Forbes since May 2009. Since April 2011, Mr. Kennedy has served as Vice Chairman and Chief Administrative Officer of Scientific Games (after serving as Vice Chairman since November 2010 and non-executive Vice Chairman since late 2009). Mr. Kennedy served as the Company’s and Products Corporation’s President and Chief Executive Officer from September 2006 to May 2009, and Executive Vice President, Chief Financial Officer and Treasurer from March 2006 to September 2006, and as the Company’s Executive Vice President and Products Corporation’s President, International from June 2002 until March 2006. From 1998 until 2001, Mr. Kennedy was Managing Director (CEO) and a member of the Board of Directors ofCoca-Cola Amatil Limited, a publicly-traded company headquartered in Sydney,5
Mr. Kennedy (66) has been the Company’s and Products Corporation’s Vice Chairman of the Board of Directors since May 2009. Mr. Kennedy has served as a Director of the Company and of Products Corporation since September 2006. Mr. Kennedy has also served as Senior Executive Vice President of MacAndrews & Forbes since May 2009. Mr. Kennedy served as Chief Administrative Officer of Scientific Games from April 2011 to March 2012. Mr. Kennedy has served as Vice Chairman of Scientific Games since October 2009. Mr. Kennedy served as the Company’s and Products Corporation’s President and Chief Executive Officer from September 2006 to May 2009, and Executive Vice President, Chief Financial Officer and Treasurer from March 2006 to September 2006, and as the Company’s Executive Vice President and Products Corporation’s President, International from June 2002 until March 2006. From 1998 until 2001, Mr. Kennedy was Managing Director (CEO) and a member of the Board of Directors of Coca-Cola Amatil Limited, a publicly-traded company headquartered in Sydney, Australia and listed on the Sydney Stock Exchange (“Coca-Cola Amatil”). From 1992 to 1997, Mr. Kennedy served as General Manager of the Coca-Cola USA Fountain Division, a unit of The Coca-Cola Company (“Coca-Cola”), which he joined in 1980. Mr. Kennedy has served on the Boards of Directors of the following public reporting companies within the last five years: the Company (2006 — present); Products Corporation (2006 — present); and Scientific Games (2009 — present).
Ms. Kurzman (43) has been a Director of the Company since February 2013. Ms. Kurzman serves as President of Nexus Management Group, Inc. (“Nexus Management”), a talent representation and consulting group which she founded in 2004. Prior to founding Nexus Management, Ms. Kurzman joined Epic/Sony Music in 1997 as Vice President of Worldwide Marketing and held positions of increasing responsibility there until 2004. From 1992 to 1997, Ms. Kurzman held positions of increasing responsibility at Arista Records, including serving as Director of Artist Development.
Ms. Lee (56) (58)has been a Director of the Company since January 2006. Ms. Lee is Chairman and Chief Executive Officer of BET Networks (“BET”), a division of Viacom Inc., a global media and entertainment company, that owns and operates Black Entertainment Television. Ms. Lee’s career atLee has held executive management positions of increasing responsibility with BET begansince joining that company in 1986 as Vice President and General Counsel. In 1992, she was named Executive Vice President of Legal Affairs and Publisher of BET’s magazine division, while continuing to serve as BET’s General Counsel. In 1995, Ms. Lee assumed responsibility for BET’s strategic business development and was named President and Chief Operating Officer in 1996.1986. Prior to joining BET, Ms. Lee was an attorney with the Washington, D.C.-based law firm of Steptoe & Johnson. Ms. Lee serves as a member of the Company’s Nominating and Corporate Governance Committee. Ms. Lee has served on the Boards of Directors of the following public reporting companies which were required to file reports under the Exchange Act within the last five years: Eastman Kodak Company (“Kodak”) (1999 — present)2011); WGL
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Ms. Mellon (43) (45)has been a Director of the Company since August 2008. Ms. Mellon is the Chief Creative OfficerPresident of TMellon Enterprises LLC. In 1996, Ms. Mellon founded, and Founder ofthereafter until November 2011 served in a senior executive capacity with, J. Choo Limited (“Jimmy Choo”), a leading manufacturer and international retailer of glamorous,ready-to-wear women’s shoes and accessories based in London, England. Ms. Mellon has served in a senior executive capacity with Jimmy Choo since its inception in 1996.England, including serving most recently as Chief Creative Officer. Prior to that, Ms. Mellon served as accessories editor forBritish Voguemagazine, since 1990, and previously held positions atMirabellamagazine and Phyllis Walters Public Relations. Ms. Mellon also serves on the Board of Directors and on the Creative Advisory Board of The H Company Holdings, LLC, a privately held holding company which owns and manages the Halston fashion design company. Ms. Mellon has served on the BoardsBoard of Directors of the following companies which were required to file reports under the Exchange Actpublic reporting company within the last five years: the Company (2008 — present).
Mr. Schwartz (61)(63) has been a Director of the Company since November 2007 and a Director of Products Corporation since March 2004. Mr. Schwartz has served as Executive Vice Chairman and Chief Administrative Officer of MacAndrews & Forbes since October 2007, and as Chief Executive Officer of M&F Worldwide since January 2008. Prior to that, Mr. Schwartz was M&F Worldwide’s Acting Chief Executive Officer and General Counsel since September 2007 and its Executive Vice President and General Counsel since 1996.2007. Mr. Schwartz served as Senior Vice President of MacAndrews & Forbes from 1989 to 1993 and as Executive Vice President and General Counsel of MacAndrews & Forbes and various of its affiliates from 1993 to 2007. Mr. Schwartz is a memberserves as the Chairperson of the Board of Trustees of Kenyon College. In addition, Mr. Schwartz is also a member of the Board of Visitors of the Georgetown University Law Center. Mr. Schwartz serves as a member of the Company’s Compensation Committee. Mr. Schwartz has served on the Boards of Directors of the
following public reporting companies which were required to file reports under the Exchange Act within the last five years: REV Holdings LLC (2002 — 2006); Scientific Games (2003 — present); Products Corporation (2004 — present); Harland Clarke Holdings Corp. (2005 — present); Allied Security (2007 — 2008); the Company (2007 — present); and M&F & F Worldwide (2008 — present)present; note, M & F Worldwide ceased being a public reporting company under the Exchange Act in December 2011).
Ms. Seifert (61) (63)has been a Director of the Company since January 2006. Ms. Seifert has been ChairpersonPresident of Katapult, LLC, a business consulting company, since July 2004. Ms. Seifert served as Corporate Executive Vice President — Personal Care of Kimberly-Clark Corporation, a global health and hygiene company (“Kimberly-Clark”), from 1999 until her retirement in June 2004. Ms. Seifert joined Kimberly-Clark in 1978 and, prior to her retirement, served in several senior executive positions in connection with Kimberly-Clark’s domestic and international consumer products businesses. Prior to joining Kimberly-Clark, Ms. Seifert held management positions at The Procter & Gamble Company, Beatrice Foods, Inc. and Fort Howard Paper Company. Ms. Seifert serves as a member of each of the Company’s Audit Committee and its Compensation Committee. Ms. Seifert has served on the Boards of Directors of the following public reporting companies which were required to file reports under the Exchange Act within the last five years: Eli Lilly & Company (1995 — present), for which she also currently serves as a member of its audit committee (“Eli Lilly”); Albertson’s Inc. (2004 — 2006); Paperweight Development Corp. (2004 — present) (“Paperweight Development”); Appleton Papers Inc. (2004 — present) (“Appleton”); the Company (2006 — present); Lexmark International, Inc. (2006 — present) (“Lexmark”); and Supervalu Inc. (2006 — present), for which she also currently serves as a member of its audit committee2013) (“Supervalu”).
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The Board of Directors currently has the following standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee (the “Governance Committee”). Each of these committees and their functions are described in further detail below.
The Company is a “controlled company” (i.e., one in which more than 50% of the voting power for the election of directors is held by an individual, a group or another company) within the meaning of the rules of the New York Stock Exchange (the “NYSE”). Accordingly, the Company is not required under the NYSE rules to have a majority of independent directors, a nominating and corporate governance committee or a compensation committee (each of which, under the NYSE’s rules, would otherwise be required to be comprised entirely of independent directors). While the Company is not required under NYSE rules to satisfy the above-listed NYSE corporate governance requirements due to its “controlled company” status, the Board has determined that more than a majority of its current directors (including Messrs. Bernikow, Bohan, Dinh, Feldberg and Santagati and Mses. Kurzman, Lee, Mellon and Seifert), as well as Ms. Cantor, a new director nominee, qualify as independent directors within the meaning of Section 303A.02 of the NYSE Listed Company Manual and under the Board Guidelines for Assessing Director Independence, which the Board adopted in accordance with Section 303A.02 of the NYSE Listed Company Manual. The Board Guidelines for Assessing Director Independence are available atwww.revloninc.com under the heading Investor Relations (Corporate Governance). Notwithstanding the fact that the Company qualifies for the “controlled company” exemption, the Company maintains the Governance Committee and the Compensation Committee. The Company maintains the Governance Committee (comprised of Messrs. Feldberg (Chairman), In October 2009, the Company SantagatiBohan, Dinh and BohanSantagati and Ms. Lee), and the Board of Directors has determined that all members of the Governance Committee qualify as independent directors within the meaning of Section 303A.02 of the NYSE Listed Company Manual and under the Board Guidelines for Assessing Director Independence. The Company also maintains the Compensation Committee (comprised of Messrs. Bernikow (Chairman), Santagati and Schwartz and Ms. Seifert), and the Board has determined that three of the four directors on the Compensation Committee (Mr. Bernikow, Mr. Santagati and Ms. Seifert) qualify as independent directors within the meaning of Section 303A.02 of the NYSE Listed Company Manual and under the Board Guidelines for Assessing Director Independence and also qualify as “non-employee directors” within the meaning of Section 16 of the Exchange Act and as “outside directors” under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).closedconsummated a voluntary exchange offer transaction, pursuant to which Revlon, Inc. issued to stockholders (other than MacAndrews & Forbes and certain of its affiliates) 9,336,905 shares of Preferred Stock (the “Exchange“2009 Exchange Offer”). In connection with the 2009 Exchange Offer, the Company entered into a Contribution and Stockholder Agreement, dated August 9, 2009, as amended, with MacAndrews & Forbes, pursuant to which the parties agreed, among other things, that, until October 8, 2013, the Company will continue to maintain a majority of independent directors on its Board of Directors, each of whom meets the “independence” criteria as set forth in Section 303A.02 of the NYSE Listed Company Manual (see “Certain Relationships and Related Transactions — Contribution and Stockholder Agreement”).
During 2010,2012, the Board of Directors held sixten meetings and acted six times by unanimous written consent; the Audit Committee held six meetings; the Compensation Committee held seven meetings;four meetings and acted once by unanimous written consent; and the Governance Committee held six meetings.8five meetings and acted once by unanimous written consent.
While the Board has not adopted a formal policy regarding directors’ attendance at the Company’s annual stockholders’ meeting, directors are invited to attend such meetings.meeting. One member of the Company’s Board of Directors attended the Company’s 20102012 Annual Stockholders’ Meeting.
The Company believes that its board leadership structure is appropriate given the specific circumstances of the Company, as its Board continues to function effectively and efficiently. Notwithstanding the fact that the Company is a “controlled” company, more than a majority of the Company’s Directors are independent under applicable SEC and NYSE rules. The Board has established audit, Set forth below is a summary of the nominatinggovernance and compensation committees, each operating under written charters, to assist the Board in its oversight functions, and in each case those committees are comprised of at least a majority of independent Directors (with each of the Board’s Audit Committee and Governance Committee being comprised entirely of independent directors and three of the four members of the Compensation Committee being independent directors). The qualifications and experience of nominees for board service and committee membership are reviewed annually by the Governance Committee. Nominees for board membership are then recommended by such committee for appointment by the Board. Respective committee chairmen lead each committee. The Company has not established a “lead director” role. At Board and committee meetings, the Chairman of the Board and the Chairman of each such committee, as applicable, presides for the purpose of conducting an orderly and efficient meeting. Independent directors or any other director may lead or initiate discussion, in the interest of promoting thorough consideration of any issue before the Board or any committee.of its committees. The Company has historically maintained separate positions of Chairman and Chief Executive Officer. Mr. Perelman, Chairman and Chief Executive Officer of MacAndrews & Forbes, has held the position of Chairman of the Company’s Board since June 1998 and Mr. Ennis has held the position of President and Chief Executive Officer of the Company since May 2009. The Chairman provides overall leadership to the Board in its oversight function, while the Chief Executive Officer provides leadership in respect to theday-to-day management and operation of the Company’s business. The Board and each committeeof its committees conduct annual self-assessments to review and monitor their respective continued effectiveness. As part of its 20102012 self-assessment exercise, the Board determined, among other things, that its size, composition and structure were appropriate. The Company believes thisthat its separation of the Chairman and Chief Executive Officer positions and its overall board leadership structure are appropriate.Company’s respective Directors’nominees’ experience, qualifications (including management experience, education and professional training) and background (including public company board experience and familiarity with the Company, including past service on the Company’s Board of Directors), which, among other factors, including as summarized in each Director’sindividual’s biographical information presented above in this Proxy Statement, and as set forth below, support their respective qualifications to continue to serve on the Company’s Board of Directors, or in the case of Ms. Cantor, to be elected to the Board of Directors. Without limiting the foregoing —
| • | Mr. | ||
| • | Ms. Cantor: Ms. Cantor’s senior executive experience in the areas of legal, investment and financial management (including currently serving as Partner of Alternative Investment Management and as Chairman of the Board of Trustees of the Virginia Retirement System), her accounting experience and financial expertise, and her significant public company directorship and committee experience (including at Media General, Domino’s Pizza and Universal Corporation) qualify her to serve on the Company’s Board. |
| • | Mr. |
General for Legal Policy for the U.S. Department of | |
| • | Mr. | ||
| • | Professor |
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| Partners), his business experience (including serving as Senior Advisor at Morgan |
| • | Mr. | ||
| • | Ms. |
| • | Ms. Lee: Ms. Lee’s senior executive experience (including serving in various senior executive roles at BET, including currently serving as its Chairman and Chief Executive Officer), her legal experience (including having practiced as an attorney at the law firm of Steptoe & Johnson and then as General Counsel of BET), her public company board experience (including at | ||
| • | Ms. | ||
| • | Mr. | ||
| • | Mr. |
at | |
| • | ||
Ms. |
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The Audit Committee is comprised of Messrs. Bernikow (Chairman), Bohan and Feldberg and Ms. Seifert, each of whom the Board of Directors has determined satisfies the NYSE’s and the SEC’s audit committee independence and financial experience requirements. Each of these directors served as a member of the Audit Committee during all of The Company has determined that Mr. Bernikow qualifies as an “audit committee financial expert,” under applicable SEC rules. In accordance with applicable NYSE listing standards, the Company’s Board of Directors has considered Mr. Bernikow’s simultaneous service on the audit committees of more than three public companies, namely the audit committees of the Company, Casual Male, Mack-Cali and the UBS Funds, and has determined that such service does not impair his ability to effectively serve on the Company’s Audit Committee as, among other things, Mr. Bernikow is retired and, accordingly, has a 20102012 and each of these directors remained a member of the Audit Committee as of the date of this Proxy Statement.more flexible schedule and more time to commit to service as an Audit Committee and Board member, including on a full-time basis, if necessary; he has significant professional accounting experience and expertise, which renders him highly qualified to effectively and efficiently serve on multiple audit committees; and the audit committees of the UBS Funds effectively function as a single, consolidated audit committee.
The Audit Committee operates under a comprehensive written charter, a printable and current copy of which is available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Pursuant to its charter, the Audit Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities with respect to, among other things, the integrity of the Company’s financial statements and disclosures; the Company’s compliance with legal and regulatory requirements; the appointment, compensation, retention and oversight of the Company’s independent auditors, as well as their qualifications, independence and performance; and the performance of the Company’s internal audit functions. The Audit Committee is also responsible for preparing the annual Audit Committee Report, which is required under SEC rules to be included in this Proxy Statement (see “— Audit“Audit Committee Report,” below).
The Audit Committee has established procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. These complaint procedures are described in the Audit Committee’s charter, a printable and current copy of which is available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Management represented to the Audit Committee that the Company’s audited consolidated financial statements for the fiscal year ended December 31, The Audit Committee discussed with the Company’s independent registered public accounting firm those matters required to be discussed by Auditing Standards No. 61, as amended (AICPA,Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T, including information concerning the scope and results of the audit and information relating to KPMG LLP’s20102012 were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed such audited consolidated financial statements with management and KPMG LLP, the Company’s independent registered public accounting firm.11
The Audit Committee has received the written disclosures and the letter from the Company’s independent registered public accounting firm, as required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with the Company’s independent registered public accounting firm that firm’s independence.
The Audit Committee also reviewed, among other things, the amount of fees paid to the independent registered public accounting firm for audit and permissible non-audit services (see “Audit Fees” in this Proxy Statement, below). The Audit Committee has satisfied itself that KPMG LLP’s provision of audit and non-audit services to the Company is compatible with KPMG LLP’s independence.
Based on the Audit Committee’s review of and discussions regarding the Company’s audited consolidated financial statements and the Company’s internal control over financial reporting with management, the Company’s internal auditors and the independent registered public accounting firm and the other reviews and discussions with the independent registered public accounting firm referred to in the preceding paragraph, subject to the limitations on the Audit Committee’s roles and responsibilities described above and in the Audit Committee charter, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 20102012 for filing with the SEC.
Respectfully submitted,
Audit Committee
Alan S. Bernikow, Chairman
Paul J. Bohan
Meyer Feldberg
Kathi P. Seifert
The Compensation Committee is comprised of Messrs. Bernikow (Chairman), Santagati and Schwartz and Ms. Seifert. Each of these directors served as a member of the Compensation Committee during all of 2010, other than Mr. Santagati who was appointed to such committee in February 2010,2012 and each of these directors remained a member of the Compensation Committee as of the date of this Proxy Statement.
