UNITED STATES
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTIONProxy Statement Pursuant to Section 14(a) OF THE SECURITIESof the
Filed by the Registrant þ
Filed by a Party other than the Registranto
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted byRule 14a-6(e)(2))
☒ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant toRule 14a-12
REVLON, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
No fee required. | ||
o | Fee computed on table below per Exchange ActRules 14a-6(i)(1) and 0-11. |
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(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange ActRule 0-11: |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. | ||
o | Check box if any part of the fee is offset as provided by Exchange ActRule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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(2) | Form, Schedule or Registration Statement No.: |
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(4) | Date Filed: |
REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017
April 19, 2011
Dear Stockholders:
You are cordially invited to attend the 2011Revlon, Inc.’s 2014 Annual Stockholders’ Meeting. The 2014 Annual Meeting of Stockholders of Revlon, Inc., which will be held at 10:00 a.m., Eastern Time, on Thursday,Tuesday, June 2, 2011,10, 2014, at Revlon’sRevlon'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 Stockholders’ Meeting of Stockholders and Proxy Statement. Please also see the accompanying Notice of Annual Stockholders’ 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 at the 2014 Annual Meeting, we recognize that many stockholders may not be able to attend the 2011 Annual Meeting. In accordance with rules adopted by the U.S. Securities and Exchange Commission, wemeeting. 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 2010 Annual Report) which contains(the “Internet Notice”) containing instructions on how stockholders can access the proxy materials over the Internet and vote electronically.
The Notice of Internet Availability of Proxy MaterialsNotice also contains instructions on how stockholders can receive a paper copy of our proxy materials, including the Proxy Statement, the 20102013 Annual Report and a form of proxy card. Our proxy materials are being furnished to Revlon, Inc. stockholders on or about April 19, 2011.
Whether or not you plan to attend the 20112014 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 MaterialsNotice and our Proxy Statement. This will not restrict your right to attend the 20112014 Annual Meeting and vote your shares in person, shouldif you wish to change your prior vote.
Thank you.
Sincerely yours,
Lorenzo Delpani
President and Chief Executive Officer
REVLON, INC.
237 PARK AVENUE
NEW YORK, NY 10017
NOTICE OF ANNUAL STOCKHOLDERS’ MEETING OF STOCKHOLDERS
To the Stockholders of Revlon, Inc.
The 20112014 Annual Stockholders’ Meeting of Stockholders of Revlon, Inc., a Delaware corporation (the “Company”), will be held at 10:00 a.m., Eastern Time, on Thursday,Tuesday, June 2, 2011,10, 2014, at Revlon’sRevlon's Research Center at 2121 Route 27, Edison, NJ 08818. The following proposals will be voted on at the 20112014 Annual Meeting:
1. the election of the following persons as members of the Company’sCompany's Board of Directors to serve until the next Annual Meetingannual stockholders’ meeting and until such directors’directors' successors are elected and shall have been qualified: Ronald O. Perelman, Alan S. Bernikow, Paul J. Bohan, Alan T. Ennis,Diana F. Cantor, Lorenzo Delpani, Viet D. Dinh, Meyer Feldberg, David L. Kennedy, Robert K. Kretzman, Ceci Kurzman, Debra L. Lee, Tamara Mellon, Richard J. Santagati, Barry F. Schwartz, and Kathi P. Seifert;
2. the ratification of the Audit Committee’s selection of KPMG LLP as the Company’sCompany's independent registered public accounting firm for 2011;
3. the non-binding, advisory “say-on-pay” vote of stockholders on the Company’sCompany's executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in this Proxy Statement(“say-on-pay”);
4. to act upon a stockholder proposal, if presented at the non-binding, advisory vote of2014 Annual Meeting, that requests the Company to provide an annual report to stockholders disclosing the Company’s policy on the future frequency of the“say-on-pay” vote;animal testing; and
5. the transaction of such other business as may properly come before the 20112014 Annual Meeting.
A Proxy Statement describing the matters to be considered at the 20112014 Annual Meeting accompanies this notice. Only stockholders of record of Revlon, Inc. Class A Common Stock at 5:00 p.m., Eastern Time, on April 8, 201114, 2014 are entitled to notice of, and to vote at, the 20112014 Annual Meeting and at any adjournments thereof. of such meeting.
For at least ten10 days prior to the 20112014 Annual Meeting, a list of stockholders entitled to vote at the 20112014 Annual Meeting will be available for inspection during normal business hours at the offices of the Company’sCompany's Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, and such10017. Such list also will be available at the 20112014 Annual Meeting.
Important Notice Regarding the Internet Availability of Proxy Materials for the June 2, 2011 AnnualStockholders’ Meeting:
Our Proxy Statement and 20102013 Annual Report under U.S. Securities and Exchange Commission rules that require companies to make proxy materialsare available to their stockholders over the Internet and to furnish notice of Internet access to such materials. Accordingly, we are sendingInternet. We have furnished the Company’s stockholders with a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) informing them of their ability to all of our stockholders (stockholdersaccess the proxy materials on the Internet.
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).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.Notice. Our Proxy Statement, including the Notice of Annual Stockholders’ Meeting, of Stockholders, and our 20102013 Annual Report to Stockholders are available atwww.proxyvote.com (where stockholders may also vote their shares over the Internet) and atwww.revloninc.com.
Whether or not you plan to attend the 20112014 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 MaterialsNotice or proxy card. Your proxy can be withdrawn by you at any time before it is voted at the 20112014 Annual Meeting.
If you plan to attend the 20112014 Annual Meeting in person, you should check the appropriate box on your proxy card (oror, if you are voting on the Internet, indicate when prompted that you will attend when prompted by electronic voting means whichin person. To be admitted to the 2014 Annual Meeting, you may access) indicating that you intend to do so. You will need to presentvalid picture identification, such as a driver’sdriver's license or passport, in order to be admitted to the meeting. passport.
If your shares are held other than as a stockholder of record (such as
(not be accepted)copies) to evidence your stock ownership as of the April 8, 201114, 2014 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. Class A Common Stock Class B Common Stock or Series A Preferred Stock (“voting capital stock”) in your account on the April 8, 201114, 2014 record date, or, ifdate.
For admission to the 2014 Annual Meeting, you did not already return it to your bank or broker,may present an original voting instruction form issued by your bank or broker, demonstrating that you held Revlon, Inc. voting capital stockClass A Common Stock in your account on the April 8, 201114, 2014 record date.date, if you did not already return such form to your bank or broker. Copies and “Requests for Admission” will not be accepted. Please see our Proxy Statement for information on how to pre-register for the meeting, should you wish to attend.
In order toTo expedite the admission registration process, we encourage stockholders to pre-register in accordance withfollow the pre-registration procedures set forth in ourthis Proxy Statement.
Thank you.
By Order of the Board of Directors
Michael T. Sheehan
April 19, 2011
TO ENABLE YOU TO VOTE YOUR SHARES IN ACCORDANCE WITH YOUR WISHES, PLEASE PROMPTLY SUBMIT YOUR VOTE BY INTERNET, TELEPHONE OR MAIL BY FOLLOWING THE INSTRUCTIONS FOUND ON YOUR NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS,NOTICE, VOTING INSTRUCTION FORM OR PROXY CARD. THIS WILL ENSURE THAT YOUR SHARES ARE VOTED IN ACCORDANCE WITH YOUR WISHES.
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ADDITIONAL INFORMATION | 61 | ||||
OTHER BUSINESS | 61 | ||||
2013 COMPARISON GROUP | Annex A-1 | ||||
2014 AUDIT COMMITTEE PRE-APPROVAL POLICY | Annex B-1 |
This summary highlights information contained in this Proxy Statement. For more information, you should carefully read and consider the entire Proxy Statement, as well as the Company’s 2013 Annual Report, before voting on the matters presented in this Proxy Statement.
2014 Annual Stockholders’ Meeting | |||
Time & Date | 10:00 a.m., June 10, 2014 | ||
Place | Revlon Research Center 2121 Route 27 Edison, NJ 08818 | ||
Record Date | April 14, 2014 | ||
Voting | Each share of the Company’s Class A Common Stock is entitled to one vote. Class A Common Stock is the Company’s only outstanding class of voting capital stock. | ||
Admission | Stockholders of record on the Record Date may attend the 2014 Annual Meeting upon presentation of appropriate admission materials; pre-registration is encouraged; see the “Questions and Answers About the Annual Meeting and Voting” section of this Proxy Statement for more information. | ||
Meeting Agenda | 1. | Election of Directors. | |
2. | Ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2013. | ||
3. | Non-binding, advisory “say-on-pay” vote of stockholders on the Company's executive compensation. | ||
4. | Stockholder Proposal. | ||
5. | Transact such other business that may properly be brought before the meeting. | ||
Voting Matters | |||
Item | Board Vote Recommendation | ||
1. | Election of Directors | For each Director nominee. | |
2. | Ratification of the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 2014 | For. | |
3. | Non-binding, advisory “say-on-pay” vote of stockholders on the Company’s executive compensation | For. | |
4. | Stockholder Proposal | Against. |
Board Nominees
The following table provides summary information about each Director nominee. Each Director nominee is a current standing Director of the Company. Each Director is elected annually by a plurality of the votes cast.
Name | Revlon Director Since | Independent | Committee Memberships | Committee Chairman | ||
Ronald O. Perelman (Chairman) | 1992 | |||||
2003 | X | Audit; Compensation | Audit; Compensation | |||
Diana F. Cantor | 2013 | X | Audit | |||
Lorenzo Delpani | 2013 | |||||
2012 | X | Nominating & Corporate Governance | ||||
Meyer Feldberg | 1997 | X | Audit; Nominating & Corporate Governance | Nominating & Corporate Governance | ||
David L. Kennedy | 2006 | |||||
2013 | Compensation | |||||
Ceci Kurzman | 2013 | X | Compensation | |||
Debra L. Lee | 2006 | X | Nominating & Corporate Governance | |||
Tamara Mellon | 2008 | X | ||||
2007 | Nominating & Corporate Governance | |||||
Kathi P. Seifert | 2006 | X | Audit; Compensation | |||
Cristiana Falcone Sorrell | 2014 | X |
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Q. | Why am I receiving these proxy materials? |
A. | Our Board of Directors is providing this Proxy Statement and other materials to you in connection with the |
(1) the election of directors;
(2) the ratification of the Audit Committee’s selection of KPMG LLP as the Company's independent registered public accounting firm for 2014;
(3) the non-binding, advisory “say-on-pay” vote of the Company's stockholders on the Company's executive compensation, as disclosed pursuant to Item 402 of Regulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in this Proxy Statement;
(4) consideration of a stockholder proposal
and such other business as may properly come before the 2014 Annual Meeting. The approximate date of making these proxy materials available to you is April 24, 2014.
Q. | Why did I receive a notice regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials? |
In accordance with SEC 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 20112014 Annual Meeting, we are making the proxy materials and our 20102013 Annual Report available to our stockholders electronically viaon the Internet. On or about April 19, 2011,24, 2014, 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 20102013 Annual Report overon the Internet and vote electronically, as well as instructions on how stockholders can receiverequest a paper copy of our proxy materials, including the 20112014 Proxy Statement, the 20102013 Annual Report and a form of proxy card. Otherwise, you will not receive a printed copy of the proxy materials (unlessUnless you already had a request for paper copies on file with our transfer agent or your broker).broker, you will not receive a printed copy of the proxy materials. Instead, the Internet Notice will instruct you as to how you may access and review the proxy materials and submit your vote viaon the Internet. If you would like to receive a printed copy of the proxy materials, please follow the instructions included in the Internet Notice for requesting printed materials.
Important Notice Regarding the Availability of Proxy Materials for the June 2, 201110, 2014 Annual
Stockholders’ Meeting:
Our 20112014 Proxy Statement, including the Notice of Annual Stockholders’ Meeting of Stockholders, and 2010our 2013 Annual Report to Stockholders are available atwww.proxyvote.com (where stockholders and at www.revloninc.com. Stockholders may also vote their shares via the Internet) and atwww.revloninc.comwww.proxyvote.com.
Q. | How can I request paper copies of proxy materials? |
A. |
Q. | When and where is the |
A. | The |
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Q. | What is the purpose of the |
A. | At the |
Q. | ||
What are the voting recommendations of the Board? |
A. | The Board recommends the following votes: |
Q. | ||
What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
A. | Many holders of the |
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How do I vote? |
A. | You may vote using one of the following methods: |
Internet. To vote through the Internet, log ongo to the Internet and go towww.proxyvote.com and follow the steps on the secure website (havewebsite. You should have your Internet Notice or your proxy card available, as you will need to reference your assigned Control Number(s)). You may vote on the Internet up until 11:59 p.m. Eastern Time on June 1, 2010,9, 2013, which is the dateday before the June 2, 201110, 2014 Annual Meeting. If you vote by the Internet, you do not need notto return your proxy card, (ifalthough you received one), unless you wishcan use it later to change your Internet vote.
Telephone. You may vote by telephone by calling the toll-free number on your proxy card up until 11:59 p.m., Eastern Time, on June 1, 2010, which is the date before the June 2, 2011 Annual Meeting,9, 2014 and following the pre-recorded instructions (haveinstructions. You should 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 shoulddo not need to return your proxy card, (ifalthough you received one), unless you wishcan use it later to change your Internettelephone vote.
Mail. If you received yourreceive paper copies of the 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 receipt11717. You should return your completed proxy card so that Broadridge receives it prior to the closing of the voting polls for the June 2, 201110, 2014 Annual Meeting.
In Person.Person. You may vote your shares in person by attending the 20112014 Annual Meeting and submitting a valid proxy at the 2011 Annual Meeting.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 card or casting a voting capital stock ballot furnished by the Company at the 2014 Annual Meeting prior to the closing of the polls; ifpolls. 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 20112014 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 (“Requestsshares. Copies and “Requests for Admission” will not be accepted).
Voting, Generally.Generally. All shares that have been voted properly by an unrevoked proxy will be voted at the 20112014 Annual Meeting in accordance with your instructions. In relation to how your proxy will be voted, see “How will my proxy be voted?” below.
If you are a “beneficial owner” because your brokerage firm, bank, broker-dealer or other similar organization is the holder of record of your shares (i.e., your shares are held in “street name”),you will receive instructions on how to vote from your bank, broker or other record holder. You must follow these instructions in order for your shares to be voted. You should instruct your nominee on how to vote your shares. Your broker is required to vote those shares in accordance with your instructions. If you do not give instructions to your broker, the broker may vote your shares only with respect to Proposal No. 2 (the ratification of the appointmentAudit Committee’s selection of the Company’sCompany's independent registered public accounting firm), which is considered a “routine” matter, and not with respect to Proposal Nos.No. 1 (the election of directors), Proposal No. 3 and 4.
Q. | Who can vote? |
A. | Only (1) stockholders of record of Revlon, Inc. Class A |
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and (2) those who have been granted and present an original, signed, valid legal proxy in appropriate form from a holder of record of Revlon, Inc. Class A |
Q. | How will my proxy be voted? |
A. |
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accounting firm for 2014); (3) FOR Proposal No. 3 (the non-binding, advisory approval of the Company's executive compensation, through the non-binding, advisory “say-on-pay” vote); and (4) AGAINST Proposal No. 4 (the stockholder proposal).
Although we are not aware of any other matter that maywill be properly presented at the 20112014 Annual Meeting, if any other matter is properly presented, the persons designated by the Company as proxies may vote on such matters in their discretion.
Q. | Can I change or revoke my vote? |
A. | Yes. If you are a stockholder of record, you can change or revoke your vote at any time before it is voted at the |
If you are a beneficial owner, please follow the voting instructions sent to you by your broker, trustee or nominee to change or revoke your vote.
To revoke a vote previously submitted electronically through the Internet or by telephone, you may simply vote again at a later date, using the same procedures, in which case the later submitted vote will be recorded and the earlier vote revoked.
Q. | What if I am a participant in the Revlon 401(k) Plan? |
A. | This Proxy Statement is being furnished to you if Revlon, Inc. Class A Common Stock is allocated to your account within the Revlon |
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shares allocated to your account under the 401(k) Plan in accordance with your instructions. If the trustee of the 401(k) Plan does not otherwise receive voting instructions for shares allocated to your 401(k) Plan Account, the trustee, in accordance with the 401(k) Plan trust agreement, will vote any such shares in the same proportion as it votes those shares allocated to 401(k) Plan |
Q. | Who can attend the |
A. | Anyone who was a stockholder of the Company as of 5:00 p.m., Eastern Time, on April |
To attend the 20112014 Annual Meeting, please follow these instructions:
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In order to ensure the safety and security of our meeting attendees, packages and bags may be inspected and may have to be checked and, in some cases, may not be permitted. We thank you in advance for your cooperation with these security measures.
Q. | Should I pre-register for the |
A. | In order to expedite the admission registration process required for you to enter the |
Q. | Can I bring a guest to the |
A. | Yes.If you plan to bring a guest to the |
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present valid picture identification to gain access to the |
Q. | Can I still attend the |
A. | Yes. Attending the |
Q. | What shares are covered by my proxy card or electronic voting form? |
A. | The shares covered by your proxy card or electronic voting form represent all of the shares of the |
Q. | What does it mean if I get more than one proxy card? |
A. | It means you have multiple accounts at our transfer agentand/or with banks or stockbrokers. Please vote all of your shares. |
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This Proxy Statement is being furnished on or about April 19, 201124, 2014 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 20112014 Annual Stockholders’ Meeting (the “2014 Annual Meeting”). The 2014 Annual Meeting of Stockholders (the “2011 Annual Meeting”)is scheduled to be held at 10:00 a.m., Eastern Time, on Thursday,Tuesday, June 2, 2011,10, 2014, at Revlon’sRevlon's Research Center at 2121 Route 27, Edison, NJ 08818, and at any adjournments thereof.of such meeting. The 20102013 Annual Report furnished with our Proxy Statement does not form any part of the material for the solicitation of proxies.
We are required to provideproviding our stockholders with access to our proxy materials over the Internet, rather than only in paper form.Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Internet Notice”), rather than a printed copy of the proxy materials, to our stockholders of record as of April 8, 2011.14, 2014. 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 20112014 Annual Meeting on or about April 19, 2011.
At the 20112014 Annual Meeting, the Company’sCompany's stockholders will be asked to:
(1) elect the following persons (all of whom currently areas the Company’s directors of the Company) as directors of the Company until the Company’sCompany's next annual stockholders’stockholders' meeting and until each such director’sdirector's successor is duly elected and has been qualified: Ronald O. Perelman, Alan S. Bernikow, Paul J. Bohan, Alan T. Ennis,Diana F. Cantor, Lorenzo Delpani, Viet D. Dinh, Meyer Feldberg, David L. Kennedy, Robert K. Kretzman, Ceci Kurzman, Debra L. Lee, Tamara Mellon, Richard J. Santagati, Barry F. Schwartz, and Kathi P. Seifert; Seifert and Cristiana Falcone Sorrell;
(2) ratify the Audit Committee’s selection of KPMG LLP (“KPMG”) as the Company’sCompany's independent registered public accounting firm for 2011; 2014;
(3) provide their non-binding, advisory “say-on-pay” approval of the Company’sCompany's executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in this Proxy Statement(“say-on-pay”);compensation;
(4) consider a stockholder proposal; and submit their non-binding, advisory vote on the future frequency of the“say-on-pay” vote on executive compensation(“say-on-frequency”); and
(5) take such other action as may properly come before the 20112014 Annual Meeting or at any adjournments thereof.
The Company’sCompany'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 20112014 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. If you are voting electronically, please indicate that you will attend the 2014 Meeting in person andwhen prompted during the Internet voting process. To attend the 2014 Annual Meeting in person, you will need to presentvalid picture identification, such as a driver’sdriver's license or passport, as well as originalproof of ownershipof shares of Revlon, Inc. Class A Common Stock, Class B Common Stock or Series A Preferred Stock as of 5:00 p.m., Eastern Time, on the April 8, 201114, 2014 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, 201114, 2014 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 stockClass A Common Stock in your account as of 5:00 p.m., Eastern Time, on the April 8, 201114, 2014 record date, or, ifdate. If you did not already return it to your bank or broker, you will need to present an original voting instruction form issued by your bank or broker demonstrating that you held Revlon, Inc. voting capital stockClass A Common Stock in your account as of 5:00 p.m., Eastern Time, on the April 8, 201114, 2014 record date. Copies and “Requests for Admission” will not be accepted.
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In order toTo expedite the admission registration process at the 2014 Annual Meeting, we encourage stockholders to pre-register by phone by calling Amy Heidingsfelder, Senior Manager, Legal Services, at(212) 527-5628, Meaghan Connerty, SeniorTrevor Ezell, Corporate Legal Assistant, at(212) 527-5528, or Liz Polido, Corporate Legal Assistant, at(212) 527-5227, Mondays527-5672, Monday through FridaysFriday from 9:00 a.m. through 5:00 p.m., Eastern Time, up until 10:00 a.m., Eastern Time, on Thursday, Monday, June 2, 20109, 2014 (the dateday before the 20112014 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, 201114, 2014 record date.Directions to the address forlocation of the 20112014 Annual Meeting are available on various Internet travel sites, or you may seek assistance from any of the above individuals when pre-registering.sites.
In order to ensure the safety and security of our annual meeting attendees,2014 Annual Meeting, 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.
Unless properly revoked, all proxies properly submitted to the Company unless such proxies are properly revoked before they are voted at the 2011 Annual Meeting, will be voted on all matters presented at the 20112014 Annual Meeting in accordance with the instructions given by the person executing (oror electronically submitting)submitting the proxy or, inproxy. In the absence of instructions, such proxies will be voted (1) FORthe election to the Board of Directors of each of the 11 nominees identified in this Proxy Statement (all of whom currently are directors of the Company); (2) FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011; (3) FORthe non-binding, advisory approval of the Company’s executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in this Proxy Statement; and (4) for the non-binding, advisory recommendation of conducting future non-binding, advisory votes on executive compensation everyTHREE (3) YEARS(seevoted:
(1) | FOR the election of each of the 14 nominees identified in this Proxy Statement to the Board of Directors; |
(2) | FOR the ratification of the Audit Committee’s selection of KPMG as the Company's independent registered public accounting firm for 2014; |
(3) | FOR the non-binding, advisory “say-on-pay” approval of the Company's executive compensation; and |
(4) | AGAINST the stockholder proposal. |
See below for discussion of broker non-votes).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 20112014 Annual Meeting was December 22, 2010.26, 2013. The Company did not receive any proposals required to bereceived the stockholder proposal included in these proxy materials.
Pursuant to the Company’sCompany's By-laws, in order for businessstockholders to be properly broughtbring any business before the 20112014 Annual Meeting (other than stockholder proposals included in the proxy statement pursuant toRule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and business specifiedthat is not otherwise set forth in this Proxy Statement),proxy statement, notice of such business must have been received by the Company between March 5, 20118, 2014 and April 4, 2011 (and7, 2014 and not subsequently withdrawn) and such noticewithdrawn. Such notices must have included,include, among other things: (i) information regarding the proposed business to be brought before suchthe meeting; (ii) the identity of the stockholder proposing the business; and (iii) the class of the Company’sCompany's shares which are owned beneficially or of record by such stockholder. The Company did not receive notification of any such matters. IfAs a general matter, if any other matters are properly presented before the 20112014 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’sstockholder's right to change theirsuch vote, attendand/or vote in person at the 20112014 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 20112014 Annual MeetingMeeting. Such revocations may be made by: (i) filing a written revocation or written notice of change, as the case may be, which must be received bywith the Company’sCompany's Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, which must be received before the original proxy is voted at the 20112014 Annual Meeting; (ii) executing and delivering a proxy bearing a later date which must be received byto the Company’sCompany's Secretary at 237 Park Avenue, 14th Floor, New York, NY 10017, Attention: Michael T. Sheehan, which must be received before the original proxy is voted at the 20112014 Annual Meeting; or (iii) attending the 20112014 Annual Meeting and voting in person.
To revoke a proxy previously submitted electronically through the Internet or by telephone, you may simply vote again at a later date, using the sameeither of those procedures, in whichor submit a properly completed original proxy reflecting your changed vote. In such case, the later submitted vote will be recorded and the earlier vote revoked.
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Only holders of record of shares of the Company’sCompany'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, 201114, 2014 (the “Record Date”) will be entitled to notice of and to vote at the 20112014 Annual Meeting or at any adjournments thereof.of such meeting. On the Record Date, there
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were issued and outstanding: (i) 49,050,628outstanding 52,356,798 shares of the Company’sCompany's Class A Common Stock, each of which is entitled to one vote, (ii) 3,125,000vote. Such shares represent all of the Company’s Class B Common Stock, each of which is entitled to 10 votes,issued and (iii) 9,336,905outstanding shares of voting capital stock as of such date. As of the Company’s Preferred Stock, each of which is entitled to one vote. Of that Voting Capital Stock,Record Date, 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%40,669,640 shares of the combinedClass A Common Stock, representing approximately 78% of the 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 2011 Annual Meeting.
The presence in person or by duly submitted proxy of the holders of a majority inof the total number of votes of the issued and outstanding shares of Voting CapitalClass A Common Stock entitled to vote at the 20112014 Annual Meeting is necessary to constitute a quorum in order to transact business at suchthe meeting. Abstentions and, aswill be included in the calculation of the number of shares present at the 2014 Annual Meeting for the purposes of determining a quorum.
As there is at least one “routine” matter (under applicable NYSE rules) for consideration at the 20112014 Annual Meeting, “broker non-votes,” if any, will also be included in the calculation of the number of shares present at the 20112014 Annual Meeting for the purposes of determining a quorum. “Broker non-votes” are shares held by a broker, trustee or nominee that are not voted because the broker, trustee or nominee does not have discretionary voting power on a particular proposal and does not receive voting instructions from the beneficial owner of the shares.
Brokers will not be allowed to vote shares as to which they have not received voting instructions from the beneficial owner with respect to Proposal Nos.No. 1 (the election of directors), Proposal No. 3(“say-on-pay”) or Proposal No. 4(“say-on-frequency”) (stockholder proposal). Accordingly, broker non-votes will not be counted as a vote for or against any of these proposals.
For shares as to which theybrokers have not received voting instructions from the beneficial owner, brokers will be able to vote on Proposal No. 2 (ratification of the Company’sAudit Committee’s selection of itsKPMG as the Company’s independent registered public accounting firm for 2011)2014), as this is considered a “routine” matter under applicable NYSE rules for which brokers have discretionary voting power.
