UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934 (AMENDMENT NO.     )

 

Filed by the Registrant þ

 

Filed by a Party other than the Registrant o

 

Check the appropriate box:

 

o  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to Rule 14a-12

 

REVLON, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017
April 21, 2010

 

Dear Stockholders:

 

You are cordially invited to attend the 2010 Annual Meeting of Stockholders of Revlon, Inc., which will be held at 10:00 a.m., Eastern Time, on Thursday, June 3, 2010, at Revlon’s Research Center at 2121 Route 27, Edison, NJ 08818. The matters to be acted upon at the meeting are described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. Please also see the accompanying 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, if you plan to attend 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 2010 Annual Meeting. In accordance with rules adopted by the U.S. Securities and Exchange Commission, we are 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 2009 Annual Report) which contains instructions on how stockholders can access the proxy materials 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 2009 Annual Report and a form of proxy card. Our proxy materials are being furnished to stockholders on or about April 21, 2010.

 

Whether or not you plan to attend the 2010 Annual Meeting, we encourage you to vote your shares, regardless of the number of shares you hold, by utilizing the voting options available to you as described in the Notice of Internet Availability of Proxy Materials and our Proxy Statement. This will not restrict your right to attend the 2010 Annual Meeting and vote your shares in person, should you wish to change your prior vote.

 

Thank you.

 

Sincerely yours,

 

Alan T. Ennis

President and Chief Executive Officer

REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

To the Stockholders of Revlon, Inc.

 

The 2010 Annual Meeting of Stockholders of Revlon, Inc., a Delaware corporation (the “Company”), will be held at 10:00 a.m., Eastern Time, on Thursday, June 3, 2010, at Revlon’s Research Center at 2121 Route 27, Edison, NJ 08818. The following proposals will be voted on at the 2010 Annual Meeting:

 

1. the 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;

 

2. the approval of the Revlon Executive Incentive Compensation Plan;

 

3. the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2010; and

 

4. the transaction of such other business as may properly come before the 2010 Annual Meeting.

 

A Proxy Statement describing the matters to be considered at the 2010 Annual Meeting accompanies this notice. Only stockholders of record at 5:00 p.m., Eastern Time, on April 8, 2010 are entitled to notice of, and to vote at, the 2010 Annual Meeting and at any adjournments thereof. For at least ten days prior to the 2010 Annual Meeting, a list of stockholders entitled to vote at the 2010 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, NY 10017, and such list also will be available at the 2010 Annual Meeting.

 

Important Notice Regarding the Availability of Proxy Materials for the June 3, 2010 Annual
Stockholders’ Meeting:

 

We are delivering our Proxy Statement and 2009 Annual Report this year under U.S. Securities and Exchange Commission rules that require 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 receive paper copies of our proxy materials in the mail). 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 2009 Annual Report to Stockholders are available at www.proxyvote.com (where stockholders may also vote their shares, over the Internet) and at www.revloninc.com.

 

Whether or not you plan to attend the 2010 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 2010 Annual Meeting.

 

If you plan to attend the 2010 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 present valid picture identification, such as a driver’s license or passport, in order to be admitted to the meeting. 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 the April 8, 2010 record date, such as an original of a legal proxy from your bank or broker (“Requests for Admission” will not be accepted), your brokerage account statement demonstrating that you held Revlon, Inc. Class A Common Stock, Class B Common Stock or

Series A Preferred Stock (“voting capital stock”) in your account on the April 8, 2010 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 on the April 8, 2010 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 a 1-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 and will be permitted to receive these proxy materials, vote their shares (after giving effect to the 1-for-10 Reverse Stock Split) and attend the 2010 Annual Meeting.

 

In order to expedite the admission registration process, we encourage stockholders to pre-register in accordance with the pre-registration procedures set forth in our Proxy Statement.

 

Thank you.

 

By Order of the Board of Directors

 

Michael T. Sheehan

Senior Vice President, Deputy General Counsel

and Secretary

 

April 21, 2010

 

 

 

 

TABLE OF CONTENTS

 

 

 

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 2010 Annual Meeting, we are making the proxy materials and our 2009 Annual Report available to our stockholders electronically via the Internet. On or about April 21, 2010, 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 2009 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 2010 Proxy Statement, the 2009 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 3, 2010 Annual
Stockholders’ Meeting:

 

Our 2010 Proxy Statement, including the Notice of Annual Meeting of Stockholders, and 2009 Annual Report to Stockholders are available at www.proxyvote.com (where stockholders may also vote their shares, via the Internet) and at www.revloninc.com.

 

 

 

 

 

 

Q. What is the difference between holding shares as a stockholder of record and as a beneficial owner?

 

 

 

 

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 to www.proxyvote.com and follow the steps on the secure website (have your Internet Notice or your proxy card available as you will need to reference your assigned Control Number(s)). You may vote on the Internet up until 11:59 p.m. Eastern Time on June 2, 2010, which is the date before the June 3, 2010 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 2, 2010, which is the date before the June 3, 2010 Annual Meeting, and following the pre-recorded instructions (have your Internet Notice or your proxy card available when you call as you will need to reference your assigned Control Number(s)). If you vote by telephone, you should not return your proxy card (if you received one), unless you wish to change your 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 polls for the June 3, 2010 Annual Meeting.

 

In Person.  You may vote your shares in person by attending the 2010 Annual Meeting and submitting a valid proxy at the 2010 Annual Meeting. If you are a “registered owner” or “record holder” (i.e., you are listed as a stockholder on the books and records of our transfer agent), you may vote in person by submitting your previously furnished proxy or casting a voting capital stock ballot furnished by the Company at the Meeting prior the closing of the polls; if you are a “beneficial owner” (i.e., your shares are held by a nominee, such as a bank or broker or in “street name”), you may not vote your shares in person at the 2010 Annual Meeting unless you obtain and present to the Company an original (copies will not be accepted) legal proxy from your bank or broker authorizing you to vote the shares (“Requests for Admission” will not be accepted).

 

Voting, Generally.  All shares that have been voted properly by an unrevoked proxy will be voted at the 2010 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. 3 (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 either Proposal No. 1 (the election of directors) or Proposal No. 2 (the approval of the Revlon Executive Incentive Compensation Plan).

 

 

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 the 1-for-10 Reverse Stock Split) and attend the 2010 Annual Meeting.

 

 

Although we are not aware of any other matter that may be properly presented at the 2010 Annual Meeting, if any other matter is properly presented, the persons designated by the Company as proxies may vote on such matters in their discretion.

 

 

 

If you are a beneficial owner, please follow the voting instructions sent to you by your broker, trustee or nominee to change or revoke your vote.

 

To revoke a vote previously submitted electronically through the Internet or by telephone, you may simply vote again at a later date, using the same procedures, in which case the later submitted vote will be recorded and the earlier vote revoked.

 

 

To attend the 2010 Annual Meeting, please follow these instructions:

 

 

 

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.

 

REVLON, INC.

 

 

 

 

PROXY STATEMENT

 

 

 

 

This Proxy Statement is being furnished on or about April 21, 2010 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 2010 Annual Meeting of Stockholders (the “2010 Annual Meeting”) to be held at 10:00 a.m., Eastern Time, on Thursday, June 3, 2010, at Revlon’s Research Center at 2121 Route 27, Edison, NJ 08818, and at any adjournments thereof. The 2009 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, 2010. 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 2010 Annual Meeting on or about April 21, 2010.

 

At the 2010 Annual Meeting, the Company’s stockholders will be asked to: (1) elect the following persons (all of whom currently are directors) 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) approve the Revlon Executive Incentive Compensation Plan (the “Incentive Compensation Plan”); (3) ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2010; and (4) take such other action as may properly come before the 2010 Annual Meeting or any adjournments thereof.

 

The Company’s principal executive offices are located at 237 Park Avenue, New York, NY 10017, and its main telephone number is (212) 527-4000.

 

In order to be admitted to the 2010 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 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, Class B Common Stock or Series A Preferred Stock as of 5:00 p.m., Eastern Time, on the April 8, 2010 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, 2010 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, 2010 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, 2010 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 Brett Fleisher, Corporate Legal Assistant,

at (212) 527-5648, 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 2, 2010 (the date before the 2010 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, 2010 record date. Directions to the address for the 2010 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.

 

All proxies properly submitted to the Company, unless such proxies are properly revoked before they are voted at the 2010 Annual Meeting, will be voted on all matters presented at the 2010 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) FOR the election to the Board of Directors of each of the 11 nominees identified in this Proxy Statement (all of whom currently are directors); (2) FOR the approval of the Incentive Compensation Plan; and (3) FOR the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2010 (see below for discussion of broker non-votes). The Company has no knowledge of any other matters to be brought before the meeting. The deadline for receipt by the Company of stockholder proposals for inclusion in the proxy materials for presentation at the 2010 Annual Meeting was December 22, 2009. The Company did not receive any proposals 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 2010 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”), and business specified in this Proxy Statement), notice of such business must have been received by the Company between March 6, 2010 and April 5, 2010 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 2010 Annual Meeting for action, however, in the absence of other instructions, it is intended that the persons named by the Company and acting as proxies will vote in accordance with their discretion on such matters.

 

The submission of a signed or validly submitted electronic proxy will not affect a stockholder’s right to change their vote, attend and/or vote in person at the 2010 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 2010 Annual Meeting by: (i) filing a written revocation or written notice of change, as the case may be, which must be received by the Company’s Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, before the original proxy is voted at the 2010 Annual Meeting; (ii) executing and delivering a proxy bearing a later date, which must be received by the Company’s Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, before the original proxy is voted at the 2010 Annual Meeting; or (iii) attending the 2010 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.

 

Only holders of record of shares of the Company’s Class A common stock, par value $0.01 per share (the “Class A Common Stock”), Class B common stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), and Series A Preferred Stock, par value $0.01 per share (the “Preferred Stock” and, together with the Common Stock, the “Voting Capital Stock”), at 5:00 p.m., Eastern Time, on April 8, 2010 (the “Record Date”) will be entitled to notice of and to vote at the 2010 Annual

Meeting or any adjournments thereof. On the Record Date, there were issued and outstanding: (i) 48,769,593 shares of the Company’s Class A Common Stock, each of which is entitled to one vote, (ii) 3,125,000 shares of the Company’s Class B Common Stock, each of which is entitled to 10 votes, and (iii) 9,336,905 shares of the Company’s Preferred Stock, each of which is entitled to one vote. Of that Voting Capital Stock, Mr. Ronald O. Perelman, Chairman of the Board of Directors, directly and indirectly through MacAndrews & Forbes Holdings Inc., of which Mr. Perelman is the sole stockholder (together with certain of its affiliates (other than the Company or its subsidiaries), “MacAndrews & Forbes”), beneficially owned approximately 77% of the combined voting power of the outstanding shares of the Company’s Voting Capital Stock as of the Record Date that are entitled to vote at the 2010 Annual Meeting.