The Compensation Committee operates under a comprehensive written charter, a printable and current copy of which is available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Pursuant to its charter, the Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the Company’s Chief Executive Officer (the “CEO”), evaluates the CEO’s performance in light of those goals and objectives and determines, either as a committee or together with the Board of Directors, the CEO’s compensation level based on such evaluation. The Compensation Committee also reviews and approves compensation and incentive arrangements for the Company’s executive officers and such other employees of the Company as the Compensation Committee may determine to be necessary or desirable from time to time. The Compensation Committee also reviews and approves awards pursuant to the Third Amended and Restated Revlon, Inc. Stock Plan (the “Stock Plan”) and the Revlon Executive Incentive Compensation Plan (the12
The Compensation Committee is also responsible for reviewing and discussing with the Company’s Chief Executive Officer and Chief Administrative Officerappropriate officers the Compensation Discussion and Analysis required by the SEC’s rules and, based on such review and discussion, (i) determining whether to recommend to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s annual report onForm 10-K or in the annual proxy statement (and incorporated by reference into the annual report onForm 10-K) and (ii) producing the annual Compensation Committee Report and approving its inclusion in the Company’s annual report onForm 10-K or in the annual proxy statement.
Pursuant to the terms of the Incentive Compensation Plan, the Compensation Committee may delegate to an administrator (who must be an employee or officer of the Company) the power and authority to administer the Incentive Compensation Plan for the Company’s employees, other than its Chief Executive Officer and certain other officers who constitute “covered employees” as defined in Treasury Regulation § 1.162-27(c)§1.162-27(c)(2) (“Section 162(m) Officers”). Section 157(c) of the Delaware General Corporation Law (the “DGCL”) provides that the Company’s Board of Directors (or the Compensation Committee acting on behalf of the Board) may delegate authority to any officer of the Company to designate grantees of equity awards under the Stock Plan other than himself or herself and to determine the number of such equity awards to be issued. The Compensation Committee did not delegate any such authority for 2010.
For a discussion of the role of the Company’s executive officers and compensation consultants in recommending the amount or form of executive and director compensation, and the consideration of any possible conflicts of interest with the Compensation Committee’s outside compensation advisor, see “— Compensation Discussion and Analysis — Role of the Compensation Committee.”
The Compensation Committee does not have any interlocks or insider participation requiring disclosure under the SEC’s executive compensation rules.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth below in this Proxy Statement with the Company’s appropriate officers. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement, as well as in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, Respectfully submitted, Compensation Committee Alan S. Bernikow, Chairman Richard J. Santagati Barry F. Schwartz Kathi P. Seifert2010,2012, including by incorporation by reference to this 20112013 Proxy Statement.
The Governance Committee is comprised of Messrs. Feldberg (Chairman), SantagatiBohan, Dinh and BohanSantagati and Ms. Lee. Each of these Directors served as a member of the Governance Committee during all of 2010, other2012 (other than13
The Governance Committee operates under a comprehensive written charter, a printable and current copy of which is available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Pursuant to its charter, the functions of the Governance Committee include, among other things: identifying individuals qualified to become Board members; selecting or recommending to the Board proposed nominees for Board membership; recommending directors to the Board to serve on the Board’s standing committees; overseeing the evaluation of the Board’s performance; evaluating the CEO’s and senior management’s performance; overseeing the Revlon, Inc. Related Party Transaction Policy; overseeing the Company’s processes for succession planning for the CEO and other senior management positions; and periodically reviewing the Board’s Corporate Governance Guidelines and Board Guidelines for Assessing Director Independence and recommending changes, if any, to the Board.
The Governance Committee identifies individuals qualified to become members of the Board when any vacancy occurs by reason of disqualification, resignation, retirement, death or an increase in the size of the Board, and selects or recommends that the Board select director nominees for each annual meeting of stockholders and director nominees to fill vacancies on the Board that may occur between annual meetings of stockholders. In evaluating director nominees, the Governance Committee is guided by, among other things, the principles for Board membership expressed in the Company’s Corporate Governance Guidelines, which are available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance). The Governance Committee, in identifying and considering candidates for nomination to the Board, considers, in addition to the requirements set out in the Company’s Corporate Governance Guidelines and the Governance Committee’s charter, the quality of the candidate’s experience, the Company’s needs and the range of talent and experience represented on the Board. In its assessment of each potential candidate, the Governance Committee will consider the nominee’s reputation, judgment, accomplishments in present and prior positions, independence, knowledge and experience that may be relevant to the Company, and such other factors as the Governance Committee determines to be pertinent in light of the Board’s needs over time, including, without limitation, education, diversity, race, gender and other individual qualities and attributes that are expected to contribute to the Board having an appropriate mix of viewpoints. The Governance Committee identifies potential nominees from various sources, such as officers, directors and stockholders, and from time to time retains the services of third party consultants to assist it in identifying and evaluating director nominees.
The Governance Committee will also consider director candidates recommended by stockholders. The process the Governance Committee follows to evaluate candidates submitted by stockholders does not differ from the process it follows for evaluating other director nominees. The Governance Committee may also take into consideration the number of shares held by the recommending stockholder, the length of time that such shares have been held and the number of candidates submitted by each stockholder or group of stockholders over the course of time. Stockholders desiring to submit director candidates must submit their recommendation in writing (certified mail — return receipt requested) to the Company’s Secretary, at Revlon, Inc., 237 Park Avenue, 14th Floor, New York, NY 10017, attention: Michael T. Sheehan. The Governance Committee will accept recommendations for director candidates throughout the year; however, in order for a recommended director candidate to be considered by the Governance Committee for nomination to stand for election at an upcoming annual meeting of stockholders, the recommendation must be received by the Company, as set forth above, not less than 120 days prior to the anniversary date of the date of the14
the stockholder’s name and address, evidence of such stockholder’s ownership of the Company’s Voting Capital Stock, including the number of shares owned and the length of time of ownership, and a statement as to the number of director candidates such stockholder has submitted to the Governance Committee during the period that such stockholder has owned shares of the Company’s Voting Capital Stock, including the names of any candidates previously submitted by such stockholder;
the name of the candidate;
the candidate’s resume or a listing of his or her qualifications to be a director of the Company;
any other information regarding the candidate that would be required to be disclosed in a proxy statement filed with the SEC if the candidate were nominated for election to the Board; and
the candidate’s consent to be named as a director, if selected by the Governance Committee and nominated by the Board.
The Board of Directors has established a process to receive communications from stockholders and other interested parties. Any stockholder or other interested party desiring to communicate with the Board or individual directors (including, without limitation, the non-management directors) regarding the Company may contact either the Board or such director by sending such communication to the attention of the Board or such director, in each case in care of the Company’s Secretary, who is responsible to ensure that all such communications are promptly provided to the Board or such director. Any such communication may be sent by: (i) emailing it to Michael T. Sheehan, Senior Vice President, Deputy General Counsel and Secretary, atmichael.sheehan@revlon.com; or (ii) mailing it to Revlon, Inc., 237 Park Avenue, 14th Floor, New York, NY, 10017, attention: Michael T. Sheehan. Communications that consist of stockholder proposals must instead follow the procedures set forth under “General Rules Applicable to Stockholder Proposals” in this Proxy Statement, below, and, in the case of recommendations of director candidates, “Nominating and Corporate Governance Committee — Stockholder Process for Submitting Director Nominees,” in this Proxy Statement, above. Communications
The Company’s Corporate Governance Guidelines provide that the Company’s Board of Directors will regularly meet in executive session without any member of the Company’s management being present and that the Company’s independent directors will also meet in at least one non-management executive session per year attended only by independent directors. The non-management directors’ and independent directors’ meeting may be a single combined meeting, if the non-management directors are comprised entirely of independent directors. A non-management director will preside over each non-management executive session of the Board, and an independent director will preside over each independent executive session of the Board, although the same director is not required to preside at all such non-management or independent executive sessions. The presiding director at such non-management and independent executive sessions of the Board is determined in accordance with the applicable provisions of the Company’s By-laws, such that the Chairman of the Board of Directors or, in his absence (as is the case with independent executive sessions), a director chosen by a majority of the directors present will preside at such meetings. The Board of Directors met in at least one executive session, attended by only independent directors (all of whom constituted non-management directors), during 2010.152012.
The following table sets forth each of the Named Executive Officersexecutive officers of the Company as of December 31, 2010 (and2012, and their respective current positions with the Company as of the date hereof)hereof (each of whom constitutes a “Named Executive Officer” under this Proxy Statement):
Name | Position | |
Alan T. Ennis | President and Chief Executive Officer | |
Steven Berns | Executive Vice President and Chief Financial Officer | |
Chris Elshaw | Executive Vice President and Chief Operating Officer | |
David L. Kennedy | Vice Chairman | |
Robert K. Kretzman | Executive Vice President and Chief Administrative Officer | |
The following sets forth the age (as of December 31, 2010)2012), positions held with the Company and selected biographical information for the Company’s Named Executive Officersexecutive officers whose biographical information is not otherwise included in this Proxy Statement, above, with the Company’s other Directors:
Mr. Berns (48) has served as the Company’s and Products Corporation’s Executive Vice President and Chief Financial Officer since May 2009. Mr. Berns formerly served as the Company’s and Products Corporation’s Treasurer from May 2009 to February 2010. Mr. Berns previously served as Chief Financial Officer of Tradeweb, LLC from November 2007 to May 2009. From November 2005 until July 2007, Mr. Berns served as President, Chief Financial Officer and Director of MDC Partners Inc. From September 2004 to November 2005, Mr. Berns served as Vice Chairman and Executive Vice President of MDC Partners. Prior to that, Mr. Berns was the Senior Vice President and Treasurer of The Interpublic Group of Companies, Inc. from August 1999 until September 2004. Before that, Mr. Berns held a variety of positions in finance with the Company from April 1992 until August 1999, becoming Senior Vice President and Treasurer in 1996, after having served as the Company’s Vice President, Corporate Finance, Investor Relations. Prior to joining the Company in 1992, Mr. Berns worked at Paramount Communications Inc. and at a predecessor public accounting firm of D&T. Mr. Berns has served as a Director of Shutterstock, Inc. since March 2012 and he currently serves as chairman of that company’s audit committee and as a member of its compensation committee. Mr. Berns served as a Director and member of the audit and compensation committees for LivePerson, Inc. from April 2002 until June 2011. Mr. Berns is a Certified Public Accountant.
Mr. Elshaw (50)(52) has served as the Company’s and Products Corporation’s Executive Vice President and Chief Operating Officer since May 2009. Mr. Elshaw previously served as the Company’s Executive Vice President and General Manager, U.S. Region, from October 2007 until May 2009. From July 2002 until September 2007, Mr. Elshaw held several leadership roles within Revlon International, including Senior Vice President and Managing Director, Europe, Middle East and Canada from May 2006 to October 2007; Managing Director of Europe and the Middle East from December 2003 to May 2006; General Manager of the U.K., Ireland and European Distributor Markets from February 2003 to December 2003; and General Manager of the U.K. and Ireland from July 2002 to February 2003. Prior to joining the Company, Mr. Elshaw held several senior management sales and marketing positions at Bristol-Myers Squibb (Clairol Division) from 1996 until 2002, including serving as General Manager of the U.K. and Ireland from 2000 until 2002. From 1983 to 1995, Mr. Elshaw served in various European senior sales and marketing positions at Alberto Culver. Mr. Elshaw is a board member of the Personal Care Products Council, (formerly known as the Cosmetic, Toiletry & Fragrance Association), a cosmetic and personal care products industry association.
Mr. Kretzman (59) (61)has served as the Company’s and Products Corporation’s Executive Vice President and Chief Administrative Officer since November 2010 and as each of such companies’ General Counsel from January 2000 to March 2011.2010. Formerly, he served as the Company’s and Products Corporation’s General Counsel from January 2000 to March 2011 and Chief Legal Officer from December 2003 to November 2010, and also as the Company’s and Products Corporation’s Executive Vice President, Human Resources from October 2006 to November 2010. Mr. Kretzman formerly served as the Company’s and Products
Corporation’s Secretary from September 1992 to June 2009. Mr. Kretzman served as the Company’s and Products Corporation’s Senior Vice President and General Counsel and Secretary from January 2000 until December 2003. Prior to becoming General Counsel, Mr. Kretzman served as Senior Vice President and Deputy General Counsel and Secretary from March 1998 to January 2000, as Vice President and Deputy General Counsel and Secretary from January 1997 to March 1998, and as Vice President, and SecretaryLaw from September 1992 to January 1997. Mr. Kretzman joined the Company in 1988 as Senior Counsel responsible for mergers and acquisitions. Mr. Kretzman has also served as the Company’s ChiefCorporate Compliance Officer sincefrom January 2000.
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The Company has reviewed and considered all of its compensation plans and practices and does not believe that its compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.
The Company’s senior management is responsible for identifying and managing risks to the Company’s business and the Board’s Audit Committee is responsible for reviewing and discussing that process with management. In accordance with applicable NYSE rules for listed issuers, the Audit Committee maintains an Audit Committee charter that addresses the duties and responsibilities of the Audit Committee, including the requirement that such committee discuss the Company’s guidelines, policies and processes with respect to risk assessment and risk management. As part of the Company’s enterprise risk management function, management identifies internal and external risk factors, monitors identified risks and takes appropriate action to mitigate such identified risks. Specifically, the Company’s internal audit group, with input from the Company’s senior management, leads a comprehensive enterprise risk assessment annually using an established risk management framework. This process identifies and characterizes risks based on the possible impact to the Company’s business and likelihood of occurrence. The Company’s management puts in place appropriate plans to mitigate the risks identified. The risk assessment is also taken into account in the formulation of the internal audit plan for the ensuing year. The Audit Committee reviews and discusses the Company’s risk assessment and risk management guidelines, policies and processes at least annually. Further, the Board reviews the Company’s business plan and receives regular business and financial updates, including progress against the Company’s business plan, at Board meetings, enabling the Board to understand, and remain updated on,regarding, the business risks faced by the Company and the Company’s management of those risks.
Set forth below is a discussion and analysis of all material elements of the Company’s compensation of its Named Executive Officers, including: (i) the objectives of the Company’s compensation program; (ii) what the compensation program is designed to reward; (iii) each element of compensation; (iv) why the Company chooses to pay each element; (v) how the Company determines the amount (and, where applicable, the formula) for each element to pay; and (vi) how each compensation element and the Company’s decisions regarding that element fit into the Company’s overall compensation objectives and may affect decisions regarding other elements of compensation.
A summary of the key actions which the Company took in respect to its For 2012, the Company’s incentive compensation programs were comprised of an annual cash bonus program (the “2012 Annual Bonus Program”) and a long-term cash incentive compensation (“LTIP”) program (the 20102012 Compensation EventsFor 2010, the Company determined to provide merit increases to salaries in March 2010 and to accrue its 2010 bonus program at 100% of target, subject to the Company achieving its 2010 corporate performance goals (i.e., 2010 adjusted EBITDA and free cash flow, as more fully described below).Set forth below is a20102012 compensation programs:programs follows: • Based on the Company’s achievement of 2010 adjusted EBITDA of $260.4 million, representing 96.8% of the Company’s 2010 EBITDA performance goal, and 2010 free cash flow of $82.3 million, representing 110.6% of the Company’s 2010 free cash flow performance goal, in February 2011 the Compensation Committee determined, pursuant to the terms and conditions of the Company’s 2010 incentive compensation programs, that such programs would be funded at 100% of target, which funding level was below the 105% that could have been authorized for payment under the terms of such programs, based upon aggregate achievement. For 2010, the Company’s incentive compensation programs were comprised of a cash bonus “2010 Bonus Program”)“2012 LTIP;” and, a cash-based long-term incentive compensation (“LTIP”) program (the “2010 LTIP Program;” together with the 20102012 Annual Bonus Program, referred to herein collectively as the17
| • | The Company’s corporate performance targets under the |
Based on the Company’s 2012 financial results, in February 2013, the Compensation Committee determined that the Company had achieved 99.5% of its 2012 EBITDA Performance Target and 124.6% of its 2012 Free Cash Flow Performance Target, after all accruals for incentive compensation actually paid at the funding level authorized below, and after adjusting, pursuant to its authority under and in accordance with the terms of the Incentive Compensation Plan, for the impact of certain extraordinary items which were not included in the Company’s budget when such targets were established (including, without limitation, certain restructuring charges, costs incurred in connection with resolving certain litigation, increased insurance premiums, receipt of insurance proceeds relating to the June 2011 fire at the Company’s Venezuela operating facility and results of the Company’s acquisition of certain assets from Bari Cosmetics, Ltd. in July 2012). Taking into account the Company’s 2012 Adjusted EBITDA and free cash flow performance, the fact that there were certain extraordinary and unbudgeted items for which adjustments were made, as noted above, and recognizing that, while the Company’s net sales increased by 4.8% (excluding the impact of foreign currency) from the prior year, the Company’s net sales performance fell slightly short of the Company’s 2012 budget for such item, the Compensation Committee determined, upon management’s recommendation, to fund the 2012 Incentive Compensation Programs at 105%.
In March 2013, the Company paid annual cash bonuses under the 2012 Annual Bonus Program to eligible employees, including its Named Executive Officers, based upon the Compensation Committee’s certification of the extent of the Company’s achievement of its performance targets under such program, individual performance ratings and the degree of achievement by bonus program participants of their individual performance objectives for 2012, subject to the terms of such program.
As has been the case since 2009, the Company does not have an equity award program. In lieu of equity awards, commencing in 2010, the Compensation Committee implemented an LTIP program, and it approved the 2012 LTIP under the Incentive Compensation Plan. In March 2013, the Company paid one-third of the LTIP award earned under its 2012 LTIP to eligible employees, including its Named Executive Officers, based upon the Compensation Committee’s certification of the extent of achievement of the performance targets under the 2012 LTIP and the 3-year payout terms of such program authorized by the
| 1 | Adjusted EBITDA is a non-GAAP financial measure which the Company defines as income from continuing operations before interest, taxes, depreciation, amortization, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses. In calculating Adjusted EBITDA, the Company excludes the effects of gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt, results of and gains/losses on discontinued operations and miscellaneous expenses because the Company’s management believes that some of these items may not occur in certain periods, the amounts recognized can vary significantly from period to period and these items do not facilitate an understanding of the Company’s operating performance. |
| 2 | Free Cash Flow is a non-GAAP measure which the Company defines as net cash provided by operating activities, less capital expenditures for property, plant and equipment, plus proceeds from the sale of certain assets. Free Cash Flow excludes proceeds on sale of discontinued operations. Free Cash Flow does not represent the residual cash flow available for discretionary expenditures, as it excludes certain expenditures such |
Compensation | ||
The Company provided merit salary increases in March 2012.
