Table of ContentsUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14AProxy Statement Pursuant to Section
PROXY STATEMENT PURSUANT TO SECTION 14(a) of the
Securities Exchange Act ofOF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant
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Filed by a Party other than the Registrant
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o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted byRule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant toRule 14a-12
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Table of Contents
REVLON, INC.
237 PARK AVENUE
NEW YORK, NEW YORKNY 10017
April 25, 2008
19, 2011
You are cordially invited to attend the
20082011 Annual Meeting of Stockholders of Revlon, Inc., which will be held at 10:00 a.m., Eastern Time, on Thursday, June
5, 2008,2, 2011, at Revlon’s Research Center
at 2121 Route 27, Edison,
New JerseyNJ 08818. The matters to be acted upon at the meeting are described in the
attachedaccompanying Notice of Annual Meeting of Stockholders and Proxy Statement. Please also see the
attachedaccompanying Notice of Annual Meeting of Stockholders and Proxy Statement for important information that you will need in order to pre-register for
admission to the meeting,
by phone and for admission, if you plan to attend
the 2008 Annual Meeting in person.
While stockholders may exercise their right to vote their shares in person, we recognize that many stockholders may not be able to attend the 2011 Annual Meeting. Accordingly,In accordance with rules adopted by the U.S. Securities and Exchange Commission, we have enclosedare mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials (instead of a paper copy of the Proxy Statement and our 2010 Annual Report) which contains instructions on how stockholders can access the proxy that will enablematerials over the Internet and vote electronically. The Notice of Internet Availability of Proxy Materials also contains instructions on how stockholders can receive a paper copy of our proxy materials, including the Proxy Statement, the 2010 Annual Report and a form of proxy card. Our proxy materials are being furnished to stockholders on or about April 19, 2011.
Whether or not you plan to attend the 2011 Annual Meeting, we encourage you to vote your shares, onregardless of the mattersnumber of shares you hold, by utilizing the voting options available to be considered at the Annual Meeting even if you are unable or choose not to attend. If you desire to vote in accordance with management’s recommendations, you need only sign, date and return the proxyas described in the enclosed postage-paid envelope to record your vote. Otherwise, please mark the proxy to indicate your vote, dateNotice of Internet Availability of Proxy Materials and sign the proxy and return it in the enclosed postage-paid envelope. In either case, you should return the proxy as soon as conveniently possible.our Proxy Statement. This will not restrict your right to attend the 20082011 Annual Meeting and vote your shares in person.person, should you wish to change your prior vote.
Thank you.
Sincerely yours,
Alan T. Ennis
President and Chief Executive Officer
Thank you for your interest in and participation in the affairs of Revlon.
| Sincerely yours,
David L. Kennedy
President and Chief Executive Officer |
Table of ContentsREVLON, INC.
237 PARK AVENUE
NEW YORK, NEW YORKNY 10017
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To the Stockholders of
Revlon, Inc.The
20082011 Annual Meeting of Stockholders of Revlon, Inc., a Delaware corporation (the
‘‘Company’’“Company”), will be held at 10:00 a.m., Eastern Time, on Thursday, June
5, 2008,2, 2011, at Revlon’s Research Center
at 2121 Route 27, Edison,
New JerseyNJ 08818. The following proposals will be voted on at the
20082011 Annual Meeting:
1.
Thethe election of the following persons as members of the
Company’s Board of Directors
of the Company to serve until the next Annual Meeting and until such directors’ successors are elected and shall have been qualified: Ronald O. Perelman, Alan S. Bernikow, Paul J. Bohan,
Alan T. Ennis, Meyer Feldberg, David L. Kennedy, Debra L. Lee,
Tamara Mellon, Richard J. Santagati, Barry F. Schwartz
and Kathi P.
Seifert and Kenneth L. Wolfe;Seifert;
2. Thethe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008;2011;
3. the non-binding, advisory vote of stockholders on the Company’s executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and
3. The Analysis,” compensation tables and accompanying narrative set forth in this Proxy Statement(“say-on-pay”);
4. the non-binding, advisory vote of stockholders on the future frequency of the“say-on-pay” vote; and
5. the transaction of such other business as may properly come before the
2011 Annual Meeting.
A
proxy statementProxy Statement describing the matters to be considered at the
20082011 Annual Meeting
is attached toaccompanies this notice. Only stockholders of record at 5:00 p.m., Eastern Time, on April
17, 20088, 2011 are entitled to notice of, and to vote at, the
20082011 Annual Meeting and at any adjournments thereof. For at least ten days prior to the
20082011 Annual Meeting, a list of stockholders entitled to vote at the
20082011 Annual Meeting will be available for inspection during normal business hours at the offices of the Company’s Secretary at 237 Park Avenue, 14th Floor, New York,
New YorkNY 10017, and such list also will be available at the
20082011 Annual Meeting.
To ensureImportant Notice Regarding the Availability of Proxy Materials for the June 2, 2011 Annual
Stockholders’ Meeting:
We are delivering our Proxy Statement and 2010 Annual Report under U.S. Securities and Exchange Commission rules that your voterequire companies to make proxy materials available to their stockholders over the Internet and to furnish notice of Internet access to such materials. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials to all of our stockholders (stockholders who have a request for paper copies on file with our transfer agent or their broker will be counted, please complete, date, sign and return the enclosedreceive paper copies of our proxy card promptlymaterials in the enclosed postage-paid envelope, whethermail). A paper copy of our proxy materials may be requested through one of the methods described in the Notice of Internet Availability of Proxy Materials. Our Proxy Statement, including the Notice of Annual Meeting of Stockholders, and our 2010 Annual Report to Stockholders are available atwww.proxyvote.com (where stockholders may also vote their shares, over the Internet) and atwww.revloninc.com.
Whether or not you plan to attend the 20082011 Annual Meeting, your vote is important. Please promptly submit your proxy by Internet, telephone or mail by following the instructions found on your Notice of Internet Availability of Proxy Materials or proxy card. Your proxy can be withdrawn by you at any time before it is voted at the 2011 Annual Meeting.
If you plan to attend the 20082011 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 do so. You will need to presentvalid picture identification, such as a driver’s license or passport, as well as original proof of ownership of shares of Revlon, Inc. Class A common stock as of the April 17, 2008 record date, in order to be admitted to the meeting. If your shares are held inother than as a stockholder of record (such as
beneficially through a brokerage, accountbank or by anotherother nominee or if you received your proxy materials electronically,account), you will need to b ringpresent original documents (copies will not be accepted) to evidence your stock ownership as of the April 17, 20088, 2011 record date, such as an original of a legal proxy from your bank or broker (‘‘(“Requests for Admission’’Admission” will not be accepted), your brokerage account statement demonstrating that you held Revlon, Inc. Class A common stockCommon Stock, Class B Common Stock or Series A Preferred Stock (“voting capital stock”) in your account on the April 17, 20088, 2011 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. Class A commonvoting capital stock in your account on the April 17,8, 2011 record date.Please see our Proxy Statement for information on how to pre-register for the meeting, should you wish to attend.
As previously disclosed, in September 2008, the Company completed a1-for-10 reverse stock split of its Class A and Class B Common Stock (the “Reverse Stock Split”) pursuant to which each ten (10) shares of Revlon, Inc. Class A and Class B Common Stock issued and outstanding immediately prior to 11:59 p.m. on September 15, 2008 were automatically combined into one (1) share of Class A Common Stock and Class B Common Stock, respectively, subject to the elimination of fractional shares. The Company has determined that stockholders who have not yet surrendered their shares to the Company’s transfer agent for exchange in connection with the Reverse Stock Split will be considered stockholders of record date. If you are a registered stockholder and planwill be permitted to receive these proxy materials, vote their shares (after giving effect to the1-for-10 Reverse Stock Split) and attend the 20082011 Annual Meeting in person, please also check the appropriate box on your proxy card indicating that you intend to do so.
Meeting.Table of ContentsIn order to expedite the admission registration process, we encourage stockholders to pre-register by phone by calling either Amy Heidingsfelder,in accordance with the Company’s Manager, Corporate Secretary Administration, at (212) 527-5628, or Meaghan Connerty, the Company’s Senior Corporate Legal Assistant, at (212) 527-5528, Mondays through Fridays from 9:00 a.m. through 5:00 p.m., Eastern Time, up until 10:00 a.m., Eastern Time, on Wednesday, June 4, 2008 (the day prior to the 2008 Annual Meeting). Stockholders pre-registering by phone will be admitted to the meeting by presenting valid picture identification and, if your shares are heldpre-registration procedures set forth in a brokerage account or by another nominee, original evidence of your stock ownership asour Proxy Statement.
Thank you.
By Order of the Board of Directors
Michael T. Sheehan
Senior Vice President, Deputy General Counsel
and Secretary
April
17, 2008 record date.Thank you.
| By Order of the Board of Directors |
19, 2011 | Robert K. Kretzman
Executive Vice President,
Chief Legal Officer and Secretary |
April 25, 2008
PLEASE COMPLETE, DATE AND SIGNPROMPTLY SUBMIT YOUR VOTE BY INTERNET, TELEPHONE OR MAIL BY FOLLOWING THE ENCLOSEDINSTRUCTIONS FOUND ON YOUR NOTICE OF INTERNET AVAILABILITY OF PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.MATERIALS, VOTING INSTRUCTION FORM OR PROXY CARD. THIS WILL ENSURE THAT YOUR SHARES ARE VOTED IN ACCORDANCE WITH YOUR WISHES.
TABLE OF CONTENTS
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| Q. | Why am I receiving these proxy materials? |
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| A. | Our Board of Directors is providing this Proxy Statement and other materials to you in connection with the Company’s 20082011 Annual Meeting of Stockholders. This Proxy Statement describes the matters proposed to be voted on at the 20082011 Annual Meeting, including the election of directors, the ratification of the selection of the Company’s independent registered public accounting firm for 20082011, the non-binding, advisory vote of the Company’s stockholders on 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”), the non-binding, advisory vote of the Company’s stockholders on the future frequency of the“say-on-pay” vote, and such other business as may properly come before the 20082011 Annual Meeting. The approximate date on which this Proxy Statement and enclosedwhen these proxy cardmaterials are being mailedmade available to you is April 25, 2008.19, 2011. |
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| Q. | What isWhy did I receive a notice regarding the purposeInternet availability of the Annual Meeting?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 2011 Annual Meeting, we are making the proxy materials and our 2010 Annual Report available to our stockholders electronically via the Internet. On or about April 19, 2011, 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 2010 Annual Report over the Internet and vote electronically, as well as instructions on how stockholders can receive a paper copy of our proxy materials, including the 2011 Proxy Statement, the 2010 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, 2011 Annual
Stockholders’ Meeting:
Our 2011 Proxy Statement, including the Notice of Annual Meeting of Stockholders, and 2010 Annual Report to Stockholders are available atwww.proxyvote.com (where stockholders may also vote their shares, via the Internet) and atwww.revloninc.com.
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| Q. | How can I request paper copies of proxy materials? |
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| A. | AtIf you only received the 2008Internet Notice, you will not receive a printed copy of the proxy materials unless you request them. There is no charge imposed by the Company for requesting a copy. To request paper copies, stockholders can (i) go towww.proxyvote.com and follow the instructions posted for requesting materials, (ii) call1-800-579-1639or (iii) send an email tosendmaterial@proxyvote.com. If you request materials by email, send a blank email with your Control Number(s) (located in the Internet Notice) in the subject line.To facilitate timely delivery of paper copies of requested materials, please make your paper copy request no later than May 20, 2011. |
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| Q. | When and where is the 2011 Annual Meeting? |
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| A. | The 2011 Annual Meeting towill be held at 10:00 a.m., Eastern Time, on Thursday, June 5, 2008,2, 2011, at Revlon’s Research Center at 2121 Route 27, Edison, New Jersey 08818,NJ 08818. |
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| Q. | What is the purpose of the 2011 Annual Meeting? |
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| A. | At the 2011 Annual Meeting, the Company’s stockholders will act upon the following matters set forth in the Notice of Annual Meeting of Stockholders: |
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| • | Thethe election of the following persons as members of the Company’s Board of Directors to serve until the next Annual Meeting and until such directors’ successors are elected and shall have been qualified: Ronald O. Perelman, Alan S. Bernikow, Paul J. Bohan, Alan T. Ennis, Meyer Feldberg, David L. Kennedy, Debra L. Lee, Tamara Mellon, Richard J. Santagati, Barry F. Schwartz and Kathi P. Seifert (if any nominee is unable or declines unexpectedly to stand for election as a director at the 2011 Annual Meeting, the Board of Directors may by resolution provide for a lesser number of directors or designate substitute nominees and Kenneth L. Wolfe; |
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| • | The ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008; and |
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| • | The transaction of such other business as may properly come before the Annual Meeting. |
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Q. | What are the voting recommendations of the Board? |
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A. | The Board recommends the following votes: |
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| • | FOR each of the director nominees (all of whom are currently directors); and |
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| • | FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008.2011; |
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| • | the non-binding, advisory vote of the Company’s stockholders on 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”); |
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| • | the non-binding, advisory vote of the Company’s stockholders on the future frequency of the“say-on-pay” vote; and |
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| • | the transaction of such other business as may properly come before the 2011 Annual Meeting. |
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| Q. | What are the voting recommendations of the Board? |
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| A. | The Board recommends the following votes: |
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| • | FOReach of the director nominees (all of whom are currently directors of the Company); |
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| • | FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011; |
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| • | FORthe non-binding, advisory approval of the Company’s executive compensation; and |
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| • | for recommending, on a non-binding, advisory basis, conducting future non-binding, advisory votes on executive compensation everyTHREE (3) YEARS. |
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| Q. | What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
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| A. | Many holders of the Company’s Class A commonvoting capital stock hold such shares through a broker or other nominee (beneficial ownership)(i.e., a beneficial owner) rather than directly in their own name (stockholder(i.e., a stockholder of record). As summarized below, there are some distinctions between shares held of record and those owned beneficially. |
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| • | 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 17, 20088, 2011 record date, you are considered the stockholder of record with respect to those shares, and these proxy materials are being sentmade 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 20082011 Annual Meeting. The Company has enclosed or sentmade available a proxy card or electronic voting means for you to use. |
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| • | Reverse Stock Split. As previously disclosed, in September 2008, the Company effected a1-for-10 reverse stock split of its Class A and Class B Common Stock (the “Reverse Stock Split”) pursuant to which each ten (10) shares of Revlon Class A and Class B Common Stock issued and outstanding immediately prior to 11:59 p.m. on September 15, 2008 were automatically combined into one (1) share of Class A Common Stock and Class B Common Stock, respectively, subject to the elimination of fractional shares. The Company has determined that stockholders who have not yet surrendered their shares to the Company’s transfer agent for exchange in connection with the Reverse Stock Split will be considered |
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| | 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 2011 Annual Meeting. |
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| • | 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 17, 20088, 2011 record date, you are considered the beneficial owner of shares held in ‘‘street“street name,’’” and these proxy materials are being sentmade available, electronically or otherwise, by the Company to your broker, nominee or trustee and they should be forwardedforward these materials to you, together with a voting instruction card, byform if furnished via paper copy to your broker, trustee or nominee. |
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| Q. | How do I vote? |
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| A. | If you are a stockholderYou may vote using one of record, there are two ways to vote:the following methods: |
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| • | By completing your proxy card and returning it in the postage-paid envelope that we have enclosed for you. Voting information is provided on the enclosed proxy card; or |
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| • | By written ballot at the Annual Meeting. |
Your shares will be voted
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 indicate. In relationwill need to howreference your assigned Control Number(s)). You may vote on the Internet up until 11:59 p.m. Eastern Time on June 1, 2010, which is the date before the June 2, 2011 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, which is the date before the June 2, 2011 Annual Meeting, and following the pre-recorded instructions (have your Internet Notice or your proxy card available when you call as you will
be voted, see ‘‘How will my proxy be voted?’’ below.need to reference your assigned Control Number(s)). If you are a beneficial owner,vote by telephone, you should follownot return your proxy card (if you received one), unless you wish to change your Internet 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 instructions sent to youpolls for the June 2, 2011 Annual Meeting.
In Person. You may vote your shares in person by
your broker, trustee or nominee. | |
Q. | What is the deadline for voting my shares? |
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A. | If you are a stockholder of record and vote by mail or by written ballot at the 2008 Annual Meeting, your vote must be received by the Company’s Secretary before the polls close at the Annual Meeting on June 5, 2008. |
attending the 2011 Annual Meeting and submitting a valid proxy at the 2011 Annual Meeting. If you are a beneficial owner, please follow“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 instructions provided to youcapital stock ballot furnished by your broker, trustee or nominee. Ifthe Company at the Meeting prior the closing of the polls; if you are a beneficial owner,“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 20082011 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’’Admission” will not be accepted).
Voting, Generally. All shares that have been voted properly by an unrevoked proxy will be voted at the 2011 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 appointment of the Company’s independent registered public accounting firm), which is considered a “routine” matter, and not with respect to Proposal Nos. 1, 3 and 4.
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| Q. | Who can vote? |
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| A. | Only holdersstockholders of record of Revlon, Inc. Class A and Class B common stockCommon Stock and Revlon, Inc. Series A Preferred Stock at 5:00 p.m., Eastern Time, on April 17, 2008,8, 2011, the record date for the 20082011 Annual Meeting, or |
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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 stockCommon Stock or Revlon, Inc. Series A Preferred Stock as of 5:00 p.m., Eastern Time, on April 17, 2008,8, 2011, are entitled to vote. Each share of the Company’s Class A common stockCommon Stock and Series A Preferred Stock is entitled to one vote, and each share of Class B common stockCommon Stock is entitled to ten votes. |
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 2011 Annual Meeting.
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| Q. | How will my proxy be voted? |
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| A. | Your proxy, when properly signed and returnedsubmitted to us, and not revoked, will be voted in accordance with your instructions. If you do not give other instructions onsign and return your proxy card without indicating how you would like your shares to be voted, the persons nameddesignated by the Company as proxies will vote in accordance with the recommendations of the Board of Directors.Directors on Proposal No. 1 (the election of directors), Proposal No. 2 (the ratification of the appointment of the Company’s independent registered public accounting firm), Proposal No. 3 (the non-binding, advisory approval of the Company’s executive compensation, through the“say-on-pay” non-binding, advisory vote), and Proposal No. 4 (the recommendation on the future frequency of conducting“say-on-pay” votes on executive compensation). The Board’s recommendation is set forth in the description of each Proposal in this Proxy Statement. In summary, the Board recommends a vote: (1) FOReach of the 911 director nominees identified in this Proxy Statement (all of whom currently are currently directors) and (2) directors of the Company), (2) FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008.2011, (3) FORthe non-binding, advisory approval of the Company’s executive compensation, and (4) for recommending, on a non-binding, advisory basis, conducting future“say-on-pay” non-binding, advisory votes everyTHREE (3) YEARS. |
Although we are not aware of any other matter that may be properly presented at the 20082011 Annual Meeting, if any other matter is properly presented, however, the persons nameddesignated by the Company as proxies on the enclosed proxy card will have discretion tomay vote on such matters in their best judgment.discretion.
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| Q. | Can I change or revoke my vote? |
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| A. | Yes. If you are a stockholder of record, you can change your vote, attend and/or revoke your proxyvote at any time before it is voted at the 20082011 Annual Meeting by: |
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| • | executing and delivering a proxy bearing a later date, which must be received by the Company’s Secretary of the Company at 237 Park Avenue, 14th Floor, New York, New YorkNY 10017, Attention: Robert K. Kretzman,Michael T. Sheehan, before the original proxy is voted at the 20082011 Annual Meeting; |
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| • | 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, New YorkNY 10017, Attention: Robert K. Kretzman,Michael T. Sheehan, before the original proxy is voted at the 20082011 Annual Meeting; or |
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| • | attending the 20082011 Annual Meeting and voting in person. |
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Table of ContentsIf 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.
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| Q. | What if I am a participant in the Revlon 401(k) Plan? |
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| A. | This Proxy Statement is being mailedfurnished to you if Revlon, Inc. Class A common stockCommon Stock is allocated to your account within the Revlon Employees’ Savings, Investment and Profit Sharing Plan (the ‘‘401(k) Plan’’“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’ ac countsaccounts for which voting instructions were received. received by the trustee.401(k) Plan participants must deliversubmit their proxy cardsvoting instructions to the trustee of our 401(k) Plan in accordance with the instructions included with suchthe proxy card or Internet Notice so that they are received by 11:59 p.m. Eastern Time on May 30, 200826, 2011 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 2011 Annual Meeting in the manner described in this paragraph above for non-votes. |
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| Q. | Who can attend the 2011 Annual Meeting? |
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| A. | Anyone who was a shareholderstockholder of the Company as of 5:00 p.m., Eastern Time, on April 17, 2008,8, 2011, the record date for the 20082011 Annual Meeting, and who provides the necessary identification may attend the 2011 Annual Meeting. Directions to the address for the 2011 Annual Meeting are available on various Internet travel sites, or you may seek assistance from the Company when pre-registering. See also, “Who Can Vote,” above. |
To attend the 20082011 Annual Meeting, please follow these instructions:
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| • | If you are a stockholder of record on the April 17, 20088, 2011 record date, check the appropriate box on the enclosed 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 meeting,2011 Annual Meeting, and please bring topresent at the meeting avalid picture identification, such as a driver’sdriver���s license or passport. |
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| • | If you are a stockholder whose shares are held in a brokerage account or by another nominee, or if you received your proxy materials electronically, please bring topresent at the meetingvalid picture identification, such as a driver’s license or passport, as well as originalproof of ownershipof shares of Revlon, Class A commonInc. voting capital stock as of 5:00 p.m., Eastern Time, on the April 17, 20088, 2011 record date, in order to be admitted to the meeting.2011 Annual Meeting. As noted, you will need to bringpresent original evidence of stock ownership, such as an original of a legal proxy from your bank or broker (‘‘(“Requests for Admission’’Admission” will not be accepted), your brokerage account statement, demonstrating that you held Revlon, Inc. Class A commonvoting capital stock in your account as of 5:00 p.m., Eastern Time, on the April 17, 20088, 2011 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. Class A commonvoting capital stock in your account as of 5:00 p.m., Eastern Time, on the April 17, 20088, 2011 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 2011 Annual Meeting? |
|
| A. | In order to expedite the admission registration process required for you to enter the 2011 Annual Meeting, we encourage stockholders to pre-register by phone by calling Amy Heidingsfelder, Senior Manager, Legal Services, at(212) 527-5628, Meaghan Connerty, Senior Corporate Legal Assistant, at(212) 527-5528, or Liz Polido, Corporate Legal Assistant, at(212) 527-5227, Mondays through Fridays from 9:00 a.m. through 5:00 p.m., Eastern Time, up until 10:00 a.m., Eastern Time, on Thursday, June 2, 2010 (the date prior to the 2011 Annual Meeting). Stockholders pre-registering by phone will be admitted to the 2011 Annual Meeting by presenting valid picture identification and, if your shares are held in a brokerage account or by another nominee, original evidence of your stock ownership as of the April 8, 2011 record date. |
|
| Q. | Can I bring a guest to the 2011 Annual Meeting? |
|
| A. | Yes.If you plan to bring a guest to the 2011 Annual Meeting, please provide us with advance notice of that pursuant to the pre-registration procedures for stockholders set forth in this Proxy Statement.When you go through the registration area at the 2011 Annual Meeting, be sure your guest is with you. Guests must also |
v
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| present valid picture identification to gain access to the 2011 Annual Meeting. We reserve the right to limit guest attendance due to space limitations. |
| |
| Q. | Can I still attend the 2011 Annual Meeting if I have previously voted or returned my proxy? |
|
| A. | Yes. Attending the 2011 Annual Meeting does not revoke a previously submitted valid proxy. See, “Can I Change or Revoke My Vote?” above. |
|
| 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 or 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. |
vi
REVLON, INC.
Annual Meeting of Stockholders
to be held on June 2, 2011
This Proxy Statement is being furnished on or about April 19, 2011 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 2011 Annual Meeting of Stockholders (the “2011 Annual Meeting”) to be held at 10:00 a.m., Eastern Time, on Thursday, June 2, 2011, at Revlon’s Research Center at 2121 Route 27, Edison, NJ 08818, and at any adjournments thereof. The 2010 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. 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 2011 Annual Meeting on or about April 19, 2011.
At the 2011 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, Alan T. Ennis, Meyer Feldberg, David L. Kennedy, Debra L. Lee, Tamara Mellon, Richard J. Santagati, Barry F. Schwartz and Kathi P. Seifert; (2) ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011; (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 2011 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.
Required Identification and Other Instructions for Attendees at the 2011 Annual Meeting
In order to be admitted to the 2011 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, 2011 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, 2011 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, 2011 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, 2011 record date.
In order to expedite the admission registration process, we encourage stockholders to pre-register by phone by calling Amy Heidingsfelder, Senior Manager, Legal Services, at(212) 527-5628, Meaghan Connerty, Senior Corporate Legal Assistant, at(212) 527-5528, or Liz Polido, Corporate Legal Assistant, at(212) 527-5227, Mondays through Fridays from 9:00 a.m. through 5:00 p.m., Eastern Time, up until 10:00 a.m., Eastern Time, on Thursday, June 2, 2010 (the date before the 2011 Annual Meeting). Stockholders pre-registering by phone will be admitted to the meeting by presenting valid picture identification and, if your shares are held in a brokerage account or by another nominee, original evidence of your stock ownership as of the April 8, 2011 record date. Directions to the address for the 2011 Annual Meeting are available on various Internet travel sites, or you may seek assistance from any of the above individuals when pre-registering.
In order to ensure the safety and security of our 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. | |
Q. | Should I pre-register for the Annual Meeting? |
| |
A. | In order to expedite the admission registration process, we encourage stockholders to pre-register by phone by calling either Amy Heidingsfelder, the Company’s Manager, Corporate Secretary Administration, at (212) 527-5628 or Meaghan Connerty, the Company’s Senior Corporate Legal Assistant, at (212) 527-5528, Mondays through Fridays from 9:00 a.m. through 5:00 p.m., Eastern Time, up until 10:00 a.m., Eastern Time, on Wednesday, June 4, 2008 (the day prior to the 2008 Annual Meeting). Stockholders pre-registering by phone will be admitted to the meeting by presenting valid picture identification and, if your shares are held in a brokerage account or by another nominee, original evidence of your stock ownership as of the April 17 , 2008 record date. |
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Table of Contents | |
Q. | Can I bring a guest to the Annual Meeting? |
| |
A. | Yes. If you plan to bring a guest to the 2008 Annual Meeting, check the appropriate box on the enclosed proxy card. When you go through the registration area at the 2008 Annual Meeting, be sure your guest is with you. Guests must also bring valid picture identification to the 2008 Annual Meeting. |
| |
Q. | Can I still attend the Annual Meeting if I return my proxy? |
| |
A. | Yes. Attending the 2008 Annual Meeting does not revoke the proxy. However, if you are a record holder, you may revoke your proxy at any time before it is actually voted by executing and delivering a proxy bearing a later date, or by filing a written revocation or written notice of change, as the case may be, any of which must be received by the Company’s Secretary at 237 Park Avenue, 14th Floor, New York, New York 10017, Attention: Robert K. Kretzman, before the original proxy is voted at the 2008 Annual Meeting, or by attending the 2008 Annual Meeting and voting in person. If you are a beneficial owner and wish to revoke your proxy, please follow the voting instructions sent to you by your broker, trustee or nominee. |
| |
Q. | What shares are covered by my proxy card? |
| |
A. | The shares covered by your proxy card represent all of the shares of the Company’s common stock that you own in one account. Any shares that may be held for your account by the 401(k) Plan will be represented on a separate proxy card. |
| |
Q. | What does it mean if I get more than one proxy card? |
| |
A. | It means you have multiple accounts at our transfer agent and/or with banks or stockbrokers. Please vote all of your shares. |
iv
Table of ContentsREVLON, INC.
PROXY STATEMENT
Annual Meeting of Stockholders
To be Held June 5, 2008
This Proxy Statement is being furnished 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 2008 Annual Meeting of Stockholders (the ‘‘2008 Annual Meeting’’) to be held at 10:00 a.m., Eastern Time, on Thursday, June 5, 2008, at Revlon’s Research Center, 2121 Route 27, Edison, New Jersey 08818, and at any adjournments thereof. This Proxy Statement and the enclosed proxy card, Notice of Annual Meeting of Stockholders and Annual Report for the year ended December 31, 2007 are first being sent to stockholders on or about April 25, 2008. The Annual Report does not form any part of the material for the solicitation of proxies.
At the 2008 Annual Meeting, the Company’s stockholders will be asked to: (1) elect the following persons (all of whom are currently directors) as directors of the Company until the Company’s next Annual Meeting and until such directors’ successors are duly elected and shall have been qualified: Ronald O. Perelman, Alan S. Bernikow, Paul J. Bohan, Meyer Feldberg, David L. Kennedy, Debra L. Lee, Barry F. Schwartz, Kathi P. Seifert and Kenneth L. Wolfe; (2) ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008; and (3) take such other action as may properly come before the 2008 Annual Meeting or any adjournments thereof.
The Company’s principal executive offices are located at 237 Park Avenue, New York, New York 10017, and its main telephone number is (212) 527-4000.
Required Identification and Other Instructions for Attendees at the Annual Meeting
In order to be admitted to the 2008 Annual Meeting in person, you will need to present valid picture identification, such as a driver’s license or passport, as well as original proof of ownership of shares of Revlon, Inc. Class A common stock as of 5:00 p.m., Eastern Time, on the April 17, 2008 record date. If your shares are held in a brokerage account or by another nominee, or if you received your proxy materials electronically, you will need to bring original documents (copies will not be accepted) to evidence your stock ownership as of 5:00 p.m., Eastern Time, on the April 17, 2008 record date, such as an original of a legal proxy from your bank or b roker (‘‘Requests for Admission’’ will not be accepted), your brokerage account statement, demonstrating that you held Revlon, Inc. Class A common stock in your account as of 5:00 p.m., Eastern Time, on the April 17, 2008 record date, or, if you did not already return it to your bank or broker, an original vote instruction form issued by your bank or broker, demonstrating that you held Revlon, Inc. Class A common stock in your account as of 5:00 p.m., Eastern Time, on the April 17, 2008 record date. If you are a registered stockholder and plan to attend the 2008 Annual Meeting in person, please also check the appropriate box on the enclosed proxy card indicating that you intend to do so.
In order to expedite the admission registration process, we encourage stockholders to pre-register by phone by calling either Amy Heidingsfelder, the Company’s Manager, Corporate Secretary Administration, at (212) 527-5628, or Meaghan Connerty, the Company’s Senior Corporate Legal Assistant, at (212) 527-5528, Mondays through Fridays from 9:00 a.m. through 5:00 p.m., Eastern Time, up until 10:00 a.m., Eastern Time, on Wednesday, June 4, 2008 (the day prior to the 2008 Annual Meeting). Stockholders pre-registering by phone will be admitted to the meeting by presenting valid picture identification and, if your shares are held in a brokerage account or by another nominee, original evidence of your stock ownership as of the April 17, 2008 record date.
In order to ensure the safety and security of our 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.
Table of ContentsSolicitation and Voting of Proxies; Revocation
All proxies properly
executed and received bysubmitted to the Company, unless such proxies are
previously and properly revoked
at any time before they are voted at the
2011 Annual Meeting, will be voted on all matters presented at the
20082011 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 911 nominees identified in this Proxy Statement (all of whom currently are currently directors)directors of the Company); and (2) FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008.2011; (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(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’s SecretaryCompany of stockholder proposals for inclusion in the proxy materials for presentation at the 20082011 Annual Meeting was December 29, 2007.22, 2010. The Company did not receive any stockholder proposals required to be included in these proxy materials.Additionally, pursuant to the Company’s By-laws, in order for business to be properly brought before the
20082011 Annual Meeting (other than stockholder proposals included in the proxy statement pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the
‘‘Exchange Act’’“Exchange Act”), and business specified in
the proxy material)this Proxy Statement), notice of such business must have been received by the Company between March
7, 20085, 2011 and April
6, 20084, 2011 (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
20082011 Annual Meeting for action, however, in the
a bsenceabsence of other instructions, it is intended that the persons named
inby the
enclosed proxyCompany and acting
thereunderas proxies will vote in accordance with their
best judgmentdiscretion on such matters.
The submission of a signed or validly submitted electronic proxy will not affect a stockholder’s right to change their vote, attendand/or vote in person at the 20082011 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 2011 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, New YorkNY 10017, Attention: Robert K. Kretzman,Michael T. Sheehan, before the original proxy is voted at the 20082011 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, New YorkNY 10017, Attention: Robert K. Kretzman,Michael T. Sheehan, before the original proxy is voted at the 20082011 Annual Meeting; or (iii) attending the 20082011 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 same procedures, in which case the later submitted vote will be recorded and the earlier vote revoked.
2
The Accompanying Form of Proxy is Being Solicited on Behalf of the Board of Directors
Although the Company does not expect to solicit any proxies, solicitation of proxies may be made by mail and also may be made by personal interview, telephone, facsimile transmission or e-mail and by directors, officers and employees of the Company without special compensation for such activities. The Company expects to reimburse banks, brokers and other persons for their reasonable out-of-pocket expenses incurred in handling proxy materials for beneficial owners.
Record Date; Voting Rights Only holders of record of shares of the Company’s Class A common stock, par value $0.01 per share (the
‘‘Class“Class A Common
Stock’’Stock”),
and Class B common stock, par value $0.01 per share (the
‘‘Class“Class B Common
Stock’’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’’Stock, the “Voting Capital Stock”), at 5:00 p.m., Eastern Time, on April
17, 20088, 2011 (the
‘‘Record Date’’“Record Date”) will be entitled to notice of and to vote at the
20082011 Annual Meeting or any adjournments thereof. On the Record Date, there were issued and outstanding: (i)
480,441,78549,050,628 shares of the Company’s Class A Common Stock, each of which is entitled to one vote,
and (ii)
31,250,0003,125,000 shares of the Company’s Class B Common Stock, each of which is entitled to 10
votes.votes, and (iii) 9,336,905 shares of the Company’s Preferred Stock, each of which is entitled to one vote. Of that
total,Voting Capital Stock, Mr. Ronald O. Perelman, Chairman of the
following shares were beneficially owned by Mr. PerelmanBoard of Directors, directly and indirectly through MacAndrews & Forbes Holdings Inc., of which Mr. Perelman is the sole stockholder
(‘‘MacAndrews & Forbes Holdings’’ and, together(together with certain of its affiliates (other than the Company or its subsidiaries),
‘‘MacAndrews“MacAndrews &
Forbes’’Forbes”)
: (a) 278,532,040 shares of the Company’s Class A Common Stock (including 3,235,000 shares of Class A Common Stock owned directly by Mr. Ronald O. Perelman, Chairman of the
Table of ContentsCompany’s Board of Directors, and 45,616,141 shares of Class A Common Stock owned by a family member of Mr. Perelman, with respect to which latter shares MacAndrews & Forbes holds a voting proxy, but excluding 1,225,000 of Mr. Perelman’s options that are fully vested and exercisable within 60 days of the April 17, 2008 Record Date) and (b) all of the shares of the Company’s Class B Common Stock. The shares identified in subclauses (a) and (b) above as, beneficially owned directly and indirectly by MacAndrews & Forbes represent approximately 74%77% of the combined voting power of the outstanding shares of the Company’s CommonVoting Capital Stock as of the April 17, 2008 Record Date that are entitled to vote at the 20082011 Annual Meeting.
The presence, in person or by duly
executedsubmitted proxy, of the holders of a majority in total number of votes of the issued and outstanding shares of
CommonVoting Capital Stock entitled to vote at the
20082011 Annual Meeting is necessary to constitute a quorum in order to transact
business.business at such meeting. Abstentions and,
‘‘brokeras there is at least one “routine” matter (under applicable NYSE rules) for consideration at the 2011 Annual Meeting, “broker non-votes,
’’” if any,
represented by submitted proxies will be included in the calculation of the number of shares present at the
20082011 Annual Meeting for the purposes of determining a quorum.
‘‘Broker non-votes’’“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.
BrokerBrokers 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. 1 (the election of directors), 3(“say-on-pay”) or 4(“say-on-frequency”). Accordingly, broker non-votes
are inapplicablewill not be counted as a vote for
‘‘routine’’ proposals,or against these proposals. For shares as to which
include Proposals No. 1 andthey have not received voting instructions from the beneficial owner, brokers will be able to vote on Proposal No. 2
to be(ratification of the Company’s selection of its independent registered public accounting firm for 2011), as this is considered
at the 2008 Annual Meeting .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
a duly-executed proxy (1) proxies (1) FORthe election to the Board of Directors of each of the 911 nominees identified in this Proxy Statement (all of whom currently are currently directors)directors of the Company); and (2) (2) FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008.2011; (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. 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 Proposals No.Proposal Nos. 1, 2, 3 and No. 24 to be considered at the 20082011 Annual Meeting.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’’“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 proxy cards.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.received by the trustee. 401(k) Plan participants must delivercast their proxy cardsvotes in accordance with the instructions included with such cardprovided in the proxy materials so that they are received by 11:59 p.m. Eastern Time on May 30, 200826, 2011 to allow the trustee time to receive such voting instructions and vote on behalf of particip antsparticipants 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 2011 Annual Meeting in the manner described in this paragraph above.