MacAndrews & Forbes has informed the Company that it will duly submit proxies (1) FORthe election to the Board of Directors of each of the 11 nominees identified in this Proxy Statement (all of whom currently are directors of the Company); (2) FORthe ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2011; (3) FORthe non-binding, advisory approval of the Company’s executive compensation; and (4) for recommending, on a non-binding, advisory basis, conducting future non-binding, advisory votes on executive compensation everyTHREE (3) YEARS. proxies:
(1) | FOR the election to the Board of Directors of each of the 14 nominees identified in this Proxy Statement; |
(2) | FOR the ratification of the Audit Committee’s selection of KPMG as the Company's independent registered public accounting firm for 2014; |
(3) | FOR the non-binding, advisory approval of the Company's executive compensation; and |
(4) | AGAINST the stockholder proposal. |
Accordingly, with MacAndrews & Forbes’ vote, there will be a quorum andfor the affirmative vote of2014 Annual Meeting. MacAndrews & Forbes isForbes’ vote will also be sufficient, without the concurring vote of any of the Company’sCompany's other stockholders, to approve and adopt Proposal Nos. 1, 2 and 3 and 4 to be considered at the 2011 Annual Meeting, as aforesaid.
If shares of Class A Common Stock are held as of the Record Date for the account of participants under the Revlon Employees’Employees' Savings, Investment and Profit Sharing Plan (the “401(k) Plan”), the trustee for the 401(k) Plan trustee will vote those shares pursuant to the instructions given by the 401(k) Plan participants on their respective voting instruction forms. If the 401(k) Plan trustee does not otherwise receive voting instructions for shares held on account of a 401(k) Plan participant, the 401(k) Plan 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’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 the 401(k) Plan trustee by 11:59 p.m. Eastern Time on May 26, 201127, 2014 to allow the 401(k) Plan trustee time to receive such voting instructions and vote on behalf of participants in the 401(k) Plan.Plan participants. 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 401(k) Plan trustee at the 20112014 Annual Meeting in the manner described in this paragraph above.
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The accompanying form of proxy is being solicited on behalf of the Company’sCompany's Board of Directors. WeThe Company will bear all costs in connection with preparing, assembling and furnishing this Proxy Statement and related materials, includingmaterials. Such costs include reimbursing banks, brokerage houses and other custodians, nominees, agents and fiduciaries for their reasonableout-of-pocket expenses for forwarding proxy and solicitation materials to stockholders. The Company has hiredengaged Broadridge to assist it in distributing and hosting on the distribution and on-line hosting ofInternet proxy materials (including the provision of electronicand providing Internet and telephone voting methods) for the 20112014 Annual Meeting. The estimated fee for Broadridge’s services is approximately $10,500,$11,000, plusout-of-pocket expenses, such as postage.
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” stockholder materials, such as proxy statements, information statements and annual reports. This means that only one copy of our Internet Notice or proxy materials as the case may be, may have been sent to multiple stockholders in your household.household, if any. We will promptly deliver a separate copy of our Internet Notice or the 20112014 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.
Pursuant to the Company's By-laws, the Board of Directors pursuant to the Company’s By-laws, has fixed the number of directors at eleven (11),14 effective as of the date of the 20112014 Annual Meeting. The 11Upon the recommendation of the Board's Nominating and Corporate Governance Committee, the 14 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 20112014 Annual Meeting to serve until the Company’sCompany's next Annual Meetingannual stockholders’ meeting and until their successors are duly elected and shall have been qualified.
All of the nominees currently are current 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 ifdirectors. If, however, 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 eventnominees. In such case, 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 1114 nominees identified in this Proxy Statement requires the affirmative vote of a plurality of the votes cast by the holders of shares of Voting Capitalthe Class A Common Stock present in person or represented by proxy at the 20112014 Annual Meeting and entitled to vote. WithUnless such proxies are revoked, 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, inproxy. In the absence of such instructions, such proxies will be votedFORthe election to the Board of Directors of each of the 1114 nominees identified in this Proxy Statement. Statement to the Board of Directors.
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
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MacAndrews & Forbes has informed the Company that it will voteFORthe election to the Board of Directors of each of the 1114 nominees identified in this Proxy Statement.Statement to the Board of Directors. Accordingly, the affirmative vote of MacAndrews & ForbesForbes’ affirmative vote is sufficient, without the concurring vote of the Company’sCompany's other stockholders, to effect the election ofelect 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 castDirector nominees at the 20112014 Annual Meeting.
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The Board of Directors unanimously recommends that stockholders vote 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, 2010)2013), principal occupation for the last five5 years, public company board service for the last five5 years, selected biographical information and period of service as a Company Director of the Company offor each of the Director nominees for election as a director are set forth below.
Mr. Perelman (67) (70)has been Chairman of the Board of Directors of the Company and of Revlon Consumer Products Corporation, the Company’sCompany'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 also served as Chairman of the Board of Directors of Scientific Games Corporation (“Scientific Games”) since November 2013. Mr. Perelman has served on the Boards of Directors of the following companies which were required to file reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or were registered investment companies under the Investment Company Act of 1940 (the “1940 Act”) (in either case, referred to herein as “public reporting companies”) within the last five5 years: the Company (1992 — present); Products Corporation (1992 — present); REV Holdings LLC (2002 — 2006); Scientific Games Corporation (“Scientific Games”) (2003 — present); Allied Security Holdings LLC (“Allied Security”) (2004 — 2008); and M&F & F Worldwide Corp. (1995 — present)2011), a holding company that owns and operates various businesses (“M & F Worldwide”), for which Mr. Perelman has served as Chairman of the Board of Directors since 2007 and as a director since 1995 (“M&F Worldwide”).
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Ms. Cantor (56) has been a Company Director since June 2013. She is a Partner of Alternative Investment Management, LLC, an independent privately-held investment management firm, a position she has held since January 2010. In addition, Ms. Cantor is the co-founder and Managing Director of Hudson James Group LLC, a strategic advisory firm providing consulting services in the public and private sectors. Ms. Cantor also serves as the Chairman of the Board of Trustees of the Virginia Retirement System, for which she is a member of its Audit and Compliance Committee. Ms. Cantor served as a Managing Director of the New York Private Bank & Trust (the wealth management division of Emigrant Bank) from January 2008 through December 2009. From 1996 to January 2008, she served as the Founder and Executive Director of the Virginia College Savings Plan, an independent agency of the Commonwealth of Virginia. Ms. Cantor served from 1990 to 1997 as Vice President of Richmond Resources, Ltd. and from 1985 to 1990 as Vice President of Goldman, Sachs & Co. She previously was an associate at the law firm Kaye Scholer LLP from 1983 to 1985. Ms. Cantor serves as a member of the Company’s Audit Committee. Ms. Cantor has served on the boards of directors of the following public reporting companies within the last 5 years: Media General, Inc. (2005 — present), for which she also currently serves as Chair of its Audit Committee; Domino’s Pizza, Inc. (2005 — present), for which she also currently serves as Chair of its Audit Committee; The Edelman Financial Group Inc. (2011 — 2012); and Universal Corporation (2012 — present).
Mr. Bohan (65)Delpani (45) has served as the Company’s and Products Corporation’s President and Chief Executive Officer since November 2013. Mr. Delpani has also served as a Director of the Company and Products Corporation since
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November 2013. Prior to joining the Company in October 2013 as part of the Company’s acquisition of The Colomer Group Participations, S.L. (“The Colomer Group”), Mr. Delpani served as The Colomer Group’s Chief Executive Officer since May 2007. Before joining The Colomer Group, from 2005 to 2007 Mr. Delpani provided innovation and new venture development guidance to various clients as a consultant. Previously, Mr. Delpani served in various senior executive positions at Reckitt Benckiser plc, and/or certain of its affiliates and predecessors, from 1998 to 2005, including responsibility for southwestern Europe and for new product initiatives, as well as e-business. Prior to working at Reckitt Benckiser plc, Mr. Delpani held various senior marketing and executive positions, from 1993 to 1998, with Johnson & Johnson and The Procter & Gamble Company. Mr. Delpani has served on the Board of Directors of the following public reporting companies within the last 5 years: the Company (2013 — present); and Products Corporation (2013 — present).
Mr. Dinh (45) has been a Director of the Company since March 2004 and a Director of Products Corporation since June 2008. Prior to his retirement2012. Mr. Dinh is the founding partner of Bancroft PLLC, a law and strategic consulting firm which he founded in February 2001,2003. Mr. Bohan wasDinh is also a Managing Director oftenured law professor at the high-yield bond sales group of Salomon Smith Barney, having joined Salomon Smith Barney in 1980.Georgetown University Law Center, where he has taught since 1996. In addition, Mr. BohanDinh serves as a memberthe General Counsel and Corporate Secretary of the Board of Directors of Arena Brands,Strayer Education, Inc., which isan education services holding company that owns Strayer University, a privately-held company.holding company he joined in 2010. From 2001 to 2003, Mr. BohanDinh served as Assistant Attorney General for Legal Policy at the U.S. Department of Justice. Mr. Dinh serves as a member of the Company’s Audit Committee and Nominating and Corporate Governance Committee. Mr. BohanDinh has served on the Boards of Directors of the following public reporting companies which were required to file reports under the Exchange Act within the last five5 years: Twenty-First Century Fox, Inc. (formerly known as News Corporation) (2004 — present), for which he also serves as a member of its audit committee; M & F Worldwide (2007 — 2011); The Orchard, Inc. (2007 — 2010); the Company (2004 — present); Products Corporation (2008(2012 — present); and Haynes International, Inc. (“Haynes”) (2004Products Corporation (2012 — present).
Professor Feldberg (68) (71)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. Professor Feldberg also serves as an Advisory Director of Welsh, Carson, Anderson & Stowe, a private equity investment firm. 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.world, from 2007 to 2013. Professor Feldberg serves as Chairman of the Company’sCompany's Nominating and Corporate Governance Committee and as a member of the Company’sCompany's Audit Committee. Professor Feldberg has served on the Boards of Directors of the following public reporting companies which were required to file reports under the Exchange Act, or were registered investment companies under the 1940 Act, within the last five5 years: Macy’s,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;2011); UBS Funds (2001 — present); and Sappi Limited (“Sappi”) (2002 — present)2012).
Ms. Lee (56) Mr. Kennedy (67)has been the Company's and Products Corporation's Vice Chairman of the Board of Directors since May 2009 (including serving in that capacity as an executive officer until November 2013). Mr. Kennedy has served as a Director of the Company and of Products Corporation since September 2006. Mr. Kennedy has served as President and Chief Executive Officer of Scientific Games since November 2013 and as Vice Chairman of Scientific Games since October 2009. Previously, Mr. Kennedy served as Scientific Games’ Chief Administrative Officer from April 2011 to March 2012. Mr. Kennedy served as President of MacAndrews & Forbes from January 2013 to November 2013 and as Senior Executive Vice President of MacAndrews & Forbes from May 2009 to December 2012. Mr. Kennedy served as the Company's and Products Corporation's interim Chief Executive Officer during October 2013; President and Chief Executive Officer from September 2006 to May 2009; 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. From 1992 to 1997, Mr. Kennedy served as General Manager of the Coca-Cola USA Fountain Division, a unit of The Coca-Cola Company, which he joined in 1980. Mr. Kennedy has served on the Boards of Directors of the following public reporting companies within the last 5 years: the Company (2006 — present); Products Corporation (2006 — present); and Scientific Games (2009 — present).
Mr. Kretzman (62) has been a Company Director since October 2013. Mr. Kretzman retired as the Company’s Executive Vice President on December 31, 2013 following a 25-year career with the Company. Most recently, Mr. Kretzman served as the Company's and Products Corporation's Executive Vice President from October 2013 to December 2013 and as the Company’s and Products Corporation’s Executive Vice President and Chief
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Administrative Officer from November 2010 to September 2013. Formerly, he served as the Company’s and Products Corporation’s General Counsel, from January 2000 to March 2011; Chief Legal Officer, from December 2003 to November 2010; and Executive Vice President, Human Resources, from October 2006 to November 2010. Mr. Kretzman formerly served as the Company's and Products Corporation's Secretary from September 1992 to June 2009. Mr. Kretzman served as the Company's and Products Corporation's Senior Vice President and General Counsel from January 2000 until December 2003. Prior to becoming General Counsel, Mr. Kretzman served as Senior Vice President and Deputy General Counsel, from March 1998 to January 2000; as Vice President and Deputy General Counsel, from January 1997 to March 1998; and as Vice President, Law from September 1992 to January 1997. Mr. Kretzman joined the Company in 1988 as Senior Counsel responsible for mergers and acquisitions. Mr. Kretzman also served as the Company's Corporate Compliance Officer from January 2000 through March 2012. Mr. Kretzman serves as a member of the Company’s Compensation Committee. Mr. Kretzman has served on the Board of Directors of the following public reporting company within the last 5 years: the Company (2013 — present).
Ms. Kurzman (44) has been a Company Director since February 2013. Ms. Kurzman serves as President of Nexus Management Group, Inc., a talent representation and consulting group which she founded in 2004. Prior to founding Nexus Management, Ms. Kurzman joined Epic/Sony Music in 1997 as Vice President of Worldwide Marketing and held positions of increasing responsibility there until 2004. From 1992 to 1997, Ms. Kurzman held positions of increasing responsibility at Arista Records, including serving as Director of Artist Development. Ms. Kurzman serves as a member of the Company’s Compensation Committee. Ms. Kurzman has served on the Board of Directors of the following public reporting company within the last 5 years: the Company (2013 — present).
Ms. Lee (59) has been a Company Director since January 2006. Ms. Lee is Chairman and Chief Executive Officer of BET Networks, (“BET”), a division of Viacom Inc., a global media and entertainment company that owns and operates Black Entertainment Television. Ms. Lee’s career atLee has held executive management positions of increasing responsibility with BET begansince joining that company in 1986 as Vice President and General Counsel. In 1992, she was named Executive Vice President of Legal Affairs and Publisher of BET’s magazine division, while continuing to serve as BET’s General Counsel. In 1995, Ms. Lee assumed responsibility for BET’s strategic business development and was named President and Chief Operating Officer in 1996.1986. Prior to joining BET, Ms. Lee was an attorney with the Washington, D.C.-based law firm of Steptoe & Johnson. Ms. Lee serves as a member of the Company’sCompany's Nominating and Corporate Governance Committee. Ms. Lee has served on the Boards of Directors of the following public reporting companies which were required to file reports under the Exchange Act within the last five5 years: Eastman Kodak Company (“Kodak”) (1999 — present)2011); WGL
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Ms. Mellon (43) (46)has been a Company Director of the Company since August 2008. Ms. Mellon ishas served as the Chief Creative Officer and FounderPresident 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.TMellon Enterprises LLC since 2011. In 1996, Ms. Mellon hasfounded and until November 2011 served in a senior executive capacity with JimmyJ. Choo sinceLimited, a manufacturer and international retailer of women's shoes and accessories based in London, England, including serving most recently as its inception in 1996.Chief Creative Officer. Prior to that, Ms. Mellon served as accessories editor forBritish Voguemagazine, since 1990, and previously held positions atMirabellamagazine and Phyllis Walters Public Relations. Ms. Mellon also serves on the Board of Directors and on the Creative Advisory Board of The H Company Holdings, LLC, a privately held holding company which owns and manages the Halston fashion design company. Ms. Mellon has served on the BoardsBoard of Directors of the following companies which were required to file reports under the Exchange Actpublic reporting company within the last five5 years: the Company (2008 — present).
Mr. Santagati (67) Schwartz (64)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).
Ms. Seifert (61) (64)has been a Company Director of the Company since January 2006. Ms. Seifert has been ChairpersonPresident of Katapult, LLC, a business consulting company, since July 2004. Ms. Seifert served as Corporate Executive Vice President — Personal Care of Kimberly-Clark Corporation, a global health and hygiene company, (“Kimberly-Clark”), from 1999 until her retirement in June 2004. Ms. Seifert joined Kimberly-Clark in 1978 and, prior to her retirement, served in several senior
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executive positions in connection with Kimberly-Clark’sKimberly-Clark's domestic and international consumer products businesses. Prior to joining Kimberly-Clark, Ms. Seifert held management positions at The Procter & Gamble Company, Beatrice Foods, Inc. and Fort Howard Paper Company. Ms. Seifert serves as a member of each of the Company’sCompany's Audit Committee and its Compensation Committee. Ms. Seifert has served on the Boards of Directors of the following public reporting companies which were required to file reports under the Exchange Act within the last five5 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);committee; Paperweight Development Corp. (2004 — present) (“Paperweight Development”); Appleton PapersAppvion, Inc. (2004 — present) (“Appleton”); the Company (2006 — present); Lexmark International, Inc. (2006 — present) (“Lexmark”); and Supervalu Inc. (2006 — present), for which she also currently2013).
Ms. Falcone Sorrell (40) has been a Company Director since March 2014. She serves as Senior Adviser to the Chairman at the World Economic Forum, a memberposition she has held since 2009, and as Principal Consultant, Office of its audit committee (“Supervalu”)Outreach and Partnership for the Inter-American Development Bank, a position she has held since 2010. Prior to joining the World Economic Forum in 2004, Ms. Falcone Sorrell held positions at the International Labor Organization from 2002 to 2004 and Shell London Ltd. from 2001 to 2002. During the past 5 years, Ms. Falcone Sorrell has served on the Boards of Directors of the following public reporting companies: Viacom, Inc. (2013 — present) and the Company (2014 — present).
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The Board of Directors currently has the following standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee (the “Governance Committee”). Each of these committees and their functions are described in further detail below.
The Company is a “controlled company” (i.e., one in which more than 50% of the voting power for the election of directors is held by an individual, a group or another company) within the meaning of the rules of the New York Stock Exchange (the “NYSE”). rules. 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 committees, under the NYSE’sNYSE's rules, would otherwise be required to be comprised entirely of independent directors).
While the Company is not required under NYSE rules to satisfy the above-listed NYSE corporate governance requirements due to its “controlled company” status, the Board has determined that more than a majority of its current directors (including(namely, Messrs. Bernikow, Bohan,Dinh and Feldberg and Santagati and Mses. Cantor, Falcone Sorrell, Kurzman, Lee, Mellon and Seifert) qualify as independent directors within the meaning ofunder Section 303A.02 of the NYSE Listed Company Manual (the “NYSE Manual”) and under theRevlon, Inc.’s Board Guidelines for Assessing Director Independence which the Board adopted in accordance with Section 303A.02 of the NYSE Listed Company Manual.(the “Independence Guidelines”). The BoardIndependence Guidelines for Assessing Director Independence are available atwww.revloninc.com under the heading Investor Relations (Corporate Governance).
Notwithstanding the fact that the Company qualifies for theCompany’s “controlled company” exemption, the Company maintains the Governance Committee and the Compensation Committee. The Company maintains the Governance Committee (comprisedis comprised of Messrs. Feldberg (Chairman), SantagatiDinh and BohanSchwartz and Ms. Lee), and theLee. The Board of Directors has determined that all members of the Governance CommitteeMessrs. Feldberg and Dinh and Ms. Lee qualify as independent directors within the meaning ofunder Section 303A.02 of the NYSE Listed Company Manual and under the Board Guidelines for Assessing Director Independence. Independence Guidelines.
The Company maintains the Compensation Committee (comprisedis comprised of Messrs. Bernikow (Chairman), Santagati and SchwartzKretzman and Ms. Seifert),Mses. Kurzman and theSeifert. The Board has determined that three of the four directors on the Compensation Committee (Mr.Mr. Bernikow, Mr. SantagatiMs. Kurzman and Ms. Seifert)Seifert qualify as independent directors within the meaning ofunder Section 303A.02 of the NYSE Listed Company Manual and under the Independence Guidelines. The Board Guidelines for Assessing Director Independence andhas also determined that all 4 Compensation Committee members qualify as “non-employee directors” within the meaning of Section 16 of the Exchange Act and that Mr. Bernikow and Mses. Kurzman and Seifert qualify as “outside directors” under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).
During 2010,2013, the Board of Directors held six14 meetings and acted six9 times by unanimous written consent; the Audit Committee held six meetings;7 meetings and acted once by unanimous written consent; the Compensation Committee held seven meetings;6 meetings and acted 4 times by unanimous written consent; and the Governance Committee held six9 meetings.
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While the Board has not adopted a formal policy regarding directors’directors' attendance at the Company’sCompany's annual stockholders’stockholders' meeting, directors are invited to attend such meetings.meeting. One member of the Company’s Board of DirectorsDirector attended the Company’s 2010Company's 2013 Annual Stockholders’Stockholders' Meeting.
The Company believes that its board leadership structure is appropriate given the Company’s specific circumstances of the Company, as its Board continues to function effectively and efficiently.circumstances. Notwithstanding the fact that the Company is a “controlled” company, more than a majority of the Company’sCompany's Directors are independent under applicable SEC and NYSE rules. rules and the Independence Guidelines.
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The Board has established audit, nominatinggovernance and compensation committees, each operating under written charters, to assist the Board in its oversight functions, and in each case those committees are comprised of at least a majority of independent Directors (with each of the Board’sDirectors. The Board's Audit Committee and Governance Committee beingis comprised entirely of independent directors and three3 of the four4 members of each of the Compensation Committee beingand the Governance Committee qualify as independent directors). directors.
The qualifications and experience of nominees for board service and committee membership are reviewed annually by the Governance Committee. Nominees for board membership are then recommended by such committee for appointment by the Board. Respective committee chairmen lead each committee. The Company has not established a “lead director” role. At Board and committee meetings, the Chairman of the Board and the Chairman of each such committee, or their respective designees, as applicable, presides for the purpose of conducting an orderly and efficient meeting. Independent directors or any other director may lead or initiate discussion, in the interest of promoting thorough consideration of any issue before the Board or any committee. of its committees.
The Company has historically maintained separate positions of Chairman and Chief Executive Officer. Mr. Perelman, Chairman and Chief Executive Officer of MacAndrews & Forbes, has held the position of Chairman of the Company’sCompany's Board since June 1998 and Mr. EnnisDelpani has held the positionpositions of President and Chief Executive Officer of the Company since May 2009.November 2013 (during 2013, Mr. Alan Ennis held the positions of President and Chief Executive Officer of the Company until October 2013). The Chairman provides overall leadership to the Board in its oversight function, while the Chief Executive Officer provides leadership in respect to theday-to-day management and operation of the Company’sCompany's business.
The Board and each committeeof its committees conduct annual self-assessments to review and monitor their respective continued effectiveness. As reflected in its self-assessment discussions, the Board believes that it continues to function effectively and efficiently. As part of its 20102013 self-assessment exercise, the Board determined, among other things, that its size, composition and structure were appropriate. The Company believes thisthat its separation of the Chairman and Chief Executive Officer positions and its overall board leadership structure are appropriate.
Set forth below is a summary of the Company’s respective Directors’nominees’ experience, qualifications (including management experience, education and professional training) and background (including public company board experience). Such 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, supportsupports their respective qualifications to continue to serve on the Company’sCompany's Board of Directors. Without limiting the foregoing —
• | Mr. |
• |
• | Mr. |
• | Mr. Dinh: Mr. Dinh’s academic experience (including serving as Professor of Law, Georgetown University Law Center), his government experience (including having served as Assistant Attorney General for Legal Policy for the U.S. Department of Justice), his business experience (including serving as a partner of Bancroft PLLC, which he founded, and as General Counsel and Corporate Secretary for Strayer Education, Inc.), as well as his public company board experience (including at Twenty-First Century Fox, Inc. (formerly known as News Corporation) and formerly at each of M & F Worldwide and The Orchard, Inc.), as well as his prior service as a Company Director, qualify him to continue to serve on the Company's Board. |
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• | Professor |
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Partners), his business experience (including serving as Senior Advisor at Morgan |
• | Mr. |
• | Mr. Kretzman: Mr. Kretzman’s senior executive experience (including having served the Company in various capacities over his 25-year career with the Company prior to his retirement on December 31, 2013, including having most recently served as Executive Vice President and as special advisor to the Company’s recently appointed President and Chief Executive Officer, as well as having previously served as the Company’s Chief Administrative Officer), his legal experience (including having served as the Company’s Chief Legal Officer, Chief Compliance Officer and General Counsel), his business experience (including leadership of the Company’s global human resources, licensing, security and facilities functions), and his familiarity with the Company, as well as his prior service as a Company Director, qualify him to continue to serve on the Company's Board. |
• | Ms. Kurzman: Ms. Kurzman’s senior executive experience in the areas of talent representation and talent-related brand-to-brand business development strategies (including serving as President of Nexus Management, a talent representation and consulting group which she founded in 2004) and marketing (including serving in senior marketing positions at Epic/Sony Music and Arista Records, respectively), as well as her prior experience as a Company Director, qualify her to continue to serve on the Company’s Board. |
• | Ms. |
• | Ms. |
• | Mr. |
• | Mr. |
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experience (including having served as General Counsel at M & F Worldwide), his public company board experience (including at Scientific Games, Harland Clarke Holdings Corp. and M & F Worldwide) and his familiarity with the Company, as well as his prior service as a Company Director, qualify him to continue to serve on the Company's Board.
• | ||
Ms. |
• | Ms. Falcone Sorrell: Ms. Falcone Sorrell’s senior executive experience in the areas of business development (including serving as Senior Advisor to the Chairman of the World Economic Forum and Principal Consultant at the Office of Outreach and Partnership for the Inter-American Development Bank) and marketing (including serving in positions at Shell London Ltd.), as well as her public company board experience (including at Viacom, Inc. and the Company), qualify her to continue to serve on the Company's Board. |
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The Audit Committee is comprised of Messrs. Bernikow (Chairman), Bohan and Feldberg and Ms.Mses. Cantor and Seifert, each of whom the Board of Directors has determined satisfies the NYSE’sNYSE's and the SEC’sSEC's audit committee independence and financial experience requirements. Each of these directors served as a member of the Audit Committee during all of 20102013 (other than Ms. Cantor, who was appointed to the Audit Committee in June 2013) 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 each of Mr. Bernikow and Ms. Cantor qualifies as an “audit committee financial expert,” under applicable SEC rules. In accordance with applicable NYSE listing standards, the Company’sCompany's Board of Directors has considered Mr. Bernikow’sBernikow'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’sCompany'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 atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Pursuant to its charter, the Audit Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities with respect to, among other things, the integrity of the Company’sCompany's financial statements and disclosures; the Company’sCompany's compliance with legal and regulatory requirements; the appointment, compensation, retention and oversight of the Company’sCompany's independent auditors, as well as their qualifications, independence and performance; and the performance of the Company’sCompany's internal audit functions. The Audit Committee is also responsible for preparing the annual Audit Committee Report, which is required under SEC rules to be included in this Proxy Statement (see “— Audit“Audit Committee Report,” below).