At the Company’s 2011 Annual Stockholders’ Meeting, approximately 99% of the stockholders who voted on the “say-on-pay” proposal approved the compensation of the Company’s Named Executive Officers, which the Company has considered in determining its compensation policies and decisions and which vote the Company believes provides an endorsement of the Company’s compensation philosophy, processes and practices, which have not varied in any meaningful way since such vote.
The Company’s philosophy is to provide to pay for performance (by basing salary increases upon individual performance and basing incentive compensation payouts upon the achievement of corporate and individual performance targets and objectives); to align the interests of management and employees with corporate performance and shareholder interests, by rewarding performance that is directly linked to achieving the Company’s business plan and strategic goals; and to retain, attract and motivate exceptional performers and key contributors with the skills and experience necessary for the Company to achieve its business plan and strategic goals, which requires that the Company’s compensation programs be competitive with the compensation practices of other companies, as discussed in further detail below. In order to achieve the objectives discussed above, the Company maintains a (i) base salary; (ii) eligibility for performance-based, annual cash bonuses under the Incentive Compensation Plan, contingent upon the Company achieving specific (iii) eligibility for performance-based, long-term incentive compensation under the Incentive Compensation Plan, contingent upon the Company achieving specific performance Prior to 2009, the Company’s long-term incentive compensation had been comprised of annual equity grants (principally, restricted stockand/or stock options) under the Company’s Stock Plan. remaining stock options expired on April 22, 2013). Based on the a compensation packageprograms that isare reasonably designed to satisfy the following objectives:• to pay for performance (by basing salary increases upon individual merit and basing incentive compensation payouts upon the achievement of corporate and individual performance goals and objectives);• to align the interests of management and employees with corporate performance and shareholder interests, by rewarding performance that is directly linked to achieving the Company’s business plan and strategic goals and fostering shareholder value creation over the long term; and• to attract, retain and motivate exceptional performers and key contributors with the skills and experience necessary for the Company to achieve its business objectives, which requires that the Company’s compensation programs be competitive with the compensation practices of other companies, as discussed in further detail below.relatively simple compensation program. This program which consists principally of:Company performance goalstargets and participants achieving individual performance objectives;objectives, with exact bonus payouts based upon the extent of achievement by participants of their respective individual performance objectives (as noted below, under the 2012 Annual Bonus Program, depending on the assessment of individual performance, participants could receive between 25% and 150% of their target award, to enable comparatively higher-performing employees to be rewarded, as long as the overall compensation budget was not exceeded); andgoalstargets and participants’participants achieving “target” performance objectives (which(the above-described elements of compensation, namely, base salary, annual performance-based cash bonus and performance-based long-term incentive compensation are referred to, collectively, in this Proxy Statement, as “total compensation,” unless otherwise noted). Historically, priorHowever, as withSince 2009 during 2010 the Company determinedhas not to implementimplemented an annual equity award program under its Stock Plan. To enableAs of December 31, 2012, none of the Company to maintain total compensation at competitive levels, the Company granted LTIP awards under its Incentive Compensation Plan.In the past, the performance-based and incentive compensation elements of cash bonus and prior equity grants have not resulted in significant wealth accumulation for the Company’s employees, including its Named Executive Officers. The Company’s bonus programs were accrued and paid at 0%, 50%, 75% and 50% of target, respectively, for 2006, 2007, 2008 and 2009.Officers other than Mr. Kennedy held any outstanding stock options (Mr. Kennedy’s$9.84$14.50 NYSE closing price of the Company’s Class A Common Stock on December 31, 2010,2012, all of Mr. Kennedy’s now-expired stock options held bywere “out-of-the-money” on such date, as the Named Executive Officers were “out of the money,” as the18
To enable the Company to maintain total compensation at competitive levels, in 2012 the Company granted LTIP awards under its Incentive Compensation Plan as it has done since 2010.
A history of any stock option currently held bythe Company’s annual cash bonus and LTIP accruals, expressed as a Named Executive Officerpercentage of target, is $25.50 per share.
Incentive Compensation Program: | 2008 | 2009 | 2010 | 2011 | 2012 | |||||||||||||||
Annual Cash Bonus | 75 | % | 50 | % | 100 | % | 98 | % | 105 | % | ||||||||||
LTIP | — | — | 100 | % | 98 | % | 105 | % | ||||||||||||
The Company’s As part of its assessment of the compensation of the Named Executive Officers, the Company also compares Compensation and Human Resources departmentsdepartment and the Compensation Committee, with input from the Compensation Committee’s outside compensation consultant, consider the compensation of the Named Executive Officers in order to balance compensation opportunities and reward and retain the Company’s high-performing executives and incent them to maximize their performance in furtherance of the execution of the Company’s business plan.theeach Named Executive Officers’Officer’s total compensation to the total compensation for executives at comparison group companies.companies, both within and outside of the consumer products industry. The Company seeks to design its total compensation opportunity to be competitive with other leading consumer productsthese comparison group companies, and other companies outside of the consumer products field, as the Company believes that the market for certain executive talent is broader than the consumer products field. When reviewing and setting Named Executive Officer compensation for 2010,2012, the Company compared the total compensation of its executive officers to market compensation data for certain groups of companies in Towers Watson’s U.S. compensation data banks for similarly situated executives (sometimes referred to herein as “competitive benchmark norms” or “competitive benchmarks,” with such companies being referred to herein as the “Comparison Group”). The Comparison Group for 20102012 consisted of the companies listed onAnnex A.A
For 2010,2012, the Named Executive Officers’ total compensation, as an approximate percentage ofcompared against the 50th50th and the 75th75th percentiles of total compensation in the relevant Comparison Group, was as follows: (i) 24%Mr. Ennis was below both the 50th and 13.7%, respectively,the 75th percentiles; (ii) Mr. Berns was at approximately the 50th percentile and was below the 75th percentile; (iii) Mr. Elshaw was above the 50th percentile and below the 75th percentile; and (iv) Mr. Kretzman was above both the 50th and the 75th percentiles. Given the nature of Mr. Kennedy’s role at the Company, which is not a full-time position, there is very limited comparable data available for Mr. Kennedy (Mr. Kennedy did not participate in the Company’s 2010 Incentive Compensation Programs; his base salary for 2010 was 121.7% and 83.4%, respectively, of the 50th and 75th percentiles of base salary in the Comparison Group); (ii) 77.9% and 56.8%, respectively, for Mr. Ennis; (iii) 124% and 86.3%, respectively, for Mr. Elshaw; (iv) 100.7% and 79.6%, respectively, for Mr. Berns; and (v) 149.4% and 100.6%, respectively, for Mr. Kretzman.
Base salary adjustments are considered annually and may be based on individual performance, assumption of new responsibilities, competitive data from the Comparison Group, employee retention efforts and the Company’s overall compensation guidelines and annual salary budget guidelines. Higher annual increases may be made to higher performers and key contributors, provided that the overall increases are within budgeted guidelines.
Each year, the Compensation Committee reviews and establishes the corporate performance value creation, Payouts under the measurestargets for the Company’s incentive compensation program(s),programs, which are intended to have the effect of fostering shareholder over the long term, to ensure that the program design appropriately motivates executives to achieve the Company’s financial and operational performance goals, which are designed to be challenging and linked directly to the Company’s business plan for the year.plan. As more fully described below, for 2010, the components of the Company’s incentive compensation program2012 Incentive Compensation Programs were a cash bonus under the 20102012 Annual Bonus Program, payable in March 2011,2013, to the extent performance goalstargets were achieved, and a cash-basedcash LTIP award under the 20102012 LTIP, Program, payable in three equal annual installments beginning in March 2011,2013, to the extent performance goalstargets were achieved, in three equal annual installments.20102012 Incentive Compensation Programs were contingent upon the achievement of identified corporate performance goals. Additionally, payout to a participant undertargets and, for the 2010 Bonus Program was contingent upon such individual’s achievementindividual, receipt of his or her own individual performance objectives; and, payout to a participant under the 2010 LTIP Program was contingent upon such individual having received a performance rating of “target” or higher under the Company’s 20102012 Performance Management Review process. The Company’s corporate performance goalsAdditionally, the exact payout to a participant under the 2010 Incentive Compensation Programs2012 Annual Bonus Program was the Company’sbased upon such individual’s degree of achievement of19
Under the 20102012 Annual Bonus Program, depending on the assessment of individual performance, participants could receive between 75%25% and 150% of their target award to enable managers to reward higher-performing employees, as long as the overall compensation budget was not exceeded.
The Company’s President and Chief Executive Officer and its Executive Vice President and Chief Administrative Officer develop, for review and approval by the Compensation Committee, the annual objectives against which each Named Executive Officer’s performance is assessed. The Company’s President and Chief Executive Officer in conjunction with the Executive Vice President and Chief Administrative Officer and the Company’s Vice Chairman, develop, for review and approval by the Compensation Committee, the CEO’s objectives to support and drive the execution of the Company’s business strategy. These objectives are derived from the Company’s annual business plan. These objectivesplan and/or long-range plan and are established by the Compensation Committee at the start of the yearperformance period and then reviewed after the end of the yearperformance period to assess and certify the extent to which they have been achieved.
For 2010,2012, the Named Executive Officers’ objectives included both quantitative financial measures and strategic and operational objectives linked directly to achieving the Company’s business strategy. When assessing the Named Executive Officers’ 20102012 performance, in February 20112013 the Compensation Committee reviewed and analyzed detailed and comprehensive documentary support offor each Named Executive Officer’s accomplishments against his respective 20102012 performance objectives, including the following:
Mr. Ennis — President and Chief Executive Officer:
the Company’s management believes that somedegree of these items may not occurachievement of its 2012 EBITDA Performance Target, on which 25% of Mr. Ennis’ target award was based, and the Company’s degree of achievement of its 2012 Free Cash Flow Performance Target, on which 25% of Mr. Ennis’ target award was based;
the Company’s achievement of a 4.8% increase in certain periods,net sales (excluding the amounts recognized can vary significantly from period to period and these items do not facilitate an understandingimpact of foreign currency), on which 20% of Mr. Ennis’ target award was based;
the continued development of the Company’s operating performance.
the Company defines as net cash provided by operating activities, less capital expenditures for property, plantcontinued improvement of the Company’s organizational capabilities through recruitment, succession planning and equipment, plus proceeds fromdevelopment planning, and the salecontinued improvement in the execution of certain assets. Free cash flow excludes proceeds from the saleCompany’s performance management process, on which 10% of discontinued operations. Free cash flow does not represent the residual cash flow available for discretionary expenditures, as it excludes certain expenditures such as mandatory debt service requirements, which for the Company are significant.
20Mr. Ennis’ target award was based; and
the development of a 3-year strategic plan, the execution of identified global growth initiatives, the continued evaluation of acquisition opportunities to complement the Company’s portfolio (including, without limitation, the Company’s consummation of the acquisition of the Pure Ice color cosmetics business in July 2012), the achievement of cost saving opportunities, including the Company’s restructuring announced on September 5, 2012, and the establishment of orderly succession for certain management responsibilities, on which 10% of Mr. Ennis’ target award was based.
Mr. Berns — Executive Vice President and Chief Financial Officer:
the Company’s degree of achievement of its 2012 EBITDA Performance Target, on which 25% of Mr. Berns’ target award was based, and the Company’s degree of achievement of its 2012 Free Cash Flow Performance Target, on which 25% of Mr. Berns’ target award was based;
the Company’s achievement of a 4.8% increase in net sales (excluding the impact of foreign currency), on which 20% of Mr. Berns’ target award was based;
the continued development of the Company’s integrated business planning process and global portfolio planning process and the achievement of inventory management objectives, on which 10% of Mr. Berns’ target award was based;
the continued improvement of the Company’s organizational capabilities through recruitment, succession planning and development planning, and the continued improvement in the execution of the Company’s performance management process, on which 10% of Mr. Berns’ target award was based; and
the achievement of key functional objectives within the Finance area, including the development of a 3-year strategic plan; the continued evaluation of acquisition opportunities to complement the Company’s portfolio (including, without limitation, the Company’s consummation of the acquisition of the Pure Ice color cosmetics business in July 2012); the achievement of cost saving opportunities, including the restructuring announced on September 5, 2012; continued improvements within the information management function to enable a more efficient and effective business application environment; and continued improvements in the Company’s financial closing process, on which 10% of Mr. Berns’ target award was based.
Mr. Elshaw — Executive Vice President and Chief Operating Officer:
the Company’s degree of achievement of its 2012 EBITDA Performance Target, on which 25% of Mr. Elshaw’s target award was based, and the Company’s degree of achievement of its 2012 Free Cash Flow Performance Target, on which 25% of Mr. Elshaw’s target award was based;
the Company’s achievement of a 4.8% increase in net sales (excluding the impact of foreign currency), on which 20% of Mr. Elshaw’s target award was based;
the continued development of the Company’s integrated business planning process and global portfolio planning process and the achievement of inventory management objectives, on which 10% of Mr. Elshaw’s target award was based;
the continued improvement of the Company’s organizational capabilities through recruitment, succession planning and development planning, and the continued improvement in the execution of the Company’s performance management process, on which 10% of Mr. Elshaw’s target award was based; and
the development of a 3-year strategic plan, the execution of identified global growth initiatives, the continued evaluation of acquisition opportunities to complement the Company’s portfolio (including, without limitation, the Company’s consummation of the acquisition of the Pure Ice color cosmetics business in July 2012), and the achievement of cost saving opportunities, including the Company’s restructuring announced on September 5, 2012, on which 10% of Mr. Elshaw’s target award was based.
Mr. BernsKennedy — Executive Vice President and Chief Financial OfficerChairman:
the Company’s degree of achievement of its 2012 EBITDA Performance Target, on which 50% of Mr. Kennedy’s target award was based, and the Company’s degree of achievement of its 2012 Free Cash Flow Performance Target, on which 50% of Mr. Kennedy’s target award was based.
Mr. Kretzman — Executive Vice President and Chief Administrative Officer:
the Company’s degree of achievement of its 2012 EBITDA Performance Target, on which 25% of Mr. Kretzman’s target award was based, and the Company’s degree of achievement of its 2012 Free Cash Flow Performance Target, on which 25% of Mr. Kretzman’s target award was based; | ||
21
the Board of Directors in May 2009 as partcontinued development of the Company’s overallintegrated business planning process and global portfolio planning process and the achievement of inventory management objectives, on which 10% of Mr. Kretzman’s target award was based;
the continued improvement of the Company’s organizational capabilities through recruitment, succession planning was not eligible to (and did not) participateand development planning, and the continued improvement in the 2010 Incentive Compensation Programsexecution of the Company’s performance management process, on which 10% of Mr. Kretzman’s target award was based; and
the achievement of key functional objectives within the Human Resource, Real Estate and Facilities Management and Security functions, including the provision of comprehensive support in his role as Vice Chairman.all aspects of the Company’s business strategy; recruitment of key senior executives globally; implementing cost savings in the Company’s healthcare programs; the achievement of cost saving opportunities, including the restructuring announced on September 5, 2012; negotiating real estate and facility cost savings; the development and preparation of succession plans; and the continued evaluation of acquisition opportunities to complement the Company’s portfolio (including, without limitation, the Company’s consummation of the acquisition of the Pure Ice color cosmetics business in July 2012), on which 10% of Mr. Kretzman’s target award was based.
As noted above, based on the extent of the Company’s achievement of its 20102012 Performance Goals,Targets, in February 2011,2013, the Compensation Committee, determined,applying the formulae set forth in, and pursuant to the terms and conditions of, the 20102012 Incentive Compensation Programs, determined that such programs would be funded at 100% of target.105%. Additionally, in February 2011,2013, based upon a comprehensive review of each Named Executive Officer’s 20102012 performance, the Compensation Committee determined that “target” performance or better had been achieved by each Named Executive Officer and also determined the extent to which the Named Executive Officers had achieved and in certain cases exceeded their respective individual performance objectives (including in the case of Messrs. Ennis, Elshaw, Berns and Kretzman, objectives for 20102012 established in compliance with Section 162(m)). Based upon the foregoing determinations, bonuses and LTIP payouts were earned by each of the eligible Named Executive Officers in respect of 20102012 (see the “Summary Compensation Table,” below).
The Company’s confidentiality and non-competition agreement (which all employees, including the Named Executive Officers, are required to execute), Stock Plan and Incentive Compensation Plan condition each employee’s eligibility for benefits (including 20102012 LTIP awards and 20102012 annual cash bonuses) upon compliance with confidentiality, non-competition and non-solicitation obligations.
Approximately was further conditioned upon the Per the terms of their respective employment agreements, As The Summary Compensation Table, below, reflects the 440430 employees, including the Named Executive Officers, were eligible to participate in the 20102012 Annual Bonus Program. As noted above, the bonusperformance objectives for all employees in the 20102012 Annual Bonus Program included the Company’s achievement of two equally weightedequally-weighted performance goalstargets (namely, its 20102012 EBITDA Performance GoalTarget and its 20102012 Free Cash Flow Performance Goal), as well asTarget). Receipt of a bonus awardparticipants’participant’s achievement of theira performance rating of “target” or higher under the Company’s 2012 Performance Management Review process, with the exact payout amount being subject to the degree of achievement of individual performance objectives linked directly to executing the Company’s 20102012 business plan. As approved by the Compensation Committee, under the 20102012 Annual Bonus Program, management (or, in the case of the Named Executive Officers, the Compensation CommitteeCommittee) had discretion to award between 75%25% and 150% of the target bonuses to reward higher-performing employees, as long as the Company’s overall compensation budget was not exceeded.Mr.for 2012, each of Messrs. Ennis and Kennedy was eligible during 2010 for a target bonus of 100% of his respective base salary, and each of MessrsMessrs. Berns, Elshaw Berns and Kretzman was eligible during 2010 for a target bonus of 75% of his respective base salary.noteddiscussed above, (see, “Incentive Compensation; Generally”),based upon the Company’s degreeunder “Compensation Discussion and Analysis — Overview of achievement of its 2010 Performance Goals,2012 Compensation Events,” the Compensation Committee, applying the formula set forth in, and pursuant to the terms and conditions of, the 2012 Annual Bonus Program, determined to fund the 2010 Bonus Programsuch program at 100% of target105%, and, based upon its determinations as to the Named Executive Officers’ respective performance ratings and the degree of achievement of their respective performance objectives, awarded Messrs. Ennis, Berns, Elshaw, BernsKennedy and Kretzman 96.2%105%, 95.7%102%, 102%, 105% and 106.5% and 103.2%105%, respectively, of their target bonuses for 2010.actual bonus awardsaward amounts that were madeearned for 2010 to2012 by the Named Executive Officers under the 20102012 Annual Bonus Program.