3
On April 11, 2008, the Company announced its intention to effect a 1-for-10 reverse stock split on its shares of Common Stock. It is currently anticipated that the reverse stock split will become effective at some time during May or June of 2008 (which may be prior to the date of the 2008 Annual Meeting). The Company’s Board of Directors may abandon the reverse stock split at any time prior to its becoming effective.
Only holders of record of shares of the Company’s CommonVoting Capital Stock on the Record Date will be entitled to notice of and to vote at the 20082011 Annual Meeting or any adjournments thereof. Stockholders will be entitled to vote the number of voting shares held by them on the Record Date, which will not reflect any adjustment to a stockholder’s common stockholdings or a reduction in the outstanding shares which would occur should, in fact, the reverse stock split become effective prior to the 2008 Annual Meeting. AllDate.
Distribution of Proxy Materials; Costs of Distribution and Solicitation
The accompanying form of proxy is being solicited on behalf of the
Common Sto ck-related informationCompany’s Board of Directors. We will bear all costs in
connection with preparing, assembling and furnishing this Proxy Statement
is presented on a pre-reverse stock split basis.Distribution of Proxy Materials
The Company has hired D.F. King & Co. to assist in the distribution of proxy materials. The estimated fee is approximately $3,500,and related materials, including their out-of-pocket expenses. In addition, the Company will reimbursereimbursing 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 2011 Annual Meeting. The estimated fee is approximately $10,500, plusout-of-pocket expenses such as postage.
Table of ContentsHouseholding of Stockholder Materials
Some banks, brokers and other nominee record holders may be participating in the practice of ‘‘householding’’“householding” stockholder materials, such as proxy statements, information statements and annual reports. This means that only one copy of this Proxy Statementour 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 this Proxy Statementour Internet Notice or the 2011 proxy materials, as the case may be, to you if you write or call us at the following address or telephone number:address: Revlon, Inc., Investor Relations Department, Revlon, Inc., 237 Park Avenue, New York, New York 10017, telephone: (212) 527-5230.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 addressaddress. In the interest of reducing costs and telephone number.promoting environmental responsibility, we encourage our stockholders to review electronic versions of our proxy materials, via the Internet.
Table of ContentsPROPOSAL NO. 1
The Company’s Board of Directors, pursuant to the Company’s By-laws, has fixed the number of directors at
9,eleven (11), effective as of the date of the
20082011 Annual Meeting. The
911 directors nominated for election by the Board of Directors, upon recommendation of the Board’s Nominating and Corporate Governance Committee,
(the ‘‘Governance Committee’’), will be elected at the
20082011 Annual Meeting to serve until the Company’s next
succeeding Annual Meeting and until their successors are duly elected and shall have been qualified. All of the nominees
currently are
currently members of the Board of Directors. All director nominees, if elected, are expected to serve until the next
succeeding Annual Meeting.
With respect to Proposal No. 1, all proxies properly executed and received by the Company, unless such proxies are revoked, will be voted in accordance with the instructions given by the person executing such proxy or, in the absence of such instructions, will be voted FOR the election to the Board of Directors of each of the 9 nominees identified in this Proxy Statement.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
named in the enclosed proxyappointed as proxies will vote
foras directed as to the election of
any such substitute
nominee or nominees.nominee. The Board of Directors has no reason to believe that any nominee will be unable or unwilling to serve.
VOTE REQUIRED AND BOARD OF DIRECTORS’ RECOMMENDATION The election to the Board of Directors of each of the 911 nominees identified in this Proxy Statement will requirerequires the affirmative vote of a plurality of the votes cast by the holders of shares of CommonVoting Capital Stock present in person or represented by proxy at the 20082011 Annual Meeting and entitled to vote. A plurality means more votes castWith 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 11 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 shares for a nominee than those cast for opposing candidates, if any.which they have not received voting instructions from the beneficial owner. In light of the application of plurality voting to this proposal,the election
4
of Directors, when tabulating the vote and determining whether the
proposalDirector has received the requisite number of affirmative votes, abstentions
and broker non-votes will
have no effect on the outcome of the vote. Broker non-votes are inapplicablenot count as a vote for
this ‘‘routine’’ proposal.or against a Director. MacAndrews & Forbes has informed the Company that it will vote
FORthe election to the Board of Dir ectorsDirectors of each of the 911 nominees identified in this Proxy Statement. Accordingly, the affirmative vote of MacAndrews & Forbes is sufficient, without the concurring vote of the Company’s other stockholders, to effect the election of each of the director nominees. Given the affirmative vote of MacAndrews & Forbes, each director nominee will receive the necessary plurality vote and, in fact, will receive at least a majority of the votes cast at the 20082011 Annual Meeting. The Board of Directors unanimously recommends that stockholders vote FOR the election to the Board of Directors of each of the 911 nominees identified below. Nominees for Election as Directors The name, age (as of December 31,
2007)2010), 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.
Mr. Perelman (64)(67) 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’’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 variouscertain 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 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 Worldwide Corp. (1995 — present), a holding company that owns and operates various businesses, for which Mr. Perelman has served as Chairman of the Board of Directors of Panavision Inc. until September 2003since 2007 and thereafter has served as its Co-Chairman. Mr. Perelman is also a Director of the following companies, which are required to file reports pursuant to the Exchange Act: Allied Security Holdings LLC (‘‘Allied Security’’),director since 1995 (“M&F Worldwide Corp. (‘‘M&F Worldwide’’Worldwide”).
Mr. Ennis (40) has been the Company’s and
Scientific Games Corporation (‘‘Scientific Games’’).
Table of ContentsMr. Kennedy (61) has beenProducts 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 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. From March 2006 until 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 offrom March 2006 to September 2006, and as the Company and Products Corporation. Mr. Kennedy served asCompany’s Executive Vice President and President of the Company’s and Products Corporation’s international operationsPresident, 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,
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Australia and listed on the Sydney Stock
Exchange.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’’(“Coca-Cola”), which he joined in 1980.
Mr. Kennedy has served on the Boards of Directors of the following companies which were required to file reports under the Exchange Act within the last five years: the Company (2006 — present); Products Corporation (2006 — present); and Scientific Games (2009 — present).
Mr. Bernikow (67)(70) 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
Senior Advisorwell as on the Board of
Barington Capital Group, L.P.Directors of such bank’s parent holding company, Bond Street Holdings, Inc., since
November 2006.October 2010. From 1998 until his retirement in May 2003, Mr. Bernikow served as the Deputy Chief Executive Officer of Deloitte & Touche LLP
(‘‘(“D
&T’’&T”). Prior to that, Mr. Bernikow held various senior executive positions at D&T and various of its predecessor companies, which he joined in
1977. Previously, Mr. Bernikow was the National Administrative Partner in Charge for the accounting firm, J.K. Lasser & Company, which he joined in 1966. Mr. Bernikow
also serves as
a Director and as a memberChairman of the
audit committeeCompany’s Audit Committee and Chairman of
the Company’s Compensation Committee. Mr. Bernikow has served on the Boards of Directors or Trustees 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”), within the last five years: the Company (2003 — present); Products Corporation (2003 — present); Casual Male Retail Group, Inc.
(‘‘(“Casual
Male’’Male”)
and(2003 — present), for which he also currently serves as a
Director and Chairmanmember of
theits audit
committee ofcommittee; Mack-Cali Realty Corporation
(‘‘Mack-Cali’’(“Mack-Cali”)
(2004 — present),
each offor which
is required to file reports pursuant to the Exchange Act. Mr. Bernikow ishe also
a director or trustee andcurrently serves as
Chairmanchairman of
theits audit
committees ofcommittee; and certain funds (the
‘‘UBS Funds’’“UBS Funds”) for which UBS Global Asset Management (US) Inc., a wholly-owned subsidiary of UBS AG, or one of its affiliates,
(‘‘UBS’’), serves as investment advisor,
sub-advisor or
manager. Mr. Bernikowmanager (2005 — present), and for which he serves as Chairman of
the Company’s Audit Committee and as a member of the Company’s Governance Committee.its audit committee.
Mr. Bohan (62)(65) has been a Director of the Company since March
2004.2004 and a Director of Products Corporation since June 2008. Prior to his retirement in February 2001, Mr. Bohan was a Managing Director of the high-yield bond sales group of Salomon Smith Barney,
a unit of Citigroup Inc., a global financial services holding company, having joined Salomon Smith Barney in 1980. Mr. Bohan
is a director of Haynes International, Inc., which files reports pursuant to the Exchange Act. Mr. Bohan also serves as a member of the Board of Directors of Arena Brands, Inc., which is a privately-held
company, and of the Board of Directors of The New York Police & Fire Widows’ & Children’s Benefit Fund.company. Mr. Bohan serves as a member of the Company’s Audit
Committee and Nominating and Corporate Governance Committee.
In addition to serving as a memberMr. Bohan has served on the Boards of Directors of the
Company’s Audit Committee, Mr. Bohan serves onfollowing companies which were required to file reports under the
audit committee of Th e New York Police & Fire Widows’ & Children’s Benefit Fund.Exchange Act within the last five years: the Company (2004 — present); Products Corporation (2008 — present); and Haynes International, Inc. (“Haynes”) (2004 — present).
Professor Feldberg (65)(68) has been a Director of the Company since February 1997. Professor Feldberg has been a Senior Advisor with Morgan Stanley since March 2005 and has been the Dean Emeritus and
Sanford Bernsteinthe Professor of Leadership and Ethics at Columbia Business School, New York City, since July
1, 2004. He was the Dean of Columbia Business School from July 1989 through June 2004.
Since 2007, Professor Feldberg
is also a Directorhas served as the President of
NYC Global Partners, an office in the
following companies, which are required to file reports pursuant toNew York City Mayor’s office that manages the
Exchange Act: Macy’s, Inc., PRIMEDIA Inc.relationships between New York City and
Sappi Limited. In addition, Professor Feldberg is also a director or trustee of certain funds for which UBS serves as investment advisor, sub-advisor or manager, and a director of certain funds for which UBS Financial Services Inc. or one of its affiliates serves as investment advisor, administ rator or manager.other cities around the world. Professor Feldberg serves as Chairman of the Company’s
Nominating and Corporate Governance Committee and as a member of the Company’s Audit Committee.
In additionProfessor Feldberg has served on the Boards of Directors of the following companies which were required to
beingfile reports under the Exchange Act, or were registered investment companies under the 1940 Act, within the last five years: Macy’s, Inc. (“Macy’s”) (1992 — present); the Company (1997 — present); PRIMEDIA Inc. (“PRIMEDIA”) (1997 — present), for which he also currently serves as a member of
the Company’s Audit Committee, Professor Feldberg is also a member of theits audit
committee of PRIMEDIA Inc.committee; UBS Funds (2001 — present); and Sappi Limited (“Sappi”) (2002 — present).
Ms. Lee (53)(56) has been a Director of the Company since January 2006. Ms. Lee is Chairman and Chief Executive Officer of BET
Holdings,Networks (“BET”), a division of Viacom Inc.
(‘‘BET’’), a global media and entertainment company, that owns and operates Black Entertainment Television. Ms. Lee’s career at BET began 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. 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 BoardBoards of Directors of the following companies
Table of Contentswhich arewere required to file reports under the Exchange Act:Act within the last five years: Eastman Kodak Company (“Kodak”) (1999 — present); WGL
6
Holdings, Inc. (“WGL”) (2000 — present); Marriott International, Inc. (“Marriott”) (2004 — present); and WGLthe Company (2006 — present).
Ms. Mellon (43) has been a Director of the Company since August 2008. Ms. Mellon is the Chief Creative Officer and Founder of 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. 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, Inc.LLC, a privately held holding company which owns and manages the Halston fashion design company. Ms. LeeMellon has served on the Boards of Directors of the following companies which were required to file reports under the Exchange Act within the last five years: the Company (2008 — present).
Mr. Santagati (67) has been a Director of the Company since October 2009. Mr. Santagati served as the President of Merrimack College from 1994 to 2008. Prior to his tenure at Merrimack College, Mr. Santagati served as President and Chief Executive Officer of Artel Communications Corporation, a high-tech company (“Artel”), from 1991 to 1994, as a Partner of Lighthouse Capital, Inc., a private investment management firm, from 1990 to 1991, and as Chief Executive Officer of Gaston & Snow, formerly a nationally-recognized, Boston-based law firm, from 1986 to 1990. From 1965 to 1986, Mr. Santagati served in various senior management roles of increasing responsibility with various telecommunications providers, including serving as President and Chief Executive Officer of NYNEX Business Information Systems from 1982 to 1986. Mr. Santagati is also involved with a number of civic organizations and institutions, including serving as Chairman of the Board of the Lawrence General Hospital; on the Executive Committee of the New England Colleges Foundation; and on the Board of Governors of the Lawrence Girls & Boys Club. Mr. Santagati serves as a member of
each of the Company’s
Compensation Committee and Nominating and Corporate Governance Committee.
Mr. Santagati has not served on the Boards of Directors of any companies that were required to file reports under the Exchange Act within the last five years other than the Company (2009 — present).
Mr. Schwartz (58)(61) 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
Holdings since October 2007, and as
President and Chief Executive Officer of M&F Worldwide since
September 2007.January 2008. Prior to that, Mr. Schwartz
joined MacAndrews & Forbes Holdings in 1989was M&F Worldwide’s Acting Chief Executive Officer and
assumed the position ofGeneral Counsel since September 2007 and its Executive Vice President and General Counsel
in 1993.since 1996. 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
also a
Director of the following companies, which are required to file reports under the Exchange Act: Allied Security, Harland Clarke Holdings Corp., Scientific Games and M&F Worldwide. Mr. Schwartz is also a Membermember of the Board of Trustees of Kenyon
College, serving on its Executive Committee, and is Chair of its Admi ssions and Financial Aid Committee.College. In addition, Mr. Schwartz
also serves as a Trustee of the Association of Governing Boards of Universities and Colleges, and is a
Membermember 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 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 Worldwide (2008 — present).
Ms. Seifert (58)(61) has been a Director of the Company since January 2006. Ms. Seifert has been
ChairmanChairperson of
Pinnacle Perspectives,Katapult, LLC, a business consulting company, since July 2004. Ms. Seifert served as Corporate Executive Vice President — Personal Care of Kimberly-Clark Corporation,
(‘‘Kimberly-Clark’’a global health and hygiene company (“Kimberly-Clark”)
, from 1999 until her retirement in June 2004. Ms. Seifert joined Kimberly-Clark
a global health and hygiene company, in 1978 and, prior to her retirement, served in several
marketing and managementsenior 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.
She also serves on the Boards of Directors o f the following companies, which are required to file reports pursuant to the Exchange Act: Supervalu Inc. (‘‘Supervalu’’), Eli Lilly & Company (‘‘Eli Lilly’’), Appleton Papers Inc., Paperweight Development Corp. (‘‘PDC’’) and Lexmark International, Inc. Ms. Seifert serves as a member of
each of the Company’s Audit Committee and
as a member ofits Compensation Committee. Ms. Seifert has served on the
audit committee of each of Supervalu and Eli Lilly.Mr. Wolfe (68) has been a Director of the Company since March 2004. Mr. Wolfe served as Chairman and Chief Executive Officer of Hershey Foods Corporation (‘‘Hershey’’) from 1994 until his retirement in December 2001. Mr. Wolfe joined Hershey in 1967 and held various executive positions, including President and Chief Operating Officer, before being appointed its Chairman and Chief Executive Officer. Mr. Wolfe was elected to the BoardBoards of Directors of The Hersheythe following companies which were required to file reports under the Exchange Act within the last five years: Eli Lilly & Company on November 11, 2007 and was appointed as Chairman of the Board of The Hershey Company, effective January 1, 2008, in a non-executive capacity. Since 2005, Mr. Wolfe has served as a member of the Board of Trustees of various mutual funds managed by Fidelity Management & Research Company. Mr. Wolfe(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’s Compensation C ommitteeCompany (2006 — present); Lexmark International, Inc. (2006 — present) (“Lexmark”); and Supervalu Inc. (2006 — present), for which she also currently serves as a member of its Governance Committee.audit committee (“Supervalu”).
7
Board of Directors and its Committees The Board of Directors currently has the following standing committees: the Audit Committee, the Compensation
and Stock Plan Committee
(the ‘‘Compensation Committee’’) and the Nominating and Corporate Governance Committee (the
‘‘Governance Committee’’“Governance Committee”). Each of these committees and their functions are described in further detail below.
Controlled Company Exemption The Company is a
‘‘controlled company’’ (one“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’’“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
suchthe above-listed NYSE
corporate governance requirements
due to its “controlled company” status, the Board has determined that more than a majority of its directors (including Messrs. Bernikow, Bohan, Feldberg and
WolfeSantagati and Mses. Lee,
Mellon and
Seifert, as well as Mr. Ed Landau, who will not stand for re-election at the 2008 Annual Meeting, and Ms. Linda Gosden Robinson, who has advised that, due to the demands of her full-time position as Chairman of Robinson Lerer & Montgomery (‘‘RLM’’), a New York City-based strategic communications consulting firm, she will not stand for re-election at the 2008 Annual Meeting),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, which the Board adopted in accordance with Section 303A.02 of the NYSE Listed Company Manual. The Board Guidelines for Assessing Director Independence are
attache d hereto as Annex A, and a printable copy is available on the Company’s investor relations website, atwww.revloninc.com, under the heading ‘‘Corporate Governance.’’Investor Relations (Corporate Governance).
Notwithstanding the fact that the Company qualifies for the ‘‘controlled company’’“controlled company” exemption, the Company maintains a governance committeethe Governance Committee and a compensation committee.the Compensation Committee. The Company maintains the Governance Committee (comprised during 2007 and as of the date of this Proxy Statement, of Messrs. Feldberg (Chairman), BernikowSantagati and WolfeBohan and Mses. Gosden Robinson andMs. 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. As noted above, Ms. Gosden Robinson has advised that she will not stand for re-election at the 2008 Annual Meeting. The Company maintains the Compensation Committee (comprised during 2007 and as of the date of this Proxy Statement, of Messrs. LandauBernikow (Chairman), Santagati and Schwartz and Wolfe)Ms. Seifert), and the Board has determined that twothree of the threefour directors on the Compensation Committee (Messrs. Landau(Mr. Bernikow, Mr. Santagati and Wolfe)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’’“non-employee directors” within the meaning of Section 16 of the Exchange Act and as ‘‘outside directors’’“outside directors” under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the ‘‘Code’’“Code”).
In October 2009, the Company closed 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 Offer”).
As noted above, Mr. Landau will not stand for re-election at the 2008 Annual Meeting. The Board intends to appoint a new member and Chairman of the Compensation Committee following the 2008 Annual Meeting.In connection with the Debt Reduction Transactions (as defined below), in 2004Exchange Offer, the Company entered into a stockholders agreementContribution and Stockholder Agreement, dated August 9, 2009, as amended, with Fidelity ManagementMacAndrews & Research Co. (‘‘Fidelity’’),Forbes, pursuant to which the Companyparties agreed, among other things, that, until such time as Fidelity ceases to beOctober 8, 2013, the beneficial holder of at least 5% of Revlon, Inc.’s outstanding voting stock, to: (i)Company will continue to maintain a majority of independent directors on theits Board of Directors, (as defined byeach of whom meets the “independence” criteria as set forth in Section 303A.02 of the NYSE listing standards) and (ii) establish and maintain the Governance Committee (See —‘‘CertainListed Company Manual (see “Certain Relationships and Related Transactions — 2004 Investment Agreement’’Contribution and Stockholder Agreement”).
Table of ContentsNumber of Board and Committee Meetings
During 2007,2010, the Board of Directors held sevensix meetings and acted threesix times by unanimous written consent; the Audit Committee held six meetings; the Compensation Committee held five meetings and acted one time by unanimous written consent;seven meetings; and the Governance Committee held foursix meetings.
8
Director Attendance at Annual Stockholders’ MeetingsMeeting
While the Board has not adopted a formal policy regarding directors’ attendance at the Company’s Annual Stockholders’ Meeting,annual stockholders’ meeting, directors are invited to attend such meetings. At the Company’s 2007 Annual Stockholders’ Meeting, five membersOne member of the Company’s Board of Directors wereattended the Company’s 2010 Annual Stockholders’ Meeting.
Board Leadership Structure
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, nominating and compensation committees, each operating under written charters, to assist the Board in
attendance.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 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. 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 committee conduct annual self-assessments to review and monitor their respective continued effectiveness. As part of its 2010 self-assessment exercise, the Board determined, among other things, that its size, composition and structure were appropriate. The Company believes this separation of the Chairman and Chief Executive Officer positions and its overall board leadership structure are appropriate.
Set forth below is a summary of the Company’s respective Directors’ 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’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. Without limiting the foregoing —
| | |
| • | Mr. Bernikow: Mr. Bernikow’s accounting experience and financial expertise (including having served for 26 years at Deloitte & Touche and its predecessors), his public-company board and audit committee experience (including at UBS Funds, Casual Male and Mack-Cali) and his familiarity with the Company, as well as his prior service as a Director of the Company, qualify him to continue to serve on the Company’s Board. |
|
| • | Mr. Bohan: Mr. Bohan’s capital markets and finance experience (including having served as Managing Director of the high-yield bond sales group of Salomon Smith Barney), his public-company board experience (including at Haynes) and his familiarity with the Company, as well as his prior service as a Director of the Company, qualify him to continue to serve on the Company’s Board. |
|
| • | Mr. Ennis: Mr. Ennis’ experience as the Company’s President and Chief Executive Officer, as well as his prior experience as the Company’s Chief Financial Officer, President, Revlon International, and Chief Accounting Officer, qualify him to continue to serve on the Company’s Board. |
|
| • | Professor Feldberg: Professor Feldberg’s academic experience (including having served for 15 years as Dean of the Columbia Business School), his civic experience (including serving as President of NYC Global |
9
| | |
| | Partners), his business experience (including serving as Senior Advisor at Morgan Stanley), as well as his public company board experience (including at Macy’s, PRIMEDIA, Sappi and UBS Funds) and his familiarity with the Company, as well as his prior service as a Director of the Company, qualify him to continue to serve on the Company’s Board. |
| | |
| • | Mr. Kennedy: Mr. Kennedy’s senior executive, international business and financial experience (including having served as the Company’s President and Chief Executive Officer and previously as Chief Financial Officer and President, Revlon International and in several senior executive positions atCoca-Cola), his public company board experience (including atCoca-Cola Amatil), and his familiarity with the Company, as well as his prior service as a Director of the Company, qualify him to continue to serve on the Company’s Board. |
|
| • | 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 Kodak, Marriott and WGL) and her familiarity with the Company, as well as her prior service as a Director of the Company, qualify her to continue to serve on the Company’s Board. |
|
| • | Ms. Mellon: Ms. Mellon’s experience in the fashion industry and marketing of women’s retail products (including serving as founder and Chief Creative Officer of Jimmy Choo) and her familiarity with the Company, as well as her prior service as a Director of the Company, qualify her to continue to serve on the Company’s Board. |
|
| • | Mr. Perelman: Mr. Perelman’s extensive business and financial experience, his public company board experience, his knowledge of the Company and his long-standing service as a Director of the Company, together with his being the Company’s controlling stockholder, qualify him to continue to serve on the Company’s Board, including continuing to serve as the Chairman of the Board. |
|
| • | Mr. Santagati: Mr. Santagati’s senior executive experience in the commercial field (including having served as President and Chief Executive Officer of Artel) and in the educational field (including having served as President at Merrimack College), his public company board experience (including at CTC Communications Group Inc.,1991-2004, and Celerity Solutions, Inc.,1997-2005) and his familiarity with the Company, as well as his prior service as a Director of the Company, qualify him to continue to serve on the Company’s Board. |
|
| • | Mr. Schwartz: Mr. Schwartz’ senior executive experience, his public company board experience and his familiarity with the Company, as well as his prior service as a Director of the Company, qualify him to continue to serve on the Company’s Board. |
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| • | Ms. Seifert: Ms. Seifert’s senior executive experience (including having served as Corporate Executive Vice President — Personal Care at Kimberly-Clark, a major consumer products company), her public company board experience (including at Eli Lilly, Supervalu, Appleton, Paperweight Development and Lexmark) and her familiarity with the Company, as well as her prior service as a Director of the Company, qualify her to continue to serve on the Company’s Board. |
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Audit Committee
Composition of the Audit Committee The Audit Committee is comprised of Messrs. Bernikow (Chairman), Bohan
Feldberg and
LandauFeldberg and Ms. Seifert, each of whom the Board of Directors has determined satisfies the
existingNYSE’s and the SEC’s audit committee independence and
financial experience
requirements of the NYSE and the Securities and Exchange Commission (the ‘‘SEC’’).requirements. Each of these directors served as a member of the Audit Committee during all of
20072010 and each of these directors remained a member of the Audit Committee as of the
April 17, 2008 Record Date. As noted previously, Mr. Landau will not stand for re-election; accordingly, he will no longer serve on the Audit Committee following the 2008 Annual Meeting.date of this Proxy Statement.
The Company has determined that Mr. Bernikow qualifies as an
‘‘audit“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 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;
a ndand 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
on the Company’s investor relations website, atwww.revloninc.com, under the heading, ‘‘Corporate Governance.’’Investor Relations (Corporate Governance).
Audit Committee Responsibilities 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
function.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 —‘‘Statement (see “— Audit Committee
Report’’ below.Report,” below).
Audit Committee Complaint Procedures 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
Table of Contentsregarding 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 on the Company’s investor relations website, atwww.revloninc.com, under the heading, ‘‘Corporate Governance.’’
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, 20072010 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. 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 sectionSection 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’s
11
judgments about the quality, and not just the acceptability, of the Company’s accounting principles. These communications and discussions are intended to assist the Audit Committee in overseeing the Company’s financial reporting and disclosure process.reporting.
The Audit Committee has received the written disclosures and the letter from the Company’s independent registered public accounting firm, as required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees), as adopted byapplicable requirements of the Public Company Accounting Oversight Board in Rule 3600T describing all relationships betweenPCAOB regarding the independent registered public accounting firm andfirm’s communications with the Company that might bear on the independent registered public accounting firm’sAudit 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’’“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, 20072010 for filing with the SEC. Audit Committee
Alan S. Bernikow, Chairman
Paul J. Bohan
Meyer Feldberg
Edward J. Landau, Esq.
Kathi P. Seifert
Compensation Committee
Table of ContentsCompensation and Stock Plan Committee
Composition of the Compensation Committee
The Compensation Committee is comprised of Messrs.
LandauBernikow (Chairman),
Santagati and Schwartz and
Wolfe.Ms. Seifert. Each of
Messrs. Landau and Wolfethese directors served as a member of the Compensation Committee during all of
2007;2010, other than Mr.
SchwartzSantagati who was appointed to
serve as a membersuch committee in February 2010, and each of
the Compensation Committee in November 2007, to fill the vacancy created by the death of former Compensation Committee member, Mr. Howard Gittis, who died in September 2007. Each of Messrs. Landau, Schwartz and Wolfethese directors remained a member of the Compensation Committee as of the
April 17, 2008 Record Date. As noted previously, Mr. Landau will not stand for re-election at the 2008 Annual Meeting. The Company’s Board intends to appoint a new member and a new Chairmandate of
the Compensation Committee, to succeed Mr. Landau, following the 2008 Annual Meeting.this Proxy Statement.
Compensation Committee Charter The Compensation Committee operates under a comprehensive written charter, a printable and current copy of which is available
on the Company’s investor relations website, atwww.revloninc.com, under the heading, ‘‘Corporate Governance.’’Investor Relations (Corporate Governance).
Compensation Committee’s Responsibilities 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 (including performance-based arrangements and bonus awards under the Company’s executive bonus plan, as it is currently in effect and as it may be amended from time to time (the ‘‘Executive Bonus Plan’’)) 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 (‘‘ Awards’’) pursuant to the Third Amended and Restated Revlon, Inc. Stock Plan (the ‘‘Stock Plan’’“Stock Plan”) and the Revlon Executive Incentive Compensation Plan (the
12
“Incentive Compensation Plan”) and administers such
plan.plans. The Company did not implement any equity award program for 2010.
The Compensation Committee is also responsible for reviewing and discussing with the Company’s
Chief Executive
Vice President, Human ResourcesOfficer and Chief
LegalAdministrative Officer 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 on
Form 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
forand approving its inclusion in the Company’s annual report on
Form 10-K or in the
annual proxy statement.
Compensation Committee’s Delegation of Authority Pursuant to the terms of the
Executive BonusIncentive Compensation Plan, the Compensation Committee may delegate to an administrator (who must be an employee or officer of the Company)
(the ‘‘Compensation Administrator’’) the power and authority to administer the
Executive BonusIncentive Compensation Plan for
employees of the
Company,Company’s employees, other than
the Company’sits Chief Executive Officer and
certain other
covered employeesofficers who constitute “covered employees” as defined in Treasury Regulation
§1.162-27(c)§ 1.162-27(c)(2)
(‘‘(“Section 162(m)
Officers’’), which would include the authority to determine business and personal performance objectives, to determine whether such objectives were met, to determine whether bonus awards would be paid out and to determine whether an award should be reduced or eliminated. During 2007, the Compensation Committee approved specific EBITDA and other business objectives (see —‘‘Compensation Discussion and Analysis — Annual Cash Bonus — Executive Bonus Plan’’Officers”).
Bonuses, which were funded at 50% of normal targets for 2007 in order to improve cash flow, were paid in March 2008 to employees who met their individual performance objectives under the Executive Bonus Plan in respect of 2007, including the Company’s Named Executive Officers, as the
Table of Contentscorporate EBITDA objectives were achieved for 2007. The Summary Compensation Table in this Proxy Statement reflects the bonus awards that were made in respect of 2007 to the Named Executive Officers pursuant to the terms of the Executive Bonus Plan in effect for 2007 (the ‘‘2007 Bonus Program’’).
Section 157(c) of the Delaware General Corporation Law (the ‘‘DGCL’’“DGCL”) provides that the Company’s Board of Directors (or the Compensation Committee acting on behalf of the Board) may authorize one or more officersdelegate authority to any officer of the Company to designate officers and employeesgrantees of the Company or of any of its subsidiaries to be issued options or rightsequity awards under the Stock Plan other than himself or herself and to determine the number of options or rightssuch equity awards to be issued to such officers and employees. The terms of the Awards, including the exercise price of any options (which may be determined pursuant to a formula, which in the case of the Stock Plan is the closing price of the Class A Common Stock on the NYSE on the grant date), as well as the total number of options or rights that may be awarded by the designated officer, must be set by the Board of Directors or the Compensation Committee acting on behalf of the Board. The designated officer may not, however, designate himself or herself as a recipient of an Award under the Stock Plan; any such Award to the designated officer must be approved by the Board or the Compensation Committee acting on behalf of the Board.issued. The Compensation Committee did not delegate any such authority under the DGCL for 2007, and all grants during 2007 were approved by the Compensation Committee or the full Board of Directors.
2010.
Role of Officers and Consultants in the Compensation Committee’s Deliberations 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, see
—‘‘“— Compensation Discussion and Analysis — Role of the Compensation Committee.
’’”
Compensation Committee Interlocks and Insider Participation The Compensation Committee does not have any interlocks or insider participation requiring disclosure under the SEC’s executive compensation rules.
Compensation Committee Report 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, 2007,2010, including by incorporation by reference to the 2008this 2011 Proxy Statement. Compensation Committee
Edward
Alan S. Bernikow, Chairman
Richard J. Landau, Chairman
Santagati
Barry F. Schwartz
Kathi P. Seifert
Kenneth L. WolfeNominating and Corporate Governance Committee
Composition of the Governance Committee The Governance Committee is comprised of Messrs. Feldberg (Chairman), BernikowSantagati and WolfeBohan and Mses. Gosden Robinson andMs. Lee. Each of these directorsDirectors served as a member of the Governance Committee during all of 2007,2010, other than
13
Mr. Santagati who was appointed to such committee in February 2010, and
each of these Directors remained a member of the Governance Committee as of the
April 17, 2008 Record Date. As noted previously, Ms. Gosden Robinson has indicated that, due to the demandsdate of
her full-time position as Chairman of RLM, she will not stand for re-election at the 2008 Annual Meeting.this Proxy Statement.
Governance Committee Charter The Governance Committee operates under a comprehensive written charter, a printable and current copy of which is available on the Company’s investor relations website, atwww.revloninc.com, under the heading, ‘‘Corporate Governance.’’Investor Relations (Corporate Governance).
Table of ContentsGovernance Committee Responsibilities
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.
Director Nominating ProcessesProcesses; Diversity
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,
for director, 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
on the Company’s investor relations website, atwww.revloninc.com, under the heading, ‘‘Corporate Governance.’’Investor Relations (Corporate Governance). The Governance Committee, does not set specific, minimum qualifications that nominees must meet, but rather, 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 assessme ntassessment 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 may determinedetermines to be pertinent in light of the Board’s current needs.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.Stockholder Process for Submitting 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
for director 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,
New YorkNY 10017, attention:
Robert K. Kretzman.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 Corporate SecretaryCompany, as set forth above, not less than 120 days prior to the anniversary date of the date of the
14
Company’s most recent proxy statement,
or by December 26, 2008,which, for recommendations for the Company’s
20092011 Annual
Stockholders’Meeting, was December 22, 2010. No such recommendations were received for the 2011 Annual Meeting.
Table of ContentsTo have a candidate considered by the Governance Committee, a stockholder must, subject to further requests for information from the Governance Committee, initially provide the following information:
| | |
| • | the stockholder’s name and address, of the stockholder, evidence of such stockholder’s ownership of the Company’s CommonVoting 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 CommonVoting 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. |
Stockholder-Director Communications 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
Robert K. Kretzman, ExecutiveMichael T. Sheehan, Senior Vice President,
Chief Legal OfficerDeputy General Counsel and Secretary, at
robert.kretzman@revlon.commichael.sheehan@revlon.com; or (ii) mailing it to him at Revlon, Inc., 237 Park Avenue, 14th Floor, New York, New York,NY, 10017, attention: Robert K. Kretzman.Michael T. Sheehan. Communications that consist of stockholder proposals must instead follow the procedures set forth under ‘‘General“General Rules Applicable to Stockholder Proposals’’Proposals” in this Proxy Statement, below, and, in the case of recommendations of director candidates, ‘‘Nominating“Nominating and Corporate Governance Committee — Stockholder Process for Submitting Director Nominees,’’” in this Proxy Statement, below.above.
Non-Management Executive Sessions 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 Directordirector will preside over each non-management executive session of the Board, and an independent Directordirector will preside over each independent executive session of the Board, although the same Directordirector 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, i nin 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 a non-managementat least one executive session, attended by only independent directors (all of whom constituted non-management directors), during 2007.2010.
15
The following table sets forth each of the
executive officersNamed Executive Officers of the Company as of December 31,
2007:2010 (and their respective current positions with the Company as of the date hereof): The following sets forth the
agesage (as of December 31,
2007)2010), positions held with the Company and selected biographical information for the
executive officers of the Company, except for Mr. Kennedy,Company’s Named Executive Officers whose biographical information is
not included in this Proxy Statement, above, with the Company’s other Directors:
Mr. Ennis (37) servesElshaw (50) 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 Chief Financial Officer, having been elected to that position in November 2006.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 March 2007,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. Ennis alsoElshaw 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 Corporate Controllerthe Cosmetic, Toiletry & Fragrance Association), a cosmetic and Chief Accounting Officer. From March 2005 to September 2006, personal care products industry association.
Mr. EnnisKretzman (59) has 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. Kretzman (56) has beenProducts 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. Formerly, he served as the Company’s and Products Corporation’s Chief Legal Officer General Counsel and Secretary of the Company and of Products Corporation sincefrom December 2003 to November 2010, and also as the Company’s and Products Corporation’s Executive Vice President, Human Resources offrom October 2006 to November 2010. Mr. Kretzman formerly served as the Company since October 2006.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, General Counsel and Secretary of the Company and of Products Corporation from January 2000 until December 2003. Prior to becoming General Counsel, Mr. Kretzman served as Senior Vice President, Deputy General Counsel and Secretary from March 1998 to January 2000, as Vice President, Deputy General Counsel and Secretary from January 1997 to March 1998, and as Vice President and Secretary from September 1992 to January 1997. Mr. Kretzman joined the Company in 1988 as Senior Counsel responsible for mergers and acquisition s.acquisitions. Mr. Kretzman has also served as the Company’s Chief Compliance Officer since January 2000.