 

The presence, in person or by duly submitted proxy, of the holders of a majority in total number of votes of the issued and outstanding shares of Voting Capital Stock entitled to vote at the 2010 Annual Meeting is necessary to constitute a quorum in order to transact business at such meeting. Abstentions and, as there is at least one “routine” matter for consideration at the 2010 Annual Meeting, “broker non-votes,” if any, will be included in the calculation of the number of shares present at the 2010 Annual Meeting for the purposes of determining a quorum. “Broker non-votes” are shares held by a broker, trustee or nominee that are not voted because the broker, trustee or nominee does not have discretionary voting power on a particular proposal and does not receive voting instructions from the beneficial owner of the shares. Brokers will not be allowed to vote shares as to which they have not received voting instructions from the beneficial owner with respect to Proposal No. 1 (the election of directors) or Proposal No. 2 (the approval of the Incentive Compensation Plan). Accordingly, broker non-votes will not be counted as a vote for or against these proposals. For shares as to which they have not received voting instructions from the beneficial owner, brokers will be able to vote on Proposal No. 3 (ratification of the Company’s selection of its independent registered public accounting firm for 2010), as this is considered a “routine” matter for which brokers have discretionary voting power.

 

MacAndrews & Forbes has informed the Company that it will duly submit proxies (1) FOR the election to the Board of Directors of each of the 11 nominees identified in this Proxy Statement (all of whom currently are directors); (2) FOR the approval of the Incentive Compensation Plan; and (3) FOR the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2010. 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. 1, No. 2 and No. 3 to be considered at the 2010 Annual Meeting.

 

If shares of Class A Common Stock are held as of the Record Date for the account of participants under the Revlon Employees’ Savings, Investment and Profit Sharing Plan (the “401(k) Plan”), the trustee for the 401(k) Plan will vote those shares pursuant to the instructions given by the 401(k) Plan participants on their respective voting instruction forms. If the trustee does not otherwise receive voting instructions for shares held on account of a 401(k) Plan participant, the trustee, in accordance with the 401(k) Plan trust agreement, will vote any such unvoted shares in the same proportion as it votes those shares allocated to 401(k) Plan participants’ accounts for which voting instructions were received by the trustee. 401(k) Plan participants must cast their votes in accordance with the instructions provided in the proxy materials so that they are received by 11:59 p.m. Eastern Time on May 28, 2010 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 2010 Annual Meeting in the manner described in this paragraph above.

 

Only holders of record of shares of the Company’s Voting Capital Stock on the Record Date will be entitled to notice of and to vote at the 2010 Annual Meeting or any adjournments thereof. Stockholders will be entitled to vote the number of voting shares held by them on the Record Date.

 

The accompanying form of proxy is being solicited on behalf of the Company’s Board of Directors. We will bear all costs in connection with preparing, assembling and furnishing this Proxy Statement and related materials,

including reimbursing banks, brokerage houses and other custodians, nominees, agents and fiduciaries for their reasonable out-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 2010 Annual Meeting. The estimated fee is approximately $10,500, plus out-of-pocket expenses such as postage. As part of the Company’s standard, historical incentive compensation programs, the Company’s employees, including its executive officers, have, in the past, received bonuses under the Company’s performance-based bonus plans upon achievement of the applicable performance criteria, and they may receive performance-based incentive compensation grants under an annual bonus program or a long-term incentive program under the Revlon Executive Incentive Compensation Plan, which is being submitted for stockholder approval as Proposal No. 2 under this Proxy Statement, subject to Compensation Committee approval. Such performance-based incentive program awards are structured so that they only pay out upon achievement by the Company of specific performance objectives and achievement by the program participants of their individual objectives.

 

Some banks, brokers and other nominee record holders may be participating in the practice of “householding” stockholder materials, such as proxy statements, information statements and annual reports. This means that only one copy of our Internet Notice or proxy materials, as the case may be, may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of our Internet Notice or the 2010 proxy materials, as the case may be, to you if you write us at the following address: Revlon, Inc., Investor Relations Department, 237 Park Avenue, New York, NY 10017; or our proxy distributor at the following address: Broadridge, 51 Mercedes Way, Edgewood, NJ 11717. If you want to receive separate copies of the stockholder materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address. In the interest of reducing costs and promoting environmental responsibility, we encourage our stockholders to review electronic versions of our proxy materials, via the Internet.

 

The Company’s Board of Directors, pursuant to the Company’s By-laws, has fixed the number of directors at eleven (11), effective as of the date of the 2010 Annual Meeting. The 11 directors nominated for election by the Board of Directors, upon recommendation of the Board’s Nominating and Corporate Governance Committee, will be elected at the 2010 Annual Meeting to serve until the Company’s next Annual Meeting and until their successors are duly elected and shall have been qualified. All of the nominees currently are members of the Board of Directors. All director nominees, if elected, are expected to serve until the next Annual Meeting.

 

The Board of Directors has been informed that all of the nominees are willing to serve as directors, but if any of them should decline or be unable to serve, the Board of Directors may by resolution provide for a lesser number of directors or designate substitute nominees, in which event the individuals appointed as proxies will vote as directed as to the election of any such substitute nominee. The Board of Directors has no reason to believe that any nominee will be unable or unwilling to serve.

 

The election to the Board of Directors of each of the 11 nominees identified in this Proxy Statement requires the affirmative vote of a plurality of the votes cast by the holders of shares of Voting Capital Stock present in person or represented by proxy at the 2010 Annual Meeting and entitled to vote. With respect to Proposal No. 1, all proxies properly submitted to the Company, unless such proxies are revoked, will be voted in accordance with the instructions given by the person submitting such proxy or, in the absence of such instructions, will be voted FOR the 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 which they have not

received voting instructions from the beneficial owner. In light of the application of plurality voting to the election of Directors, when tabulating the vote and determining whether the Director has received the requisite number of affirmative votes, abstentions and broker non-votes will not count as a vote for or against a Director. MacAndrews & Forbes has informed the Company that it will vote FOR the election to the Board of Directors of each of the 11 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 2010 Annual Meeting.

 

The Board of Directors unanimously recommends that stockholders vote FOR the election to the Board of Directors of each of the 11 nominees identified below.

 

The name, age (as of December 31, 2009), 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 (66) has been Chairman of the Board of Directors of the Company and of Revlon Consumer Products Corporation, the Company’s wholly-owned operating subsidiary (“Products Corporation”), since June 1998 and a Director of the Company and of Products Corporation since their respective formations in 1992. Mr. Perelman has been Chairman of the Board and Chief Executive Officer of MacAndrews & Forbes Holdings Inc. (“MacAndrews & Forbes”), a diversified holding company, and certain of its affiliates since 1980. Mr. Perelman has served on the Boards of Directors of the following companies which were required to file reports under the Exchange Act 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 since 2007 (“M&F Worldwide”).

 

Mr. Ennis (39) has been the Company’s and Products Corporation’s President and Chief Executive Officer since May 2009. Mr. Ennis has served as a Director of the Company and of Products Corporation since March 2009. Mr. Ennis served as President, Revlon International from May 2008 to March 2009. Mr. Ennis served as the Company’s and Products Corporation’s Executive Vice President and Chief Financial Officer from November 2006 to May 2009, Treasurer from June 2008 to May 2009, and Corporate Controller and Chief Accounting Officer from September 2006 to March 2007. From March 2005 to September 2006, Mr. Ennis served as the Company’s Senior Vice President, Internal Audit. From 1997 through 2005, Mr. Ennis held several senior financial positions with Ingersoll-Rand Company Limited, a NYSE-listed company, where his duties included regional responsibility for Internal Audit in Europe and global responsibility for financial planning and analysis. Mr. Ennis began his career in 1991 with Arthur Andersen in Ireland. Mr. Ennis is a Chartered Accountant and member of the Institute of Chartered Accountants in Ireland. Mr. Ennis has 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 (63) has been the Company’s and Products Corporation’s Vice Chairman since May 2009. Mr. Kennedy has served as a Director of the Company and of Products Corporation since September 2006. Mr. Kennedy has also served as Senior Executive Vice President of MacAndrews & Forbes since May 2009. Mr. Kennedy served as the Company’s and Products Corporation’s President and Chief Executive Officer from September 2006 to May 2009, and Executive Vice President, Chief Financial Officer and Treasurer from March 2006 to September 2006, and as the Company’s Executive Vice President and Products Corporation’s President, International from June 2002 until March 2006. From 1998 until 2001, Mr. Kennedy was Managing Director (CEO) and a member of the Board of Directors of Coca-Cola Amatil Limited, a publicly-traded company headquartered in Sydney, Australia and listed on the Sydney Stock Exchange (“Coca-Cola Amatil”). From 1992 to 1997,

Mr. Kennedy served as General Manager of the Coca-Cola USA Fountain Division, a unit of The Coca-Cola Company (“Coca-Cola”), which he joined in 1980. Mr. Kennedy has served on the Boards of Directors of the following 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 (69) has been a Director of the Company and of Products Corporation since September 2003. Mr. Bernikow has served as Senior Advisor of Barington Capital Group, L.P. since November 2006 and has served on the Board of Directors of Premier American Bank, N.A. since January 2010. From 1998 until his retirement in May 2003, Mr. Bernikow served as the Deputy Chief Executive Officer of Deloitte & Touche LLP (“D&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 serves as Chairman of the Company’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”) (2003 — present), for which he also currently serves as a member of its audit committee; Mack-Cali Realty Corporation (“Mack-Cali”) (2004 — present), for which he also currently serves as chairman of its audit committee; and certain funds (the “UBS Funds”) for which UBS Global Asset Management (US) Inc., a wholly-owned subsidiary of UBS AG, or one of its affiliates, serves as investment advisor, sub-advisor or manager (2005 — present), and for which he serves as Chairman of its audit committee.

 

Mr. Bohan (64) has been a Director of the Company since March 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, having joined Salomon Smith Barney in 1980. Mr. Bohan also serves as a member of the Board of Directors of Arena Brands, Inc., which is a privately-held company, and as a member of the Board of Directors and audit committee of The New York Police & Fire Widows’ & Children’s Benefit Fund. Mr. Bohan serves as a member of the Company’s Audit Committee and Nominating and Corporate Governance Committee. Mr. Bohan 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 (2003 — present); Products Corporation (2003 — present); and Haynes International, Inc. (“Haynes”) (2004 to present).

 

Professor Feldberg (67) 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 the Professor of Leadership and Ethics at Columbia Business School, New York City, since July 2004. He was the Dean of Columbia Business School from July 1989 through June 2004. Since 2007, Professor Feldberg has served as the President of NYC Global Partners, an office in the New York City Mayor’s office that manages the relationships between New York City and 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. Professor Feldberg has served on the Boards of Directors of the following companies which were required to file reports under the Exchange Act, or were registered investment companies under the 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 its audit committee; UBS Funds (2001 — present); and Sappi Limited (“Sappi”) (2002 — present).

 

Ms. Lee (55) has been a Director of the Company since January 2006. Ms. Lee is Chairman and Chief Executive Officer of BET Networks (“BET”), a division of Viacom Inc., a global media and entertainment company, that owns and operates Black Entertainment Television. Ms. Lee’s career 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 Boards of Directors of the following companies which were required to file reports under the Exchange Act within the last five years: Eastman Kodak Company (“Kodak”) (1999 — present); WGL

Holdings, Inc. (“WGL”) (2000 — present); Marriott International, Inc. (“Marriott”) (2004 — present); and the Company (2006 — present).

