<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
PARLUX FRAGRANCES, INC.
(Name of Registrant as Specified In Its Charter)
PARLUX FRAGRANCES, INC.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
PARLUX FRAGRANCES, INC.
3725 S.W. 30TH AVENUE
FORT LAUDERDALE, FL 33312
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- --------------------------------------------------------------------------------
Notice is hereby given that the Annual Meeting of Stockholders of
Parlux Fragrances, Inc. (the "Company") will be held at the Holiday Inn, 2905
Sheridan Street, Hollywood, Florida, 33020 on Tuesday, October 1, 1996, at
10:00 a.m. for the following purposes as set forth in the accompanying Proxy
Statement:
1. To elect eight directors to serve for a term of one year;
2. To adopt the Parlux Fragrances, Inc. Stock Option Plan;
3. To ratify the appointment of Price Waterhouse L.L.P. as
independent certified public accountants for the Company for
the fiscal year ending March 31, 1997; and
4. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Holders of record of the Company's common stock at the close of
business on August 23, 1996, will be entitled to vote at the meeting.
By order of the Board of Directors
/s/ Ilia Lekach
Ilia Lekach
Chairman of the Board and
Chief Executive Officer
Dated: August 23, 1996
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED. ANY PERSON GIVING A
PROXY HAS THE POWER TO REVOKE IT AT ANY TIME PRIOR TO THE EXERCISE THEREOF AND
IF PRESENT AT THE MEETING MAY WITHDRAW IT AND VOTE IN PERSON. ATTENDANCE AT
THE MEETING IS LIMITED TO STOCKHOLDERS, THEIR PROXIES AND INVITED GUESTS OF THE
COMPANY.
<PAGE> 3
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
OF PARLUX FRAGRANCES, INC.
TO BE HELD OCTOBER 1, 1996
This proxy statement (the "Proxy Statement") is furnished in
connection with the solicitation by the Board of Directors (the "Board") of
Parlux Fragrances, Inc. (the "Company") of proxies to be voted at the annual
meeting of stockholders (the "Annual Meeting") of the Company to be held at the
Holiday Inn, 2905 Sheridan Street, Hollywood, Florida, 33020 at 10:00 a.m. on
Tuesday, October 1, 1996, or at any adjournment thereof. The Proxy Statement
and the form of proxy are being mailed on or about August 29, 1996, to
stockholders as of the Record Date.
VOTING SECURITIES; PROXIES; REQUIRED VOTE
VOTING SECURITIES
The Board of Directors has fixed the close of business on August 23,
1996, as the record date (the "Record Date") for the determination of
stockholders entitled to notice of, and to vote at, the Annual Meeting. As of
the Record Date, the Company had outstanding 13,694,711 shares of Common Stock,
par value $0.01 per share (the "Common Stock"). Only the holders of Common
Stock are entitled to notice of and to vote at the Annual Meeting. Holders of
Common Stock are entitled to one vote per share.
PROXIES
Mr. Frederick Purches and Mr. Frank Buttacavoli, the persons named as
proxies on the proxy card accompanying this Proxy Statement, were selected by
the Board of Directors of the Company to serve in such capacity. Messrs.
Purches and Buttacavoli are directors of the Company. Each executed and
returned proxy will be voted in accordance with the directions indicated
thereon, or if no direction is indicated, such proxy will be voted in
accordance with the recommendations of the Board of Directors contained in this
Proxy Statement. Each stockholder giving a proxy has the power to revoke it at
any time before the shares it represents are voted. Revocation of a proxy is
effective upon receipt by the Secretary of the Company of either (i) an
instrument revoking the proxy or (ii) a duly executed proxy bearing a later
date. Additionally, a stockholder may change or revoke a previously executed
proxy by voting in person at the Annual Meeting.
REQUIRED VOTE
The holders of at least a majority of the outstanding shares of Common
Stock represented in person or by proxy will constitute a quorum at the Annual
Meeting. At the Annual Meeting, the vote of a majority in the interest of
stockholders present in person or by proxy and entitled to vote thereon is
required to elect directors, approve the adoption of the Parlux Fragrances,
Inc. Stock Option Plan and ratify the appointment of Price Waterhouse L.L.P. as
the independent certified public accountants of the Company's consolidated
financial statements for the fiscal years ending March 31, 1997.
The election inspectors appointed for the meeting will tabulate the
votes in person or by proxy at the Annual Meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstention as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for the purposes of determining the
approval of any matter submitted to the stockholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as
Page 2
<PAGE> 4
to certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
PROPOSAL 1:
NOMINEES FOR ELECTION AS DIRECTORS
The directors elected at the Annual Meeting will hold office until the
next Annual Meeting and until his successor is duly elected and qualified.
Unless the proxy specifies otherwise, the person named in the enclosed proxy
intends to vote the shares represented by the proxies given to him for the
eight nominees listed below. Messrs. I. Lekach, Z. Lekach, Buttacavoli,
Purches, Vercillo, Gopman, Barrie and Ms. de la Vega are all presently
directors of the Company. The Company has no reason to believe that any of the
nominees will become unavailable to serve as directors for any reason before
the Annual Meeting. However, in the event that any of them shall become
unavailable, the person designated as proxy reserves the right to substitute
another person of his choice when voting at the Annual Meeting.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Ilia Lekach 48 Chairman of the Board and Chief Executive Officer
Zalman Lekach 29 President, Chief Operating Officer and Director
Frank A. Buttacavoli 41 Executive Vice President, Chief Financial Officer and
Director
Frederick E. Purches 58 Vice Chairman of the Board
Albert F. Vercillo 66 Director
Glenn Gopman 40 Director
Mayi de la Vega 41 Director
Richard Barrie 54 Director
</TABLE>
ILIA LEKACH is Chairman of the Board of Directors and Chief Executive
Officer of the Company. Mr. Lekach became a director of the Company in
November 1987 and resigned in November 1988. He was re-elected to the Board of
Directors in February 1989. Mr. Lekach assumed the position of Chairman of the
Board of the Company in November of 1990 and as Chief Executive Officer of the
Company in December 1993. Prior to resigning in April 1994, he was Chairman of
the Board of Directors and CEO of Perfumania, Inc. ("Perfumania"), an
affiliated public company based in Miami, Florida, and a leading specialty
retailer of fragrances with approximately 200 retail outlets in manufactures'
outlet malls and regional malls. Perfumania also maintains a wholesale
operation supplying fragrances and other beauty related items to customers in
North America and internationally.