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The Audit Committee has established procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. These complaint procedures are described in the Audit Committee’s charter, a printable and current copy of which is available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Management represented to the Audit Committee that the Company’sCompany's audited consolidated financial statements for the fiscal year ended December 31, 20102013 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 (“KPMG”), the Company’sCompany's independent registered public accounting firm.
The Audit Committee discussed with the Company’sCompany'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 bythe applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”“PCAOB”) in Rule 3200T,, including information concerning the scope and results of the audit and information relating to KPMG LLP’sKPMG's
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The Audit Committee has received the written disclosures and the letter from the Company’sCompany's independent registered public accounting firm, as required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’sfirm's communications with the Audit Committee concerning independence, and the Audit Committee has discussed with the Company’sCompany's independent registered public accounting firm that firm’s 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’sKPMG's provision of audit and non-audit services to the Company is compatible with KPMG LLP’sKPMG's independence.
Based on the Audit Committee’sCommittee's review of and discussions regarding the Company’sCompany's audited consolidated financial statements and the Company’sCompany's internal control over financial reporting with management, the Company’s 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’sCommittee's roles and responsibilities described above and in the Audit Committee charter, the Audit Committee recommended to the Board of Directors that the Company’sCompany's audited consolidated financial statements be included in the Company’sCompany's Annual Report onForm 10-K for the fiscal year ended December 31, 20102013 for filing with the SEC.
Respectfully submitted,
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The Compensation Committee is comprised of Messrs. Bernikow (Chairman), Santagati and SchwartzKretzman and Ms.Mses. Kurzman and Seifert. Each of these directors served as a member of the Compensation Committee during all of 2010, other2013 (other than Mr. SantagatiKretzman, who was appointed to such committeethe Compensation Committee in February 2010,October 2013, and Ms. Kurzman, who was appointed to the Compensation Committee in June 2013) and each of these directors remained a member of the Compensation Committee as of the date of this Proxy Statement.
The Compensation Committee operates under a comprehensive written charter, a printable and current copy of which is available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Pursuant to its charter, the Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the Company’sCompany's Chief Executive Officer (the “CEO”), evaluates the CEO’sCEO's performance in light of those goals and objectives, together with the Governance Committee, and determines, either as a committee or together with the Board of Directors, the CEO’sCEO's compensation level based on such evaluation. The Compensation Committee also reviews and approves compensation and incentive arrangements for the Company’sCompany's executive officers and such other Company employees of the Company as the Compensation Committee may determine to be necessary or desirable from time to time. The Compensation Committee also reviews and approves awards pursuant to the Third Amended and Restated Revlon, Inc. Stock Plan (the “Stock Plan”) and the Revlon Executive Incentive Compensation Plan (the
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The Compensation Committee is also responsible for reviewing and discussing with the Company’s Chief Executive Officer and Chief Administrative OfficerCompany's appropriate officers the Compensation Discussion and Analysis required by the SEC’s rules and, basedincluded in this Proxy Statement. Based on such review and discussion, the Compensation Committee is also responsible for (i) determining whether to recommend to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’sCompany's annual report onForm 10-K or in the annual proxy statement (and incorporated by reference into the annual report onForm 10-K) and (ii) producing the annual Compensation Committee Report and approving its inclusion in the Company’sCompany's annual report onForm 10-K or in the annual proxy statement.
Pursuant to the terms of the Incentive Compensation Plan, the Compensation Committee may delegate to an administrator (who must be an employee or officer of the Company) the power and authority to administer the Incentive Compensation Plan for the Company’sCompany's employees, other than its Chief Executive Officer and certain other officers who constitute “covered employees” as defined in Treasury Regulation § 1.162-27(c)§1.162-27(c)(2) (“Section 162(m) Officers”). Section 157(c) of the Delaware General Corporation Law (the “DGCL”) provides that the Company’sCompany's Board of Directors (or the Compensation Committee acting on behalf of the Board) may delegate authority to any officer of the Company to designate grantees of equity awards under the Stock Plan other than himself or herself and to determine the number of such equity awards to be issued. The Compensation Committee did not delegate any such authority for 2010.
For a discussion of the role of the Company’sCompany's executive officers and compensation consultants in recommending the amount or form of executive and director compensation, and the consideration of any possible conflicts of interest with the Compensation Committee’s outside compensation advisor, see “—Compensation Discussion and Analysis — Role of the Compensation Committee.”
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The Compensation Committee does not have any interlocks or insider participation requiring disclosure under the SEC’sSEC'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’sCompany'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’sCompany's Annual Report onForm 10-K for the fiscal year ended December 31, 2010,2013, including by incorporation by reference to this 20112014 Proxy Statement.
Respectfully submitted,
Compensation Committee
Alan S. Bernikow, Chairman
The Governance Committee is comprised of Messrs. Feldberg (Chairman), SantagatiDinh and BohanSchwartz and Ms. Lee. Each of these Directors served as a member of the Governance Committee during all of 2010, other2013 (other than
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The Governance Committee operates under a comprehensive written charter, a printable and current copy of which is available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance).
Pursuant to its charter, the functions of the Governance Committee include, among other things: identifying individuals qualified to become Board members; selecting or recommending to the Board proposed nominees for Board membership; recommending directors to the Board to serve on the Board’sBoard's standing committees; overseeing the evaluation of the Board’sBoard's performance; evaluating, together with the CEO’sCompensation Committee, the CEO's and senior management’smanagement's performance; overseeing the Revlon, Inc. Related Party Transaction Policy; overseeing the Company’sCompany's processes for succession planning for the CEO and other senior management positions; and periodically reviewing the Board’sBoard's Corporate Governance Guidelines and BoardIndependence Guidelines for Assessing Director Independence and recommending changes, if any, to the Board.
The Governance Committee identifies individuals qualified to become Board members of the Board when any vacancy occurs by reason of disqualification, resignation, retirement, death or an increase in the size of the Board, andBoard. The Governance Committee selects or recommends that the Board select director nominees for each annual stockholders’ 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’sCompany's Corporate Governance Guidelines, which are available atwww.revloninc.com under the heading, Investor Relations (Corporate Governance). The Governance Committee, in identifying and considering candidates for nomination to the Board, considers, in addition to the requirements set out in the Company’sCompany's Corporate Governance Guidelines and the Governance Committee’sCommittee's charter, the quality of the candidate’scandidate's experience, the Company’sCompany's needs and the range of talent and experience represented on the Board.
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In its assessment of each potential candidate, the Governance Committee will consider the nominee’snominee'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’sBoard'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 retainsmay retain 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’sCompany'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, inyear. In order for a recommended director candidate to be considered by the Governance Committee for nomination to stand for election at an upcoming annual stockholders’ 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
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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’sCompany's Secretary, who is responsible to ensure that all such communications are promptly provided to the Board or such director. Any such communication may be sent by: (i) emailing it to Michael T. Sheehan, Senior Vice President, Deputy General Counsel and Secretary, atmichael.sheehan@revlon.com; or (ii) mailing it to Revlon, Inc., 237 Park Avenue, 14th Floor, New York, NY, 10017, attention: Michael T. Sheehan. Communications that consist of stockholder proposals must instead follow the procedures set forth under “General Rules Applicable to Stockholder Proposals” in this Proxy Statement, below, and, in the case of recommendations of director candidates, “Nominating and Corporate Governance Committee —- Stockholder Process for Submitting Director Nominees,” in this Proxy Statement, above.
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The Company’sCompany's Corporate Governance Guidelines provide that the Company’sCompany's Board of Directors will regularly meet in executive session without any member of the Company’sCompany's management being present and that the Company’sCompany's independent directors will also meet in at least one non-management executive session per year attended only by independent directors. The non-management directors’directors' and independent directors’directors' meeting may be a single combined meeting, if the non-management directors are comprised entirely of independent directors. A non-management director will preside over each non-management executive session of the Board, and an independent director will preside over each independent executive session of the Board, although the same director is not required to preside at all such non-management or independent executive sessions. The presiding director at such non-management and independent executive sessions of the Board is determined in accordance with the applicable provisions of the Company’sCompany's By-laws, such that the Chairman of the Board of Directors or, in his absence (as is the case with independent executive sessions), a director chosen by a majority of the directors present will preside at such meetings. The Board of Directors met in at least one executive session, attended by only independent directors (all of whom constituted non-management directors), during 2010.2013.
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The following table sets forth each of the Named Executive Officersbelow listed executive officers of the Company, as of December 31, 2010 (and their respective currentwhose positions with the Company as of the date hereof):
Name | Position | |
Lorenzo Delpani | President and Chief Executive Officer | |
Lawrence Alletto | Executive Vice President, | |
The following sets forth the age (as of December 31, 2010)2013), positions held with the Company and selected biographical information for the Company’s Named Executive OfficersCompany's current executive officers whose biographical information is not otherwise included in this Proxy Statement, above, with the Company’s otherCompany's Directors:
Mr. Elshaw (50) Alletto (48)has served as the Company’sCompany's and Products Corporation’sCorporation's Executive Vice President, and Chief OperatingFinancial Officer since May 2009. Mr. Elshaw previously served as the Company’s Executive Vice President and General Manager, U.S. Region, from October 2007 until May 2009. From July 2002 until September 2007, Mr. Elshaw held several leadership roles within Revlon International, including Senior Vice President and Managing Director, Europe, Middle East and Canada from May 2006 to October 2007; Managing Director of Europe and the Middle East from December 2003 to May 2006; General Manager of the U.K., Ireland and European Distributor Markets from February 2003 to December 2003; and General Manager of the U.K. and Ireland from July 2002 to February 2003. Prior to joining the Company, Mr. Elshaw held several senior management sales and marketing positions at Bristol-Myers Squibb (Clairol Division) from 1996 until 2002, including serving as General Manager of the U.K. and Ireland from 2000 until 2002. From 1983 to 1995, Mr. Elshaw served in various European senior sales and marketing positions at Alberto Culver. Mr. Elshaw is a board member of the Personal Care Products Council (formerly known as the Cosmetic, Toiletry & Fragrance Association), a cosmetic and personal care products industry association.
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The Company has reviewed and considered all of its compensation plans and practices and does not believe that its compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.
The Company’sCompany's senior management is responsible for identifying and managing risks to the Company’sCompany's business and the Board’sBoard'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’sCompany's guidelines, policies and processes with respect to risk assessment and risk management. As part of the Company’sCompany'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’sCompany's internal audit group, with input from the Company’sCompany'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’sCompany's business and likelihood of occurrence. The Company’sCompany'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’sCompany's risk assessment and risk management guidelines, policies and processes at least annually. Further, the Board reviews the Company’s business plan and receives regular business and financial updates, including progress against the Company’sCompany's business plan, at Board meetings, enabling the Board to understand, and remain updated on,regarding, the business risks faced by the Company and the Company’sCompany's management of those risks.
The following is a discussion and analysis of all material elements of the Company’sCompany's compensation of its Named Executive Officers, including: (i) the objectives of the Company’sCompany'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,and, where applicable, the formula)formula, for each element to pay; and (vi) how each compensation element and the Company’sCompany's decisions regarding that element fit into the Company’sCompany's overall compensation objectives and may affect decisions regarding other elements of compensation.compensation; and (vii) whether and, if so, how the Company has considered the results of the most recent stockholder advisory vote on executive compensation in determining its compensation policies and decisions.
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A summary of key aspects of the Company’s 2013 compensation programs follows:
• | Payments in March 2014 under the 2013 Annual Bonus Program were based on the Company’s degree of achievement of two equally-weighted performance targets, namely: (1) a 2013 Adjusted EBITDA1 target of $313.9 million (the “2013 EBITDA Performance Target”); and (2) a 2013 Free Cash Flow2 target of $68.5 million (the “2013 Free Cash Flow Performance Target”), as adjusted to account for the 2013 Unusual Items (as defined below). |
1 | Adjusted EBITDA is a non-GAAP financial measure which, for 2013, the Company defined as income from continuing operations before interest, taxes, depreciation, amortization, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses (the foregoing being the “Non-Operating Exclusions”), as well as excluding certain other unusual items that are not directly attributable to the Company's underlying operating performance (the “Unusual Items”), including net charges for restructuring and related actions; expenses related to the acquisition and integration of The Colomer Group; insurance gain related to the 2011 fire in Venezuela; charges for estimated costs to clean-up the Venezuela facility; insurance recoveries for costs related to resolving litigation related to the Company’s 2009 exchange offer; and inventory purchase accounting adjustments related to the acquisition of The Colomer Group. In calculating Adjusted EBITDA, the Company excluded the effects of Non-Operating Exclusions and Unusual Items because the Company's management believed that some of these items may not occur in certain periods, the amounts recognized can vary significantly from period to period and these items do not facilitate an understanding of the Company's operating performance. |
2 | Free Cash Flow is a non-GAAP financial measure which, for 2013, the Company defined 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. |
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The Company’sCompany's philosophy is to provide a compensation packageprograms that isare reasonably designed to satisfy the following objectives:
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In order to achieve the objectives discussed above, the Company maintains a relatively simplecompetitive compensation program. This program which consists principally of: of the following three main components:
(i) base salary;
(ii) eligibility for performance-based, annual cash bonuses under the Incentive Compensation Plan, which are contingent upon the Compensation Committee determining the extent to which the Company achieved its performance objectives and the Company’s executives’ achieving specific Company performance goalsa satisfactory level of annual performance. Under the 2013 Annual Bonus Program, participants could receive between 25% and individual performance objectives;150% of their target award to enable comparatively higher-performing employees to be appropriately rewarded, provided that the aggregate bonus payout was within the overall incentive compensation budget; and
(iii) eligibility for long-term incentive compensationLTIP awards under the Incentive Compensation Plan, which are also contingent upon the Compensation Committee determining the extent to which the Company achieving specific performance goals and participants’ achieving “target”achieved its performance objectives (which elementsand the Company’s executives’ achieving a satisfactory level of compensation are referred to, collectively, inannual performance (in this Proxy Statement, as “total compensation,”compensation” refers to base salary, annual cash bonus and LTIP awards, unless otherwise noted). Historically, prior
Prior to 2009, the Company’sCompany's long-term incentive compensation had been comprisedconsisted of annual equity grants (principally, restricted stockand/or stock options) under the Company’sCompany's Stock Plan. However,As of December 31, 2013, none of the Named Executive Officers held any outstanding stock options or restricted shares, other than a one-time restricted stock award granted during 2013 to Mr. Alletto as with 2009, duringan inducement for him to join the Company as its new Executive Vice President, Chief Financial Officer and Chief Administrative Officer.
With the elimination of annual equity grant programs as a form of long-term compensation, since 2010 the Company determined not to implement an annual equity award programhas granted LTIP awards under its Stock Plan. ToIncentive Compensation Plan to enable the Company to maintain total compensation at competitive levels,levels. For 2013, the Company’s Compensation Committee approved a modified LTIP structure and design, replacing the LTIP’s former one-year performance period that paid out in cash installments ratably over three years, with a multi-year performance period that provided for a single installment cash payout after the multi-year performance period.
With this new structure, under the 2013 LTIP there would be a single cash payment opportunity in March 2016 based on the extent of achieving targets that took into account certain results for the relevant multi-year performance period ending December 31, 2015. In order to provide eligible LTIP grantees with comparable LTIP payout opportunities during 2014 and 2015 as the LTIP structure transitioned from a one-year performance period to a multi-year performance period, the Company grantedimplemented the Transitional LTIP awards under its Incentive Compensation Plan.
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The Company’s Compensation andCompany's Human Resources departmentsdepartment and the Compensation Committee, with input from the Compensation Committee’sCommittee's outside compensation consultant, consider the compensation of the Named Executive Officers in order to balance compensation opportunities and reward and retain the Company’sCompany's high-performing executives and incentprovide them with incentives designed to maximize their performance in furtherance ofexecuting the execution of the Company’sCompany's business plan.
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As part of its assessmentassessing of the compensation of the Named Executive Officers, the Company also compares theeach Named Executive Officers’Officer’s total compensation to the total compensation for executives at comparison group companies.companies, both within and outside of the consumer products industry. The Company seeks to design its total compensation opportunity to be competitive with other leading consumer productsthese comparison group companies, and other companies outside of the consumer products field, as the Company believes that the market for certain executive talent is broader than the consumer products field.industry. When reviewing and setting Named Executive Officer compensation for 2010,2013, the Company compared the total compensation of its executive officers to market compensation data for certain groups of companies in Towers Watson’sWatson'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 20102013 consisted of the companies listed onAnnex A.A
For 2010,2013, the Named Executive Officers’Officers' total compensation, as an approximate percentage ofcompared against the 50th50th and the 75th75th percentiles of total compensation in the relevant Comparison Group, was as follows: (i) 24%Mr. Delpani was below both the 50th and 13.7%, respectively,the 75th percentiles; (ii) Mr. Alletto was above the 50th percentile and below the 75th percentile; (iii) Mr. Elshaw was below both the 50th and the 75th percentiles; (iv) Mr. Kretzman was above both the 50th and the 75th percentiles; (v) Mr. Ennis was below both the 50th and the 75th percentiles; and (vi) Mr. Berns was below both the 50th and the 75th percentiles. Given Mr. Kennedy’s unique roles at the Company during 2013, when he served as executive Vice Chairman and, for Mr. Kennedy (Mr. Kennedy didapproximately one month, as interim Chief Executive Officer, there is very limited comparable data for 2013 and thus meaningful benchmarking is not participate in the Company’s 2010 Incentive Compensation Programs; his base salary for 2010 was 121.7% and 83.4%, respectively, of the 50th and 75th percentiles of base salary in the Comparison Group); (ii) 77.9% and 56.8%, respectively, for Mr. Ennis; (iii) 124% and 86.3%, respectively, for Mr. Elshaw; (iv) 100.7% and 79.6%, respectively, for Mr. Berns; and (v) 149.4% and 100.6%, respectively, for Mr. Kretzman.
Base salary adjustments are considered annually and may be based on individual performance, assumption of new responsibilities, competitive data from the Comparison Group, employee retention efforts and the Company’sCompany's overall compensation guidelines and annual salary budget guidelines. Higher annual increases may be made to higher performers and key contributors, provided that the overall increases are within budgeted guidelines.
Each year, the Compensation Committee reviews and establishes the Company’s corporate performance measurestargets for the Company’sits incentive compensation program(s),programs that are linked directly to the extent to which the Company achieves its business plan. These corporate performance targets are intended to have the effect of fostering shareholder value creation over the long term, to ensureand ensuring that the program design appropriately motivates executives to achieve the Company’sCompany's financial and operational performance goals, which are designedwhile being challenging to be challenging and linked directly to the Company’s business plan for the year.attain. As more fully described below, for 2010,noted above, the components of the Company’s incentive compensation program were a cash bonus under the 2010 Bonus Program, payable in March 2011, to the extent performance goals were achieved, and a cash-based LTIP award under the 2010 LTIP Program, payable in March 2011, to the extent performance goals were achieved, in three equal annual installments.
The March 2014 payouts under the 2013 Annual Bonus Program and the Transitional LTIP were contingentbased upon the achievementCompensation Committee’s certification of identified corporate performance goals. Additionally, payout to a participant under the 2010 Bonus Program was contingent upon such individual’s achievement of his or her own individual performance objectives; and, payout to a participant under the 2010 LTIP Program was contingent upon such individual having received a performance rating of “target” or higher under the Company’s 2010 Performance Management Review process. The Company’s corporate performance goals under the 2010 Incentive Compensation Programs was the Company’s achievement of
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The Company’sCompany's President and Chief Executive Officer and itsOfficer; Executive Vice President, Chief Financial Officer and Chief Administrative OfficerOfficer; and senior Human Resource executives develop for review and approval by the Compensation Committee, the annual objectives against which each Named Executive Officer’s performance, including the CEO’s, is assessed. The Company’s President and Chief Executive Officer in conjunction with the Executive Vice President and Chief Administrative Officer and the Company’s Vice Chairman, develop, for review and approval by the Compensation Committee the CEO’salso reviews and approves these objectives, to support and drive the execution of the Company’s business strategy. These objectives are derived from the Company’s annual business plan.having discussed them with its outside compensation advisor. These objectives are established by the Compensation Committee at the start of the yearperformance period based on the Company’s future business plans and the Compensation Committee then reviewedreviews them after the end of the yeardesignated performance period to assess and certify the extent to which they have been achieved.
In February 2013, the Named Executive Officers’ objectivesCompensation Committee approved and adopted performance-based incentive compensation factors for certain executives (the “2013 Performance Factors”), under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”). The 2013 Performance Factors included both quantitative financial measures and strategic and operational objectives linked directly to achievingthe extent to which the Company achieved its business strategy. These objectives are used primarily to measure the degree of the executives’ annual performance in connection with determining annual bonus payments.
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During 2013, some of the Company’s business strategy. When assessingexecutive officers for whom 2013 Performance Factors were adopted under Section 162(m) ceased employment with the NamedCompany prior to year end, namely:
Mr. Kretzman served as income from continuing operations before interest, taxes, depreciation, amortization, gains/lossesa Named Executive Officer during all of 2013 until his retirement on foreign currency fluctuations, gains/lossesDecember 31, 2013, following a 25-year career with the Company. Mr. Kretzman remained eligible for incentive compensation based on the early extinguishment of debt2013 performance pursuant to his employment agreement and miscellaneous expenses. In calculating adjusted EBITDA, the Company excludes the effects of gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt, results of and gains/losses on discontinued operations and miscellaneous expenses becauseCompensation Committee approval. Mr. Elshaw, 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.
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The following executive officers joined the Company during the fourth quarter of 2013:
Lawrence Alletto, the Company’s | ||
In March 2014, the Compensation Committee considered certain Named Executive Officers’ 2013 performance, and/or certain respective employment agreements and/or separation agreements, as the case may be, for Messrs. Delpani, Alletto, Ennis and Elshaw, including reviewing and analyzing detailed and comprehensive documentary support for certain Named Executive Officer's accomplishments, including, for Mr. Kretzman, achievement against his 2013 Performance Factors (and after taking into account the 2013 Unusual Items).
Messrs. Ennis, Kennedy and Elshaw received certain incentive compensation pursuant to the terms of their separation or retirement arrangements. Mr. Berns did not receive any incentive compensation as a result of his departure from the Company in July 2013.
Below is a summary of the 2013 Performance Factors that applied for, and formed the basis for considering the performance of, Mr. Kretzman for 2013:
Mr. Kretzman —– Retired Executive Vice President and Chief Administrative Officer:
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Note, the first two of Mr. Kretzman’s 2013 Performance Factors were also assigned to and shared by Messrs. Kennedy, Ennis, Elshaw and Berns when their respective 2013 Performance Factors were established at the beginning of 2013, and, for certain of those Named Executive Officers, were supplemented by other performance factors, including those relevant to their respective functional responsibilities with the Company.
While Messrs. Delpani and Alletto, each of whom joined the Company in the fourth quarter of 2013, were not assigned formal performance objectives under Section 162(m), their performance was assessed as part of the Company’s overall succession planning, was not eligible to (and did not) participate2013 performance management review process, which the Compensation Committee reviewed in assessing their respective annual bonus and LTIP awards.
In March 2014, based on the 2010extent of the Company's achievement of its 2013 performance targets and applying the formulae of the 2013 Incentive Compensation Programs, in his role as Vice Chairman.
Additionally, in February 2011,March 2014, based upon a comprehensive review of each Named Executive Officer’s 2010the degree of achievement of objectives and performance, and contractual obligations, as described above, the Compensation Committee determinedauthorized the extent to which the Named Executive Officers had achieved their respective individual performance objectives (including, in the casepayment of Messrs. Ennis, Elshaw, Berns and Kretzman, objectives for 2010 established in compliance with Section 162(m)). Based upon the foregoing determinations, bonuses and LTIP payouts were earned by each of the eligible Named Executive Officersto Messrs. Delpani, Alletto, Kennedy, Ennis, Kretzman and Elshaw in respect of 2010 (see2013, as set forth in the “Summary Compensation Table,Table.” below).
The Company’sCompany'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’semployee's eligibility for benefits (including 20102013 LTIP awards and 20102013 annual cash bonuses) upon compliance with confidentiality, non-competition and non-solicitation obligations.
Approximately 440430 employees, including the Named Executive Officers, were eligible to participate in the 20102013 Annual Bonus Program. As noted above,Mr. Berns was not eligible for any 2013 incentive compensation due to his ceasing employment with the bonusCompany in July 2013. The performance objectives for all employees in the 20102013 Annual Bonus Program included the Company’sCompany's achievement of two equally weightedequally-weighted performance goalstargets (namely, its 20102013 EBITDA Performance GoalTarget and its 20102013 Free Cash Flow Performance Goal), as well asTarget). Receipt of a bonus award under the participants’2013 Annual Bonus Program was further conditioned upon the participant’s achievement of theira performance rating of “target” or higher under the Company’s 2013 performance management review process. The exact payout amount was further subject to the extent to which an employee achieved such employee’s individual performance objectives, which are designed to be linked directly to executing the Company’s 2010Company's business plan.
As approved by the Compensation Committee, under the 20102013 Annual Bonus Program, management (or, in the case of the Named Executive Officers, the Compensation CommitteeCommittee) had discretion to award between 75%25% and
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150% of the target bonuses to rewardenable comparatively higher-performing employees as long asto be appropriately rewarded, provided that the aggregate bonus payout was within the overall incentive compensation budget was not exceeded.
Per the terms of their respective employment agreements, Mr.generally, each of Messrs. Delpani, Ennis and Kennedy was eligible during 2010 for a target bonus of 100% of his respective base salary, and each of MessrsMessrs. Alletto, Berns, Elshaw Berns and Kretzman was eligible during 2010 for a target bonus of 75% of his respective base salary.