 

Ms. Mellon (42) has been a Director of the Company since August 2008. Ms. Mellon is the President 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 for British Vogue magazine, since 1990, and previously held positions at Mirabella magazine and Phyllis Walters Public Relations. Ms. Mellon also serves on the Board of Directors and on the Creative Advisory Board of The H Company Holdings, LLC, a privately held holding company which owns and manages the Halston fashion design company. Ms. Mellon has served on the 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 (66) 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 (60) has been a Director of the Company since November 2007 and a Director of Products Corporation since March 2004. Mr. Schwartz has served as Executive Vice Chairman and Chief Administrative Officer of MacAndrews & Forbes since October 2007, and as Chief Executive Officer of M&F Worldwide since January 2008. Prior to that, Mr. Schwartz was M&F Worldwide’s Acting Chief Executive Officer and General Counsel since September 2007 and its Executive Vice President and General Counsel since 1996. Mr. Schwartz served as Senior Vice President of MacAndrews & Forbes from 1989 to 1993 and as Executive Vice President and General Counsel of MacAndrews & Forbes and various of its affiliates from 1993 to 2007. Mr. Schwartz is a member of the Board of Trustees of Kenyon College. In addition, Mr. Schwartz is a member of the Board of Visitors of the Georgetown University Law Center. Mr. Schwartz serves as a member of the Company’s Compensation Committee. Mr. Schwartz has served on the Boards of Directors of the following companies which were required to file reports under the Exchange Act within the last five years: 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 (60) has been a Director of the Company since January 2006. Ms. Seifert has been Chairperson of 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”) 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 senior executive positions in connection with Kimberly-Clark’s domestic and international consumer products businesses. Prior to joining Kimberly-Clark, Ms. Seifert held management positions at The Procter & Gamble Company, Beatrice Foods, Inc. and Fort Howard Paper Company. Ms. Seifert serves as a member of the Company’s Audit Committee. Ms. Seifert 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: Eli Lilly & Company (1995 — present), for which she also currently serves as a member of its audit committee (“Eli Lilly”); Albertson’s Inc. (2004 — 2006); Paperweight Development Corp. (2004 — present) (“Paperweight Development”); Appleton Papers Inc. (2004 — present) (“Appleton”); the Company (2006 — present); Lexmark

International, Inc. (2006 — present) (“Lexmark”); and Supervalu Inc. (2006 — present), for which she also currently serves as a member of its audit committee (“Supervalu”).

 

The Board of Directors currently has the following standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee (the “Governance Committee”). Each of these committees and their functions are described in further detail below.

 

The Company is a “controlled company” (one in which more than 50% of the voting power for the election of directors is held by an individual, a group or another company) within the meaning of the rules of the New York Stock Exchange (the “NYSE”). Accordingly, the Company is not required under the NYSE rules to have a majority of independent directors, a nominating and corporate governance committee or a compensation committee (each of which, under the NYSE’s rules, would otherwise be required to be comprised entirely of independent directors).

 

While the Company is not required under NYSE rules to satisfy the above-listed NYSE corporate governance requirements due to its “controlled company” status, the Board has determined that more than a majority of its directors (including Messrs. Bernikow, Bohan, Feldberg and Santagati and Mses. Lee, Mellon and 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 attached hereto as Annex A, and a printable copy is available at www.revloninc.com under the heading Investor Relations (Corporate Governance).

 

Notwithstanding the fact that the Company qualifies for the “controlled company” exemption, the Company maintains the Governance Committee and the Compensation Committee. The Company maintains the Governance Committee (comprised of Messrs. Feldberg (Chairman), Santagati (since February 2010) and Bohan and Ms. Lee), and the Board of Directors has determined that all members of the Governance Committee qualify as independent directors within the meaning of Section 303A.02 of the NYSE Listed Company Manual and under the Board Guidelines for Assessing Director Independence. The Company maintains the Compensation Committee (comprised of Messrs. Bernikow (Chairman), Santagati (since February 2010) and Schwartz and Ms. Seifert), and the Board has determined that three of the four directors on the Compensation Committee (Mr. Bernikow, Mr. Santagati and Ms. Seifert) qualify as independent directors within the meaning of Section 303A.02 of the NYSE Listed Company Manual and under the Board Guidelines for Assessing Director Independence and also qualify as “non-employee directors” within the meaning of Section 16 of the Exchange Act and as “outside directors” under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

In October 2009, the Company closed its 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”). In connection with the Exchange Offer, the Company entered into a Contribution and Stockholder Agreement, dated August 9, 2009, as amended, with MacAndrews & Forbes, pursuant to which the parties agreed, among other things, that, until October 8, 2013, the Company will continue to maintain a majority of independent directors on its Board of Directors, each of whom meets the “independence” criteria as set forth in Section 303A.02 of the NYSE Listed Company Manual (see “Certain Relationships and Related Transactions — Contribution and Stockholder Agreement”).

 

During 2009, the Board of Directors held 11 meetings and acted four times by unanimous written consent; the Audit Committee held seven meetings and acted four times by unanimous written consent; the Compensation

Committee held six meetings and acted one time by unanimous written consent; and the Governance Committee held six meetings.

 

In connection with a proposal that the Company received from MacAndrews & Forbes and publicly disclosed in April 2009, the Company formed a Special Committee, consisting of Messrs. Bernikow, Bohan, Feldberg and Wolfe and Ms. Lee, which committee met 12 times during 2009. Additionally, the Company’s independent Directors met, as a group, 4 times during 2009.

 

While the Board has not adopted a formal policy regarding directors’ attendance at the Company’s annual stockholders’ meeting, directors are invited to attend such meetings. Seven members of the Company’s Board of Directors attended the Company’s 2009 Annual Stockholders’ Meeting.

 

The Company believes that its board leadership structure is appropriate given the specific circumstances of the Company, as its Board continues to function effectively and efficiently. Notwithstanding the fact that the Company is a “controlled” company, more than a majority of the Company’s Directors are independent under applicable SEC and NYSE rules. The Board has established audit, nominating and compensation committees, each operating under written charters, to assist the Board in its oversight functions, and in each case those committees are comprised of at least a majority of independent Directors (with the Board’s Audit Committee and Governance Committee each 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 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 the day-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 2009 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 —

 

 

 

The Audit Committee is comprised of Messrs. Bernikow (Chairman), Bohan and Feldberg and Ms. Seifert, each of whom the Board of Directors has determined satisfies the NYSE’s and the SEC’s audit committee

independence and financial experience requirements. Each of these directors served as a member of the Audit Committee during all of 2009 and each of these directors remained a member of the Audit Committee as of the date of this Proxy Statement.

 

The Company has determined that Mr. Bernikow qualifies as an “audit committee financial expert,” under applicable SEC rules. In accordance with applicable NYSE listing standards, the Company’s Board of Directors has considered Mr. Bernikow’s simultaneous service on the audit committees of more than three public companies, namely the audit committees of the Company, Casual Male, Mack-Cali and the UBS Funds, and has determined that such service does not impair his ability to effectively serve on the Company’s Audit Committee as, among other things, Mr. Bernikow is retired and, accordingly, has a more flexible schedule and more time to commit to service as an Audit Committee and Board member, including on a full-time basis, if necessary; he has significant professional accounting experience and expertise, which renders him highly qualified to effectively and efficiently serve on multiple audit committees; and the audit committees of the UBS Funds effectively function as a single, consolidated audit committee.

 

The Audit Committee operates under a comprehensive written charter, a printable and current copy of which is available at www.revloninc.com under the heading Investor Relations (Corporate Governance).

 

Pursuant to its charter, the Audit Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities with respect to, among other things, the integrity of the Company’s financial statements and disclosures; the Company’s compliance with legal and regulatory requirements; the appointment, compensation, retention and oversight of the Company’s independent auditors, as well as their qualifications, independence and performance; and the performance of the Company’s internal audit functions. The Audit Committee is also responsible for preparing the annual Audit Committee Report, which is required under SEC rules to be included in this Proxy Statement (see “— Audit Committee Report,” below).

 

The Audit Committee has established procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. These complaint procedures are described in the Audit Committee’s charter, a printable and current copy of which is available at www.revloninc.com under the heading Investor Relations (Corporate Governance).

 

Management represented to the Audit Committee that the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2009 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 Section 380), as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T, including information concerning the scope and results of the audit and information relating to KPMG LLP’s 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.

 

The Audit Committee has received the written disclosures and the letter from the Company’s independent registered public accounting firm, as required by applicable requirements of the PCAOB regarding the independent

registered public accounting firm’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with the Company’s independent registered public accounting firm that firm’s independence.

 

The Audit Committee also reviewed, among other things, the amount of fees paid to the independent registered public accounting firm for audit and permissible non-audit services (see “Audit Fees” in this Proxy Statement, below). The Audit Committee has satisfied itself that KPMG LLP’s provision of audit and non-audit services to the Company is compatible with KPMG LLP’s independence.

 

Based on the Audit Committee’s review of and discussions regarding the Company’s audited consolidated financial statements and the Company’s internal control over financial reporting with management, the Company’s internal auditors and the independent registered public accounting firm and the other reviews and discussions with the independent registered public accounting firm referred to in the preceding paragraph, subject to the limitations on the Audit Committee’s roles and responsibilities described above and in the Audit Committee charter, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 for filing with the SEC.

 

Respectfully submitted,

 

Audit Committee

 

Alan S. Bernikow, Chairman

Paul J. Bohan

Meyer Feldberg

Kathi P. Seifert

 

The Compensation Committee is comprised of Messrs. Bernikow (Chairman), Santagati and Schwartz and Ms. Seifert. Each of Messrs. Bernikow and Schwartz served as a member of the Compensation Committee during all of 2009; Ms. Seifert was appointed to the Compensation Committee in October 2009; and Mr. Santagati was appointed to the Compensation Committee in February 2010. Each of Messrs. Bernikow, Santagati and Schwartz and Ms. Seifert remained a member of the Compensation Committee as of the date of this Proxy Statement.

 

The Compensation Committee operates under a comprehensive written charter, a printable and current copy of which is available at www.revloninc.com under the heading Investor Relations (Corporate Governance).

 

Pursuant to its charter, the Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the Company’s Chief Executive Officer (the “CEO”), evaluates the CEO’s performance in light of those goals and objectives and determines, either as a committee or together with the Board of Directors, the CEO’s compensation level based on such evaluation. The Compensation Committee also reviews and approves compensation and incentive arrangements for the Company’s executive officers and such other employees of the Company as the Compensation Committee may determine to be necessary or desirable from time to time. The Compensation Committee also reviews and approves awards pursuant to the Third Amended and Restated Revlon, Inc. Stock Plan (the “Stock Plan”) and administers such plan. The Company did not implement any annual equity award program for 2009, and does not intend to issue equity as a component of long-term compensation in 2010 or beyond.

 

The Compensation Committee is also responsible for reviewing and discussing with the Company’s Executive Vice President, Human Resources and Chief Legal 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 on Form 10-K) and (ii) producing the annual Compensation Committee Report and approving its inclusion in the Company’s annual report on Form 10-K or in the annual proxy statement.