ZALMAN LEKACH is President and Chief Operating Officer of the Company.
He became a director and an executive in Parlux, S.A., the Company's French
subsidiary, in May 1990. In May 1993, he resigned his executive position and
owned and operated a company exporting foods and health/beauty aids to South
America. In January of 1995, he rejoined the Company as its Chief Operating
Officer and a director. In June 1996, Mr. Zalman Lekach also assumed the
position of President. Messrs. Ilia Lekach and Zalman Lekach are brothers.
FRANK A. BUTTACAVOLI, a Certified Public Accountant, has been Vice
President and Chief Financial Officer of the Company since April 1993, and a
director for the Company since March 1993. From July 1979 through June 1992,
Mr. Buttacavoli was employed by Price Waterhouse, and was a Senior Manager
from July 1987 to June 1992. From July 1992 through March 1993, he provided
financial consulting services to the Company. In June 1996, Mr. Buttacavoli
was promoted to Executive Vice President.
FREDERICK E. PURCHES has been a director of the Company since its
formation in July 1984. He has been engaged in the cosmetic/fragrance business
for over 30 years in various executive capacities with Helena Rubinstein, Inc.
and Revlon, Inc. From 1980 through 1988, he was President of Helena
Rubinstein, Inc. He resigned from the latter position in 1989 to take a more
active role in the direction of
Page 3
<PAGE> 5
the Company's operations. In November of 1990 Mr. Purches resigned as Chairman
of the Board in favor of Mr. Lekach, and Mr. Purches assumed the new position
of Vice Chairman of the Board.
ALBERT F. VERCILLO has been director of the Company since May 1989.
Mr. Vercillo is President of Cambridge Development Corporation, Chairman of
Cambridge Business Services, Inc. and President of Schiaparelli, Inc. The
companies are privately-held companies engaged in providing administrative and
business services, licensing and the distribution of various products since
April 1981.
GLENN GOPMAN has been a director of the Company since October 1995.
Mr. Gopman is the principal shareholder of the public accounting firm Thaw,
Gopman and Associates, and has been associated with that firm for over ten
years. He is a member of the Florida Institute of Certified Public Accountants
and actively participates on its committees and in community activities.
MAYI DE LA VEGA, a director of the Company since October 1995, founded
International Metal Exports, Inc. in May of 1978, a company operating as a
distributor and supplier of aluminum, stainless steel, and other metals to the
aircraft industry. In 1992, the Company was sold to a Swiss multi-national
corporation, and Ms. de la Vega continued as President and a director through
December 1994. She has subsequently been evaluating entrepreneurial
opportunities.
RICHARD BARRIE has been a director of the Company since July 1996. Mr.
Barrie has been President and Chief Executive Officer of Richard Barrie
Fragrances, Inc. since July of 1986. From May 1984 through May 1988 he was
President of Richard Barrie Enterprises, a private consulting company. Prior
to that, Mr. Barrie was Executive Vice President and Chief Operating Officer of
Fabrege, Inc.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
In fiscal year 1996, there were seven meetings of the Board of
Directors (including regularly scheduled and special meetings), three of which
were conducted by teleconference. In addition, the Board took action by
unanimous written consent on two occasions in fiscal year 1996. Ms. de la Vega
attended fewer than 75% of the meetings of the Board in fiscal 1996.
The Board of Directors has established two standing committees: the
Audit Committee and the Compensation Committee. The Board of Directors does
not have a Nominating Committee.
AUDIT COMMITTEE
The Audit Committee recommends the appointment of a firm of
independent public accountants to audit the Company's financial statements, as
well as reviews and approves the scope, purpose and type of audit services to
be performed by the external auditors. The Audit Committee is composed of
Messrs. Gopman and Vercillo and Ms. de la Vega. The Audit Committee held one
meeting in fiscal year 1996.
COMPENSATION COMMITTEE
The duties of the Compensation Committee are to make recommendations
to the Board of Directors concerning the salaries of the Company's officers and
to advise and act for the Board of Directors on other compensation matters.
The Compensation Committee is composed of Messrs. Purches and Gopman and Ms. de
la Vega. The Compensation Committee held one meeting in fiscal year 1996.
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<PAGE> 6
EXECUTIVE COMPENSATION
The Company effected a two-for-one stock split in the form of a
dividend to shareholders of record as of November 3, 1995. All common stock
and warrant information contained in this proxy statement has been restated to
reflect the stock split. The words "warrant" and "option" have the same
meaning herein, and are used interchangeably.
The following table sets forth information with respect to
compensation paid by the Company for services to the Company during the fiscal
year ended March 31, 1996 and for the two prior fiscal years for (i) the
Company's Chief Executive Officer and (ii) the Company's four most highly
compensated executive officers other than the Chief Executive Officer
(collectively the "Named Executive Officers") whose base compensation and bonus
exceeded $100,000 during the fiscal year ended March 31, 1996.