The Compensation Committee, applying the terms of the 2013 Annual Bonus Program and taking into account the 2013 Unusual Items, determined to fund the 2010 Bonus Programsuch program at 100% of target and,90%. Also, based upon its determinations asdetermination of the extent to which the Named Executive Officers’ degree of achievement ofOfficers achieved their respective performance objectives and, where applicable, the terms of their employment agreements or separation agreements, as the case may be, and taking into account, for Mr. Kennedy, his service as interim Chief Executive Officer following Mr. Ennis’ cessation of employment in that role and prior to Mr. Delpani’s assumption of such role and Mr. Kennedy’s oversight of the Company’s negotiation and closing of its acquisition of The Colomer Group, among other factors, and for Mr. Kretzman, his leadership of the Company’s negotiation and closing of its acquisition of The Colomer Group and the recruitment, hiring and transition of its new Chief Financial Officer and Chief Administrative Officer and its new General Counsel, among other factors, the Compensation Committee awarded Messrs. Ennis, Elshaw, BernsDelpani and Kretzman 96.2%, 95.7%, and 106.5% and 103.2%, respectively,Alletto 100% of their respective 2013 guaranteed minimum bonuses to which they were entitled under their employment agreements; Mr. Ennis 100% of his 2013 adjusted target bonusesbonus, pro-rated through his October 1, 2013 termination date; Mr. Kennedy 111% of his 2013 adjusted target bonus (and without pro-ration for 2010.
The Summary Compensation Table below reflects the actualannual bonus awardsaward amounts that were made for 2010 toearned by the Named Executive Officers under the 20102013 Annual Bonus Program.
The third principal component of total compensation for the Company’sCompany's key employees is LTIP awards. Prior to 2009, the Company's long-term incentive compensation awards. Historically, this had takenconsisted of annual equity grants under the Company's Stock Plan. As of December 31, 2013, none of the Named Executive Officers held any outstanding stock options or restricted shares, other than a one-time restricted stock award granted during 2013 to Mr. Alletto as an inducement for him to join the Company as its new Executive Vice President, Chief Financial Officer and Chief Administrative Officer.
With the elimination of annual equity grant programs as a form of an annual grant of equity awards, usually in the form of restricted stockand/or stock options, under the Stock Plan.
Transitional LTIP and 2013 LTIP awards were each structured as flat dollar amounts, tiered to levels of responsibility within the organization. These awards were approved by the Compensation Committee during 2013. Approximately 5060 senior employees, including the Named Executive Officers, were eligible to participate in the 20102013 LTIP Program. Fundingand the Transitional LTIP. Each of Messrs. Delpani, Alletto, Kennedy, Ennis, Kretzman and Elshaw was entitled to some form of LTIP compensation in respect to 2013 performance.
Payouts under the 20102013 LTIP Program waswill be made in March 2016 and payouts under the Transitional LTIP will be made in March 2015, in each case based onupon the extent to which the Company achieves its designated performance targets for the relevant performance period.
The Company’s degree ofcorporate performance targets under the 2013 LTIP are based upon average achievement of
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50%; (2) the 2013 Free Cash Flow Performance Goal).
By conditioning payments over a multi-year performance period, the 2013 LTIP’s structure and design is intended to levelsmotivate key employees to focus on the Company’s long-term business goals, provide more effective retention incentives, better align the Company’s LTIP with more customary long-term incentive programs and better distinguish the Company’s long-term compensation from its annual bonus program, which is tied to one year’s performance.
By providing payout opportunities under the Transitional LTIP in March 2014 and March 2015, when combined with prior LTIP grants’ remaining installment payments, the Transitional LTIP balances a participant’s LTIP payout opportunities in respect of responsibility within2013 and 2014 as the organization, and were approved byCompany transitions from a one-year performance period to a multi-year performance period, the latter of which will pay out for the first time in March 2016.
In accordance with the Incentive Compensation Plan, the Compensation Committee. Once earned, based uponCommittee determined to fund the achievementone-third portion of the Company’s 2010 Performance Goals,Transitional LTIP covering the award amount is to besolely the 2013 performance year at 75%, which was paid out in equal one-third amounts in March 2011, March 2012 and March 2013, provided the participant received a “target” or better performance rating under the Company’s Performance Management Review process for 2010 and remains employed with the Company on the applicable payment date. By deferring payments over three years for the 2010 performance year, the program’s structure is intended2014 to have a retentive element for the key personnel expected to implement the Company’s business plan from year to year.
The Company also maintains standard benefits that are consistent with those offered by other major corporations and which are generally available to all of the Company’s full timeCompany's full-time employees (subject to meeting basic eligibility requirements). These plans, which include standard medical, dental, vision and life insurance coverages thatcoverage, are available to allU.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 attractingretaining and retainingattracting key talent.
The Company focuses annually on developing a total compensation packageopportunity that is intended to be competitive such that the level of total compensation (i.e., base salary, annual cash bonus and long-term incentive compensation, combined) is targeted to be positioned at or about the 50th to 75th percentile of competitive benchmark norms. Salary ranges, annual cash bonus plan targets and long-term incentive compensation targets are reviewed using a “total compensation” perspective under which total remuneration is targeted to be within certain ranges compared to the Comparison Group. Values and targets of each element may change from yearperformance period to year. Historically, the Named Executive Officers have not realized any meaningful wealth accumulation from prior equity awards, which influenced the introduction of an LTIP component to the Incentive Compensation Plan to replace the former equity component of compensation.
The Company designs its compensation programs such that there is a correlation between the level of position and the degree of risk in compensation. Based on that guiding principle, the Company’sCompany's more senior executives with the highest levels of responsibility and accountability have a higher percentage of their total potential remuneration at risk (in the form of performance-based annual cash bonuses and performance-based LTIP awards), than do employees with lower levels of responsibility and accountability. This means that a higher proportion of the Company’sCompany's more senior executives’executives' total potential compensation is based upon variable elements, than is the case with the Company’sCompany's employees with lower levels of responsibility and accountability.
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The Compensation Committee reviews and approves, among other things,things: (i) compensation for the Company’sCompany's Named Executive Officers; (ii) the structure of the Company’sCompany's annual bonus program under the Incentive Compensation Plan, including settingapproving annual performance objectives for the Named Executive Officers and annually assessing the extent to which those objectives have been achieved; and (iii) the structure of the Company’s long-term incentive programs under the Incentive Compensation Plan, including approving performance-based objectives and actual grants under the Company’sCompany's long-term incentive compensation award programs for the Named Executive Officers and annually assessing the extent to which those objectives have been achieved.
The Compensation Committee reviews and approves objectives relevant to the compensation of the Company’sCompany's Chief Executive Officer, evaluates, together with the Governance Committee, the Chief Executive Officer’sOfficer's performance in respect of those objectives and determines, either as a committee or together with the Governance Committeeand/or the Board of Directors, the Chief Executive Officer’sOfficer's total compensation level based on that evaluation process. The Compensation Committee also reviews and approves compensation and incentive arrangements for the Company’sCompany's other Named Executive Officers.
The Compensation Committee reviews key components of each Named Executive Officer’sOfficer's compensation, which enables the Compensation Committee to make informed decisions regarding future elements of compensation.
The Company’sCompany's Executive Vice President, Chief Financial Officer and Chief Administrative Officer, in consultation with the Company’sCompany's Chief Executive Officer, works with the Company’s CompensationCompany's Human Resources Department to recommend: (i) merit increase guidelines, based on external benchmarksif any, under the Company’sCompany's salary administration program; (ii) the structure of the Company’sCompany's annual bonus program under the Incentive Compensation Plan; and (iii) the structure of itsthe Company’s long-term incentive compensation programs.
As part of the Company’sCompany's processes and procedures for determining the amount and form of executive officer and director compensation, the Company’sCompany's Compensation Committee relies in part upon informed proposals and information provided by management, as well as market data, analysis and guidance provided by its outside compensation consultant. During 2010,2013, the Compensation Committee consulted withand/or considered advice provided by its outside compensation advisor (Compensation Advisory Partners LLC (“CAP”)) with respect to the structure and components of the Company’sCompany's incentive compensation programs, as well as the total direct compensation of the Company’s Named Executive Officers, inclusive of the March 20102013 merit salary increases for the Named Executive Officers. CAP performed no other services for the Company or the Compensation Committee during 20102013 other than providing compensation advice to the Compensation Committee (or to the Company’s CompensationCompany's Human Resources Department in respect to routine compensation survey data analysis); without limiting the foregoing,. CAP did not provide services such as benefits administration, human resources consulting or actuarial services. The Compensation Committee approved CAP’sCAP's engagement, upon themanagement’s recommendation, of management, and based upon CAP’sCAP'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’sCompany's financial results, the Company has not considered any policy in respect of adjustment or recovery of amounts paid under its compensation plans.
Whether and, if so, How the Company has Considered the Results of the Most Recent Stockholder Advisory Vote on Executive Compensation in Determining its Compensation Policies and Decisions
At the Company’s June 2011 annual stockholders' meeting, approximately 99% of the stockholders who voted on the given items (i) approved, on an advisory, non-binding basis, the Company's executive compensation, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative set forth in the Company’s 2011 proxy statement (“say-on-pay”), and (ii) recommended, on an advisory, non-binding basis, that the Company conduct future “say-on-pay” votes every 3 years (which is the Company’s current intention). Although such advisory stockholder vote on executive compensation was non-binding, management considered the results of such advisory vote in determining the Company’s compensation policies and decisions. The Company believes that the near unanimity of that vote represents an endorsement that the Company’s compensation philosophy, processes and practices are appropriate for the Company. These philosophies, processes and practices have not changed in any significant manner since such 2011 vote of the stockholders.
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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“qualified performance-based compensation” meeting certain requirements. Generally, the Company’sCompany's provision of cash incentive compensation under the Incentive Compensation Plan, stock option awards and performance-based stock awards meetsis intended to meet the requirements for qualified performance-based compensation under Section 162(m) and thus, generally, those items are intended to be fully deductible. Salary, perquisites, discretionary bonuses and restricted stock that have time-based vesting generally are not considered performance-based compensation under Section 162(m) and are generally subject to Section 162(m) limitations on deductibility. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Compensation Committee has not adopted a policy requiring all compensation to be deductible. The 2010 annual bonusdeductible and LTIP performance objectives for the Company’s Named Executive Officers were approvedretains discretion to award compensation that may not constitute qualified performance-based compensation under
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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’sCompany's Chief Executive Officer and the Chief Financial Officer during 20102013 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 20102013 (collectively, the “Named Executive Officers”), for services rendered in all capacities to the Company and its subsidiaries during such periods. As with last year’s proxy statement, the amounts under the columns “Stock Awards” and “Option Awards,” in the Summary Compensation Table below, have been calculated based upon the aggregate grant date fair value of the stock and option awards made during each given fiscal year, if any, in each case as determined in accordance with applicable financial accounting standards (namely, FASB Accounting Standards Codification Topic 718). Historic amounts for 2008 under the columns “Stock Awards” and “Option Awards,” if any, and the corresponding historic amounts in the “Total” column, in the Summary Compensation Table below, have been adjusted and are re-presented in accordance with Item 402 ofRegulation S-K under the Exchange Act. Additionally, as it did last year, the Company is presenting its 2010 annual cash bonus awards under the Revlon Executive Incentive Compensation Plan, as well as its historic presentation of those awards for 2009 and 2008, in theThe “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table, below, for awardspresents bonus and LTIP payments earned under the Incentive Compensation Plan. As discussed above under “Compensation Discussion and Analysis – Overview of 2013 Compensation Events,” the 2013 Annual Bonus Program and the 2013 LTIP were funded at 90% and 75%, respectively, of target bonuses foramounts by the year, and any discretionary annual cash bonusCompensation Committee in excess of target bonuses foraccordance with the year in the “Bonus” column. For 2010, such column also includes earned 2010 LTIP Program awards, as more fullyformulae set forth in footnote (d), below (although 2010 LTIP Program awards have been listed in the table below at their full-value, only one-third of such amounts was actually paid in March 2011; the remaining two-thirds of such 2010 LTIP awards are payable in March 2012 and March 2013, only if the executive remains employed with the Company on each respective payout date). In all cases, stock option awards outstanding as of December 31, 2010 were“out-of-the-money,” in that in each case they had exercise prices that were above the $9.84 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2010 and therefore had no realizable monetary value to the Named Executive Officers on such date. See “Outstanding Equity Awards at Fiscal Year End.”
Change in | ||||||||||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||||||||||
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Nonqualified | ||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Earnings ($) | Compensation | Total | |||||||||||||||||||||||||||||
Name and Principal Position(a) | Year | ($) | ($)(b) | ($)(c) | ($) | ($)(d) | (e) | ($)(f) | ($) | |||||||||||||||||||||||||||
David L. Kennedy | 2010 | 614,038 | — | — | — | — | 23,949 | 52,984 | 690,971 | |||||||||||||||||||||||||||
Vice Chairman | 2009 | 867,500 | — | — | — | — | 101,146 | 36,447 | 1,005,093 | |||||||||||||||||||||||||||
2008 | 1,310,000 | — | 602,388 | — | 975,000 | 111,287 | 40,859 | 3,039,534 | ||||||||||||||||||||||||||||
Alan T. Ennis | 2010 | 907,980 | — | — | — | 2,075,000 | 19,557 | 91,777 | 3,094,314 | |||||||||||||||||||||||||||
President and Chief Executive | 2009 | 781,558 | 12,500 | — | — | 437,500 | 56,176 | 24,063 | 1,311,797 | |||||||||||||||||||||||||||
Officer | 2008 | 460,923 | 30,000 | 347,490 | — | 270,000 | 26,517 | 22,512 | 1,157,442 | |||||||||||||||||||||||||||
Chris Elshaw | 2010 | 729,346 | — | — | — | 1,025,000 | 5,394 | 226,382 | 1,986,122 | |||||||||||||||||||||||||||
Executive Vice President and Chief Operating Officer | 2009 | 678,347 | 12,500 | — | — | 262,500 | 34,226 | 192,533 | 1,180,106 | |||||||||||||||||||||||||||
Robert K. Kretzman | 2010 | 740,857 | 17,716 | — | — | 1,057,284 | 612,947 | 77,794 | 2,506,598 | |||||||||||||||||||||||||||
Executive Vice President and | 2009 | 713,783 | 8,357 | — | — | 266,643 | 673,313 | 75,990 | 1,738,086 | |||||||||||||||||||||||||||
Chief Administrative Officer | 2008 | 711,889 | 20,036 | 275,990 | — | 399,964 | 311,337 | 71,972 | 1,791,188 | |||||||||||||||||||||||||||
Steven Berns | 2010 | 448,211 | 22,125 | — | — | 837,875 | 18,098 | 62,393 | 1,388,702 | |||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | 2009 | 268,077 | 10,625 | 122,750 | — | 159,375 | 18,461 | 18,982 | 598,270 |
Name and Principal Position | Year | Salary ($) | Bonus ($)(a) | Stock Awards ($)(b) | Non-Equity Incentive Plan Compensation ($)(c) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(d) | All Other Compensation ($)(e) | Total ($) | ||||||||||||||||
Lorenzo Delpani | 2013 | 161,250 | 887,000 | — | 83,333 | — | — | 1,131,583 | ||||||||||||||||
President and Chief | ||||||||||||||||||||||||
Executive Officer | ||||||||||||||||||||||||
Lawrence Alletto | 2013 | 138,288 | 1,073,350 | 2,976,000 | — | — | — | 4,187,638 | ||||||||||||||||
Executive Vice President, | ||||||||||||||||||||||||
Chief Financial Officer and | ||||||||||||||||||||||||
Chief Administrative Officer | ||||||||||||||||||||||||
Alan T. Ennis | 2013 | 699,798 | — | — | 909,397 | 0 | 2,046,458 | 3,655,652 | ||||||||||||||||
Former President and | 2012 | 921,235 | — | — | 2,226,000 | 25,410 | 65,989 | 3,238,634 | ||||||||||||||||
Chief Executive Officer | 2011 | 910,000 | — | — | 2,067,800 | 34,632 | 65,523 | 3,077,955 | ||||||||||||||||
Steven Berns | 2013 | 269,122 | — | — | — | 0 | 32,608 | 301,730 | ||||||||||||||||
Former Executive Vice President | 2012 | 482,069 | — | — | 892,500 | 32,257 | 49,849 | 1,456,675 | ||||||||||||||||
and Chief Financial Officer | 2011 | 469,560 | 227 | — | 837,673 | 42,971 | 48,797 | 1,399,228 | ||||||||||||||||
Chris Elshaw | 2013 | 767,540 | — | — | 254,265 | 0 | 69,621 | 1,091,426 | ||||||||||||||||
Former Executive Vice President | 2012 | 758,312 | — | — | 1,102,500 | 5,263 | 220,121 | 2,086,196 | ||||||||||||||||
and Chief Operating Officer | 2011 | 746,355 | — | — | 1,024,100 | 8,598 | 209,697 | 1,988,750 | ||||||||||||||||
David L. Kennedy | 2013 | 132,692 | 15,000 | — | 322,500 | 0 | 23,573 | 493,765 | ||||||||||||||||
Retired Interim Chief Executive | 2012 | 150,576 | — | — | 420,000 | 11,664 | 24,000 | 606,240 | ||||||||||||||||
Officer and Executive Vice | 2011 | 150,000 | — | — | — | 37,933 | 24,000 | 211,933 | ||||||||||||||||
Chairman | ||||||||||||||||||||||||
Robert K. Kretzman | 2013 | 771,443 | 99,304 | — | 643,728 | 978,420 | 93,394 | 2,586,289 | ||||||||||||||||
Retired Executive Vice President | 2012 | 770,272 | — | — | 1,130,850 | 1,210,262 | 95,227 | 3,206,611 | ||||||||||||||||
| 2011 | 758,134 | — | — | 1,049,090 | 1,309,330 | 81,810 | 3,198,364 |
(a) |
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The amounts set forth under the “Bonus” column reflect the portion of |
For Mr. Delpani, this amount is comprised of $637,000, representing his guaranteed minimum bonus in respect of 2013, and $250,000, representing his sign-on bonus in connection with his commencement of employment, each of which amounts he was entitled to be paid pursuant to his employment agreement. |
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For Mr. Alletto, this amount is comprised of $573,350, representing his guaranteed minimum bonus in respect of 2013, plus $500,000, representing his guaranteed minimum LTIP payment, each of which he was entitled to be paid pursuant to his employment agreement. |
For Mr. Kennedy, this amount represents $15,000 of annual cash bonus in excess of adjusted target, in respect to 2013. |
For Mr. Kretzman, this amount is comprised of $57,637, representing his annual cash bonus in excess of adjusted target, plus $41,667, representing his Transitional LTIP payment in excess of adjusted target, in each case paid in respect to 2013. |
(b) | The amount set forth under the “Stock Awards” column |
(c) | The amounts set forth under the “Non-Equity Incentive Plan Compensation” column reflect the portion of the annual | |
For Mr. | ||
For Mr. | ||
For Mr. | ||
For Mr. |
For Mr. Kretzman, for 2013, the amount set forth under the “Non-Equity Incentive Plan Compensation” column reflects $518,728 in cash bonus, representing target bonus, adjusted for Company performance, plus $125,000 in Transitional LTIP, representing target award, adjusted for Company performance. |
(d) | The amounts under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column have been calculated based on the aggregate change in actuarial present value of the Named Executive |
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The Pension Equalization Plan is a non-qualified and unfunded plan. In May 2009, the Company amended the Retirement Plan and the Pension Equalization Plan to cease future benefit accruals under such plans after December 31, 2009. For those Named Executive Officers whose 2013 amount in the above column reflects a $0 value, there was a decrease in the net present value of their accumulated pension benefit. As detailed below, the negative amounts represent a decrease in the net present value of the executive’s accumulated pension benefit as of December 31, 2013, as compared to the net present value of the executive’s accumulated pension benefit as of December 31, 2012. Such decreases are primarily attributable to an increase in the applicable discount rate assumption used to determine the net present values of their accumulated pension benefits. Messrs. Delpani and Alletto joined the Company after the above-referenced plans were frozen as of December 31, 2009, and thus they have no amounts under such plans to report.
(e) | Mr. Ennis. The amount shown under All Other Compensation for Mr. Ennis for 2013 consists of (i) $57,537 of 2013 perquisites and personal benefits, comprised of a car allowance; tax preparation services; life insurance premiums; profit sharing contributions under the Amended and Restated Revlon Excess Savings Plan (the “Excess Savings Plan”) and the 401(k) Plan; and matching contributions under the 401(k) Plan; and (ii) $1,988,921 of separation pay, comprised of $1,861,178, representing 24 months (the “severance period”) of salary continuation at his base salary in effect upon termination, which is payable bi-weekly over the 24-month severance period; life insurance premiums for continued coverage during the severance period; medical insurance premiums for continued coverage during the severance period; tax preparation and financial counseling services incurred during the severance period, subject to program terms; car allowance continuation for the severance period; outplacement services; and unused vacation pay. |
Mr. Berns. The amount shown under All Other Compensation for Mr. Berns for 2013 consists of a car allowance; life insurance premiums; profit sharing contributions; and matching contributions under the 401(k) Plan. |
Mr. Elshaw. The amount shown under All Other Compensation for Mr. Elshaw for 2013 consists of a car allowance; tax preparation and financial counseling services; life insurance premiums; profit-sharing contributions (comprised of $34,285 of profit sharing contributions under the Excess Savings Plan and the |
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Mr. Kennedy. The amount shown under All Other Compensation for Mr. Kennedy for | ||
Mr. Kretzman. The amount shown under All Other Compensation for Mr. Kretzman for | ||
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Set forth below is a summary of Messrs. Kennedy, Ennis, Elshaw, Kretzman and Berns, who were the Company’s Named Executive Officers during 2010, has an executiveOfficers’ employment agreementagreements (copies of which have been filed with Products Corporation.
Mr. KennedyDelpani
Mr. Kennedy’sDelpani's employment agreement provides that heMr. Delpani will serve as Vice Chairman of the Board of DirectorsCompany's President and Chief Executive Officer, at an annual base salary of not less than $150,000$975,000 (which was his base salary as of December 31, 2010)2013).
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Mr. Delpani’s employment agreement requires that he comply with confidentiality and non-compete obligations, and with the Company’s Code of Business Conduct.
Products Corporation may terminate Mr. Delpani’s employment upon written notice following his “disability” (as defined in Mr. Delpani’s employment agreement), with no further amounts or benefits under the employment agreement being due after any such termination. Products Corporation or Mr. Delpani may terminate Mr. Delpani's employment agreement for any reason upon 30 days’ prior written notice to the other party.
Upon termination of employment, the Company may elect to enforce the executive’s non-competition covenant under the employment agreement, for up to 24 months, and in such event, as sole consideration for such non-competition agreement, Mr. Kennedy’s level,Delpani would be entitled to: (i) payments in lieu of base salary at 50% of his base salary then in effect, during such non-compete period; (ii) payment of a pro-rated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for the performance year when the termination occurs, based upon achievement of objectives and payable on the date that bonuses are paid to other executives under the bonus program for such performance year; (iii) the executive's bonus (if not already paid) with respect to the performance year immediately preceding the year of termination (if bonuses with respect to such year are payable to other executives based upon achievement of bonus objectives), payable as and when such bonuses are paid to other executives under the bonus program for such performance year; and (iv) continued participation in Products Corporation's medical, dental and group life insurance plans in which Mr. Delpani was participating on the termination date, subject to the terms of such plans, throughout the non-compete period or until Mr. Delpani is covered by like medical or dental plans of another company.
Mr. Alletto
Mr. Alletto's employment agreement provides that Mr. Alletto will serve as the Company's Executive Vice President, Chief Financial Officer and Chief Administrative Officer, at an annual base salary of not less than $765,000 (which was his base salary as of December 31, 2013).
Mr. Alletto is eligible to participate in the Company’s annual bonus programs as in effect from time to time, with a target bonus of 75% of his base salary. Pursuant to his employment agreement, Mr. Alletto was granted three LTIP awards: (i) a $500,000 new-hire LTIP, which was paid in March 2014; (ii) a $500,000 LTIP, which is payable in March 2015 subject to the Company and Mr. Alletto achieving certain objectives over the relevant performance period; and (iii) a $500,000 LTIP, which is payable in March 2016 subject to the Company and Mr. Alletto achieving certain objectives over the relevant performance period. Mr. Alletto is also eligible to participate in the Company’s future LTIPs as in effect from time to time.
Under his employment agreement, Mr. Alletto is eligible to participate in fringe benefit programs and perquisites as may be generally made available to other senior executives, including a car allowance and financial planning and tax preparation assistance.
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Mr. Kennedy’sAlletto’s employment agreement also provides for protectionrequires that he comply with confidentiality and non-compete obligations, and with the Company’s Code of Company confidential information and includes a non-compete obligation.
Products Corporation may terminate Mr. Kennedy’sAlletto’s employment upon written notice following his “disability” (as defined in Mr. Alletto’s employment agreement), with no further amounts or benefits under the employment agreement effectivebeing due after any such termination. Products Corporation may terminate Mr. Alletto's employment agreement upon 24 months aftermonths’ written notice of non-extension of thenon-renewal, or sooner upon written notice for “cause,” as defined in Mr. Alletto’s employment agreement, andor for any reason at any time without prior notice. Mr. KennedyAlletto may terminate his employment agreement at any time upon 60 days’30 days' prior written notice following a material uncured breach by Products Corporation of its obligations to Mr. KennedyAlletto under such agreement. agreement which breach remains uncured following 90 days’ written notice of such breach by the executive to Products Corporation.
Mr. Kennedy’sAlletto's employment agreement provides that, in the event of termination of employment by Mr. KennedyAlletto for any material uncured breach by Products Corporation of any of its obligations under his employment agreement, or by Products Corporation (otherwise(other than for “cause” as defined in theMr. Alletto's employment agreement or for disability), Mr. KennedyAlletto would be entitled toto: (i) continued payments of base salary throughout the24-month severance period,period; (ii) payment of a pro-rated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for the performance year when the termination occurs, based upon achievement of objectives and payable on the date bonuses are paid to other executives under the bonus program for such performance year; (iii) the executive's bonus (if not already paid) with respect to the performance year immediately preceding the year of termination (if bonuses with respect to such performance year are payable to other executives based upon achievement of bonus objectives), payable as and when such bonuses are paid to other executives under the bonus program for such performance year; and (iv) continued participation in Products Corporation’sCorporation's life insurance plan, subject to a limit of two years, and medical and dental plans, subject to the terms of such plans, throughout the severance period or until Mr. KennedyAlletto 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.
Mr. Berns
Mr. Berns’ employment with the Company ceased on July 19, 2013. Prior to such termination, benefits duringMr. Berns' employment agreement provided that Mr. Berns was to serve as the24-month severance period if Mr. Kennedy had been terminated without “cause” on December 31, 2010 would have been approximately $351,230, consisting of the following: (a) two times Mr. Kennedy’s Company's Executive Vice President and Chief Financial Officer, at an annual base salary on December 31, 2010 (hisof not less than $487,544 (which was his base salary on December 31, 2010as of the termination date).