The third principal component of total compensation for the Company’s key employees is long-term incentive compensation awards. Since 2009, Approximately Historically,Prior to 2009, this had taken the form of an annual grant of equity awards, usually in the form of restricted stockand/or stock options, under the Stock Plan.However, beginning with (and again in 2010), the Company decidedhas not to implementimplemented an annual equity award program under its Stock Plan as a component of long-term compensation. To enable the Company to seek to maintain a competitive total compensation opportunity, the Company adopted a cash-basedcash LTIP component under its Incentive Compensation Plan, effective from and after 2010. The 2010 calendar year2012 was the first performancethird year underthat the Company’s newly-implemented LTIP.5060 senior employees, including the Named Executive Officers, were eligible to participate in the 2010 LTIP Program.2012 LTIP. Funding of the 20102012 LTIP Program was based on the Company’s degree of achievement of22
Awards under the 20102012 LTIP Program were structured as flat dollar amounts, tiered to levels of responsibility within the organization, and were approved by the Compensation Committee.Committee in December 2011. Once earned, based upon the degree of achievement of the Company’s 20102012 Performance Goals,Targets, the award amount is towould be paid out in equal one-third amounts in March 2011,2013, March 20122014 and March 2013,2015, provided the participant received a “target” or better performance rating under the Company’s Performance Management Review process for 20102012 and remains employed with the Company on the applicable payment date. By deferring payments over three years for the 20102012 performance year,period, the program’s structure is intended to have a retentive element foreffect on the key personnel expected to implement the Company’s business plan from yearand/or long-range plan.
In accordance with the Incentive Compensation Plan, as discussed above, under “Compensation Discussion and Analysis — Overview of 2012 Compensation Events,” the Compensation Committee determined to year.
The Summary Compensation Table, below, reflects the portion of the 20102012 LTIP Program awards that were earned and actually paid out for 2010 to2012 by the eligible Named Executive Officers under the 20102012 LTIP, Program.
The Company also maintains standard benefits that are consistent with those offered by other major corporations and which are generally available to all of the Company’s The Company also maintains a limited number of benefit programs that are available to the Named Executive Officers and other senior employees qualifying for eligibility based on salary grade level. These benefits and perquisites include an automobile allowance or use of a Company automobile and limited reimbursement of certain costs for financial counseling, tax preparation and life insurance premiums. These types of benefits are commonly made available to senior executives at other major corporations and assist the Company in full timefull-time employees (subject to meeting basic eligibility requirements). These plans include standard medical, dental, vision and life insurance coverages that are available to allU.S.-based, non-union employees.attractingretaining and retainingattracting key talent.
The Company focuses annually on developing a total compensation The Company designs its compensation programs such that there is a correlation between the level of position and the degree of risk in compensation. Based on that guiding principle, the Company’s more senior executives with the highest levels of responsibility and accountability have a higher percentage of their total potential remuneration at risk (in the form of performance-based annual cash bonuses and performance-based LTIP awards), than do employees with lower levels of responsibility and accountability. This means that a higher proportion of the Company’s more senior executives’ total potential compensation is based upon variable elements, than is the case with the Company’s employees with lower levels of responsibility and accountability.Amount(and,Amount (and, Where Applicable, the Formula) for Each Element of Compensation to Pay and How Each Compensation Element and the Company’s Decisions Regarding that Element Fit into the Company’s Overall Compensation Objectives and May Affect Decisions Regarding Other Elements of Compensationpackageopportunity that is intended to be competitive such that the level of total compensation (i.e., base salary, annual cash bonus and long-term incentive compensation, combined) is targeted to be positioned at or about the 50th to 75th percentile of competitive benchmark norms. Salary ranges, annual cash bonus plan targets and long-term incentive compensation targets are reviewed using a “total compensation” perspective under which total remuneration is targeted to be within certain ranges compared to the Comparison Group. Values and targets of each element may change from yearperformance period to year. Historically, the Named Executive Officers have not realized any meaningful wealth accumulation from prior equity awards, which influenced the introduction of an LTIP component to the Incentive Compensation Plan to replace the former equity component of compensation.23
The Compensation Committee reviews and approves, among other things, compensation for the Company’s Named Executive Officers; the structure of the Company’s annual bonus program under the Incentive Compensation Plan, including setting annual performance objectives for the Named Executive Officers and annually assessing the extent to which those objectives have been achieved; and the structure of the Company’s long-term incentive programs under the Incentive Compensation Plan, including setting performance-based objectives and actual grants under the Company’s long-term incentive compensation award programs for the Named Executive Officers and annually assessing the extent to which those objectives have been achieved.
The Compensation Committee reviews and approves objectives relevant to the compensation of the Company’s Chief Executive Officer, evaluates, together with the Governance Committee, the Chief Executive Officer’s performance in respect of those objectives and determines, either as a committee or together with the Governance Committeeand/or the Board of Directors, the Chief Executive Officer’s total compensation level based on that evaluation process. The Compensation Committee also reviews and approves compensation and incentive arrangements for the Company’s other Named Executive Officers.
The Compensation Committee reviews key components of each Named Executive Officer’s compensation, which enables the Compensation Committee to make informed decisions regarding future elements of compensation.
The Company’s Executive Vice President and Chief Administrative Officer, in consultation with the Company’s Chief Executive Officer, works with the Company’s CompensationHuman Resources Department to recommend: (i) merit increase guidelines based on external benchmarks under the Company’s salary administration program; (ii) the structure of the Company’s annual bonus program under the Incentive Compensation Plan; and (iii) the structure of itsthe Company’s long-term incentive compensation programs.
As part of the Company’s processes and procedures for determining the amount and form of executive officer and director compensation, the Company’s Compensation Committee relies in part upon informed proposals and information provided by management, as well as market data, analysis and guidance provided by its outside compensation consultant. During 2010,2012, the Compensation Committee consulted withand/or considered advice provided by its outside compensation advisor (Compensation Advisory Partners LLC (“CAP”)) with respect to the structure and components of the Company’s incentive compensation programs, as well as the total direct compensation of the Company’s Named Executive Officers, inclusive of the March 20102012 merit salary increases for the Named Executive Officers. CAP performed no other services for the Company or the Compensation Committee during 20102012 other than providing compensation advice to the Compensation Committee (or to the Company’s CompensationHuman Resources Department in respect to routine compensation survey data analysis); without limiting the foregoing, CAP did not provide services such as benefits administration, human resources consulting or actuarial services. The Compensation Committee approved CAP’s engagement, upon themanagement’s recommendation, of management, and based upon CAP’s experience and qualifications. The Chairman of the Compensation Committee reviews and approves all invoices from the outside compensation consultant prior to payment.
As there has never been a restatement of the Company’s financial results, the Company has not considered any policy in respect of adjustment or recovery of amounts paid under its compensation plans.
On June 2, 2011, the Company held its 2011 annual stockholders’ meeting at which approximately 99% of the stockholders who voted on the given items (i) approved, on an advisory, non-binding basis, the Company’s executive compensation, as disclosed pursuant to Item 402 of Regulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in the 2011 proxy statement (“say-on-pay”), and (ii) recommended, on an advisory, non-binding basis, that the Company conduct future “say-on-pay” votes every three (3) years (which is the Company’s current intention). Although such advisory stockholder vote on executive compensation is non-binding, management has considered the results of such advisory vote when determining the Company’s compensation policies and decisions and believes that the above-referenced stockholder vote endorses the Company’s compensation philosophy, processes and practices, which have not varied in any meaningful way since such vote. Section 162(m) places a limit of $1,000,000 on the amount of compensation that the Company may deduct, for tax purposes, in any one year for certain officers who constitute “covered employees” under the rule, unless such amounts are determined to be performance-based compensation under Section 162(m) and thus, generally, those items are intended to be fully deductible. Salary, perquisites, discretionary bonuses and restricted stock that have time-based vesting generally are not considered performance-based compensation under Section 162(m) and are generally subject to Section 162(m) limitations on deductibility. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Compensation Committee has not adopted a policy requiring all compensation to be “performance-based“qualified performance-based compensation” meeting certain requirements. Generally, the Company’s provision of cash incentive compensation under the Incentive Compensation Plan, stock option awards and performance-based stock awards meetsis intended to meet the requirements for qualifieddeductible.deductible and retains discretion to award compensation that may not constitute qualified performance-based compensation under Section 162(m). The 20102012 annual bonus and LTIP performance objectives for the Company’s Named Executive Officers were approved under24
The following table sets forth information for the years indicated concerning the compensation awarded to, earned by or paid to the persons who served as the Company’s Chief Executive Officer and the Chief Financial Officer during 20102012 and the three other most highly paid executive officers (see footnote (a) below), other than the Chief Executive Officer and the Chief Financial Officer, who served as executive officers of the Company during 20102012 (collectively, the “Named Executive Officers”), for services rendered in all capacities to the Company and its subsidiaries during such periods. As with last year’s proxy statement, the amounts under the columns “Stock Awards” and “Option Awards,” in the Summary Compensation Table below, have been calculated based upon the aggregate grant date fair value of the stock and option awards made during each given fiscal year, if any, in each case as determined in accordance with applicable financial accounting standards (namely, FASB Accounting Standards Codification Topic 718). Historic amounts for 2008 under the columns “Stock Awards” and “Option Awards,” if any, and the corresponding historic amounts in the “Total” column, in the Summary Compensation Table below, have been adjusted and are re-presented in accordance with Item 402 ofRegulation S-K under the Exchange Act. Additionally, as it did last year, the Company is presenting its 2010 annual cash bonus awards under the Revlon Executive Incentive Compensation Plan, as well as its historic presentation of those awards for 2009 and 2008, in theThe “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table, below, for awardspresents bonus and LTIP payments earned under the Incentive Compensation Plan. As discussed above under “Compensation Discussion and Analysis — Overview of 2012 Compensation Events,” the 2012 Annual Bonus Program and the 2012 LTIP were each funded at 105% of target bonuses foramounts by the year, and any discretionary annual cash bonusCompensation Committee in excess of target bonuses foraccordance with the year in the “Bonus” column. For 2010, such column also includes earned 2010 LTIP Program awards, as more fullyformulae set forth in footnote (d), below (although 2010such programs. Although 2012 LTIP Program awards have been listed in the table below at their full-value, which reflects funding such program at 105% of target for 2012 LTIP awards, only one-third of such amounts washas actually been paid in(in March 2011;2013); the remaining two-thirds of such 20102012 LTIP awards are payable in March 20122014 and March 2013, only2015, if the executive remains employed with the Company on each respective payout date). In all cases, stock option awards outstanding asdate, unless provided otherwise in the executive’s employment agreement (see “Employment Agreements and Payments upon Termination and Change of December 31, 2010 wereControl”).“out-of-the-money,” in that in each case they had exercise prices that were above the $9.84 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2010 and therefore had no realizable monetary value to the Named Executive Officers on such date. See “Outstanding Equity Awards at Fiscal Year End.” Change in Pension Value and Nonqualified Non-Equity Deferred Stock Option Incentive Plan Compensation All Other Salary Bonus Awards Awards Compensation Earnings ($) Compensation Total Year ($) ($)(b) ($)(c) ($) ($)(d) (e) ($)(f) ($) David L. Kennedy 2010 614,038 — — — — 23,949 52,984 690,971 2009 867,500 — — — — 101,146 36,447 1,005,093 2008 1,310,000 — 602,388 — 975,000 111,287 40,859 3,039,534 Alan T. Ennis 2010 907,980 — — — 2,075,000 19,557 91,777 3,094,314 2009 781,558 12,500 — — 437,500 56,176 24,063 1,311,797 2008 460,923 30,000 347,490 — 270,000 26,517 22,512 1,157,442 Chris Elshaw 2010 729,346 — — — 1,025,000 5,394 226,382 1,986,122 2009 678,347 12,500 — — 262,500 34,226 192,533 1,180,106 Robert K. Kretzman 2010 740,857 17,716 — — 1,057,284 612,947 77,794 2,506,598 2009 713,783 8,357 — — 266,643 673,313 75,990 1,738,086 2008 711,889 20,036 275,990 — 399,964 311,337 71,972 1,791,188 Steven Berns 2010 448,211 22,125 — — 837,875 18,098 62,393 1,388,702 2009 268,077 10,625 122,750 — 159,375 18,461 18,982 598,270
Name and Principal Position | Year | Salary ($) | Bonus ($)(a) | Non-Equity Incentive Plan Compensation ($)(b) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(c) | All Other Compensation ($)(d) | Total ($) | |||||||||||||||||||||
Alan T. Ennis | 2012 | 921,235 | — | 2,226,000 | 25,410 | 65,989 | 3,238,634 | |||||||||||||||||||||
President and Chief Executive Officer | 2011 | 910,000 | — | 2,067,800 | 34,632 | 65,523 | 3,077,955 | |||||||||||||||||||||
| 2010 | 907,980 | — | 2,075,000 | 19,557 | 91,777 | 3,094,314 | ||||||||||||||||||||||
Steven Berns | 2012 | 482,069 | — | 892,500 | 32,257 | 49,849 | 1,456,675 | |||||||||||||||||||||
Executive Vice President and Chief Financial Officer | 2011 | 469,560 | 227 | 837,673 | 42,971 | 48,797 | 1,399,228 | |||||||||||||||||||||
| 2010 | 448,211 | 22,125 | 837,875 | 18,098 | 62,393 | 1,388,702 | ||||||||||||||||||||||
Chris Elshaw | 2012 | 758,312 | — | 1,102,500 | 5,263 | 220,121 | 2,086,196 | |||||||||||||||||||||
Executive Vice President and Chief Operating Officer | 2011 | 746,355 | — | 1,024,100 | 8,598 | 209,697 | 1,988,750 | |||||||||||||||||||||
| 2010 | 729,346 | — | 1,025,000 | 5,394 | 226,382 | 1,986,122 | ||||||||||||||||||||||
David L. Kennedy | 2012 | 150,576 | — | 420,000 | 11,664 | 24,000 | 606,240 | |||||||||||||||||||||
Vice Chairman | 2011 | 150,000 | — | — | 37,933 | 24,000 | 211,933 | |||||||||||||||||||||
| 2010 | 614,038 | — | — | 23,949 | 52,984 | 690,971 | ||||||||||||||||||||||
Robert K. Kretzman | 2012 | 770,272 | — | 1,130,850 | 1,210,262 | 95,227 | 3,206,611 | |||||||||||||||||||||
Executive Vice President and Chief Administrative Officer | 2011 | 758,134 | — | 1,049,090 | 1,309,330 | 81,810 | 3,198,364 | |||||||||||||||||||||
| 2010 | 740,857 | 17,716 | 1,057,284 | 612,947 | 77,794 | 2,506,598 | ||||||||||||||||||||||
| (a) |
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| The amounts set forth under the “Bonus” column reflect the portion of |
The amounts set forth under the “Non-Equity Incentive Plan Compensation” column reflect the |
| have been listed in the table above at their | ||
For Mr. Ennis, for 2012, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $966,000 in cash bonus plus $1,260,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2012 (the remaining two-thirds of such 2012 LTIP award are to be paid out in equal amounts in March 2014 and March 2015).
For Mr. Berns, for 2012, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $367,500 in cash bonus plus $525,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2012 (the remaining two-thirds of such 2012 LTIP award are to be paid out in equal amounts in March 2014 and March 2015).
For Mr. Elshaw, for 2012, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $577,500 in cash bonus plus $525,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2012 (the remaining two-thirds of such 2012 LTIP award are to be paid out in equal amounts in March 2014 and March 2015).
For Mr. Kennedy, for 2012, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $157,500 in cash bonus plus $262,500 in LTIP, of which LTIP amount only one-third has been paid in respect to 2012 (the remaining two-thirds of such 2012 LTIP award are to be paid out in equal amounts in March 2014 and March 2015).
For Mr. Kretzman, for 2012, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $605,850 in cash bonus plus $525,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2012 (the remaining two-thirds of such 2012 LTIP award are to be paid out in equal amounts in March 2014 and March 2015).
| (c) | The amounts under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column have been calculated based on the aggregate change in actuarial present value of the Named Executive Officers’ accumulated benefit under the Retirement Plan and the Pension Equalization Plan from January 1 to December 31 of each reported year and based on, with respect to 2012, the assumptions as set forth in Note 15 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 Form 10-K”); with respect to 2011, the assumptions as set forth in Note 14 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”); and with respect to 2010, the assumptions as set forth in Note 14 to the consolidated financial statements in the Company’s Annual Report onForm 10-K for the year ended December 31, |
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For Mr. Ennis, who has over 7 years of service with the Company, this amount includes $11,463, $15,624 and $8,823 under the Retirement Plan and $13,947, $19,008 and $10,734 under the Pension Equalization Plan for 2012, 2011 and 2010, respectively.
For Mr. Berns, who has over 10 years of service with the Company (due to credited service during his period of employment with the Company from April 1992 to August 1999), this amount includes $22,331, $29,749 and $12,529 under the Retirement Plan and $9,926, $13,222, and $5,569 under the Pension Equalization Plan for 2012, 2011 and 2010, respectively.
For Mr. Elshaw, who has over 11 years of service with the Company, this amount includes $2,664, $4,352 and $2,730 under the Retirement Plan and $2,599, $4,246 and $2,664 under the Pension Equalization Plan for 2012, 2011 and 2010, respectively.
For Mr. Kennedy, who has over 10 years of service with the Company, this amount includes $2,638, $8,580 and $5,417 under the Retirement Plan and $9,026, $29,353 and $18,532 under the Pension Equalization Plan for 2012, 2011 and 2010, respectively.
| (d) | ||
| Mr. Ennis. The amount shown under All Other Compensation for Mr. Ennis for | ||
Mr. Berns. The amount shown under All Other Compensation for Mr. Berns for 2012 consists of a car allowance; life insurance premiums; tax preparation services; profit sharing contributions (including $21,502 of profit sharing contributions under the Excess Savings Plan and the 401(k) Plan); and matching contributions under the 401(k) Plan.