 

Pursuant to the terms of the Incentive Compensation Plan, the Compensation Committee may delegate to an administrator (who must be an employee or officer of the Company) the power and authority to administer the Incentive Compensation Plan for the Company’s employees, other than its Chief Executive Officer and certain other officers who constitute “covered employees” as defined in Treasury Regulation § 1.162-27(c)(2) (“Section 162(m) Officers”). Section 157(c) of the Delaware General Corporation Law (the “DGCL”) provides that the Company’s Board of Directors (or the Compensation Committee acting on behalf of the Board) may delegate authority to any officer of the Company to designate grantees of equity awards under the Stock Plan other than himself or herself and to determine the number of such equity awards to be issued. The Compensation Committee did not delegate any such authority for 2009.

 

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.”

 

The Compensation Committee does not have any interlocks or insider participation requiring disclosure under the SEC’s executive compensation rules.

 

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth below in this Proxy Statement with the Company’s appropriate officers. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement, as well as in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, including by incorporation by reference to this 2010 Proxy Statement.

 

Respectfully submitted,

 

Compensation Committee

 

Alan S. Bernikow, Chairman

Richard J. Santagati (became a Compensation Committee member in February 2010)

Barry F. Schwartz

Kathi P. Seifert

 

The Governance Committee is comprised of Messrs. Feldberg (Chairman), Santagati and Bohan and Ms. Lee. Each of Messrs. Feldberg and Bohan and Ms. Lee served as a member of the Governance Committee during all of 2009; and Mr. Santagati was appointed to the Governance Committee in February 2010. Each of these Directors remained a member of the Governance Committee as of the date of this Proxy Statement.

 

The Governance Committee operates under a comprehensive written charter, a printable and current copy of which is available at www.revloninc.com under the heading Investor Relations (Corporate Governance).

 

Pursuant to its charter, the functions of the Governance Committee include, among other things: identifying individuals qualified to become Board members; selecting or recommending to the Board proposed nominees for Board membership; recommending directors to the Board to serve on the Board’s standing committees; overseeing the evaluation of the Board’s performance; evaluating the CEO’s and senior management’s performance; overseeing the Revlon, Inc. Related Party Transaction Policy; overseeing the Company’s processes for succession planning for the CEO and other senior management positions; and periodically reviewing the Board’s Corporate Governance Guidelines and Board Guidelines for Assessing Director Independence and recommending changes, if any, to the Board.

 

The Governance Committee identifies individuals qualified to become members of the Board when any vacancy occurs by reason of disqualification, resignation, retirement, death or an increase in the size of the Board, and selects or recommends that the Board select director nominees for each annual meeting of stockholders and director nominees to fill vacancies on the Board that may occur between annual meetings of stockholders.

 

In evaluating director nominees, the Governance Committee is guided by, among other things, the principles for Board membership expressed in the Company’s Corporate Governance Guidelines, which are available at www.revloninc.com under the heading Investor Relations (Corporate Governance). The Governance Committee, in identifying and considering candidates for nomination to the Board, considers, in addition to the requirements set out in the Company’s Corporate Governance Guidelines and the Governance Committee’s charter, the quality of the candidate’s experience, the Company’s needs and the range of talent and experience represented on the Board. In its assessment of each potential candidate, the Governance Committee will consider the nominee’s reputation, judgment, accomplishments in present and prior positions, independence, knowledge and experience that may be relevant to the Company, and such other factors as the Governance Committee determines to be pertinent in light of the Board’s needs over time, including, without limitation, education, diversity, race, gender and other individual qualities and attributes that are expected to contribute to the Board having an appropriate mix of viewpoints. The Governance Committee identifies potential nominees from various sources, such as officers, directors and stockholders, and from time to time retains the services of third party consultants to assist it in identifying and evaluating director nominees.

 

The Governance Committee will also consider director candidates recommended by stockholders. The process the Governance Committee follows to evaluate candidates submitted by stockholders does not differ from the process it follows for evaluating other director nominees. The Governance Committee may also take into consideration the number of shares held by the recommending stockholder, the length of time that such shares have been held and the number of candidates submitted by each stockholder or group of stockholders over the course of time. Stockholders desiring to submit director candidates must submit their recommendation in writing (certified mail — return receipt requested) to the Company’s Secretary, at Revlon, Inc., 237 Park Avenue, 14th Floor, New York, NY 10017, attention: Michael T. Sheehan.

 

The Governance Committee will accept recommendations for director candidates throughout the year; however, in order for a recommended director candidate to be considered by the Governance Committee for nomination to stand for election at an upcoming annual meeting of stockholders, the recommendation must be received by the Company, as set forth above, not less than 120 days prior to the anniversary date of the date of the Company’s most recent proxy statement, which, for recommendations for the Company’s 2010 Annual Meeting, was December 22, 2009. No such recommendations were received for the 2010 Annual Meeting. To 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 Board of Directors has established a process to receive communications from stockholders and other interested parties. Any stockholder or other interested party desiring to communicate with the Board or individual directors (including, without limitation, the non-management directors) regarding the Company may contact either the Board or such director by sending such communication to the attention of the Board or such director, in each case in care of the Company’s Secretary, who is responsible to ensure that all such communications are promptly provided to the Board or such director. Any such communication may be sent by: (i) emailing it to Michael T. Sheehan, Senior Vice President, Deputy General Counsel and Secretary, at michael.sheehan@revlon.com; or (ii) mailing it to Revlon, Inc., 237 Park Avenue, 14th Floor, New York, NY, 10017, attention: Michael T. Sheehan. Communications that consist of stockholder proposals must instead follow the procedures set forth under “General Rules Applicable to Stockholder Proposals” in this Proxy Statement, below, and, in the case of recommendations of director candidates, “Nominating and Corporate Governance Committee — Stockholder Process for Submitting Director Nominees,” in this Proxy Statement, above.

 

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. A non-management director will preside over each non-management executive session of the Board, and an independent director will preside over each independent executive session of the Board, although the same director is not required to preside at all such non-management or independent executive sessions. The presiding director at such non-management and independent executive sessions of the Board is determined in accordance with the applicable provisions of the Company’s By-laws, such that the Chairman of the Board of Directors or, in his absence (as is the case with independent executive sessions), a director chosen by a majority of the directors present will preside at such meetings. As noted above, the Board of Directors met in four non-management executive sessions, attended by only independent directors, during 2009.

 

The following table sets forth each of the Named Executive Officers of the Company as of December 31, 2009 (and their respective current positions with the Company as of the date hereof):

 

 

The following sets forth the age (as of December 31, 2009), positions held with the Company and selected biographical information for the Company’s Named Executive Officers whose biographical information is not included in this Proxy Statement, above, with the Company’s other Directors:

 

Mr. Elshaw (49) has served as the Company’s and Products Corporation’s Executive Vice President and Chief Operating Officer since May 2009. Mr. Elshaw previously served as the Company’s Executive Vice President and General Manager, U.S. Region, from October 2007 until May 2009. From July 2002 until September 2007, Mr. Elshaw held several leadership roles within Revlon International, including Senior Vice President and Managing Director, Europe, Middle East and Canada from May 2006 to October 2007; Managing Director of Europe and the Middle East from December 2003 to May 2006; General Manager of the U.K., Ireland and European Distributor Markets from February 2003 to December 2003; and General Manager of the U.K. and Ireland from July 2002 to February 2003. Prior to joining the Company, Mr. Elshaw held several senior management sales and marketing positions at Bristol-Myers Squibb from 1996 until 2002, including serving as General Manager of the U.K. and Ireland from 2000 until 2002. From 1983 to 1995, Mr. Elshaw served in various European senior sales and marketing positions at Alberto Culver. Mr. Elshaw is a board member of the Personal Care Products Council (formerly known as the Cosmetic, Toiletry & Fragrance Association), a cosmetic and personal care products industry association.

 

Mr. Kretzman (58) has served as the Company’s and Products Corporation’s Executive Vice President, Chief Legal Officer and General Counsel since December 2003 and also as the Company’s and Products Corporation’s Executive Vice President, Human Resources since October 2006. Mr. Kretzman formerly served as the Company’s and Products Corporation’s Secretary from September 1992 to June 2009. Mr. Kretzman served as the Company’s and Products Corporation’s Senior Vice President, General Counsel and Secretary 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 acquisitions. Mr. Kretzman has also served as the Company’s Chief Compliance Officer since January 2000.

 

Mr. Berns (45) 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, a leading over-the-counter, multi-asset class online marketplace, 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., an organization of advertising agencies and marketing services companies, 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. He has

served as a Director and member of the audit and compensation committees for LivePerson, Inc., a provider of online customer communications platforms, since April 2002. Mr. Berns is a Certified Public Accountant.

 

The Company has reviewed and considered all of its compensation plans and practices and does not believe that its compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.

 

The Company’s senior management is responsible for identifying and managing risks to the Company’s business and the Board’s Audit Committee is responsible for reviewing and discussing that process with management. In accordance with applicable NYSE rules for listed issuers, the Audit Committee maintains an Audit Committee charter that addresses the duties and responsibilities of the Audit Committee, including the requirement that such committee discuss the Company’s 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 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 the business risks faced by the Company and the Company’s management of those risks.

 

Set forth below is a discussion and analysis of all material elements of the Company’s compensation of its Named Executive Officers, including: (i) the objectives of the Company’s compensation program; (ii) what the compensation program is designed to reward; (iii) each element of compensation; (iv) why the Company chooses to pay each element; (v) how the Company determines the amount (and, where applicable, the formula) for each element to pay; and (vi) how each compensation element and the Company’s decisions regarding that element fit into the Company’s overall compensation objectives and may affect decisions regarding other elements of compensation.

 

In the face of the uncertain economic conditions in 2009, to balance the Company’s goal of providing competitive compensation with its goal of maintaining financial flexibility to achieve its financial objectives, the Company took the following compensation actions affecting certain of its 2009 compensation programs:

 

 

 

The Company’s philosophy is to provide a compensation package that is reasonably designed to satisfy the following objectives:

 

 

In order to achieve the objectives discussed above, the Company maintains a relatively simple compensation program. This program consists principally of: (i) base salary; (ii) eligibility for annual cash bonuses under the Incentive Compensation Plan, contingent upon achieving specific Company and individual performance objectives; and (iii) eligibility for long-term incentive compensation under such plan, contingent upon achieving specific Company and individual performance objectives (which elements of compensation are referred to, collectively, in this Proxy Statement as “total compensation,” unless otherwise noted). Traditionally, the Company’s long-term incentive compensation has been comprised of annual equity grants (principally, restricted stock) under the Company’s Stock Plan. During 2009, 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 adopted an LTIP component under its Incentive Compensation Plan, to position the Company to make future LTIP awards, from and after 2010 (for further discussion of the LTIP, see Proposal No. 2, in this Proxy Statement, below).

 

The performance-based and incentive compensation elements of cash bonus and prior equity grants have not resulted in significant wealth accumulation for the Company’s employees, including its Named Executive Officers. The Company’s bonus programs have been accrued and paid at 0%, 50%, 75% and 50% of target, respectively, for 2006, 2007, 2008 and 2009. Based on the $17.01 NYSE closing price of the Company’s Class A Common Stock on December 31, 2009, all stock options held by the Named Executive Officers were “out of the money,” as the exercise

price of all of their stock options exceeded such NYSE closing price at year end. The lowest exercise price of any stock option currently held by a Named Executive Officer is $25.50 per share.