TABLE I
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
- -------------------------------------------------------------------------------------------------
Awards
- -------------------------------------------------------------------------------------------------
Other Securities
Name and Principal Salary ($) Bonus ($) Compensation ($) Underlying
Positions Fiscal Year (1) Options (#)
=================================================================================================
<S> <C> <C> <C> <C> <C>
Ilia Lekach; 1994 0 0 0 420,000
Chairman 1995 163,654 0 0 0
and CEO 1996 185,000 0 0 0
Rachmil Lekach; 1994 0 0 0 300,000
President (2) 1995 130,769 0 0 0
1996 170,000 0 0 0
Zalman Lekach; 1994 0 0 0 0
President and 1995 41,242 0 0 180,000
Chief Operating 1996 165,000 0 0 0
Officer
Frank Buttacavoli; 1994 110,000 0 0 200,000
Executive Vice 1995 129,266 0 0 0
President and 1996 145,000 0 0 0
Chief Financial
Officer
Danielle Petit; 1994 95,621 0 0 0
General Manager, 1995 104,726 0 0 0
Parlux, S.A. 1996 111,140 0 0 0
</TABLE>
(1) No executive officer named in the table received any other
compensation in an amount in excess of the lesser of either $50,000 or
10% of the total annual salary and loans reported for him in the two
preceding columns for the periods covered by this table.
(2) Effective June 1996, Mr. Rachmil Lekach resigned from all positions
with the Company.
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<PAGE> 7
TABLE II
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
VALUES
The following table shows stock options exercised by each of the Named
Executives during fiscal 1996, including the aggregate value of gains on the
date of exercise. In addition, this table includes the number of shares
covered by both exercisable and non-exercisable stock options as of fiscal
year-end, and the values for unexercised options.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-The-Money Options At
Options at March 31, 1996 March 31, 1996 (2)
------------------------- ------------------
Shares
Acquired Value
On Realized
Name Exercise (1) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ilia Lekach 0 $0 280,000 140,000 $2,835,000 $1,417,500
Rachmil Lekach 0 0 200,000 100,000 2,025,000 1,012,500
Zalman Lekach 0 0 60,000 120,000 540,000 1,080,000
Frank Buttacavoli 12,000 74,250 188,000 0 1,997,500 0
Danielle Petit 5,000 30,937 11,000 0 122,562 0
</TABLE>
(1) Based on the difference between the closing market price for Common
Stock on the date of exercise of the option and the option exercise
price. The above valuation may not reflect the actual value of
exercised options as the value of exercised options will fluctuate
with market activity.
(2) Based on the difference between the closing market price on March 31,
1996, for Common Stock, which was $12.375 per share, and the option
exercise price. The above valuation may not reflect the actual value
of unexercised options as the value of unexercised options will
fluctuate with market activity.
EMPLOYMENT AND CONSULTING AGREEMENTS
As of April 1, 1994, the Company entered into a three-year employment
agreement with Mr. Ilia Lekach, Chairman and Chief Executive Officer, which
called for an annual base salary of $185,000, with annual increases at the
discretion of the Board. Mr., Lekach received warrants to purchase 420,000
shares of Common Stock at an exercise price of $2.00 per share (the closing
price per share of Common Stock on the NASDAQ National Market on the date of
the grant). The warrants are exercisable in quantities of 140,000 each on
March 31, 1995, 1996, and 1997, and expire on April 1, 2004. In January of
1996, the Compensation Committee increased Mr. Lekach's annual base salary to
$260,000 effective July 1, 1996
As of April 1, 1994, the Company entered into a three-year employment
agreement with Mr. Rachmil Lekach, which called for an annual base salary of
$170,000, with annual increases at the discretion of the Board. Mr. Lekach
received options to purchase 300,000 shares of Common Stock at an exercise
price of $2.00 per share (the closing price per share of Common Stock on the
NASDAQ National Market on the date of the grant). The options are exercisable
in quantities of 100,000 each on March 31, 1995, 1996, and 1997, and expire on
April 1, 2004. In January of 1996, the Compensation Committee increased Mr.
Lekach's annual base salary to $195,000 effective July 1, 1996. In June 1996,
Mr. Rachmil Lekach resigned his positions as an officer and director of the
Company.
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<PAGE> 8
As of January 1, 1995, the Company entered into a three-year
employment agreement with Mr. Zalman Lekach, President and Chief Operating
Officer, which called for an annual base salary of $165,000, with annual
increases at the discretion of the Board. Mr. Lekach received options to
purchase 180,000 shares of Common Stock at an exercise price of $3.125 per
share (the closing price per share of Common Stock on the NASDAQ National
Market on the date of the grant). The options are exercisable in quantities of
60,000 each on December 31, 1995, 1996, and 1997, and expire on January 1,
2005. In January of 1996, the Compensation Committee increased Mr. Lekach's
annual base salary to $180,000 effective July 1, 1996, and it was subsequently
increased to $195,000 when he became President.
As of April 1, 1993, the Company entered into a three-year employment
agreement with Mr. Frank A. Buttacavoli, Executive Vice President and Chief
Financial Officer, which called for annual compensation for the fiscal year
March 31, 1994 of $110,000 and for the remaining two fiscal years thereafter at
the immediate year's prior annual rate, plus an increase based on performance
to be determined by the President. In June of 1995, Mr. Buttacavoli's
agreement was extended by the Board of Directors for an additional year ending
March 31, 1997. Mr. Buttacavoli also received warrants to purchase 200,000
shares of Common Stock at an exercise price of $1.50 per share (the closing
price per share of Common Stock on the NASDAQ National Market on the date of
the grant). All the options granted to Mr. Buttacavoli are vested as of March
31, 1996 and expire on April 1, 2003. Mr. Buttacavoli exercised 12,000
warrants in August 1995. In January 1996, the Compensation Committee increased
Mr. Buttacavoli's annual base salary to $180,000 effective July 1, 1996.