Mr. Berns (46) has served as the Company’s and Products Corporation’s Executive Vice President and Chief Financial Officer since May 2009. Mr. Berns also 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, Mr. Berns worked at Paramount Communications Inc. and at a predecessor public accounting firm of Deloitte & Touche. Mr. Berns served as a Director and member of the audit, nominating and corporate governance and compensation committees for LivePerson, Inc. from April 2002 until April 2011. Mr. Berns is a Certified Public Accountant.
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RISK MANAGEMENT
Relationship of Compensation Practices to Risk Management
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.
Risk Oversight
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 policies 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 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, the business risks faced by the Company and the Company’s management of those risks.
COMPENSATION DISCUSSION AND ANALYSIS Set forth below is a discussion and analysis of all material elements of the Company’s compensation of its Named Executive Officers,
(as defined below), 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.elements of compensation.
Overview of 20072010 Compensation EventsDuring 2007,
For 2010, the Compensation Committee authorizedCompany determined to provide merit increases to salaries in March 2010 and to accrue its 2010 bonus program at 100% of target, subject to the followingCompany achieving its 2010 corporate performance goals (i.e., 2010 adjusted EBITDA and free cash flow, as more fully described below).
Set forth below is a summary of the key actions which the Company took in respect of theto its 2010 compensation of its senior management, including the Named Executive Officers, as further discussed below:programs:
| | |
| • | As a resultBased 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 benchmarking studycash bonus program (the “2010 Bonus Program”) and a cash-based long-term incentive compensation (“LTIP”) program (the “2010 LTIP Program;” together with the 2010 Bonus Program, referred to herein as the |
17
| | |
| | “2010 Incentive Compensation Programs”), each of executive officer compensation performedwhich is governed by Mercer Human Resource Consulting (‘‘Mercer’’), a nationally-recognized compensation consultant, the Company entered into ‘‘change of control’’ agreements with its Named Executive Officers in April 2007, providing for so-called ‘‘double trigger’’ severance protection (i.e., providing certain severance arrangements following a terminationterms of the executive by the employer without ‘‘cause’’ or a termination by the executive for ‘‘good reason,’’ in either case following a ‘‘change of control’’);Incentive Compensation Plan. |
Table of Contents | | |
| • | After advice from, and consultation with, Mercer, in December 2007In March 2011, the Company granted restricted stock to a broad range of eligible employees, including its Named Executive Officers, as a retention incentive, as well as to make up for the Company’s recent bonus payout history (e.g., bonuses were only funded and paid at approximately 22% of target, on average, over the last five calendar years, including no cash bonuses being paid for 2003 or 2006); and |
| | |
| • | After advice from, and upon consultation with, Mercer, the Company’s 2007 Bonus Program was funded at 50% of target, to balance the need for employee compensation and retention with the objective of improving cash flow. Managers also had the ability to award between 75% and 150% of target to individuals based upon relative performance, subject to staying within the overall budget of 50% of target. The Company paid annual cash bonuses under the 2010 Bonus Program to eligible employees, including its eligible Named Executive Officers, in March 2008, under its 2007 Bonus Program, based upon the Company’s achievement of individualits performance goals under such program, and Companythe degree of achievement by bonus program participants of their individual performance objectives for 2007.2010, subject to the terms of such program. |
|
| • | As was the case in 2009, the Company did not implement an equity award program for 2010. In lieu of equity awards, for 2010 the Compensation Committee approved a LTIP component to the Incentive Compensation Plan, which plan was approved by the Company’s stockholders at the 2010 annual stockholders’ meeting. In March 2011, the Company paid one-third of the LTIP award earned under its 2010 LTIP Program to eligible employees, including its eligible Named Executive Officers, based upon the Compensation Committee’s certification of the achievement of the performance goals under the 2010 LTIP Program and the payout terms of such program authorized by the Compensation Committee upon its approval of the 2010 LTIP Program in October 2009 (the 2010 LTIP award is paid out in equal one-third amounts in March 2011, 2012 and 2013, provided the grantee received a “target” or better performance rating under the Company’s Performance Management Review process for 2010 and is employed with the Company on the payout dates). |
|
| • | The Company provided merit salary increases in March 2010, after providing no such increases in 2009. |
Objectives of the Company’s Compensation Program and What it is Designed to Reward The Company’s philosophy is to provide a compensation package that is 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. This is accomplishedinterests, by rewarding performance that is directly linked to achievement ofachieving the Company’s business plan and strategic goals;goals and fostering shareholder value creation over the long term; and |
| | |
| • | to both attract, retain and retainmotivate exceptional performers and key contributors with the skills and experience necessary for the Company to achieve its business objectives, and who are prepared to work in a lean, highly-leveraged organization. Thiswhich requires that the Company’s compensation programs be competitive with the compensation practices of other leading consumer products companies.companies, as discussed in further detail below. |
Each Element of Compensation and Why the Company Chooses to Pay It In order to achieve the objectives discussed above, the Company maintains a relatively simple compensation
program. This program
consistingconsists principally of: (i)
cashbase salary; (ii) eligibility for annual cash bonuses
under the Incentive Compensation Plan, contingent upon
the achievement ofachieving specific Company
performance goals and
personalindividual performance objectives; and (iii)
eligibility for long-term incentive compensation under the Incentive Compensation Plan, contingent upon the Company achieving specific performance goals and participants’ achieving “target” performance objectives (which elements of compensation are referred to, collectively, in this Proxy Statement as “total compensation,” unless otherwise noted). Historically, prior to 2009, the Company’s long-term incentive compensation had been comprised of annual equity grants (principally, restricted
stock)stockand/or stock options) under the Company’s Stock Plan.
The However, as with 2009, during 2010 the Company determined not to implement an annual equity award program under its Stock Plan. To enable 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 any significant wealth accumulation for any of the Company’s employees, including its Named Executive Officers. For example, theThe Company’s bonus programs have been fundedwere accrued and paid at only approximately 22%0%, 50%, 75% and 50% of target, on average, over the last five calendar years. Further, basedrespectively, for 2006, 2007, 2008 and 2009. Based on the $1.18$9.84 NYSE closing price of Revlonthe Company’s Class A common stockCommon Stock on December 31, 2007,2010, all stock options held by the Named Executive Officers were ‘‘underwater,’’ since“out of the money,” as the
18
exercise price of all of their stock options exceeded
thesuch NYSE closing
price.price at year end. The lowest exercise price of any
stock option currently held by a Named Executive Officer is
$2.55.$25.50 per share.
Setting Pay; Market References The Company’s Compensation and Human Resources departments 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.
As part of its assessment of the compensation of the Named Executive Officers, the Company also compares the Named Executive Officers’ total compensation to the total compensation for executives at comparison group companies. The Company seeks to design its total compensation
including salaries, bonuses and equity awards in the aggregate, to be competitive with other leading consumer products companies and other companies outside of the consumer products field,
(collectively, the ‘‘Comparison Group’’), taking into account total compensation. While the Comparison Group is comprised primarily of consumer products companies, companies outside of the consumer products field are also included becauseas the Company believes that the market for certain executive talent is
broader.Base Salary
Base salariesbroader than the consumer products field. When reviewing and setting Named Executive Officer compensation for 2010, 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 2010 consisted of the companies listed onAnnex A.
Total Compensation
For 2010, the Named Executive Officers are generally at or aboveOfficers’ total compensation, as an approximate percentage of the median50th and the 75th percentiles of competitivecompensation in the relevant Comparison Group, was as follows: (i) 24% and 13.7%, respectively, for Mr. Kennedy (Mr. Kennedy did not participate in the Company’s 2010 Incentive Compensation Programs; his base salaries. 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
Base salary adjustments are
generally madeconsidered annually and
have been awardedmay be based on individual performance, assumption of new responsibilities, competitive data from the Comparison
Table of ContentsGroup, employee retention efforts and the Company’s overall compensation guidelines and annual salary budget guidelines. Higher annual increases are availablemay be made to higher performers and key contributors, provided that the overall increases are within budgeted guidelines, which are generally consistent with external norms.
During 2007, Messrs. Ennis and Kretzman received merit salary increases to reflect their performance during 2006 and the successful assumption of significantly expanded responsibilities in a much leaner organization after the Company’s 2006 restructuring activities. Mr. Kennedy did not receive a base salary increase during 2007 as he had received an increase with his promotion from Chief Financial Officer to Chief Executive Officer in September 2006.
guidelines.
Annual Cash Bonus — Incentive Compensation; GenerallyExecutive Bonus PlanUnder the Executive Bonus Plan, annual cash bonuses are designed to reward the achievement of specific business objectives approved by
Each year, the Compensation Committee
inreviews and establishes the
beginningperformance measures for the Company’s incentive compensation program(s), which are intended to have the effect of
each year. These objectives are generally tiedfostering shareholder value creation over the long term, to
ensure that the program design appropriately motivates executives to achieve the Company’s financial
and operational performance
and achievement of its business strategy, such as, without limitation, EBITDA targets. While the Company’s bonus programsgoals, which are designed to be
competitive, historicallychallenging and linked directly to the Company’s
business plan for the year. As more fully described below, for 2010, the components of the Company’s incentive compensation program were a cash bonus
payments have been well belowunder the
median of2010 Bonus Program, payable in March 2011, to the
Comparison Group dueextent performance goals were achieved, and a cash-based LTIP award under the 2010 LTIP Program, payable in March 2011, to
shortfallsthe extent performance goals were achieved, in
the Company’s actual performance versus planned performance (e.g., bonuses were only funded and paid at approximately 22% of target, on average, over the last five calendar years, including no cash bonuses being paid for 2003 or 2006).three equal annual installments.
Payouts under the Company’s cash bonus plan generally are2010 Incentive Compensation Programs were contingent upon the achievement of annualidentified corporate performance goals. Additionally, payout to a participant under the 2010 Bonus Program was contingent upon such individual’s achievement of his or her own individual performance objectives; and, personalpayout to a participant under the 2010 LTIP Program was contingent upon such individual having received a performance objectives.rating of “target” or higher under the Company’s 2010 Performance Management Review process. The Company’s corporate performance objectivegoals under the 2010 Incentive Compensation Programs was the Company’s achievement of
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two equally weighted performance targets, namely, $268.9 million of “adjusted EBITDA” for 2010 (the “2010 EBITDA Performance Goal”)1 and $74.4 million of “free cash flow” for 2010 (the “2010 Free Cash Flow Performance Goal”),2 in each case measured after all incentive compensation accruals (collectively, the “2010 Performance Goals”).
The 2010 Incentive Compensation Programs featured a customary payout curve, to account for the payout of bonuses at 50% of target bonus underextent to which the 2007Company partially achieved or over achieved the Company’s 2010 Performance Goals.
Under the 2010 Bonus Program,
was the achievement of $210 million of EBITDA for 2007 (after accruing for bonus). The Company selected EBITDA as the bonus target because the Company believes it provides a useful performance measure of the Company’s overall business, which eliminates the effects of certain charges that are not directly attributable to the Company’s underlying operating performance.Upon the achievement of EBITDA targets for 2007, a participant in the Executive Bonus Plan can earn his or her target bonus award if he or she achieves his or her individual performance objectives. Dependingdepending on the Company’s assessment of individual performance, participants could receive between 75% toand 150% of thetheir target bonus awards may be paid,award, to enable managers to reward higher-performing employees, as long as the overall bonuscompensation budget iswas 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 objectives are established by the Compensation Committee at the start of the year and then reviewed after the end of the year to assess the extent to which they have been achieved.
For 2010, 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’ 2010 performance, in February 2011 the Compensation Committee reviewed and analyzed detailed and comprehensive documentary support of each Named Executive Officer’s accomplishments against his respective 2010 performance objectives, including the following:
Mr. Ennis — President and Chief Executive Officer:
| | |
| • | the Company’s 2010 reported financial results, which supported the Company’s achievement of 96.8% of its 2010 EBITDA Performance Goal, on which 35% of Mr. Ennis’ target bonus was based, and 110.6% of its 2010 Free Cash Flow Performance Goal, on which 35% of Mr. Ennis’ target award was based; |
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| • | the Company’s achievement of an approximate 2.3% increase in net sales, representing partial achievement of this budgeted target, on which 10% of Mr. Ennis’ target award was based; |
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| • | the execution of the Company’s portfolio planning process and inventory management, on which 10% of Mr. Ennis’ target award was based; and |
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| • | the continued improvement of the Company’s organizational capabilities through developmental assignments and succession planning, and the implementation of effective performance management processes and line management training, on which 10% of Mr. Ennis’ target award was based. |
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 from the sale 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.
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Mr. Elshaw — Executive Vice President and Chief Operating Officer:
| | |
| • | the Company’s 2010 reported financial results, which supported the Company’s achievement of 96.8% of its 2010 EBITDA Performance Goal, on which 35% of Mr. Elshaw’s target bonus was based, and 110.6% of its 2010 Free Cash Flow Performance Goal, on which 35% of Mr. Elshaw’s target award was based; |
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| • | the Company’s achievement of an approximate 2.3% increase in net sales, representing partial achievement of this budgeted target, on which 10% of Mr. Elshaw’s target award was based; |
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| • | the execution of the Company’s portfolio planning process and inventory management, on which 10% of Mr. Elshaw’s target award was based; and |
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| • | the continued improvement of the Company’s organizational capabilities through developmental assignments and succession planning, and the implementation of effective performance management processes and line management training, on which 10% of Mr. Elshaw’s target award was based. |
Mr. Berns — Executive Vice President and Chief Financial Officer:
| | |
| • | the Company’s 2010 reported financial results, which supported the Company’s achievement of 96.8% of its 2010 EBITDA Performance Goal, on which 25% of Mr. Berns’ target bonus was based, and 110.6% of its 2010 Free Cash Flow Performance Goal, on which 25% of Mr. Berns’ target award was based; |
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| • | the Company’s achievement of an approximate 2.3% increase in net sales, representing partial achievement of this budgeted target, on which 10% of Mr. Berns’ target award was based; |
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| • | the execution of the Company’s portfolio planning process and inventory management, on which 10% of Mr. Berns’ target award was based; |
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| • | the continued improvement of the Company’s organizational capabilities through developmental assignments and succession planning, and the implementation of effective performance management processes and line management training, on which 10% of Mr. Berns’ target award was based; and |
|
| • | the achievement of key functional objectives within the Finance area, including refinancing the Company’s credit facility on terms and conditions to allow the Company to execute its business strategy for growth; improving the financial close process and continuing to strengthen the financial control environment; establishing the operating framework for a functional business continuity plan for all functions; and ensuring that the information management function achieved its 2010 strategic objectives, on which 20% of Mr. Berns’ target award was based. |
Mr. Kretzman — Executive Vice President and Chief Administrative Officer:
| | |
| • | the Company’s 2010 reported financial results, which supported the Company’s achievement of 96.8% of its 2010 EBITDA Performance Goal, on which 25% of Mr. Kretzman’s target bonus was based, and 110.6% of its 2010 Free Cash Flow Performance Goal, on which 25% of Mr. Kretzman’s target award was based; |
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| • | the Company’s achievement of an approximate 2.3% increase in net sales, representing partial achievement of this budgeted target, on which 10% of Mr. Kretzman’s target award was based; |
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| • | the execution of the Company’s portfolio planning process and inventory management, on which 10% of Mr. Kretzman’s target award was based; |
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| • | the continued improvement of the Company’s organizational capabilities through developmental assignments and succession planning, and the implementation of effective performance management processes and line management training, on which 10% of Mr. Kretzman’s target award was based; and |
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| • | the achievement of key functional objectives within the Legal and Human Resource areas, including the provision of comprehensive legal services at or below budgeted cost, in support of the Company’s worldwide operations; the leadership of comprehensive succession and development planning, and performance management and line management training, globally; the structuring of competitive health and welfare benefits in the U.S.; and leading the recruitment, hiring and on-boarding of key senior executive positions, on which 20% of Mr. Kretzman’s target award was based. |
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Mr. Kennedy, who transitioned from President and Chief Executive Officer to Vice Chairman of the Board of Directors in May 2009 as part of the Company’s overall succession planning, was not eligible to (and did not) participate in the 2010 Incentive Compensation Programs in his role as Vice Chairman.
As noted above, based on the Company’s achievement of its 2010 Performance Goals, in February 2011, the Compensation Committee determined, pursuant to the terms and conditions of the 2010 Incentive Compensation Programs, that such programs would be funded at 100% of target. Additionally in February 2011, based upon a comprehensive review of each Named Executive Officer’s 2010 performance, the Compensation Committee determined the extent to which the Named Executive Officers had achieved their respective individual performance objectives (including, in the case of Messrs. Ennis, Elshaw, Berns and Kretzman, objectives for 2010 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 2010 (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 2010 LTIP awards and 2010 bonuses) upon compliance with confidentiality, non-competition and non-solicitation obligations.
Incentive Compensation; Annual Cash Bonus
Approximately
460440 employees, including the Named Executive Officers, were eligible
(based on salary grade) to participate in the
20072010 Bonus Program.
TheAs noted above, the bonus objectives for
Messrs. Kennedy, Ennis and Kretzman established byall employees in the
Compensation Committee in March 20072010 Bonus Program included the Company’s achievement of
$210 million oftwo equally weighted performance goals (namely, its 2010 EBITDA
(after accruing for bonus)Performance Goal and its 2010 Free Cash Flow Performance Goal), as well as the
Named Executive Officer’sparticipants’ achievement of
individually tailored and weighted bonustheir individual performance objectives
which collectively were designedlinked directly to
be challenging to attain. As noted above, for 2007,executing the Company’s
bonus program was funded at only 50% of target, due2010 business plan. As approved by the Compensation Committee, under the 2010 Bonus Program, the Compensation Committee had discretion to
the Company’s focus on balancing employee compensationaward between 75% and
retention goals with a desire to improve cash flow.The terms150% of the Company’s standard employee confidentiality and non-competition agreement, which every employee, includingtarget bonuses to reward higher-performing employees, as long as the Named Executive Officers, is required to execute, andoverall compensation budget was not exceeded.
Per the terms of
the Company’s Executive Bonus Plan, condition each employee’s eligibility for benefits (including 2007 Bonus Program awards) upon the execution of, and compliance with, such agreement.their respective employment agreements, Mr. Kennedy, the Company’s President and Chief Executive Officer, isEnnis was eligible under his employment agreementduring 2010 for a target bonus of 100% of his base salary, butand each of Messrs Elshaw, Berns and Kretzman was eligible during 2010 for 2007 hisa target bonus was 50%, due to the funding levels set by the Compensation Committee under the 2007 Bonus Program. Mr. Ennis and Mr. Kretzman are eligible under their employment agreements for target bonuses of 75% of his respective base salary, but for 2007 their target bonuses were 37.5%. In March 2008,salary.
As noted above (see, “Incentive Compensation; Generally”),based upon the Company’s degree of achievement of its 2010 Performance Goals, the Compensation Committee determined
thatto fund the
Company’s EBITDA objectives had been met,2010 Bonus Program at 100% of target and,
that each ofbased upon its determinations as to the Named Executive
Officers had met (and in a numberOfficers’ degree of
cases exceeded) allachievement of their respective
individual performance
objectives; accordingly, bonuses were earned by eachobjectives, awarded Messrs. Ennis, Elshaw, Berns and Kretzman 96.2%, 95.7%, and 106.5% and 103.2%, respectively, of
the Named Executive Officers during 2007 (see the ‘‘Summary Compensation Table,’’ below).In March 2008, the Compensation Committee certified that the Named Executive Officers had achieved their 162(m) objectives for 2007, earning the executives the right to receive, at a minimum, their
Table of Contentsrespective target bonuses. As approved by the Compensation Committee in early 2007, under the 2007 Bonus Program, the Compensation Committee had discretion to award up to 150% of adjusted target bonuses to reward high performance.
Under Mr. Kennedy’s leadership, the Company—
| | |
| • | demonstrated significantly improved financial performance in 2007, with EBITDA of $224.5 million and free cash flow usage of $13.8 million, which measures were the best the Company has achieved since 1998; |
| | |
| • | successfully formed a U.S. Operating Region; and |
| | |
| • | instituted a global, three-year color cosmetics and beauty care portfolio strategy, which resulted in the launch of a broad lineup of new products across substantially all of the Company’s brands and categories for 2008. |
The Compensation Committee therefore awarded Mr. Kennedy a discretionary bonus of $150,000, for a total bonus of $800,000. Mr. Kennedy’s bonus is consistent with the provisions of the 2007 Bonus Program in that it is 123% of Mr. Kennedy’s adjusted target of $650,000 for 2007. The Compensation Committee also approved that Messrs. Ennis and Kretzman each achieved and in a number of cases exceeded their objectives for 2007 under the 2007 Bonus Program and so the Compensation Committee awarded each of them 120% of their adjusted bonus targets for 2007 based upon such over-achievement.
2010.
The Summary Compensation Table, below, reflects the
actual bonus awards that were made for
20072010 to the Named Executive Officers under the
20072010 Bonus Program.
Incentive Compensation; Long-Term Compensation — The Stock Plan The third principal component
inof total compensation for the Company’s key employees
(i.e., salary, bonus and equity) is
long-term incentive compensation awards. Historically, this had taken the
awardform of
an annual grant of equity awards, usually in the form of restricted stockand/or stock options,
and restricted stock under the Stock Plan.
Grants of stock options and restricted stock are designed
However, beginning with 2009 (and again in 2010), the Company decided not to
directly alignimplement an annual equity award program under its Stock Plan as a
portion of compensation for key employees with shareholders’ equity interests and, in doing so, serve as the Company’s principal elementcomponent of long-term compensation.
Stock optionsTo enable the Company to seek to maintain competitive total compensation, the Company adopted a cash-based LTIP component under its Incentive Compensation Plan, effective from and
restricted stock have time-based vesting schedules, which are designed to retain key employees.Stock option and/or restricted stock Awards generally have been granted annually to executives and other key employees. Guidelines forafter 2010. The 2010 calendar year was the size of awards are developed based upon, among other factors, shares available for grantfirst performance year under the Stock Plan, the executive’s position in the Company, his or her contributions to the Company’s objectives and total compensation, as compared to external references, such as competitive compensation data from Mercer and Towers Perrin. Larger equity awards are made to morenewly-implemented LTIP.
Approximately 50 senior
executives so that a larger portion of their total potential compensation will be variable and contingent upon shareholder value creation.Factors that may be considered in deciding which form the equity awards will take (i.e., stock options or restricted stock) may include, among others, the Company’s stock price at the time the Awards are granted; the degree to which the awards are intended to provide a retention incentive; and the impact on ‘‘overhang’’ (i.e., the dilutive effect on the Company’s common stock).
Grants of stock options and restricted stock are not specifically timed to be made before major announcements or earnings releases. Grants of equity as a result of new-hires or promotions generally are made at the next Compensation Committee meeting following such events. There are generally no differences in the timing of equity grants foremployees, including the Named Executive Officers, compared with otherwere eligible employees.
In 2007,to participate in the Company believed that it was critical to provide meaningful equity-based retention incentives in order to retain and motivate key existing employees expected to contribute to the continued execution2010 LTIP Program. Funding of the Company’s business strategy, and to provide competitive total compensation for the recruitment of new, highly-qualified employees to fill key positions. This2010 LTIP Program was particularly important after the decline inbased on the Company’s stock price in 2006 followingdegree of achievement of
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two equally weighted performance goals (namely, its 2010 EBITDA Performance Goal and its 2010 Free Cash Flow Performance Goal).
Awards under the
Company’s announcement that it was discontinuing its Vital Radiance brand,2010 LTIP Program were structured as flat dollar amounts, tiered to levels of responsibility within the organization, and
the elimination of positions and layers of management in connection with the Company’s organizational realignment actions in February and September 2006.
Table of ContentsIn December 2007, the Compensation Committee, based upon management’s recommendation and after consultation with Mercer, approved awards of restricted stock to key employees. Such grants were approved by the Compensation Committee, including asCommittee. Once earned, based upon the achievement of the Company’s 2010 Performance Goals, the award amount is to specific size, vesting termsbe paid out in equal one-third amounts in March 2011, March 2012 and grantees, at its meeting in December 2007March 2013, provided the participant received a “target” or better performance rating under the Company’s Performance Management Review process for 2010 and were made effectiveremains employed with the Company on the date of such meeting. These grants vested ratablyapplicable payment date. By deferring payments over three years for more senior employees, and, for less senior employees, 50% on July 2, 2008, 25% on January 2, 2009 and 25% on July 2, 2009. Mercer advised the Compensation Committee that2010 performance year, the 2007 restricted stock awards representedprogram’s structure is intended to have a reasonable approachretentive element for the Companykey personnel expected to implement the Company’s business plan from year to year.
As noted above (see, “Incentive Compensation; Generally”),based upon the Company’s degree of achievement of its 2010 Performance Goals, LTIP awards were earned by each of the eligible Named Executive Officers in respect of 2010.
The Summary Compensation Table, below, reflects the portion of the 2010 LTIP Program awards that were earned and
were within external norms in terms of dilution and burn rate.While equity Awardsactually paid out for 2010 to the eligible Named Executive Officers under the Stock Plan generally involve no immediate cash cost, the Company does recognize expense for such Awards in accordance with Statement of Financial Accounting Standards No. 123(R), ‘‘Share-Based Payment’’ (‘‘SFAS No. 123(R)’’).
2010 LTIP Program.
Other Compensation and Benefit Programs The Company also maintains
fairly standard benefits that are
generally consistent with those offered by other major corporations and
which are generally available to all of the Company’s full time employees (subject to meeting basic eligibility requirements). These plans include
the Revlon Employees’ Savings, Investment and Profit Sharing Plan (the ‘‘Savings Plan’’), which is a defined contribution plan, the Revlon Employees’ Retirement Plan (the ‘‘Retirement Plan’’), which is a defined benefit plan, and the Revlon Pension Equalization Plan (the ‘‘Pension Equalization Plan’’), which is a non-qualified and unfunded plan that provides retirement benefits to employees, including the Named Executive Officers, equal to those that would have been provided under the Retirement Plan for compensation in excess of Code limits. The Retirement Plan and Pension Equalization Plan are described in more detail under the ‘‘Pension Benefits’’ table below.In the past, the Company maintained the Revlon Excess Savings Plan for Key Employees (the ‘‘Excess Savings Plan’’) to recognize compensation in excess of these Code limitations to employees. That plan was ‘‘frozen’’ on December 31, 2004 (i.e., no further contributions were permitted after this date).
The Company offers fairly standard medical, dental, vision and life insurance coveragecoverages that is generallyare available to allU.S.-based, non-union employees.
The Company also maintains a limited number of benefit programs that are
only 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
supplemental Executive Medical Plan,Company automobile
allowances or Company automobiles for certain Named Executive Officers,and limited reimbursement of
certain costs for financial counseling,
and tax preparation and
reimbursement for life insurance premiums. These types of benefits are commonly made available to senior executives at other major corporations and assist the Company in attracting and retaining key talent.
As previously disclosed in the Company’s 2007 annual proxy statement, in April 2007, the Company entered into ‘‘change of control’’ agreements with a group of senior executives, including its Named Executive Officers, all of whom were expected to be essential to the Company’s business strategy going forward in a leaner, more efficient environment. These agreements provide for 24 months of (i) salary, (ii) average bonus earned over the five preceding calendar years (or the prior years of employment with the Company if less than five years) and (iii) benefits following the occurrence of a ‘‘double trigger’’ event (i.e., a termination of the executive by the employer without ‘‘cause’’ or a termination by the executive for ‘‘good reason,’’ following a ‘‘change of control’’). The Company was not considering any given business t ransaction at the time, but considered, among other factors, the results of a study by Mercer which found that the Company did not offer a full spectrum of change of control benefits, and found such provisions to be reasonable and at market for similarly situated companies.
How the Company Determines the 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 Intointo the Company’s Overall Compensation Objectives and May Affect Decisions Regarding Other Elements of Compensation
The Company focuses annually on developing a total compensation
levelpackage that is intended to be
externally competitive.competitive such that the level of total compensation (i.e., base salary, 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 bonus plan targets and
equitylong-term incentive compensation targets are
Table of Contentsreviewed using a ‘‘total compensation’’“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 year to year. As a general matter, sinceHistorically, the Named Executive Officers have not realized any meaningful wealth accumulation from prior equity awards, or other incentive compensation, as described above, this haswhich influenced setting base salaries.
the introduction of an LTIP component to the Incentive Compensation Plan to replace the former equity component of compensation.
The Company designs its compensation programs such that there is a correlation between level of position and 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 i.e., cash bonus(in the form of performance-based annual bonuses and equity compensation,performance-based LTIP awards), than do employees with lower levels of responsibility and accountability. This means that a higher proportion of theirthe Company’s more senior executives’ total potential compensation is based upon variable elements, (namely, performance-based cash bonuses and equity grants), than is the case with the Company’s employees with lower levels of responsibility and accountability.
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Role of the Compensation Committee The Compensation Committee reviews and approves, among other things,
salary increasescompensation for the Company’s Named Executive Officers; the structure of the Company’s
Executive Bonusannual bonus program under the Incentive Compensation Plan, including
setting annual performance objectives for the Named Executive
Officers;Officers and annually assessing the extent to which those objectives have been achieved; and the structure
of and actual grants under the Company’s
equitylong-term incentive compensation award
programs.programs and annually assessing the extent to which those objectives have been achieved.
The Compensation Committee reviews and approves
goals and objectives relevant to the compensation of the Company’s Chief Executive Officer, evaluates the
CEO’sChief Executive Officer’s performance in respect of those
goals and objectives and determines, either as a committee or together with the
Governance Committeeand/or the Board of Directors, the
CEO’sChief Executive Officer’s total compensation level based on
the evaluation.that evaluation process. The Compensation Committee also reviews and approves compensation and incentive arrangements for the Company’s other Named Executive Officers.
The Committee also reviews and approves equity grants under the Stock Plan.The Compensation Committee
has reviewed ‘‘tally sheets,’’ which includereviews key components of
theeach Named Executive Officer’s compensation,
including, among other things: (i) a detailed breakdown of 2007 compensation, including base salary, bonus and perquisites and other fringe benefits; (ii) estimates of the annual actuarial accrual of pension benefits; (iii) a summary of equity grants (i.e., restricted stock and stock options), vesting provisions and any change in control provisions of those grants; and (iv) estimates of severance benefits that would apply under each of the Named Executive Officer’s employment agreements. These summaries providewhich enables the Compensation Committee
with information about senior management compensation that enables them to make informed decisions regarding future
compensation elements and to adjust elements of
compensation when applicable due to economic and/or executive compensation trends affecting the Co mpany and/or its industry.compensation.
The Company’s Executive Vice President Human Resources,and Chief Administrative Officer, in consultation with the Company’s Chief Executive Officer, works with the Company’s compensation groupCompensation 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 Executive Bonus Plan and otherannual bonus plans;program under the Incentive Compensation Plan; and (iii) the structure of equity award programs underits long-term incentive compensation programs.
As part of the Company’s
Stock Plan, includingprocesses and procedures for determining the
2007 Restricted Stock Grants.Theamount and form of executive officer and director compensation, the Company’s Compensation Committee considers input from consultants, including Mercer,relies in part upon informed proposals and information provided by management, as well as from the Company, inmarket data, analysis and guidance provided by its consideration of the competitiveness and effectiveness of, and its oversight and approval of, theoutside compensation arrangements for the Company’s Chief Executive Officer and other Named Executive Officers.
consultant. During 2007,2010, the Compensation Committee consulted withand/or considered advice provided by Mercerits outside compensation advisor (Compensation Advisory Partners LLC (“CAP”)) with respect to the following matters, among others: (i) amending and restating the Company’s Stock Plan to increase the number of shares available for Awards and making all shares authorized under the Stock Plan available for Awards of any type permissible under the Stock Plan to enable the Company to grant restricted stock to key employees who are essential to the Company’s operations; (ii) the structure of the Company’s 2007 restricted stock grant program (including the grants to the Named Executive Officers); (iii) as part of the annual compensation for Board members, the Compensation
Table of ContentsCommittee’s grant of 25,000 shares of restricted stock to each of the Company’s independent, non-employee directors in December 2007; (iv) the structure and components of the Company’s 2008 Executive Bonus Plan; and (v) consideration of amendments to the employment agreements of a group of senior executive officers, includingincentive compensation programs, as well as March 2010 merit salary increases for the Named Executive Officers,Officers. CAP performed no other services for the Company or the Compensation Committee during 2010 other than providing compensation advice to the Compensation Committee (or to the Company’s Compensation Department in respect to routine compensation survey data analysis); without limiting the foregoing, CAP did not provide certain ‘‘double trigger’’ severanceservices such as benefits inadministration, human resources consulting or actuarial services. The Compensation Committee approved CAP’s engagement, upon the event they are terminated without ‘‘cause’’ or for ‘‘good reason’’ after a ‘‘changerecommendation of control.’’
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.
Tax Deductibility of Executive Compensation Section 162(m) of the Code (‘‘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 each of its five most highly paid executive officers. There is an exceptioncertain officers who constitute “covered employees” under the rule, unless such amounts are determined to the $1,000,000 limitation for performance-based compensationbe “performance-based compensation” meeting certain requirements. AnnualGenerally, the Company’s provision of cash incentive compensation under the Executive BonusIncentive Compensation Plan, stock option Awardsawards and performance-based stock awards generally aremeets the requirements for performance-based compensation meetingunder Section 162(m) and thus, generally, those requirements anditems are 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 deductible. Since Mr. Kennedy’s salary is aboveThe 2010 annual bonus and LTIP performance objectives for the $1,000,000 threshold, a portionCompany’s Named Executive Officers were approved under
24
Section 162(m)’s guidelines for deductibility. Certain amounts of
his salarycompensation for the Company’s officers do not meet Section 162(m)’s performance-based requirements and
the deemed value of his perquisitestherefore are not
tax-deductibledeductible by the Company.
Restricted stock and restricted stock units that have time-based vesting are not considered performance-based under Section 162(m) and are generally not tax-deductible by the Company. 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 of the Company during 20072010 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 20072010 (collectively, the ‘‘Named“Named Executive Officers’’Officers”), for services rendered in all capacities to the Company and its subsidiaries during such periods. The summary compensation table below includes,As with last year’s proxy statement, the amounts under the columns ‘‘Stock Awards’’“Stock Awards” and ‘‘Option“Option Awards,’’” in the expense required to be recognized bySummary Compensation Table below, have been calculated based upon the Company pursuant to SFAS No. 123(R) during 2007 and 2006 (excluding forfeiture assumptions) in respectaggregate grant date fair value of outstanding restrictedthe stock and option a wards toawards 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 Namedcolumns “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 Officers.Incentive Compensation Plan, as well as its historic presentation of those awards for 2009 and 2008, in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table, below, for awards of target bonuses for the year, and any discretionary annual cash bonus in excess of target bonuses for the year in the “Bonus” column. For 2010, such column also includes earned 2010 LTIP Program awards, as more fully set forth in footnote (d), below (although 2010 LTIP Program awards have been listed in the table below at their full-value, only one-third of such amounts was actually paid in March 2011; the remaining two-thirds of such 2010 LTIP awards are payable in March 2012 and March 2013, only if the executive remains employed with the Company on each respective payout date). In all cases, stock option awards outstanding as of December 31, 20072010 were ‘‘“out-of-the-money,’’” in that in each case they had exercise prices that were above the $1.18$9.84 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 20072010 and therefore had no realizable monetary value to the Named Executive Officers.Officers on such date. See ‘‘Outstanding“Outstanding Equity Awards at Fiscal Year End.’’”