 

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 higher-performing executives and incent them to maximize their performance.

 

As part of its assessment of the compensation opportunities for the Named Executive Officers, the Company also compares the Named Executive Officers’ total compensation to the total compensation opportunities for executives at comparison group companies. The Company seeks to design its total compensation to be competitive with other leading consumer products companies and other companies outside of the consumer products field, as the Company believes that the market for certain executive talent is broader than the consumer products field. When reviewing and setting Named Executive Officer compensation for 2009, the Company compared the total compensation of its executive officers to market compensation data for certain groups of companies in Towers Perrin’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 2009 consisted of the companies listed on Annex B.

 

For 2009, total compensation for the Company’s Named Executive Officers was below the 50th percentile of competitive benchmark norms. Specifically, the Named Executive Officers’ total compensation for 2009, as a percentage of the 50th percentile of compensation in the relevant Comparison Group, was as follows: (i) 39.8% for Mr. Kennedy; (ii) 33.1% for Mr. Ennis; (iii) 48.9% for Mr. Elshaw; (iv) 55.6% for Mr. Kretzman; and (v) 47.9% for Mr. Berns.

 

Base salary adjustments are considered annually and may be based on individual performance, assumption of new responsibilities, competitive data from the Comparison Group, employee retention efforts and the Company’s overall compensation guidelines and annual salary budget guidelines. Higher annual increases may be made to higher performers and key contributors, provided that the overall increases are within budgeted guidelines.

 

In the face of the uncertain economic conditions in 2009, to balance the Company’s goal of providing competitive compensation with its goal of maintaining financial flexibility to achieve its financial objectives, the Company did not award any annual base salary merit increases to its Named Executive Officers during 2009 (although Messrs. Ennis and Elshaw did receive salary increases in connection with their respective individual promotions during the year in recognition of their assumption of increased responsibilities in their new roles as President and Chief Executive Officer and Executive Vice President and Chief Operating Officer, respectively).

 

Under the Incentive Compensation Plan, annual cash bonus targets for 2009 were designed to reward the achievement of specific business objectives approved by the Compensation Committee at the beginning of the year. As noted above, the Company’s 2009 Bonus Program was accrued at 50%, to balance the Company’s goal of providing competitive compensation with its goal of maintaining financial flexibility to achieve its financial objectives in the face of the uncertain economic conditions in 2009.

 

Each year, the Compensation Committee reviews and establishes the performance measures for the Company’s annual cash bonus program to ensure that the program design appropriately motivates executives to achieve the Company’s financial and operational performance goals, which are designed to be challenging and linked directly to the Company’s business plan for the year. Payouts under the Company’s 2009 Bonus Program were contingent upon the achievement of identified corporate and individual performance objectives. The

Company’s corporate performance objective for the payout of bonuses at 50% of target under the 2009 Bonus Program was the achievement of 90% of $229 million of “adjusted EBITDA” for 2009 (the “2009 EBITDA Performance Goal”)¹.

 

Upon achieving the Company’s 2009 EBITDA Performance Goal, participants in the 2009 Bonus Program were eligible to receive 50% of their target bonus award if they achieved their individual performance objectives and met or exceeded expectations based on their 2009 Performance Management Review. Depending on the assessment of individual performance, participants could receive 75% to 150% of their 50% adjusted target bonus award, to enable managers to reward higher-performing employees, as long as the overall bonus budget of 50% of target was not exceeded.

 

Approximately 430 employees, including the Named Executive Officers, were eligible to participate in the 2009 Bonus Program. The bonus objectives for all employees in the 2009 Bonus Program included the Company’s achievement of its 2009 EBITDA Performance Goal, as well as the participants’ achievement of their individual performance objectives linked directly to executing the Company’s business plan for 2009.

 

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 2009 bonus awards) upon compliance with confidentiality, non-competition and non-solicitation obligations.

 

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, did not participate in the 2009 Bonus Program in his role as Vice Chairman. Mr. Ennis, who succeeded Mr. Kennedy as President and Chief Executive Officer in May 2009, was eligible during 2009 for a target bonus of 100% of his base salary, but for 2009 his target bonus was adjusted to 50%, due to the accrual of the 2009 Bonus Program at 50% of target. Messrs Elshaw, Kretzman and Berns were eligible under their employment agreements during 2009 for target bonuses of 75% of base salary, but for 2009 their target bonuses were adjusted to 37.5%, due to the accrual of the 2009 Bonus Program at 50% of target. In February 2010, with the Company reporting 2009 adjusted EBITDA in excess of the 2009 EBITDA Performance Goal, the Compensation Committee determined that the Company had exceeded its 2009 EBITDA Performance Goal, and that each of the Named Executive Officers had achieved (and in a number of cases exceeded) all of their respective individual performance objectives (including, in the case of Messrs. Ennis, Elshaw, Kretzman and Berns, objectives for 2009 established in compliance with Section 162(m)). Accordingly, bonuses were earned by each of the Named Executive Officers in respect of 2009, other than Mr. Kennedy, as noted above (see the Named Executive Officers’ respective objectives and the “Summary Compensation Table,” below).

 

As approved by the Compensation Committee, under the 2009 Bonus Program, the Compensation Committee had discretion to award up to 150% of the 50% adjusted target bonuses to reward high performance, as long as the overall bonus budget of 50% of target was not exceeded.

 

The Chief Executive Officer and the Executive Vice President, Human Resources develop, for review and approval by the Compensation Committee, the annual objectives that each Named Executive Officer is expected to achieve, and against which their performance is assessed. The Chief Executive Officer in conjunction with the Executive Vice President, Human Resources and the Vice Chairman develops, for review and approval by the Compensation Committee, his objectives to support and drive the execution of the Company’s business strategy. These objectives are derived from the Company’s annual financial and strategic planning sessions in which the Company’s Named Executive Officers and other senior executives participate. These objectives are established by

 

 

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 transactions, gains/losses on the repurchase of debt and miscellaneous expenses. In calculating adjusted EBITDA, the Company excludes the effects of gains/losses on foreign currency transactions, gains/losses on the repurchase 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.

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 2009, the Named Executive Officers’ objectives included both quantitative financial measurements and qualitative strategic and operational objectives linked directly to achieving the Company’s business strategy. When assessing the Named Executive Officers’ performance during 2009, the Compensation Committee reviewed and analyzed, in February 2010, detailed, comprehensive documentary support of each Named Executive Officer’s accomplishments against his respective 2009 performance objectives, including the following:

 

Mr. Ennis — President and Chief Executive Officer:

 

 

Mr. Elshaw — Executive Vice President and Chief Operating Officer:

 

 

Mr. Kretzman — Executive Vice President, Human Resources, Chief Legal Officer and General Counsel:

 

 

 

² Free cash flow is a non-GAAP measure which the Company defines as net cash provided by operating activities, less capital expenditures for property, plant and equipment, plus proceeds from the sale of certain assets. Free cash flow excludes proceeds on sale of discontinued operations. Free cash flow does not represent the residual cash flow available for discretionary expenditures, as it excludes certain expenditures such as mandatory debt service requirements, which for the Company are significant.

 

 

Mr. Berns — Executive Vice President and Chief Financial Officer:

 

 

Based upon its review and discussion of these materials, and following its determination that the Company had exceeded its 2009 EBITDA Performance Goal, the Compensation Committee determined in February 2010 that each of the Named Executive Officers had achieved (and in a number of cases exceeded) all of their respective individual performance objectives. As a result of the achievement or over-achievement of their performance objectives, the Compensation Committee awarded each of Messrs. Ennis, Elshaw, Kretzman and Berns 102.9%, 104.8%, 103.1% and 106.7%, respectively, of their adjusted target bonuses for 2009.

 

The Summary Compensation Table, below, reflects the bonus awards that were made for 2009 to the Named Executive Officers under the 2009 Bonus Program.

 

The third principal component of total compensation for the Company’s key employees (i.e., base salary, cash bonus and long-term incentive compensation) is long-term incentive compensation awards. Historically, this has taken the form of an annual grant of equity awards, usually in the form of restricted stock and, in prior years, stock options, under the Stock Plan.

 

However, during 2009, the Company decided not to implement an annual equity award program under its Stock Plan, and does not intend to issue equity as a component of long-term compensation in 2010 or beyond. To enable the Company to seek to maintain competitive total compensation, the Company adopted an LTIP component under its Incentive Compensation Plan, effective from and after 2010 (for further discussion of the LTIP, see Proposal No. 2, in this Proxy Statement, below).

 

The Company also maintains fairly standard benefits that are 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 fairly standard medical, dental, vision and life insurance coverages that are available to all U.S.-based, non-union employees.

 

The Company also maintains a limited number of benefit programs that are available to the Named Executive Officers and other senior employees qualifying for eligibility based on salary grade level. These benefits and perquisites include an automobile allowance or use of a Company automobile and limited reimbursement of certain costs for financial counseling, tax preparation and life insurance premiums. These types of benefits are commonly made available to senior executives at other major corporations and assist the Company in attracting and retaining key talent.

 

The Company focuses annually on developing a total compensation package that is intended to be externally competitive such that the level of total compensation (i.e., base salary, cash bonus and long-term incentive compensation) is targeted to be positioned at or about the 50th percentile of competitive benchmark norms. Salary ranges, annual bonus plan targets and long-term incentive compensation targets are reviewed using a “total compensation” perspective under which total remuneration is targeted to be within certain ranges compared to the Comparison Group. Values and targets of each element may change from year to year. Historically, the Named Executive Officers have not realized any meaningful wealth accumulation from prior equity awards, which has influenced setting base salaries.

 

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, than do employees with lower levels of responsibility and accountability. This means that a higher proportion of their total potential compensation is based upon variable elements, than is the case with the Company’s employees with lower levels of responsibility and accountability.

 

 

The Compensation Committee reviews and approves, among other things, compensation for the Company’s Named Executive Officers; the structure of the Company’s annual bonus program under the Incentive Compensation Plan, including setting annual performance objectives for the Named Executive Officers and annually assessing the extent to which those objectives have been achieved; and the structure of and actual grants under the Company’s long-term incentive compensation award programs.

 

The Compensation Committee reviews and approves goals and objectives relevant to the compensation of the Company’s Chief Executive Officer, evaluates the CEO’s performance in respect of those goals and objectives and determines, either as a committee or together with the Governance Committee and/or the Board of Directors, the CEO’s total compensation level based on that evaluation process. The Compensation Committee also reviews and approves compensation and incentive arrangements for the Company’s other Named Executive Officers.

 

The Compensation Committee reviews “tally sheets,” which include key components of each Named Executive Officer’s compensation that enables the Compensation Committee to make informed decisions regarding future elements of compensation.

 

The Company’s Executive Vice President, Human Resources, in consultation with the Company’s Chief Executive Officer, works with the Company’s Compensation Department to recommend: (i) merit increase guidelines under the Company’s salary administration program; (ii) the structure of the Company’s annual bonus program under the Incentive Compensation Plan; and (iii) the structure of its long-term incentive compensation programs (as noted above, the Company did not implement any annual equity award program under the Stock Plan in 2009).