On April 1, 1994, the Company entered into a three-year agreement with
Cosmix, Inc., a company owned by Mr. Frederick Purches, the Vice Chairman of
the Board, which provides for annual payments of $100,000. The agreement calls
for Mr. Purches to spend substantial time to assist the Company in the areas of
banking, Securities and Exchange Commission and stockholder relations,
financial planning, assessment and coordination of acquisitions and
divestitures, and any other similar activities which may be assigned by the
Board of Directors. Mr. Purches receives certain benefits as part of his
agreement, and has received 90,000 warrants to acquire shares of Common Stock
at an exercise price of $2.0625 per share (the closing price of the Common
Stock on the NASDAQ National Market on the date of the grant). The warrants
are exercisable in quantities of 30,000 each on March 31, 1995, 1996, and 1997,
and expire on April 1, 2004. Mr. Purches exercised 30,000 warrants in July
1995 and 30,000 warrants in March 1996.
On April 1, 1994, the Company entered into a three-year consulting
agreement commencing on June 1, 1994, with the Cambridge Development
Corporation, a company owned by Mr. Albert F. Vercillo, director of the
Company, which provides for monthly payments of $4,500. The agreement call for
Mr. Vercillo to devote substantial time to the Company on the areas of U.S. and
international financial analysis and planning. Mr. Vercillo receives certain
insurance benefits as part of the agreement, and has received 30,000 warrants
to acquire shares of Common Stock at an exercise price $2.0625 per share (the
closing price of the Common Stock on the NASDAQ National Market on the date of
the grant). The warrants are exercisable in quantities of 10,000 each on June
1, 1995, 1996 and 1997, and expire on April 1, 2004.
As of July 1, 1996, the Company entered into an employment agreement
through March 31, 1999, with Mr. Richard Barrie in connection with the
acquisition of Richard Barrie Fragrances, Inc. The agreement calls for an
annual base salary of $241,000, adjusted annually for inflation. Mr. Barrie,
received warrants to acquire 180,000 shares of Common Stock at an exercise rice
of $6.75 per share (the closing price of the Common Stock on the NASDAQ
National Market on the date of the grant, January 23, 1996). The warrants are
exercisable in quantities of 60,000 each on March 31, 1997, 1998, and 1999, and
expire on July 1, 2006.
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<PAGE> 9
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
In October of 1995, a Compensation Committee was appointed. The
Committee consists of Mr. Frederick Purches, Mr. Glenn Gopman and Ms. Mayi de
la Vega. Prior to this date, the Board of Directors discussed compensation
issues regarding the Company's executive officers and directors. (See
"Employment and Consulting Agreements" and "Certain Relationships and Related
Transactions".)
DIRECTOR COMPENSATION
The Company compensates outside (non-employee/consultant) members of
the Board of Directors for their activities as directors of the Company, at an
annual rate of $6,000, and awards 2,000 options annually on the anniversary
date of each directors election, at the closing price on such day as reported
by the NASDAQ National Market.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board (The "Compensation Committee"). The
Company's executive compensation program is structured to achieve the Company's
goals as they relate to maximizing corporate performance and stockholder
return. In general, executive compensation is made up of annual salaries,
incentive bonuses and option grants. The Board of Directors believes that total
compensation should increase or decrease with Company performance; as such,
incentive bonuses and option grants constitute a portion of executive
compensation to help align executive and stockholder interests. The Board of
Directors believes that compensation should attract, motivate and retain
executive talent to improve the Company's performance and therefore increase
shareholder returns.
In addition to base salaries and option grants, the Compensation
Committee may elect to award incentive bonuses as part of total compensation to
executive officers who have rendered services during the year that
substantially exceed those normally required or anticipated. These bonuses are
intended to reflect the Compensation Committee's determination to reward any
executive who, through extraordinary effort, has substantially benefited the
Company and its stockholders during the year. No incentive bonuses were awarded
to the Named Executive Officers during the year ended March 31, 1996.
In January of 1996, the Compensation Committee modified the
employment agreements with Messrs. I. Lekach, Z. Lekach, R. Lekach, and
Buttacavoli to double the warrants specified in their respective employment
contracts in the event of sale of or a change in control of the Company.
Compensation Deductible under Section 162(m) of the Internal Revenue Code
On August 10, 1993, the Revenue Reconciliation Act of 1993 was enacted
which amended the Internal Revenue Code of 1986, as amended, by adding Section
162(m) which eliminates the deductibility of most cash and non-cash
compensation over $1 million paid to certain "covered employees" (which
generally is defined as a corporation's chief executive officer and the four
other highest compensated employees). Contributions to qualified plans, items
excluded from the employee's gross income, compensation paid pursuant to a
binding agreement entered into on or before February 17, 1993, commission-based
compensation, and certain "performance-based" compensation are types of
remuneration that are not affected by the deduction limitation.
During the fiscal year ended March 31, 1996, none of the Named
Executive Officers received total compensation in excess of $1 million.