Table of ContentsSUMMARY COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Change in
| | | | |
| | | | | | | | | | | | | | | Pension Value
| | | | |
| | | | | | | | | | | | | | | and
| | | | |
| | | | | | | | | | | | | | | Nonqualified
| | | | |
| | | | | | | | | | | | | Non-Equity
| | Deferred
| | | | |
| | | | | | | | | Stock
| | Option
| | Incentive Plan
| | Compensation
| | All Other
| | |
| | | | | Salary
| | Bonus
| | Awards
| | Awards
| | Compensation
| | Earnings ($)
| | Compensation
| | Total
|
Name and Principal Position(a) | | Year | | ($) | | ($)(b) | | ($)(c) | | ($) | | ($)(d) | | (e) | | ($)(f) | | ($) |
| |
| David L. Kennedy | | | 2010 | | | | 614,038 | | | | — | | | | — | | | | — | | | | — | | | | 23,949 | | | | 52,984 | | | | 690,971 | |
Vice Chairman | | | 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 | |
President and Chief Executive | | | 2009 | | | | 781,558 | | | | 12,500 | | | | — | | | | — | | | | 437,500 | | | | 56,176 | | | | 24,063 | | | | 1,311,797 | |
Officer | | | 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 | |
Executive Vice President and Chief Operating Officer | | | 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 | |
Executive Vice President and | | | 2009 | | | | 713,783 | | | | 8,357 | | | | — | | | | — | | | | 266,643 | | | | 673,313 | | | | 75,990 | | | | 1,738,086 | |
Chief Administrative Officer | | | 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 | |
Executive Vice President and Chief Financial Officer | | | 2009 | | | | 268,077 | | | | 10,625 | | | | 122,750 | | | | — | | | | 159,375 | | | | 18,461 | | | | 18,982 | | | | 598,270 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal
Position (a) | | | Year | | | Salary
($) | | | Bonus
($) | | | Stock
Awards
($) (b) | | | Option
Awards
($) (c) | | | Non-Equity
Incentive Plan
Compensation
($) | | | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)
(d) | | | All Other
Compensation
($) (e) | | | Total
($) |
| David L. Kennedy | | | | | 2007 | | | | | | 1,305,000 | | | | | | 800,000 | | | | | | 261,881 | | | | | | 226,654 | | | | | | — | | | | | | 61,278 | | | | | | 41,212 | | | | | | 2,696,025 | |
| President and Chief Executive Officer | | | | | 2006 | | | | | | 771,000 | | | | | | — | | | | | | 220,208 | | | | | | 534,038 | | | | | | — | | | | | | 41,121 | | | | | | 21,600 | | | | | | 1,587,967 | |
| Alan T. Ennis | | | | | 2007 | | | | | | 397,212 | | | | | | 180,000 | | | | | | 110,508 | | | | | | 5,468 | | | | | | — | | | | | | 11,198 | | | | | | 22,688 | | | | | | 727,074 | |
| Executive Vice President and Chief Financial Officer | | | | | 2006 | | | | | | 250,839 | | | | | | — | | | | | | 15,473 | | | | | | 10,289 | | | | | | — | | | | | | 14,077 | | | | | | — | | | | | | 290,678 | |
| Robert K. Kretzman | | | | | 2007 | | | | | | 681,189 | | | | | | 308,000 | | | | | | 179,257 | | | | | | 151,425 | | | | | | — | | | | | | 110,054 | | | | | | 68,774 | | | | | | 1,498,699 | |
| Executive Vice President, Human Resources Chief Legal Officer, General Counsel and Secretary | | | | | 2006 | | | | | | 571,393 | | | | | | — | | | | | | 254,806 | | | | | | 340,702 | | | | | | — | | | | | | 115,555 | | | | | | 54,081 | | | | | | 1,336,537 | |
| (a) | For 2007 and 2006, the Company is reporting the compensation of | Messrs. Kennedy, Ennis and Kretzman its only executive officersserved as Named Executive Officers of the Company during such periods.2010, 2009 and 2008. Mr. Berns and Mr. Elshaw became “Named Executive Officers” during 2009, as Mr. Berns was appointed Executive Vice President and Chief Financial Officer in May 2009 and Mr. Elshaw was appointed |
25
| | |
| | Executive Vice President and Chief Operating Officer in May 2009; neither of Messrs. Berns or Elshaw served as a “Named Executive Officer” during 2008. Mr. Kennedy served as the Company’s President and Chief Executive Officer during 2008 and through May 2009, when he transitioned to Vice Chairman of the Board of Directors as part of the Company’s overall succession planning, which included Mr. Ennis succeeding to the positions of President and Chief Executive Officer. |
|
| (b) | | The amounts set forth under the ‘‘Stock Awards’’“Bonus” column reflect the expense required under SFAS No. 123(R)portion of the annual bonus awarded to be recognized by the Company during 2007 and 2006, excluding forfeiture assumptions, in respect of all restricted stock awards held by the Named Executive Officers, including awards granted prior to 2007, some of which were unvested at December 31, 2007. The accounting principles and related assumptions usedOfficer by the CompanyCompensation Committee in calculating the expenses forexcess of such awards under SFAS No. 123(R) are set forth in Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-Kexecutive’s target bonus for the year, ended December 31, 2007 filed withpursuant to the SEC on March 5, 2008 (the ‘‘2007 Form 10-K’’)Compensation Committee’s authority under the Revlon Executive Incentive Compensation Plan (see “Non-Equity Incentive Plan Compensation” column in this table for target bonuses earned). The |
|
| (c) | | As noted above, the amounts set forth under the “Stock Awards” column reflect the grant date fair value of restricted shares that were granted to the Named Executive OfficersOfficer during 2007 pursuant to the year, based upon the NYSE closing market price of the Company’s Class A Common Stock Plan are discussed below under ‘‘Grants of Plan-Based Awards’’ in this Proxy Statement, below.on the respective grant dates. |
(c) |
| (d) | | The amounts set forth under the ‘‘Option Awards’’“Non-Equity Incentive Plan Compensation” column reflect the expense required under SFAS No. 123(R)annual target bonus awarded to be recognized by the Company during 2007 and 2006, excluding forfeiture assumptions, in respect of all outstanding option awards held by the Named Executive Officers and reflect awards granted prior to 2007, some of which were unvested at December 31, 2007. The accounting principles and related assumptions usedOfficer by the Company in calculating the expenses for such awards under SFAS No. 123(R) are set forth in Note 13 to the consolidated financial statements in the 2007 Form 10-K. |
The Named Executives were not awarded any stock options during 2007. As of December 31, 2007, all stock options held by the Named Executive Officers had a strike price that was above the $1.18 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2007. The lowest exercise price of any options held by the Named Executive Officers is $2.55 per share. Accordingly, all of the stock options held by the Named Executive Officers had no realizable monetary value at December 31, 2007.
(d) | The Company used September 30th as its pension plan measurement date for financial statement reporting purposes with respect to the audited financial statements included in the Company’s Annual Report on Form 10-KCompensation Committee for the year, ended December 31, 2006 filedpursuant to its authority under the Revlon Executive Incentive Compensation Plan, based on the achievement of specific performance factors, plus, for 2010, the full value of the executive’s long-term incentive compensation award earned. Note that, although 2010 LTIP Program awards have been listed in the table above at their full-value per SEC interpretative rules, only one-third of such amount was paid in March 2011 to the executive in respect to 2010; the remaining two-thirds of such 2010 LTIP award is payable in March 2012 and March 2013, only if the executive remains employed with the SECCompany on March 13, 2007 (the ‘‘2006 Form 10-K’’). The Company used December 31st as its pension plan measurement date for financial statement reporting purposes witheach respective payout date. There were no LTIP awards prior to 2010. |
|
| | For Mr. Ennis, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $875,000 in cash bonus plus $1,200,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2010 (the remaining two-thirds of such 2010 LTIP award is to be paid out in equal amounts in March 2012 and March 2013). |
|
| | For Mr. Elshaw, the audited financial statements includedamount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $525,000 in cash bonus plus $500,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2010 (the remaining two-thirds of such 2010 LTIP award is to be paid out in equal amounts in March 2012 and March 2013). |
|
| | For Mr. Kretzman, the 2007 Form 10-K. Accordingly,amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $557,284 in cash bonus plus $500,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2010 (the remaining two-thirds of such 2010 LTIP award is to be paid out in equal amounts in March 2012 and March 2013). |
|
| | For Mr. Berns, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $337,875 in cash bonus plus $500,000 in LTIP, of which LTIP amount only one-third has been paid in respect to 2010 (the remaining two-thirds of such 2010 LTIP award is to be paid out in equal amounts in March 2012 and March 2013). |
|
| (e) | | The amounts under the ‘‘Change“Change in Pension Value and Nonqualified Deferred Compensation Earnings’’Earnings” column have been calculated based on the aggregate change in actuarial present value of the Named Executive Officers’ accumulate d |
Table of Contents | accumulated benefit under the Retirement Plan and the Pension Equalization Plan from September 30, 2005 to September 30, 2006, for 2006, and from September 30, 2006January 1 to December 31 2007 annualized to reflect 12 months, for 2007,of each reported year and based on, the assumptions, with respect to 2006,2010, the assumptions as set forth in Note 1114 to the consolidated financial statements in the 2006 Company’s Annual Report onForm 10-K and, for the year ended December 31, 2010 (the “2010 Form10-K”); with respect to 2007,2009, the assumptions as set forth in Note 1113 to the consolidated financial statements in the 2007 Company’s Annual Report onForm 10-K.10-K for the year ended December 31, 2009; and, with respect to 2008, the assumptions as set forth in Note 12 to the consolidated financial statements in the Company’s Annual Report onForm 10-K for the year ended December 31, 2008. These amounts have been calculated based on normal retirement age of 65 as specified in the Retirement Plan and Pension Equalization Plan. The Pension Equalization Plan is a non-qualified and unfunded 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. |
26
For Mr. Kennedy, this amount includes $9,076 and $12,130 under the Retirement Plan and $52,202 and $28,991 under the Pension Equalization Plan for 2007 and 2006, respectively.
For Mr. Ennis, this amount includes $5,562 and $14,077 under the Retirement Plan and $5,636 and nil under the Pension Equalization Plan for 2007 and 2006, respectively.
For Mr. Kretzman, this amount includes $26,793 and $38,934 under the Retirement Plan and $83,261 and $76,621 under the Pension Equalization Plan for 2007 and 2006, respectively. Mr. Kretzman’s employment agreement provides that he is entitled to receive a retirement benefit at age 60, calculated under the Retirement Plan and Pension Equalization Plan without regard to any early retirement reductions. The aggregate change in the actuarial present value of Mr. Kretzman’s accumulated benefit calculated under the Retirement Plan based on retirement at age 60 is $33,566, and the aggregate change in the actuarial present value of Mr. Kretzman’s accumulated benefit calculated under the Pension Equalization Plan based on retirement at age 60 is $171,309.
(e) | | |
| | • For Mr. Kennedy, who has over 8 years of actual service with the Company, this amount includes $5,417, $18,541 and $15,686 under the Retirement Plan and $18,532, $82,605 and $95,601 under the Pension Equalization Plan for 2010, 2009 and 2008, respectively. |
|
| | • For Mr. Ennis, who has over 5 years of actual service with the Company, this amount includes $8,823, $18,158 and $10,785 under the Retirement Plan and $10,734, $38,018 and $15,732 under the Pension Equalization Plan for 2010, 2009 and 2008, respectively. |
|
| | • For Mr. Elshaw, who has over 9 years of actual service with the Company, this amount includes $2,730 and $12,722 under the Retirement Plan and $2,664 and $21,504 under the Pension Equalization Plan for 2010 and 2009, respectively. |
|
| | • For Mr. Kretzman, who has over 22 years of actual service with the Company, this amount includes $74,057, $117,445 and $50,849 under the Retirement Plan, $227,706, $555,868 and $260,488 under the Pension Equalization Plan, and $311,184 under his employment agreement for 2010. The pension plans were frozen on December 31, 2009. Mr. Kretzman’s employment agreement provides that he continues to accrue retirement benefits through his retirement date, and that he is entitled to a retirement benefit at age 60. The aggregate change in the actuarial present value of Mr. Kretzman’s accumulated benefit calculated under the Retirement Plan, the Pension Equalization Plan and his employment agreement for 2010 is, respectively, $64,967, $199,758 and $574,108, based on retirement at age 60. |
|
| | • For Mr. Berns, who has over 8 years of actual 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 $12,529 and $12,781 under the Retirement Plan and $5,569 and $5,680 under the Pension Equalization Plan for 2010 and 2009, respectively. |
|
| (f) | | Mr. Kennedy. The amountsamount shown under All Other Compensation for Mr. Kennedy include: (i) payments of $15,058 and $15,000 in respectfor 2010 consists of a car allowance, for 2007allowance; profit sharing contributions; and 2006, respectively; (ii) $19,404 in imputed income arising from premiums paid or reimbursed by the Company in respect of life insurance for 2007; and (iii) $6,750 and $6,600 in matching contributions under the 401(k) Plan for 2007 and 2006, respectively.Plan. |
|
| | Mr. Ennis. The amountsamount shown under All Other Compensation for Mr. Ennis include:for 2010 consists of a car allowance; tax preparation services; life insurance premiums; profit sharing contributions (including $54,856 of Excess Savings Plan contributions); and matching contributions under the 401(k) Plan. |
$22,688 in other compensation for 2007, consisting of: (i) $15,058 in respect of a car allowance for 2007; (ii) $90 in reimbursement of fees for tax preparation software; (iii) $790 in respect of life insurance premiums for 2007; and (iv) $6,750 in matching contributions under the 401(k) Plan for 2007.
|
| | Mr. KretzmanElshaw. The amountsamount shown under All Other Compensation for Mr. Elshaw for 2010 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); a car allowance; life insurance premiums; profit-sharing contributions (including $37,832 of Excess Savings Plan contributions); and matching contributions under the 401(k) Plan. |
|
| | Mr. Kretzman. The amount shown under All Other Compensation for Mr. Kretzman include:for 2010 consists of $18,003 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 premiums; medical plan premiums; tax preparation services; and matching contributions under the 401(k) Plan. |
|
| | Mr. Berns. The amount shown under All Other Compensation for Mr. Berns for 2010 consists of a car allowance; life insurance premiums; tax preparation services and financial counseling; profit sharing contributions; matching contributions under the 401(k) Plan; and health club dues. |
$15,060 and $13,490 in tax gross ups for 2007 and 2006, respectively, consisting of: (i) $10,700 and $11,470 in connection with imputed income arising from personal use of a Company automobile for 2007 and 2006, respectively; and (ii) $4,360 and $2,020 in connection with imputed income arising from premiums paid or reimbursed by the Company in respect of life insurance for 2007 and 2006, respectively; and
$53,714 and $40,591 in other compensation for 2007 and 2006, respectively, consisting of: (i) $15,019 and $16,101 in respect of use of a Company automobile for 2007 and 2006, respectively; (ii) $16,800 and $14,827 in premiums under the Company’s Executive Medical Plan for 2007 and 2006, respectively; (iii) $6,987 and $3,063 in imputed income in respect of life insurance premiums for 2007 and 2006, respectively; (iv) $6,658 in reimbursements for payroll deductions for supplemental life insurance for 2007; (v) $1,500 in reimbursement of fees for tax preparation services for 2007; and (vi) $6,750 and $6,600 in respect of matching contributions under the 401(k) Plan, for 2007 and 2006, respectively.
Table of ContentsEmployment Agreements and Payments Upon Termination and Change of Control
Termination Payments
Each of Messrs. Kennedy, Ennis,
Elshaw, Kretzman and
KretzmanBerns, who were the Company’s Named Executive Officers during 2010, has an executive employment agreement with Products Corporation.
Mr. Kennedy’s employment agreement (as amended and restated, his ‘‘employment agreement’’) contains the following principal terms: The employment agreement provides that he will serve as President and Chief Executive OfficerVice Chairman of the Board of Directors at aan annual base salary of not less than his current base salary, with a target bonus of 100% of$150,000 (which was his base salary and a maximum bonusas of 150% of his base salary. As previously noted, the 2007 Bonus Program was funded at 50% of target in order to improve cash flow.December 31, 2010).
27
Products Corporation may terminate Mr. Kennedy’s employment agreement effective two years 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. During any period that his employment continues after termination or expiration of the term of his employment agreement, Mr. Kennedy would be deemed an employee at will and would be eligible for severance under Products Corporation’s Executive Severance Policy (see —‘‘Executive Severance Policy’’), provided that the severance period for Mr. Kennedy shall not be less than 24 months. Mr. Kennedy’s employment agreement also provides ‘‘double trigger’’ separation benefits in the event he is terminated without ‘‘cause’’ after a ‘‘change of control’’ (see —‘&lsquo ;Change of Control Payments,’’ below).
Under his employment agreement, Mr. Kennedy is eligible to participate in fringe benefit programs
made available to other executives of Mr. Kennedy’s level and
in such other plans and programs and in such perquisites as may be generally made available to senior executives of
the CompanyProducts 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 the CompanyProducts Corporation of any of its obligations under his employment agreement, or by the CompanyProducts Corporation (otherwise than for ‘‘cause’’“cause” as defined in the employment agreement or for disability), Mr. Kennedy would be entitled to the greater of (i) severance and benefits continuation pursuant to the Executive Severance Policy (see —‘‘Executive Severance Policy’’) (provided that the severance period for Mr. Kennedy shall not be less than 24 months) or (ii) continued payments of base salary throughout the term, payment of prorated target bonus, if and to the extent bonuses are payable to executives under the Executive Bonus Plan for that year based upon achievement of objectives,24-month severance period, continued participation in the Company’sProducts Corporation’s life insurance plan, subject to a limit of two y ears,years, and medical plans, subject to the terms of such plans, throughout the termseverance 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 Company in whichtermination date.
The estimated aggregate total of termination benefits during the24-month severance period if Mr. Kennedy
was entitled to participate during the severance period.Estimated termination benefits if Mr. Kennedy’s employment with the Company had been terminated without ‘‘cause’’“cause” on December 31, 20072010 would be:have been approximately $351,230, consisting of the following: (a) two times Mr. Kennedy’s annual base salary aton December 31, 20072010 (his base salary on December 31, 2010 was $150,000); (b) 24 months of $1,300,000 per year; (b) $650,000, representing Mr. Kennedy’s 2007 target bonus;life insurance coverage, at a cost of approximately $230; (c) 24 months of basic lifegroup medical and dental insurance coverage, at a total cost to the Company of approximately $13,260 (based on 2008 rates);$4,000; (d) 24 months of tax preparation and (d)financial counseling, at a cost of approximately $17,000; and (e) 24 months of car allowance, at a total cost to the Company of approximately $30,000. Mr. Kennedy does not currently participate in the Company’s standard group medical and dental plans. 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. Ennis’
employment agreement (as amended and restated, his ‘‘employment agreement’’) contains the following principal terms: The employment agreement provides that Mr. Ennis will serve as the Company’s
Executive Vice President and Chief
FinancialExecutive Officer, at
aan annual base salary of not less than
$910,000 (which was his
current base salary
as of December 31, 2010), with a target bonus of
75%100% of his base
salary and a maximum of 100% of his base
salary.
Table of Contentssalary, and that he shall be eligible to receive awards of stock options, restricted shares or other awards during the term under the Stock Plan. As previously noted, the 2007 Bonus Program was funded at 50% of target in order to improve cash flow.
Products Corporation may terminate Mr. Ennis’ employment agreement effective two years after written notice of non-extension of the agreement. During any period that his employment continues after the termination or expiration of the term of his employment agreement, Mr. Ennis would be deemed an employee at will and would be eligible for severance under Products Corporation’s Executive Severance Policy (see —‘‘Executive Severance Policy’’), provided that the severance period for Mr. Ennis shall not be less than 24 months. Mr. Ennis’ employment agreement also provides ‘‘double trigger’’ separation benefits in the event he is terminated without ‘‘cause’’ after a ‘‘change of control’’ (see —‘‘Change of Control Payments,’’ below).
Under his employment agreement, Mr. Ennis is eligible to participate in fringe benefit programs
made available to other executives of Mr. Ennis’ level and
in such other plans and programs and in such perquisites as may be generally made available to
other senior executives of
the Company of Mr. Ennis’ level,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 the CompanyProducts Corporation of any of its obligations under his employment agreement or by the CompanyProducts Corporation (otherwise than for ‘‘cause’’“cause” as defined in Mr. Ennis’sEnnis’ employment agreement or disability), Mr. Ennis would be entitled to the greater of (i) severance, including participation in the Company’s medical plans, pursuant to the Executive Severance Policy (see —‘‘Executive Severance Policy’’) (provided that the severance period for Mr. Ennis shall not be less than 24 months) or (ii) continued payments of base salary throughout the term,24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Executive BonusIncentive Compensation Plan for that year based upon achievement of objectives, and continued participation in the Company’s li feProducts Corporation’s life insurance plan, which life insurance coverage is subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the termseverance 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 Company in which Mr. Ennis was entitled to participatetermination date.
The estimated aggregate total of termination benefits during the
24-month severance
period.Estimated termination benefitsperiod if Mr. Ennis had been terminated without ‘‘cause’’“cause” on December 31, 20072010 would be:have been approximately $2,789,343, consisting of the following: (a) two times Mr. Ennis’sEnnis’ annual base salary aton December 31, 2007 of $400,000;2010; (b) $150,000,$910,000, representing
28
Mr. Ennis’
20072010 target bonus; (c) 24 months of
basic life
insurance coverage at a cost of approximately $8,343; (d) 24 months of medical and dental insurance coverage, at a total cost
to the Company of approximately
$4,243 (based on 2008 rates);$4,000; (e) 24 months of tax preparation and
(d)financial counseling, at a cost of approximately $17,000; and (f) 24 months of car allowance, at a
total cost
to the Company of approximately $30,000. Mr. Ennis does not currently participate in the Company’s
standard group medical and dental plans. All of Mr. Ennis’ 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’sElshaw’s employment agreement (as amendedprovides that Mr. Elshaw will serve as the Company’s Executive Vice President and restated,Chief Operating Officer, at an annual base salary of not less than $731,500 (which was his ‘‘base salary as of December 31, 2010), with a target bonus of 75% of his base salary.
Under his employment agreement’’)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 following principal terms: agreement. Mr. Elshaw’s employment agreement provides that, in the event of termination of employment by Products Corporation (otherwise 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, 2010 would have been approximately $2,047,029, consisting of the following: (a) two times Mr. Elshaw’s annual base salary on December 31, 2010; (b) $548,625, representing Mr. Elshaw’s 2010 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $6,706; (d) 24 months of group medical and dental insurance coverage, at a total cost of approximately $15,698; 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. Kretzman
Mr. Kretzman’s employment agreement provides that he will serve as Executive Vice President
Human Resources,and Chief
LegalAdministrative Officer,
and General Counsel, at
aan annual base salary of not less than
$743,045 (which was his
current base salary
as of December 31, 2010), with a target bonus of 75% of his base
salary and a maximum of 100% of his base salary, and that he shall be eligible to receive awards of stock options, restricted shares or other awards during the term under the Stock Plan. As previously noted, the 2007 Bonus Program was funded at 50% of target in order to improve cash flow.Products Corporation may terminate Mr. Kretzman’s employment agreement effective two years after written notice of non-extension of the agreement. During any period that his employment continues after the termination or expiration of the term ofsalary.
Under his employment agreement, Mr. Kretzman
would be deemed an employee at will and would beis eligible
for severance under Products Corporation’s Executive Severance Policy (see —‘‘Executive Severance Policy’’), provided that the severance period for
Table of ContentsMr. Kretzman shall not be less than 24 months. Mr. Kretzman’s employment agreement also provides ‘‘double trigger’’ separation benefits in the event he is terminated without ‘‘cause’’ after a ‘‘change of control’’ (see —‘‘Change of Control Payments,’’ below).
Mr. Kretzman’s employment agreement provides (i) for participation in the Executive Bonus Plan and other executivefringe benefit plansprograms and perquisites on a basis equivalentas may be generally made available to other senior executives of the Company generally,Products Corporation of Mr. Kretzman’s level, including a Company car, (ii) for Company-paidfinancial planning and tax preparation assistance; use of an automobile; supplemental term life insurance coverage of two times Mr. Kretzman’s base salarysalary; continued accrual of retirement benefits until his retirement date (in lieu of any discretionary profit sharing contributions); and (iii) for a retirement benefit at age 60 without regard to the early retirement reductions he would otherwise be subject to under the Retirement Plan and Pension Equalization Plan.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
Products Corporation may terminate Mr. Kretzman’s employment agreement effective 24 months after written notice of non-extension of the agreement. Mr. Kretzman’s employment agreement provides that, in the event of termination of employment by Mr. Kretzman for any material breach by
the CompanyProducts Corporation of any of its obligations under his employment agreement or for
‘‘good reason’’“good reason” (as
definedset forth in Mr. Kretzman’s employment agreement), or by
the CompanyProducts Corporation (otherwise than for
‘‘cause,’’“cause,” as defined in the employment agreement, or for disability), Mr. Kretzman would be entitled to
the greater of (i) severance and benefits continuation pursuant to the Executive Severance Policy (see —‘‘Executive Severance Policy’’) (provided that the severance period for Mr. Kretzman shall not be less than 24 months) or (ii) continued payments of base salary throughout the
term,24-month severance period, payment of
a prorated target bonus, if and to the extent bonuses are payable to executives under the
Executive BonusIncentive Compensation Plan for that year based upon
achiev ementachievement of objectives, continued participation in
the Company’sProducts Corporation’s life insurance plan, subject to a limit of two years, and medical, dental and executive medical plans, subject to the terms of such plans, throughout the
termseverance period or until Mr. Kretzman 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
Company in which Mr. Kretzman would otherwise have been entitled to participate during the severance period.Mr. Kretzman’s employment agreement also provides that, intermination date. In the event Mr. Kretzman’s employment is terminated by the CompanyProducts Corporation without ‘‘cause’’“cause” or by Mr. Kretzman for ‘‘good“good reason,’’” or upon his retirement, all restricted stock and stock option awards held by Mr. Kretzman would continue to vest and remain exercisable, and the unpaid portion of all previously earned LTIP awards would continue to remain payable, in accordance with their terms as if Mr. Kretzman’s employment had not been terminated and he had remained employed by the Company, and those stock option awards would remain exercisable until the later of (i) one year after such existing option awards become 100% fully vested and exercisable or (ii) 18 months following Mr. Kretzman’s termination of employment, but in no event beyond the original option term of each such award; provided, however, that as(in consideration for continued vesting of any option awards or restricted stock awards, as described above,which, the non-solicitation and non-competition c ovenantscovenants referred to in Mr. Kretzman’s employment agreement would remain in effect at least until the date that all existing equity awards are fully vested.
Estimatedvested and all earned LTIP awards are paid).
The estimated aggregate total of termination benefits during the24-month severance period if Mr. Kretzman had been terminated without “cause” on December 31, 20072010 would be:have been approximately $2,204,788, consisting of the following: (a) two times Mr. Kretzman’s annual base salary aton December 31, 2007 of $683,700;2010; (b) $256,388,$557,284, representing Mr. Kretzman’s 2007his 2010 target bonus; (c) 24 months of life insurance coverage, at a total cost to the Company of approximately $29,292 (based on 2008 rates);$29,104; (d) 24 months of group medical and dental insurance and executive medical coverage, at a total cost to the Company of approximately $55,230 (based on 2008 rates);$49,298; (e) 24 months of use of a Companyan automobile, at a total cost of approximately $66,012; 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 Company of approximately $51,439 (based on 2007 cost); and (f) continued vesting of unvested restricted stock (575,001(40,734 restricted shares were unvested at December 31, 2007) and stock option awards outstanding on December 31, 2007,2010 having a fair market value on such date of $678,501 (which does not include any value in respe ct of stock options which are allowed to continue vesting in accordance with their terms, as all of Mr. Kretzman’s options were ‘‘out-of-the-money’’ as of December 31, 2007 and had no realizable monetary value),$400,823 based on the $1.18$9.84 per share NYSE closing price of the Company’s Class A common stockCommon Stock on such date. Alldate), 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 remainder of his $500,000 2010 LTIP award (one-third of which was paid in March 2011). 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.
Mr. Berns
Mr. Berns’ employment agreement (his “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 $450,500 (which was his base salary as of December 31, 2010), 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 (otherwise than for “cause” as defined in Mr. Berns’ employment agreement or disability), Mr. Berns 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
30
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 the24-month severance period if Mr. Berns had been terminated without “cause” on December 31, 2010 would have been approximately $1,317,405, consisting of the following: (a) two times Mr. Berns’ annual base salary on December 31, 2010; (b) $337,875, representing Mr. Berns’ 2010 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $4,130; (d) 24 months of group medical and dental insurance coverage, at a total cost of approximately $27,400; (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.
Change of Control Payments Each of Messrs. Kennedy’s,
Elshaw’s, Ennis’
, Kretzman’s and
Kretzman’sBerns’ employment agreements provides that, in the event of any
‘‘change“change of control,
’’” the terms of their employment agreements would be extended for an
Table of Contentsadditional 24 months from the effective date of any such ‘‘change“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’’“good reason” or if the Company were to terminate the executive’s employment other than for ‘‘cause,’’“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 then provided toin 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“change of control,’’” all then-unvested stock options and restricted shares held by them shall immediately v estvest and become fully exercisable.
Under the Incentive Compensation Plan, if, in connection with a “change in 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 in control,” LTIP awards related to the year when the event occurred are to be paid at target on a pro-rated basis (based on the number of days elapsed) within 60 days following such “change in control,” and (ii) LTIP awards related to prior years 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 in control.”
The estimated
aggregate total of benefits upon a
‘‘change“change of
control’’control” and subsequent termination
forif Mr. Kennedy
assuming his employment had
been terminated on December 31,
2007,2010 would
be:have been approximately $1,079,230, consisting of the following: (a) two times his
annual base salary
aton December 31,
2007 of $1,300,000;2010; (b) two times his
5-year average bonus,
which average was $355,000 as of
$211,420 (which, for 2007, includes his target bonus before any discretionary amounts);December 31, 2010; (c)
$13,500 in respect of the one-time costs to the Company of providing the equivalent of two years of contributions under the Company’s 401(k)
Plan (based on 2007 Company matching contributions);Plan; (d)
$130,000 in respect of two
additional years of
service creditprofit sharing contributions under the Company’s
Retirement Plan and Pension Equalization401(k) Plan; (e) 24 months of
basic life insurance
coverage, at a cost
to the Company of approximately
$13,260 (based on 2008 rates);$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
to the Company of approximately $30,000; and
(g)(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
(1,068,334(84,001 restricted shares were unvested at December 31,
2007) and stock option awards outstanding on December 31, 2007,2010 having a fair market value on
such date of $1,260,634 (which does not include any value in respect of vesting of stock options, as all of Mr. Kennedy’s options were ‘‘out-of-the-money’’ and had no realizable monetary value on December 31,
2007)2010 of $826,570 based on the
$1.18$9.84 per share NYSE closing price of the Company’s Class A
common stockCommon Stock on such date)
. and stock option awards outstanding on December 31, 2010 (all of Mr.
Kennedy does not currently participate in the Company’s medicalKennedy’s options were“out-of-the-money” on such date and
dental plans.had no realizable monetary value on December 31, 2010).
The estimated aggregate total of benefits upon a ‘‘change“change of control’’control” and subsequent termination forif Mr. Ennis assuming his employment had been terminated on December 31, 2007,2010 would be:have been approximately $2,711,943, consisting of the following: (a) two times his annual base salary aton December 31, 2007 of $400,000;2010; (b) two times his average5-year bonus of $54,725 during the three years he has been eligible to receive a bonus (which, for 2007, includes his target bonus before any discretionary amounts);$368,000; (c) $13,500 in respect of the one-time costs to the Company of providing the equivalent of two years of contributions under the Company’s 401(k) Plan (based on 2007 contributions);Plan; (d) $40,000approximately $81,900 in respect
31
of two
additional years of
service creditprofit sharing contributions under the
Company’s Retirement Plan and Pension Equalization401(k) Plan; (e) 24 months of
basic life insurance
coverage, at a cost of approximately $8,343; (f) 24 months of group medical and dental insurance coverage, at a total cost
to the Company of approximately
$4,243 (based on 2008 rates); (f)$4,000; (g) 24 months of car allowance at a total cost
to the Company of
ap proximatelyapproximately $30,000; and
(g)(h) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000. In addition, under such circumstances, Mr. Ennis would be entitled to the immediate vesting of
his unvested restricted stock
(408,750(44,067 restricted shares were unvested at December 31,
2007) and stock option awards outstanding on December 31, 2007,2010 having a fair market value on
such date of $482,325 (which does not include any value in respect of vesting of stock options, as all of Mr. Ennis’s options were ‘‘out-of-the-money’’ and had no realizable monetary value on December 31,
2007),2010 of $433,619 based on the
$1.18$9.84 per share NYSE closing price of the Company’s Class A
common stockCommon Stock on such date)
and stock option awards outstanding on December 31, 2010 (all of Mr. Ennis’ options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010).
Upon a “change in control” without the successor entity assuming or otherwise continuing the terms of the LTIP, Mr. Ennis
does not currently participatealso would be entitled to the full payout of his $1,200,000 2010 LTIP award (one-third of which was paid in
March 2011), which was earned for 2010 based upon the
Company’s medicalCompensation Committee’s determination that the Company had achieved its 2010 performance objectives and
dental plans.that the executive had earned a “target” or better 2010 performance rating.
The estimated aggregate total of benefits upon a ‘‘change“change of control’’control” and subsequent termination forif Mr. Kretzman, assuming his employmentElshaw had been terminated on December 31, 2007,2010 would be:have been approximately $2,466,590, consisting of the following: (a) two times his annual base salary aton December 31, 2007 of $683,700;2010; (b) two times his average5-year average bonus of $118,193 (which, for 2007, includes his target bonus before any discretionary amounts);$267,325; (c) $13,500 in respect of the one-time costs to the Company of providing the equivalent of two years of contributions under the Company’s 401(k) Plan (based on 2007 Company matching contributions);Plan; (d) $168,900approximately $65,836 in respect of two additional years of service creditprofit sharing contributions under the Company’s Retirement Plan and Pension Equalization401(k) Plan; (e) 24 months of life insurance coverage, at a total cost to the Company of approximately $29,292 (based on 2008 rates);$6,706; (f) 24 months of group medical an dand dental insurance and executive medical coverage, at a total cost of approximately $15,698; (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; (i) 24 months of housing allowance, at a total cost of approximately $300,000; and (j) 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. In addition, under such circumstances, Mr. Elshaw would be entitled to the immediate vesting of his unvested restricted stock (44,268 restricted shares were unvested at December 31, 2010 having a fair market value on December 31, 2010 of $435,597 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. Elshaw’s options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010). Upon a “change in control” without the successor entity assuming or otherwise continuing the terms of the LTIP, Mr. Elshaw also would be entitled to the full payout of his $500,000 2010 LTIP award (one-third of which was paid in March 2011), which was earned for 2010 based upon the Compensation Committee’s determination that the Company had achieved its 2010 performance objectives and that the executive had earned a “target” or better 2010 performance rating.
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Kretzman had been terminated on December 31, 2010 would have been approximately $2,657,618, consisting of the following: (a) two times his annual base salary on December 31, 2010; (b) two times his5-year average bonus of $312,057; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $371,300 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
$55,230 (based on 2008 rates);$29,104; (f) 24 months of medical and dental insurance coverage at a total cost of approximately $49,298; (g) 24 months of use of a Company automobile at a
total cost
of approximately $66,012; 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
Company of approximately $51,439 (based on 2007 cost); and (h) immediate vesting of
his unvested restricted stock
(575,001(40,734 restricted shares were unvested at
Table of ContentsDecember 31, 2007) and stock option awards outstanding on December 31, 20072010 with a fair market value of $678,501 (which does not include any value in respect of vesting of stock options, as all of Mr. Kretzman’s stock options were ‘‘out-of-the-money’’ and had no realizable monetary value$400,823 on December 31, 2007),2010 based on the $1.18$9.84 per share NYSE closing price of the Company’s Class A common stockCommon Stock on such date).
Executive Severance Policy
The Revlon Executive Severance Pay Plan (the ‘‘Executive Severance Policy’’), as in effect and stock option awards outstanding on December 31, 2007, provides that upon termination2010 (all of employment of eligible executive employees, including Messrs. Kennedy, EnnisMr. Kretzman’s stock options were“out-of-the-money” on such date and Kretzman, other than voluntary resignation by the executive or termination by Products Corporation for ‘‘good reason,’’ in consideration for the executive’s execution of a release and confidentiality agreement and the Company’s standard employee non-competition agreement, the eligible executive may be eligible to receive a number of months of separation pay in bi-weekly installments based upon such executive’s grade level and years of service, reduced by the amount of any statutory termination payments received by such executive during the severance period and, in certain circumstances, by the actuarialhad no realizable monetary value of enhanced pension benefits received by the executive, as well as continued participation in medical and certain other benefit plans for the severance period. Pursuant to the Executive Severance Policy, upon meeting the conditions set forth in such policy, as ofon December 31, 2007, Messrs. Kennedy, Ennis and2010). Upon a “change in control” without the successor entity assuming or otherwise continuing the terms of the LTIP, Mr. Kretzman couldalso would be entitled to severance paythe full payout of up to 21, 18his $500,000 2010 LTIP award (one-third of which was paid in March 2011), which was earned for 2010 based upon the Compensation Committee’s determination that the Company had
32
achieved its 2010 performance objectives and 22that the executive had earned a “target” or better 2010 performance rating.