 

As part of the Company’s processes and procedures for determining the amount and form of executive officer and director compensation, the Company’s Compensation Committee relies in part upon informed proposals and information provided by management, as well as market data, analysis and guidance provided by its outside compensation consultant. During 2009, the Compensation Committee consulted with and/or considered advice provided by its outside compensation advisors (Mercer through the third quarter of 2009 and thereafter, Compensation Advisory Partners LLC (“CAP”)) with respect to the following matters, among others: (i) the Company’s adoption of a cash-based, long-term incentive compensation component to its executive incentive compensation plan, effective from and after January 1, 2010; (ii) the structure and components of the Company’s 2010 Bonus Program; and (iii) salary adjustments for various executives who took on new roles in the organization during 2009 (including Mr. Kennedy as Vice Chairman, Mr. Ennis as President and Chief Executive Officer, Mr. Elshaw as Executive Vice President and Chief Operating Officer, and Mr. Berns, who was hired as Executive Vice President and Chief Financial Officer). Additionally, the Compensation Committee received guidance from CAP during 2009 when considering increases

recommended by management to the compensation of the Company’s independent, non-employee directors (see “Director Compensation,” below), which increases were approved by the Board during 2009, effective from and after January 1, 2010, upon the recommendation of the Compensation Committee, as director compensation has been below the median of competitive benchmarks. CAP performed no other services for the Company or the Compensation Committee during 2009 other than providing compensation advice to the Compensation Committee; without limiting the foregoing, CAP did not provide services such as benefits administration, human resources consulting or actuarial services. The Compensation Committee approved CAP’s engagement, upon the recommendation of management, and based upon CAP’s experience and qualifications. The Chairman of the Compensation Committee reviews and approves all invoices from the outside compensation consultant prior to payment.

 

As there has never been a restatement of the Company’s financial results, the Company has not considered any policy in respect of adjustment or recovery of amounts paid under its compensation plans.

 

Section 162(m) places a limit of $1,000,000 on the amount of compensation that the Company may deduct, for tax purposes, in any one year for certain officers who constitute “covered employees” under the rule, unless such amounts are determined to be “performance-based compensation” meeting certain requirements. Generally, the Company’s provision of cash incentive compensation under the Incentive Compensation Plan, stock option awards and performance-based stock awards meets the requirements for performance-based compensation under Section 162(m) and thus, generally, those items 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. The 2009 bonus objectives for the Company’s Named Executive Officers were approved under Section 162(m)’s guidelines for deductibility. Certain amounts of compensation for the Company’s officers do not meet Section 162(m)’s performance-based requirements and therefore are not 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 during 2009 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 2009 (collectively, the “Named Executive Officers”), for services rendered in all capacities to the Company and its subsidiaries during such periods. The amounts under the columns “Stock Awards” and “Option Awards,” in the Summary Compensation Table below, have been calculated based upon the aggregate grant date fair value of the stock and option awards made during each given fiscal year, if any, in each case as determined in accordance with applicable financial accounting standards (namely, FASB Accounting Standards Codification Topic 718). Historic amounts for 2008 and 2007 under the columns “Stock Awards” and “Option Awards,” 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 the SEC’s recent amendments to Item 402 of Regulation S-K under the Exchange Act. Additionally, the Company is presenting its 2009 annual cash bonus awards under the Revlon Executive Incentive Compensation Plan, as well as its historic presentation of those awards for 2008 and 2007, 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, where the Company formerly disclosed all of its annual cash bonus payments (i.e., annual target bonus plus any discretionary annual cash bonus). In all cases, stock option awards outstanding as of December 31, 2009 were “out-of-the-money,” in that in each case they had exercise prices that were above the $17.01 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2009 and therefore had no realizable monetary value to the Named Executive Officers on such date. See “Outstanding Equity Awards at Fiscal Year End.”

 

 

 

 

 

 

 

Mr. Ennis.  The amount shown under All Other Compensation for Mr. Ennis for 2009 consists of a car allowance; tax preparation services; life insurance premiums; and matching contributions under the 401(k) Plan.

 

Mr. Elshaw.  The amount shown under All Other Compensation for Mr. Elshaw for 2009 consists of $155,563 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; matching contributions under the 401(k) Plan; and employer contributions to Mr. Elshaw’s Revlon U.K. pension program, in which he ceased participation in May 2009.

 

Mr. Kretzman.  The amount shown under All Other Compensation for Mr. Kretzman for 2009 consists of $15,060 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; Executive Medical Plan premiums; tax preparation services and financial counseling; and matching contributions under the 401(k) Plan.

 

Mr. Berns.  The amount shown under All Other Compensation for Mr. Berns for 2009 consists of a car allowance; life insurance premiums; matching contributions under the 401(k) Plan; and health club dues.

 

Each of Messrs. Kennedy, Ennis, Elshaw, Kretzman and Berns, who were the Company’s Named Executive Officers during 2009, has an executive employment agreement with Products Corporation.

 

Mr. Kennedy

 

Mr. Kennedy’s employment agreement (as amended and restated, his “employment agreement”) provides that he will serve as Vice Chairman of the Board of Directors at an annual base salary of not less than $650,000.

 

Under his employment agreement, Mr. Kennedy is eligible to participate in fringe benefit programs and perquisites as may be generally made available to senior executives of Products Corporation of Mr. Kennedy’s level, including a car allowance and financial planning and tax preparation assistance. Mr. Kennedy’s employment agreement also provides for protection of Company confidential information and includes a non-compete obligation.

 

Products Corporation may terminate Mr. Kennedy’s employment agreement effective 24 months after written notice of non-extension of the agreement, and Mr. Kennedy may terminate his employment agreement at any time upon 60 days’ prior written notice following a material uncured breach by Products Corporation of its obligations to

Mr. Kennedy under such agreement. Mr. Kennedy’s employment agreement provides that, in the event of termination of employment by Mr. Kennedy for any material breach by Products Corporation of any of its obligations under his employment agreement, or by Products Corporation (otherwise than for “cause” as defined in the employment agreement or for disability), Mr. Kennedy would be entitled to continued payments of base salary throughout the 24-month severance period, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Kennedy is covered by like plans of another company, and continued participation during the severance period in the other perquisites of Products Corporation for which he was eligible on the termination date.

 

The estimated aggregate total of termination benefits over 24 months if Mr. Kennedy had been terminated without “cause” on December 31, 2009 would have been approximately $1,355,221, consisting of the following: (a) two times Mr. Kennedy’s annual base salary on December 31, 2009; (b) 24 months of life insurance coverage, at a cost of approximately $4,221; (c) 24 months of group medical and dental insurance coverage, at a total cost of approximately $4,000; (d) 24 months of tax preparation and financial counseling; and (e) 24 months of car allowance, at a cost of approximately $30,000. Mr. Kennedy does not currently participate in the Company’s standard group medical and dental plans. 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

 

Mr. Ennis’ employment agreement (as amended and restated, his “employment agreement”) provides that Mr. Ennis will serve as the Company’s President and Chief Executive Officer, at an annual base salary of not less than $875,000, with a target bonus of 100% of his base salary. As previously noted, the 2009 Bonus Program was accrued at 50% of target in furtherance of the Company’s goal of maintaining financial flexibility to achieve its financial objectives.

 

Under his employment agreement, Mr. Ennis is eligible to participate in fringe benefit programs and perquisites as may be generally made available to other senior executives of Products Corporation, including a car allowance and financial planning and tax preparation assistance. The employment agreement for Mr. Ennis also provides for protection of Company confidential information and includes a non-compete obligation.

 

Products Corporation may terminate Mr. Ennis’ employment agreement effective 24 months after written notice of non-extension of the agreement, and Mr. Ennis may terminate his employment agreement upon 60 days’ prior written notice following a material uncured breach by Products Corporation of its obligations to Mr. Ennis under such agreement. Mr. Ennis’ employment agreement provides that, in the event of termination of employment by Mr. Ennis for any material breach by Products Corporation of any of its obligations under his employment agreement or by Products Corporation (otherwise than for “cause” as defined in Mr. Ennis’ employment agreement or disability), Mr. Ennis would be entitled to continued payments of base salary throughout the 24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, and continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Ennis is covered by like plans of another company and continued participation during the severance period in the other perquisites of Products Corporation for which he was eligible on the termination date.

 

The estimated aggregate total of termination benefits over 24 months if Mr. Ennis had been terminated without “cause” on December 31, 2009 would have been approximately $2,231,030, consisting of the following: (a) two times Mr. Ennis’ annual base salary on December 31, 2009; (b) $437,500, representing Mr. Ennis’ 2009 target bonus; (c) 24 months of life insurance coverage at a cost of approximately $9,282; (d) 24 months of medical and dental insurance coverage, at a total cost of approximately $4,000; (e) 24 months of tax preparation and financial counseling; and (f) 24 months of car allowance, at a cost 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. Elshaw

 

Mr. Elshaw’s employment agreement (as amended and restated, his “employment agreement”) provides that Mr. Elshaw will serve as the Company’s Executive Vice President and Chief Operating Officer, at an annual base salary of not less than $700,000, with a target bonus of 75% of his base salary. As previously noted, the 2009 Bonus Program was accrued at 50% of target in furtherance of the Company’s goal of maintaining financial flexibility to achieve its financial objectives.

 

Under his employment agreement, Mr. Elshaw, who relocated to the U.S. from the U.K. at the Company’s request in connection with his promotion in 2007 to Executive Vice President and General Manager, U.S. Region, prior to his being appointed Executive Vice President and Chief Operating Officer in May 2009, receives a $150,000 annual housing allowance and is eligible to participate in fringe benefit programs and perquisites as may be generally made available to other senior executives of Products Corporation, including a car allowance and financial planning and tax preparation assistance. The employment agreement for Mr. Elshaw also provides for protection of Company confidential information and includes a non-compete obligation.

 

Products Corporation may terminate Mr. Elshaw’s employment agreement effective 24 months after written notice of non-extension of the agreement. Mr. Elshaw’s employment agreement provides that, in the event of termination of employment by Products Corporation (otherwise 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 the 24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Elshaw is covered by like plans of another company, and repatriation to the U.K.

 

The estimated aggregate total of termination benefits over 24 months if Mr. Elshaw had been terminated without “cause” on December 31, 2009 would have been approximately $1,696,954, consisting of the following: (a) two times Mr. Elshaw’s annual base salary on December 31, 2009; (b) $262,500, representing Mr. Elshaw’s 2009 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $7,426; (d) 24 months of group medical and dental insurance coverage, at a total cost of approximately $14,028; and (e) repatriation from the U.S. to the U.K. 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 (as amended and restated, his “employment agreement”) provides that he will serve as Executive Vice President, Human Resources, Chief Legal Officer and General Counsel, at an annual base salary of not less than his current base salary, with a target bonus of 75% of his base salary. As previously noted, the 2009 Bonus Program was accrued at 50% of target in furtherance of the Company’s goal of maintaining financial flexibility to achieve its financial objectives.