However, it is possible that in future years some portion of the compensation
paid to the Company's chief executive officer and its four highest compensation
employees will not be tax deductible under Section 162(m). When the
compensation of any of the Company's
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<PAGE> 10
affected executives becomes closer to the $1 million deduction limitation, the
Compensation Committee plans to consider the requirements of Section 162(m) and
decide what actions, if any, will be taken when setting the compensation levels
for these executives.
Compensation Committee
Frederick Purches, Chairman
Glenn Gopman
Mayi de la Vega
STOCKHOLDER RETURN PERFORMANCE: FIVE YEAR GRAPH
Set forth below is a line graph comparing the cumulative total return on the
Common Stock with the cumulative total return of the Standard and Poors 500
Index, and the Standard and Poors Cosmetic Segment Index for the fiscal years
of 1991 through 1996.
TOTAL SHAREHOLDER RETURNS - DIVIDENDS REINVESTED
<TABLE>
<CAPTION>
FISCAL YEAR: MARCH
YEARLY RETURNS
RETURN RETURN RETURN RETURN RETURN
COMPANY \ INDEX NAME 3/31/92 3/31/93 3/31/94 3/31/95 3/31/96
===================================================================================================================
<S> <C> <C> <C> <C> <C>
PARLUX FRAGRANCES INC. 190.91 -62.50 62.47 88.47 169.43
S&P 500 INDEX 11.04 15.23 1.47 15.57 32.10
COSMETICS 25.15 25.42 1.86 30.26 24.41
INDEXED \ CUMULATIVE RETURNS
BASE
PERIOD RETURN RETURN RETURN RETURN RETURN
COMPANY \ INDEX NAME 3/31/91 3/31/92 3/31/93 3/31/94 3/31/95 3/31/96
===================================================================================================================
PARLUX FRAGRANCES INC 100 290.91 109.09 177.24 334.04 900.00
S&P 500 INDEX 100 111.04 127.95 129.84 150.05 198.22
COSMETICS 100 125.15 156.97 159.89 208.26 259.10
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of the Record Date certain information
with respect to the number of shares of Common Stock beneficially owned by (i)
each director of the Company who beneficially owns Common Stock, (ii) the
Company's chief executive officer and the other most highly compensated
executive officers of the Company whose total salary and bonus exceeded $100,000
during fiscal 1996, (iii) all directors and executive officers of the Company as
a group and (iv) based on information available to the Company and a review of
statements filed with the SEC pursuant to Section 13(d) and 13(g) of the
Securities Act of 1934, as amended (the "Exchange Act"), each person or entity
that beneficially owns (directly or together with affiliates) more than 5% of
the Common Stock. The Company believes that each individual or entity named has
sole investment and voting power with respect to shares of Common Stock
indicated as beneficially owned by them, except as otherwise noted.
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<PAGE> 11
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY PERCENTAGE
DIRECTORS AND EXECUTIVE OFFICERS: OWNED (1) OWNERSHIP (1)
------------ -------------
<S> <C> <C>
Ilia Lekach (2) 2,400,368 17.2%
Zalman Lekach (3) 219,000 1.6
Frank A. Buttacavoli (4) 200,000 1.4
Danielle Petit 5,000 *
Axlbert F. Vercillo (5) 110,000 *
Frederick Purches 83,000 *
Glenn Gopman (6) 4,100 *
Mayi de la Vega (7) 2,000 *
All Directors and Officers as a Group (9 Persons) 3,023,468 21.2
OTHER PRINCIPAL STOCKHOLDERS:
Strong Capital Management, Inc. (8) 2,382,325 17.4
Pacific Investment Group (9) 1,727,980 12.6
</TABLE>
(1) Calculated pursuant to Rule 13d-3 of the Exchange Act. Under
Rule 13d-3(d), shares not outstanding which are subject to
options, warrants, rights or conversion privileges exercisable
within 60 days are deemed outstanding for the purpose of
calculating the number and percentage owned by such person,
but not deemed outstanding for the purpose of calculating the
percentage owned by each other person listed. As of the
Record Date, the Company had 13,694,711 shares of Common Stock
outstanding.
(2) Consists of (a) 392,388 shares owned jointly by Mr. Lekach and
his wife, (b) 1,727,980 shares owned or controlled by Pacific
Investment Group Inc., a corporation owned by Mr. Lekach and
(c) immediately exercisable warrants to purchase 280,000
shares of Common Stock issued to Mr. Lekach pursuant to his
employment agreement. The address of Mr. Lekach is 3725 S.W.
30th Avenue, Fort Lauderdale, Florida 33312.
(3) Includes immediately exercisable warrants to purchase 60,000
shares of Common Stock issued to Mr. Lekach pursuant to his
employment agreement.
(4) Includes immediately exercisable options to purchase 188,000
shares of Common Stock.
(5) Includes immediately exercisable options to purchase 20,000
for shares of Common Stock pursuant to Mr. Vercillo's
Consulting Agreement and immediately options to purchase
30,000 shares of Common Stock issued under the Company's 1987
Stock Option Plan.
(6) Includes immediately exercisable options to purchase 2,000
shares of Common Stock.
(7) Includes immediately exercisable options to purchase 2,000
shares of Common Stock.
(8) Address is One Hundred Heritage Reserve, Milwaukee, Wisconsin,
53201. Includes 770,275 shares owned by Strong Discovery
Fund, for which Strong Capital Management, Inc. acts as the
investment advisor.