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Berns had been terminated on December 31, 2010 would have been approximately $1,542,650, consisting of the following: (a) two times his annual base salary on December 31, 2010; (b) two times his average bonus of $253,937; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $40,545 in respect of two years of profit sharing contributions under the 401(k) Plan; (e) 24 months of
base salary, respectively,life insurance coverage, at
the base salary rate in effect on the datea cost of
employment termination, plus continued participation in theapproximately $4,130; (f) 24 months of group medical and dental
plans forinsurance coverage, at a total cost of approximately $27,400; (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. Berns would be entitled to the
same respective periodsimmediate vesting of his unvested restricted stock (16,667 restricted shares were unvested at December 31, 2010 having a fair market value on December 31, 2010 of $164,003 based on the
same terms as active employees, provided that under each of Messrs. Kennedy’s, Ennis’ and Kretzman’s employment agreements, the severance period is at least 24 months. Any compensation and benefits to which Messrs. Kennedy, Ennis or Kretzman would be eligible to receive upon termination pursuant to the terms of their employment agreements or the Executive Severance Policy would be subject to applicable restrictions of the Code, if any, including, without limi tation, Section 409A of the Code and related regulations.GRANTS OF PLAN-BASED AWARDS
During 2007, the Named Executive Officers received the Awards of restricted stock under the Stock Plan as set forth below. None of the Named Executive Officers received awards of stock options during 2007. Grant date fair values reflect the number of shares of restricted stock (all of which are currently unvested) times $1.25, which was the$9.84 per share NYSE closing market price of the Company’s Class A Common Stock on such date). Upon a “change in control” without the December 10, 2007 grant date. Additionally,successor entity assuming or otherwise continuing the terms of the LTIP, Mr. Berns also would be entitled to the full payout of his $500,000 2010 LTIP award (one-third of which was paid in March 2011), which was earned for 2010 based upon the Compensation Committee’s determination that the Company had achieved its 2010 performance objectives and that the executive had earned a “target” or better 2010 performance rating.
GRANTS OF PLAN-BASED AWARDS
During 2010, none of the Named Executive Officers received any equity awards from the Company. Pursuant to the 2010 LTIP Program, the Compensation Committee granted performance-based LTIP awards to eligible Named Executive Officers in respect to the 2010 performance year under the Revlon Executive Incentive Compensation Plan, which grants are summarized in the table below. Awards under the 2010 LTIP Program were structured as flat dollar amounts that could be earned upon achievement of the Company’s 2010 Performance Goals, subject 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
|
Name | | Grant Date | | Awards | | Continued Employment) |
| |
| Alan Ennis | | February 2010 | | $ | 1,200,000 | | | March 2011, 2012 & 2013 |
President and Chief Executive Officer | | | | | | | | |
| Chris Elshaw | | February 2010 | | $ | 500,000 | | | March 2011, 2012 & 2013 |
EVP and Chief Operating Officer | | | | | | | | |
| Robert Kretzman | | February 2010 | | $ | 500,000 | | | March 2011, 2012 & 2013 |
EVP and Chief Administrative Officer | | | | | | | | |
| Steven Berns | | February 2010 | | $ | 500,000 | | | March 2011, 2012 & 2013 |
EVP and Chief Financial Officer | | | | | | | | |
Payouts to grantees 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, with the remaining two-thirds payable in March 2012 and March 2013, provided the grantee is employed with the Company on the $1.18remaining payout dates.
33
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
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. As the $9.84 per share NYSE closing market price of the Company’s Class A Common Stock on December 31,
2007, the fair value for the awards at year end would be less than on the grant date, at $985,300, $413,000 and $531,000 for Messrs. Kennedy, Ennis and Kretzman, respectively. | | | | | | | | | | | | | | | | | | | | | |
| Name (a) | | | Grant Date | | | All Other Stock Awards:
Number of Shares of
Stock or Units (#) | | | All Other Option
Awards: Number of
Securities Underlying
Options (#) | | | Grant Date Fair
Value of Stock
and Option
Awards ($) |
| David L. Kennedy | | | December 10, 2007 | | | | | 835,000 | | | | | | — | | | | | | 1,043,750 | |
President and Chief
Executive Officer | | | | | | | | | | | | | | | | | | | | | |
| Alan T. Ennis | | | December 10, 2007 | | | | | 350,000 | | | | | | — | | | | | | 437,500 | |
Executive Vice President and
Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | |
| Robert K. Kretzman | | | December 10, 2007 | | | | | 450,000 | | | | | | — | | | | | | 562,500 | |
| Executive Vice President, Human Resources, Chief Legal Officer, General Counsel and Secretary | | | | | | | | | | | | | | | | | | | | | |
(a) | None of the Named Executive Officers received awards of stock options during 2007. |
On December 10, 2007, the Compensation Committee granted shares of restricted Class A Common Stock to approximately 460 employees under the Stock Plan, including each of Messrs. Kennedy, Ennis
Table of Contentsand Kretzman. Each of these awards was previously publicly reported on a Form 4 filed with the SEC on December 11, 2007. All of the restricted shares granted to Messrs. Kennedy, Ennis and Kretzman vest as to one-third of the shares on each of January 2, 2009, January 2, 2010 and January 2, 2011, or in full upon any ‘‘change of control.’’ No dividends will be paid on the unvested restricted stock granted in 2007 to Messrs. Kennedy, Ennis and Kretzman. On December 31, 2007, all of these shares were unvested and therefore had no realizable monetary value as of that date.
Table of ContentsOUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth certain information regarding equity Awards granted to the Named Executive Officers during 2007 and awards granted during previous years under the Company’s Stock Plan, in each case which remained outstanding as of December 31, 2007. Since the $1.18 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2007 was lower than the exercise price for all options outstanding on December 31, 2007,2010, all of the stock options held by the Named Executive Officers had no realizable monetary value as of December 31, 2007.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | Stock Awards | |
| | | | | | | | | | | | | | | | | | | | | | | | Equity
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | Incentive
| | | Equity
| |
| | | Option Awards | | | | | | | | | Plan
| | | Incentive Plan
| |
| | | | | | | | | Equity
| | | | | | | | | | | | | | | Awards:
| | | Awards:
| |
| | | | | | �� | | | Incentive
| | | | | | | | | | | | | | | Number of
| | | Market or
| |
| | | | | | | | | Plan
| | | | | | | | | | | | Market
| | | Unearned
| | | Payout Value
| |
| | | | | | | | | Awards:
| | | | | | | | | Number of
| | | Value of
| | | Shares,
| | | of Unearned
| |
| | | Number of
| | | Number of
| | | Number of
| | | | | | | | | Shares or
| | | Shares or
| | | Units or
| | | Shares, Units
| |
| | | Securities
| | | Securities
| | | Securities
| | | | | | | | | Units of
| | | Units of
| | | Other
| | | or Other
| |
| | | Underlying
| | | Underlying
| | | Underlying
| | | | | | | | | Stock
| | | Stock
| | | Rights
| | | Rights
| |
| | | Unexercised
| | | Unexercised
| | | Unexercised
| | | Option
| | | | | | That
| | | That
| | | That
| | | That
| |
| | | Options (#)
| | | Options (#)
| | | Unearned
| | | Exercise
| | | Option
| | | Have Not
| | | Have Not
| | | Have Not
| | | Have Not
| |
| | | Exercisable
| | | Unexercisable
| | | Options
| | | Price
| | | Expiration
| | | Vested
| | | Vested
| | | Vested
| | | Vested
| |
Name | | (a) | | | (a) | | | (#) | | | ($) | | | Date | | | (#) | | | ($)(b) | | | (#) | | | ($) | |
| |
| David L. Kennedy | | | 15,000 | | | | — | | | | — | | | | 49.60 | | | | 6/21/2012 | | | | 84,001 | | | | 826,570 | | | | — | | | | — | |
Vice Chairman | | | 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 | | | | — | | | | — | |
President and Chief Executive | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chris Elshaw | | | 300 | | | | — | | | | — | | | | 39.80 | | | | 9/4/2012 | | | | 44,268 | | | | 435,597 | | | | — | | | | — | |
Executive Vice President | | | 300 | | | | — | | | | — | | | | 37.80 | | | | 9/17/2012 | | | | | | | | | | | | | | | | | |
and Chief Operating | | | 16,600 | | | | — | | | | — | | | | 30.30 | | | | 4/14/2011 | | | | | | | | | | | | | | | | | |
Officer | | | 7,000 | | | | — | | | | — | | | | 25.50 | | | | 3/7/2012 | | | | | | | | | | | | | | | | | |
| Robert K. Kretzman | | | 1,500 | | | | — | | | | — | | | | 56.60 | | | | 6/18/2011 | | | | 40,734 | | | | 400,823 | | | | — | | | | — | |
Executive Vice | | | 5,000 | | | | — | | | | — | | | | 37.80 | | | | 9/17/2012 | | | | | | | | | | | | | | | | | |
President and Chief | | | 95,500 | | | | — | | | | — | | | | 30.30 | | | | 4/14/2011 | | | | | | | | | | | | | | | | | |
Administrative Officer | | | 12,000 | | | | — | | | | — | | | | 25.50 | | | | 3/07/2012 | | | | | | | | | | | | | | | | | |
| Steven Berns | | | — | | | | — | | | | — | | | | — | | | | — | | | | 16,667 | | | | 164,003 | | | | — | | | | — | |
Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 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
($) | | | Option
Expiration
Date | | | Number of
Shares or
Units of
Stock
That
Have Not
Vested (#) | | | Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($) (b) | | | 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
($) |
| David L. Kennedy | | | | | 150,000 | | | | | | — | | | | | | — | | | | | | 4.96 | | | | 6/21/2012 | | | | | 1,068,334 | | | | | | 1,260,634 | | | | | | — | | | | | | — | |
| President and Chief | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | 3.06 | | | | 4/22/2013 | | | | | | | | | | | | | | | | | | | | | | | | |
| Executive Officer | | | | | 1,493,000 | | | | | | — | | | | | | — | | | | | | 3.03 | | | | 4/14/2011 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | 67,500 | | | | | | 67,500 | | | | | | — | | | | | | 2.55 | | | | 3/07/2012 | | | | | | | | | | | | | | | | | | | | | | | | |
| Alan T. Ennis | | | | | 10,000 | | | | | | 10,000 | | | | | | — | | | | | | 2.88 | | | | 3/31/2012 | | | | | 408,750 | | | | | | 482,325 | | | | | | — | | | | | | — | |
Executive Vice
President and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Robert K. Kretzman | | | | | 7,500 | | | | | | — | | | | | | | | | 34.00 | | | | 1/08/2008 | | | | | 575,001 | | | | | | 678,501 | | | | | | — | | | | | | — | |
| EVP, Human | | | | | 8,000 | | | | | | — | | | | | | | | | 15.00 | | | | 2/12/2009 | | | | | | | | | | | | | | | | | | | | | | | | |
| Resources, Chief | | | | | 10,000 | | | | | | — | | | | | | | | | 24.125 | | | | 5/17/2009 | | | | | | | | | | | | | | | | | | | | | | | | |
| Legal Officer, | | | | | 20,000 | | | | | | — | | | | | | | | | 7.0625 | | | | 5/22/2010 | | | | | | | | | | | | | | | | | | | | | | | | |
| General Counsel | | | | | 15,000 | | | | | | — | | | | | | | | | 5.66 | | | | 6/18/2011 | | | | | | | | | | | | | | | | | | | | | | | | |
| and Secretary | | | | | 50,000 | | | | | | — | | | | | | | | | 3.78 | | | | 9/17/2012 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | 955,000 | | | | | | — | | | | | | | | | 3.03 | | | | 4/14/2011 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | 60,000 | | | | | | 60,000 | | | | | | | | | 2.55 | | | | 3/07/2012 | | | | | | | | | | | | | | | | | | | | | | | | |
(a) | Grant dates and vesting for options listed in the table are as follows: |
Mr. Kennedy:
Mr. Kennedy was granted 150,000 stock options at an exercise price of $4.96 per share on June 21, 2002. The options vested 25% on each anniversary of the grant date and were fully vested on June 21, 2006.
Mr. Kennedy was granted 50,000 stock options at an exercise price of $3.06 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.
Mr. Kennedy was granted 1,493,000 stock options at an exercise price of $3.03 per share on April 14, 2004. The options vested 25% on December 31 of each year, beginning December 31, 2004, and were fully vested on December 31, 2007.
Mr. Kennedy was granted 135,000 stock options at an exercise price of $2.55 per share on March 7, 2005. The options vest 25% on each anniversary of the grant date. As of December 31, 2007, 67,500 of these options had vested and 67,500 were unvested.
Table of ContentsMr. Ennis:
Mr. Ennis was granted 20,000 stock options at an exercise price of $2.88 per share on March 31, 2005. The options vest 25% on each anniversary of the grant date. As of December 31, 2007, 10,000 of these options had vested and 10,000 were unvested.
Mr. Kretzman:
Mr. Kretzman was granted 7,500 stock options at an exercise price of $34.00 per share on January 8, 1998. The options vested 25% on each anniversary of the grant date and were fully vested on January 8, 2002. These options expired on January 8, 2008 (after December 31, 2007).
Mr. Kretzman was granted 8,000 stock options at an exercise price of $15.00 per share on February 12, 1999. 100% of the options vested on February 12, 2000.
Mr. Kretzman was granted 10,000 stock options at an exercise price of $24.125 per share on May 17, 1999. The options vested 25% on each anniversary of the grant date and were fully vested on May 17, 2003.
Mr. Kretzman was granted 20,000 stock options at an exercise price of $7.0625 per share on May 22, 2000. The options vested 25% on each anniversary of the grant date and were fully vested on May 22, 2004.
Mr. Kretzman was granted 15,000 stock options at an exercise price of $5.66 per share on June 18, 2001. The options vested 25% on each anniversary of the grant date and were fully vested on June 18, 2005.
Mr. Kretzman was granted 50,000 stock options at an exercise price of $3.78 per share on September 17, 2002. One third of these options vested on each anniversary of the grant date and were fully vested on September 17, 2005.
Mr. Kretzman was granted 955,000 stock options at an exercise price of $3.03 per share on April 14, 2004. The options vested 25% on December 31 of each year, beginning December 31, 2004, and were fully vested on December 31, 2007.
Mr. Kretzman was granted 120,000 stock options at an exercise price of $2.55 per share on March 7, 2005. The options vest 25% on each anniversary of the grant date. As of December 31, 2007, 60,000 of these options had vested and 60,000 were unvested.
| | |
| • | Mr. Kennedy was granted 15,000 stock options at an exercise price of $49.60 per share on June 21, 2002. The options vested 25% on each anniversary of the grant date and were fully vested on June 21, 2006. |
|
| • | Mr. 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. |
|
| • | Mr. Kennedy was granted 149,300 stock options at an exercise price of $30.30 per share on April 14, 2004. The options vested 25% on December 31 of each year and were fully vested on December 31, 2007. These options expired on April 14, 2011 (after the December 31, 2010 measurement date in the above table). |
|
| • | Mr. Kennedy was granted 13,500 stock options at an exercise price of $25.50 per share on March 7, 2005. The options vested 25% on each anniversary of the grant date and were fully vested on March 7, 2009. |
34
| | |
| • | Mr. Ennis was granted 2,000 stock options at an exercise price of $28.80 per share on March 31, 2005. The options vested 25% on each anniversary of the grant date and were fully vested on March 31, 2009. |
| | |
| • | Mr. Elshaw was granted 300 options at an exercise price of $39.80 per share on September 4, 2002. The options vested 25% on each anniversary of the grant date and were fully vested on September 4, 2006. |
|
| • | Mr. Elshaw was granted 300 stock options at an exercise price of $37.80 per share on September 17, 2002. One-third of these options vested on each anniversary of the grant date and were fully vested on September 17, 2005. |
|
| • | Mr. Elshaw was granted 16,600 stock options at an exercise price of $30.30 per share on April 14, 2004. The options vested 25% on December 31 of each year and were fully vested on December 31, 2007. These options expired on April 14, 2011 (after the December 31, 2010 measurement date in the above table). |
|
| • | Mr. Elshaw was granted 7,000 stock options at an exercise price of $25.50 per share on March 7, 2005. The options vested 25% on each anniversary of the grant date and were fully vested on March 7, 2009. |
| | |
| • | Mr. Kretzman was granted 1,500 stock options at an exercise price of $56.60 per share on June 18, 2001. The options vested 25% on each anniversary of the grant date and were fully vested on June 18, 2005. |
|
| • | Mr. Kretzman was granted 5,000 stock options at an exercise price of $37.80 per share on September 17, 2002. One-third of these options vested on each anniversary of the grant date and were fully vested on September 17, 2005. |
|
| • | Mr. Kretzman was granted 95,500 stock options at an exercise price of $30.30 per share on April 14, 2004. The options vested 25% on December 31 of each year and were fully vested on December 31, 2007. These options expired on April 14, 2011 (after the December 31, 2010 measurement date in the above table). |
|
| • | Mr. Kretzman was granted 12,000 stock options at an exercise price of $25.50 per share on March 7, 2005. The options vested 25% on each anniversary of the grant date and were fully vested on March 7, 2009. |
| | |
| (b) | | The market value of the restricted shares identified in the table above is based on the $1.18$9.84 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2007.2010. None of the restricted stock granted to the executives has any dividend rights.rights until vested. |
Mr. Kennedy:
Mr. Kennedy was granted 50,000 shares of restricted stock on June 21, 2002. 100% of these shares were vested on June 18, 2004.
Mr. Kennedy was granted 195,000 shares of restricted stock on April 14, 2004. 100% of these shares were vested on April 14, 2007.
Mr. Kennedy was granted 350,000 shares of restricted stock on November 16, 2006. One-third of these shares vest on each anniversary of the grant date. As of December 31, 2007, 116,666 of these shares had vested.
Mr. Kennedy was granted 835,000 shares of restricted stock on December 10, 2007. One-third of these shares vest on January 2, 2009, January 2, 2010 and January 2, 2011. As of December 31, 2007, none of these shares had vested.
Mr. Ennis:
Mr. Ennis was granted 110,000 shares of restricted stock on November 16, 2006. 43,750 of these shares vested on July 2, 2007, 7,500 of these shares vested on November 16, 2007 and 21,875 of these shares vested on January 2, 2008 (after December 31, 2007). 21,875 of these
Table of Contents | | |
| • | Mr. Kennedy was granted 83,500 shares of restricted stock on December 10, 2007. As of December 31, 2010, 55,666 of these shares had vested. The remaining 27,834 of these shares vested on January 2, 2011 (after the December 31, 2010 measurement date in the above table). |
|
| • | Mr. Kennedy was granted 84,250 shares of restricted stock on December 8, 2008. As of December 31, 2010, 28,083 of these shares had vested. 28,083 of these shares vested on January 10, 2011 (after the December 31, 2010 measurement date in the above table). The remaining 28,084 shares vest on July 1, 2008, 7,500January 10, 2012. |
| | |
| • | Mr. Ennis was granted 35,000 shares of restricted stock on December 10, 2007. As of December 31, 2010, 23,333 of these shares vest on November 16, 2008 and 7,500had vested. The remaining 11,667 of these shares vested on January 2, 2011 (after the December 31, 2010 measurement date in the above table). |
|
| • | Mr. Ennis was granted 48,600 shares of restricted stock on December 8, 2008. As of December 31, 2010, 16,200 of these shares had vested. 16,200 of these shares vested on January 10, 2011 (after the December 31, 2010 measurement date in the above table). The remaining 16,200 shares vest on November 16,January 10, 2012. |
35
| | |
| • | Mr. Elshaw was granted 35,600 shares of restricted stock on December 10, 2007. As of December 31, 2010, 23,733 of these shares had vested. The remaining 11,867 of these shares vested on January 2, 2011 (after the December 31, 2010 measurement date in the above table). |
|
| • | Mr. Elshaw was granted 48,600 shares of restricted stock on December 8, 2008. As of December 31, 2010, 16,199 of these shares had vested. 16,200 of these shares vested on January 10, 2011 (after the December 31, 2010 measurement date in the above table). The remaining 16,201 shares vest on January 10, 2012. |
| | |
| • | Mr. Kretzman was granted 45,000 shares of restricted stock on December 10, 2007. As of December 31, 2010, 30,000 of these shares had vested. The remaining 15,000 shares vested on January 2, 2011 (after the December 31, 2010 measurement date in the above table). |
|
| • | Mr. Kretzman was granted 38,600 shares of restricted stock on December 8, 2008. As of December 31, 2010, 12,866 of these shares had vested. 12,867 of these shares vested on January 10, 2011 (after the December 31, 2010 measurement date in the above table). The remaining 12,867 shares vest on January 10, 2012. |
| | |
| • | Mr. Berns was granted 25,000 shares of restricted stock on May 18, 2009. As of December 31, 2007, 51,2502010, 8,333 of these shares had vested. The remaining shares vest on July 2, 2011 (as to 8,333 shares) and July 2, 2012 (as to 8,334 shares). |
Mr. Ennis was granted 350,000 shares of restricted stock on December 10, 2007. One-third of these shares vest on January 2, 2009, January 2, 2010 and January 2, 2011. As of December 31, 2007, none of these shares had vested.
Mr. Kretzman:
Mr. Kretzman was granted 35,000 shares of restricted stock on June 18, 2001. 100% of these shares were vested on June 18, 2004.
Mr. Kretzman was granted 40,000 shares of restricted stock on September 17, 2002. 100% of these shares were vested on September 17, 2005.
Mr. Kretzman was granted 240,000 shares of restricted stock on April 14, 2004. 100% of these shares were vested on April 14, 2007.
Mr. Kretzman was granted 187,500 shares of restricted stock on November 16, 2006. 62,499 of these shares vested on November 16, 2007, 62,500 of these shares vest on November 16, 2008 and 62,501 of these shares vest on November 16, 2009. As of December 31, 2007, 62,499 of the shares had vested.
Mr. Kretzman was granted 450,000 shares of restricted stock on December 10, 2007. One-third of these shares vest on January 2, 2009, January 2, 2010 and January 2, 2011. As of December 31, 2007, none of these shares had vested.
Table of ContentsOPTION EXERCISES AND STOCK VESTED
The following table sets forth the value of restricted stock held by the Named Executive Officers which vested during
2007,2010, with the value determined by multiplying the number of shares that vested
during 2010 by the NYSE closing market price of the Company’s Class A Common Stock on the vesting date.
Year-end valuesNone of
the Named Executive Officers sold any of their shares of formerly restricted stock that vested during
2007, based on the $1.18 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2007, were $214,366, $60,475 and $168,149 for Messrs. Kennedy, Ennis and Kretzman, respectively.| | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| | | Number of Shares
| | Value Realized
| | Number of Shares
| | Value Realized
|
| | | Acquired on Exercise
| | on Exercise
| | Acquired on Vesting
| | on Vesting
|
Name | | (#) | | ($) | | (#) | | ($)(a) |
| |
| David L. Kennedy | | | — | | | | — | | | | 55,916 | | | | 951,412 | |
Vice Chairman | | | | | | | | | | | | | | | | |
| Alan T. Ennis | | | — | | | | — | | | | 27,867 | | | | 474,180 | |
President and Chief Executive Officer | | | | | | | | | | | | | | | | |
| Chris Elshaw | | | — | | | | — | | | | 28,066 | | | | 477,565 | |
Executive Vice President and Chief Operating Officer | | | | | | | | | | | | | | | | |
| Robert K. Kretzman | | | — | | | | — | | | | 27,866 | | | | 474,129 | |
Executive Vice President and Chief Administrative Officer | | | | | | | | | | | | | | | | |
| Steven Berns | | | — | | | | — | | | | 8,333 | | | | 89,913 | |
Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Option Awards | | | Stock Awards |
| Name | | | Number of Shares
Acquired on Exercise
(#) | | | Value Realized
on Exercise
($) | | | Number of Shares
Acquired on Vesting
(#) | | | Value Realized
on Vesting
($) (a) |
| David L. Kennedy | | | | | — | | | | | | — | | | | | | 181,666 | | | | | | 203,999 | |
| President and Chief Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | |
| Alan T. Ennis | | | | | — | | | | | | — | | | | | | 51,250 | | | | | | 68,475 | |
| Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | |
| Robert K. Kretzman | | | | | — | | | | | | — | | | | | | 142,499 | | | | | | 163,499 | |
| Executive Vice President, Human Resources Chief Legal Officer, General Counsel and Secretary | | | | | | | | | | | | | | | | | | | | | | | | |
(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 20072010 by the NYSE closing price of the Company’s Class A Common Stock on the respective vesting dates. The SFAS No. 123(R) expense incurred |
36
| | |
| • | Mr. Kennedy had 27,833 shares of restricted stock vest on January 2, 2010. Of this amount, 11,584 shares were withheld by the Company with respect to cover tax withholding obligations; such withheld shares were not sold on the 2007 fiscal year in connection with these shares is reflected in the ‘‘Stock Awards’’ columnopen market and became treasury shares. The NYSE closing market price of the Summary Compensation Table.Company’s Class A Common Stock on January 2, 2010 was $17.01 per share. Mr. Kennedy had 28,083 shares of restricted stock vest on January 10, 2010. Of this amount, 11,295 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, 2010 was $17.02 per share. |
|
| • | Mr. Ennis had 11,667 shares of restricted stock vest on January 2, 2010. Of this amount, 4,616 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 2, 2010 was $17.01 per share. Mr. Ennis had 16,200 shares of restricted stock vest on January 10, 2010. Of this amount, 5,868 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, 2010 was $17.02 per share. |
|
| • | Mr. Elshaw had 11,867 shares of restricted stock vest on January 2, 2010. Of this amount, 5,163 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 2, 2010 was $17.01 per share. Mr. Elshaw had 16,199 shares of restricted stock vest on January 10, 2010. Of this amount, 6,516 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, 2010 was $17.02 per share. |
|
| • | Mr. Kretzman had 15,000 shares of restricted stock vest on January 2, 2010. Of this amount, 5,823 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 2, 2010 was $17.01 per share. Mr. Kretzman had 12,866 shares of restricted stock vest on January 10, 2010. Of this amount, 4,661 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, 2010 was $17.02 per share. |
|
| • | Mr. Berns had 8,333 shares of restricted stock vest on July 2, 2010. Of this amount, 3,019 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, 2010 was $10.79 per share. |
37
Mr. Kennedy had 65,000 shares of restricted stock vest on April 14, 2007. Of this amount, 24,570 shares were withheld by the Company to cover tax withholding obligations. The NYSE closing market price of the Company’s Class A Common Stock on April 13, 2007 (there was no trading on April 14, 2007) was $1.20 per share. Mr. Kennedy had 116,666 shares of restricted stock vest on November 16, 2007. Of this amount, 44,100 shares were withheld by the Company to cover tax withholding obligations. The NYSE closing market price of the Company’s Class A Common Stock on November 16, 2007 was $1.08 per share. Based on the year-end $1.18 per share NYSE closing market price of the Company’s Class A Common Stock, the value of Mr. Kennedy&rsquo ;s stock awards that vested during 2007 was $214,366 on December 31, 2007.Mr. Ennis had 43,750 shares of restricted stock vest on July 2, 2007. Of this amount, 14,788 shares were withheld by the Company to cover tax withholding obligations. The NYSE closing market price of the Company’s Class A Common Stock on July 2, 2007 was $1.38 per share. Mr. Ennis had 7,500 shares of restricted stock vest on November 16, 2007. Of this amount, 2,535 shares were withheld by the Company to cover tax withholding obligations. The NYSE closing market price of the Company’s Class A Common Stock on November 16, 2007 was $1.08 per share. Based on the year-end $1.18 per share NYSE closing market price of the Company’s Class A Common Stock, the value of Mr. Ennis’ stock awards that vested during 2007 was $60,475 on December 31, 20 07.
Mr. Kretzman had 80,000 shares of restricted stock vest on April 14, 2007. Of this amount, 27,040 shares were withheld by the Company to cover tax withholding obligations. The NYSE closing market price of the Company’s Class A Common Stock on April 13, 2007 (there was no trading on April 14, 2007) was $1.20 per share. Mr. Kretzman had 62,499 shares of restricted stock vest on November 16, 2007. Of this amount, 21,126 shares were withheld by the Company to cover tax withholding obligations. The NYSE closing market price of the Company’s Class A Common Stock on November 16, 2007 was $1.08 per share. Based on the year-end $1.18 per share NYSE closing market price of the Company’s Class A Common Stock, the value of Mr. Kretzman&rsq uo;s stock awards that vested during 2007 was $168,149 on December 31, 2007.
Table of ContentsPENSION BENEFITS
The following table shows, as of December 31,
20072010 (the pension plan measurement date used for financial statement reporting purposes with respect to the audited financial statements included in the Company’s
2007 2010Form 10-K), the number of years of credited service
under the plans (which differs from the actual number of years of service to the Company), and the present value of accumulated benefit and payments during the last fiscal year, with respect to each Named Executive Officer under the Retirement Plan and the Pension Equalization Plan, as described below.
| | | | | | | | | | | | | | | |
| | | | | Number of Years
| | Present Value of
| | Payments
|
| | | | | of Credited Service
| | Accumulated Benefit
| | During 2010
|
Name | | Plan Name | | (#) | | ($)(a) | | ($) |
| |
| David L. Kennedy | | Retirement Plan | | | 7.50 | | | | 105,416 | | | | — | |
Vice Chairman | | Pension Equalization Plan | | | 7.50 | | | | 360,650 | | | | — | |
| Alan T. Ennis | | Retirement Plan | | | 4.75 | | | | 58,795 | | | | — | |
President and Chief Executive Officer | | Pension Equalization Plan | | | 4.75 | | | | 71,530 | | | | | |
| Chris Elshaw | | Retirement Plan | | | 2.00 | | | | 24,768 | | | | — | |
Executive Vice President and Chief Operating Officer | | Pension Equalization Plan | | | 0.67 | �� | | | 24,168 | | | | — | |
| Robert K. Kretzman | | Retirement Plan | | | 21.42 | | | | 628,183 | | | | — | |
Executive Vice | | Pension | | | 21.42 | | | | 1,931,432 | | | | — | |
President and Chief Administrative Officer | | Equalization Plan Employment Agreement | | | 22.42 | | | | 311,184 | | | | | |
| Steven Berns | | Retirement Plan | | | 7.33 | | | | 73,575 | | | | — | |
Executive Vice President and Chief Financial Officer | | Pension Equalization Plan | | | 7.33 | | | | 32,701 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Name | | | Plan Name | | | Number of Years
Credited Service
(#) | | | Present Value of
Accumulated Benefit
($) (a) | | | Payments
During 2007
($) |
| David L. Kennedy | | | Retirement Plan | | | | | 5.50 | | | | | | 65,772 | | | | | | — | |
| President and Chief Executive Officer | | | Pension Equalization Plan | | | | | 5.50 | | | | | | 163,912 | | | | | | — | |
| Alan T. Ennis | | | Retirement Plan | | | | | 2.75 | | | | | | 21,029 | | | | | | — | |
| Executive Vice President and Chief Financial Officer | | | Pension Equalization Plan | | | | | 2.75 | | | | | | 7,047 | | | | | | | |
| Robert K. Kretzman | | | Retirement Plan | | | | | 19.42 | | | | | | 385,832 | | | | | | — | |
| Executive Vice President, Human Resources, Chief Legal Officer, General Counsel and Secretary | | | Pension Equalization Plan | | | | | 19.42 | | | | | | 887,370 | | | | | | — | |
(a) | The amounts set forth in the Pension Benefits tableTable are based on the assumptions set forth in Note 1114 to the consolidated financial statements in the 2007 2010Form 10-K. These amounts have been calculated based on the normal retirement age of 65 as specified in the Retirement Plan and Pension Equalization Plan. Mr. Kretzman’s employment agreement provides that he is entitled to receiveaccrue retirement benefits through his retirement date and a retirement benefit at age 60. The aggregate present value of Mr. Kretzman’s accumulated retirement benefit based on retirement at age 60 calculated under the Retirement Plan, and Pension Equalization Plan without regard to any early retirement reductions. The present value of Mr. Kretzman’s accumulated benefit calculated under the Retirement Plan based on retirement at age 60 is $409,776, and the present value of Mr. Kretzman’s accumulated benefit calculated under the Pension Equalization Plan based on retirement at age 60and his employment agreement is $1,539,923. The Pension Equalization Plan is a non-qualified$641,141, $1,971,274 and unfunded plan.$1,613,073, respectively. |
The Retirement Plan is intended to be a tax qualified defined benefit plan.
BenefitsIn 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 (the
‘‘Non-Cash“Non-Cash Balance
Program’’Program”)
arewere a function of service and final average compensation. The Non-Cash Balance Program
iswas 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
o ror 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 by
½%1/2% for each month that benefits start before the normal retirement date of age 65 (or 6% for each full year of
early retirement).
AsMessrs. Kennedy, Ennis and Elshaw, each of
December 31, 2007, Mr. Kretzman was eligible for early retirement under the Non-Cash Balance Program. Except as otherwise indicated, credited service includes all periods of employment withwhom joined the Company
or a subsidiary prior to retirement or earlier termination. Messrs. Kennedy and Ennis doafter the implementation of the Cash Balance Program (as discussed below), did not participate in the Non-Cash Balance Program.
Table of ContentsEffective January 1, 2001, Products Corporation amended the Retirement Plan to provide for a cash balance program under the Retirement Plan (the ‘‘Cash“Cash Balance Program’’Program”). UnderPrior to ceasing future benefit accruals under the
38
Retirement Plan after December 31, 2009, under the Cash Balance Program, eligible employees
will receivereceived quarterly pay credits to an individual cash balance bookkeeping account equal to 5% of their base salary and bonus (but not any part of bonuses in excess of 50% of base
salary for the year)salary) for the previous quarter. Interest credits, which commenced June 30, 2001,
arewere and will continue to be allocated quarterly (based on the yield of the
30-year Treasury bill for November of the preceding calendar year).
Messrs. Kennedy, Ennis and Elshaw 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’’“grandfathered” and
continuecontinued to participate in the Non-Cash Balance Program
und erunder the same retirement formula described in the preceding
paragraph.paragraph, prior to ceasing future benefit accruals under the Retirement Plan after December 31, 2009. All
other eligible employees had their benefits earned (if any) under the Non-Cash Balance Program
‘‘frozen’’“frozen” on December 31, 2000 and began to participate in the Cash Balance Program on January 1,
2001.2001, prior to ceasing future benefit accruals under the Retirement Plan after December 31, 2009. The
‘‘frozen’’“frozen” benefits will be payable at normal retirement age and will be reduced if the employee elects early retirement.
Any employee who, as of January 1, 2001, was at least age 40 but not part of the ‘‘grandfathered’’ group will, in addition to the ‘‘basic’’ 5% quarterly pay credits, receive quarterly ‘‘transition’’ pay credits of 3% of compensation each year for up to 10 years or until he/she leaves employment with the Company, whichever is earlier. Messrs. Kennedy and Ennis participate in the Cash Balance Program. As they were not employed by the Company on January 1, 2001 ( the date on which a ‘‘transition’’ employee was determined), Messrs. Kennedy and Ennis are eligible to receive only basic pay credits. The Retirement Plan and Pension Equalization Plan each
providedprovide that employees vest in their benefits after they have completed
fivethree years of service with the Company or an affiliate of the Company.
Effective January 1, 2008,Each of the
years of service threshold for vesting was reduced to three years of service, from five, as required by the Pension Protection Act. Mr. Kennedy becameNamed Executive Officers are fully vested in
his benefits in September 2007; Mr. Kretzman, who has 19 years of service, is vested in these benefits; and Mr. Ennis was not yet vested in histheir respective benefits under the Pension Plan
orand the Pension Equalization Plan as of December 31,
2007, but, following the change in years of service vesting, Mr. Ennis became fully vested in these benefits in March 2008.2009. 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. The Pension Equalization Plan, as amended, is a non-qualified and unfunded benefit arrangement 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 (including the Non-Cash Balance Program and the Cash Balance Program) 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 $500,000. Benefits provided under the Pension Equalization Plan are conditioned on the parti cipant’sparticipant’s compliance with his or her non-competition agreement and on the participant not competing with Products Corporation for one year after termination of employment.
Messrs. Kennedy, Ennis and Elshaw will be paid out their “frozen” vested accrued benefit under the Cash Balance Program, at termination or retirement, as a lump sum, in the form of a monthly annuity or other deferred payment, as they elect. Mr. Kretzman will be paid out his accrued benefit under the Non-Cash Balance Program, at termination or retirement, in the form of a monthly annuity payment. Mr. Berns will be paid out his “frozen” accrued benefit under the Non-Cash Balance Program, at termination or retirement, in the form of a monthly annuity payment.
Table of ContentsNON-QUALIFIED DEFERRED COMPENSATION
The only non-qualified deferred compensation plan in which any of the Company’s Named Executive Officers participated is the unfunded Excess Savings Plan, which plan was frozen to new contributions on December 31, 2004. Amounts shown in the table below reflect amounts deferred from compensation and Company matching contributions prior to December 31, 2004, as well as investment returns from December 31, 2004 through December 31, 2007.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | | Executive
Contributions in
2007 ($) | | | Registrant
Contributions in
2007 ($) | | | Aggregate Earnings
in 2007 ($) (a) | | | Aggregate
Withdrawals/
Distributions
($) (b) | | | Aggregate Balance
at 12/31/07 ($) |
| Robert K. Kretzman | | | | | — | | | | | | — | | | | | | (43 | ) | | | | | — | | | | | | 87,447 | |
| Executive Vice President, Human Resources, Chief Legal Officer, General Counsel and Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) | Amounts reported under Aggregate Earnings in 2007 are not reported in the Summary Compensation Table. These amounts represent market returns on Mr. Kretzman’s investments under the Excess Savings Plan. |
Prior to December 31, 2004, employees were able to make contributions to the Company’s Excess Savings Plan, an unfunded, non-qualified, defined contribution, deferred compensation plan, and the Company allowedmatched 50% of those contributions up to 6% of pay contributed. New contributions by employees to contribute to and matched employee contributions in the Excess Savings Plan. Contributions 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.