Mr. Berns was $150,000); (b) 24 months of life insurance coverage, at a cost of approximately $230; (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, at a cost of approximately $17,000; and (e) 24 months of car allowance, at a cost of approximately $30,000. Mr. Kennedy does not currentlyeligible to participate in the Company’s standard groupannual bonus programs as in effect from time to time, with a target bonus of 75% of his base salary. Mr. Berns was eligible to participate in the Company’s LTIPs as in effect from time to time.
Under his employment agreement, Mr. Berns was eligible to participate in fringe benefit programs and perquisites as were generally made available to other senior executives, including a car allowance and financial planning and tax preparation assistance.
Mr. Berns’ employment agreement required that he comply with confidentiality and non-compete obligations, and with the Company’s Code of Business Conduct.
Mr. Elshaw
Mr. Elshaw’s employment with the Company ceased on February 24, 2014. Mr. Elshaw's employment agreement provided that Mr. Elshaw was to serve as the Company's Executive Vice President and Chief Operating Officer, at an annual base salary of not less than $766,013 (which was his base salary as of the termination date).
Mr. Elshaw was eligible to participate in the Company’s annual bonus programs as in effect from time to time, with a target bonus of 75% of his base salary. Mr. Elshaw was eligible to participate in the Company’s LTIPs as in effect from time to time.
Under his employment agreement, Mr. Elshaw was eligible to participate in fringe benefit programs and perquisites as were generally made available to other senior executives, including a car allowance and financial planning and tax preparation assistance.
Mr. Elshaw’s employment agreement required that he comply with confidentiality and non-compete obligations, and with the Company’s Code of Business Conduct.
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Products Corporation had the right to terminate Mr. Elshaw’s employment upon written notice following his “disability” (as defined in Mr. Elshaw’s employment agreement), with no further amounts or benefits under the employment agreement being due after any such termination. Under Mr. Elshaw’s employment agreement, Products Corporation had the right to terminate Mr. Elshaw's employment agreement effective 24 months after written notice of non-extension of the agreement. Mr. Elshaw's employment agreement provided that in the event of termination of employment by Products Corporation, Mr. Elshaw was entitled to: (i) continued payments of base salary throughout the 24-month severance period; (ii) payment of a pro-rated target bonus, if and to the extent bonuses were payable to other executives for the performance year when the termination occurred based upon achievement of objectives and payable on the date bonuses were paid to other executives under the bonus program for such performance year; (iii) the executive's bonus (if not already paid) with respect to the performance year immediately preceding the year of termination (if bonuses with respect to such year were payable to other executives based upon achievement of bonus objectives), payable as and when such bonuses were paid to other executives under the bonus program for such performance year; (iv) continued participation in Products Corporation's life insurance plan, subject to a limit of two years, and medical and dental plans. Allplans, subject to the terms of such plans, throughout the severance period or until Mr. Kennedy’s severance payments are conditional on his full compliance withElshaw is covered by like plans of another company; and (v) repatriation to the Company’s comprehensive agreement as to confidentiality and non-competition during any severance period.
Mr. Ennis
Mr. Ennis’ employment with the Company ceased on October 1, 2013. Prior to such termination, Mr. Ennis' employment agreement providesprovided that Mr. Ennis willwas to serve as the Company’sCompany's President and Chief Executive Officer, at an annual base salary of not less than $910,000$930,589 (which was his base salary as of December 31, 2010),the termination date).
Mr. Ennis was eligible to participate in the Company’s annual bonus programs as in effect from time to time, with a target bonus of 100% of his base salary.
Under his employment agreement, Mr. Ennis iswas eligible to participate in fringe benefit programs and perquisites as may bewere generally made available to other senior executives, of Products Corporation, including a car allowance and financial planning and tax preparation assistance. The
Mr. Ennis’ employment agreement forrequired that he comply with confidentiality and non-compete obligations, and with the Company’s Code of Business Conduct.
Under Mr. Ennis also provides for protection of Company confidential information and includes a non-compete obligation.
Mr. Ennis had been terminated without “cause”Kennedy
While Mr. Kennedy retired as executive Vice Chairman on December 31, 2010 would have been approximately $2,789,343, consisting of the following: (a) two times Mr. Ennis’ annual base salaryNovember 18, 2013, he remains on December 31, 2010; (b) $910,000, representing
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Mr. Kennedy was eligible to participate in the Company’s annual bonus programs as in effect from time to time, with a target bonus of 75%100% of his base salary.
Under his employment agreement, Mr. Elshaw, who relocated to the U.S. from the U.K. at the Company’s request in connection with his promotion in 2007 to Executive Vice President and General Manager, U.S. Region, prior to his being appointed Executive Vice President and Chief Operating Officer in May 2009, receives a $150,000 annual housing allowance through December 31, 2012, and isKennedy was eligible to participate in fringe benefit programs and perquisites as may bewere generally made available to other senior executives, of Products Corporation, including a car allowance and financial planning and tax preparation assistance. The
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Mr. Kennedy's employment agreement forrequired that he comply with confidentiality and non-compete obligations, and with the Company’s Code of Business Conduct.
Mr. Elshaw also provides for protection of Company confidential information and includes a non-compete obligation.
While Mr. Elshaw’s employment agreement effective 24 months after written notice of non-extensionKretzman retired as an executive officer 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 the24-month severance period, payment of a prorated target bonus, if and to the extent bonuses are payable to executives under the Incentive Compensation Plan for that year based upon achievement of objectives, continued participation in Products Corporation’s life insurance plan, subject to a limit of two years, and medical plans, subject to the terms of such plans, throughout the severance period or until Mr. Elshaw is covered by like plans of another company, and repatriation to the U.K.
Mr. Kretzman was eligible to participate in the Company’s annual bonus programs as in effect from time to time, with a target bonus of 75% of his base salary.
Under his employment agreement, Mr. Kretzman iswas eligible for participationto participate in fringe benefit programs and perquisites as may bewere generally made available to other 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’sKretzman's base salary; executive medical plan coverage; continued accrual of retirement benefits until his retirement date (in lieu of any discretionary profit sharing contributions); and a retirement benefit at and after age 60 without regard to the early retirement reductions he would otherwise be subject to under the Retirement Plan and Pension Equalization Plan and giving effect to his years of service and compensation through his retirement date.
Mr. Kretzman’sKretzman's employment agreement also provides for protectionrequired that he comply with confidentiality and non-compete obligations, and with the Company’s Code of Company confidential information and includes a non-compete obligation.
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Under his employment agreement, if Mr. Delpani had been terminated without “cause” on December 31, 2013 and the Company had elected to enforce the non-compete provision for the maximum 24-month period, the estimated aggregate total of termination benefits during the24-month severance period if Mr. Kretzman had been terminated without “cause” on December 31, 2010 would have been approximately $2,204,788,$1,715,315, consisting of the following: (a) two times 50% of Mr. Kretzman’sDelpani’s annual base salary on December 31, 2010;2013; (b) $557,284,$637,000, representing his 2010 target2013 guaranteed bonus; (c) 24 months of life insurance coverage, at a cost of approximately $29,104;$8,050; (d) 24 months of medical and dental insurance coverage, at a total cost of approximately $49,298;$28,265; (e) 24 months of use of an automobile, at a cost of approximately $66,012;$48,000; and (f) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000. Under such circumstances,$19,000. Mr. Kretzman would also be entitled to the continued vesting of unvested restricted stock (40,734 restricted shares were unvested at December 31, 2010 having a fair market value on such date of $400,823 based on the $9.84 per share NYSE closing price of the Company’s Class A Common Stock on such date), stock option awards outstanding on December 31, 2010 (all of Mr. Kretzman’s options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010) and to the full payout of the remainder of his $500,000 2010 LTIP award (one-third of which was paid in March 2011). Mr. Kretzman’sDelpani’s severance payments are conditional on his full compliance with the Company’s comprehensive agreement as tocertain confidentiality and non-competition provisions during any severance period.
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Mr. Berns resigned from employment with the Company on July 19, 2013. He is not receiving any separation pay from the Company.
The estimated aggregate total of termination benefits during the 24-month severance period if Mr. Elshaw had been terminated without “cause” on December 31, 2013 would have been approximately $2,070,723, consisting of
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the following: (a) two times Mr. Elshaw's annual base salary on December 31, 2013; (b) $517,058, representing Mr. Elshaw's 2013 target bonus, adjusted for Company performance (as noted above, Mr. Elshaw’s actual bonus for 2013 was $129,265); (c) 24 months of life insurance coverage, at a cost of approximately $6,328; (d) 24 months of group medical and dental insurance coverage, at a cost of approximately $9,311; and (e) repatriation from the U.S. to the U.K, at a cost of approximately $6,000.
Mr. Elshaw’s employment with the Company ceased after December 31, 2013, on February 24, 2014. Mr. Elshaw and Products Corporation entered into a separation agreement, effective February 24, 2014, which provides Mr. Elshaw with separation benefits consistent with those set forth in his employment agreement (see above). In addition, Mr. Elshaw remains eligible to be paid the following installments of his previously-granted LTIP awards, all of which relate to performance periods prior to his cessation of employment: (i) the 3rd installment of his 2011 LTIP, in the amount of $163,333; (ii) the 2nd installment of his 2012 LTIP, in the amount of $175,000; and (iii) the 1st installment of his Transitional LTIP, in the amount of $125,000, each of which will be paid no earlier than August 24, 2014. All of Mr. Berns’Elshaw’s severance payments are conditional on his full compliance with certain confidentiality and non-solicitation provisions during the Company’s comprehensiveseverance period.
Mr. Ennis’ employment with the Company ceased on October 1, 2013. Mr. Ennis and Products Corporation entered into a separation agreement, aseffective October 1, 2013, which provides Mr. Ennis with separation benefits consistent with those set forth in his employment agreement (see above). In addition, the Compensation Committee authorized Mr. Ennis remaining eligible to receive payment under the following LTIP awards on the regular payment dates for such awards, all of which relate to performance periods prior to his cessation of employment: (i) the 3rd installment of his 2011 LTIP, in the amount of $392,000, which was paid in April 2014; (ii) the 2nd installment of his 2012 LTIP, in the amount of $420,000, which was paid in April 2014; (iii) the 1st installment of his Transitional LTIP, in the amount of $281,250, which was paid in April 2014; and (iv) the 3rd installment of his 2012 LTIP, in the amount of $420,000, which is payable in March 2015. All of Mr. Ennis' severance payments are conditional on his compliance with certain confidentiality and non-competition provision during anythe severance period.
Mr. Kennedy retired on November 18, 2013. Pursuant to his employment agreement, or as authorized by the Compensation Committee, he continues to be eligible to receive payments under the following LTIP awards, all of which relate to performance periods prior to his retirement: (i) the 2nd installment of his 2012 LTIP, in the amount of $87,500, which was paid in March 2014; (ii) the 3rd installment of his 2012 LTIP, in the amount of $87,500, which is payable in March 2015; (iii) the 1st installment of his Transitional LTIP, in the amount of $62,500, which was paid in March 2014; (iv) one-half of the 2nd installment of his Transitional LTIP, in the amount of $62,500, which is payable in March 2015; and (v) one-third of his 2013 LTIP, in the amount of $62,500, which is payable in March 2016.
Mr. Kretzman retired on December 31, 2013. Pursuant to Mr. Kretzman’s employment agreement, he continues to be eligible to receive payments under the following LTIP awards, all of which relate to performance periods prior to his retirement: (i) the 3rd installment of his 2011 LTIP, in the amount of $163,333, which will be paid in July 2014; (ii) the 2nd installment of his 2012 LTIP, in the amount of $175,000, which will be paid in July 2014; (iii) the 3rd installment of his 2012 LTIP, in the amount of $175,000, which is payable in March 2015; and (iv) his 2013 Transitional LTIP, in the amount of $166,667, which was paid in March 2014.
Each of Messrs. Kennedy’s, Elshaw’s, Ennis’Delpani’s, Alletto’s, Ennis', Kretzman’sBerns', Elshaw's, Kennedy's and Berns’Kretzman's employment agreements provides that, in the event of any “change of control,” the terms of their employment agreements would be extended for an additional 24 months from the effective date of any such “change of control.” Each of their employment agreements also provides that if, within this24-month period, the executive were to terminate his employment with the Company for “good reason” or if the Company were to terminate the executive’sexecutive's employment other than for “cause,” he would receive: (i) a lump-sum payment equal to two times the sum of (a) the executive’sexecutive's base salary and (b) the executive’sexecutive'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
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restricted shares held by them shall immediately vest and become fully exercisable.
Under the Incentive Compensation Plan, if, in connection with a “change inof control,” a successor entity assumes the LTIP, does not terminate the LTIP or provides participants with comparable LTIP benefits, then the LTIP awards remain payable in accordance with their terms. Otherwise, upon a “change inof control,” LTIP awards related to the yearperformance period when the event occurred are to be paid at target on a pro-rated basis (based on the number of days elapsed) within 60 days following such “change inof control,” and (ii) LTIP awards related to prior yearsperformance periods as to which the respective performance objectives were achieved, but for which payments remain outstanding, are to be paid within 60 days following such “change inof control.”
Messrs. Ennis, Elshaw and Berns ceased employment with the Company and Messrs. Kennedy and Kretzman retired prior to the date of this Proxy Statement, and not following a “change of control.”
The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. KennedyDelpani had been terminated on December 31, 20102013 would have been approximately $1,079,230,$3,430,365, consisting of the following: (a) two times his annual base salary on December 31, 2010;2013; (b) two times his5-year average 5-year bonus which average was $355,000 as of December 31, 2010;$637,000 (representing his 2013 bonus); (c) two years of contributions under the Company’sCompany's 401(k) Plan; (d) two years of profit sharing contributions under the Company’s 401(k) Plan; (e) 24 months of life insurance coverage, at a costPlan of approximately $230; (f) 24 months of group medical and dental insurance coverage, at a total cost of approximately $4,000; (g) 24 months of car allowance at a cost of approximately $30,000; and (h) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000. In addition, under such circumstances, Mr. Kennedy would be entitled to the immediate vesting of his unvested restricted stock (84,001 restricted shares were unvested at December 31, 2010 having a fair market value on December 31, 2010 of $826,570 based on the $9.84 per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding on December 31, 2010 (all of Mr. Kennedy’s options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010).
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The estimated aggregate total of benefits upon a “change of control” and subsequent termination if Mr. Alletto had been terminated on December 31, 2013 would have been approximately $5,837,655, consisting of the following: (a) two times his annual base salary on December 31, 2013; (b) two times his average 5-year bonus of $573,350 (representing his 2013 bonus); (c) two years of contributions under the Company's 401(k) Plan of approximately $15,300; (d) approximately $68,850 in respect of two years of profit sharing contributions under the 401(k) Plan; (e) 24 months of life insurance coverage, at a cost of approximately $6,316; (f) 24 months of group medical and dental insurance coverage, at a cost of approximately $26,289; (g) 24 months of car allowance at a cost of approximately $30,000; (h) 24 months of tax preparation and financial counseling, at a cost of approximately $17,000;$19,000; and (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 immediateaccelerated vesting of his unvested restricted stock (44,268 restrictedaward of 120,000 shares were unvested at December 31, 2010 havingof Class A Common Stock, which had a fair market value on December 31, 2010such date of $435,597$2,995,200 based on the $9.84NYSE closing market price per share NYSE closing price of the Company’s Class A Common Stock on such date) and stock option awards outstanding$24.96 on December 31, 2010 (all of Mr. Elshaw’s options were“out-of-the-money” on such date and had no realizable monetary value on December 31, 2010).2013. Upon a “change inof control” without the successor entity assuming or otherwise continuing the terms of the LTIP, Mr. ElshawAlletto also would be entitled to the full payout of the remaining unpaid portion of his previously earned LTIP awards, in the amount as of December 31, 2013 of $500,000, 2010representing his 2013 Transitional LTIP, award (one-thirdnot subject to pro-ration or adjustment for 2013 Company performance pursuant to his employment agreement.
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The following tables present information about the non-equity, plan-based awards that were granted to Named Executive Officers in the last completed fiscal year. The actual payout of which was paid in March 2011), which was earned for 2010 based uponsuch awards required the Compensation Committee’s determination that the Company had achieved its 2010satisfaction of certain performance objectives and that the executive had earned a “target”other conditions and, in light of certain executives’ retirement or better 2010 performance rating.
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LTIP Mr. Berns also would be entitled to the full payout of his $500,000 2010 LTIP award (one-third of which was paid in March 2011), which was earned for 2010 based upon the Compensation Committee’s determination that the Company had achieved its 2010 performance objectives and that the executive had earned a “target” or better 2010 performance rating.
The Compensation Committee granted, and authorized the payment of, performance-based LTIP awards and annual cash bonuses to eligible Named Executive Officers in respect to the 2010 performance year2013 under the Revlon Executive2013 Incentive Compensation Plan, which grants are summarized inPrograms. The structure and design of, and performance factors for, those programs were adopted, ratified and approved by the table below. AwardsCompensation Committee pursuant to its authority under the 2010 LTIP Program were structured as flat dollar amounts that could beIncentive Compensation Plan. Amounts earned are based upon the Company’s degree of achievement of its relevant Performance Targets for the Company’s 2010 Performance Goals, subjectrelevant performance periods, which is reviewed and certified by the Compensation Committee, which also reviews and makes determinations in respect to the Named Executive Officers’ respective achievement of their personal objectives.
Estimated Possible Future Payouts Under Non-Equity Incentive Plan Awards
2013 LTIP (1) | Transitional LTIP (2) | |||||||||||||||||||
Name | Threshold | Target | Maximum | LTIP Payout Dates | Threshold | Target | Maximum | LTIP Payout Dates | ||||||||||||
Lorenzo Delpani | — | — | — | — | $ | 0 | $ | 888,888 | $ | 1,333,332 | $111,111 in March 2014; $777,777 in March 2015 | |||||||||
President & Chief | ||||||||||||||||||||
Executive Officer | ||||||||||||||||||||
Lawrence Alletto (3) | $ | 0 | $ | 500,000 | $ | 750,000 | March 2016 | $ | 500,000 | $ | 500,000 | $ | 750,000 | March 2014 | ||||||
EVP, Chief Financial | — | — | — | — | $ | 0 | $ | 500,000 | $ | 750,000 | March 2015 | |||||||||
Officer & Chief | ||||||||||||||||||||
Administrative Officer | ||||||||||||||||||||
Alan Ennis | $ | 0 | $ | 1,500,000 | $ | 2,250,000 | March 2016 | $ | 0 | $ | 1,500,000 | $ | 2,250,000 | 1/3 amount in March 2014; 2/3 amount in March 2015 | ||||||
Former President and | ||||||||||||||||||||
Chief Executive | ||||||||||||||||||||
Officer | Steven Berns | $ | 0 | $ | 500,000 | $ | 750,000 | March 2016 | $ | 0 | $ | 500,000 | $ | 750,000 | 1/3 amount in March 2014; 2/3 amount in March 2015 | |||||
Former EVP and | ||||||||||||||||||||
Chief Financial | ||||||||||||||||||||
Officer | ||||||||||||||||||||
Chris Elshaw | $ | 0 | $ | 500,000 | $ | 750,000 | March 2016 | $ | 0 | $ | 500,000 | $ | 750,000 | 1/3 amount in March 2014; 2/3 amount in March 2015 | ||||||
Former EVP and | ||||||||||||||||||||
Chief Operating | ||||||||||||||||||||
Officer | ||||||||||||||||||||
David Kennedy | $ | 0 | $ | 250,000 | $ | 375,000 | March 2016 | $ | 0 | $ | 250,000 | $ | 375,000 | 1/3 amount in March 2014; 2/3 amount in March 2015 | ||||||
Retired Interim Chief | ||||||||||||||||||||
Executive Officer and | ||||||||||||||||||||
executive Vice | ||||||||||||||||||||
Chairman | ||||||||||||||||||||
Robert K. Kretzman | — | — | — | — | $ | 0 | $ | 166,667 | $ | 250,000 | March 2014 | |||||||||
Retired Executive Vice | ||||||||||||||||||||
President |
(1) | Awards under the 2013 LTIP were structured as flat dollar amounts that could be earned based upon the degree of achievement of the Company's applicable Performance Targets, subject to the grantee achieving at least target performance on his |
Estimated Future | Payout Dates | |||||||
Payouts Under | (in Each Case, as to | |||||||
Non-Equity | One-Third of Award | |||||||
Effective | Incentive Plan | Amount, and Subject to | ||||||
Name | Grant Date | Awards | Continued Employment) | |||||
Alan Ennis | February 2010 | $ | 1,200,000 | March 2011, 2012 & 2013 | ||||
President and Chief Executive Officer | ||||||||
Chris Elshaw | February 2010 | $ | 500,000 | March 2011, 2012 & 2013 | ||||
EVP and Chief Operating Officer | ||||||||
Robert Kretzman | February 2010 | $ | 500,000 | March 2011, 2012 & 2013 | ||||
EVP and Chief Administrative Officer | ||||||||
Steven Berns | February 2010 | $ | 500,000 | March 2011, 2012 & 2013 | ||||
EVP and Chief Financial Officer |
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LTIP Program are to be made in equal one-third amounts over three years, one-third of which was paidone installment in March 2011, with the remaining two-thirds payable in March 2012 and March 2013, provided2016, if the grantee is employed with the Company on the remaining payout dates.date, unless provided otherwise in the executive’s employment agreement (see “Employment Agreements and Payments upon Termination and Change of Control”). Pursuant to its terms, the 2013 LTIP, as amended, is not funded, and no award is payable, if the Company achieves less than 90% of its applicable Adjusted EBITDA and Free Cash Flow Performance Targets and less than 96% of its Net Sales Performance Target (represented by the “Threshold” column, above); the 2013 LTIP, as amended, is funded at the “Target” level if the Company achieves 100% of its applicable Performance Targets; and the 2013 LTIP, as amended, is funded at 150% of the “Target” level for achievement by the Company of 110% of its applicable Adjusted EBITDA and Free Cash Flow Performance Targets and 102% of its applicable Net Sales Performance Target (represented by the “Maximum” column, above). The Company’s corporate performance targets under the 2013 LTIP, as amended, are based upon average achievement of 2014 and 2015 performance as to: (1) Adjusted EBITDA, weighted at 50%; (2) Free Cash Flow, weighted at 25%; and (3) Net Sales weighted at 25%. For additional information about the 2013 LTIP, including modifications made to such program authorized by the Compensation Committee, see “Compensation Discussion and Analysis,” above.
(2) | Awards under the Transitional LTIP were structured as flat dollar amounts that could be earned based upon the degree of achievement of the Company's applicable Performance Targets, subject to the grantee achieving at least target performance on his Performance Management Review. In order to provide eligible LTIP grantees with comparable payout opportunities during 2014 and 2015, as the LTIP structure transitioned from a one-year performance period to a multi-year performance period, the Company implemented the Transitional LTIP in 2013. Payouts to grantees of earned awards under the Transitional LTIP are to be made in two installments, one-third of which was payable in March 2014 and two-thirds of which is payable in March 2015, if the grantee is employed with the Company on the payout date, unless provided otherwise in the executive’s employment agreement (see “Employment Agreements and Payments upon Termination and Change of Control”). Pursuant to its terms, the Transitional LTIP, as amended, is not funded, and no award is payable, if the Company achieves less than 90% of its applicable Adjusted EBITDA and Free Cash Flow Performance Targets and less than 96% of its Net Sales Performance Target (represented by the “Threshold” column, above); the Transitional LTIP, as amended, is funded at the “Target” level if the Company achieves 100% of its applicable Performance Targets; and the Transitional LTIP, as amended, is funded at 150% of the “Target” level for achievement by the Company of 110% of its applicable Adjusted EBITDA and Free Cash Flow Performance Targets and 102% of its applicable Net Sales Performance Target (represented by the “Maximum” column, above). The Company’s corporate performance targets under the Transitional LTIP for its one-third payout in March 2014 included the following: (1) the Company’s 2013 EBITDA Performance Target, weighted at 50%; (2) the Company’s 2013 Free Cash Flow Performance Target, weighted at 25%; and (3) the Company’s 2013 Net Sales Performance Target, weighted at 25%, as adjusted to account for the 2013 Unusual Items. The Company’s corporate performance targets for the remaining two-thirds payout opportunity under the Transitional LTIP, as amended, are based upon 2014 performance as to: (1) Adjusted EBITDA, weighted at 50%; (2) Free Cash Flow, weighted at 25%; and (3) Net Sales, weighted at 25%. For additional information about the Transitional LTIP, including modifications made to such program authorized by the Compensation Committee, see “Compensation Discussion and Analysis,” above. |
(3) | In accordance with his employment agreement, Mr. Alletto was entitled to a guaranteed minimum LTIP of $500,000, which was paid in March 2014. Pursuant to his employment agreement, Mr. Alletto was also granted a $500,000 LTIP, payable in March 2015, and a $500,000 LTIP, payable in March 2016, in each case subject to achievement of certain objectives during the relevant performance period. |
33
39
2013 Annual Bonus Program (4) | |||||||||
Name | Threshold | Target | Maximum | ||||||
Lorenzo Delpani | $ | 637,000 (5 | ) | $ | 975,000 | $ | 1,462,500 | ||
President & Chief Executive Officer | |||||||||
Lawrence Alletto | $ | 573,350 (5 | ) | $ | 573,750 | $ | 860,625 | ||
EVP, Chief Financial Officer & Chief Administrative Officer | |||||||||
Alan Ennis | $ | 0 | $ | 930,589 | $ | 1,395,883 | |||
Former President and Chief Executive Officer | |||||||||
Steven Berns | $ | 0 | $ | 365,658 | $ | 548,487 | |||
Former EVP and Chief Financial Officer | |||||||||
Chris Elshaw | $ | 0 | $ | 574,510 | $ | 861,765 | |||
Former EVP and Chief Operating Officer | |||||||||
David Kennedy | $ | 0 | $ | 150,000 | $ | 225,000 | |||
Retired Interim Chief Executive Officer and Executive Vice Chairman | |||||||||
Robert K. Kretzman | $ | 0 | $ | 576,365 | $ | 864,548 | |||
Retired Executive Vice President |
(4) | The amounts under this column represent the threshold, target, and maximum payouts for annual cash bonuses under the 2013 Annual Bonus Program, based on 2013 performance against pre-established performance measures. The amount under the “Target” column represents the target award opportunity, which is set as a percentage of base salary under the Named Executive Officers’ respective employment agreements. Pursuant to its terms, the 2013 Annual Bonus Program would not be funded, and no award would be payable, if the Company were to achieve less than 85% of its 2013 Performance Targets (represented by the “Threshold” column, above); the 2013 Annual Bonus Program could have been funded at the “Target” level if the Company had achieved 100% of its 2013 Performance goals; and the 2013 Annual Bonus Program could have been funded at 150% of the “Target” level for achievement by the Company of 120% of its 2013 Performance Targets (represented by the “Maximum” column, above). In addition, under the 2013 Annual Bonus Program, managers (or, for Named Executive Officers, the Compensation Committee) retained the discretion to award between 25% and 150% of target awards, to reward comparative performance, provided the overall bonus pool was not exceeded. For additional information about the 2013 Annual Bonus Program, see “Compensation Discussion and Analysis,” above. |
(5) | Pursuant to his employment agreement, each of Mr. Delpani and Mr. Alletto was entitled to a guaranteed minimum 2013 annual bonus, which was paid in March 2014. Pursuant to his employment agreement, Mr. Delpani received a $250,000 sign-on bonus and is entitled to a relocation bonus of $250,000 during each of 2014, 2015 and 2016, payable monthly, to compensate him for costs to move with his family to the New York metropolitan area. |
40
During 2013, Mr. Alletto received the following restricted stock grant pursuant to his employment agreement. The Company granted such award to Mr. Alletto as an inducement for him to join the Company as its new Executive Vice President, Chief Financial Officer and Chief Administrative Officer. The Company did not make any other equity awards during 2013. The grant date fair value reflects the number of shares of restricted stock (all of which are currently unvested) multiplied by $24.80, which was the NYSE closing market price of the Company's Class A Common Stock on the October 28, 2013 grant date.
Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#)(a) | Grant Date Fair Value of Stock and Option Awards ($) | ||||||||
Lawrence Alletto | October 28, 2013 | 120,000 | — | $ | 2,976,000 | |||||||
Executive Vice President, Chief Financial Officer and Chief Administrative Officer |
(a) | None of the Named Executive Officers received awards of stock options during 2013. |
Mr. Alletto’s restricted stock grant was previously publicly reported on a Form 4 filed with the SEC on October 28, 2013. All of the restricted shares granted to Mr. Alletto vest as to one-third of the shares on each of October 28, 2014, October 28, 2015 and October 28, 2016, or in full upon any “change of control.” No dividends are payable on the unvested restricted stock. On December 31, 2013, all of these restricted shares were unvested and therefore had no realizable monetary value as of that date.
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The following table sets forth certain information regarding equity awards held by the Named Executive Officers under the Company’sCompany's Stock Plan which remained outstanding as of December 31, 2010.2013. The Company last implemented an annual equity award program under the Stock Plan in 2008. As the $9.84 per share NYSE closing market price of the Company’s Class A Common Stock on December 31, 2010 was lower2013, all restricted stock awards previously granted under the Stock Plan to any Named Executive Officer had fully vested, other than the exercise price for all options outstanding onMr. Alletto’s restricted stock grant, described above. As of December 31, 2010,2013, all of the stock options held bypreviously granted to any of the Named Executive Officers had no realizable monetary value as of December 31, 2010. The NYSE closing market price of the Company’s Class A Common Stock on the Record Date was $15.28 per share. All historical share data has been adjusted for the Company’s1-for-10 Reverse Stock Split. Each of the Named Executive Officers exchanged in the Exchange Offer all of their eligible shares of the Company’s Class A Common Stock held by them on October 8, 2009 (the closing date of the Exchange Offer), and received a like number of shares of Series A Preferred Stock. The stock awards listed in the table below reflect restricted shares of Class A Common Stock that vest after the closing date of the Exchange Offer and therefore were not exchanged.
Stock Awards | ||||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Incentive | Equity | |||||||||||||||||||||||||||||||||||
Option Awards | Plan | Incentive Plan | ||||||||||||||||||||||||||||||||||
Equity | Awards: | Awards: | ||||||||||||||||||||||||||||||||||
�� | Incentive | Number of | Market or | |||||||||||||||||||||||||||||||||
Plan | Market | Unearned | Payout Value | |||||||||||||||||||||||||||||||||
Awards: | Number of | Value of | Shares, | of Unearned | ||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Shares or | Shares or | Units or | Shares, Units | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | Units of | Units of | Other | or Other | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Stock | Stock | Rights | Rights | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | That | That | That | That | |||||||||||||||||||||||||||||
Options (#) | Options (#) | Unearned | Exercise | Option | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
Exercisable | Unexercisable | Options | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||
Name | (a) | (a) | (#) | ($) | Date | (#) | ($)(b) | (#) | ($) | |||||||||||||||||||||||||||
David L. Kennedy | 15,000 | — | — | 49.60 | 6/21/2012 | 84,001 | 826,570 | — | — | |||||||||||||||||||||||||||
Vice Chairman | 5,000 | — | — | 30.60 | 4/22/2013 | |||||||||||||||||||||||||||||||
149,300 | — | — | 30.30 | 4/14/2011 | ||||||||||||||||||||||||||||||||
13,500 | — | — | 25.50 | 3/07/2012 | ||||||||||||||||||||||||||||||||
Alan T. Ennis | 2,000 | — | — | 28.80 | 3/31/2012 | 44,067 | 433,619 | — | — | |||||||||||||||||||||||||||
President and Chief Executive | ||||||||||||||||||||||||||||||||||||
Chris Elshaw | 300 | — | — | 39.80 | 9/4/2012 | 44,268 | 435,597 | — | — | |||||||||||||||||||||||||||
Executive Vice President | 300 | — | — | 37.80 | 9/17/2012 | |||||||||||||||||||||||||||||||
and Chief Operating | 16,600 | — | — | 30.30 | 4/14/2011 | |||||||||||||||||||||||||||||||
Officer | 7,000 | — | — | 25.50 | 3/7/2012 | |||||||||||||||||||||||||||||||
Robert K. Kretzman | 1,500 | — | — | 56.60 | 6/18/2011 | 40,734 | 400,823 | — | — | |||||||||||||||||||||||||||
Executive Vice | 5,000 | — | — | 37.80 | 9/17/2012 | |||||||||||||||||||||||||||||||
President and Chief | 95,500 | — | — | 30.30 | 4/14/2011 | |||||||||||||||||||||||||||||||
Administrative Officer | 12,000 | — | — | 25.50 | 3/07/2012 | |||||||||||||||||||||||||||||||
Steven Berns | — | — | — | — | — | 16,667 | 164,003 | — | — | |||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer |
Option Awards | Stock Awards | ||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(a) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||
Lorenzo Delpani | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
President and Chief Executive Officer | |||||||||||||||||||||||||||
Lawrence Alletto | — | — | — | — | — | 120,000 | 2,995,200 | — | — | ||||||||||||||||||
Executive Vice President, Chief Financial Officer and Chief Administrative Officer | |||||||||||||||||||||||||||
Steven Berns | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Former Executive Vice President and Chief Financial Officer | |||||||||||||||||||||||||||
Chris Elshaw | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Former Executive Vice President and Chief Operating Officer | |||||||||||||||||||||||||||
Alan T. Ennis | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Former President and Chief Executive Officer | |||||||||||||||||||||||||||
David L. Kennedy | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Retired Interim Chief Executive Officer and executive Vice Chairman | |||||||||||||||||||||||||||
Robert K. Kretzman | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Retired Executive Vice President |
(a) |
34
The market value of the restricted shares identified in the table above is based on the |
35
None of the Named Executive Officers soldheld any of their shares of formerly restricted stock that vested during 2010.2013, nor did any of the Named Executive Officers exercise any stock options during 2013. None of the Named Executive Officers hold any stock options or shares of restricted stock, other than Mr. Alletto, whose restricted share grant is described above.
Option Awards | Stock Awards | |||||||||||||||
Number of Shares | Value Realized | Number of Shares | Value Realized | |||||||||||||
Acquired on Exercise | on Exercise | Acquired on Vesting | on Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($)(a) | ||||||||||||
David L. Kennedy | — | — | 55,916 | 951,412 | ||||||||||||
Vice Chairman | ||||||||||||||||
Alan T. Ennis | — | — | 27,867 | 474,180 | ||||||||||||
President and Chief Executive Officer | ||||||||||||||||
Chris Elshaw | — | — | 28,066 | 477,565 | ||||||||||||
Executive Vice President and Chief Operating Officer | ||||||||||||||||
Robert K. Kretzman | — | — | 27,866 | 474,129 | ||||||||||||
Executive Vice President and Chief Administrative Officer | ||||||||||||||||
Steven Berns | — | — | 8,333 | 89,913 | ||||||||||||
Executive Vice President and Chief Financial Officer |
42
37
The following table shows, as of December 31, 2010 (the pension plan measurement date used for financial statement reporting purposes with respect to the audited financial statements included in the Company’s 2010Form 10-K),2013, the number of years of credited service under the plans, (which differs from the actual number of years of service to the Company), and the present value of accumulated benefit and payments during the last fiscal year, with respect to each Named Executive Officer who has a benefit under the Retirement Plan and the Pension Equalization Plan, as described below.
Number of Years | Present Value of | Payments | ||||||||||||
of Credited Service | Accumulated Benefit | During 2010 | ||||||||||||
Name | Plan Name | (#) | ($)(a) | ($) | ||||||||||
David L. Kennedy | Retirement Plan | 7.50 | 105,416 | — | ||||||||||
Vice Chairman | Pension Equalization Plan | 7.50 | 360,650 | — | ||||||||||
Alan T. Ennis | Retirement Plan | 4.75 | 58,795 | — | ||||||||||
President and Chief Executive Officer | Pension Equalization Plan | 4.75 | 71,530 | |||||||||||
Chris Elshaw | Retirement Plan | 2.00 | 24,768 | — | ||||||||||
Executive Vice President and Chief Operating Officer | Pension Equalization Plan | 0.67 | �� | 24,168 | — | |||||||||
Robert K. Kretzman | Retirement Plan | 21.42 | 628,183 | — | ||||||||||
Executive Vice | Pension | 21.42 | 1,931,432 | — | ||||||||||
President and Chief Administrative Officer | Equalization Plan Employment Agreement | 22.42 | 311,184 | |||||||||||
Steven Berns | Retirement Plan | 7.33 | 73,575 | — | ||||||||||
Executive Vice President and Chief Financial Officer | Pension Equalization Plan | 7.33 | 32,701 | — |
Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(a) | Payments During 2013 ($) | ||||||
Lorenzo Delpani | Retirement Plan Pension Equalization Plan | — | — | — | ||||||
President and Chief Executive Officer | — | — | — | |||||||
Lawrence Alletto | Retirement Plan | — | — | — | ||||||
Executive Vice President, Chief Financial Officer and Chief Administrative Officer | Pension Equalization Plan | — | — | — | ||||||
Alan T. Ennis | Retirement Plan | 4.75 | 69,731 | — | ||||||
Former President and Chief Executive Officer | Pension Equalization Plan | 4.75 | 84,835 | — | ||||||
Steven Berns | Retirement Plan | 7.33 | 92,921 | — | ||||||
Former Executive Vice President and Chief Financial Officer | Pension Equalization Plan | 7.33 | 41,300 | — | ||||||
Chris Elshaw | Retirement Plan | 2.00 | 29,183 | — | ||||||
Former Executive Vice President and Chief Operating Officer | Pension Equalization Plan | 0.67 | 28,476 | — | ||||||
David L. Kennedy | Retirement Plan | 7.50 | 102,136 | — | ||||||
Retired Interim Chief Executive Officer and executive Vice Chairman | Pension Equalization Plan | 7.50 | 409,285 | — | ||||||
Robert K. Kretzman | Retirement Plan | 21.42 | 815,384 | — | ||||||
Retired Executive Vice President | Pension Equalization Plan | 21.42 | 2,506,972 | — | ||||||
| Employment Agreement | 25.42 | 3,046,455 |
(a) | The amounts set forth in the Pension Benefits Table are based on the assumptions set forth in Note |
The Retirement Plan is intended to be a tax qualified defined benefit plan. The Pension Equalization Plan is a non-qualified and unfunded benefit plan. In May 2009, the Company amended the Retirement Plan and the Pension Equalization Plan to cease future benefit accruals under such plans after December 31, 2009. Prior to such amendments, benefits under the non-cash balance program of the Retirement Plan and the Pension Equalization Plan (the “Non-Cash Balance Program”) were a function of service and final average compensation. The Non-Cash Balance Program was designed to provide an employee having 30 years of credited service with an annuity generally equal to 52% of final average compensation less 50% of estimated individual Social Security benefits. Final average compensation is defined as average annual base salary and bonus (but not any part of bonuses in excess of 50% of base salary) during the five consecutive calendar years in which base salary and bonus (but not any part of bonuses in excess of 50% of base salary) were highest out of the last 10 years prior to retirement or earlier termination. Participants in the Non-Cash Balance Program are eligible for early retirement upon the later of the date that they reach age 55 or complete 10 years of service. The amount payable upon early retirement is calculated based on the normal retirement benefit calculation under the Non-Cash Balance Program, reduced by1/∕2% for each month that
43
benefits start before the normal retirement date of age 65 (or 6% for each full year of early retirement). Messrs. Kennedy, Ennis, Elshaw and Elshaw,Kennedy, each of whom joined the Company after the implementation of the Cash Balance Program (as discussed below), did not participate in the Non-Cash Balance Program.
Effective January 1, 2001, Products Corporation amended the Retirement Plan and the Pension Equalization Plan to provide for a cash balance program under the Retirement Plansuch plans (the “Cash Balance Program”). Prior to ceasing future benefit accruals under the
38
Messrs. Kennedy, Ennis, Elshaw and ElshawKennedy participated in the Cash Balance Program prior to the cessation of future benefit accruals after December 31, 2009. Employees who as of January 1, 2001 were at least age 45, had 10 or more years of service with the Company and whose age and years of service totaled at least 60, including Mr. Kretzman, through his retirement on December 31, 2013, were “grandfathered” and continued to participate in the Non-Cash Balance Program under the same retirement formula described in the preceding paragraph, prior to ceasing future benefit accruals under the Retirement Plan and the Pension Equalization Plan after December 31, 2009.2009; provided, that, as described below, Mr. Kretzman continued to accrue retirement benefits under his employment agreement. All eligible employees had their benefits earned (if any) under the Non-Cash Balance Program “frozen” on December 31, 2000 and began to participate in the Cash Balance Program on January 1, 2001, prior to ceasing future benefit accruals under the Retirement Plan and the Pension Equalization Plan after December 31, 2009. The “frozen” benefits will be payable at normal retirement age and will be reduced if the employee elects early retirement.
The Retirement Plan and Pension Equalization Plan each provide that employees vest in their benefits after they have completed three years of service with the Company or an affiliate of the Company. Each of the Named Executive Officers areis fully vested in theirhis respective benefits under the PensionRetirement Plan and the Pension Equalization Plan as of December 31, 2009. The Employee Retirement Income Security Act of 1974, as amended, places certain maximum limitations under ERISA and the Code upon the annual benefit payable under all qualified plans of an employer to any one individual. In addition, the Code limits the annual amount of compensation that can be considered in determining the level of benefits under qualified plans. TheAs noted above, the Pension Equalization Plan as amended, is a non-qualified and unfunded benefit arrangementplan that was designed to provide for the payment by the Company of the difference, if any, between the amount of such maximum limitations and the annual benefit that would otherwise be payable under the Retirement Plan but for such limitations, up to a combined maximum annual straight life annuity benefit at age 65 under the Retirement Plan and the Pension Equalization Plan of $500,000. Benefits provided under the Pension Equalization Plan are conditioned on the participant’sparticipant's compliance with his or her non-competition agreement and on the participant not competing with Products Corporation for one year after termination of employment.
Messrs. Ennis and Berns ceased employment with the Company prior to December 31, 2013. Mr. Elshaw ceased employment with the Company prior to the date of this proxy statement. Mr. Kennedy retired from the Company prior to, and Mr. Kretzman retired on, December 31, 2013. Based upon the application of IRS rules and the retirement program’s terms, Mr. Ennis has been paid out his “frozen” vested accrued benefit under the Cash Balance Program of the Retirement Plan, as a lump sum, as he elect(ed), and Mr. Elshaw will be paid out his “frozen” vested accrued benefit under the Cash Balance Program of the Retirement Plan, as a lump sum or in the form of a monthly annuity payment, as he elects. Also, Messrs. Ennis and Elshaw will be or have been paid out their “frozen” vested accrued benefit under the Cash Balance Program at terminationof the Pension Equalization Plan following 6 months after their respective employment cessation or retirement dates, for Code Section 409A reasons, as a lump sum, as they have elected. Based upon the application of IRS rules and the applicable retirement program’s terms, Mr. Berns will be paid out his
44
“frozen” accrued benefit under the Non-Cash Balance Program, at retirement, in the form of a monthly annuity or other deferredpayment. Based upon the application of IRS rules and the retirement program’s terms, Mr. Kennedy will be paid out his “frozen” vested accrued benefit under the Cash Balance Program of the Retirement Plan, in the form of a monthly annuity payment, as they elect.he elected. Mr. Kennedy will also be paid out his “frozen” vested accrued benefit under the Cash Balance Program of the Pension Equalization Plan following 6 months after his retirement date, for Code Section 409A reasons, as a lump sum, as he elected. Based upon the application of IRS rules and the applicable retirement program’s terms, Mr. Kretzman will be paid out his accrued benefit under the Non-Cash Balance Program, at termination orcommencing with his retirement, which occurred on December 31, 2013, in the form of a monthly annuity payment.payment, provided, the portion of such Non-Cash Balance Program benefit which accrued for Mr. BernsKretzman under the Pension Equalization Plan and his employment agreement will be paid outdelayed for 6 months following his “frozen” accrued benefit underretirement, pursuant to Code Section 409A.
Messrs. Delpani and Alletto do not participate in the Non-Cash Balance Program or the Cash Balance Program, as they joined the Company after the above-referenced plans were frozen at termination or retirement, in the formend of a monthly annuity payment.2009.
45
Prior to December 31, 2004, employees were able to make contributions to the Company’sCompany's Excess Savings Plan, an unfunded,a non-qualified, defined contribution, deferred compensation plan, and the Company matched 50% of those contributions up to 6% of pay contributed. New contributions by employees to the Excess Savings Plan were frozen on December 31, 2004. Mr. Kretzman is the only Named Executive Officer who contributed to the Company’sCompany's Excess Savings Plan before it was frozen.
As previously noted, the Company “froze” its U.S. qualified and non-qualified defined benefit retirement plans (namely, the Retirement Plan and the Pension Equalization Plan) so that no further benefits would accrue thereunder after December 31, 2009. The Company also amended its qualified and non-qualified savings plans effective January 1, 2010 to enable the Company, on a discretionary basis, to make profit-sharing contributions (equal to for 2010, 5%3%, 3% and 3% of eligible compensation)compensation for 2011, 2012 and 2013, respectively) to the qualified plan and, to the extent eligible compensation exceeds IRS limits, to the Excess Savings Plan (i.e., the non-qualified savings plan).
The Excess Savings Plan provides for substantially the same investment choices as are available in the Company’sCompany's qualified 401(k) Plan. The Excess Savings Plan does not provide for above-market returns. Payments of participant balances under the Excess Savings Plan commence in accordance with the applicable provisions of the
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Amounts shown in the table below reflect amounts deferred from compensation and Company matching contributions prior to December 31, 2004, plus discretionary Company contributions made under the discretionary employer profit-sharing provisions of the Excess Savings Plan during 2010,2013, as well as total account balances, inclusive of investment returns, as of December 31, 2010.2013. Mr. Kretzman has waived his eligibility to receive profit sharing contributions, as he has a retirement benefit under his employment agreement.
Aggregate | ||||||||||||||||||||
Executive | Registrant | Withdrawals/ | ||||||||||||||||||
Contributions in | Contributions in | Aggregate Earnings | Distributions | Aggregate Balance | ||||||||||||||||
Name | 2010 ($) | 2010 ($)(a) | in 2010 ($)(b) | ($) | at 12/31/10 ($)(c) | |||||||||||||||
David Kennedy | — | 18,327 | 623 | — | 12,123 | |||||||||||||||
Vice Chairman | ||||||||||||||||||||
Alan T. Ennis | — | 54,856 | 4,825 | — | 47,431 | |||||||||||||||
President and Chief Executive Officer | ||||||||||||||||||||
Chris Elshaw | — | 37,832 | 1,614 | — | 29,599 | |||||||||||||||
Executive Vice President and Chief Operating Officer | ||||||||||||||||||||
Robert K. Kretzman | — | — | (1,367 | ) | — | 65,054 | ||||||||||||||
Executive Vice President and Chief Administrative Officer | ||||||||||||||||||||
Steven Berns | — | 18,578 | 1,253 | — | 13,767 | |||||||||||||||
Executive Vice President and Chief Financial Officer |
Name | Executive Contributions in 2013 ($) | Registrant Contributions for 2013 ($)(a) | Aggregate Earnings in 2013 ($)(b) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at 12/31/13 ($)(c) | ||||||||||
Lorenzo Delpani | — | — | — | — | — | ||||||||||
President and Chief Executive Officer | |||||||||||||||
Lawrence Alletto | — | — | — | — | — | ||||||||||
Executive Vice President, Chief Financial Officer and Chief Administrative Officer | |||||||||||||||
Alan T. Ennis | — | 27,237 | 32,945 | — | 199,064 | ||||||||||
Former President and Chief Executive Officer | |||||||||||||||
Steven Berns | — | 7,702 | 8,012 | — | 68,065 | ||||||||||
Former Executive Vice President and Chief Financial Officer | |||||||||||||||
Chris Elshaw | — | 26,635 | 6,815 | — | 128,994 | ||||||||||
Former Executive Vice President and Chief Operating Officer | |||||||||||||||
David Kennedy | — | — | 1,680 | — | 22,801 | ||||||||||
Retired Interim Chief Executive Officer and executive Vice Chairman | |||||||||||||||
Robert K. Kretzman | — | — | 11,620 | — | 85,950 | ||||||||||
Retired Executive Vice President |
(a) | These amounts represent discretionary employer contributions credited under the profit-sharing provisions of the Excess Savings Plan in respect to |
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(b) | Amounts reported under |
(c) | These amounts |
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The following Director Compensation table shows all compensation paid by the Company to its Directors in respect of 2010.
Fees Earned or | All Other | |||||||||||||||||||||||
Fiscal | Paid in Cash | Stock Awards | Option Awards | Compensation | Total | |||||||||||||||||||
Name (a) | Year | ($)(b) | ($) | ($) | ($)(c) | ($) | ||||||||||||||||||
Alan S. Bernikow | 2010 | 148,000 | — | — | 25,000 | 173,000 | ||||||||||||||||||
Paul J. Bohan | 2010 | 126,500 | — | — | 25,000 | 151,500 | ||||||||||||||||||
Meyer Feldberg | 2010 | 135,000 | — | — | — | 135,000 | ||||||||||||||||||
Ann D. Jordan | 2010 | 43,695 | — | — | — | 43,695 | ||||||||||||||||||
Debra L. Lee | 2010 | 106,000 | — | — | — | 106,000 | ||||||||||||||||||
Tamara Mellon | 2010 | 95,500 | — | — | — | 95,500 | ||||||||||||||||||
Richard J. Santagati | 2010 | 110,500 | — | — | — | 110,500 | ||||||||||||||||||
Kathi P. Seifert | 2010 | 128,000 | — | — | — | 128,000 |
Name (a) | Fiscal Year | Fees Earned or Paid in Cash ($)(b) | All Other Compensation ($)(c) | Total ($) | ||||||||
Alan S. Bernikow | 2013 | 188,500 | 32,500 | 221,000 | ||||||||
Paul J. Bohan(d) | 2013 | 79,758 | 13,851 | 93,609 | ||||||||
Diana Cantor(e) | 2013 | 88,742 | — | 88,742 | ||||||||
Lorenzo Delpani | 2013 | — | — | — | ||||||||
Viet D. Dinh | 2013 | 148,000 | 18,648 | 166,648 | ||||||||
Alan T. Ennis | 2013 | — | — | — | ||||||||
Meyer Feldberg | 2013 | 185,500 | — | 185,500 | ||||||||
David Kennedy | 2013 | 20,563 | 5,644 | 26,207 | ||||||||
Robert K. Kretzman | 2013 | — | — | — | ||||||||
Ceci Kurzman | 2013 | 127,083 | — | 127,083 | ||||||||
Debra L. Lee | 2013 | 152,500 | — | 152,500 | ||||||||
Tamara Mellon | 2013 | 133,000 | — | 133,000 | ||||||||
Ronald O. Perelman | 2013 | — | — | — | ||||||||
Richard Santagati(d) | 2013 | 70,917 | — | 70,917 | ||||||||
Barry F. Schwartz | 2013 | — | — | — | ||||||||
Kathi P. Seifert | 2013 | 168,500 | — | 168,500 |
(a) | See “Summary Compensation Table” regarding compensation |
(b) | During |
(c) | The amounts shown under the “All Other Compensation” column reflect fees received by Messrs. Bernikow, Bohan, Dinh and |
(d) | Messrs. Bohan and Santagati did not stand for re-election at the Company’s 2013 Annual Stockholders’ Meeting. |
(e) | Ms. Cantor was elected to the Company’s Board of Directors at the Company’s 2013 Annual Stockholders’ Meeting, in June 2013. |
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The following table sets forth, as of March 18, 2011,April 14, 2014, the number of shares of each class of the Company’s Voting Capital StockCompany'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’sCompany's voting securities; (ii) each director of the Company; (iii) the Chief Executive Officer during 2010 and each of the other Named Executive Officers during 2010;Officers; and (iv) all directors and executive officers of the Company during 2010 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 Stockvoting capital stock as to which a person has sole or shared voting power or investment power and any shares of Voting Capital Stockvoting 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.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (Class A Common Stock) | Percentage of Class (Class A Common Stock) | ||
Ronald O. Perelman | 40,669,640 (1 | ) | 77.7% | |
c/o MacAndrews and Forbes Holdings Inc., 35 E. 62nd St., New York, NY 10065 | ||||
Lawrence Alletto | 0 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Alan S. Bernikow | 13,250 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Steven Berns (2) | 15,955 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Diana Cantor | 0 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Lorenzo Delpani | 0 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Viet D. Dinh | 0 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Chris Elshaw (2) | 44,407 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Alan Ennis (2) | 45,304 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Meyer Feldberg | 13,250 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
David L. Kennedy | 111,550 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Robert K. Kretzman | 46,592 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Ceci Kurzman | 0 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Debra L. Lee | 13,250 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Tamara Mellon | 10,750 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Barry F. Schwartz | 0 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Kathi P. Seifert | 13,250 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
Cristiana Falcone Sorrell | 0 | * | ||
c/o Revlon, 237 Park Ave., New York, NY 10017 | ||||
All Directors and Executive Officers, as a Group | 40,997,198 | 78.3% | ||
(18 Persons) |
*Less than one percent.