(9) Address is c/o Mr. Ilia Lekach, 3725 S.W. 30th Avenue, Fort
Lauderdale, Florida 33312.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Perfumania, a public company in which Mr. Ilia Lekach has a substantial
investment, purchases the Company's products for distribution through the
Perfumania chain of retail outlets in the United States, and also for
distribution in North America and overseas. Sales to Perfumania amounted to
$26,187,000, $15,230,000 and $12,410,000 for the fiscal years ended March 31,
1996, 1995 and 1994, respectively. Amounts receivable from these companies
amounted to $13,482,000, and $4,894,000 at
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<PAGE> 12
March 31, 1996 and 1995, respectively. The Company believes that its
arrangements with Perfumania, except for credit terms, are based upon customary
commercial terms.
The Company has entered into various employment and consulting agreements
with its executive officers and directors (see "Employment and Consulting
Agreements").
In July 1995 and March 1996, Mr. Purches exercised options to acquire a
total of 60,000 shares of the Company's Common Stock at a price of $2.0625, of
which 30,000 shares were registered with an S-3 filing in September 1995, and
30,000 shares were registered with an S-3 filing in August 1996. In August
1995, Mr. Vercillo exercised options to acquire 50,000 shares of the Company's
Common Stock at a price of $1.875, which were registered with an S-3 filing in
September 1995. In August 1995, Mr. Buttacavoli exercised options to acquire
12,000 shares of the Company's Common Stock at a price of $1.50, which were
registered with an S-3 filing in September 1995.
In June 1995, the Company borrowed on an unsecured basis, $300,000 from an
individual related to the Company's Chairman of the Board. The note bears
interest at 11% per annum, and was due in June 1996. In connection with the
note, the Company had issued warrants to purchase 60,000 shares of Parlux
common stock at a price of $6.94 per share. In July 1996 the warrants were
exercised, effectively converting the loan to equity., and the shares were
registered with an S-3 filing in August 1996.
PROPOSAL NO. 2:
APPROVAL OF PARLUX FRAGRANCES, INC. STOCK OPTION PLAN
A proposal will be presented at the annual meeting to approve the
Parlux Fragrances, Inc. Stock Option Plan (the "Plan") which was adopted by
the Compensation Committee on July 15, 1996, subject to stockholder approval.
A summary of the material provisions of the Plan is set forth below and is
qualified in its entirety by reference to the Plan as set forth in Annex I
hereto.
Purpose. Non-qualified stock options will be awarded under the Plan
for the purpose of enhancing the Company's ability to attract, retain and
motivate employees who are not executive officers or directors of the Company
by providing such employees with an opportunity to acquire an equity interest
in the Company. The Compensation Committee believes that non-qualified stock
options will enable the targeted employees to share in the success of the
Company and, as an alternative to additional cash compensation, conserve the
Company's working capital.
Shares Subject to the Plan. Subject to adjustment in the event of
certain transactions involving the Company, the Plan reserves up to 250,000
shares of Common Stock for issuance. Any shares allocated to an award which is
forfeited, surrendered, terminated or canceled may again become subject to
awards under the Plan.
Who May Participate in the Plan. Employees of the Company who are not
executive officers or directors of the Company are eligible to receive awards
under the Plan (collectively, the "Participants"). The Board will determine
which eligible employees will be granted options, the number of shares to be
optioned and other terms and conditions applicable to the grants. Because
awards are granted at the Board's discretion, the Company is unable to
determine the benefits or amounts that may be received or allocated under the
Plan to the Participants.
As of the Record Date, approximately 320 employees would be qualified
to receive awards under the Plan.
Administration. The Plan will be administered by the Board. Subject
to the provisions of the Plan, the Board will have all powers with respect to
the administration and operation of the Plan, including without limitation,
full power and authority to interpret the provisions of the Plan and any
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<PAGE> 13
option agreement executed thereunder and to resolve all questions arising under
the Plan. The Board may delegate any and all of its responsibilities under the
Plan to a committee.
Exercise of Awards; Exercise Price; Termination of Awards. Awards
granted pursuant to the Plan may be evidenced by option agreements in such form
as the Board may from time to time establish. The terms and conditions of each
option grant will be established at the sole discretion of the Board at the
time of grant; provided, however, that the Board may only grant non-qualified
stock options and the purchase price of a share of Common Stock under an option
shall not be less than the fair market value (as determined by the Board) of a
share of Common Stock on the date the option is granted. Generally, options
granted under the Plan will vest at a rate of 25% on the first anniversary of
the date of grant, 50% on the second anniversary of the date of grant and 100%
on the third anniversary of the date of grant.
An award may be exercised in whole or in part (but for the purchase of
whole shares only) from time to time by written notice to the Secretary of the
Company which states the number of shares being exercised. Subject to the
terms of an option agreement executed by the holder, a Participant may elect to
pay the purchase price upon the exercise of an option by following a cashless
exercise procedure.
An award expires on the earlier of (a) the date established by the
Board at the time of grant or (b) 10 years from the date of grant (the
"Expiration Date"). Generally, if the employment of a Participant terminates
for any reason, his non-vested options shall terminate and his vested options
shall be exercisable no later than the earlier of (a) the date which is 90 days
after such termination or (b) the Expiration Date.
As of August 19, 1996, the printing date of this Proxy Statement, the
closing price of the Common Stock on the NASDAQ National Market was $____ per
share.
Duration of the Plan; Amendment; Certain Transactions. The Plan will
remain in effect until all awards have either been satisfied by the issuance of
Common Stock or the payment of cash, or the awards have been terminated in
accordance with the Plan or the related option agreement. The Board may, at
any time, amend, suspend or terminate the Plan or any award outstanding under
the Plan; provided, however, that no such amendment, suspension or termination
shall (i) be made without stockholder approval to the extent such approval is
required by law or (ii) alter or impair the rights of holders with respect to
awards previously made under the Plan.