 

Under his employment agreement, Mr. Kretzman is eligible for participation in fringe benefit programs and perquisites as may be generally made available to senior executives of Products Corporation of Mr. Kretzman’s level, including financial planning and tax preparation assistance; use of an automobile; supplemental term life insurance coverage of two times Mr. Kretzman’s base salary; and 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, 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.

 

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 Products Corporation of any of its obligations under his employment agreement or for “good reason” (as set forth in Mr. Kretzman’s employment agreement), or by Products Corporation (otherwise than for “cause,” as defined in the employment agreement, or for disability), Mr. Kretzman would be entitled to continued payments of base salary throughout the 24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical, dental and executive medical plans, subject to the terms of such plans, throughout the severance 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 termination date.

 

Additionally, in the event Mr. Kretzman’s employment is terminated by Products Corporation without “cause” or by Mr. Kretzman for “good reason,” all restricted stock and stock option awards held by Mr. Kretzman would continue to vest and remain exercisable in accordance with their terms (in consideration for which, the non-solicitation and non-competition covenants in Mr. Kretzman’s employment agreement would remain in effect until the date that all existing equity awards are fully vested).

 

The estimated aggregate total of termination benefits over 24 months if Mr. Kretzman had been terminated without “cause” on December 31, 2009 would have been approximately $1,841,283, consisting of the following: (a) two times Mr. Kretzman’s annual base salary on December 31, 2009; (b) $266,643, representing his 2009 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $30,736; (d) 24 months of group and executive medical and dental insurance coverage, at a total cost of approximately $47,628; (e) 24 months of use of an automobile, at a cost of approximately $57,180; and (f) 24 months of tax preparation and financial counseling. Under such circumstances, Mr. Kretzman would also be entitled to the continued vesting of unvested restricted stock (68,600 restricted shares were unvested at December 31, 2009 having a fair market value on such date of $1,166,886 based on the $17.01 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2009 (all of Mr. Kretzman’s options were “out-of-the-money” on such date and had no realizable monetary value on December 31, 2009). 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 $425,000, with a target bonus of 75% of his base salary. As previously noted, the 2009 Bonus Program was accrued at 50% of target in furtherance of the Company’s goal of maintaining financial flexibility to achieve its financial objectives.

 

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 the 24-month severance period, payment of a 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, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Berns is covered by like plans of

another company, and continued participation during the severance period in the other perquisites of Products Corporation for which he was eligible on the termination date.

 

The estimated aggregate total of termination benefits over 24 months if Mr. Berns had been terminated without “cause” on December 31, 2009 would have been approximately $1,087,160, consisting of the following: (a) two times Mr. Berns’ annual base salary on December 31, 2009; (b) $159,375, representing Mr. Berns’ 2009 target bonus; (c) 24 months of life insurance coverage, at a cost of approximately $7,362; (d) 24 months of group medical and dental insurance coverage, at a total cost of approximately $23,423; (e) 24 months of tax preparation and financial counseling; 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.

 

Each of Messrs. Kennedy’s, Elshaw’s, Ennis’, Kretzman’s and Berns’ employment agreements provides that, in the event of any “change of control,” the terms of their employment agreements would be extended for an additional 24 months from the effective date of any such “change of control.” Each of their employment agreements also provides that if, within this 24-month period, the executive were to terminate his employment with the Company for “good reason” or if the Company were to terminate the executive’s employment other than for “cause,” he would receive: (i) a lump-sum payment equal to two times the sum of (a) the executive’s base salary and (b) the executive’s average gross bonus earned over the five calendar years prior to termination; and (ii) 24 months of continuation of all fringe benefits in which the executive participated on the “change of control” effective date or, in lieu of such benefits, a lump-sum cash payment equal to the value of such benefits. Each of their employment agreements also provides that, in the event of a “change of control,” all then-unvested stock options and restricted shares held by them shall immediately vest and become fully exercisable.

 

The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Kennedy had been terminated on December 31, 2009 would have been approximately $2,214,361, consisting of the following: (a) two times his annual base salary on December 31, 2009; (b) two times his 5-year average bonus, which average was $389,720 as of December 31, 2009; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $65,000 in respect of two years of profit sharing contributions under the Company’s 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $4,221; (f) 24 months of group medical and dental insurance coverage, at a total cost of approximately $4,000; (g) 24 months of car allowance at a cost of approximately $30,000; and (h) 24 months of tax preparation and financial counseling. In addition, under such circumstances, Mr. Kennedy would be entitled to the immediate vesting of his unvested restricted stock (139,917 restricted shares were unvested at December 31, 2009 having a fair market value on December 31, 2009 of $2,379,988 based on the $17.01 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2009 (all of Mr. Kennedy’s options were “out-of-the-money” on such date and had no realizable monetary value on December 31, 2009).

 

The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Ennis had been terminated on December 31, 2009 would have been approximately $2,312,150, consisting of the following: (a) two times his annual base salary on December 31, 2009; (b) two times his average 5-year bonus of $186,335; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $131,250 in respect of two years of profit sharing contributions under the 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $9,282; (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 total cost of approximately $30,000; and (h) 24 months of tax preparation and financial counseling. In addition, under such circumstances, Mr. Ennis would be entitled to the immediate vesting of his unvested restricted stock (71,934 restricted shares were unvested at December 31, 2009 having a fair market value on December 31, 2009 of $1,223,597 based on the $17.01 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2009

(all of Mr. Ennis’ options were “out-of-the-money” on such date and had no realizable monetary value on December 31, 2009).

 

The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Elshaw had been terminated on December 31, 2009 would have been approximately $2,198,004, consisting of the following: (a) two times his annual base salary on December 31, 2009; (b) two times his average 5-year bonus of $155,100; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $96,250 in respect of two years of profit sharing contributions under the 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $7,426; (f) 24 months of group medical and dental insurance coverage, at a total cost of approximately $14,028; (g) 24 months of car allowance, at a cost of approximately $30,000; (h) 24 months of tax preparation and financial counseling; (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 (72,334 restricted shares were unvested at December 31, 2009 having a fair market value on December 31, 2009 of $1,230,401 based on the $17.01 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2009 (all of Mr. Elshaw’s options were “out-of-the-money” on such date and had no realizable monetary value on December 31, 2009).

 

The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Kretzman had been terminated on December 31, 2009 would have been approximately $2,345,991, consisting of the following: (a) two times his annual base salary on December 31, 2009; (b) two times his 5-year average bonus of $221,726; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $313,200 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 $30,736; (f) 24 months of group and executive medical and dental insurance coverage at a total cost of approximately $47,628; (g) 24 months of use of a Company automobile at a cost of approximately $57,180; and (h) 24 months of tax preparation and financial counseling. In addition, under such circumstances, Mr. Kretzman would be entitled to the immediate vesting of his unvested restricted stock (68,600 restricted shares were unvested at December 31, 2009 with a fair market value of $1,166,886 on December 31, 2009 based on the $17.01 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2009 (all of Mr. Kretzman’s stock options were “out-of-the-money” on such date and had no realizable monetary value on December 31, 2009).

 

The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Berns had been terminated on December 31, 2009 would have been approximately $1,321,473, consisting of the following: (a) two times his annual base salary on December 31, 2009; (b) two times his average bonus of $159,375 during the one year he has been eligible to receive a bonus; (c) two years of contributions under the Company’s 401(k) Plan; (d) approximately $58,438 in respect of two years of profit sharing contributions under the 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $7,362; (f) 24 months of group medical and dental insurance coverage, at a total cost of approximately $23,423; (g) 24 months of car allowance at a cost of approximately $30,000; and (h) 24 months of tax preparation and financial counseling. In addition, under such circumstances, Mr. Berns would be entitled to the immediate vesting of his unvested restricted stock (25,000 restricted shares were unvested at December 31, 2009 having a fair market value on December 31, 2009 of $425,250 based on the $17.01 per share NYSE closing price of the Company’s Class A Common Stock on such date).

 

During 2009, the only Named Executive Officer who received an equity award under the Stock Plan was Mr. Berns, whose restricted stock award, which was granted upon Mr. Berns joining the Company as Executive Vice President and Chief Financial Officer in May 2009, is summarized below. None of the other Named Executive Officers received restricted stock awards during 2009 and none of the Named Executive Officers received awards of stock options during 2009. Grant date fair value, below, reflects the number of shares of restricted stock (all of which are currently unvested) times $4.91, which was the NYSE closing market price of the Company’s Class A Common Stock on the May 18, 2009 grant date.

 

 

On May 18, 2009, the Compensation Committee granted shares of restricted Class A Common Stock to Mr. Berns in connection with the commencement of his employment with the Company as Executive Vice President and Chief Financial Officer. Mr. Berns’ award was publicly reported on a Form 4 filed with the SEC on May 19, 2009. All of the restricted shares granted to Mr. Berns vest as to one-third of the shares on each of July 2, 2010, July 2, 2011 and July 2, 2012, or in full upon any “change of control.” No dividends will be paid on the unvested restricted stock granted in 2009 to Mr. Berns. On December 31, 2009, all of these shares were unvested and therefore had no realizable monetary value as of that date.

 

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, 2009. As the $17.01 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2009 was lower than the exercise price for all options outstanding on December 31, 2009, all of the stock options held by the Named Executive Officers had no realizable monetary value as of December 31, 2009. The NYSE closing market price of the Company’s Class A Common Stock on the Record Date was $15.04 per share. All historical share data has been adjusted for the Company’s 1-for-10 Reverse Stock Split. Each of the Named Executive Officers exchanged in the Exchange Offer all of their eligible shares of the Company’s Class A Common Stock held by them on October 8, 2009 (the closing date of the Exchange Offer), and received a like number of shares of Series A Preferred Stock. The stock awards listed in the table below reflect restricted shares of Class A Common Stock that vest after the closing date of the Exchange Offer and therefore were not exchanged.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table sets forth the value of restricted stock held by the Named Executive Officers which vested during 2009, with the value determined by multiplying the number of shares that vested by the NYSE closing market price of the Company’s Class A Common Stock on the vesting date. Each of the Named Executive Officers exchanged in the Exchange Offer all of their eligible shares of the Company’s Class A Common Stock held by them on October 8, 2009 (the closing date of the Exchange Offer), and received a like number of shares of Series A Preferred Stock. None of the Named Executive Officers sold any of their shares of formerly restricted stock that vested during 2009.

 

 

 

 

 

 

The following table shows, as of December 31, 2009 (the pension plan measurement date used for financial statement reporting purposes with respect to the audited financial statements included in the Company’s 2009 Form 10-K), the number of years of credited service, 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.

 

 

 

 

The Retirement Plan is intended to be a tax qualified defined benefit plan. In May 2009 the Company amended the Retirement Plan and the Pension Equalization Plan to cease future benefit accruals under such plans after December 31, 2009. Prior to such amendments, benefits under the non-cash balance program of the Retirement Plan (the “Non-Cash Balance Program”) were a function of service and final average compensation. The Non-Cash Balance Program was designed to provide an employee having 30 years of credited service with an annuity generally equal to 52% of final average compensation less 50% of estimated individual Social Security benefits. Final average compensation is defined as average annual base salary and bonus (but not any part of bonuses in excess of 50% of base salary) during the five consecutive calendar years in which base salary and bonus (but not any part of bonuses in excess of 50% of base salary) were highest out of the last 10 years prior to retirement or earlier termination. Participants in the Non-Cash Balance Program are eligible for early retirement upon the later of the date that they reach age 55 or complete 10 years of service. The amount payable upon early retirement is calculated based on the normal retirement benefit calculation under the Non-Cash Balance Program, reduced by 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). Messrs. Kennedy, Ennis and Elshaw, each of whom joined the Company after the implementation of the Cash Balance Program (as discussed below), do not participate in the Non-Cash Balance Program.