Amount and Nature of | ||||||
Name and Address of | Beneficial Ownership (Class A Common | |||||
Beneficial Owner | Stock Unless Otherwise Noted) | Percentage of Class(10) | ||||
Ronald O. Perelman | 37,577,140 | (1) | 77.9% (Class A and Class B | |||
35 E. 62nd St. | 3,125,000 (Class B Common Stock | )(1) | Common Stock, combined) | |||
New York, NY 10065 | 76.6% (Class A Common Stock) 100% (Class B Common Stock) | |||||
Alan S. Bernikow | 15,563 | (2) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 2,499 (Preferred Stock | )(9) | * | |||
Steven Berns | 5,314 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
Paul J. Bohan | 14,813 | (3) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 22,499 (Preferred Stock | )(9) | * | |||
Chris Elshaw | 59,178 | (4) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 11,618 (Preferred Stock | )(9) | * | |||
Alan T. Ennis | 37,168 | (5) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 23,648 (Preferred Stock | )(9) | * | |||
Meyer Feldberg | 17,063 | (6) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 2,499 (Preferred Stock | )(9) | * | |||
David L. Kennedy | 276,704 | (7) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 127,001 (Preferred Stock | )(9) | 1.4% (Preferred Stock) | |||
Robert K. Kretzman | 152,605 | (8) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 49,209 (Preferred Stock | )(9) | * | |||
Debra L. Lee | 9,666 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 2,499 (Preferred Stock | )(9) | * | |||
Tamara Mellon | 7,166 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
Richard J. Santagati | 680 (Preferred Stock | )(9) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
Barry F. Schwartz | 22,014 (Preferred Stock | )(9) | * | |||
c/o Revlon, 237 Park Ave., NY, NY 10017 | ||||||
Kathi P. Seifert | 9,666 | * | ||||
c/o Revlon, 237 Park Ave., NY, NY 10017 | 14,807 (Preferred Stock | )(9) | * | |||
All Directors and Executive Officers as a Group | 38,182,046 (Class A Common Stock | ) | 67.2% (Class A Common Stock, Class B | |||
(14 Persons) | 3,125,000 (Class B Common Stock | ) | Common Stock, & Preferred | |||
278,973 (Preferred Stock | )(9) | Stock, combined) | ||||
77.3% (Class A Common Stock) 100% (Class B Common Stock) 3.0% (Preferred Stock) |
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(1) | Mr. Perelman beneficially owned, directly and indirectly through MacAndrews & Forbes, as of |
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(2) | ||
The following table sets forth as of December 31, 2010,2013, with respect to all equity compensation plans of the Company previously approved and not previously approved by its stockholders: (i) the number of securities to be issued upon the exercise of outstanding options, warrants and rights; (ii) the weighted-average exercise price of such outstanding options, warrants and rights; and (iii) the number of securities remaining available for future issuance under such equity compensation plans, excluding securities reflected in column (a).
(b) | (c) | |||||||||||
(a) | Weighted-Average | Number of Securities Remaining | ||||||||||
Number of Securities to | Exercise Price of | Available for Future Issuance | ||||||||||
be Issued Upon Exercise | Outstanding | Under Equity Compensation | ||||||||||
of Outstanding Options, | Options, Warrants | Plans (Excluding Securities | ||||||||||
Plan Category | Warrants and Rights | and Rights | Reflected in Column (a)) | |||||||||
Previously Approved by Stockholders: | ||||||||||||
Stock Plan | 987,886 | (1) | 31.68 | 3,416,662 | (2) | |||||||
Not Previously Approved by Stockholders: | — | — | — |
Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) | ||||||
Previously Approved by Stockholders: | |||||||||
Stock Plan | 800 | (1) | $ | 27.50 | 4,515,656 | (2) | |||
Not Previously Approved by Stockholders: | — | — | — |
(1) |
(2) | As of December 31, |
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As of December 31, 2010,2013, MacAndrews & Forbes beneficially owned sharesapproximately 78% of Revlon, Inc.'s Class A Common Stock, representing approximately 78% of Revlon, Inc.’s Voting Capital Stock having approximately 77%outstanding shares of the combined voting power of such outstanding shares.capital stock. As a result, MacAndrews & Forbes is able to elect Revlon, Inc.’s's entire Board of Directors and control the vote on all matters submitted to a vote of Revlon, Inc.’s's stockholders. MacAndrews & Forbes is wholly owned by Ronald O. Perelman, Chairman of Revlon, Inc.’s'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
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Revlon, Inc., Products Corporation and MacAndrews & Forbes Inc., a wholly-owned subsidiary of MacAndrews & Forbes Holdings Inc. (“MacAndrews & Forbes Holdings”) have entered into reimbursement agreements (the “Reimbursement Agreements”) pursuant to which (i) MacAndrews & Forbes Inc. is obligated to provide (directly or through its affiliates) certain professional and administrative services, including without limitation employees, to Revlon, Inc. and its subsidiaries, including without limitation Products Corporation, and to purchase services from third party providers, such as insurance, legal, and accounting services and air transportation services, on behalf of Revlon, Inc. and its subsidiaries, including Products Corporation, to the extent requested by Products Corporation, and (ii) Products Corporation is obligated to provide certain professional and administrative services, including, without limitation, employees, to MacAndrews & Forbes and to 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.
The Company reimburses MacAndrews & Forbes for the allocable costs of the services purchased for or provided by MacAndrews & Forbes to Products Corporationthe Company and its subsidiaries and for the reasonableout-of-pocket expenses incurred by MacAndrews & Forbes in connection with the provision of such services. MacAndrews & Forbes reimburses Products Corporation for the allocable costs of the services purchased for or provided by Products Corporation to MacAndrews & Forbes and for the reasonableout-of-pocket expenses incurred in connection with the purchase or provision of such services. Each of Revlon, Inc. and Products Corporation,the Company, on the one hand, and MacAndrews & Forbes, Inc., on the other, has agreed to indemnify the other party for losses arising out of the provision of services provided by it under the Reimbursement Agreements, other than losses resulting from its willful misconduct or gross negligence.
The Reimbursement Agreements may be terminated by either party on 90 days’days' notice. Products CorporationThe Company does not intend to request services under the Reimbursement Agreements unless their costs would be at least as favorable to Products Corporationthe Company as could be obtained from unaffiliated third parties.
The Company participates in MacAndrews & Forbes’ directors’Forbes' directors and officers’officers liability insurance program (the “D&O Insurance Program”), as well as its other insurance coverages, such as property damage, business interruption, liability and other coverages, which covers Revlon, Inc. and Products Corporationcover the Company as well as MacAndrews & Forbes.Forbes and its subsidiaries. The limits of coverage for certain of the policies are available on an aggregate basis for losses to any
51
or all of the participating companies and their respective directors and officers. Revlon, Inc. and Products Corporation reimburseThe Company reimburses MacAndrews & Forbes from time to time for their allocable portion of the premiums for such coverage or they paythe Company pays the insurers directly, which premiums the Company believes are more favorable than the premiums the Company would pay were it to secure stand-alone coverage. Any amounts paid by Revlon, Inc. and Products Corporationthe Company directly to MacAndrews & Forbes in respect of premiums are included in the amounts paid under the Reimbursement Agreements.
The net amount reimbursableactivity related to services provided and/or purchased under the Reimbursement Agreements during the year ended December 31, 2013 was $(4.4) million, which primarily includes a $6.1 million partial payment made by the Company to MacAndrews & Forbes during the first quarter of 2013 for premiums related to the Company's allocable portion of the 5-year renewal of the D&O Insurance Program for the period from January 31, 2012 through January 31, 2017, partially offset by $1.8 million from MacAndrews & Forbes for reimbursable costs incurred by the Company related to Products Corporation formatters covered by the services provided under the Reimbursement Agreements for 2010 was $0.1 million.
As a result of aclosing the 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
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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's and Products Corporation’sCorporation's federal taxable income and loss were included in such group’sgroup'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’sCorporation's federal taxable income and loss will beare included in such group’sgroup's consolidated tax returns. Accordingly, Revlon, Inc. and Products Corporation entered into a tax sharing agreement (the “Revlon Tax Sharing Agreement”) pursuant to which Products Corporation will beis required to pay to Revlon, Inc. amounts equal to the taxes that Products Corporation would otherwise have had to pay if Products Corporation were to file separate federal, state or local income tax returns, limited to the amount, and payable only at such times, as Revlon, Inc. will be required to make payments to the applicable taxing authorities.
There were no federal tax payments or payments in lieu of taxes from Revlon, Inc. to Revlon Holdings pursuant to the MacAndrews & Forbes Tax Sharing Agreement in 20102013 with respect to periods covered by the MacAndrews & Forbes Tax Sharing Agreement, and the Company expects that there will not be any such payments in 2011.2014. During 2010,2013, there were no federal tax payments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement with respect to 2009. During 2010,2012 and $1.3 million with respect to 2013. The Company expects that there werewill be no federal tax payments from Products Corporation to Revlon, Inc. pursuant to the Revlon Tax Sharing Agreement of $0.2 millionduring 2014 with respect to 2010. The Company expects that there will be no federal tax payment from2013.
Pursuant to the asset transfer agreement referred to above, Products Corporation assumed all tax liabilities of Revlon Holdings other than (i) certain income tax liabilities arising prior to Revlon, Inc. pursuantJanuary 1, 1992 to the extent such liabilities exceeded the reserves on Revlon Tax Sharing Agreement during 2011 with respectHoldings' books as of January 1, 1992 or were not of the nature reserved for and (ii) other tax liabilities to 2010.
Prior to the consummation of Revlon, Inc.’s's initial public equity offering in February 1996, Revlon, Inc. and Revlon Worldwide Corporation (which subsequently merged into REV Holdings LLC, a Delaware limited liability
52
company (formerly a Delaware corporation) and a wholly-owned subsidiary of MacAndrews & Forbes (“REV Holdings”), the then direct parent of Revlon, Inc.) entered into a registration rights agreement (the “Registration Rights Agreement”), and in February 2003, MacAndrews & Forbes executed a joinder agreement to the Registration Rights Agreement, pursuant to which REV Holdings, MacAndrews & Forbes and certain transferees of Revlon, Inc.’s's Common Stock held by REV Holdings (the “Holders”) hadhave the right to require Revlon, Inc. to register under the Securities Act of 1933, as amended, all or part of the Class A Common Stock owned by such Holders, including, without limitation, the 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 the shares of Class A Common Stock issuablewhich were issued to REV Holdings upon its October 2013 conversion of all of its 3,125,000 shares of Revlon, Inc.’s Class B Common Stock owned by such Holders (a “Demand Registration”). In connection with the closing of the 2004 Revlon Exchange Transactions and pursuant to an Investment Agreement entered into in connection with such transactions (the “2004 Investment Agreement”), MacAndrews & Forbes executed a joinder agreement that provided that MacAndrews & Forbes would also be a Holder under the Registration Rights Agreement and that all shares acquired by MacAndrews & Forbes pursuant to the 2004 Investment Agreement are deemed to be registrable securities under the Registration Rights Agreement. This included all of the shares of Class A Common Stock acquired by MacAndrews & Forbes in connection with the Company’sRevlon, Inc.’s $110 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, which was consummated in March 2006, and the Company’sCompany'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.
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Products Corporation was party to the Senior Subordinated Term Loan Agreement (as defined below), consisting of (i) the $58.4 million Non-Contributed Loan (as defined below) which matures on October 8, 2014, and Related Transactions
Upon consummation of the 2009 Exchange Offer in October 2009, MacAndrews & Forbes contributed to Revlon, Inc. $48.6 million of the $107.0$107 million aggregate outstanding principal amount of the Senior Subordinated Term Loan (the “Senior Subordinated Term Loan;” the agreement in respect to such loan is referred to as the “Senior Subordinated Term Loan Agreement”) made fromin January 2008 by MacAndrews & Forbes to Products Corporation in 2008 in the original aggregate principal amount of $170 million (such $48.6 million of the Senior Subordinated Term Loan being the(the “Contributed Loan;” the remaining $58.4 million in principal amount of the Senior Subordinated Term Loan is referred to as the “Non-Contributed Loan”), representing $5.21 of outstanding principal amount for each of the 9,336,905 shares of Revlon, Inc.’s Class A Common Stock exchanged in the 2009 Exchange Offer, and Revlon, Inc. issued to MacAndrews & Forbes 9,336,905 shares of Class A Common Stock at a ratio of one share of Class A Common Stock for each $5.21 of outstanding principal amount of the Senior Subordinated Term Loan contributed to Revlon. Also uponRevlon, Inc. Upon consummation of the 2009 Exchange Offer, the terms of the Senior Subordinated Term Loan Agreement were amended to (i) extend the maturity date onof the Contributed Loan which remains owing from Products Corporation to Revlon, Inc. from August 2010 to October 8, 2013, and to change the annual interest rate on the Contributed Loan from 11% to 12.75%, to; and (ii) extend the maturity date onof the Non-Contributed$58.4 million principal amount of the Senior Subordinated Loan which, at December 31, 2011, remained owing from
53
Products Corporation to MacAndrews & Forbes (the “Non-Contributed Loan”) from August 2010 to October 8, 2014 and to change the annual interest rate on the Non-Contributed Loan from 11% to 12%.
47
In connection with consummating the 2009 Exchange Offer, Revlon, Inc. and MacAndrews & Forbes entered into a Contribution and Stockholder Agreement on August 9, 2009 (as amended, the “Contribution and Stockholder Agreement”), pursuant to which through such agreement’s termination on October 8, 2013:
Through such agreement’s termination on October 8, 2013, MacAndrews & Forbes agreed that it willwould not complete certain short-form mergers under Section 253 of the DGCL unless either (i) such transaction has beenwas approved in advance by a majority of the independent directors of Revlon, Inc.’s's Board of Directors, as well as satisfying certain other conditions; or (ii) the short-form merger iswas 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 retainhave retained their shares of Preferred Stock, or receivereceived 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 Management & Research Co. (“Fidelity”), a wholly-owned subsidiary of FMR LLC (“FMR”), entered into a stockholders agreement (the “Stockholders’ Agreement”) pursuant to which, among other things, Revlon, Inc. (i) agreed to continue to maintain a majority of independent directors (as defined by NYSE listing standards) on its Board of Directors, as it currently does; (ii) established and maintains itsmaintained the Governance Committee of theits Board of Directors; and (iii) agreed to certain restrictions with respect to its 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’The Fidelity Stockholders Agreement terminates, by its terms, when Fidelity ceases to beterminated no later than the beneficial holder of at least 5% of the Company’s outstanding voting stock. Fidelity advised the Company that, as of the April 8, 2010 record date for Revlon, Inc.’s 2010 Annual Stockholders’ Meeting, FMR (singly or together with other affiliates of Fidelity) owned 8,233,526 sharesconsummation of Revlon, Inc.’s outstanding Class A Common Stock andmandatory redemption of its Preferred Stock in October 2013.
During 2012, Revlon, Inc. and MacAndrews & Forbes entered into settlement agreements in connection with the aggregate, representingpreviously disclosed litigation actions related to the 2009 Exchange Offer. Such settlements became effective in August 2013 and resulted in total cash payments of approximately 9.2% of$36.9 million to settle all actions and related claims by Revlon, Inc.’s issued and outstanding sharesstockholders, of voting capital stock at such date. Subsequently, however, Fidelity filedwhich $23.5 million were paid from insurance proceeds. In August 2013, a Schedule 13Fpayment of $8.9 million, representing the Company's allocable portion of the settlement amount, was made to settle all amounts owed by Revlon, Inc. in connection with the SEC on February 11, 2011, indicating that it owned 1,013,000 sharessettlement agreements. In September 2013, Revlon, Inc. received a final payment of Class A Common Stock asapproximately $1.8 million of December 31, 2010. The Company does not know how many shares of Class A Preferred Stock Fidelity may own and there is no public record of such ownership.insurance proceeds in connection with matters related to the 2009 Exchange Offer.
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Pursuant to a lease dated April 2, 1993 (the “Edison Lease”), Revlon Holdings leased to Products Corporation the Edison, NJ research and development facility for a term of up to 10 years with an annual rent of $1.4 million and certain shared operating expenses payable by Products Corporation which, together with the annual rent, were not to exceed $2.0 million per year. In August 1998, Revlon Holdings sold the Edison facility to an unrelated third party,
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Certain of Products Corporation’sCorporation's debt obligations, including its amended and restated bank term loan agreement, amended and itsrestated multi-currency revolving credit agreement (the “2010 Credit Agreements”) and its 93/45¾% Senior Secured Notes due 2021, have been, and may in the future be, supported by, among other things, guarantiesguarantees from the Company and, subject to certain limited exceptions, all of the domestic subsidiaries of Products Corporation. The obligations under such guarantiesguarantees are and were secured by, among other things, the capital stock of Products Corporation and, subject to certain limited exceptions, the capital stock of all of Products Corporation’sCorporation's domestic subsidiaries and 66% of the capital stock of Products Corporation’sCorporation's and its domestic subsidiaries’subsidiaries' first-tier foreign subsidiaries.
The Revlon, Inc. Related Party Transaction Policy (the “Policy”) serves as a set of guidelines for the approval of interested transactions with related parties. Under the Policy, related party transactions are subject to the review, approvaland/or ratification of the Governance Committee, a majority of which is comprised solely of independent directors. The Policy also pre-approves a series of related party transactions including, among others: (i) certain employment relationships and related compensatory arrangements with executive officers, which are either approved by the Compensation Committee or disclosed in the Company’sCompany's annual proxy statement, if so required; (ii) any compensation paid to a director if the compensation is required to be reported in the Company's proxy statement; (iii) transactions related to the ownership of the Company’sCompany's common stock where all stockholders are receiving the same or substantially the same pro rata benefit; (iii)(iv) competitively-bid transactions; (iv)(v) any transaction involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture or similar services; (vi) transactions permitted under Products Corporation’sCorporation's indentures, credit agreements and other debt instruments (copies of each of which are on file with the SEC); and (v)(vii) transactions described in the Company’sCompany's proxy statements or other SEC reports filed with or furnished to the SEC on or before the adoption of the Policy in March 2007.
The Company has a written Code of Business Conduct (the “Code of Business Conduct”) that includes a code of ethics (the “Senior Financial Officer Code of Ethics”) that applies to the Company’sCompany's Chief Executive Officer and senior financial officers, including the Company’sCompany's Chief Financial Officer, Controller and persons performing similar functions (collectively, the “Senior Financial Officers”). Printable copies of the Code of Business Conduct and the Senior Financial Officer Code of Ethics are available atwww.revloninc.com under the heading Investor Relations (Corporate Governance). If the Company changes the Senior Financial Officer Code of Ethics in any material respect or waives any provision of the Code of Business Conduct for its executive officers or Directors, including waivers of the Senior Financial Officer Code of Ethics for any of its Senior Financial Officers, the Company expects to provide the public with notice of any such change or waiver by publishing an appropriate description of such event on its corporate website,www.revloninc.com, or by other appropriate means as required or permitted under applicable rules of the SEC. The Company does not currently expect to make any such waivers.
The Company’sCompany's executive officers, directors and 10% stockholders may be required under the Exchange Act to file reports of ownership and changes in ownership with the NYSE and the SEC. The Company makes such SEC filings available on its corporate website,www.revloninc.com, under the heading Investor Relations (SEC Filings). Copies of these reports also must be furnished to the Company by such filers.
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The Audit Committee of the Board of Directors has selected, subject to ratification by the Company’sCompany's stockholders, KPMG LLP to audit the consolidated financial statements of the Company for the fiscal year ending December 31, 2011.
The Sarbanes-Oxley Act of 2002 and Section 10A of the Exchange Act require that the Audit Committee of the Board of Directors be directly responsible for the appointment, compensation, retention and oversight of the audit work of the Company’sCompany's independent registered public accounting firm. Ratification by the stockholders of the Audit Committee’s selection of KPMG LLP is not required by law, the Company’sCompany's By-laws or otherwise. However, the Board of Directors is submitting the Audit Committee’s selection of KPMG LLP for stockholder ratification to ascertain stockholders’ viewsstockholders' view on the matter.
KPMG LLP has audited the consolidated financial statements of the Company and its predecessors for more than the past five5 consecutive years. Representatives of KPMG LLP are expected to be present at the 20112014 Annual Meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from stockholders.
The Audit Committee reviews audit and non-audit services performed by KPMG, LLP, as well as the fees charged by KPMG LLP for such services. In its review of non-audit service fees, the Audit Committee received and discussed with KPMG LLP their annual written report on KPMG LLP’sKPMG's independence from the Company and its management, as required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’sfirm's communications with the Audit Committee concerning independence, and the Audit Committee has discussed with KPMG LLP that firm’sfirm's independence. The Audit Committee has satisfied itself that KPMG LLP’sKPMG's provision of audit and non-audit services to the Company is compatible with KPMG LLP’sKPMG's independence. Additional information concerning the Audit Committee and its activities with KPMG LLP can be found in the following sections of this Proxy Statement: “Board of Directors and its Committees” and “Audit Committee Report.” Information regarding the aggregate fees billed by KPMG LLP for services rendered to the Company for the fiscal years ended December 31, 20102013 and December 31, 20092012 can be found below under “Audit Fees.”
The ratification of the Audit Committee’s selection of KPMG LLP as the Company’sCompany's independent registered public accounting firm for 20112014 requires the affirmative vote of the holders of a majority of the total number of votes of Voting Capitalthe Class A Common Stock present in person or represented by proxy and entitled to vote at the 20112014 Annual Meeting, voting as a single class.Meeting. With respect to Proposal No. 2, all proxies properly submitted to the Company unless such proxies are revoked prior to their being voted on, will be voted in accordance with the instructions given by the person submitting such proxy or, in the absence of such instructions, will be votedFORthe ratification of the Audit Committee’s selection of KPMG LLP as the Company’sCompany's independent registered public accounting firm for 2011.2014, unless such proxies are revoked prior to their being voted on. In determining whether Proposal No. 2 has received the requisite number of affirmative votes, abstentions will be counted and will have the same effect as a vote against Proposal No. 2. Brokers will have discretionary authority to vote on Proposal No. 42 (ratification of the Company’sAudit Committee’s selection of its independent registered public accounting firm for 2011)2014) absent instructions from the beneficial owner of the shares, as this is a “routine” proposal. MacAndrews & Forbes has informed the Company that it will voteFORthe ratification of the Audit Committee’s selection of KPMG LLP as the Company’sCompany's independent registered public accounting firm for 2011.2014. Accordingly, the affirmative vote of MacAndrews & Forbes is sufficient, without the concurring vote of any other stockholder of the Company, to approve and adopt Proposal No. 2.
The Board of Directors unanimously recommends that stockholders vote THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR the ratification of the selection of THE RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF KPMG LLP as the Company’s independent registered public accounting firm for 2011.AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2014.
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The Board of Directors of Revlon, Inc. maintains its Audit Committee in accordance with applicable SEC rules and the NYSE’sNYSE's listing standards. In accordance with itsthe Audit Committee’s charter, a printable and current copy of which is available atwww.revloninc.com under the heading Investor Relations (Corporate Governance), the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the audit work of Revlon, Inc.’s's independent auditors for the purpose of preparing and issuing its audit report or performing other audit, review or attest services for Revlon, Inc. A printable and current copy of the Audit Committee’s charter is currently available at www.revloninc.com under the heading Investor Relations (Corporate Governance). The independent auditors, KPMG, LLP, report directly to the Audit Committee and the Audit Committee is directly responsible for, among other things, reviewing in advance, and granting any appropriate pre-approvals of, (a) all auditing services to be provided by the independent auditor and (b) all non-audit services to be provided by the independent auditor (as permitted by the Exchange Act), and in connection therewith to approve all fees and other terms of engagement, as required by the applicable rules of the Exchange Act and subject toAct.
Since 2005, the exemptions provided for in such rules. The Audit Committee has approved an Audit Committee Pre-Approval Policy for pre-approving all permissible audit and non-audit services performed by KPMG LLP.KPMG. During 2013, an electronic printable copy of the 2013 Audit Committee Pre-Approval Policy was available at www.revloninc.com under the heading Investor Relations (Corporate Governance). A copy of the 2014 Audit Committee Pre-Approval Policy is attached to this Proxy Statement as Annex B and an electronic printable copy of such policy is currently available at www.revloninc.com under the heading Investor Relations (Corporate Governance). The Audit Committee also has the authority to approve services to be provided by KPMG LLP at its meetings and by unanimous written consents.
The aggregate fees billed for professional services by KPMG LLP in 20102013 and 20092012 for these various services for Revlon, Inc. and Products Corporation in the aggregate were (in millions):
Types of Fees | 2010 | 2009 | ||||||
Audit Fees | 3.6 | 3.7 | ||||||
Audit-Related Fees | 0.2 | 0.7 | ||||||
Tax Fees | 0.2 | 0.2 | ||||||
All Other Fees | — | — | ||||||
TOTAL FEES | 4.0 | 4.6 | ||||||
Types of Fees | ||||||
(Dollars in millions) | 2013 | 2012 | ||||
Audit Fees | $ | 5.4 | $ | 3.9 | ||
Audit-Related Fees | 0.2 | 0.2 | ||||
Tax Fees | 0.2 | 0.2 | ||||
All Other Fees | 0.3 | — | ||||
Total Fees | $ | 6.1 | $ | 4.3 |
In the above table, in accordance with the SEC definitions and rules, (A)(a) “audit fees” are fees the Company paid KPMG LLP for professional services rendered for (i) the audits of (i) Revlon, Inc.’s's and Products Corporation’sCorporation's annual financial statements; (ii) the effectivenessaudit of Revlon, Inc.’s's internal control over financial reporting; and (iii) the review of financial statements included in Revlon, Inc.’s's and Products Corporation’sCorporation's Quarterly Reports onForm 10-Q, and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements; (B)(b) “audit-related fees” are fees billed by KPMG LLP for assurance and related services that are traditionally performed by the auditor, including services performed by KPMG LLP related to employee benefit plan audits and certain transactions, including the Exchange Offer consummated by Revlon, Inc. in October 2009 and Products Corporation’s November 2009 refinancing of its 91/2% Senior Notes due April 2011 with its new 93/4% Senior Secured Notes due November 2015 (the “93/4% Senior Secured Notes”), andas well as attestation services not required by statute or regulation; (C)(c) “tax fees” are fees for permissible tax compliance, tax advice and tax planning; and (D)(d) “all other fees” are fees billed by KPMG LLP to the Company for any permissible services not included in the first three categories.