If the Common Stock is changed by reason of a stock dividend, stock
split, spin-off, recapitalization or other similar change, the Board, in its
discretion, will make such equitable adjustments in the type and number of
shares which are or may be awarded under the Plan and the terms and number of
outstanding awards (including the number of shares and price at which such
shares may be issued) if it determines such adjustments are necessary to
preserve the benefit of the award for the Participant and the Company.
Assignment; Death of Holder. During the lifetime of a holder, an
award will be exercisable only by the holder and will not be assignable or
transferable. If the holder dies, his or her award will thereafter be
exercisable by his or her executors or administrators to the full extent to
which such award was exercisable by the holder at the time of his or her death.
Registration under the Securities Act. Upon stockholder adoption of
the Plan, the Company intends to file with the Securities and Exchange
Commission a Registration Statement on Form S-8 to register under the
Securities Act of 1933, as amended (the "Securities Act"), the shares of Common
Stock reserved for issuance under the Plan. As long as the Company's
Registration Statement for the Plan remains effective, Participants will be
able to transfer or sell their shares of Common Stock acquired upon exercise
without restriction, unless the Participant is in a "control" relationship with
the Company, in which case such Participant will be able to only offer or sell
their shares of Common Stock pursuant to
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<PAGE> 14
Rule 144 promulgated under the Securities Act or another exemption from the
registration requirements of the Securities Act.
Federal Income Tax Consequences. The following summarizes the effect
of Federal income taxation upon the Participant and the Company with respect to
stock non-qualified stock options granted under the Plan. The summary does not
purport to be complete and reference should be made to the applicable
provisions of the Internal Revenue Code of 1986, as amended. In addition, this
summary does not discuss the income tax laws of any municipality, state or
foreign country in which a Participant may reside.
A Participant who is granted a non-qualified stock option will not be
subject to Federal income tax at the time of grant, and the Company will not be
entitled to a tax deduction by reason of such grant. Upon the exercise of a
non-qualified option, the optionee will generally recognize ordinary
compensation income equal to the "spread" between the exercise price and the
fair market value of the Common Stock on the date of exercise, and the Company
generally will be entitled to a corresponding deduction. Upon a subsequent
disposition of the Common Stock, the optionee will recognize a short-term or
long-term capital gain or loss equal to the difference between the fair market
value of the shares on the date of exercise and the fair market value at
disposition, depending upon the length of time the shares are held.
The Company may withhold amounts from a Participant to satisfy
withholding tax requirements. To the extent permitted by the Board, a
Participant may have shares of Common Stock withheld from an award or may
tender shares of Common Stock to the Company to satisfy withholding tax
requirements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTING THE PARLUX
FRAGRANCES, INC. STOCK OPTION PLAN.
PROPOSAL 3:
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected Price Waterhouse L.L.P ("Price
Waterhouse") as the independent certified public accountants of the Company for
the fiscal year ending March 31, 1997. Price Waterhouse has served as the
Company's independent certified public accounting firm since 1988.
Representatives of Price Waterhouse will be present at the Annual Meeting and
will be given the opportunity to make a statement if they so desire. They will
also be available to respond to appropriate questions.
If the Company's stockholders do not ratify the appointment of Price
Waterhouse, other certified public accountants will be considered by the Board
of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE L.L.P. AS INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS FOR THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 1997.
EXPENSE SOLICITATION
The cost of soliciting proxies, which also includes the preparation,
printing and mailing of the Proxy Statement, will be borne by the Company.
Solicitation will be made by the Company primarily through the mail.
Shareholders Communication Corporation, New York, New York, has been retained
to assist in the distribution of proxies at an estimated fee of $7,000, plus
expenses. Directors, officers and regular employees of the Company may also
solicit proxies personally, by telephone or telefax. The
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<PAGE> 15
Company will request brokers and nominees to obtain voting instructions of
beneficial owners of stock registered in their names and will reimburse them
for any expenses incurred in connection therewith.
PROPOSALS OF STOCKHOLDERS FOR 1997 ANNUAL MEETING
Stockholders of the Company who intend to present a proposal for
action at the 1997 Annual Meeting of Stockholders of the Company, must notify
the Company's management of such intention by notice received at the Company's
principal executive offices no later than May 20, 1997 for such proposal to be
included in the Company's proxy statement and form of proxy relating to such
meeting.
FINANCIAL STATEMENTS
The Company's Annual Report to Stockholders for the year ended March
31, 1996 is being delivered with the Proxy to the Company's stockholders. Also
accompanying this Notice of Annual Meeting and Proxy Statement is a copy of the
Company's quarterly report on Form 10-Q for the three-month period ended June
30, 1996, which contains financial information for that period.
OTHER MATTERS
The Board knows of no matters that are expected to be presented for
consideration at the Annual Meeting which are not described herein. However, if
other matters properly come before the meeting, it is intended that the person
named in the accompanying proxy will vote thereon in accordance with his best
judgment.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IN THE UNITED
STATES. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE
THE EXPENSE OF FURTHER MAILINGS.
Fort Lauderdale, FL
August 23, 1996
By order of the Board of Directors
/s/ Ilia Lekach
Ilia Lekach
Chairman of the Board and
Chief Executive Officer
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ANNEX A
PARLUX FRAGRANCES, INC. STOCK OPTION PLAN
Section 1
Purpose
The purpose of this Parlux Fragrances, Inc. Stock Option Plan (the
"Plan") is to increase shareholder value and to advance the interests of Parlux
Fragrances, Inc. and any subsidiary thereof (the "Company") by awarding equity
incentives designed to attract, retain and motivate employees who are not
officers or directors of the Company.