Mr. Elshaw. The amount shown under All Other Compensation for Mr. Elshaw for 2012 consists of $150,000 in housing allowance (as Mr. Elshaw relocated to the U.S. from the U.K. at the Company’s request in connection with his promotion in 2007 to Executive Vice President and General Manager, U.S. Region, prior to his being appointed Executive Vice President and Chief Operating Officer in May 2009; such allowance expired on December 31, 2012); a car allowance; tax preparation services and financial counseling; life insurance premiums; profit-sharing contributions (including $33,898 of profit sharing contributions under the Excess Savings Plan and the 401(k) Plan); and matching contributions under the 401(k) Plan.
Mr. Kennedy. The amount shown under All Other Compensation for Mr. Kennedy for 2012 consists of a car allowance; profit sharing contributions; and matching contributions under the 401(k) Plan.
Mr. Kretzman. The amount shown under All Other Compensation for Mr. Kretzman for 2012 consists of $21,378 in tax gross ups in respect of imputed income arising from use of a Company automobile and life insurance premiums; and other compensation in respect of use of a Company automobile; life insurance and medical plan premiums; tax preparation services and financial counseling; and matching contributions under the 401(k) Plan.
Each of Messrs. Ennis, Berns, Elshaw, Kennedy Ennis, Elshaw,and Kretzman, and Berns, who were the Company’s Named Executive Officers during 2010,2012, has an executive employment agreement with Products Corporation.Mr. KennedyMr. Kennedy’s employment agreement provides that he will serve as Vice Chairman of the Board of Directors at an annual base salary of not less than $150,000 (which was his base salary as of December 31, 2010).27
Mr. Ennis’ employment agreement provides that Mr. Ennis will serve as the Company’s President and Chief Executive Officer, at an annual base salary of not less than $910,000$919,100 (which was his base salary as of December 31, 2010)2012), with a target bonus of 100% of his base salary.
Under his employment agreement, Mr. Ennis is eligible to participate in fringe benefit programs and perquisites as may be generally made available to other senior executives of Products Corporation, including a
car allowance and financial planning and tax preparation assistance. The employment agreement for Mr. Ennis also provides for protection of Company confidential information and includes a non-compete obligation.
Products Corporation may terminate Mr. Ennis’ employment agreement effective 24 months after written notice of non-extension of the agreement, and Mr. Ennis may terminate his employment agreement upon 60 days’ prior written notice following a material uncured breach by Products Corporation of its obligations to Mr. Ennis under such agreement. Mr. Ennis’ employment agreement provides that, in the event of termination of employment by Mr. Ennis for any material breach by Products Corporation of any of its obligations under his employment agreement or by Products Corporation (otherwise(other than for “cause” as defined in Mr. Ennis’ employment agreement or disability), Mr. Ennis would be entitled to continued payments of base salary throughout the24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, and continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Ennis is covered by like plans of another company and continued participation during the severance period in the other perquisites of Products Corporation for which he was eligible on the termination date.
The estimated aggregate total of termination benefits during the24-month severance period if Mr. Ennis had been terminated without “cause” on December 31, 20102012 would have been approximately $2,789,343,$2,845,906, consisting of the following: (a) two times Mr. Ennis’ annual base salary on December 31, 2010;2012; (b) $910,000,$919,100, representing
28
Mr. Berns
Mr. Berns’ employment agreement provides that Mr. Berns will serve as the Company’s Executive Vice President and Chief Financial Officer, at an annual base salary of not less than $481,525 (which was his base salary as of December 31, 2012), with a target bonus of 75% of his base salary.
Under his employment agreement, Mr. Berns is eligible to participate in fringe benefit programs and perquisites as may be generally made available to other senior executives of Products Corporation, including a car allowance and financial planning and tax preparation assistance. The employment agreement for Mr. Berns also provides for protection of Company confidential information and includes a non-compete obligation.
Products Corporation may terminate Mr. Berns’ employment agreement effective 24 months after written notice of non-extension of the agreement and Mr. Berns may terminate his employment agreement upon 60 days’ prior written notice following a material uncured breach by Products Corporation of its obligations to Mr. Berns under such agreement. Mr. Berns’ employment agreement provides that, in the event of termination of employment by Mr. Berns for any material uncured breach by Products Corporation of any of its obligations under his employment agreement, or by Products Corporation (other than for “cause” as defined in Mr. Berns’ employment agreement or disability), Mr. Berns would be entitled to continued payments of base salary throughout the 24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Berns is covered by like plans of another company, and continued participation during the severance period in the other perquisites of Products Corporation for which he was eligible on the termination date.
The estimated aggregate total of termination benefits during the 24-month severance period if Mr. Berns had been terminated without “cause” on December 31, 2012 would have been approximately $1,408,789, consisting of the following: (a) two times Mr. Berns’ annual base salary on December 31, 2012; (b) $361,144, representing Mr. Berns’ 2012 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $4,419; (d) 24 months of group medical and dental insurance coverage, at a total cost of approximately $33,176; (e) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000; and (f) 24 months of car allowance, at a cost of approximately $30,000. All of Mr. Berns’ severance payments are conditional on his full compliance with the Company’s comprehensive agreement as to confidentiality and non-competition during any severance period.
Mr. Elshaw
Mr. Elshaw’s employment agreement provides that Mr. Elshaw will serve as the Company’s Executive Vice President and Chief Operating Officer, at an annual base salary of not less than $731,500$756,556 (which was his base salary as of December 31, 2010)2012), with a target bonus of 75% of his base salary.
Under his employment agreement, Mr. Elshaw, who relocated to the U.S. from the U.K. at the Company’s request in connection with his promotion in 2007 to Executive Vice President and General Manager, U.S. Region, prior to his being appointed Executive Vice President and Chief Operating Officer in May 2009, receives a $150,000 annual housing allowance through December 31, 2012, and is eligible to participate in fringe benefit programs and perquisites as may be generally made available to other senior executives of Products Corporation, including a car allowance and financial planning and tax preparation assistance. The employment agreement for Mr. Elshaw also provides for protection of Company confidential information and includes a non-compete obligation.
Products Corporation may terminate Mr. Elshaw’s employment agreement effective 24 months after written notice of non-extension of the agreement. Mr. Elshaw’s employment agreement provides that, in the event of termination of employment by Products Corporation (otherwise(other than for “cause” as defined in Mr. Elshaw’s employment agreement or disability), Mr. Elshaw would be entitled to continued payments of base salary throughout the24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Elshaw is covered by like plans of another company, and repatriation to the U.K.
The estimated aggregate total of termination benefits during the24-month severance period if Mr. Elshaw had been terminated without “cause” on December 31, 20102012 would have been approximately $2,047,029,$2,109,948, consisting of the following: (a) two times Mr. Elshaw’s annual base salary on December 31, 2010;2012; (b) $548,625,$567,417, representing Mr. Elshaw’s 20102012 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $6,706;$6,940; (d) 24 months of group medical and dental insurance coverage, at a total cost of approximately $15,698;$9,479; and (e) repatriation from the U.S. to the U.K, at a cost of approximately $13,000. All of Mr. Elshaw’s severance payments are conditional on his full compliance with the Company’s comprehensive agreement as to confidentiality and non-competition during any severance period.
Mr. Kennedy
Mr. Kennedy’s employment agreement provides that he will serve as Vice Chairman of the Board of Directors at an annual base salary of not less than $150,000 (which was his base salary as of December 31, 2012), with a target bonus of 100% of his base salary.
Under his employment agreement, Mr. Kennedy is eligible to participate in fringe benefit programs and perquisites as may be generally made available to senior executives of Products Corporation of Mr. Kennedy’s
level, including a car allowance and financial planning and tax preparation assistance. Mr. Kennedy’s employment agreement also provides for protection of Company confidential information and includes a non-compete obligation.
Products Corporation may terminate Mr. Kennedy’s employment agreement effective 24 months after written notice of non-extension of the agreement, and Mr. Kennedy may terminate his employment agreement at any time upon 60 days’ prior written notice following a material uncured breach by Products Corporation of its obligations to Mr. Kennedy under such agreement. Mr. Kennedy’s employment agreement provides that, in the event of termination of employment by Mr. Kennedy for any material breach by Products Corporation of any of its obligations under his employment agreement, or by Products Corporation (other than for “cause” as defined in the employment agreement or for disability), Mr. Kennedy would be entitled to continued payments of base salary throughout the 24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Kennedy is covered by like plans of another company, and continued participation during the severance period in the other perquisites of Products Corporation for which he was eligible on the termination date. Pursuant to his current employment agreement, in the event Mr. Kennedy’s employment is terminated by Products Corporation without “cause” or by Mr. Kennedy for “good reason,” or upon his retirement, the unpaid portion of all previously-earned LTIP awards would continue to remain payable, in accordance with their terms (in consideration for which, the non-competition covenants referred to in Mr. Kennedy’s employment agreement would remain in effect until the date that all earned LTIP awards are paid).
The estimated aggregate total of termination benefits during the 24-month severance period if Mr. Kennedy had been terminated without “cause” on December 31, 2012 would have been approximately $501,230, consisting of the following: (a) two times Mr. Kennedy’s annual base salary on December 31, 2012 (his base salary on December 31, 2012 was $150,000); (b) $150,000, representing Mr. Kennedy’s 2012 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $230; (d) 24 months of group medical and dental insurance coverage, at a total cost of approximately $4,000; (e) 24 months of tax preparation and financial counseling, at a total cost of approximately $17,000; and (f) 24 months of car allowance, at a cost of approximately $30,000. Mr. Kennedy does not currently participate in the Company’s standard group medical and dental plans. Under such circumstances, pursuant to his current employment agreement, Mr. Kennedy would also be entitled to the continued payout, on the respective annual payout dates in March 2013, March 2014 and March 2015, as applicable, of the remaining unpaid portion of his $262,500 2012 LTIP award (all of which remained unpaid as of December 31, 2012). All of Mr. Kennedy’s severance payments are conditional on his full compliance with the Company’s comprehensive agreement as to confidentiality and non-competition during any severance period.
Mr. Kretzman
Mr. Kretzman’s employment agreement provides that he will serve as Executive Vice President and Chief Administrative Officer, at an annual base salary of not less than $743,045$768,487 (which was his base salary as of December 31, 2010)2012), with a target bonus of 75% of his base salary.
Under his employment agreement, Mr. Kretzman is eligible for participation in fringe benefit programs and perquisites as may be generally made available to senior executives of Products Corporation of Mr. Kretzman’s level, including financial planning and tax preparation assistance; use of an automobile; supplemental term life insurance coverage of two times Mr. Kretzman’s base salary; executive medical plan coverage; continued accrual of retirement benefits until his retirement date (in lieu of any discretionary profit sharing contributions); and a retirement benefit at and after age 60 without regard to the early retirement reductions he would otherwise be subject to under the Retirement Plan and Pension Equalization Plan and giving effect to his years of service and compensation through his retirement date. Mr. Kretzman’s employment agreement also provides for protection of Company confidential information and includes a non-compete obligation.
29
The estimated aggregate total of termination benefits during the24-month severance period if Mr. Kretzman had been terminated without “cause” on December 31, 20102012 would have been approximately $2,204,788,$2,296,029, consisting of the following: (a) two times Mr. Kretzman’s annual base salary on December 31, 2010;2012; (b) $557,284,$576,365, representing his 20102012 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $29,104;$42,476; (d) 24 months of medical and dental insurance coverage, at a total cost of approximately $49,298;$52,398; (e) 24 months of use of an automobile, at a cost of approximately $66,012;$70,816; and (f) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000. Under such circumstances, Mr. Kretzman would also be entitled to the continued vesting of unvested restricted stock (40,734 restricted shares were unvested at December 31, 2010 having a fair market value on such date of $400,823 basedpayout, on the $9.84 per share NYSE closing pricerespective annual payout dates in March 2013, March 2014 and March 2015, as applicable, of the Company’s Class A Common Stock on such date), stock option awards outstanding on December 31, 2010 (all of Mr. Kretzman’s options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010) and to the full payout of the remainderremaining unpaid portion of his $500,000 2010 LTIP award (one-third of which was paid in March 2011)remained unpaid as of December 31, 2012), his $490,000 2011 LTIP award (two-thirds of which remained unpaid as of December 31, 2012) and his $525,000 2012 LTIP award (all of which remained unpaid as of December 31, 2012). Mr. Kretzman’s severance payments are conditional on his full compliance with the Company’s comprehensive agreement as to confidentiality and non-competition during any severance period.
30
Each of Messrs. Kennedy’s, Elshaw’s, Ennis’, Kretzman’sBerns’, Elshaw’s, Kennedy’s and Berns’Kretzman’s employment agreements provides that, in the event of any “change of control,” the terms of their employment agreements would be extended for an additional 24 months from the effective date of any such “change of control.” Each of their employment agreements also provides that if, within this24-month period, the executive were to terminate his employment with the Company for “good reason” or if the Company were to terminate the executive’s employment other than for “cause,” he would receive: (i) a lump-sum payment equal to two times the sum of (a) the executive’s base salary and (b) the executive’s average gross bonus earned over the five calendar years prior to termination; and (ii) 24 months of continuation of all fringe benefits in which the executive participated on the “change of control” effective date or, in lieu of such benefits, a lump-sum cash payment equal to the value of such benefits. Each of their employment agreements also provides that, in the event of a “change of control,” all then-unvested stock options and restricted shares held by them shall immediately vest and become fully exercisable.
Under the Incentive Compensation Plan, if, in connection with a “change inof control,” a successor entity assumes the LTIP, does not terminate the LTIP or provides participants with comparable LTIP benefits, then the LTIP awards remain payable in accordance with their terms. Otherwise, upon a “change inof control,” LTIP awards related to the yearperformance period when the event occurred are to be paid at target on a pro-rated basis (based
(based on the number of days elapsed) within 60 days following such “change inof control,” and (ii) LTIP awards related to prior yearsperformance periods as to which the respective performance objectives were achieved, but for which payments remain outstanding, are to be paid within 60 days following such “change of control.”
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Ennis had been terminated on December 31, 2012 would have been approximately $3,398,886, consisting of the following: (a) two times his annual base salary on December 31, 2012; (b) two times his average 5-year bonus of $687,180; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $82,720 in control.”
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Berns had been terminated on December 31, 2012 would have been approximately $1,725,505, consisting of the following: (a) two times his annual base salary on December 31, 2012; (b) two times his 5-year average bonus of $309,761; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $43,338 in respect of two years of profit sharing contributions under the 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $4,419; (f) 24 months of group medical and dental insurance coverage, at a total cost of approximately $33,176; (g) 24 months of car allowance at a cost of approximately $30,000; and (h) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000. Upon a “change of control” without the successor entity assuming or otherwise continuing the terms of the LTIP, Mr. Berns also would be entitled to the payout of the remaining unpaid portion of his $500,000 2010 LTIP award (one-third of which remained unpaid as of December 31, 2012), the remaining unpaid portion of his $490,000 2011 LTIP award (two-thirds of which remained unpaid as of December 31, 2012), and the remaining unpaid portion of his $525,000 2012 LTIP award (all of which remained unpaid as of December 31, 2012), which was earned for each of 2010, 2011 and 2012 based upon the Compensation Committee’s determination that the Company had achieved its 2010, 2011 and 2012 performance objectives and that the executive had earned a “target” or better performance rating for each such year.
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Elshaw had been terminated on December 31, 2012 would have been approximately $2,589,228, consisting of the following: (a) two times his annual base salary on December 31, 2012; (b) two times his average 5-year bonus of $455,303; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $68,090 in respect of two years of profit sharing contributions under the 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $6,940; (f) 24 months of group medical and dental insurance coverage, at a total cost of approximately $9,479; (g) 24 months of car allowance, at a cost of approximately $30,000; (h) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000; and (i) the cost of two annual trips to the U.K. and airfare to repatriate Mr. Elshaw back to the U.K., as he relocated to the U.S. from the U.K. at the Company’s request in connection with his promotion in 2007 to Executive Vice President and General Manager, U.S. Region, prior to his being appointed Executive Vice President and Chief Operating Officer in May 2009, at a total cost of approximately $19,000. Upon a “change of control” without the successor entity assuming or otherwise continuing the terms of the LTIP, Mr. Elshaw also would be entitled to the payout of the remaining unpaid portion of his $500,000 2010 LTIP award (one-third of which remained unpaid as of December 31, 2012), the remaining unpaid portion of his $490,000 2011 LTIP award (two-thirds of which
remained unpaid as of December 31, 2012), and the remaining unpaid portion of his $525,000 2012 LTIP award (all of which remained unpaid as of December 31, 2012), which was earned for each of 2010, 2011 and 2012 based upon the Compensation Committee’s determination that the Company had achieved its 2010, 2011 and 2012 performance targets and that the executive had earned a “target” or better performance rating for each such year.
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Kennedy had been terminated on December 31, 20102012 would have been approximately $1,079,230,$823,730, consisting of the following: (a) two times his annual base salary on December 31, 2010;2012; (b) two times his5-year average bonus which average was $355,000of $225,000 as of December 31, 2010;2012; (c) two years of contributions under the Company’s 401(k) Plan; (d) two years of profit sharing contributions under the Company’s 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $230; (f) 24 months of group medical and dental insurance coverage, at a total cost of approximately $4,000; (g) 24 months of car allowance at a cost of approximately $30,000; and (h) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000. In addition, under such circumstances, Mr. Kennedy would be entitled to the immediate vesting of his unvested restricted stock (84,001 restricted shares were unvested at December 31, 2010 having a fair market value on December 31, 2010 of $826,570 based on the $9.84 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2010 (all of Mr. Kennedy’s options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010).