All of the services performed by KPMG LLP for the Company during 20102013 and 20092012 were either expressly pre-approved by the Audit Committee or were pre-approved in accordance with the Audit Committee Pre-Approval Policy, and the Audit Committee was provided with regular updates as to the nature of such services and fees paid for such services.
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Pursuant to the recently enacted“say-on-pay”“say-on-pay” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in July 2010, and the corresponding implementing SEC rules (the “Dodd-Frank Act” or the “Act”), the Company is soliciting, under this
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Proposal No. 3, its stockholders’stockholders' advisory views“say-on-pay” view on the Company’sCompany's executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and narrative discussion set forth in this Proxy Statement. Pursuant to applicable law, the stockholder “say-on-pay” vote on the Company’sCompany's executive compensation is advisory in nature and non-binding.
Under the Dodd-Frank Act, the stockholder “say-on-pay” vote on this matter is advisory and non-binding, and therefore the Company is not required to obtain any specific percentage of stockholder approval.
As more fully set forth in the “Compensation Discussion and Analysis” section of this Proxy Statement, above, the Company believes that its executive compensation structure is designed to pay for performance, to align the interests of management and employees with corporate performance and shareholder interests and to attract and retain the personnel needed to enable the Company to execute its business strategy in a competitive environment and, as such, that it is reasonably designed and appropriate for its purposes. MacAndrews & Forbes has informed the Company that it will voteFORthe approval of the Company’sCompany's executive compensation, as disclosed pursuant to Item 402 ofRegulation S-K, including as disclosed in the “Compensation Discussion and Analysis,” compensation tables and narrative discussion set forth the in this Proxy Statement.compensation. Accordingly, the affirmative vote of MacAndrews & Forbes is sufficient, without the concurring vote of any other stockholder of the Company, to approve and adopt Proposal No. 3 on a non-binding and advisory basis.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ADOPT THE FOLLOWING RESOLUTION BY SUBMITTING THEIR NON-BINDING, ADVISORY “SAY-ON-PAY” VOTE FOR APPROVAL OF THE COMPANY'S EXECUTIVE COMPENSATION:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in the Company's proxy statement in support of the 2014 Annual Meeting, is hereby approved. |
PROPOSAL NO. 4 — STOCKHOLDER PROPOSAL
The People for the Ethical Treatment of Animals (“PETA”), 1536 16th Street, NW, Washington, DC 20036, which represents that it owns 190 shares of Revlon, Inc. common stock, has notified the Company that it intends to submit the following proposal for consideration at the 2014 Annual Meeting. The proposal and supporting statement are presented as received from the proponent and the Company is not responsible for the accuracy or content of the proposal and supporting statement.
Following isthe proposal that PETA has notified the Company that it intends to submit for consideration at the 2014 Annual Meeting:
“Transparency in Animal Testing
RESOLVED, to promote transparency, the Board should issue an annual report to shareholders accurately disclosing the company’s policy on animal testing; any violations of the policy or changes to the policy; whether the company has conducted, commissioned, paid for, or allowed tests on animals anywhere in the world for its products, formulations, or ingredients; countries in which those tests occurred; the types of tests; the numbers and species of animals used; and specific actions our Company is taking to eliminate this testing.” |
PETA’s Supporting Statement
“For more than two decades, Revlon portrayed itself to its shareholders and consumers as a company that had banned all animal tests and, as a result, has enjoyed the support of millions of consumers who care deeply about this issue. It was discovered last year that our company has not been transparent about its actions and has been marketing its products in China, where cosmetics companies are required to pay for their products to be tested on animals. Our Company’s animal test policy has been vague and has not explicitly stated that animal tests were being conducted. |
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Furthermore, in 2012, our Company repeatedly refused to confirm or deny whether it paid for tests on animals in order to sell its products in China. At our 2013 Annual Shareholders’ meeting, our Company finally disclosed that it does market and sell in countries that require tests on animals for its products and that the company is complying with those countries’ animal testing requirements. |
As Revlon customers have long relied on our company’s pledge that it is not involved in animal testing in any way, our Company has risked losing the trust and support of its loyal customer base. In this competitive global market, we must ensure that Revlon’s products and reputation are above reproach, and the secrecy around our company’s animal testing practices must be lifted to regain consumers’ trust. |
Our company is aware that animal tests for cosmetics are not necessary in order to market safe products. Indeed, such testing is now illegal in the European Union, India, and Israel and is not required in the United States. The estimated 75 animals who are poisoned for each product in those tests in China are force-fed the product, have it dripped into their eyes, and are ultimately killed. Revlon has chosen to allow this misery for marketing—not scientific—reasons and appears to be taking no action toward ending China’s requirement for these painful tests. |
Our Company’s previous commitment to using only nonanimal test methods must be restored and strengthened, and it would be in our shareholders’ best interest for our company to work actively toward eliminating foreign requirements for animal tests. Toward that end, we propose that our Company issue an annual report, as described above, so that shareholders may be kept informed about this important area. |
We urge shareholders to vote FOR this socially and ethnically significant proposal.” |
THE COMPANY’S STATEMENT IN OPPOSITION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “AGAINST” THIS STOCKHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
At the Company’s recommendation, the Board of Directors has concluded, for the reasons described below, that the report called for by this stockholder proposal is unnecessary and would not be an effective use of the Company’s resources. Accordingly, the Board believes that adopting this stockholder proposal would not be in the best interests of the Company and its stockholders.
The Company’s animal testing policy is already publicly available on the Company’s Facebook page, which plainly affirms that the Company does not conduct any animal testing and supports the advancement of non-animal testing alternatives and methodologies in the industry, as follows:
Revlon does not conduct animal testing and has not done so since 1989. We comprehensively test all of our products using the most technologically advanced methods available to ensure they are both innovative and safe to use. We believe that women should have the opportunity to express themselves through makeup, so we sell our products in many markets around the world and as such, are subject to local rules and regulations. Regulatory authorities in a few countries conduct independent testing in order to satisfy their own mandatory registration requirements. Revlon complies with all regulations in the countries in which our products are sold, and supports the advancement of non-animal testing alternatives and methodologies in our industry.
Accordingly, the Company believes that its Facebook statement accurately describes the Company’s policy on animal testing, sufficiently addresses and informs stockholders and consumers about where the Company stands on the issue. While we recognize that a limited number of countries have imposed mandatory product registration requirements that may require independent animal testing by local regulatory authorities, the Company has no influence nor control over, nor any involvement in, the testing or the protocols imposed by such governmental authorities, other than paying regulatory fees and related expenses to register its products.
Specifically, the Company is not aware of any country other than China where local regulatory authorities conduct animal testing on the Company’s products as part of its product registration procedures, and the Company has neither control over nor involvement in any such animal testing conducted by Chinese regulatory authorities, other than the payment of regulatory fees assessed upon product registrations. Moreover, the Company has previously announced that it would be exiting its business operations in China in 2014.
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The Board believes that the report requested by the stockholder proposal is unnecessary and would not be an effective use of the Company’s resources, given that the Company has directly addressed its policy on animal testing clearly and publicly on its Facebook page and does not conduct any animal testing (and has not since 1989) on its products. Accordingly, the Board believes that adopting this stockholder proposal would not be in the best interests of the Company and its stockholders.
The Board of Directors unanimously recommends that stockholders adopt the following resolution by submitting their non-binding, advisory vote FOR approvalAGAINST this stockholder proposal.
Vote Required and Board of Directors' Recommendation (Proposal No. 4)
Approval of the Company’s executive compensation:
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The Board of Directors unanimously recommends that stockholders submit their non-binding, advisory vote for conducting future advisory votes on executive compensation every THREE (3) YEARS.THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
Stockholder proposals intended for inclusion in next year’syear's proxy statement pursuant toRule 14a-8 under the Exchange Act must be received by the Company’sCompany's Secretary, at Revlon, Inc., 237 Park Avenue, 14th Floor, New York, NY 10017, attention: Michael T. Sheehan, no later than December 21, 201125, 2014 (provided, however, if the date of the annual stockholders’stockholders' meeting has been changed by more than 30 days from the date of the previous year’syear's meeting, then the deadline is a reasonable time before the Company begins to print and send its proxy materials). The Company’sCompany's By-laws require that proposals of stockholders made outside ofRule 14a-8 under the Exchange Act (i.e., proposals that are not to be included in the proxy statement, but to be otherwise considered at the annual stockholders’ meeting) must comply with the requirements of Article II, Section 3 of the Company’sCompany's By-laws and must be received by the Company’sCompany's Secretary by no earlier than March 4, 201212, 2015 and by no later than April 3, 201211, 2015 (provided, however, that if the 20122015 annual stockholders’stockholders' meeting is called for a date that is not within 30 days before or after the1-year anniversary of the 20112014 Annual Meeting date, the stockholder’sstockholder's notice in order to be timely must be received by the Company’sCompany's Secretary not later than the close of business on the 10th day following the earlier of the day on which such notice of the date of the 20122015 annual stockholders’stockholders' meeting is mailed or such public disclosure of the date of the 20122015 annual stockholders’stockholders' meeting is made).
Our stockholders voting through the Internet or telephone should understand that there may be costs associated with such voting methods, such as usage charges from Internet access providers or telephone companies, which must be borne by the stockholder. To vote by telephone if you are astockholder of recordof our Voting Capital Stockvoting capital stock as of the Record Date, call toll free1-800-690-6903 and follow the instructions provided by the recorded message. To vote by telephone if you are abeneficial ownerof our Voting Capital Stockvoting capital stock as of the Record Date (i.e., your shares are held in a brokerage account or by another nominee), call the toll free number listed on your voting instruction form or follow the instructions provided by your broker. To vote through the Internet, log on to the Internet and go towww.proxyvote.com and follow the steps on the secure website. In either case, have your Control Number(s) listed on your Internet Notice or proxy available for voting.
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The Company will provide shareholders with a copy of its Annual Report onForm 10-K for the fiscal year ended December 31, 20102013 filed with the SEC on February 17, 2011,March 5, 2014, including financial statements and financial statement schedules, without charge, upon written request to the Company’sCompany's Secretary, at Revlon, Inc., 237 Park Avenue, 14th Floor, New York, NY 10017, attention: Michael T. Sheehan (or via email tomichael.sheehan@revlon.com). In order to ensure timely delivery of such documents prior to the 20112014 Annual Meeting, any request should be sent to the Company promptly.
For your convenience, please note that current electronic printable copies of the Company’sCompany's Annual Report onForm 10-K and Quarterly Reports onForm 10-Q, as well as a copy of our Internet Notice and this Proxy Statement, are available on the Company’sCompany's website atwww.revloninc.com under the heading SEC Filings, as well as the SEC’sSEC's website atwww.sec.gov through the Filings and Forms (EDGAR) pages. In addition, electronic printable copies of the Corporate Governance Guidelines, Board Guidelines for Assessing Director Independence, Code of Business Conduct, Audit Committee Pre-Approval Policy and the current charters of the Audit Committee, Compensation
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Management does not intend to present any other items of business and is not aware of any matters other than those set forth in this Proxy Statement that will be presented for action at the 20112014 Annual Meeting. However, if any other matters properly come before the 20112014 Annual Meeting, the persons designated by the Company as proxies may vote the shares of Voting Capital Stockvoting capital stock that they represent in their discretion.
By Order of the Board of Directors | |
Michael T. Sheehan | |
Senior Vice President, Deputy General Counsel and Secretary | |
New York, New York | |
April 24, 2014 |
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Towers Watson U.S. General Industry Executive Database — Total Sample*– $1 to $3B Revenue Group
A-1
Barnes Group | H.B. Fuller | Polaris Industries |
Beam | Harsco | Polymer Group |
Black Box | Herman Miller | PolyOne |
Boise | Hexcel | Purdue Pharma |
Boise Cascade | HNI | Rayonier |
Brady | HNTB | Regal-Beloit |
Carmeuse North America Group | Houghton Mifflin Harcourt Publishing | Regeneron Pharmaceuticals |
Carpenter Technology | Husky Injection Molding Systems | Revlon |
Catalent Pharma Solutions | IDEXX Laboratories | Rowan Companies |
Chemtura | Intercontinental Hotels Group | Sage Software |
Cloud Peak Energy | International Flavors & Fragrances | SAS Institute |
Coinstar | International Game Technology | Schwan's |
Columbia Sportswear | Invensys Controls | Scotts Miracle-Gro |
Convergys | Irvine | ServiceMaster Company |
Cooper Standard Automotive | ITT Corporation | ShawCor |
Cott Corporation | Kennametal | Sigma-Aldrich |
Covance | Kimco Realty | Snap-on |
Curtiss-Wright | Leprino Foods | Steelcase |
Cytec | Lifetouch | Suburban Propane |
Day & Zimmerman | Lincoln Electric | TeleTech Holdings |
Deluxe | Magellan Midstream Partners | Teradata |
Dentsply | Makino | Tetra Tech |
Donaldson Company | Martin Marietta Materials | Toro |
E.W. Scripps | Mary Kay | Total System Service (TSYS) |
Engility Corporation | Matthews International | Tronox |
EnPro Industries | Milacron | Tupperware Brands |
Equifax | Mine Safety Appliances | Underwriters Laboratories |
Equity Office Properties | NBTY | Ventura Foods |
ESRI | NewPage | Vertex Pharmaceuticals |
Esterline Technologies | Nypro | Viad |
Exterran | OMNOVA Solutions | Vulcan Materials |
G&K Services | Pall Corporation | W.R. Grace |
GAF Materials | Parsons Corporation | Wendy's Group |
Gartner | PHH | West Pharmaceutical Services |
GenCorp | Plexus | Worthington Industries |
General Atomics | Plum Creek Timber | Xilinx |
Graco | ||
A-2
A-1
REVLON, INC.
I. Statement of Principles
The Audit Committee is required to pre-approve the audit and non-audit services performed by the Company’s independent auditor, KPMG LLP (“KPMG LLP” or the “independent auditor”), in order to assure that KPMG LLP’s provision of such services dodoes not impair its independence. Unless a type of service to be provided by the independent auditor is within the pre-approved services and dollar limits set forth in the appendices attached to this Policy, the provision of such service by the independent auditor will require specific pre-approval by the Audit Committee.
The appendices to this Policy describe the Audit Services, Audit-Related Services, Tax Services and All Other Services that have the general pre-approval of the Audit Committee for 2011,2014, as well as the applicable dollar limits for the particular services. The Audit Committee will annually review and pre-approve the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee. The Audit Committee may revise the list of general pre-approved services from time to time, based on its subsequent determinations.time. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
II. Delegation
The Audit Committee may delegate pre-approval authority to one or more of its members for Audit-Related, Tax Services or All Other Services (each as defined below) to be provided by the independent auditor (but excluding Annual Audit Services referred to in Section III below and prohibited services referred to in Section VII below). Specifically, the Chairman of the Audit Committee may approve services which are not Annual Audit Services referred to in Section III below or prohibited services referred to in Section VII below if the fees as to any applicable project will not exceed $35,000, provided that the independent auditor complies with any applicable rules or requirements of this Policy to document the services to the Audit Committee and to discuss such services with the Audit Committee. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at least quarterly on the services provided by KPMG LLP and the approximate fees paid or payable to KPMG LLP for such services during the preceding quarter, including a report on any services pre-approved during such quarter by the Chairman of the Audit Committee pursuant to this Section II.
III. Audit Services
The terms and fees of the annual Audit Services engagement, including, without limitation, the independent auditor’sauditor's services in connection with the audit of the Company’sCompany's annual financial statements and internal control over financial reporting and the independent auditor’sauditor's review of the Company’sCompany's financial statements included in the Company’sCompany's quarterly reports onForm 10-Q, and the independent auditor’s testing and attestation on management’s report on the effectiveness of the Company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, will be subject to the specific pre-approval of the Audit Committee. The Audit Committee will also approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope or other matters.
In addition to the foregoing annual Audit Services engagement, the Audit Committee may grant pre-approval for other Audit Services, which are those services that are normally provided by the independent auditor in connection with statutory and regulatory filings or engagements for those fiscal years and other services that generally only the independent auditor reasonably can provide, such as comfort letters, statutory audits, attest services, consents and assistance with and review of documents filed with the SEC. The Audit Committee has pre-approved the other Audit Services listed inAppendix A, provided that such services do not exceed the pre-approved fees set forth on Appendix A.A. All other Audit Services not listed in Appendix A must be specifically pre-approved by the Audit Committee.
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Audit-Related Services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor, and in each case which are not covered by the Audit Services described in Section III. Such services could include,
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among other things, employee benefit plan audits, due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, attest services and internal control reviews that are not required by statute and regulation and consultations concerning financial accounting and reporting standards. The Audit Committee believes that the provision of Audit-Related Services does not impair the independence of the auditor, and has pre-approved the Audit-Related Services listed inAppendix B, provided that such services do not exceed the pre-approved fees set forth on Appendix B.B. All other Audit-Related Services not listed in Appendix B must be specifically pre-approved by the Audit Committee, except to the extent covered by the delegation of authority under Section II above. As to all non-audit internal control services for the Company, the independent auditor must — must—(1) describe in writing to the Audit Committee the scope of the proposed non-audit internal control service; (2) discuss with the Audit Committee any potential effects on the independent auditor’sauditor's independence that could be caused by the independent auditor’sauditor's performance of the proposed non-audit internal control service; and (3) document the substance of such discussions with the Audit Committee.
V. Tax Services
The Audit Committee believes that the independent auditor can provide certain Tax Services to the Company, such as (i) tax compliance (e.g., preparing original and amended state and federal corporate tax returns, planning for estimated tax payments and preparation of tax return extensions); (ii) tax advice; and (iii) tax planning, without impairing the auditor’s independence. Tax advice and tax planning could include, without limitation, assistance with tax audits and appeals, tax advice related to mergers and acquisitions and employee benefit plans and request for rulings or technical advice from taxing authorities. However, the Audit Committee will not permit the retention of the independent auditor (or any affiliate of the independent auditor) in connection with the provision of any prohibited tax service listed inExhibit 1 to the Company or its affiliates, as the PCAOB has determined that such prohibited tax services would impair the independent auditor’sauditor's independence.
The Audit Committee has pre-approved the Tax Services listed inAppendix C, provided that such services do not exceed the pre-approved fees set forth on Appendix C.C. All other Tax Services for the Company not listed in Appendix C must be specifically pre-approved by the Audit Committee, except to the extent covered by the delegation of authority under Section II above, provided that the independent auditor complies with any applicable rules and the following requirements to document the applicable Tax Services to the Audit Committee and to discuss such services with the Audit Committee.
As to all Tax Services for the Company, the independent auditor must — must—(1) describe in writing to the Audit Committee the scope of the proposed Tax Service, the proposed fee structure for the engagement and any agreement between the independent auditor and the Company and its affiliates relating to the proposed Tax Service; (2) describe in writing to the Audit Committee any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the independent auditor or any of its affiliates and any person (other than the Company and its affiliates) with respect to the promoting, marketing or recommending of any transaction covered by the Tax Service; (3) discuss with the Audit Committee any potential effects of the proposed Tax Services on the independence of the independent auditor; and (4) document the substance of such discussions with the Audit Committee.
VI. All Other Services
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other Services that it believes are routine and recurring services, and would not impair the independence of the auditor, provided such All Other Services may not include Audit Services referred to in Section III above or prohibited services referred to in Section VII below. The Audit Committee has pre-approved the All Other Services listed inAppendix D, provided that such services do not exceed the pre-approved fees set forth on Appendix D.D. Permissible All Other Services other than those listed in Appendix D must be specifically pre-approved by the Audit Committee, except to the extent covered by the delegation of authority under Section II above.
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The Company will not retain its independent auditors for any services that are “prohibited services” as defined by applicable statutes or regulations, as may be in effect from time to time, including, without limitation, those services prohibited by Section 201(a) of the Sarbanes-Oxley Act of 2002 and the SEC’sSEC's or the PCAOB’sPCAOB's rules and regulations and such other rules and regulations as may be promulgated thereunder from time to time. Attached to this policy asExhibit 1 is a current list of the SEC’s and PCAOB’sPCAOB's prohibited non-audit services, including prohibited tax services.
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VIII. Pre-Approval Fee Levels
Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any services proposed to be provided by the independent auditors during a fiscal year exceeding these levels will require specific pre-approval by the Audit Committee.
IX. Procedures
Requests or applications to provide services that require specific approval by the Audit Committee may be submitted to the Audit Committee by the independent auditor and any of the Company’sCompany's Chief Financial Officer, Corporate Controller or Chief Legal Officer.General Counsel
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Pre-Approved Audit Services for Fiscal Year 2011
Dated: October 26, 201023, 2013
Service | Total Pre-Approved Annual Fees for Pre-Approved Audit Services: | |||
1. | Statutory audits or financial audits for subsidiaries of the Company | $ | 50,000 | |
2. | Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents), and assistance in responding to SEC comment letters | |||
3. | Consultations by the Company’s management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies |
Total Pre-Approved | ||||
Annual Fees for | ||||
Pre-Approved Audit | ||||
Service | Services: | |||
Statutory audits or financial audits for subsidiaries of the Company | $ | 50,000 | ||
Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents), and assistance in responding to SEC comment letters | ||||
Consultations by the Company’s management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies |
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Pre-Approved Audit-Related Services for Fiscal Year 2011
Dated: October 26, 201023, 2013
Service | Total Pre-Approved Annual Fees for Pre-Approved Audit-Related Services: | |||
1. | Due diligence services pertaining to potential business acquisitions/dispositions | $ | 200,000 | |
2. | Financial statement audits of employee benefit plans | |||
3. | Agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters | |||
4. | Attest services and internal control reviews not required by statute or regulation | |||
5. | Audit work in connection with liquidations and contract terminations; legal entity dissolution/restructuring assistance; and inventory audits |
* | The foregoing pre-approval of non-audit internal control services identified on this Appendix B is subject in all cases to compliance with Section IV of this Pre-Approval Policy, including without limitation, compliance with applicable rules to document the services to the Audit Committee and to discuss such services with the Audit Committee. |
Total Pre-Approved | ||||
Annual Fees for | ||||
Pre-Approved | ||||
Audit-Related | ||||
Service | Services: | |||
1. Due diligence services pertaining to potential business acquisitions/dispositions | $ | 200,000 | ||
2. Financial statement audits of employee benefit plans | ||||
3. Agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters | ||||
4. Attest services and internal control reviews not required by statute or regulation | ||||
5. Audit work in connection with liquidations and contract terminations; legal entity dissolution/restructuring assistance; and inventory audits |
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Pre-Approved Tax Services for Fiscal Year 2011*
Dated: October 26, 2010
Total Pre-Approved | ||||
Annual Fees for | ||||
Pre-Approved | ||||
Service | Tax Services: | |||
1. U.S. federal, state and local tax compliance, including, without limitation, review of income, franchise and other tax returns | $ | 300,000 | ||
2. International tax compliance, including, without limitation, review of income, franchise and other tax returns | ||||
3. U.S. federal, state and local tax advice, including, without limitation, general tax advisory services | ||||
4. International tax advice, including, without limitation, intercompany pricing and advanced pricing agreement services, general tax advisory services and tax audits and appeals services |
Service | Total Pre-Approved Annual Fees for Pre-Approved Tax Services: | |||
1. | U.S. federal, state and local tax compliance, including, without limitation, review of income, franchise and other tax returns | $ | 500,000 | |
2. | International tax compliance, including, without limitation, review of income, franchise and other tax returns | |||
3. | U.S. federal, state and local tax advice, including, without limitation, general tax advisory services | |||
4. | International tax advice, including, without limitation, intercompany pricing and advanced pricing agreement services, general tax advisory services and tax audits and appeals services |
* | The foregoing pre-approval of Tax Services identified on this Appendix C is subject in all cases to compliance with Section V of this Pre-Approval Policy, including without limitation, compliance with applicable rules to document the services to the Audit Committee and to discuss such services with the Audit Committee. |
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Pre-Approved All Other Services for Fiscal Year 2011
Dated: October 26, 2010
Service | Total Pre-Approved Annual Fees for Pre-Approved All Other Services: | |||
All Other Services approved by the Chairman of the Audit Committee pursuant to Section II of this policy, provided that the independent auditor complies with any applicable rules and requirements of this Policy to document the services to the Audit Committee and to discuss such services with the Audit Committee (and in each case excluding Audit Services described in Section III and prohibited services described in Section VII). | $ | 35,000 per project |
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Exhibit 1
I. | PROHIBITED NON-AUDIT SERVICES |
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• | ||
Financial information systems design and implementation* |
• | Appraisal or valuation services, fairness opinions orcontribution-in-kind reports* |
• | Actuarial services* |
• | Internal audit outsourcing services* | |
Each of these prohibited services is subject to applicable exceptions under the SEC’s rules.
* | Unless it is reasonable to conclude that the results of these services will not be subject to audit procedures during an audit of the audit client’s financial statements. |
II. | PROHIBITED TAX SERVICES |
The PCAOB has determined the following services to be “Prohibited Tax Services” for the independent auditor (including any affiliate of the independent auditor, as defined in PCAOB Rule 3501(a)(i)):
any service or product by the independent auditor or any of its affiliates for the Company and its affiliates for a contingent fee or a commission, including any fee established for the sale of a product or the performance of any service pursuant to an arrangement in which no fee would be payable unless a specified finding or result is attained or the amount of the fee is otherwise dependent | ||
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Company or its affiliates (in each case who do not otherwise occupy an employment position in a financial oversight role), (ii) any person serving in a financial reporting oversight role at the Company or its affiliates only because of such person’s relationship to an affiliate of the Company if such affiliate’s financial statements (1) are not material to the Company's consolidated financial statements or (2) are audited by an auditor other than the Company's independent auditor or its associated persons and (iii) employees who were not in a financial reporting oversight role for the Company or its affiliates before a hiring, promotion or other change in employment event and the tax services were provided by the independent auditor or any of its affiliates to such person pursuant to an engagement in process before the meeting date (or, ifhiring, promotion or other change in employment event, provided that such tax services are completed on or before 180 days after the 401(k) Plan holds voting capital stock for your account, by May 26, 2011). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Last reviewed as of Future PROXY MATERIALSIf you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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