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, for 2010, 5% of eligible compensation) 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).
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 as soon as practicablein accordance with the applicable provisions of the
39
Excess Savings Plan after termination of a participant’s employment and may be paid in either annual installments over a period of 10 years, over a period of lessno more than 10 years or as a single lump sum payment.lump-sum payment, as elected by the participant.
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, as well as total account balances, inclusive of investment returns, as of December 31, 2010. 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 | | | | | | | | | | | | | | | | | | | | |
| | |
| (a) | | These amounts represent discretionary employer contributions credited under the profit-sharing provisions of the Excess Savings Plan in respect to 2010 (including those credited during January 2011). |
|
| (b) | | Amounts reported under Aggregate Earnings in 2010 are not reported in the Summary Compensation Table. For Mr. Kretzman, his amount represents the depreciation in market returns on his investments under the Excess Savings Plan which he made prior to December 31, 2004, when the employee contribution feature was frozen. See the “Pension Benefits Table” and the “Summary Compensation Table,” above, for a discussion of the Pension Equalization Plan, a non-qualified, deferred compensation plan. |
|
| (c) | | These amounts are unfunded and represent actual account balances at year end, and do not reflect the portion of the 2010 discretionary employer contributions credited during 2011 nor the earnings thereon. |
40
The following Director Compensation table shows all compensation paid by the Company to its Directors in respect of
2007. The director compensation table below includes, under the columns ‘‘Stock Awards’’ and ‘‘Option Awards,’’ the expense required to be recognized by the Company pursuant to SFAS No. 123(R) during 2007 (excluding forfeiture assumptions) in respect of outstanding restricted stock and option awards to the Directors listed below, which include awards granted in years prior to 2007. In all cases, option awards outstanding as of December 31, 2007 were ‘‘out-of-the-money,’’ in that in each case they had exercise prices that were above the $1.18 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2007 and therefore had no realizable monetary value to the Directors listed below.| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Fees Earned or
| | | | | | All Other
| | |
| | | Fiscal
| | Paid in Cash
| | Stock Awards
| | Option Awards
| | Compensation
| | Total
|
Name (a) | | Year | | ($)(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
($) (b) | | | Stock Awards
($)
(c) (d) | | | Option Awards
($)
(c) (e) | | | All Other
Compensation
($) (f) | | | Total
($) |
| Alan S. Bernikow | | | | | 2007 | | | | | | 76,000 | | | | | | 13,276 | | | | | | 10,798 | | | | | | 26,000 | | | | | | 126,074 | |
| Paul J. Bohan | | | | | 2007 | | | | | | 62,000 | | | | | | 13,276 | | | | | | 9,962 | | | | | | — | | | | | | 85,238 | |
| Meyer Feldberg | | | | | 2007 | | | | | | 75,000 | | | | | | 13,276 | | | | | | 9,962 | | | | | | — | | | | | | 98,238 | |
| Edward J. Landau | | | | | 2007 | | | | | | 77,000 | | | | | | 13,276 | | | | | | 9,962 | | | | | | 26,000 | | | | | | 126,238 | |
| Debra L. Lee | | | | | 2007 | | | | | | 47,000 | | | | | | 13,276 | | | | | | — | | | | | | — | | | | | | 60,276 | |
| Linda Gosden Robinson | | | | | 2007 | | | | | | 45,000 | | | | | | 13,276 | | | | | | 9,962 | | | | | | — | | | | | | 68,238 | |
| Kathi P. Seifert | | | | | 2007 | | | | | | 60,500 | | | | | | 13,276 | | | | | | — | | | | | | — | | | | | | 73,776 | |
| Kenneth L. Wolfe | | | | | 2007 | | | | | | 51,000 | | | | | | 13,276 | | | | | | 9,962 | | | | | | — | | | | | | 74,238 | |
| (a) | | See —‘‘Summary“Summary Compensation Table’’Table” regarding compensation paid during the fiscal year to David L.each of Messrs. Kennedy and Ennis in his role as the Company’s President and Chief Executive Officer.an executive officer. Messrs. Kennedy, Ennis, Perelman and Schwartz did not receive any compensation for their service as Directors for 2007.2010. |
|
| (b) | | During 2007,2010, the Company’s Board compensation structure was comprised of the following components: (i) an annual Board retainer of $85,000; (ii) Board and Committee meeting fees of $1,500 per meeting; (iii) an additional annual retainer of $10,000 for each Committee chairman; and (iv) an additional annual Audit Committee membership retainer of $10,000. |
|
| (c) | | The amounts shown under the “All Other Compensation” column reflect fees received by Messrs. Bernikow and Bohan during 2010 as members of the Board of Directors of Products Corporation (the Company’s wholly-owned operating subsidiary). Products Corporation’s non-employee directors (i.e., those Directors who were not receiving compensation as officers or employees of the Company or any of its affiliates (‘‘Non-Employee Directors’’) were paid an annual retainer fee of $35,000, payable in quarterly installments, and a fee of $1,000 for each meeting of the Board of Directors or any committee (other than the Audit Committee) that they attend. In recognition of the increased responsibilities that have arisen as a result of the passage of the Sarbanes-Oxley Act of 2002 and revised SEC and NYSE rules, and based upon the advice of Mercer, during 2007, members of the Audit Committee were paid an annual Audit Committee retainer fee of $10,000, in addition to the aforementioned annual retainer fee for Board membership, and a per meeting fee of $1,500 for each meeting of the Audit Committe e that they attend. During 2007, Non-Employee Directors who served as chairman of the Audit Committee, Governance Committee and Compensation Committee each received an annual retainer fee of $10,000 per annum, in addition to any other retainer or meeting fees they receive. In March 2008, the Board of Directors, based upon the recommendation of the Compensation Committee and Mercer (which noted that the annual retainer and meeting fees for Directors were below median competitive levels), modified the above structure by increasing the annual Board retainer fee to $50,000 and the per meeting fee to $1,500 for all Board and Committee meetings attended, effective from and after the 2008 Annual Meeting. The per meeting fee for Products Corporation’s Board meetings was also increased to $1,500, from $1,000, effective from and after the 2008 Annual Meeting. |
(c) | The Compensation Committee determines a maximum face value of an annual equity award for each Non-Employee Director (which face value amount, under the terms of the Company’s Stock Plan, cannot exceed $100,000 in any given year), with the face value amount of the grant being divided by the NYSE closing market price of the Company’s Class A Common Stock on the date of grant to determine the number of equity awards to be granted to each Non-Employee Director. In December 2007, the Compensation Committee based upon management’s recommendation and after consultation with Mercer, approved Awards of 25,000 shares of restricted stock to each of the |
Table of Contents | Company’s Non-Employee Directors (the ‘‘2007 Director Restricted Stock Grants’’). The 2007 Director Restricted Stock Grants were granted as part of the annual compensation program for Board members. |
(d) | The amounts set forth under the ‘‘Stock Awards’’ column reflect the expense required under SFAS No. 123(R) to be recognized by the Company with respect to fiscal year 2007, excluding forfeiture assumptions, in respect of all outstanding restricted stock awards held by the Non-Employee Directors (including the 2007 Director Restricted Stock Grants, all of which were unvested at December 31, 2007) and include awards granted in respect of years prior to 2007, some of which were unvested at December 31, 2007. The accounting principles and related assumptions used by the Company in calculating the expenses for such awards under SFAS No. 123(R)affiliates) are set forth in Note 13 to the consolidated financial statements in the 2007 Form 10-K. As noted above, each Non-Employee Director was gra nted 25,000 shares of restricted stock on December 10, 2007, which they each held at December 31, 2007. The grant date fair value of these restricted stock awards, based on the $1.25 NYSE closing market price of the Company’s Class A Common Stock on the December 10, 2007 grant date, was $31,250 per Director grant. These shares vest as to one-third of the total award on January 2, 2009, January 2, 2010 and January 2, 2011. On December 31, 2007, all of these shares were unvested and therefore had no realizable monetary value as of that date. |
(e) | The amounts set forth under the ‘‘Option Awards’’ column reflect the expense required under SFAS No. 123(R) to be recognized by the Company with respect to fiscal year 2007, excluding forfeiture assumptions, in respect of all outstanding option awards held by the Non-Employee Directors and reflect awards granted in respect of years prior to 2007, some of which were unvested at December 31, 2007 (and all of which were ‘‘out-of-the-money’’ as of December 31, 2007). The accounting principles and related assumptions used by the Company in calculating the expenses for such awards under SFAS No. 123(R) are set forth in Note 13 to the consolidated financial statements included in the 2007 Form 10-K. As of December 31, 2007, Mr. Bernikow held 44,266 vested stock options, Messrs. Bohan and Wolfe held 36,766 vested stock options, each of Messrs. Feldberg and Landau and Ms. Robinson held 59,266 vested stock options, and Mses. Lee and Seifert held no stock options. All such options were ‘‘out-of-the-money’’ as of December 31, 2007. |
(f) | The amounts shown under the ‘‘All Other Compensation’’ column reflect fees received by Messrs. Bernikow and Landau as members of Products Corporation’s (Revlon, Inc.’s wholly-owned operating subsidiary) Board of Directors. Messrs. Bernikow and Landau, as non-employee members of Products Corporation’s Board of Directors, were paid an annual retainer fee of $25,000 per annum and are entitled to a meeting fee of $1,000$1,500 for each meeting of Products Corporation’s Board of Directors that they attended in 2007. Mr. Landau will not stand for re-election forattend. Messrs. Ennis, Kennedy, Perelman and Schwartz also served as members of Products Corporation’s Board of Directors in connection with his decision not to not stand for re-election to the Company’s Board of Directors. Messrs. Kennedy, Perelman and Schwartz also serve as members of Products Corporat ion’s Board of Directors,during 2010, but receivereceived no fees for such service. |
41
Table of ContentsSECURITY OWNERSHIP OF COMMON STOCK
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March
31, 2008 (unless otherwise noted),18, 2011, the number of shares of the Company’s
CommonVoting 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
outstanding shares of Common Stock;Company’s voting securities; (ii) each director of the Company; (iii) the Chief Executive Officer during
20072010 and each of the other Named Executive Officers during
2007;2010; and (iv) all directors and
Named Executive Officersexecutive officers of the Company during
20072010 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
CommonVoting Capital Stock as to which a person has sole or shared voting power or investment power and any shares of
Common Stoc kVoting 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 | | | Percentage of Class |
Ronald O. Perelman
35 E. 62nd St. | | | 279,157,040 (Class A)
31,250,000 (Class B)(1) | | | 60.5% (Class A and Class B
combined) |
New York, NY 10065 | | | | | | 57.9% (Class A)
100% (Class B) |
FMR LLC
82 Devonshire Street | | | 65,535,710 (Class A)(2) | | | 12.8% (Class A and Class B
combined) |
Boston MA 02109 | | | | | | 13.6% (Class A) |
Alan S. Bernikow | | | 59,952 (Class A)(3) | | | * |
Paul J. Bohan | | | 52,452 (Class A)(4) | | | * |
Alan T. Ennis | | | 62,052 (Class A)(5) | | | * |
Meyer Feldberg | | | 74,952 (Class A)(6) | | | * |
David L. Kennedy | | | 2,327,873(Class A)(7) | | | * |
Robert K. Kretzman | | | 1,408,713 (Class A)(8) | | | * |
Edward J. Landau | | | 75,086 (Class A)(9) | | | * |
Debra L. Lee | | | 8,333 (Class A)(10) | | | * |
Linda Gosden Robinson | | | 74,952 (Class A)(11) | | | * |
Barry Schwartz | | | 20,148 (Class A) | | | * |
Kathi P. Seifert | | | 131,413 (Class A)(12) | | | * |
Kenneth L. Wolfe | | | 67,452 (Class A)(13) | | | * |
All Directors and Named | | | | | | |
Executive Officers as a Group | | | 283,520,418 (Class A) | | | 60.9% (Class A and Class B |
(13 Persons) | | | 31,250,000 (Class B) | | | combined)
58.5% (Class A)
100% (Class B) |
|
| (1) | | Mr. Perelman beneficially owned, directly and indirectly through MacAndrews & Forbes, as of March 31, 2008, 279,157,04018, 2011, 37,577,140 shares of Class A Common Stock (including, among other(of which, (a) 25,264,938 shares 45,616,141were beneficially owned by MacAndrews & Forbes ; (b) 7,718,092 shares were owned by a holding company, RCH Holdings One Inc. (of which each of Class A Common StockMr. Perelman and The Ronald O. Perelman 2008 Trust owns 50% of the shares); (c) 4,561,610 shares were beneficially owned by a family member of Mr. Perelman with respect to which shares MacAndrews & Forbes holds a voting proxy, 3,135,000proxy; and (d) 32,500 shares held directly by Mr. Perelman and 1,225,000were shares that Mr. Perelman maycould acquire under vested options (which includes 300,000 option shares which will expire on April 27, 2008))stock options). Mr. Perelman, through MacAndrews & Forbes, also beneficially |
42
| | |
| | owned, as of March 31, 2008,18, 2011, all of the outstanding 31,250,0003,125,000 shares of Revlon, Inc. Class B Common Stock, each of which is convertible into |
Table of Contents | one share of Class A Common Stock, which, together with the Class AStock. Such Common Stock referenced above,share ownership represented approximately 60%77% of the outstanding shares of Revlon, Inc. CommonVoting Capital Stock and approximately 74% of the combined voting power of such shares as of March 31, 2008. Shares18, 2011. MacAndrews & Forbes has advised the Company that it has pledged shares of Class A Common Stock to secure certain obligations of MacAndrews & Forbes. Additional shares of Revlon, Inc., and shares of common stock of intermediate holding companies between Revlon, Inc. and MacAndrews & Forbes, are, and may from time to time be pledged to secure obligations of MacAndrews & Forbes. A default under any of these obligations that are secured by the pledged shares could cause a foreclosure with respect to such shares of Class A Common Stock, Products Corporation’s common stock or stock of intermediate holding companies.companies between Revlon, Inc. and MacAndrews & Forbes. A foreclosure upon any such shares of common stock or dispositions of shares of Revlon, Inc.’s Class A Common Stock, Products Corporation’s common stock or stock of intermediate holding companies between Revlon, Inc. and MacAndrews & Forbes which are beneficially owned by MacAndrews & Forbes could, in a sufficient amount, constitute a ‘‘change“change of control’’control” under Products Corporation’s 2006 Cre ditthe 2010 Credit Agreements, (as hereinafter defined), the MacAndrews & Forbes Senior Subordinated Term Loan (as hereinafter defined)Agreement and the indenture governing the 93/4% Senior Secured Notes (each as hereinafter defined). A change of control constitutes an event of default under the 2010 Credit Agreements, which would permit Products Corporation’s 9½lenders to accelerate amounts outstanding under such facilities. In addition, holders of the 93/4% Senior Notes.Secured Notes may require Products Corporation to repurchase their respective notes under those circumstances. Upon a change of control, Products Corporation would also be required, after fulfilling its repayment obligations under the 93/4% Senior Secured Notes indenture, to repay in full the Senior Subordinated Term Loan,provided that Revlon, Inc. at such time has redeemed or is then concurrently redeeming the Preferred Stock. |
|
| (2) | Information based solely on a Schedule 13G/A, dated and filed with the SEC on February 14, 2008 and reporting, as of December 31, 2007, beneficial ownership by FMR LLC, the successor of FMR Corp., and Edward C. Johnson 3d (the Chairman of FMR LLC), of 65,535,710 shares of Class A (collectively, the ‘‘Fidelity Owned Shares’’), including 13,604,388 shares with respect to which FMR LLC has sole power to vote or direct the vote and 65,535,710 shares in total that FMR LLC has sole power to dispose of or direct the disposition of. According to the Schedule 13G/A, Fidelity Management & Research Company, a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, was the beneficial owner of 47,644,135 sh ares of Class A Common Stock (which are included in the total reported Fidelity Owned Shares) as a result of acting as investment adviser to various investment companies, one of which, Fidelity Advisors High Yield Fund, was the beneficial owner of 41,158,562 | Includes 9,666 shares of Class A Common Stock (which are included in the total reported Fidelity Owned Shares). |
(3) | Includes 8,333 shares held directly by Mr. Bernikow (representing formerly restricted shares that vested during 2007)after the closing date of the Exchange Offer in accordance with the terms of the award agreements and 51,619were not eligible to be exchanged in the Exchange Offer) and 5,897 shares that Mr. Bernikow may acquire under vested options, all of which options areout-of-the-money. |
(4) |
| (3) | | Includes 8,3339,666 shares of Class A Common Stock held directly by Mr. Bohan (representing formerly restricted shares that vested during 2007)after the closing date of the Exchange Offer in accordance with the terms of the award agreements and 44,119were not eligible to be exchanged in the Exchange Offer) and 5,147 shares that Mr. Bohan may acquire under vested options, all of which options areout-of-the-money. |
|
| (4) | | Includes 34,978 shares of Class A Common Stock held directly by Mr. Elshaw (representing formerly restricted shares that vested after the closing date of the Exchange Offer in accordance with the terms of the award agreements, net of shares withheld for taxes, and were not eligible to be exchanged in the Exchange Offer) and 24,200 shares that Mr. Elshaw may acquire under vested options, all of which options areout-of-the-money. |
|
| (5) | | Includes 47,05235,168 shares of Class A Common Stock held directly by Mr. Ennis (including 33,927 shares that represent(representing formerly restricted shares that vested during 2007 and 13,125 shares that represent restricted shares that vested during 2008,after the closing date of the Exchange Offer in each caseaccordance with the terms of the award agreements, net of shares withheld for taxes)taxes, and 15,000were not eligible to be exchanged in the Exchange Offer) and 2,000 shares that Mr. Ennis may acquire under vested options, all of which options areout-of-the-money. |
|
| (6) | | Includes 8,3339,666 shares of Class A Common Stock held directly by Mr.Professor Feldberg (representing formerly restricted shares that vested during 2007)after the closing date of the Exchange Offer in accordance with the terms of the award agreements, and 66,619were not eligible to be exchanged in the Exchange Offer) and 7,397 shares that Mr.Professor Feldberg may acquire under vested options, all of which options areout-of-the-money. |
|
| (7) | | Includes 533,62373,904 shares of Class A Common Stock held directly by Mr. Kennedy (including 288,650 shares that were purchased directly by Mr. Kennedy, 50,000 shares that represent(representing formerly restricted shares that vested during 2004, 42,477 shares that represent restricted shares that vested during 2005, 39,500 shares that represent restricted shares that vested during 2006 and 112,996 shares that represent restricted shares that vested during 2007,after the closing date of the Exchange Offer in each caseaccordance with the terms of the award agreements, net of shares withheld for taxes)taxes, and 1,794,250were not eligible to be exchanged in the Exchange Offer), 20,000 shares of Class A Common Stock purchased by Mr. Kennedy through his Company 401(k) plan account (which shares were not eligible to be exchanged in the Exchange Offer), and 182,800 shares that Mr. Kennedy may acquire under vested options, all of which options areout-of-the-money. |
|
| (8) | | Includes 260,71338,605 shares of Class A Common Stock held directly by Mr. Kretzman (including 35,000 shares that represent(representing formerly restricted shares that vested during 2004, 78,420 shares that represent restricted shares that vested during 2005, 52,960 shares that represent restricted shares that vested during 2006 and 94,333 shares |
Table of Contents | that represent restricted shares that vested during 2007,after the closing date of the Exchange Offer in each caseaccordance with the terms of the award agreements, net of shares withheld for taxes)taxes, and 1,148,000were not eligible to be exchanged in the Exchange |
43
| | |
| | Offer) and 114,000 shares that Mr. Kretzman may acquire under vested options, all of which options areout-of-the-money. |
|
| (9) | Includes 8,467 shares held directly | The referenced Executive Officers and Directors fully participated in the Company’s Exchange Offer, by Mr. Landau (including 134 shares that were purchased directly by Mr. Landau and 8,333 shares that represent restricted shares that vested during 2007) and 66,619 shares that Mr. Landau may acquire under vested options,exchanging in the Exchange Offer all of which options are out-of-the-money.their respective eligible shares of the Company’s Class A Common Stock held by them on October 8, 2009 (the closing date of the Exchange Offer) for a like number of shares of Series A Preferred Stock. |
|
| (10) | Includes 8,333 | Fidelity advised the Company that, as of April 8, 2010, it owned 8,233,526 shares held directly by Ms. Lee (representing restrictedof the Company’s outstanding Class A Common Stock and Series A Preferred Stock, in the aggregate, representing approximately 9.2% of the Company’s issued and outstanding shares of Voting Capital Stock as of such date. Subsequently, however, Fidelity filed a Schedule 13F with the SEC on February 11, 2011, indicating that vested during 2007).it owned 1,013,000 shares of Class A Common Stock as of December 31, 2010. The Company does not know how many shares of Class A Preferred Stock Fidelity may own, or owned as of the measurement date for this table, and there is no public record of such ownership. |
(11) | Includes 8,333 shares held directly by Ms. Robinson (representing restricted shares that vested during 2007) and 66,619 shares that Ms. Robinson may acquire under vested options, all of which options are out-of-the-money. |
(12) | Includes 123,080 shares that were purchased directly by Ms. Seifert and 8,333 shares representing restricted shares that vested during 2007. |
(13) | Includes 23,333 shares held directly by Mr. Wolfe (including 15,000 shares that were purchased directly by Mr. Wolfe and 8,333 shares representing restricted shares that vested during 2007) and 44,119 shares that Mr. Wolfe may acquire under vested options, all of which options are out-of-the-money. |
Table of ContentsEQUITY COMPENSATION PLAN INFORMATION
The following table sets forth as of December 31,
2007,2010, 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,rights; (ii) the weighted-average exercise price of such outstanding options, warrants and
rightsrights; and (iii) the number of securities remaining available for future issuance under such equity compensation plans, excluding securities reflected in
item (i)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
| |
Plan Category | | 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 | | | | | 21,680,968 | (1) | | | | | 4.19 | | | | | | 25,560,642 | (2) |
| Not Previously Approved by Stockholders: | | | | | — | | | | | | — | | | | | | — | |
| (1) | | Includes 21,680,968987,886 stock options and no stock appreciation rights issued under the Stock Plan. DoesPlan; does not include 11,648,067690,689 shares of restricted stock and restricted stock units issued under the Stock Plan, which are not yet vested and are subject to forfeiture. In all cases, stock option awards outstanding as of December 31, 2010 were“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 on such date. |
|
| (2) | | As of December 31, 2007,2010, all of these shares remained available for issuance as awards of any kind under the Stock Plan, including awards of restricted stock and restricted stock units. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS As of December 31,
2007,2010, MacAndrews & Forbes beneficially owned shares of Revlon, Inc.’s
CommonVoting Capital Stock having approximately
74%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.
See —‘‘2004 Investment Agreement’’ below for information regarding Revlon, Inc.’s rights offerings and the related effect on MacAndrews & Forbes’ beneficial ownership of shares of the Company’s Common Stock.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’’Holdings”), and which is an affiliate and an indirect wholly-owned subsidiary of
44
MacAndrews & Forbes, and certain of Revlon Holdings’ wholly-owned subsidiaries. Revlon, Inc. and Products Corporation also entered into a real property asset transfer agreement with Revlon Holdings. Pursuant to such agreements, on June 24, 1992 Revlon Holdings transferred assets to Products Corporation and Products Corporation assumed all of the liabilities of Revlon Holdings, other than certain specifically excluded assets and liabilities (the liabilities excluded are referred to as the ‘‘Excluded Liabilities’’“Excluded Liabilities”). Certain consumer products lines sold in demonstrator-assisted dis tributiondistribution channels considered not integral to Revlon, Inc.’sthe Company’s business and that historically had not been profitable and certain other assets and liabilities were retained by Revlon Holdings. Revlon Holdings agreed to indemnify Revlon, Inc. and Products Corporation against losses arising from the Excluded Liabilities, and Revlon, Inc. and Products Corporation agreed to indemnify Revlon Holdings against losses arising from the liabilities assumed by Products Corporation. The amount reimbursed by Revlon Holdings to Products Corporation for the Excluded Liabilities for 20072010 was approximately $0.1$0.3 million.
Table of ContentsReimbursement Agreements
Revlon, Inc., Products Corporation and MacAndrews & Forbes Inc.
(a, a wholly-owned subsidiary of MacAndrews & Forbes
Holdings)Holdings Inc. (“MacAndrews & Forbes Holdings”) have entered into reimbursement agreements (the
‘‘Reimbursement Agreements’’“Reimbursement Agreements”) pursuant to which (i) MacAndrews & Forbes Inc. is obligated to provide (directly or through affiliates) certain professional and administrative services, including
without limitation employees, to Revlon, Inc. and its subsidiaries, including
without limitation Products Corporation, and purchase services from third party providers, such as insurance, legal 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
a ccountingaccounting 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 Corporation reimburses MacAndrews & Forbes for the allocable costs of the services purchased for or provided to Products Corporation and its subsidiaries and for the reasonable
out-of-pocket expenses incurred in connection with the provision of such services. MacAndrews & Forbes reimburses Products Corporation for the allocable costs of the services purchased for or provided to MacAndrews & Forbes and for the reasonable
out-of-pocket expenses incurred in connection with the purchase or provision of such services. Each of Revlon, Inc. and Products Corporation, 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 by it under the Reimbursement Agreements, other than losses resulting from its willful misconduct or gross negligence.
The Reimbursement Agreements may be terminated by either party on 90 days’ notice. Products Corporation does not intend to request services under the Reimbursement Agreements unless their costs would be at least as favorable to Products Corporation as could be obtained from unaffiliated third parties.
Revlon, Inc. and Products Corporation participate in MacAndrews & Forbes’ directors’ and officers’ liability insurance program,
and other insurance programs which
covercovers Revlon, Inc.
, and Products Corporation
andas well as MacAndrews & Forbes. The limits of
directors’ and officers’ liability coverage 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 reimburse MacAndrews & Forbes from time to time for their allocable portion of the premiums for such coverage or they pay 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 Corporation directly to MacAndrews & Forbes in respect of premiums are included in the amounts paid under the Reimbursement Agreements. The net amount reimbursable from MacAndrews & Forbes to Products Corporation for the services provided under the Reimbursement Agreements for 20072010 was approximately $0.6$0.1 million.
As a result of the closing of theadebt-for-equity exchange transaction completed in March 2004 (the “2004 Revlon Exchange Transactions (as defined below) (see —‘‘2004 Investment Agreement’’Transactions”), as of March 25, 2004, Revlon, Inc., Products Corporation and their U.S. subsidiaries were no longer
45
included in the affiliated group of which MacAndrews & Forbes was the common parent (the
‘‘MacAndrews“MacAndrews & Forbes
Group’’Group”) for federal income tax purposes.
In June 1992,
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“MacAndrews & Forbes Tax Sharing
Agreement’’Agreement”)
, pursuant to which MacAndrews & Forbes Holdings agreed to indemnify Revlon, Inc. and Products Corporation against federal, state or local income tax liabilities of the MacAndrews & Forbes Group (other than in respect of Revlon, Inc. and Products Corporation) 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
such group.the MacAndrews & Forbes Group. In these taxable periods,
Revlon, Inc. and Products Corporation were included in the MacAndrews & Forbes Group, and Revlon, Inc.’s and Products Corporation’s federal taxable income and loss were included in
Table of Contentssuch 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. Pursuant toRevlon, Inc. and Products Corporation remain liable under the MacAndrews & Forbes Tax Sharing Agreement, for all such taxable periods Products Corporation was required to pay to Revlon, Inc., which in turn was required to pay to Revlon Holdings, amounts equal to the taxes that Products Corporation would otherwise have had to pay if it were to file separate federal, state or local income tax returns (including anythrough and including March 25, 2004 for amounts determined to be due as a result of a redetermination arising from an audit or otherwise, ofequal to the consolidatedtaxes that Revlon, Inc. or combined tax liability relating to any such period which was attributable to Products Corporation), except that Products Corporation was not entitledwould otherwise have had to carry back any lossespay if it were to taxable periods ending prior to January 1, 1992. The MacAndrews & Forbes Tax Sharing Agreement w ill remain in effect solelyhave filed separate federal, state or local income tax returns for taxable periods beginning on or after January 1, 1992, through and including March 25, 2004.
such periods.
Following the closing of the 2004 Revlon Exchange Transactions, in March 2004, 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 be included in such group’s consolidated tax returns. Accordingly, Revlon, Inc. and Products Corporation entered into a tax sharing agreement (the ‘‘Revlon“Revlon Tax Sharing Agreement’’Agreement”) pursuant to which Products Corporation will be 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
MacAndr ewsMacAndrews & Forbes Tax Sharing Agreement
orin 2010 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. During 2010, there were no federal tax payments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement
inwith respect
to 2009. During 2010, there were federal tax payments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement of
2007.$0.2 million with respect to 2010. The Company expects that there will be no federal tax payment from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement during 2011 with respect to 2010.
Registration Rights Agreement 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 (‘‘(“REV Holdings’’Holdings”), the then direct parent of Revlon, Inc.,) entered into a registration rights agreement (the ‘‘Registration“Registration Rights Agreement’’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’’“Holders”) had 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 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’’“Demand Registration”). In connection with the closing of the 2004 Revlon Exchange Transactions (as hereinafter defined) and pursuant to the 2004an 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, including, without limitation,Agreement. This included all of the shares of Class A Common Stock acquired by MacAndrews & Forbes in connection with the Company’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, (the &lsqu o;‘$110 Million Rights Offering’’) 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 (the ‘‘$100 Million Rights Offering’’).2007.
46
Revlon, Inc. may postpone giving effect to a Demand Registration for a period of up to 30 days if Revlon, Inc. believes such registration might have a material adverse effect on any plan or proposal by Revlon, Inc. with respect to any financing, acquisition, recapitalization, reorganization or other material transaction, or if Revlon, Inc. is in possession of material non-public information that, if publicly disclosed, could result in a material disruption of a major corporate development or transaction then pending or in progress or in other material adverse consequences to Revlon, Inc. In addition, the Holders have the right to participate in registrations by Revlon, Inc. of its Class A Common Stock (a
‘‘Piggyback Registration’’“Piggyback Registration”).
Table of ContentsThe Holders will pay allout-of-pocket expenses incurred in connection with any Demand Registration. Revlon, Inc. will pay any expenses incurred in connection with a Piggyback Registration, except for underwriting discounts, commissions and expenses attributable to the shares of Class A Common Stock sold by such Holders.
2004 Consolidated MacAndrews & Forbes Line of Credit
In July 2004, Products Corporation and MacAndrews & Forbes Inc. entered into an agreement, which provided Products Corporation with a $152 million line of credit (as amended, the ‘‘2004 Consolidated MacAndrews & Forbes Line of Credit’’). The commitment under the 2004 Consolidated MacAndrews & Forbes Line of Credit reduced to $87.0 million from $152.0 million in July 2005 and reduced to $50.0 million from $87.0 million in January 2007 upon completion of the $100 Million Rights Offering. As of December 31, 2007, and through its expiration on January 31, 2008, the 2004 Consolidated MacAndrews & Forbes Line of Credit had availability of $50.0 million and remained undrawn.
2004 Investment Agreement
In February 2004, the Company’s Board of Directors approved certain agreements with Fidelity and MacAndrews & Forbes intended to strengthen the Company’s balance sheet, as well as an Investment Agreement (as amended, the ‘‘2004 Investment Agreement’’) with MacAndrews & Forbes covering a series of transactions designed to reduce Products Corporation’s levels of indebtedness. In March 2004, the Company exchanged approximately $804 million of Products Corporation’s debt, $54.6 million of the Company’s preferred stock and $9.9 million of accrued interest for 299,969,493 shares of Class A Common Stock (the ‘‘Revlon Exchange Transactions’’).
In connection with the Revlon Exchange Transactions, in February 2004, the Company and Fidelity entered into a stockholders agreement (the ‘‘Stockholders Agreement’’) pursuant to which, among other things, (i) the Company agreed to continue to maintain a majority of independent directors (as defined by New York Stock Exchange listing standards) on its Board of Directors, as it currently does; (ii) the Company established and maintains a Nominating and Corporate Governance Committee of the Board of Directors; and (iii) the Company agreed to certain restrictions with respect to the Company’s conducting any business or entering into any transactions or series of related transactions with any of its affiliates, any holders of 10% or more of the outstanding voting stock or any affiliates of such holders (in each case, other than its subsidiaries). This Stockholders Agreement will terminate when Fidelity ceases to be the beneficial h older of at least 5% of the Company’s outstanding voting stock. Pursuant to the 2004 Investment Agreement, the Company committed to conduct further rights and equity offerings, which were successfully completed with the $110 Million Rights Offering and the $100 Million Rights Offering (such equity offerings, together with the Revlon Exchange Transactions, are referred to as the ‘‘Debt Reduction Transactions’’). Under the 2004 Investment Agreement, MacAndrews & Forbes agreed to take, or cause to be taken, all commercially reasonable actions to facilitate the Debt Reduction Transactions, including back-stopping certain rights offerings; however, as each rights offering was fully subscribed, in each case, MacAndrews & Forbes was not required to purchase any shares beyond its pro rata subscription.
$100 Million Rights Offering
In December 2006, the Company launched the $100 Million Rights Offering, which allowed each stockholder of record of Revlon Inc.’s Class A and Class B Common Stock as of the close of business on December 11, 2006, the record date set by the Company’s Board of Directors, to purchase additional shares of Class A Common Stock. The subscription price for each share of Class A Common Stock purchased in the $100 Million Rights Offering, including shares purchased in the private placement by MacAndrews & Forbes, was $1.05 per share. Upon completing the $100 Million Rights Offering, the Company promptly transferred the net proceeds to Products Corporation, which it used in February 2007 to redeem $50.0 million aggregate principal amount of its 85/8% Senior Subordinated Notes (the balance of which were thereafter paid off in full on their February 1, 2008 maturity date), at an aggregate redemption price of $50.3 million, including $0.3 million of accrued and unpaid interest up to, but not
Table of Contentsincluding, the redemption date. In January 2007, Products Corporation used the remainder of such proceeds to repay approximately $43.3 million of indebtedness outstanding under Products Corporation’s 2006 $160 million multi-currency revolving credit facility, without any permanent reduction in that commitment, after paying approximately $2.0 million of fees and expenses incurred in connection with such offering, with approximately $5 million of the remaining proceeds being available for general corporate purposes.
In completing the $100 Million Rights Offering, in January 2007, the Company issued an additional 95,238,095 shares of its Class A Common Stock, including 37,847,472 shares subscribed for by public shareholders (other than MacAndrews & Forbes) and 57,390,623 shares issued to MacAndrews & Forbes in a private placement directly from the Company pursuant to a Stock Purchase Agreement between the Company and MacAndrews & Forbes, dated as of December 18, 2006. The shares issued to MacAndrews & Forbes represented the number of shares of the Company’s Class A Common Stock that MacAndrews & Forbes would otherwise have been entitled to purchase pursuant to its basic subscription privilege in the $100 Million Rights Offering (which was approximately 60% of the shares of the Company’s Class A Common Stock offered in the $100 Million Rights Offering). Following the completion of these transactions in January 2007, MacAndre ws & Forbes beneficially owned approximately 58% of the Company’s outstanding Class A Common Stock and approximately 60% of the Company’s total outstanding Common Stock, which shares together represented approximately 74% of the combined voting power of such shares at such date.
MacAndrews & Forbes Senior Subordinated Term Loan
In January 2008, Products Corporation entered into its previously-announced $170 million Senior Subordinated Term Loan Agreement with MacAndrews & Forbes (the ‘‘MacAndrews & Forbes Senior Subordinated Term Loan’’). On February 1, 2008, Products Corporation used the proceeds of the MacAndrews & Forbes Senior Subordinated Term Loan and Related Transactions
Upon consummation of the Exchange Offer in October 2009, MacAndrews & Forbes contributed to repayRevlon, Inc. $48.6 million of the $107.0 million aggregate outstanding principal amount of the Senior Subordinated Term Loan (the “Senior Subordinated Term Loan;” the agreement in fullrespect to such loan is referred to as the $167.4 million remaining“Senior Subordinated Term Loan Agreement”) made from MacAndrews & Forbes to Products Corporation in 2008 in the original aggregate principal balanceamount of Products Corporation’s 85/8%$170 million (such $48.6 million of the Senior Subordinated Notes, which matured on February 1, 2008,Term Loan being 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 Exchange Offer, and to pay certain related fees and expenses, including the paymentRevlon, Inc. issued to MacAndrews & Forbes 9,336,905 shares of Class A Common Stock at a facility feeratio of $2.55 million (or 1.5%one share of the total aggregateClass A Common Stock for each $5.21 of outstanding principal amount of such loan) upon MacAndrews & Forbes’ funding of such loan. In connection with such repayment, Products Corporation also used cash on hand to pay $7.2 million of accrued and unpaid interest due on the 85/8% Senior Subordinated Notes up to, but not including, the February 1, 2008 maturity date. The MacAndrews & Forbes Senior Subordinated Term Loan generally incorporatescontributed to Revlon. Also upon consummation of the subordination provisionsExchange Offer, the terms of the Senior Subordinated Term Loan Agreement were amended to extend the maturity date on the Contributed Loan which remains owing from Products Corporation to Revlon, Inc. from August 2010 to October 8, 2013, to change the indentureannual interest rate on the Contributed Loan from 11% to 12.75%, to extend the maturity date on 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 the Senior Subordinated Term Loan is payable in arrears in cash on January 8, April 8, July 8 and October 8 of each year. 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 dates without premium or penalty,provided that governed the 8prior 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 full.