31
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Kretzman had been terminated on December 31, 20102012 would have been approximately $2,657,618,$3,261,846, consisting of the following: (a) two times his annual base salary on December 31, 2010;2012; (b) two times his5-year average bonus of $312,057;$481,091; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $371,300$565,000 in respect of two additional years of service credit for purposes of his retirement benefit; (e) 24 months of life insurance coverage at a cost of approximately $29,104;$42,476; (f) 24 months of medical and dental insurance coverage at a total cost of approximately $49,298;$52,398; (g) 24 months of use of a Company automobile at a cost of approximately $66,012;$70,816; and (h) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000. In addition, under such circumstances, Mr. Kretzman would be entitled to the immediate vesting of his unvested restricted stock (40,734 restricted shares were unvested at December 31, 2010 with a fair market value of $400,823 on December 31, 2010 based on the $9.84 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2010 (all of Mr. Kretzman’s stock options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010). Upon a “change inof control” without the successor entity assuming or otherwise continuing the terms of the LTIP, Mr. Kretzman also would be entitled to the full payout of the remaining unpaid portion of his $500,000 2010 LTIP award (one-third of which was paid in March 2011)remained unpaid as of December 31, 2012), the remaining unpaid portion of his $490,000 2011 LTIP award (two-thirds of which remained unpaid as of December 31, 2012), and the remaining unpaid portion of his $525,000 2012 LTIP award (all of which remained unpaid as of December 31, 2012), which was earned for each of 2010, based upon the Compensation Committee’s determination that the Company had
32
The following table presents information about the non-equity, plan-based awards that were granted to Named Executive Officers in the last completed fiscal year. During The Compensation Committee granted, and authorized the payment of, performance-based LTIP awards and annual cash bonuses to eligible Named Executive Officers in respect to 2010,2012, none of the Named Executive Officers received any equity awards from the Company. Pursuant to the 2010 LTIP Program, thethe 2010 performance year2012 under the Revlon Executive2012 Incentive Compensation Plan,Programs, the structure and design of, and performance factors for, which grants are summarized inwere adopted, ratified and approved by the table below. AwardsCompensation Committee pursuant to its authority under the 2010 LTIP ProgramIncentive Compensation Plan. In all cases, amounts earned were structured as flat dollar amounts that could be earnedbased upon the Company’s degree of achievement of its 2012 Performance Targets, which was reviewed and certified by the Company’s 2010 Performance Goals, subjectCompensation Committee, which also reviewed and made determinations in respect to the grantee achieving at least target performance on his 2010 Performance Management Review. Estimated Future Payout Dates Payouts Under (in Each Case, as to Non-Equity One-Third of Award Effective Incentive Plan Amount, and Subject to Grant Date Awards Continued Employment) Alan Ennis February 2010 $ 1,200,000 March 2011, 2012 & 2013 Chris Elshaw February 2010 $ 500,000 March 2011, 2012 & 2013 Robert Kretzman February 2010 $ 500,000 March 2011, 2012 & 2013 Steven Berns February 2010 $ 500,000 March 2011, 2012 & 2013 PayoutsNamed Executive Officers’ respective achievement of their personal objectives. For amounts actually awarded in respect to grantees2012, see the “Summary Compensation Table,” above, and for additional factors relevant to an understanding of earned awards under the 2010 LTIP Program are to be made in equal one-third amounts over three years, one-third of which was paid in March 2011, with2012 Incentive Compensation Programs, and the remaining two-thirds payable in March 2012below table, see “Compensation Discussion and March 2013, provided the grantee is employed with the Company on the remaining payout dates.33
Name | Estimated Possible Future Payouts Under Non-Equity Incentive Plan Awards | |||||||||||||||||||||||||||
| 2012 LTIP(1) | 2012 Annual Bonus Program(2) | |||||||||||||||||||||||||||
| Threshold | Target | Maximum | LTIP Payout Dates | Threshold | Target | Maximum | ||||||||||||||||||||||
| (in each case, as to one-third of award amount) | ||||||||||||||||||||||||||||
Alan Ennis President and Chief Executive Officer | $ | 0 | $ | 1,200,000 | $ | 1,800,000 | | March 2013, 2014 & 2015 | | $ | 0 | $ | 919,100 | $ | 1,378,650 | |||||||||||||
Steven Berns EVP and Chief Financial Officer | $ | 0 | $ | 500,000 | $ | 750,000 | | March 2013, 2014 & 2015 | | $ | 0 | $ | 361,144 | $ | 541,716 | |||||||||||||
Chris Elshaw EVP and Chief Operating Officer | $ | 0 | $ | 500,000 | $ | 750,000 | | March 2013, 2014 & 2015 | | $ | 0 | $ | 567,417 | $ | 851,126 | |||||||||||||
David Kennedy Vice Chairman | $ | 0 | $ | 250,000 | $ | 375,000 | | March 2013, 2014 & 2015 | | $ | 0 | $ | 150,000 | $ | 225,000 | |||||||||||||
Robert Kretzman EVP and Chief Administrative Officer | $ | 0 | $ | 500,000 | $ | 750,000 | | March 2013, 2014 & 2015 | | $ | 0 | $ | 576,365 | $ | 864,548 | |||||||||||||
| (1) | Awards under the 2012 LTIP were structured as flat dollar amounts that could be earned upon achievement of the Company’s 2012 Performance Targets, subject to the grantee achieving at least target performance on his 2012 Performance Management Review. Payouts to grantees of earned awards under the 2012 LTIP are to be made in equal one-third amounts over three years, one-third of which was paid in March 2013, with the remaining two-thirds payable in equal installments in March 2014 and March 2015, if the grantee is employed with the Company on the remaining payout dates, unless provided otherwise in the executive’s employment agreement (see “Employment Agreements and Payments upon Termination and Change of Control”). Pursuant to its terms, the 2012 LTIP would not be funded, and no award would be payable, if the Company were to achieve less than 85% of its 2012 Performance Targets (represented by the “Threshold” column, above); the 2012 LTIP could have been funded at the “Target” level if the Company achieved 100% of its 2012 Performance Targets; and the 2012 LTIP could have been funded at 150% of the “Target” level for achievement by the Company of 120% of its 2012 Performance Targets (represented by the “Maximum” column, above). As discussed above under the “Compensation Discussion and Analysis — |
| Overview of 2012 Compensation Events,” the Compensation Committee determined to fund the 2012 LTIP at 105% of the “Target” level, in accordance with the Incentive Compensation Plan and pursuant to the formula set forth in the 2012 LTIP. The actual amounts awarded are included in the “Summary Compensation Table,” above, in the column titled “Non-Equity Incentive Plan Compensation.” For additional information about the 2012 LTIP, see “Compensation Discussion and Analysis,” above. |
| (2) | The amounts under this column represent the possible payout under the 2012 Annual Bonus Program under the Incentive Compensation Plan. The amounts shown represent the threshold, target, and maximum payouts for annual cash bonuses under the 2012 Annual Bonus Program with respect to services in 2012, based on performance against pre-established performance measures. The amount under the “Target” column represents the target award opportunity, which is set as a percentage of base salary under the Named Executive Officers’ respective employment agreements. Pursuant to its terms, the 2012 Annual Bonus Program would not be funded, and no award would be payable, if the Company were to achieve less than 85% of its 2012 Performance Targets (represented by the “Threshold” column, above); the 2012 Annual Bonus Program could have been funded at the “Target” level if the Company achieved 100% of its 2012 Performance goals; and the 2012 Annual Bonus Program could have been funded at 150% of the “Target” level for achievement by the Company of 120% of its 2012 Performance Targets (represented by the “Maximum” column, above). In addition, under the 2012 Annual Bonus Program, managers (or, for Named Executive Officers, the Compensation Committee) retained the discretion to award between 25% and 150% of target awards, to reward comparative performance, provided the overall bonus pool was not exceeded. As discussed above under “Compensation Discussion and Analysis — Overview of 2012 Compensation Events,” the Compensation Committee determined to fund the 2012 Annual Bonus Program at 105% of the “Target” level, in accordance with the Incentive Compensation Plan and pursuant to the formula set forth in the 2012 Annual Bonus Program. The actual amounts awarded are included in the “Summary Compensation Table,” above, in the column titled “Non-Equity Incentive Plan Compensation.” For additional information about the 2012 Annual Bonus Program, see “Compensation Discussion and Analysis,” above. |
The following table sets forth certain information regarding equity awards held by the Named Executive Officers under the Company’s Stock Plan which remained outstanding as of December 31, 2010.2012. The Company last implemented an annual equity award program under the Stock Plan in 2008. As of December 31, 2012, all restricted stock awards previously granted under the Stock Plan to any Named Executive Officer had fully vested. As of December 31, 2012, the only Named Executive Officer to hold Company stock options was Mr. Kennedy, as all other stock options previously granted under the Stock Plan to Named Executive Officers had expired by that date (Mr. Kennedy’s remaining stock options expired on April 22, 2013). As the $9.84$14.50 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 20102012 was lower than the exercise price for allMr. Kennedy’s stock options outstanding on December 31, 2010,2012, all of theMr. Kennedy’s now-expired stock options held by the Named Executive Officers had no realizable monetary value as of December 31, 2010. The2012. As the NYSE closing market price of the Company’s Class A Common Stock on the Record Date was $15.28$22.10 per share. All historical share, data has been adjusted for the Company’s1-for-10 Reverse Stock Split. Each of the Named Executive Officers exchanged in the Exchange Offer all of their eligible sharessuch options remained as of the Company’s Class A Common Stock held by them on October 8, 2009 (the closingsuch date of the Exchange Offer), and received a like number of shares of Series A Preferred Stock. The stock awards listed in the table below reflect restricted shares of Class A Common Stock that vest after the closing date of the Exchange Offer and therefore were not exchanged. Stock Awards Equity Incentive Equity Option Awards Plan Incentive Plan Equity Awards: Awards: �� Incentive Number of Market or Plan Market Unearned Payout Value Awards: Number of Value of Shares, of Unearned Number of Number of Number of Shares or Shares or Units or Shares, Units Securities Securities Securities Units of Units of Other or Other Underlying Underlying Underlying Stock Stock Rights Rights Unexercised Unexercised Unexercised Option That That That That Options (#) Options (#) Unearned Exercise Option Have Not Have Not Have Not Have Not Exercisable Unexercisable Options Price Expiration Vested Vested Vested Vested (a) (a) (#) ($) Date (#) ($)(b) (#) ($) David L. Kennedy 15,000 — — 49.60 6/21/2012 84,001 826,570 — — 5,000 — — 30.60 4/22/2013 149,300 — — 30.30 4/14/2011 13,500 — — 25.50 3/07/2012 Alan T. Ennis 2,000 — — 28.80 3/31/2012 44,067 433,619 — — Chris Elshaw 300 — — 39.80 9/4/2012 44,268 435,597 — — 300 — — 37.80 9/17/2012 16,600 — — 30.30 4/14/2011 7,000 — — 25.50 3/7/2012 Robert K. Kretzman 1,500 — — 56.60 6/18/2011 40,734 400,823 — — 5,000 — — 37.80 9/17/2012 95,500 — — 30.30 4/14/2011 12,000 — — 25.50 3/07/2012 Steven Berns — — — — — 16,667 164,003 — —
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable (a) | Number of Securities Underlying Unexercised Options (#) Unexercisable (a) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Alan T. Ennis President and Chief Executive Officer | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Steven Berns Executive Vice President and Chief Financial Officer | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Chris Elshaw Executive Vice President and Chief Operating Officer | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
David L. Kennedy Vice Chairman | 5,000 | — | — | 30.60 | 4/22/2013 | — | — | — | — | |||||||||||||||||||||||||||
Robert K. Kretzman Executive Vice President and Chief Administrative Officer |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||||
| (a) | Grant dates and vesting for options listed in the table are as follows: |
34Mr. Kennedy was granted 5,000 stock options at an exercise price of $30.60 per share on April 22, 2003. The options vested 25% on each anniversary of the grant date and were fully vested on April 22, 2007. As noted in the above table, this option grant expired, unexercised, after December 31, 2012 and prior to the date of this Proxy Statement.
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The following table sets forth the value of restricted stock held by the Named Executive Officers which vested during 2010,2012, with the value determined by multiplying the number of shares that vested during 20102012 by the NYSE closing market price of the Company’s Class A Common Stock on the vesting date. None of the Named Executive Officers sold any of their shares of formerly restricted stock that vested during 2010.
| Option Awards | Stock Awards | |||||||||||||||
| Number of Shares | Value Realized | Number of Shares | Value Realized | |||||||||||||
| Acquired on Exercise | on Exercise | Acquired on Vesting | on Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($)(a) | ||||||||||||
| David L. Kennedy | — | — | 55,916 | 951,412 | ||||||||||||
Vice Chairman | ||||||||||||||||
| Alan T. Ennis | — | — | 27,867 | 474,180 | ||||||||||||
President and Chief Executive Officer | ||||||||||||||||
| Chris Elshaw | — | — | 28,066 | 477,565 | ||||||||||||
Executive Vice President and Chief Operating Officer | ||||||||||||||||
| Robert K. Kretzman | — | — | 27,866 | 474,129 | ||||||||||||
Executive Vice President and Chief Administrative Officer | ||||||||||||||||
| Steven Berns | — | — | 8,333 | 89,913 | ||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(a) | ||||||||||||
Alan T. Ennis President and Chief Executive Officer | — | — | 16,200 | 229,716 | ||||||||||||
Steven Berns Executive Vice President and Chief Financial Officer | — | — | 8,334 | 120,426 | ||||||||||||
Chris Elshaw Executive Vice President and Chief Operating Officer | — | — | 16,201 | 229,730 | ||||||||||||
David L. Kennedy Vice Chairman | — | — | 28,084 | 398,231 | ||||||||||||
Robert K. Kretzman Executive Vice President and Chief Administrative Officer | — | — | 12,867 | 182,454 | ||||||||||||
| (a) | The aggregate dollar amount realized upon the vesting of restricted shares was computed by multiplying the number of shares of restricted stock that vested during |
36
Mr. Ennis had 16,200 shares of restricted stock vest on January 10, 2012. Of this amount, 6,064 shares were withheld by the Company to cover tax withholding obligations; such withheld shares were not sold on the open market and became treasury shares. The NYSE closing market price of the Company’s Class A Common Stock on January 10, 2012 was $14.18 per share.
Mr. Berns had 8,334 shares of restricted stock vest on July 2, 2012. Of this amount, 3,007 shares were withheld by the Company to cover tax withholding obligations; such withheld shares were not sold on the open market and became treasury shares. The NYSE closing market price of the Company’s Class A Common Stock on July 2, 2012 was $14.45 per share.
Mr. Elshaw had 16,201 shares of restricted stock vest on January 10, 2012. Of this amount, 6,772 shares were withheld by the Company to cover tax withholding obligations; such withheld shares were not sold on the open market and became treasury shares. The NYSE closing market price of the Company’s Class A Common Stock on January 10, 2012 was $14.18 per share.
Mr. Kennedy had 28,084 shares of restricted stock vest on January 10, 2012. Of this amount, 10,438 shares were withheld by the Company to cover tax withholding obligations; such withheld shares were not sold on the open market and became treasury shares. The NYSE closing market price of the Company’s Class A Common Stock on January 10, 2012 was $14.18 per share.
Mr. Kretzman had 12,867 shares of restricted stock vest on January 10, 2012. Of this amount, 4,880 shares were withheld by the Company to cover tax withholding obligations; such withheld shares were not sold on the open market and became treasury shares. The NYSE closing market price of the Company’s Class A Common Stock on January 10, 2012 was $14.18 per share.
37
The following table shows, as of December 31, 2010 (the pension plan measurement date used for financial statement reporting purposes with respect to the audited financial statements included in the Company’s 2010Form 10-K),2012, the number of years of credited service under the plans, (which differs from the actual number of years of service to the Company), and the present value of accumulated benefit and payments during the last fiscal year, with respect to each Named Executive Officer under the Retirement Plan and the Pension Equalization Plan, as described below.
| Number of Years | Present Value of | Payments | ||||||||||||
| of Credited Service | Accumulated Benefit | During 2010 | ||||||||||||
Name | Plan Name | (#) | ($)(a) | ($) | ||||||||||
| David L. Kennedy | Retirement Plan | 7.50 | 105,416 | — | ||||||||||
Vice Chairman | Pension Equalization Plan | 7.50 | 360,650 | — | ||||||||||
| Alan T. Ennis | Retirement Plan | 4.75 | 58,795 | — | ||||||||||
President and Chief Executive Officer | Pension Equalization Plan | 4.75 | 71,530 | |||||||||||
| Chris Elshaw | Retirement Plan | 2.00 | 24,768 | — | ||||||||||
Executive Vice President and Chief Operating Officer | Pension Equalization Plan | 0.67 | �� | 24,168 | — | |||||||||
| Robert K. Kretzman | Retirement Plan | 21.42 | 628,183 | — | ||||||||||
Executive Vice | Pension | 21.42 | 1,931,432 | — | ||||||||||
President and Chief Administrative Officer | Equalization Plan Employment Agreement | 22.42 | 311,184 | |||||||||||
| Steven Berns | Retirement Plan | 7.33 | 73,575 | — | ||||||||||
Executive Vice President and Chief Financial Officer | Pension Equalization Plan | 7.33 | 32,701 | — | ||||||||||
Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(a) | Payments During 2012 ($) | ||||||||||
Alan T. Ennis | Retirement Plan | 4.75 | 85,882 | — | ||||||||||
President and Chief Executive Officer | Pension Equalization Plan | 4.75 | 104,485 | — | ||||||||||
Steven Berns | Retirement Plan | 7.33 | 125,655 | — | ||||||||||
Executive Vice President and Chief Financial Officer | Pension Equalization Plan | 7.33 | 55,849 | — | ||||||||||
Chris Elshaw | Retirement Plan | 2.00 | 31,784 | — | ||||||||||
Executive Vice President and Chief Operating Officer | Pension Equalization Plan | 0.67 | 31,013 | — | ||||||||||
David L. Kennedy | Retirement Plan | 7.50 | 116,634 | — | ||||||||||
Vice Chairman | Pension Equalization Plan | 7.50 | 399,029 | — | ||||||||||
Robert K. Kretzman | Retirement Plan | 21.42 | 902,393 | — | ||||||||||
Executive Vice President and Chief Administrative Officer | Pension Equalization Plan Employment Agreement |
| 21.42 24.42 |
|
| 2,774,526 1,713,472 |
| — | ||||||
| (a) | The amounts set forth in the Pension Benefits Table are based on the assumptions set forth in Note |
The Retirement Plan is intended to be a tax qualified defined benefit plan. The Pension Equalization Plan is a non-qualified and unfunded benefit plan. In May 2009, the Company amended the Retirement Plan and the Pension Equalization Plan to cease future benefit accruals under such plans after December 31, 2009. Prior to such amendments, benefits under the non-cash balance program of the Retirement Plan and the Pension Equalization Plan (the “Non-Cash Balance Program”) were a function of service and final average compensation. The Non-Cash Balance Program was designed to provide an employee having 30 years of credited service with an annuity generally equal to 52% of final average compensation less 50% of estimated individual Social Security benefits. Final average compensation is defined as average annual base salary and bonus (but not any part of bonuses in excess of 50% of base salary) during the five consecutive calendar years in which base salary and bonus (but not any part of bonuses in excess of 50% of base salary) were highest out of the last 10 years prior to retirement or earlier termination. Participants in the Non-Cash Balance Program are eligible for early retirement upon the later of the date that they reach age 55 or complete 10 years of service. The amount payable upon early retirement is calculated based on the normal retirement benefit calculation under the Non-Cash Balance Program, reduced by1/2% for each month that benefits start before the normal retirement date of age 65 (or 6% for each full year of early retirement). Messrs. Kennedy, Ennis, Elshaw and Elshaw,Kennedy, each of whom joined the Company after the implementation of the Cash Balance Program (as discussed below), did not participate in the Non-Cash Balance Program.