 

Effective January 1, 2001, Products Corporation amended the Retirement Plan to provide for a cash balance program under the Retirement Plan (the “Cash Balance Program”). Prior to ceasing future benefit accruals under the Retirement Plan after December 31, 2009, under the Cash Balance Program, eligible employees received 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 previous quarter. Interest credits, which commenced June 30, 2001, were 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” and continued to participate in the Non-Cash Balance Program under the same retirement formula described in the preceding paragraph, prior to ceasing future benefit accruals under the Retirement Plan after December 31, 2009. All eligible employees had their benefits earned (if any) under the Non-Cash Balance Program “frozen” on December 31, 2000 and began to participate in the Cash Balance Program on January 1, 2001, prior to ceasing future benefit accruals under the Retirement Plan after December 31, 2009. The “frozen” benefits will be payable at normal retirement age and will be reduced if the employee elects early retirement.

 

The Retirement Plan and Pension Equalization Plan each provide that employees vest in their benefits after they have completed three years of service with the Company or an affiliate of the Company. Each of the Named Executive Officers are fully vested in their respective benefits under the Pension Plan and the Pension Equalization Plan as of December 31, 2009. The Employee Retirement Income Security Act of 1974, as amended, places certain maximum limitations under ERISA and the Code upon the annual benefit payable under all qualified plans of an employer to any one individual. In addition, the Code limits the annual amount of compensation that can be considered in determining the level of benefits under qualified plans. 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 but for such limitations, up to a combined maximum annual straight life annuity benefit at age 65 under the Retirement Plan and the Pension Equalization Plan of $500,000. Benefits provided under the Pension Equalization Plan are conditioned on the participant’s compliance with his or her non-competition agreement and on the participant not competing with Products Corporation for one year after termination of employment.

 

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.

 

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 matched 50% of those contributions up to 6% of pay contributed. New contributions to the Excess Savings Plan were frozen on December 31, 2004. The Excess Savings Plan provides for the same investment choices as are available in the Company’s 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 practicable after termination of a participant’s employment and may be paid in either annual installments over a period of no more than 10 years or as a single lump-sum payment, as elected by participants upon enrollment. Mr. Kretzman contributed to the Company’s Excess Savings Plan before it was frozen. 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, 2009.

 

 

 

 

The following Director Compensation table shows all compensation paid by the Company to its Directors in respect of 2009.

 

 

 

 

The following table sets forth, as of March 31, 2010, the number of shares of the Company’s Voting Capital Stock beneficially owned, and the percent so owned, by (i) each person known to the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities; (ii) each director of the Company; (iii) the Chief Executive Officer and each of the other Named Executive Officers; and (iv) all directors and executive officers of the Company as a group. The number of shares owned are those beneficially owned, as determined under the applicable rules of the SEC for the purposes of this Proxy Statement, and such information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares of Voting Capital Stock as to which a person has sole or shared voting power or investment power and any shares of Voting Capital Stock which the person has the right to acquire within 60 days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of attorney or revocation of a trust, discretionary account or similar arrangement. Certain of the shares listed as beneficially owned are pursuant to stock options which were all “out-of-the-money” as of such date.

 

 

 

The following table sets forth as of December 31, 2009, with respect to all equity compensation plans of the Company previously approved and not previously approved by its stockholders: (i) the number of securities to be issued upon the exercise of outstanding options, warrants and rights; (ii) the weighted-average exercise price of such outstanding options, warrants and rights; and (iii) the number of securities remaining available for future issuance under such equity compensation plans, excluding securities reflected in column (a).

 

 

 

 

As of December 31, 2009, MacAndrews & Forbes beneficially owned shares of Revlon, Inc.’s Voting Capital Stock having approximately 77% of the combined voting power of such outstanding shares. As a result, MacAndrews & Forbes is able to elect Revlon, Inc.’s entire Board of Directors and control the vote on all matters submitted to a vote of Revlon, Inc.’s stockholders. MacAndrews & Forbes is wholly owned by Ronald O. Perelman, Chairman of Revlon, Inc.’s Board of Directors.

 

In June 1992, Revlon, Inc. and Products Corporation entered into an asset transfer agreement with Revlon Holdings LLC, a Delaware limited liability company and formerly a Delaware corporation known as Revlon Holdings Inc. (“Revlon Holdings”), and which is an affiliate and an indirect wholly-owned subsidiary of 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”). Certain consumer products lines sold in demonstrator-assisted distribution channels considered not integral to the 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 2009 was $0.3 million.

 

Revlon, Inc., Products Corporation and MacAndrews & Forbes Inc., a wholly-owned subsidiary of MacAndrews & Forbes Holdings Inc. (“MacAndrews & Forbes Holdings”) have entered into reimbursement agreements (the “Reimbursement Agreements”) pursuant to which (i) MacAndrews & Forbes Inc. is obligated to provide (directly or through affiliates) certain professional and administrative services, including employees, to Revlon, Inc. and its subsidiaries, including 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 employees, to MacAndrews & Forbes and purchase services from third party providers, such as insurance, legal and accounting services, on behalf of MacAndrews & Forbes to the extent requested by MacAndrews & Forbes, provided that in each case the performance of such services does not cause an unreasonable burden to MacAndrews & Forbes or Products Corporation, as the case may be.

 

Products 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, which covers Revlon, Inc. and Products Corporation as well as MacAndrews & Forbes. The limits of 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 payable to MacAndrews & Forbes from Products Corporation for the services provided under the Reimbursement Agreements for 2009 was nil.

 

As a result of a debt-for-equity exchange transaction completed in March 2004 (the “2004 Revlon Exchange Transactions”), as of March 25, 2004, Revlon, Inc., Products Corporation and their U.S. subsidiaries were no longer included in the affiliated group of which MacAndrews & Forbes was the common parent (the “MacAndrews & Forbes Group”) for federal income tax purposes.

 

Revlon Holdings, Revlon, Inc., Products Corporation and certain of its subsidiaries, and MacAndrews & Forbes Holdings entered into a tax sharing agreement (as subsequently amended and restated, the “MacAndrews & Forbes Tax Sharing Agreement”) for taxable periods beginning on or after January 1, 1992 through and including March 25, 2004 during which Revlon, Inc. and Products Corporation or a subsidiary of Products Corporation was a member of the MacAndrews & Forbes Group. In these taxable periods, Revlon, Inc.’s and Products Corporation’s federal taxable income and loss were included in such group’s consolidated tax return filed by MacAndrews & Forbes Holdings. Revlon, Inc. and Products Corporation were also included in certain state and local tax returns of MacAndrews & Forbes Holdings or its subsidiaries. Revlon, Inc. and Products Corporation remain liable under the MacAndrews & Forbes Tax Sharing Agreement, for all such taxable periods through and including March 25, 2004 for amounts determined to be due as a result of a redetermination arising from an audit or otherwise, equal to the taxes that Revlon, Inc. or Products Corporation would otherwise have had to pay if it were to have filed separate federal, state or local income tax returns for such periods.

 

Following the closing of the 2004 Revlon Exchange Transactions, Revlon, Inc. became the parent of a new consolidated group for federal income tax purposes and Products Corporation’s federal taxable income and loss will be included in such group’s consolidated tax returns. Accordingly, Revlon, Inc. and Products Corporation entered into a tax sharing agreement (the “Revlon Tax Sharing Agreement”) pursuant to which Products Corporation will 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 MacAndrews & Forbes Tax Sharing Agreement in 2009 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 2010. There were federal tax payments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement during 2009 of $0.6 million with respect to 2008 and $0.2 million with respect to 2009. There were federal tax repayments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement during 2010 of $0.3 million with respect to 2009.

 

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”), the then direct parent of Revlon, Inc.) entered into a registration rights agreement (the “Registration Rights Agreement”), and in February 2003, MacAndrews & Forbes executed a joinder agreement to the Registration Rights Agreement, pursuant to which REV Holdings, MacAndrews & Forbes and certain transferees of Revlon, Inc.’s Common Stock held by REV Holdings (the “Holders”) 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”). In connection with the closing of the 2004 Revlon Exchange Transactions and pursuant to an Investment Agreement entered into in connection with such transactions (the “2004 Investment Agreement”), MacAndrews & Forbes executed a joinder agreement that provided that MacAndrews & Forbes would also be a Holder under the Registration Rights Agreement and that all shares acquired by MacAndrews & Forbes pursuant to the 2004 Investment Agreement are deemed to be registrable securities under the Registration Rights Agreement. This included all of the shares of Class A Common Stock acquired by MacAndrews & Forbes in connection with the Company’s $110 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, which was consummated in March 2006, and the Company’s $100 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, which was consummated in January 2007.

 

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”). The Holders will pay all out-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.

 

Upon consummation of the Exchange Offer, MacAndrews & Forbes contributed to Revlon, 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 respect to such loan is referred to as the “Senior Subordinated Term Loan Agreement”) made from MacAndrews & Forbes to Products Corporation in 2008 in the original aggregate principal amount of $170 million (such $48.6 million of the Senior Subordinated Term Loan being the “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 Revlon, Inc. issued to MacAndrews & Forbes 9,336,905 shares of Class A Common Stock at a ratio of one share of Class A Common Stock for each $5.21 of outstanding principal amount of the Senior Subordinated Term Loan contributed to Revlon. Also upon consummation of the Exchange 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 annual interest rate on the Contributed Loan from 11% to 12.75%, to extend the maturity date on the $58.4 million principal amount of the Senior Subordinated Term Loan which remains owing from Products Corporation to MacAndrews & Forbes 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 prior to such loan’s respective maturity dates all shares of Revlon, Inc.’s Preferred Stock have been or are being concurrently redeemed and all payments due thereon are paid in full or are concurrently being paid in full.

 

The Senior Subordinated Term Loan Agreement contains various restrictive covenants, cross acceleration provisions, customary events of default for loan agreements of such type, and change of control provisions.

 

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 & Forbes and/or its affiliates elects to participate in any such offering, MacAndrews & Forbes and/or its affiliates may pay for any shares it acquires in such offering either in cash or by tendering debt valued at its face amount under the Non-Contributed Loan, 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.

 

In connection with consummating the Exchange Offer, Revlon, Inc. and MacAndrews & Forbes entered into a Contribution and Stockholder Agreement on August 9, 2009 (as amended, the “Contribution and Stockholder Agreement”), pursuant to which through October 8, 2013:

 

 

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).

 

In connection with the 2004 Revlon Exchange Transactions, in February 2004 Revlon, Inc. and Fidelity 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; 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, when Fidelity ceases to be the beneficial holder of at least 5% of the Company’s outstanding voting stock.