The 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 (i) Products Corporation’s 2010 Credit Agreements (as defined below), and (ii) Products Corporation’s 953/84% Senior Secured Notes. Prior to its respective maturity dates, the Senior Subordinated Notes priorTerm Loan is also subordinated in right of payment to their repaymentRevlon, Inc.’s Preferred Stock. The Senior Subordinated Term Loan has the right to payment equal in right of payment with any present and certain othe rfuture senior subordinated indebtedness of Products Corporation.
The Senior Subordinated Term Loan Agreement contains various restrictive covenants,
from the indenture governing Products Corporation’s 9½% Senior Notes due April 2011.cross acceleration provisions, customary events of default for loan agreements of such type, and change of control provisions.
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 & Forbes 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 MacAndrews & Forbes Senior Subordinated TermNon-Contributed Loan, Agreement, 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
Contribution and Stockholder Agreement
In approvingconnection with consummating the Exchange Offer, Revlon, Inc. and MacAndrews & Forbes Senior Subordinated Term Loan,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 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; and |
|
| • | Revlon, Inc. will not engage in any transaction with any affiliate, other than Revlon, Inc.’s subsidiaries, or with any legal or beneficial owner of 10% or more of the voting power of Revlon, Inc.’s voting stock, unless, in each case subject to certain exceptions (i) any such transaction or series of related transactions involving aggregate payments or other consideration in excess of $5 million has been approved by all of Revlon, Inc.’s independent directors and (ii) any such transaction or series of related transactions involving aggregate payments or other consideration in excess of $20 million has been determined, in the written opinion of a nationally recognized investment banking firm, to be fair, from a financial point of view, to Revlon, Inc. |
MacAndrews & Forbes agreed that it will not complete certain short-form mergers under Section 253 of the DGCL unless either (i) such transaction has been approved in advance by a majority of the independent directors of Revlon, Inc.’s Board of Directors, as well as satisfying certain other conditions; or (ii) the short-form merger is preceded by a “qualifying tender offer” (as defined in the Contribution and Stockholder Agreement) for the shares of Class A Common Stock held by persons other than MacAndrews & Forbes, subject to certain other conditions. In any such merger, the holders of Preferred Stock would retain their shares of Preferred Stock, or receive shares of preferred stock in the surviving corporation of such merger with terms identical to, or no less favorable than, the terms of the Preferred Stock (with, for the avoidance of doubt, the same terms as though issued on the date of original issuance of the Preferred Stock).
Fidelity Stockholders’ Agreement
In connection with the 2004 Revlon Exchange Transactions, in February 2004 Revlon, Inc. and Fidelity Management & Research Co. (“Fidelity”), a wholly-owned subsidiary of FMR LLC (“FMR”), entered into a stockholders agreement (the “Stockholders’ Agreement”) pursuant to which, among other things, Revlon, Inc. (i) agreed to continue to maintain a majority of independent directors (as defined by NYSE listing standards) on its Board of Directors, as it currently does; (ii) established and maintains its Governance Committee of the Board of Directors determined thatDirectors; and (iii) agreed to certain restrictions with respect to conducting any business or entering into any transactions or series of related transactions with any of its affiliates, any holders of 10% or more of the outstanding voting stock or any affiliates of such holders (in each case, other than its subsidiaries). This Stockholders’ Agreement terminates, by its terms, were more favorablewhen Fidelity ceases to be the beneficial holder of at least 5% of the Company’s outstanding voting stock. Fidelity advised the Company than those that, were available toas of the April 8, 2010 record date for Revlon, Inc.’s 2010 Annual Stockholders’ Meeting, FMR (singly or together with other affiliates of Fidelity) owned 8,233,526 shares of Revlon, Inc.’s outstanding Class A Common Stock and Preferred Stock, in the aggregate, representing approximately 9.2% of Revlon, Inc.’s issued and outstanding shares of voting capital stock at such date. Subsequently, however, Fidelity filed a Schedule 13F with the SEC on February 11, 2011, indicating that it owned 1,013,000 shares of Class A Common Stock as of December 31, 2010. The Company from commercial lenders at the time. While such transaction was a pre-approved transaction under the Company’s Related Party Transaction Policy, the Company’s Boarddoes not know how many shares of Directors reviewedClass A Preferred Stock Fidelity may own and approved the entering intothere is no public record of such transaction in November 2007 and in accordance with such policy, the Board’s Governance Committee, consisting solely of independent directors, reviewed the terms of such transaction.ownership.
Other
Table of ContentsOther
Pursuant to a lease dated April 2, 1993 (the ‘‘Edison Lease’’“Edison Lease”), Revlon Holdings leased to Products Corporation the Edison, N.J.NJ research and development facility for a term of up to 10 years with an annual rent of $1.4 million and certain shared operating expenses payable by Products Corporation which, together with the annual rent, were not to exceed $2.0 million per year. In August 1998, Revlon Holdings sold the Edison facility to an unrelated third party,
48
which assumed substantially all liability for environmental claims and compliance costs relating to the Edison facility, and in connection with the sale Products Corporation terminated the Edison Lease and entered into a new lease with the new owner. Revlon Holdings agreed to indemnify Products Corporation through September 1, 2013 (the term of the new lease) to the extent that rent under the new lease exceeds the rent that would have been payable
un derunder the terminated Edison Lease had it not been terminated.
Effective October 2010, Products Corporation entered into a renewal of the lease with the owner through September 2025. The Revlon Holdings indemnification will terminate on September 1, 2013. The net amount reimbursed by Revlon Holdings to Products Corporation with respect to the Edison facility for
20072010 was approximately $0.3 million.
Certain of Products Corporation’s debt obligations, including its
$840 millionamended and restated bank term loan agreement and its
$160 million multi-currency revolving credit agreement (the
‘‘2006“2010 Credit
Agreements’’Agreements”)
, and its 93/4% Senior Secured Notes, have been, and may in the future be, supported by, among other things, guaranties from the Company and, subject to certain limited exceptions, all of the domestic subsidiaries of Products Corporation. The obligations under such guaranties are and were secured by, among other things, the capital stock of Products Corporation and, subject to certain limited exceptions, the capital stock of all of Products Corporation’s domestic subsidiaries and 66% of the capital stock of Products Corporation’s and its domestic subsidiaries’ first-tier foreign subsidiaries.
During 2007, Products Corporation paid approximately $0.7 million to a nationally-recognized security services company, in which MacAndrews & Forbes has a controlling interest, for security officer services. Products Corporation’s decision to engage such firm was based upon its expertise in the field of security services, and the rates were competitive with industry rates for similarly situated security firms.
Fidelity Management Trust Company, a wholly-owned subsidiary of FMR LLC (which, as of the Record Date, beneficially owned more than 5% of the Company’s Class A Common Stock (see —‘‘Ownership of Common Stock’’)), acts as trustee of the 401(k) Plan. During 2007, the Company paid Fidelity Management Trust Company approximately $125,000 to administer the $100 Million Rights Offering with respect to 401(k) Plan participants and $5,000 to administer the Company’s 401(k) Plan. The fees for such services were based on standard rates charged by Fidelity Management Trust Company for similar services and are not material to the Company or FMR LLC.
Review and Approval of Transactions with Related PersonsUnder the Company’s long-standing practices and standard procedures and under Products Corporation’s indenture, credit agreements and other debt instruments, related party transactions must be upon terms no less favorable to the Company than would be obtainable at the time in a comparable transaction in arm’s length dealings with unrelated third parties and the terms of any such transaction must be set forth in writing. In addition, with respect to any transactions or series of transactions involving payments or other consideration in excess of $5.0 million, pursuant to Products Corporation’s indenture, such transactions must be approved by all of Products Corporation’s independent directors. For any transaction or series of transactions involving payments or other consideration in excess of $20.0 million, pursuant to Products Corporation’s indenture, such transaction or series of transactions must be approved by all of Products Corporation’s independent directors and determined, in the written opinion of a nationally recognized, investment banking firm, to be fair, from a financial point of view, to the Company.
Certain limited transactions, such as transactions previously approved by the Board of Directors and disclosed in the Company’s Form 10-Ks and proxy statements, certain routine transactions between the Company and its subsidiaries, compensation arrangements between the Company and its officers and directors (provided they hold less than 10% of the Company’s common stock), and inventory transactions entered into the ordinary course of business, are excluded from these requirements.
The Company also has a detailed written Conflicts of Interest Policy which specifically provides, among other things, that each of the Company’s directors, officers and employees has a responsibility to
Table of Contentsavoid, and to cause their immediate family members to avoid, any interest, activity or relationship that may interfere or conflict with the performance of his or her duties to the Company in a loyal and effective manner to the best of his or her ability and in the Company’s best interest. Under the Conflicts of Interest Policy, it is recognized that conflicts of interest do not include any interest, relationship or activity in which an interested person has a direct or indirect involvement or interest if the terms of such interest, relationship or activity are at least as favorable to the Company as terms that would be available at the time for a comparable interest, relationship or activity in arm’s length dealings with unrelated third parties.
In March 2007, the Company’s Board of Directors formalized these practices and procedures by adopting the
The Revlon, Inc. Related Party Transaction Policy
which(the “Policy”) serves as a set of guidelines for the approval of interested transactions with related parties. Under
thisthe Policy, related party transactions are subject to the review, approval
and/or ratification of the Governance Committee, which is comprised solely of independent directors. The Policy also pre-approves a series of related party transactions including, among others: (i) certain employment relationships and related compensatory arrangements with executive officers, which are either approved by the Compensation Committee or disclosed in the Company’s annual proxy statement, if so required; (ii) transactions related to the ownership of the Company’s common stock where all stockholders are receiving the same or substantially the same pro rata benefit; (iii) competitively-bid
transacti ons;transactions; (iv) transactions permitted under Products Corporation’s
indenture,indentures, credit agreements and other debt
instruments;instruments (copies of each of which are on file with the SEC); and (v) transactions described in the Company’s proxy statements or other SEC reports filed with or furnished to the SEC on or before the adoption of the Policy in March 2007.
The Policy also delegates to the Chair of the Governance Committee the authority to approve certain related party
transactions and all related party transactions approved by the Chair, as well as all related party transactions deemed pre-approved under the Policy, are to be periodically reviewed by the full Governance Committee.transactions.
CODE OF BUSINESS CONDUCT AND SENIOR FINANCIAL OFFICER CODE OF ETHICS The Company has a written Code of Business Conduct (the
‘‘Code“Code of Business
Conduct’’Conduct”) that includes a code of ethics (the
‘‘Senior“Senior Financial Officer Code of
Ethics’’Ethics”) that applies to the Company’s Chief Executive Officer and senior financial officers,
(includingincluding the Company’s Chief Financial Officer, Controller and persons performing similar
functions)functions (collectively, the
‘‘Senior“Senior Financial
Officers’’Officers”).
In addition to printablePrintable copies of the Code of Business Conduct and the Senior Financial Officer Code of Ethics
beingare available
onatwww.revloninc.com under the
Company’s website, www.revloninc.com, the Company will provide a copy of the Code of Business Conduct and Senior Financial Officer Code of Ethics, without charge, upon written request to the Secretary of the Comp any at Revlon, Inc., 237 Park Avenue, New York, New York, 10017, attention: Robert K. Kretzman.heading Investor Relations (Corporate Governance). If the Company changes the Senior Financial Officer Code of Ethics in any material respect or waives any provision of the Code of Business Conduct for its executive officers or Directors, including waivers of the Senior Financial Officer Code of Ethics for any of its Senior Financial Officers, the Company expects to provide the public with notice of any such change or waiver by publishing an appropriate description of such event on its corporate website,www.revloninc.com, or by other appropriate means as required or permitted under applicable rules of the SEC. The Company does not currently expect to make any such waivers.SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The Company’s executive officers, directors and 10% stockholders may be required under the Exchange Act to file reports of ownership and changes in ownership with the NYSE and the SEC. The Company makes such SEC filings available on its investor relationscorporate website,www.revloninc.com, under the heading ‘‘SEC Filings.’’Investor Relations (SEC Filings). Copies of these reports also must be furnished to the Company.Company by such filers.
49
Based solely upon a review of copies of such reports furnished to the Company through the date hereof and written representations
that no other reports were required regarding theas to transactions consummated by the Company’s executive officers, directors and 10%
holders,stockholders during the year, if any, the Company believes that all
Section 16 filing requirements applicable to its executive officers, directors and 10%
holdersstockholders were complied with during
2007.
2010.
RATIFICATION OF SELECTION OF KPMG LLP The Audit Committee of the Board of Directors has selected, subject to ratification by the Company’s stockholders, KPMG LLP to audit the consolidated financial statements of the Company for the fiscal year ending December 31,
2008.2011.
The Sarbanes-Oxley Act of 2002 and Section 10A of the Exchange Act require that the Audit Committee of the Board of Directors be directly responsible for the appointment, compensation, retention and oversight of the audit work of the Company’s independent registered public accounting firm. Ratification by the stockholders of the selection of KPMG LLP is not required by law, the Company’s By-laws or otherwise. However, the Board of Directors is submitting the selection of KPMG LLP for stockholder ratification to ascertain stockholders’ views on the matter.
KPMG LLP has audited the consolidated financial statements of the Company and its predecessors for more than the past five
consecutive years. Representatives of KPMG LLP are expected to be present at the
20082011 Annual Meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate
questions.questions from stockholders.
The Audit Committee reviews audit and non-audit services performed by KPMG LLP, as well as the fees charged by KPMG LLP for such services. In its review of non-audit service fees, the Audit Committee received and discussed with KPMG LLP their annual written report on KPMG LLP’s independence from the Company and its management, as required by
Independence Standardsapplicable requirements of the Public Company Accounting Oversight Board
Standard No. 1 (Independence Discussionsregarding the independent registered public accounting firm’s communications with
the Audit
Committees),Committee concerning independence, and the Audit Committee has discussed with KPMG LLP that firm’s independence. 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. Additional information concerning the Audit Committee and its activities with KPMG LLP can be found in the following sections of this Proxy Statement:
‘‘Board“Board of Directors and its
Committees’’Committees” and
‘‘Audit“Audit Committee Report.
’’ Infor mation” Information regarding the aggregate fees billed by KPMG LLP for services rendered to the Company for the fiscal years ended December 31,
20072010 and December 31,
20062009 can be found below under
‘‘Audit“Audit Fees.
’’”
VOTE REQUIRED AND BOARD OF DIRECTORS’ RECOMMENDATION
The ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011 requires the affirmative vote of the holders of a majority of the total number of votes of Voting Capital Stock present in person or represented by proxy and entitled to vote at the 2011 Annual Meeting, voting as a single class. With respect to Proposal No. 2, all proxies properly
executed and received bysubmitted to the Company, unless such proxies are revoked prior to their being voted on, will be voted in accordance with the instructions given by the person
executingsubmitting such proxy or, in the absence of such instructions, will be voted
FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008.VOTE REQUIRED AND BOARD OF DIRECTORS’ RECOMMENDATION
The ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008 will require the affirmative vote of the holders of a majority of the total number of votes of Common Stock present in person or represented by proxy and entitled to vote at the 2008 Annual Meeting, voting as a single class.2011. In determining whether the proposalProposal No. 2 has received the requisite number of affirmative votes, abstentions will be counted and will have the same effect as a vote against Proposal No. 2. Broker non-votes are inapplicableBrokers will have discretionary authority to vote on Proposal No. 4 (ratification of the Company’s selection of its independent registered public accounting firm for 2011) absent instructions from the beneficial owner of the shares, as this ‘‘routine’’is a “routine” proposal. MacAndrews & Forbes has informed the Company that it will voteFORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008.2011. Accordingly, t hethe affirmative vote of MacAndrews & Forbes is sufficient, without the concurring vote of any other stockholder of the Company, to approve and adopt Proposal No. 2.
The Board of Directors unanimously recommends that stockholders vote FOR the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2008.2011.
50
The Board of Directors of Revlon, Inc. maintains its Audit Committee in accordance with applicable SEC rules and the NYSE’s listing standards. In accordance with its charter, a printable and current copy of which is available at
www.revloninc.com under the heading Investor Relations (Corporate Governance), the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the audit work of Revlon, Inc.’s independent auditors for the purpose of preparing and issuing its audit report or performing other audit, review or attest services for Revlon, Inc. The independent auditors, KPMG LLP, report directly to the Audit Committee and the Audit Committee is directly responsible for, among other things, reviewing in advance, and granting any appropriate pre-approvals of, (a) all auditing services to be provided by the independent auditor and (b) a llall non-audit services to be provided by the independent auditor (as permitted by the Exchange Act), and in connection therewith to approve all fees and other terms of engagement, as required by the applicable rules of the Exchange Act and subject to the exemptions provided for in such rules. The Audit Committee has an Audit Committee Pre-Approval Policy for pre-approving all permissible audit and non-audit services performed by KPMG LLP.In The Audit Committee also has the authority to approve services to be provided by KPMG LLP at its meetings and by unanimous written consents.
For each year since 2005, the Audit Committee
has approved
an Audit Committee Pre-Approval Policy. During 2010, an electronic printable copy of the 2010 Audit Committee Pre-Approval Policy was available atwww.revloninc.com under the heading Investor Relations (Corporate Governance). A copy of the Audit Committee Pre-Approval Policy
in effect for
2006, in 2006 the Audit Committee approved the Audit Committee Pre-Approval Policy for 2007 and in 2007 the Audit Committee approved the Audit Committee Pre-Approval Policy for 2008, a copy of which2011 is attached as
Annex B hereto and aan electronic printable copy of whichsuch policy is currently available atwww.revloninc.com under the heading Investor Relations (Corporate Governance). The aggregate fees billed for professional services by KPMG LLP in
20072010 and
20062009 for these various services for Revlon, Inc. and Products Corporation in the aggregate were (in millions):
| | | | | | | | | |
Types of Fees | | 2010 | | | 2009 | |
| |
| Audit Fees | | | 3.6 | | | | 3.7 | |
| Audit-Related Fees | | | 0.2 | | | | 0.7 | |
| Tax Fees | | | 0.2 | | | | 0.2 | |
| All Other Fees | | | — | | | | — | |
| | | | | | | | | |
TOTAL FEES | | | 4.0 | | | | 4.6 | |
| | | | | | | | | |
| | | | | | | | | | | | |
| Types of Fees | | | 2007 | | | 2006 |
| Audit Fees | | | | $ | 4.8 | | | | | $ | 4.7 | |
| Audit-Related Fees | | | | $ | 0.2 | | | | | $ | 0.2 | |
| Tax Fees | | | | $ | 0.5 | | | | | $ | 0.4 | |
| All Other Fees | | | | | — | | | | | | — | |
| TOTAL FEES | | | | $ | 5.5 | | | | | $ | 5.3 | |
In the above table, in accordance with the SEC definitions and rules, (A) ‘‘audit fees’’“audit fees” are fees the Company paid KPMG LLP for professional services rendered for the audits of (i) Revlon, Inc.’s and Products Corporation’s annual financial statements; (ii) the effectiveness of Revlon, Inc.’s internal control over financial reporting; and (iii) the review of financial statements included in Revlon, Inc.’s and Products Corporation’s Quarterly Reports onForm 10-Q, and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements; (B) ‘‘audit-related fees’’“audit-related fees” are fees billed by KPMG LLP for assurance and related services that are traditionally performed by the auditor, including services performed by KPMG LLP related to employee benefit plan audits and certain equity issuances,transactions, including the $110 Million Rights OfferingExchange Offer consummated by Revlon, Inc. in March 2006October 2009 and the $100 Million Rights Offering consummated by Revlon, Inc. in January 2007,Products Corporation’s November 2009 refinancing of its 91/2% Senior Notes due April 2011 with its new 93/4% Senior Secured Notes due November 2015 (the “93/4% Senior Secured Notes”), and attestattestation services not required by statute or regulation; (C) ‘‘tax fees’’“tax fees” are fees for permissible tax compliance, tax advice and tax planning; and (D) ‘‘all“all other fees’’fees” are fees billed by KPMG LLP to the Company for any permissible services not included in the first three categories.
All of the services performed by KPMG LLP for the Company during 20072010 and 20062009 were either expressly pre-approved by the Audit Committee or were pre-approved in accordance with the Audit Committee’sCommittee Pre-Approval Policy, and the Audit Committee was provided with regular updates as to the nature of such services and fees paid for such services.
51
PROPOSAL NO. 3
NON-BINDING, ADVISORY VOTE OF STOCKHOLDERS ON THE COMPANY’S
EXECUTIVE COMPENSATION
Pursuant to the recently enacted“say-on-pay” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in July 2010, and the corresponding implementing SEC rules (the “Dodd-Frank Act” or the “Act”), the Company is soliciting, under this Proposal No. 3, its stockholders’ advisory views on 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 narrative discussion set forth in this Proxy Statement. Pursuant to applicable law, the stockholder vote on the Company’s executive compensation is advisory in nature and non-binding.
Under the Act, the stockholder vote on this matter is advisory and non-binding, and therefore the Company is not required to obtain any specific percentage of Contentsstockholder approval.
As more fully set forth in the “Compensation Discussion and Analysis” section of this Proxy Statement, above, the Company believes that its executive compensation structure is designed to pay for performance, to align the interests of management and employees with corporate performance and shareholder interests and to attract and retain the personnel needed to enable the Company to execute its business strategy in a competitive environment and, as such, that it is reasonably designed and appropriate for its purposes. MacAndrews & Forbes has informed the Company that it will voteFORthe 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 narrative discussion set forth the in this Proxy Statement. Accordingly, the affirmative vote of MacAndrews & Forbes is sufficient, without the concurring vote of any other stockholder of the Company, to approve and adopt Proposal No. 3 on a non-binding and advisory basis.
The Board of Directors unanimously recommends that stockholders adopt the following resolution by submitting their non-binding, advisory vote FOR approval of the Company’s executive compensation:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 ofRegulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in the Company’s proxy statement in support of the 2011 Annual Meeting, is hereby approved.
PROPOSAL NO. 4
NON-BINDING, ADVISORY VOTE OF STOCKHOLDERS ON FREQUENCY OF FUTURE
NON-BINDING, ADVISORY VOTES ON EXECUTIVE COMPENSATION
Pursuant to the Dodd-Frank Act, the Company is soliciting, under this Proposal No. 4, its stockholders’ advisory views on how often the Company will solicit future stockholder non-binding advisory votes on the Company’s executive compensation (the subject of Proposal No. 3, above). Under the Act, stockholders’ advisory votes on executive compensation are to be solicited every one, two or three years, subject to stockholders’ non-binding, advisory views on the frequency of the“say-on-pay” vote, which, under the Act, are to be solicited at least every six years. Pursuant to applicable law, the stockholder vote on the future frequency of stockholders’“say-on-pay” is advisory in nature and non-binding.
VOTE REQUIRED AND BOARD OF DIRECTORS’ RECOMMENDATION
Under the Act, the stockholder vote on this matter is advisory and non-binding, and therefore the Company is not required to obtain any specific percentage of stockholder approval. Your proxy card will afford you the opportunity to select conducting a“say-on-pay” vote every one year, every two years or every three years (or to abstain), as provided in the Act. As permitted by the Act, the Company proposes to solicit its stockholders’ views on
GENERAL RULES APPLICABLE TO
52
“say-on-pay” every three years, as it believes that doing so more frequently would be burdensome, inefficient and not of meaningful value to stockholders and due to the fact that it is important to view the Company’s performance (and compensation for performance) over longer periods of time. MacAndrews & Forbes has informed the Company that it will vote for conducting future“say-on-pay” votes every three (3) years. Accordingly, the affirmative vote of MacAndrews & Forbes is sufficient, without the concurring vote of any other stockholder of the Company, to recommend conducting future“say-on-pay” votes on a triennial basis.
The Board of Directors unanimously recommends that stockholders submit their non-binding, advisory vote for conducting future advisory votes on executive compensation every THREE (3) YEARS.
SUBMISSION OF STOCKHOLDER PROPOSALSPursuant
Stockholder proposals intended for inclusion in next year’s proxy statement pursuant to
Rule 14a-8 under the Exchange Act
holders of either: (1) at least $2,000 in market value of the Company’s Common Stock, or (2) 1% of the number of shares of Common Stock entitled tomust be
voted on the proposal at the meeting, who have held such shares of Common Stock for at least one year, and who continue to hold those shares of Common Stock through the date of the Annual Meeting of Stockholders to be held in 2009, may submit a proposal for inclusion in the Company’s proxy material for use in connection with the 2009 Annual Stockholders’ Meeting. In order to be eligible for consideration for such inclusion, the holder must transmit the proposal, along with: (1) his or her name; (2) address; (3) the number of shares of Common Stock that he or she holds of record or beneficially; (4) the dates on which the shares of Common Stock were acquired; (5) documentary support for claims of beneficial ownership of Common Stock that comply w ith Rule 14a-8; and (6) a written statement that the holder intends to continue to hold the Common Stock through the date of the 2009 Annual Stockholders’ Meeting, in writing,received by
certified mail – return receipt requested, to the Company’s Secretary, at Revlon, Inc., 237 Park Avenue, 14th Floor, New York,
New YorkNY 10017, attention:
Robert K. Kretzman. StockholderMichael T. Sheehan, no later than December 21, 2011 (provided, however, if the date of the annual stockholders’ meeting has been changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before the Company begins to print and send its proxy materials). The Company’s By-laws require that proposals
intendedof stockholders made outside ofRule 14a-8 under the Exchange Act (i.e., proposals that are not to be
presentedincluded in the
Company’s proxy
material for use in connectionstatement, but to be otherwise considered at the annual meeting) must comply with the
2009 Annual Stockholders’ Meetingrequirements of Article II, Section 3 of the Company’s By-laws and must be received by the Company’s Secretary by no
earlier than March 4, 2012 and by no later than
December 26, 2008.With respect to matters not included in the proxy statement pursuant to Rule 14a-8 under the Exchange Act, the Company’s By-laws require advance notice. Specifically, pursuant to Article II, SectionApril 3, of the Company’s By-laws, in order for business to be properly brought before an annual meeting (other than business specified in the proxy material), notice of such business must be received by the Company not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting, and must include, 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 shares of the Company which are owned beneficially or of record by such stockholder; provided,2012 (provided, however, that inif the event that the2012 annual stockholders’ meeting is called for a date that is not within thirty (30)30 days before or after suchthe1-year anniversary of the 2011 Annual Meeting date, notice by the stockholder,stockholder’s notice in order to be timely must be received by the Company’s Secretary not later than the close of business on the tenth10th day following the earlier of the day on which such notice of the date of the 2012 annual stockholders’ meeting wasis mailed or such public disclosure of the date of the 2012 annual stockholders’ meeting was made, whichever occurs first. Asis made).
VOTING THROUGH THE INTERNET OR BY TELEPHONE
Our stockholders voting through the Internet or telephone should understand that there may be costs associated with such voting methods, such as usage charges from Internet access providers or telephone companies, which must be borne by the stockholder. To vote by telephone if you are a
result, because the 2008 Annual Meeting is within 30 days before or after the anniversary datestockholder of recordof our Voting Capital Stock as of the
2007 Annual Stockholders’ Meeting, any notice of a stockholder nomination for candidates forRecord Date, call toll free1-800-690-6903 and follow the
Board of Directors or any other stockholder proposal (other than stockholder proposals included in the proxy statement pursuant to Rule 14a-8 under the Exchange Act, of which there are none for the 2008 annual meeting) must have been receivedinstructions provided by the
Company between March 7, 2008 and April 6, 2008. No such proposals were received. In addition,recorded message. To vote by telephone if
the 2009 Annual Stockholders’ Meeting is within 30 days before or after the anniversary dateyou are abeneficial ownerof our Voting Capital Stock as of the
2008 Annual Mee ting, then notice ofRecord Date (i.e., your shares are held in a
stockholder nomination for candidates forbrokerage account or by another nominee), call the
Board of Directorstoll free number listed on your voting instruction form or
any other stockholder proposal must be receivedfollow the instructions provided by
your broker. To vote through the
Company between March 7, 2009 and April 6, 2009.Rule 14a-4(c)(1) promulgated under the Exchange Act (‘‘Rule 14a-4(c)(1)’’) governs the Company’s use of its discretionary proxy voting authority with respect to a stockholder proposal that is not addressed in the Company’s proxy statement. The rule provides that if a proponent of a proposal fails to notify a company at least 45 days priorInternet, log on to the first anniversary date ofInternet and go towww.proxyvote.com and follow the date of mailing ofsteps on the prior year’ssecure website. In either case, have your Control Number(s) listed on your Internet Notice or proxy statement (or a date specified in an advance notice provision in the Company’s By-laws), then the company will be permitted to use its discretionary voting authority when the proposal is raised at the meeting, without any discussion of the matter in the proxy statement. Since the Company has an advance notice provision in its By-laws, as discussed in the preceding paragraph, the 45-day period under Rule 14a-4(c)(1) does not apply. With respect to the 2008 Annual Meeting, the Company has not been pr ovided with notice of a stockholder proposal prior to April 6, 2008, and accordingly, the Company will be permitted to use its discretionary voting authority as outlined above. With respect to the Company’s 2009 Annual Stockholders’ Meeting, assuming such meeting occurs within 30 days before or after the anniversary date of the 2008 Annual Meeting, if the Company is not provided notice of a stockholder proposal (other than stockholder proposals included in the proxy statement pursuant to Rule 14a-8 under the Exchange Act) between March 7, 2009 and April 6, 2009, the Company will be permitted to use its discretionary voting authority as outlined above.
Additionally, holders of shares of Common Stock desiring to have proposals submittedavailable for consideration at future meetings of the Company’s stockholders should consult the applicable rules and regulations of the SEC, including Rule 14a-8 under the Exchange Act, as such rule may be amended from time to time, with respect to such proposals, including the permissible number and length of proposals, the circumstances in which the Company is permitted to exclude proposals and other matters governed by such rules and regulations.
voting.
Table of ContentsADDITIONAL INFORMATION
The Company will provide shareholders with a copy of its Annual Report onForm 10-K for the fiscal year ended December 31, 20072010 filed with the SEC on March 5, 2008,February 17, 2011, including financial statements and financial statement schedules, and any Quarterly Reports on Form 10-Q filed thereafter, as well as copies of the Corporate Governance Guidelines, Board Guidelines for Assessing Director Independence and the charters of the Audit Committee, Compensation Committee and Governance Committee, without charge, upon written request to the Company’s Secretary, at Revlon, Inc., 237 Park Avenue, 14th Floor, New York, New York,NY 10017, attention: Robert K. Kretzman.Michael T. Sheehan (or via email tomichael.sheehan@revlon.com). In order to ensure timely delivery of such documents prior to the 20082011 Annual Meeting, any request should be sent to the Company promptly. For your convenience, please note that current electronic printable copies of the Company’s Annual Report onForm 10-K and Quarterly Reports onForm 10-Q, as well as a copy of our Internet Notice and this Annual Proxy Statement, are available on the Company’s website atwww.revloninc.com, under the heading ‘‘SEC Filings,’’ as well as the SEC’s website atwww.sec.gov through the Filings and Forms (EDGAR) pages. In addition, electronic printable copies of the Corporate Governance Guidelines, Board Guidelines for Assessing Director Independence, Code of Business Conduct, Audit Committee Pre-Approval Policy and the current charters of the Audit Committee, Compensation
53
Committee and Gov ernanceGovernance Committee are available on the Company’s website atwww.revloninc.com, under the heading ‘‘Corporate Governance.’’ Any person wishing to receive an electronic copy of Revlon’s 2007 2010Form 10-K, without charge, may send an email making such a request and including a return email address tomichael.sheehan@revlon.com (note that the Company’s ability to respond may be subject to file size limitations imposed by Internet service providers ande-mail services).
robert.kretzman@revlon.com.OTHER BUSINESS
Management does not intend to present any other items of business and is not aware of any matters other than those set forth in this Proxy Statement that will be presented for action at the
20082011 Annual Meeting. However, if any other matters properly come before the
20082011 Annual Meeting, the persons
named indesignated by the
enclosed proxy intend toCompany as proxies may vote the shares of
CommonVoting Capital Stock that they represent in
accordance with their
best judgment.New York, New York
April 25, 2008
Table of ContentsAnnex A
REVLON, INC.
BOARD GUIDELINES FOR ASSESSING DIRECTOR INDEPENDENCE
Any member of the Board of Directors
Michael T. Sheehan
Senior Vice President, Deputy General Counsel and
Secretary
New York, New York
April 19, 2011
54
Annex A
2010 Comparison Group
Towers Watson U.S. General Industry Executive Database — Total Sample*
3M
7-Eleven
A&P
A.H. Belo
A.O. Smith (1)
A.T. Cross
Abbott Laboratories
Accenture
ACH Food
Acuity Brands (1)
Aeropostale (1)
Agilent Technologies
Agrium
Air Liquide
Air Products and Chemicals
Alcatel-Lucent
Alcoa
Alcon Laboratories
Alexander & Baldwin (1)
Allergan
Alliant Techsystems
Amazon.com
American Crystal Sugar (1)
Ameron
AMETEK (1)
Amgen
AOL (1)
APL
Appleton Papers (1)
Applied Materials
ARAMARK
Archer Daniels Midland
Arctic Cat
Armstrong World Industries (1)
Arrow Electronics
AstraZeneca
AT&T
Automatic Data Processing
Avanade (1)
Avis Budget Group
Ball
Barnes Group (1)
Barrick Gold of North America
Baxter International
Bayer CropScience
Beckman Coulter (1)
Belco
Best Buy
Big Lots
Biogen Idec
BJ’s Wholesale Club
Blockbuster
Blyth (1)
Boehringer Ingelheim
Boston Scientific
Bovis Lend Lease
Brady (1)
Bristol-Myers Squibb
Broadcom
Burlington Northern Santa Fe
Bush Brothers
C. H. Robinson Worldwide
Cadbury
Calgon Carbon
Callaway Golf (1)
Cameron International
Cardinal Health
CareFusion
Cargill
Carlson Companies
Carnival
Carpenter Technology (1)
Catalent Pharma Solutions (1)
Celgene (1)
Cemex
CenturyLink
Cephalon (1)
CF Industries (1)
CH2M Hill
Chemtura (1)
Chiquita Brands
Choice Hotels International
CHS
Cimarex Energy (1)
Cintas
Cisco Systems
Cliffs Natural Resources (1)
COACH (1)
Coca-Cola
Colgate-Palmolive
Columbia Sportswear (1)
ConAgra Foods
Continental Automotive Systems
ConvaTec (1)
Convergys (1)
Cooper Industries
Corning
Covance (1)
Covidien
Cox Enterprises
Crown Castle (1)
CSR
CSX
CVS Caremark
Cytec (1)
Daiichi Sankyo
Dana
Dannon
Darden Restaurants
Day & Zimmermann (1)
Dean Foods
Del Monte Foods
Dell
Delta Air Lines
Deluxe (1)
Denny’s
Dentsply (1)
Dex One (1)
Diageo North America
Dionex
Domtar
Donaldson (1)
Dow Chermical
Dow Corning
DuPont
E.W. Scripps
Eastman Chemical
Eaton
Ecolab
Eisai
Eli Lilly
EMC
EMCOR Group
EMI Music (1)
Equifax (1)
Equity Office Properties (1)
Essilor of America
Evergreen Packagaing
Express Scripts
Exterran (1)
Fair Isaac
Fairchild Controls
FANUC Robotics America (1)
Federal-Mogul
Fidelity National Information
Services
First Solar (1)
Fiserv
Flowserve
Fluor
Ford
Forest Laboratories
Fortune Brands
Freeport-McMoRan Copper& Gold
GAF Materials (1)
Gap
GATX (1)
Gavilon
General Atomics (1)
General Dynamics
General Mills
General Motors
Gezyme
Getty Images
Gilead Sciences
GlaxoSmithKline
Goodrich
Goodyear Tire & Rubber
Gorton’s
Graco
Greif (1)
Gruma
Grupo Ferrovial
GTECH (1)
GXS
H.J. Heinz
H.B. Fuller (1)
Hanesbrands
Hannaford
Harland Clarke (1)
Harley-Davidson
Hasbro
HBO
Henkel of America
Herman Miller (1)
Hershey
Hertz
Hewlett Packard
Hilton Worldwide
Hitachi Data Systems
HNI (1)
HNTB (1)
Hoffmann-LaRoche
Honeywell
Hormel Foods
Hospira
Houghton Mifflin Harcourt Publishing (1)
Hunt Consolidated (1)
Husky Injection Molding Systems (1)
Hyatt Hotels (1)
IBM
IDEXX Laboratiories (1)
IKON Office Solutions
IMS Health (1)
Infragistics
Intel
Intercontinental Hotels (1)
International Flavors & Fragrances (1)
International Paper
Invensys Controls (1)
ION Geophysical
Iron Mountain (1)
Irvin Company
ITT
J. Crew (1)
J.M. Sucker
J.R. Simplot
Jabil Circuit
Jack in the Box (1)
Jacobs Engineering
JM Family
Johnson & Johnson
Johnson Controls
Kaman Industrial Technologies (1)
KBR
A-1
Kellogg
Kimberly-Clark
King Pharmaceuticals (1)
Kinross Gold (1)
KLA-Tencor (1)
Knowles Electronics
Koch Industries
Kohler
Kohl’s
L.L. Bean (1)
L-3 Communications
Lafarge North America
Lance (1)
Land O’Lakes
Lear
Leggett & Platt (1)
Level 3 Communications
Levi Strauss
Life Techonolgies (1)
Lockeheed Martin
Lorillard Tobacco
MAG Industrial Automation Systems (1)
Magellan Midstream Partners (1)
Marriott International
Martin Marietta Materials (1)
Mary Kay (1)
Masco
Mattel
Matthews International
McClatchy (1)
McDermott
McDonald’s
McGraw-Hill
McKesson
MeadWestvaco
Medicines Company
MedImmue
Medtronic
Merck & Co.