Effective January 1, 2001, Products Corporation amended the Retirement Plan and the Pension Equalization Plan to provide for a cash balance program under the Retirement Plansuch plans (the “Cash Balance Program”). Prior to ceasing future benefit accruals under the
38
Messrs. Kennedy, Ennis, Elshaw and ElshawKennedy participated in the Cash Balance Program prior to the cessation of future benefit accruals after December 31, 2009. Employees who as of January 1, 2001 were at least age 45, had 10 or more years of service with the Company and whose age and years of service totaled at least 60, including Mr. Kretzman, were “grandfathered” and continued to participate in the Non-Cash Balance Program under the same retirement formula described in the preceding paragraph, prior to ceasing future benefit accruals under the Retirement Plan and the Pension Equalization Plan after December 31, 2009. All eligible employees had their benefits earned (if any) under the Non-Cash Balance Program “frozen” on December 31, 2000 and began to participate in the Cash Balance Program on January 1, 2001, prior to ceasing future benefit accruals under the Retirement Plan and the Pension Equalization Plan after December 31, 2009. The “frozen” benefits will be payable at normal retirement age and will be reduced if the employee elects early retirement.
The Retirement Plan and Pension Equalization Plan each provide that employees vest in their benefits after they have completed three years of service with the Company or an affiliate of the Company. Each of the Named Executive Officers areis fully vested in theirhis respective benefits under the PensionRetirement Plan and the Pension Equalization Plan as of December 31, 2009. The Employee Retirement Income Security Act of 1974, as amended, places certain maximum limitations under ERISA and the Code upon the annual benefit payable under all qualified plans of an employer to any one individual. In addition, the Code limits the annual amount of compensation that can be considered in determining the level of benefits under qualified plans. TheAs noted above, the Pension Equalization Plan as amended, is a non-qualified and unfunded benefit arrangementplan that was designed to provide for the payment by the Company of the difference, if any, between the amount of such maximum limitations and the annual benefit that would otherwise be payable under the Retirement Plan but for such limitations, up to a combined maximum annual straight life annuity benefit at age 65 under the Retirement Plan and the Pension Equalization Plan of $500,000. Benefits provided under the Pension Equalization Plan are conditioned on the participant’s compliance with his or her non-competition agreement and on the participant not competing with Products Corporation for one year after termination of employment.
Based upon the application of IRS rules and the retirement programs’ respective terms, Messrs. Kennedy, Ennis, Elshaw and ElshawKennedy will be paid out their “frozen” vested accrued benefit under the Cash Balance Program, at termination or retirement, as a lump sum or in the form of a monthly annuity or other deferred payment, as they elect.elect; Mr. Kretzman will be paid out his accrued benefit under the Non-Cash Balance Program, at termination or retirement, in the form of a monthly annuity payment.payment; and Mr. Berns will be paid out his “frozen” accrued benefit under the Non-Cash Balance Program, at termination or retirement, in the form of a monthly annuity payment.
Prior to December 31, 2004, employees were able to make contributions to the Company’s Excess Savings Plan, As previously noted, the Company “froze” its U.S. qualified and non-qualified defined benefit retirement plans (namely, the Retirement Plan and the Pension Equalization Plan) so that no further benefits would accrue thereunder after December 31, 2009. The Company also amended its qualified and non-qualified savings plans effective January 1, 2010 to enable the Company, on a discretionary basis, to make profit-sharing contributions (equal to 5%, 3% and 3% of eligible compensation for 2010, The Excess Savings Plan provides for substantially the same investment choices as are available in the Company’s qualified 401(k) Plan. The Excess Savings Plan does not provide for above-market returns. Payments of participant balances under the Excess Savings Plan commence in accordance with the applicable provisions of thean unfunded,a non-qualified, defined contribution, deferred compensation plan, and the Company matched 50% of those contributions up to 6% of pay contributed. New contributions by employees to the Excess Savings Plan were frozen on December 31, 2004. Mr. Kretzman is the only Named Executive Officer who contributed to the Company’s Excess Savings Plan before it was frozen.5% of eligible compensation)2011 and 2012, respectively) to the qualified plan and, to the extent eligible compensation exceeds IRS limits, to the Excess Savings Plan (i.e., the non-qualified savings plan).39
Amounts shown in the table below reflect amounts deferred from compensation and Company matching contributions prior to December 31, 2004, plus discretionary Company contributions made under the discretionary employer profit-sharing provisions of the Excess Savings Plan during 2010,2012, as well as total account balances, inclusive of investment returns, as of December 31, 2010.2012. Mr. Kretzman has waived his eligibility to receive profit sharing contributions, as he has a retirement benefit under his employment agreement.
| Aggregate | ||||||||||||||||||||
| Executive | Registrant | Withdrawals/ | ||||||||||||||||||
| Contributions in | Contributions in | Aggregate Earnings | Distributions | Aggregate Balance | ||||||||||||||||
Name | 2010 ($) | 2010 ($)(a) | in 2010 ($)(b) | ($) | at 12/31/10 ($)(c) | |||||||||||||||
| David Kennedy | — | 18,327 | 623 | — | 12,123 | |||||||||||||||
Vice Chairman | ||||||||||||||||||||
| Alan T. Ennis | — | 54,856 | 4,825 | — | 47,431 | |||||||||||||||
President and Chief Executive Officer | ||||||||||||||||||||
| Chris Elshaw | — | 37,832 | 1,614 | — | 29,599 | |||||||||||||||
Executive Vice President and Chief Operating Officer | ||||||||||||||||||||
| Robert K. Kretzman | — | — | (1,367 | ) | — | 65,054 | ||||||||||||||
Executive Vice President and Chief Administrative Officer | ||||||||||||||||||||
| Steven Berns | — | 18,578 | 1,253 | — | 13,767 | |||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||||||||
Name | Executive Contributions in 2012 ($) | Registrant Contributions for 2012 ($)(a) | Aggregate Earnings in 2012 ($)(b) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at 12/31/12 ($)(c) | |||||||||||||||
Alan T. Ennis | — | 33,681 | 16,824 | — | 132,204 | |||||||||||||||
President and Chief Executive Officer | ||||||||||||||||||||
Steven Berns | — | 14,002 | 5,850 | — | 48,460 | |||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||||||||
Chris Elshaw | — | 26,398 | 9,249 | — | 95,620 | |||||||||||||||
Executive Vice President and Chief Operating Officer | ||||||||||||||||||||
David Kennedy | — | — | 1,989 | — | 21,121 | |||||||||||||||
Vice Chairman | ||||||||||||||||||||
Robert K. Kretzman | — | — | 9,096 | — | 74,330 | |||||||||||||||
Executive Vice President and Chief Administrative Officer | ||||||||||||||||||||
| (a) | These amounts represent discretionary employer contributions credited under the profit-sharing provisions of the Excess Savings Plan in respect to | |
| (b) | Amounts reported under Aggregate Earnings in | |
| (c) | These amounts |
40
The following Director Compensation table shows all compensation paid by the Company to its Directors in respect of 2010.
| Fees Earned or | All Other | |||||||||||||||||||||||
| Fiscal | Paid in Cash | Stock Awards | Option Awards | Compensation | Total | |||||||||||||||||||
Name (a) | Year | ($)(b) | ($) | ($) | ($)(c) | ($) | ||||||||||||||||||
| Alan S. Bernikow | 2010 | 148,000 | — | — | 25,000 | 173,000 | ||||||||||||||||||
| Paul J. Bohan | 2010 | 126,500 | — | — | 25,000 | 151,500 | ||||||||||||||||||
| Meyer Feldberg | 2010 | 135,000 | — | — | — | 135,000 | ||||||||||||||||||
| Ann D. Jordan | 2010 | 43,695 | — | — | — | 43,695 | ||||||||||||||||||
| Debra L. Lee | 2010 | 106,000 | — | — | — | 106,000 | ||||||||||||||||||
| Tamara Mellon | 2010 | 95,500 | — | — | — | 95,500 | ||||||||||||||||||
| Richard J. Santagati | 2010 | 110,500 | — | — | — | 110,500 | ||||||||||||||||||
| Kathi P. Seifert | 2010 | 128,000 | — | — | — | 128,000 | ||||||||||||||||||
Name (a) | Fiscal Year | Fees Earned or Paid in Cash ($)(b) | All Other Compensation ($)(c) | Total ($) | ||||||||||||
Alan S. Bernikow | 2012 | 181,000 | 25,000 | 206,000 | ||||||||||||
Paul J. Bohan | 2012 | 162,500 | 25,000 | 187,500 | ||||||||||||
Viet D. Dinh(d) | 2012 | 78,267 | — | 78,267 | ||||||||||||
Meyer Feldberg | 2012 | 172,500 | — | 172,500 | ||||||||||||
Debra L. Lee | 2012 | 142,000 | — | 142,000 | ||||||||||||
Tamara Mellon | 2012 | 131,500 | — | 131,500 | ||||||||||||
Richard J. Santagati | 2012 | 148,000 | — | 148,000 | ||||||||||||
Kathi P. Seifert | 2012 | 159,500 | — | 159,500 | ||||||||||||
| (a) | See “Summary Compensation Table” regarding compensation paid during the fiscal year to each of Messrs. | |
| (b) | During | |
| (c) | The amounts shown under the “All Other Compensation” column reflect fees received by Messrs. Bernikow and Bohan during |
41
| (d) | Mr. Dinh was elected to the Company’s Board of Directors at the Company’s 2012 Annual Stockholders’ Meeting, in June 2012. |
The following table sets forth, as of March 18, 2011,31, 2013, the number of shares of each class of the Company’s Voting Capital Stock beneficially owned, and the percent so owned, by (i) each person known to the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities; (ii) each director of the Company; (iii) the Chief Executive Officer during 2010 and each of the other Named Executive Officers during 2010;2012; and (iv) all directors and executive officers of the Company during 20102012 as a group. The number of shares owned are those beneficially owned, as determined under the applicable rules of the SEC for the purposes of this Proxy Statement, and such information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares of Voting Capital Stock as to which a person has sole or shared voting power or investment power and any shares of Voting Capital Stock which the person has the right to acquire within 60 days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of attorney or revocation of a trust, discretionary account or similar arrangement. Certain of the shares listed as beneficially owned are pursuant to stock options which were all“out-of-the-money” “out-of-the-money” as of such date.
| Amount and Nature of | ||||||
| Name and Address of | Beneficial Ownership (Class A Common | |||||
Beneficial Owner | Stock Unless Otherwise Noted) | Percentage of Class(10) | ||||
| Ronald O. Perelman | 37,577,140 | (1) | 77.9% (Class A and Class B | |||
| 35 E. 62nd St. | 3,125,000 (Class B Common Stock | )(1) | Common Stock, combined) | |||
| New York, NY 10065 | 76.6% (Class A Common Stock) 100% (Class B Common Stock) | |||||
| Alan S. Bernikow | 15,563 | (2) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 2,499 (Preferred Stock | )(9) | * | |||
| Steven Berns | 5,314 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
| Paul J. Bohan | 14,813 | (3) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 22,499 (Preferred Stock | )(9) | * | |||
| Chris Elshaw | 59,178 | (4) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 11,618 (Preferred Stock | )(9) | * | |||
| Alan T. Ennis | 37,168 | (5) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 23,648 (Preferred Stock | )(9) | * | |||
| Meyer Feldberg | 17,063 | (6) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 2,499 (Preferred Stock | )(9) | * | |||
| David L. Kennedy | 276,704 | (7) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 127,001 (Preferred Stock | )(9) | 1.4% (Preferred Stock) | |||
| Robert K. Kretzman | 152,605 | (8) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 49,209 (Preferred Stock | )(9) | * | |||
| Debra L. Lee | 9,666 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 2,499 (Preferred Stock | )(9) | * | |||
| Tamara Mellon | 7,166 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
| Richard J. Santagati | 680 (Preferred Stock | )(9) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
| Barry F. Schwartz | 22,014 (Preferred Stock | )(9) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
| Kathi P. Seifert | 9,666 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 14,807 (Preferred Stock | )(9) | * | |||
| All Directors and Executive Officers as a Group | 38,182,046 (Class A Common Stock | ) | 67.2% (Class A Common Stock, Class B | |||
| (14 Persons) | 3,125,000 (Class B Common Stock | ) | Common Stock, & Preferred | |||
| 278,973 (Preferred Stock | )(9) | Stock, combined) | ||||
| 77.3% (Class A Common Stock) 100% (Class B Common Stock) 3.0% (Preferred Stock) | ||||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (Class A Common Stock Unless Otherwise Noted) | Percentage of Class(5) | ||||||
Ronald O. Perelman c/o MacAndrews and Forbes Holdings Inc., | 37,544,640 3,125,000 (Class B Common Stock) | (1) (1) | 76.3% (Class A Common Stock) 100% (Class B Common Stock) | |||||
Alan S. Bernikow c/o Revlon, 237 Park Ave., New York, NY 10017 | 14,000 2,499 (Preferred Stock) | (2) (4) | * * | |||||
Steven Berns c/o Revlon, 237 Park Ave., New York, NY 10017 | 15,955 | * | ||||||
Paul J. Bohan c/o Revlon, 237 Park Ave., New York, NY 10017 | 13,250 22,499 (Preferred Stock) | (4) | * * | |||||
Viet D. Dinh c/o Revlon, 237 Park Ave., New York, NY 10017 | 0 | * * | ||||||
Chris Elshaw c/o Revlon, 237 Park Ave., New York, NY 10017 | 44,407 11,618 (Preferred Stock) | (4) | * * | |||||
Alan T. Ennis c/o Revlon, 237 Park Ave., New York, NY 10017 | 45,304 23,648 (Preferred Stock) | (4) | * * | |||||
Meyer Feldberg c/o Revlon, 237 Park Ave., New York, NY 10017 | 13,250 2,499 (Preferred Stock) | (4) | * * | |||||
David L. Kennedy c/o Revlon, 237 Park Ave., New York, NY 10017 | 116,550 127,001 (Preferred Stock) | (3) (4) | * 1.4% (Preferred Stock) | |||||
Cecelia Kurzman c/o Revlon, 237 Park Ave., New York, NY 10017 | 0 | * | ||||||
Robert K. Kretzman c/o Revlon, 237 Park Ave., New York, NY 10017 | 46,592 49,209 (Preferred Stock) | (4) | * * | |||||
Debra L. Lee c/o Revlon, 237 Park Ave., New York, NY 10017 | 13,250 2,499 (Preferred Stock) | (4) | * * | |||||
Tamara Mellon c/o Revlon, 237 Park Ave., New York, NY 10017 | 10,750 | * | ||||||
Richard J. Santagati c/o Revlon, 237 Park Ave., New York, NY 10017 | 680 (Preferred Stock) | * | ||||||
Barry F. Schwartz c/o Revlon, 237 Park Ave., New York, NY 10017 | 22,014 (Preferred Stock) | (4) | * | |||||
Kathi P. Seifert c/o Revlon, 237 Park Ave., New York, NY 10017 | 13,250 14,807 (Preferred Stock) | (4) | * * | |||||
Wells Fargo & Company 420 Montgomery Street, San Francisco, CA 94104 | 472,720 (Preferred Stock) | (6) | 5.06% (Preferred Stock) | |||||
All Directors and Executive Officers, as a Group (16 Persons) | 37,891,198 (Class A Common Stock) 3,125,000 (Class B Common Stock) 278,973 (Preferred Stock) | (4) | 76.96% (Class A Common Stock) 100% (Class B Common Stock) 3.0% (Preferred Stock) | |||||
| * | Less than one percent. |
| (1) | Mr. Perelman beneficially owned, directly and indirectly through MacAndrews & Forbes, as of March |
42
| owned, as of March | ||
| (2) | Includes | |
| (3) | Includes | |
43
| (4) | The referenced Executive Officers and Directors, each of whom was a director, officer and/or employee of the Company at the time of the Company’s 2009 Exchange Offer, fully participated in the |
In November 2009, affiliates of Fidelity filed a Schedule 13G/A with the SEC disclosing that they ceased to own any shares of Class A Common Stock. In 2010, Fidelity advised the Company that, as of the April 8, 2010 |
| and |
| (6) | On February 13, 2013, Wells Fargo & Company filed a Schedule 13G with the SEC disclosing that it owned 472,720 shares of Revlon, Inc. Series A Preferred Stock, as of December 31, 2012, representing approximately 5.06% of the Company’s issued and outstanding shares of Preferred Stock. As Revlon, Inc.’s Series A Preferred Stock is not registered under Section 12 of the Exchange Act, ownership of such shares does not require any such Schedule 13G filing obligation. |
The following table sets forth as of December 31, 2010,2012, with respect to all equity compensation plans of the Company previously approved and not previously approved by its stockholders: (i) the number of securities to be issued upon the exercise of outstanding options, warrants and rights; (ii) the weighted-average exercise price of such outstanding options, warrants and rights; and (iii) the number of securities remaining available for future issuance under such equity compensation plans, excluding securities reflected in column (a). (b) (c) (a) Weighted-Average Number of Securities Remaining Number of Securities to Exercise Price of Available for Future Issuance be Issued Upon Exercise Outstanding Under Equity Compensation of Outstanding Options, Options, Warrants Plans (Excluding Securities Warrants and Rights and Rights Reflected in Column (a)) Previously Approved by Stockholders: Stock Plan 987,886 (1) 31.68 3,416,662 (2) Not Previously Approved by Stockholders: — — —
| (a) | (b) | (c) | ||||||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Previously Approved by Stockholders: | ||||||||||||
Stock Plan | 8,105 | (1) | $ | 29.91 | 4,628,351 | (2) | ||||||
Not Previously Approved by Stockholders: | — | — | — | |||||||||
| (1) | ||
| (2) | As of December 31, |
As of December 31, 2010,2012, MacAndrews & Forbes beneficially owned shares of Revlon, Inc.’s Voting Capital Stock having approximately 77% of the combined voting power of such outstanding shares. As a result, MacAndrews & Forbes is able to elect Revlon, Inc.’s entire Board of Directors and control the vote on all matters submitted to a vote of Revlon, Inc.’s stockholders. MacAndrews & Forbes is wholly owned by Ronald O. Perelman, Chairman of Revlon, Inc.’s Board of Directors.
In June 1992, Revlon, Inc. and Products Corporation entered into an asset transfer agreement with Revlon Holdings LLC, a Delaware limited liability company and formerly a Delaware corporation known as Revlon Holdings Inc. (“Revlon Holdings”), and which is an affiliate and an indirect wholly-owned subsidiary of44
Revlon, Inc., Products Corporation and MacAndrews & Forbes Inc., a wholly-owned subsidiary of MacAndrews & Forbes Holdings Inc. (“MacAndrews & Forbes Holdings”) have entered into reimbursement agreements (the “Reimbursement Agreements”) pursuant to which (i) MacAndrews & Forbes Inc. is obligated to provide (directly or through its affiliates) certain professional and administrative services, including without limitation employees, to Revlon, Inc. and its subsidiaries, including without limitation Products Corporation, and to purchase services from third party providers, such as insurance, legal, The Company reimburses MacAndrews & Forbes for the allocable costs of the services purchased for or provided by MacAndrews & Forbes to The Reimbursement Agreements may be terminated by either party on 90 days’ notice. The Company participates in MacAndrews & Forbes’ directors’ and officers’ liability insurance program (the “D&O Insurance Program”), as well as its other insurance coverages, such as property damage, business interruption, liability and other coverages, which The net and accounting services and air transportation services, on behalf of Revlon, Inc. and its subsidiaries, including Products Corporation, to the extent requested by Products Corporation, and (ii) Products Corporation is obligated to provide certain professional and administrative services, including without limitation employees, to MacAndrews & Forbes and purchase services from third party providers, such as insurance, legal and accounting services, on behalf of MacAndrews & Forbes to the extent requested by MacAndrews & Forbes, provided that in each case the performance of such services does not cause an unreasonable burden to MacAndrews & Forbes or Products Corporation, as the case may be.Products CorporationProducts Corporationthe Company and its subsidiaries and for the reasonableout-of-pocket expenses incurred by MacAndrews & Forbes in connection with the provision of such services. MacAndrews & Forbes reimburses Products Corporation for the allocable costs of the services purchased for or provided by Products Corporation to MacAndrews & Forbes and for the reasonableout-of-pocket expenses incurred by Products Corporation in connection with the purchase or provision of such services. Each of Revlon, Inc. and Products Corporation,the Company, on the one hand, and MacAndrews & Forbes Inc., on the other, has agreed to indemnify the other party for losses arising out of the provision of services provided by it under the Reimbursement Agreements, other than losses resulting from its willful misconduct or gross negligence.Products CorporationThe Company does not intend to request services under the Reimbursement Agreements unless their costs would be at least as favorable to Products Corporationthe Company as could be obtained from unaffiliated third parties.Revlon, Inc. and Products Corporation participatecovers Revlon, Inc. and Products Corporationcover the Company as well as MacAndrews & Forbes.Forbes and its subsidiaries. The limits of coverage for certain of the policies are available on an aggregate basis for losses to any or all of the participating companies and their respective directors and officers. Revlon, Inc. and Products Corporation reimburseThe Company reimburses MacAndrews & Forbes from time to time for their allocable portion of the premiums for such coverage or they paythe Company pays the insurers directly, which premiums the Company believes are more favorable than the premiums the Company would pay were it to secure stand-alone coverage. Any amounts paid by Revlon, Inc. and Products Corporationthe Company directly to MacAndrews & Forbes in respect of premiums are included in the amounts paid under the Reimbursement Agreements.amount reimbursable from MacAndrews & Forbesactivity related to Products Corporation for the services provided and/or purchased under the Reimbursement Agreements during the year ended December 31, 2012 was $3.3 million, which primarily includes $18.0 million of costs incurred by the Company that were reimbursed by MacAndrews & Forbes from proceeds received from the D&O Insurance Program, partially offset by a $14.6 million partial pre-payment made by the Company to MacAndrews & Forbes during the first quarter of 2012 for 2010 was $0.1 million.
As a result of adebt-for-equity exchange transaction completed in March 2004 (the “2004 Revlon Exchange Transactions”), as of March 25, 2004, Revlon, Inc., Products Corporation and their U.S. subsidiaries were no longer45
Revlon Holdings, Revlon, Inc., Products Corporation and certain of its subsidiaries and MacAndrews & Forbes Holdings entered into a tax sharing agreement (as subsequently amended and restated, the “MacAndrews & Forbes Tax Sharing Agreement”) for taxable periods beginning on or after January 1, 1992 through and including March 25, 2004, during which Revlon, Inc. and Products Corporation or a subsidiary of Products Corporation was a member of the MacAndrews & Forbes Group. In these taxable periods, Revlon, Inc.’s and Products Corporation’s federal taxable income and loss were included in such group’s consolidated tax return filed by MacAndrews & Forbes Holdings. Revlon, Inc. and Products Corporation were also included in certain state and local tax returns of MacAndrews & Forbes Holdings or its subsidiaries. Revlon, Inc. and Products Corporation remain liable under the MacAndrews & Forbes Tax Sharing Agreement, for all such taxable periods through and including March 25, 2004 for amounts determined to be due as a result of a redetermination arising from an audit or otherwise, equal to the taxes that Revlon, Inc. or Products Corporation would otherwise have had to pay if it were to have filed separate federal, state or local income tax returns for such periods.
Following the closing of the 2004 Revlon Exchange Transactions, Revlon, Inc. became the parent of a new consolidated group for federal income tax purposes and Products Corporation’s federal taxable income and loss will beare included in such group’s consolidated tax returns. Accordingly, Revlon, Inc. and Products Corporation entered into a tax sharing agreement (the “Revlon Tax Sharing Agreement”) pursuant to which Products Corporation will beis required to pay to Revlon, Inc. amounts equal to the taxes that Products Corporation would otherwise have had to pay if Products Corporation were to file separate federal, state or local income tax returns, limited to the amount, and payable only at such times, as Revlon, Inc. will be required to make payments to the applicable taxing authorities.
There were no federal tax payments or payments in lieu of taxes from Revlon, Inc. to Revlon Holdings pursuant to the MacAndrews & Forbes Tax Sharing Agreement in 20102012 with respect to periods covered by the MacAndrews & Forbes Tax Sharing Agreement, and the Company expects that there will not be any such payments in 2011.2013. During 2010,2012, there were nowas $0.3 million in federal tax payments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement with respect to 2009. During 2010,2011 and $1.8 million with respect to 2012. The Company expects that there werewill be $0.1 million in federal tax payments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement of $0.2 millionduring 2013 with respect to 2010. The Company expects that there will be no federal tax payment from2012.
Pursuant to the asset transfer agreement referred to above, Products Corporation assumed all tax liabilities of Revlon Holdings other than (i) certain income tax liabilities arising prior to Revlon, Inc. pursuantJanuary 1, 1992 to the extent such liabilities exceeded the reserves on Revlon Tax Sharing Agreement during 2011 with respectHoldings’ books as of January 1, 1992 or were not of the nature reserved for and (ii) other tax liabilities to 2010.
Prior to the consummation of Revlon, Inc.’s initial public equity offering in February 1996, Revlon, Inc. and Revlon Worldwide Corporation (which subsequently merged into REV Holdings LLC, a Delaware limited liability company (formerly a Delaware corporation) and a wholly-owned subsidiary of MacAndrews & Forbes (“REV Holdings”), the then direct parent of Revlon, Inc.) entered into a registration rights agreement (the “Registration Rights Agreement”), and in February 2003, MacAndrews & Forbes executed a joinder agreement to the Registration Rights Agreement, pursuant to which REV Holdings, MacAndrews & Forbes and certain transferees of Revlon, Inc.’s Common Stock held by REV Holdings (the “Holders”) hadhave the right to require Revlon, Inc. to register under the Securities Act of 1933, as amended, all or part of the Class A Common Stock owned by such Holders, including, without limitation, shares of Class A Common Stock purchased by MacAndrews & Forbes in connection with the $50.0 million equity rights offering consummated by Revlon, Inc. in 2003 and shares of Class A Common Stock issuable upon conversion of Revlon, Inc.’s Class B Common Stock owned by such Holders (a “Demand Registration”). In connection with the closing of the 2004 Revlon Exchange Transactions and pursuant to an Investment Agreement entered into in connection with such transactions (the “2004 Investment Agreement”), MacAndrews & Forbes executed a joinder agreement that provided that MacAndrews & Forbes would also be a Holder under the Registration Rights Agreement and that all shares acquired by MacAndrews & Forbes pursuant to the 2004 Investment Agreement are deemed to be registrable securities under the Registration Rights Agreement. This included all of the shares of Class A Common Stock acquired by MacAndrews & Forbes in connection with the Company’sRevlon, Inc.’s $110 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, which was consummated in March 2006, and the Company’s $100 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, which was consummated in January 2007.46
Upon consummation of the 2009 Exchange Offer in October 2009, MacAndrews & Forbes contributed to Revlon, Inc. $48.6 million of the On April 30, 2012, MacAndrews & Forbes exercised its right to assign its interest in the Non-Contributed Loan. In connection with such assignment, Products Corporation entered into an Amended and Restated Senior Subordinated Term Loan Agreement with MacAndrews & Forbes and a related Administrative Letter was entered into with Citibank, N.A. and MacAndrews & Forbes, to among other things: Concurrent with the effectiveness of the Amended and Restated Senior Subordinated Term Loan Agreement, MacAndrews & Forbes assigned its entire interest in Pursuant to the terms of The Amended and Restated Senior Subordinated Term Loan is an unsecured obligation of Products Corporation and is subordinated in right of payment to all existing and future senior debt of Products Corporation, currently including indebtedness under Products Corporation’s 2011 Credit Agreements and its 5 3/4% Senior Notes. The Amended and Restated Senior Subordinated Term Loan has the right to payment equal in right of payment with any present and future senior subordinated indebtedness of Products Corporation. The Amended and Restated Senior Subordinated Term Loan Agreement contains covenants (other than the subordination provisions discussed above) that limit the ability of Products Corporation and its subsidiaries to, among other things, incur additional indebtedness, pay dividends on or redeem or repurchase stock, engage in certain asset sales, make certain types of investments and other restricted payments, engage in certain transactions with affiliates, restrict dividends or payments from subsidiaries and create liens on their assets. All of these limitations and prohibitions, however, are subject to a number of important qualifications and exceptions. The Amended and Restated Senior Subordinated Term Loan Agreement includes a cross acceleration provision which provides that it shall be an event of default under such agreement if any debt (as defined in such agreement) of Products Corporation or any of its significant subsidiaries (as defined in such agreement) is not paid within any applicable grace period after final maturity or is accelerated by the holders of such debt because of a default and the total principal amount of the portion of such debt that is unpaid or accelerated exceeds $25.0 million and such default continues for 10 days after notice from the holders of a majority of the outstanding principal amount of the Amended and Restated Senior Subordinated Term Loan (provided that if Revlon, Inc. or Products Corporation held such majority, notice would be required from the holders of a majority of the outstanding principal amount of the Amended and Restated Senior Subordinated Term Loan not held by Revlon, Inc. or Products Corporation at the time of any such decision). If any such event of default occurs, such requisite holders of the Non-Contributed and Contributed Loans may declare the Amended and Restated Senior Subordinated Term Loan to be due and payable immediately. The Amended and Restated Senior Subordinated Term Loan Agreement also contains other customary events of default for loan agreements of such type, including, subject to applicable grace periods, nonpayment of any principal or interest when due under such agreement, non-compliance with any of the material covenants in such agreement, any representation or warranty being incorrect, false or misleading in any material respect, or the occurrence of certain bankruptcy, insolvency or similar proceedings by or against Products Corporation or any of its significant subsidiaries. Upon any change of control (as defined in the Amended and Restated Senior Subordinated Term Loan Agreement), Products Corporation is required to repay the Amended and Restated Senior Subordinated Term Loan in full, provided that prior to such loan’s respective maturity dates all shares of Revlon, Inc.’s Preferred Stock have been or are being concurrently redeemed and all payments due thereon are paid in full or are concurrently being paid in In connection with the closing of the MacAndrews & Forbes Senior Subordinated Term Loan, Revlon, Inc. and MacAndrews & Forbes entered into a letter agreement in January 2008 pursuant to which Revlon, Inc. agreed that if Revlon, Inc. conducts any equity offering before full payment of the MacAndrews & ForbesAmended and Restated Senior Subordinated Term Loan and Related Transactions$107.0$107 million aggregate outstanding principal amount of the Senior Subordinated Term Loan (the “Senior Subordinated Term Loan;” the agreement in respect to such loan is referred to as the “Senior Subordinated Term Loan Agreement”) made fromin January 2008 by MacAndrews & Forbes to Products Corporation in 2008 in the original aggregate principal amount of $170 million (such $48.6 million of the Senior Subordinated Term Loan being the(the “Contributed Loan;” the remaining $58.4 million in principal amount of the Senior Subordinated Term Loan is referred to as the “Non-Contributed Loan”), representing $5.21 of outstanding principal amount for each of the 9,336,905 shares of Revlon, Inc.’s Class A Common Stock exchanged in the 2009 Exchange Offer, and Revlon, Inc. issued to MacAndrews & Forbes 9,336,905 shares of Class A Common Stock at a ratio of one share of Class A Common Stock for each $5.21 of outstanding principal amount of the Senior Subordinated Term Loan contributed to Revlon. Also uponRevlon, Inc. Upon consummation of the 2009 Exchange Offer, the terms of the Senior Subordinated Term Loan Agreement were amended to (i) extend the maturity date onof the Contributed Loan which remains owing from Products Corporation to Revlon, Inc. from August 2010 to October 8, 2013, and to change the annual interest rate on the Contributed Loan from 11% to 12.75%, to; and (ii) extend the maturity date onof the Non-Contributed$58.4 million principal amount of the Senior Subordinated Loan which, at December 31, 2011, remained owing from Products Corporation to MacAndrews & Forbes (the “Non-Contributed Loan”) from August 2010 to October 8, 2014 and to change the annual interest rate on the Non-Contributed Loan from 11% to 12%.Interest under(i) modify the interest rate on the Non-Contributed Loan from its prior 12% fixed rate to a floating rate of LIBOR plus 7%, with a 1.5% LIBOR floor, resulting in an interest rate of approximately 8.5% per annum through December 31, 2012 (or a 3.5% reduction per annum) upon the effectiveness of the Amended and Restated Senior Subordinated Term Loan Agreement. Interest under the Amended and Restated Senior Subordinated Term Loan Agreement is payable quarterly in arrears in cash; (ii) insert prepayment premiums such that Products Corporation may optionally prepay the Non-Contributed Loan (i) through October 31, 2013 with a prepayment premium based on a formula designed to provide the assignees of the Non-Contributed Loan with the present value, using a discount rate of 75 basis points over U.S. Treasuries, of the principal, premium and interest that would have accrued on the Non-Contributed Loan from any such prepayment date through October 31, 2013 (provided that, pursuant to the loan’s terms (both before and after giving effect to these amendments), no portion of the principal amount of the Non-Contributed Loan may be repaid prior to its October 8, 2014 maturity date unless and until all shares of Revlon, Inc.’s Preferred Stock have been or are being concurrently redeemed and all payments due thereon are paid in full or are concurrently being paid in full), (ii) from November 1, 2013 through April 30, 2014 with a 2% prepayment premium on the aggregate principal amount of the Non-Contributed Loan being prepaid, and (iii) from May 1, 2014 through maturity on October 8, 2014 with no prepayment premium; and (iii) designate Citibank, N.A. as the administrative agent for the Non-Contributed Loan. arrears in cash on January 8, April 8, July 8 and October 8the Non-Contributed Loan to several third parties.each year.the Contributed Loan, Products Corporation may, at its option, prepay such loan, in whole or in part (together with accrued and unpaid interest), at any time prior to its respective maturity datesdate without premium or penalty,provided that prior to such loan’s maturity date all shares of Revlon, Inc.’s Preferred Stock have been or are being concurrently redeemed and all payments due thereon are paid in full or are concurrently being paid in full.full.The Senior Subordinated Term Loan isfull, after fulfilling an unsecured obligation of Products Corporation and is subordinated in right of paymentoffer to all existing and future senior debt of Products Corporation, currently including indebtedness under (i)repay Products Corporation’s 2010 Credit Agreements (as defined below), and (ii) Products Corporation’s 953/4% Senior Secured Notes. PriorNotes and to its respective maturity dates, the Senior Subordinated Term Loan is also subordinated in right of payment to Revlon, Inc.’s Preferred Stock. The Senior Subordinated Term Loan has the right to payment equal in right of payment with any present and future senior subordinated indebtedness ofextent permitted by Products Corporation.The Senior Subordinated Term Loan Agreement contains various restrictive covenants, cross acceleration provisions, customary events of default for loan agreements of such type, and change of control provisions.MacAndrews & ForbesAmended and Restated Senior Subordinated Term Loan, and, if MacAndrews & Forbesand/or its affiliates elects to participate in any such offering, MacAndrews & Forbesand/or its affiliates may pay for any shares it acquires in such offering either in cash or by tendering debt valued at its face amount under the Non-ContributedAmended and Restated Senior Subordinated Term Loan, if any, including any accrued but unpaid interest, on a dollar for dollar basis, or in any combination of cash and such debt. Revlon, Inc. is under no obligation to conduct an equity offering and MacAndrews & Forbes and its affiliates are under no obligation to subscribe for shares should Revlon elect to conduct an equity offering.47
In connection with consummating the 2009 Exchange Offer, Revlon, Inc. and MacAndrews & Forbes entered into a Contribution and Stockholder Agreement on August 9, 2009 (as amended, the “Contribution and Stockholder Agreement”), pursuant to which through October 8, 2013:
During any period in which Revlon, Inc. may not be subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, Revlon, Inc. will file or furnish, as appropriate, with the SEC on a voluntary basis all periodic and other reports that are required of a company that is subject to such reporting requirements;
Revlon, Inc. will maintain a majority of independent directors on its Board of Directors, each of whom meets the “independence” criteria as set forth in Section 303A.02 of the NYSE Listed Company Manual, as it currently does; and