Microsoft
Milacron
Millipore (1)
Mine Safety Appliances (1)
Mizuno USA (1)
Molson Coors Brewing (1)
Molycorp Minerals
Monsanto
Mosaic
Motorola
Murphy Oil
MWH Global (1)
Navistar International
Nestle USA
NetJets
New York Times (1)
Newmont Mining
NewPage (1)
NIKE
Nissan North America
Nokia
Noranda Aluminun
Norfolk Southern
Northrop Grumman
Novartis
Novartis Consumer Health
Novell (1)
Novo Nordisk Pharmaceuticals
Nycomed US
Nypro (1)
Occidential Petroleumn
Office Depot
Orange Business Services
Oshkosh
Owens-Corning
Owens-Illinois
Parker Hannifin
Parsons (1)
PepsiCo
PerkinElmer (1)
Pervasive Software
PetSmart
Pfizer
Pitney Bowes
Pittsburgh Corning
Plexus (1)
Polaris Industries (1)
Polymer Group (1)
PolyOne (1)
Potash
PPG Industries
Praxair
Pulte Homes
Purdue Pharma (1)
QUALCOMM
Quest Diagnostics
Quintiles (1)
R.R. Donnelley
Ralcorp Holdings
Redcats USA
Reddy Ice
Revlon Inc. (the ‘‘Company’’) satisfying the following guidelines shall be ‘‘independent’’:(1)
RF Micro Devices (1)
Rio Tinto
Roche Diagnostics
Rockwell Automation
Rockwell Collins
Ryder System
S.C. Johnson
Safety-Kleen Systems (1)
SAIC
Sanofi-Aventis
Sanofi-Pasteur
SAS Institution (1)
SCA Americas
Schlumberger
Schreiber Foods
Schwan’s (1)
Seagate Technology
Sealed Air
Sensata Technologies (1)
Sensient Technologies (1)
Sherwin-Williams
Shire Pharmaceuticals (1)
Siemens
Simpson Manaufacturing
Sirius XM Radio (1)
Skype (1)
Smith & Nephew
Smurfit-Stone Container
Snap-On (1)
Sodexo
Sonoco Products
Sony Corporation
Spirit AeroSystems
Sprint Nextel
SPX
SRA International (1)
Stantec (1)
Starbucks
Star Tek
Starwood Hotels & Resorts
Steelcase (1)
Stryker
Sunoco
Swagelok (1)
Sybron Dental Specialities
Synacor
Takeda Pharmaceutical Company
Limited
Target
Taubaman Centers
Tellabs (1)
Temple-Inland
Teradata (1)
Terex
Textron
Thomas & Betts (1)
Time Warner
Time Waner Cable
Timken (1)
T-Mobile USA
Toro (1)
Total System Services (1)
Trinity Industries (1)
TRW Automotive
TUI
Tupperware (1)
Tyco Electronics
U.S. Foodservice
Unifi
Unilever United States
Union Pacific
Unisys
United Airlines
United Parcel Service
United Rentals (1)
United States Cellular
United States Steel
United Techonologies
USG (1)
Valero Energy
Verde Realty
Verizon
Vertex Pharmaceuticals
VF
Viacom
Village Farms
Vision Service Plan (1)
Vistar
Visteon
Volvo Group North America
Vulcan Materials (1)
VWR International
Walt Disney
Waste Management
Watson Pharmaceuticals (1)
Watts Water Technologies (1)
Wendy’s/Arby’s Group
Western Digital
Weyerhaeuser
Whole Foods Market
Wm. Wrigley Jr.
Wyndham Worldwide
Yahoo!
YRC Worldwide
Yum! Brands
Zale (1)
| | |
| * | 1. | The Towers Watson “Total Sample” executive database of companies reflected in thisAnnex A was used to benchmark Named Executive Officers’ 2010 total compensation. In cases whereNo Material Relationship withsub-categories of this database provided more comparable roles and responsibilities against which to benchmark, those more comparable sectors were used. Mr. Kennedy’s total compensation was benchmarked against the Company. Such Director does not have any material relationship withTotal Sample database; Messrs. Ennis’, Elshaw’s, Kretzman’s and Berns’ compensation was benchmarked against the Company (either directly or as a partner, shareholder or officerTowers Watson executive database sector of an organization that has a relationship with the Company), as determined by the Board of Directors after taking into account all relevant facts and circumstances. For purposes of these guidelines, any transaction, relationship or arrangement that does not exceed the guidelines set forth in Sections (2) to (7) are immaterial and are not required to be consider ed by the Board; |
| | |
|
| (1) | 2. | Employment with the Company. Such director is not, andThese companies are within the last three years has not been, employed by the Company, nor are any of his or her Immediate Family members employed, or within the last three years have been employed, as an executive officer of, the Company;sub-category |
| | |
| 3. | Direct Compensation from the Company of Less than $100,000. The Director has not received, and none of his or her Immediate Family members have received, more than $100,000 in direct compensation from the Company during any 12-month period within the last three years. In calculating such compensation, the following will be excluded — (i) Director and committee fees and pension or other forms of deferred compensation for prior service (provided such deferred compensation is not contingent in any way on continued service), (i i) compensation paid to a Director for service as an interim Chairman, CEO or other executive officer, (iii) compensation paid to an Immediate Family member for service as an employee of the Company (other than as an executive officer), and (iv) dividend or interest income and bona fide and documented reimbursed business expenses; |
| | |
| 4. | No Material Business Dealings. The Director is not a current employee of, nor are any of the Director’s Immediate Family members a current executive officer of, a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues (as reported for the last completed fiscal year of such other company);— $3 billion revenue companies. |
| | |
| 5. | No Affiliation with the Company’s Auditor. The Director is not, and each member of his or her Immediate Family is not, a current partner of a firm that is the Company’s internal or external auditor; the Director is not a current employee of such a firm; no Immediate Family member of the Director is a current employee of such a firm who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; and the Director and his or her Immediate Family members must not have been within t he last three years a partner or employee of such a firm and who personally worked on the Company’s audit within that time; |
| | |
| 6. | No Interlocking Directorates. The Director is not, and within the last three years has not been, employed, and no Immediate Family member of the Director is, and within the last three years has not been, employed, as an executive officer of another company where either the Company’s Chief Executive Officer or Chief Financial Officer or any other executive officer of the Company at the same time serves or served on such other company’s compensation committee; and |
| | |
| 7. | No Material Charitable Contributions. The Director has not been an executive officer of a tax exempt organization to which the Company has made charitable contributions exceeding the greater of (1) $1 million per year or (2) 2% of the tax exempt organization’s annual consolidated gross revenues from all sources, in each case as measured during the tax exempt organization’s last completed fiscal year. |
Table of ContentsFor purposes of these guidelines—
1. references to the ‘‘Company’’ in items 1 through 7 above include any parent and subsidiary entities within Revlon, Inc.’s consolidated group;
2. references to a member of a Director’s ‘‘Immediate Family’’ include his or her spouse, parents, children, siblings, mother- and father-in-law, daughters- and sons-in-law, sisters- and brothers-in-law and anyone who share such Director’s home (excluding employees); provided that individuals who are no longer Immediate Family members as a result of legal separation or divorce, or those who have died or become incapacitated, as well as step-children that do not share such Director’s home or the in-laws of such step-children, do not need to be considered; and
3. the term ‘‘executive officer’’ means a president, principal financial officer, principal accounting officer (or, if there is no such accounting officer, the controller) of the Company, any vice-president of the Company in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Officers of the Company’s parent or subsidiaries shall be deemed ‘‘executive officers’’ of the Company if they perform such policy-making functions for the Company.
Table of ContentsAnnex B
2011 AUDIT COMMITTEE PRE-APPROVAL POLICY I.
Statement of PrinciplesThe Audit Committee is required to pre-approve the audit and non-audit services performed by the Company’s independent auditor, KPMG LLP
(‘‘(“KPMG
LLP’’LLP” or the
‘‘independent auditor’’“independent auditor”), in order to assure that KPMG LLP’s provision of such services do not impair its independence. Unless a type of service to be provided by the independent auditor is within the pre-approved services and dollar limits set forth in the appendices attached to this Policy, the provision of such service by the independent auditor will require specific pre-approval by the Audit Committee.
The appendices to this Policy describe the Audit Services, Audit-Related Services, Tax Services and All Other Services that have the general pre-approval of the Audit Committee for
2008,2011, as well as the applicable dollar limits for the particular services. The Audit Committee will annually review and pre-approve the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee. The Audit Committee may revise the list of general pre-approved services from time to time, based on its subsequent determinations. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
The Audit Committee may delegate pre-approval authority to one or more of its members for Audit-Related, Tax Services or All Other Services
each(each as defined
below,below) to be provided by the independent auditor (but excluding Annual Audit Services referred to in Section III below and prohibited services referred to in Section VII below). Specifically, the Chairman of the Audit Committee may approve services which are not Annual Audit Services referred to in Section III below or prohibited services referred to in Section VII below if the fees as to any applicable project will not exceed $35,000, provided that the independent auditor complies with any applicable rules or requirements of this Policy to document the services to the Audit Committee and to discuss such services with the Audit Committee. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at least quarterly on the services provided by KPMG LLP and the approximate fees paid or payable to KPMG LLP for such services
provided by KPMG LLP during the preceding quarter, including a report on any services pre-approved during such quarter by the Chairman of the Audit Committee pursuant to this Section II.
III.
Audit Services — Annual Audit and other audit servicesThe terms and fees of the
Annualannual Audit Services engagement, including, without limitation, the independent auditor’s services in connection with
theirthe audit of the Company’s annual financial statements, the independent auditor’s review of the Company’s financial statements included in the Company’s quarterly reports onForm 10-Q and the independent auditor’s testing and attestation on management’s report on the effectiveness of the Company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, will be subject to the specific pre-approval of the Audit Committee. The Audit Committee will also approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope or other matters.
In addition to the Annualforegoing annual Audit Services engagement, approved by the Audit Committee, the Audit Committee may grant pre-approval for Otherother Audit Services, which are those services that are normally provided by the independent auditor in connection with statutory and regulatory filings or engagements for those fiscal years and other services that generally only the independent auditor reasonably can provide.provide, such as comfort letters, statutory audits, attest services, consents and assistance with and review of documents filed with the SEC. The Audit Committee has pre-approved the Otherother Audit Services listed inAppendix A, provided that such services do not exceed the pre-approved fees set forth on Appendix A. All Otherother Audit Services not listed in Appendix A must be specifically pre-approved by the Audit Committee.
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Table of ContentsIV. Audit-related Services
Audit-Related Services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent
auditor.auditor, and in each case which are not covered by the Audit Services described in Section III. Such services could include, among other things, employee benefit plan audits, due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, attest services and internal control reviews that are not required by statute and regulation and consultations concerning financial accounting and reporting standards. The Audit Committee believes that the provision of Audit-Related Services does not impair the independence of the auditor, and has pre-approved the Audit-Related Services listed in
Appendix B, provided that such services do not exceed the pre-approved fees set forth on Appendix B. All other Audit-Related Services not listed in Appendix B must be specifically pre-approved by the Audit Committee, except to the extent covered by the delegation authority under Section II above. As to all non-audit internal control services for the Company, the independent auditor must — (1) describe in writing to the Audit Committee the scope of the proposed non-audit internal control service; (2) discuss with the Audit Committee any potential effects on the independent auditor’s independence that could be caused by the independent auditor’s performance of the proposed non-audit internal control service; and (3) document the substance of such discussions with the Audit Committee.
The Audit Committee believes that the independent auditor can provide certain Tax Services to the Company, such as
tax preparation and(i) tax compliance (e.g., preparing original and amended state and federal corporate tax returns, planning for estimated tax payments and preparation of tax return extensions)
; (ii) tax advice; and
general(iii) tax planning,
and tax advice (including related tax research), without impairing the auditor’s independence.
Tax advice and tax planning could include, without limitation, assistance with tax audits and appeals, tax advice related to mergers and acquisitions and employee benefit plans and request for rulings or technical advice from taxing authorities. However, the Audit Committee will not permit the retention of the independent auditor (or any affiliate of the independent auditor) in connection with the provision of any prohibited tax service listed in
Exhibit 1 to the Company or its affiliates, as the PCAOB has determined that such prohibited tax services would impair the independent auditor’s independence.The Audit Committee has pre-approved the Tax Services listed in
Appendix C, provided that such services do not exceed the pre-approved fees set forth on Appendix C. All other Tax Services for the Company not listed in Appendix C must be specifically pre-approved by the Audit Committee, except to the extent covered by the delegation authority under Section II above, provided that the independent auditor complies with any applicable rules and the following requirements to document the applicable Tax Services to the Audit Committee and to discuss such services with the Audit Committee.Effective April 19, 2007, as
As to all Tax Services for the Company, the independent auditor must — (1) describe in writing to the Audit Committee the scope of the proposed Tax Service, the proposed fee structure for the engagement and any
side letter or other amendment to the engagement letter or other agreement
(whether oral, written or otherwise) between the independent auditor and the Company and its affiliates relating to the proposed Tax Service; (2) describe in writing to the Audit Committee any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the independent auditor or any of its affiliates and any person (other than the Company and its affiliates) with respect to the promoting, marketing or recommending of
aany transaction covered by the Tax Service; (3) discuss with the Audit Committee any potential effects of the proposed Tax Services on the independence of the independent auditor; and (4) document the substance of such discussions with the Audit Committee.
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other Services that it believes are routine and recurring services, and would not impair the independence of the auditor, provided such All Other Services may not include Annual Audit Services referred to in Section III above or prohibited services referred to in Section VII below. The Audit Committee has pre-approved the All Other Services listed inAppendix D, provided that such services do not exceed the pre-approved fees set forth on Appendix D. Permissible All Other Services other than those listed in Appendix D must be specifically pre-approved by the Audit Committee, except to the extent covered by the delegation authority under Section II above. Effective for fiscal years ending after November 15, 2007, as to all non-audit internal control services for the Company, the independent auditor must — (1) describe in writing to the Audit Committee the scope of the proposed non-audit internal control service; (2) discuss with the Audit Committee any potential effects on the independent auditor’s independence that could be caused by the independent auditor’s performance of the proposed non-audit internal control service; and (3) document the substance of such discussions with the Audit Committee.
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VII. Prohibited Services
Table of ContentsVII. PROHIBITED SERVICES
The Company will not retain its independent auditors for any services that are
‘‘prohibited services’’“prohibited services” as defined by applicable statutes or regulations, as may be in effect from time to time, including, without limitation, those services prohibited by Section 201(a) of the Sarbanes-Oxley Act of 2002 and the SEC’s or the PCAOB’s rules and regulations and such other rules and regulations as may be promulgated thereunder from time to time. Attached to this policy as
Exhibit 1 is a current list of the SEC’s and PCAOB’s prohibited non-audit services, as of November 1, 2007, including prohibited tax services.VIII.
Pre-Approval Fee LevelsPre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any
services proposed
servicesto be provided by the independent auditors during a fiscal year exceeding these levels will require specific pre-approval by the Audit Committee.
Requests or applications to provide services that require specific approval by the Audit Committee may be submitted to the Audit Committee by the independent auditor and eitherany of the Company’s Chief Financial Officer, Corporate Controller or Chief Legal Officer.
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Table of ContentsAppendix A
Pre-Approved Other Audit Services for Fiscal Year 20082011
Dated: October 26, 2010
| | | | | |
| | | Total Pre-Approved
|
| | | Annual Fees for
|
| | | Pre-Approved Audit
|
Service | | Services: |
| |
| Statutory audits or financial audits for subsidiaries of the Company | | $ | 50,000 | |
| Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents), and assistance in responding to SEC comment letters | | | | |
| Consultations by the Company’s management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies | | | | |
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Dated: November 1, 2007
| | | |
Service | | | |
Statutory audits or financial audits for subsidiaries of the Company | | | |
Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents), and assistance in responding to SEC comment letters | | | Total Pre-Approved Annual Fees for Pre-Approved Other Audit Services: |
Consultations by the Company’s management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies | | | $50,000 |
Table of ContentsAppendix B
Pre-Approved Audit-Related Services for Fiscal Year 20082011
Dated: October 26, 2010
| | | | | |
| | | Total Pre-Approved
|
| | | Annual Fees for
|
| | | Pre-Approved
|
| | | Audit-Related
|
Service | | Services: |
| |
| 1. Due diligence services pertaining to potential business acquisitions/dispositions | | $ | 200,000 | |
| 2. Financial statement audits of employee benefit plans | | | | |
3. Agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters | | | | |
| 4. Attest services and internal control reviews not required by statute or regulation | | | | |
| 5. Audit work in connection with liquidations and contract terminations; legal entity dissolution/restructuring assistance; and inventory audits | | | | |
The foregoing pre-approval of non-audit internal control services identified on this Appendix B is subject in all cases to compliance with Section IV of this Pre-Approval Policy, including without limitation, compliance with applicable rules to document the services to the Audit Committee and to discuss such services with the Audit Committee.
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Dated: November 1, 2007
| | | |
Service | | | |
1. Due diligence services pertaining to potential business acquisitions/dispositions | | | |
2. Financial statement audits of employee benefit plans | | | |
3. Agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters | | | Total Pre-Approved Annual Fees for Pre-Approved Audit-Related Services: |
4. Attest services not required by statute or regulation | | | |
5. Audit work in connection with liquidations and contract terminations; legal entity dissolution/restructuring assistance; and inventory audits | | | $200,000 |
| | | |
Table of ContentsAppendix C
Pre-Approved Tax Services for Fiscal Year 2008*2011*
Dated:
November 1, 2007| | | | | |
| | | Total Pre-Approved
|
| | | Annual Fees for
|
| | | Pre-Approved
|
Service | | Tax Services: |
| |
| 1. U.S. federal, state and local tax compliance, including, without limitation, review of income, franchise and other tax returns | | $ | 300,000 | |
| 2. International tax compliance, including, without limitation, review of income, franchise and other tax returns | | | | |
| 3. U.S. federal, state and local tax advice, including, without limitation, general tax advisory services | | | | |
| 4. International tax advice, including, without limitation, intercompany pricing and advanced pricing agreement services, general tax advisory services and tax audits and appeals services | | | | |
| | | |
Service* | | | |
1. U.S. federal, state and local tax planning and advice | | | |
2. U.S. federal, state and local tax compliance | | | |
3. International tax planning and advice | | | Total Pre-Approved Annual |
4. International tax compliance, including, without limitation, intercompany pricing studies and advance pricing agreements | | | Fees for Pre-Approved Tax Services: |
5. Review of federal, state, local and international income, franchise, and other tax returns, and assistance with tax audit and appeals | | |
$450,000 |
| | | |
* | The foregoing pre-approval of Tax Services identified on this Appendix C is subject in all cases to compliance with Section V of this Pre-Approval Policy, including without limitation, compliance with applicable rules to document the services to the Audit Committee and to discuss such services with the Audit Committee. |
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Table of ContentsAppendix D
Pre-Approved All Other Services for Fiscal Year 20082011
Dated:
November 1, 2007
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Exhibit 1
The foregoing pre-approval of non-audit internal control services identified on this Appendix D is subject in all cases to compliance with Section VI of this Pre-Approval Policy, including without limitation, compliance with applicable rules to document the services to the Audit Committee and to discuss such services with the Audit Committee. | |
| I. | PROHIBITED NON-AUDIT SERVICES |
Table of ContentsExhibit 1
I. PROHIBITED NON-AUDIT SERVICES
| | |
| • | Bookkeeping or other services related to the accounting records or financial statements of the audit client |
| | |
| • | Financial information systems design and implementation* |
| | |
|
| • | Appraisal or valuation services, fairness opinions orcontribution-in-kind reports* |
| | |
|
| • | Internal audit outsourcing services* |
| | |
| • | Broker-dealer, investment adviser or investment banking services |
| | |
| • | Expert services unrelated to the audit |
Each of these prohibited services is subject to applicable exceptions under the SEC’s rules.
Each of these prohibited services is subject to applicable exceptions under the SEC’s rules. |
| |
| II. | PROHIBITED TAX SERVICES |
The PCAOB has determined the following services to be ‘‘Prohibited“Prohibited Tax Services’’Services” for the independent auditor (including any affiliate of the independent auditor, as defined in PCAOB Rule 3501(a)(i)):
| | |
| • | any service or product by the independent auditor or any of its affiliates for the Company and its affiliates for a contingent fee or a commission, including any fee established for the sale of a product or the performance of any service pursuant to an arrangement in which no fee would be payable unless a specified finding or result is attained or the amount of the fee is otherwise dependent on the finding or result of such product or service, taking into account any rights to reimbursements, refunds or other repayments that could modify the amount received in a manner that make it contingent on a finding or result (excluding fees where the amount is fixed by courts or other public authorities and is not dependent on a finding or result), or the independ entindependent auditor or any of its affiliates receives, directly or indirectly, a contingent fee or commission; |
| | |
| • | non-audit services by the independent auditor or any of its affiliates for the Company and its affiliates related to marketing, planning or opining in favor of the tax treatment of a ‘‘confidential transaction’’“confidential transaction” as defined under PCAOB Rule 3501(c)(i) or an ‘‘aggressive“aggressive tax position transaction’’transaction” (including, without limitation, any transaction that is a ‘‘listed transaction’’“listed transaction” under applicable U.S. Treasury regulations) that was (i) initially recommended, directly or indirectly, by the independent auditor or another tax advisor with which the independent auditor has a formal agreement or other arrangement related to the promotion of such transactions, and (ii) a significant purpos epurpose of which is tax avoidance, unless the proposed tax treatment is at least more likely than not to be allowable under applicable tax laws; and |
| | |
|
| • | tax services by the independent auditor or any of its affiliates for persons that serve in a financial reporting oversight role at the Company or its affiliates, including any employee who is in a position to, or does, exercise influence over the contents of the Company’s financial statements or any employee who prepares the financial statements, including, without limitation, the Company’s chief executive officer, president, chief financial officer, chief operating officer, general counsel, chief accounting officer, controller, director of internal audit, director of financial reporting, treasurer or any equivalent position, including for any immediate family member of such employees (being such employee’s spouse, spousal equivalent an dand dependents), but excluding tax services for (i) any person that serve in a financial reporting oversight role for |
Table of Contents | | |
| | the Company or its affiliates solely because such person serves as a member of the Board of Directors, the |
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| | |
| | Audit Committee, any other Board committee or similar management or governing body of the Company or its affiliates (in each case who do not otherwise occupy an employment position in a financial oversight role), (ii) any person serving in a financial reporting oversight role at the Company or its affiliates only because of such person’s relationship to an affiliate of the Company if such affiliate’s financial statements (1) are not material to the Company’s consolidated financial statements or (2) are audited by an auditor other than the Company’s independent auditor or its associated persons and (iii) employees who were not in a financial reporting oversight role for the Company or its affiliates before a hiring, promotion or other change in employment event and the tax services were provided by the independent auditor or any of its affiliates to such person pursuant to an enga gementengagement in process before the hiring, promotion or other change in employment event, provided that such tax services are completed on or before 180 days after the hiring or promotion event. |
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REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| | | | |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | KEEP THIS PORTION FOR YOUR RECORDS |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
| | | | | | | | | | | | |
| | For
All | | Withhold
All | | For All
Except | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. |
| The Board of Directors recommends you vote
FOR each of the following nominees: | | o | | o | | o | | |
| | | | | | | | |
| 1. | Election of Directors
Nominees | | | | | | | | | |
| | | | | | | | | | |
| | 01 Ronald O. Perelman | | 02 Alan S. Bernikow | | 03 Paul J. Bohan | | 04 Alan T. Ennis | | 05 Meyer Feldberg |
| | 06 David L. Kennedy | | 07 Debra L. Lee | | 08 Tamara Mellon | | 09 Barry F. Schwartz | | 10 Richard J. Santagati |
| | 11 Kathi P. Seifert |
| | | | | | | | | | | | |
| The Board of Directors recommends you vote FOR proposals 2 and 3. | | | | | For | | Against | | Abstain |
| | | | | | | | |
| 2 | Proposal to ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011. | | o | | o | | o |
|
| 3 | Proposal to approve, by non-binding, advisory vote, 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 accompanying Proxy Statement. | | o | | o | | o |
|
| The Board of Directors recommends you vote 3 YEARS on the following proposal: | | 1 Year | | 2 Years | | 3 Years | | Abstain |
|
| 4 | Proposal to recommend the frequency of future non-binding, advisory votes on executive compensation. | | o | | o | | o | | o |
|
| NOTE:Proxies are authorized to vote in their discretion upon such other business as may properly come before the Annual Meeting
or any postponement or adjournment thereof. | | | | | | |
|
| | | | | | | | | | | |
| For address change/comments, mark here. | | | | | o | | |
| (see reverse for instructions) | | Yes | | No | | | |
| | | | | | | | |
| Please indicate if you plan to attend this meeting | | | o | | | | o | | | |
| | | | | | | |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | | Signature (Joint Owners) | Date | | |
ANNUAL MEETING OF STOCKHOLDERS OF
REVLON, INC.
To be held on June 2, 2011 at 10:00 a.m. Eastern Daylight Time (EDT)
at the Revlon Research Center, 2121 Route 27, Edison, NJ 08818
Please date, sign and mail
your proxy card in the envelope provided as soon as possible.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.com.
REVLON, INC.
Proxy for June 2, 2011 Annual Meeting of Stockholders
CLASS A COMMON STOCK
Proxy For June 2, 2011 Annual Meeting of Stockholders
The undersigned hereby appoints Robert K. Kretzman, Esq., Michael T. Sheehan, Esq., and Marc R. Esterman, Esq. as proxies, each with the full power to appoint his substitute, and hereby authorizes each of them to represent and vote, as designated on the reverse side of this card, all shares of Class A Common Stock of Revlon, Inc. held of record by the undersigned at the close of business on April 8, 2011, at the Annual Meeting of Stockholders to be held at 10:00 A.M. Eastern Daylight Time (EDT) on June 2, 2011 or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY (IF OTHERWISE VALIDITY SUBMITTED) WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS FOR EACH PROPOSAL, AS SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.
Address change/comments:
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Electronic Delivery of Future PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| | | | |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | KEEP THIS PORTION FOR YOUR RECORDS |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
| | | | | | | | | | | | |
| | For
All | | Withhold
All | | For All
Except | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. |
| The Board of Directors recommends you vote
FOR each of the following nominees: | | o | | o | | o | | |
| | | | | | | | |
| 1. | Election of Directors
Nominees | | | | | | | | | |
| | | | | | | | | | |
| | 01 Ronald O. Perelman | | 02 Alan S. Bernikow | | 03 Paul J. Bohan | | 04 Alan T. Ennis | | 05 Meyer Feldberg |
| | 06 David L. Kennedy | | 07 Debra L. Lee | | 08 Tamara Mellon | | 09 Barry F. Schwartz | | 10 Richard J. Santagati |
| | 11 Kathi P. Seifert |
| | | | | | | | | | | | |
| The Board of Directors recommends you vote FOR proposals 2 and 3. | | | | | For | | Against | | Abstain |
| | | | | | | | |
| 2 | Proposal to ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011. | | o | | o | | o |
|
| 3 | Proposal to approve, by non-binding, advisory vote, 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 accompanying Proxy Statement. | | o | | o | | o |
|
| The Board of Directors recommends you vote 3 YEARS on the following proposal: | | 1 Year | | 2 Years | | 3 Years | | Abstain |
|
| 4 | Proposal to recommend the frequency of future non-binding, advisory votes on executive compensation. | | o | | o | | o | | o |
|
| NOTE:Proxies are authorized to vote in their discretion upon such other business as may properly come before the Annual Meeting
or any postponement or adjournment thereof. | | | | | | |
|
| | | | | | | | | | | |
| For address change/comments, mark here. | | | | | o | | |
| (see reverse for instructions) | | Yes | | No | | | |
| | | | | | | | |
| Please indicate if you plan to attend this meeting | | | o | | | | o | | | |
| | | | | | | |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | | Signature (Joint Owners) | Date | | |
ANNUAL MEETING OF STOCKHOLDERS OF
REVLON, INC.
To be held on June 2, 2011 at 10:00 a.m. Eastern Daylight Time (EDT)
at the Revlon Research Center, 2121 Route 27, Edison, NJ 08818
Please date, sign and mail
your proxy card in the envelope provided as soon as possible.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.com.
REVLON, INC.
Proxy for June 2, 2011 Annual Meeting of Stockholders
CLASS B COMMON STOCK
Proxy For June 2, 2011 Annual Meeting of Stockholders
The undersigned hereby appoints Robert K. Kretzman, Esq., Michael T. Sheehan, Esq., and Marc R. Esterman, Esq. as proxies, each with the full power to appoint his substitute, and hereby authorizes each of them to represent and vote, as designated on the reverse side of this card, all shares of Class B Common Stock of Revlon, Inc. held of record by the undersigned at the close of business on April 8, 2011, at the Annual Meeting of Stockholders to be held at 10:00 A.M. Eastern Daylight Time (EDT) on June 2, 2011 or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY (IF OTHERWISE VALIDITY SUBMITTED) WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS FOR EACH PROPOSAL, AS SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.
Address change/comments:
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Electronic Delivery of Future PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| | | | |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | KEEP THIS PORTION FOR YOUR RECORDS |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
| | | | | | | | | | | | |
| | For
All | | Withhold
All | | For All
Except | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. |
| The Board of Directors recommends you vote
FOR each of the following nominees: | | o | | o | | o | | |
| | | | | | | | |
| 1. | Election of Directors
Nominees | | | | | | | | | |
| | | | | | | | | | |
| | 01 Ronald O. Perelman | | 02 Alan S. Bernikow | | 03 Paul J. Bohan | | 04 Alan T. Ennis | | 05 Meyer Feldberg |
| | 06 David L. Kennedy | | 07 Debra L. Lee | | 08 Tamara Mellon | | 09 Barry F. Schwartz | | 10 Richard J. Santagati |
| | 11 Kathi P. Seifert |
| | | | | | | | | | | | |
| The Board of Directors recommends you vote FOR proposals 2 and 3. | | | | | For | | Against | | Abstain |
| | | | | | | | |
| 2 | Proposal to ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011. | | o | | o | | o |
|
| 3 | Proposal to approve, by non-binding, advisory vote, 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 accompanying Proxy Statement. | | o | | o | | o |
|
| The Board of Directors recommends you vote 3 YEARS on the following proposal: | | 1 Year | | 2 Years | | 3 Years | | Abstain |
|
| 4 | Proposal to recommend the frequency of future non-binding, advisory votes on executive compensation. | | o | | o | | o | | o |
|
| NOTE:Proxies are authorized to vote in their discretion upon such other business as may properly come before the Annual Meeting
or any postponement or adjournment thereof. | | | | | | |
|
| | | | | | | | | | | |
| For address change/comments, mark here. | | | | | o | | |
| (see reverse for instructions) | | Yes | | No | | | |
| | | | | | | | |
| Please indicate if you plan to attend this meeting | | | o | | | | o | | | |
| | | | | | | |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | | Signature (Joint Owners) | Date | | |
ANNUAL MEETING OF STOCKHOLDERS OF
REVLON, INC.
To be held on June 2, 2011 at 10:00 a.m. Eastern Daylight Time (EDT)
at the Revlon Research Center, 2121 Route 27, Edison, NJ 08818
Please date, sign and mail
your proxy card in the envelope provided as soon as possible.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.com.
REVLON, INC.
Proxy for June 2, 2011 Annual Meeting of Stockholders
Revlon Employees’ Savings, Investment and
Profit Sharing Plan (The “Plan”) Participants
Proxy For June 2, 2011 Annual Meeting of Stockholders
The undersigned hereby appoints Robert K. Kretzman, Esq., Michael T. Sheehan, Esq., and Marc R. Esterman, Esq. as proxies, each with the full power to appoint his substitute, and hereby authorizes each of them to represent and vote, as designated on the reverse side of this card, all shares of Class A Common Stock of Revlon, Inc. held of record by the Plan for the account of the undersigned at the close of business on April 8, 2011, at the Annual Meeting of Stockholders to be held at 10:00 A.M. Eastern Daylight Time (EDT) on June 2, 2011 or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY (IF OTHERWISE VALIDITY SUBMITTED) WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS FOR EACH PROPOSAL, AS SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.
Address change/comments:
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Electronic Delivery of Future PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Daylight Time on the day before the meeting date (or, if the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| | | | |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | KEEP THIS PORTION FOR YOUR RECORDS |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
| | | | | | | | | | | | |
| | For
All | | Withhold
All | | For All
Except | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. |
| The Board of Directors recommends you vote
FOR each of the following nominees: | | o | | o | | o | | |
| | | | | | | | |
| 1. | Election of Directors
Nominees | | | | | | | | | |
| | | | | | | | | | |
| | 01 Ronald O. Perelman | | 02 Alan S. Bernikow | | 03 Paul J. Bohan | | 04 Alan T. Ennis | | 05 Meyer Feldberg |
| | 06 David L. Kennedy | | 07 Debra L. Lee | | 08 Tamara Mellon | | 09 Barry F. Schwartz | | 10 Richard J. Santagati |
| | 11 Kathi P. Seifert |
| | | | | | | | | | | | |
| The Board of Directors recommends you vote FOR proposals 2 and 3. | | | | | For | | Against | | Abstain |
| | | | | | | | |
| 2 | Proposal to ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011. | | o | | o | | o |
|
| 3 | Proposal to approve, by non-binding, advisory vote, 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 accompanying Proxy Statement. | | o | | o | | o |
|
| The Board of Directors recommends you vote 3 YEARS on the following proposal: | | 1 Year | | 2 Years | | 3 Years | | Abstain |
|
| 4 | Proposal to recommend the frequency of future non-binding, advisory votes on executive compensation. | | o | | o | | o | | o |
|
| NOTE:Proxies are authorized to vote in their discretion upon such other business as may properly come before the Annual Meeting
or any postponement or adjournment thereof. | | | | | | |
|
| | | | | | | | | | | |
| For address change/comments, mark here. | | | | | o | | |
| (see reverse for instructions) | | Yes | | No | | | |
| | | | | | | | |
| Please indicate if you plan to attend this meeting | | | o | | | | o | | | |
| | | | | | | |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | | Signature (Joint Owners) | Date | | |
ANNUAL MEETING OF STOCKHOLDERS OF
REVLON, INC.
To be held on June 2, 2011 at 10:00 a.m. Eastern Daylight Time (EDT)
at the Revlon Research Center, 2121 Route 27, Edison, NJ 08818
Please date, sign and mail
your proxy card in the envelope provided as soon as possible.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.com.
REVLON, INC.
Series A Preferred Stock
Proxy For June 2, 2011 Annual Meeting of Stockholders
The undersigned hereby appoints Robert K. Kretzman, Esq., Michael T. Sheehan, Esq., and Marc R. Esterman, Esq. as proxies, each with the full power to appoint his substitute, and hereby authorizes each of them to represent and vote, as designated on the reverse side of this card, all shares of Series A Preferred Stock of Revlon, Inc. held of record by the undersigned at the close of business on April 8, 2011, at the Annual Meeting of Stockholders to be held at 10:00 A.M. Eastern Daylight Time (EDT) on June 2, 2011 or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY (IF OTHERWISE VALIDLY SUBMITTED) WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS FOR EACH PROPOSAL, AS SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.
Address change/comments:
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