Section 2
Administration
2.1. Administration by Board. The authority to manage and control the
operation and administration of the Plan shall be vested in the Company's Board
of Directors (the "Board"). Except to the extent prohibited by applicable law
or the rules of any stock exchange, the Board may, in its sole discretion,
delegate any or all responsibilities and powers reserved to it under the terms
of the Plan to a committee (the "Committee"). Any such allocation or
delegation may be revoked by the Board at any time.
2.2. Authority. Subject to the provisions of the Plan, the Board
shall have the authority to (a) manage and control the operation of the Plan,
(b) interpret and construe the provisions of the Plan, and prescribe, amend and
rescind rules and regulations relating to the Plan, (c) make awards under the
Plan, in such amounts and subject to such restrictions, limitations and
conditions as it deems appropriate, (d) prescribe the form of agreement,
certificate or other instrument evidencing any award under the Plan, (e)
correct any defect or omission and reconcile any inconsistency in the Plan or
in any award hereunder, and (g) make all other determinations and take all
other actions as it deems necessary or desirable for the implementation and
administration of the Plan. Any interpretation of the Plan by the Board (or
the Committee, if applicable) and any decision made by the Board (or the
Committee, if applicable) on any matter within its discretion is final and
binding on all persons. No member of the Board or the Committee shall be
liable for any action or determination made with respect to the Plan.
Section 3
Shares Subject to the Plan
3.1. Number of Shares Reserved. Subject to adjustment in accordance
with subsection 3.2, the number of shares of common stock of the Company
("Common Stock") with respect to which options may be granted under the Plan
shall not exceed 250,000 shares in the aggregate. Such shares may be either
authorized and unissued shares, treasury shares or a combination thereof, as
the Board may determine. The number of shares related to awards that are
forfeited, surrendered, terminated or canceled shall again be available for
additional awards under the Plan unless the Plan shall have terminated.
3.2. Adjustments to Number of Shares. Subject to the following
provisions of this subsection 3.2, in the event of any change in the
outstanding shares of Common Stock by reason of any stock dividend, split,
spin-off, recapitalization or other similar change, the type and number of
shares of stock which are or may be subject to awards under the Plan and the
terms and the number of outstanding awards (including the number of shares and
price at which shares of stock may be issued pursuant to an outstanding award)
shall be equitably adjusted by the Board in its discretion to the extent the
Board determines that such adjustment is necessary to preserve the benefit of
the award for the Participant and the Company.
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<PAGE> 17
Section 4
Participation
Subject to the terms and conditions of the Plan, employees of the
Company who are not officers or directors of the Company shall be eligible to
receive awards under the Plan ("Participants").
Section 5
Stock Options
5.1. Award of Stock Options. Subject to the terms and conditions of
the Plan, the Board shall determine the number, type and terms of the options
to be awarded to each Participant under the Plan. Each option awarded under
the Plan shall be a "non-qualified stock option" for tax purposes.
5.2. Option Price. The exercise price per share for any option
awarded under the Plan shall be determined by the Board, but in no event shall
the exercise price be less than the fair market value (as determined by the
Board) of a share of Common Stock on the date the option is awarded.
5.3. Option Expiration Date. All rights to purchase shares of Common
Stock pursuant to an option shall cease as of the date, if any, established by
the Board at the time of the award, but in no event later than the date which
is ten years after the date on which the option is awarded (the "Expiration
Date"). Unless provided otherwise by the Board, if the employment of a
Participant terminates for any reason, his non-vested options shall terminate
and his vested options shall be exercisable no later than the earlier of the
date which is 90 days after the Participant's termination of employment, or the
option's Expiration Date.
5.4. Vesting. Unless determined otherwise by the Board at the time an
option is awarded, each option awarded under the Plan shall become exercisable
with respect to 1/4 of the shares subject to option on the first anniversary of
the award date, with respect to 1/2 of the shares subject to option on the
second anniversary of the award date and with respect to all of the shares
subject to option on the third anniversary of the award date. Notwithstanding
the preceding sentence, the Board may, in its sole discretion, accelerate the
vesting of an option awarded under the Plan.
5.5. Manner of Exercise.
(a) An option may be exercised by a Participant (or, in the event
of his death, by the person or persons to whom that right
passes by will or by the laws of descent and distribution) as
to all or any portion of the shares of Common Stock then
exercisable under such option by giving written notice to the
Secretary of the Company at the principal executive offices of
the Company prior to the option's Expiration Date; provided,
however, that an option may only be exercised with respect to
whole shares of Common Stock. Such notice shall specify the
number of shares of Common Stock to be purchased and shall be
accompanied by payment of the option price for such shares in
such form and manner as the Committee may from time to time
approve.
(b) Notwithstanding paragraph 5.5(a), a Participant may elect to
pay the purchase price upon the exercise of an option through
the following cashless exercise procedures: The Participant
shall notify the Secretary of the Company of the intent to
exercise. Written instructions will then be prepared and
delivered to the Company and the broker indicating the
Participant's cashless exercise election and instructing the
Company to deliver to the broker the Common Stock issuable
upon exercise. The exercise of the option will be executed on
the same day that the broker is able to sell the Common
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Stock. The broker will then withhold from the sale proceeds
and deliver to the Company an amount, in cash, equal to the
option exercise price. An additional amount for federal and
state tax withholdings may also be withheld and delivered to
the Company at the Participant's election.
Section 6
General
6.1. Effective Date and Duration. The Plan shall be effective as of
July 15, 1996, subject to the approval of the Company's shareholders. Awards
may be granted under the Plan prior to such approval, but if such approval is
not received, such awards shall be of no effect. The Plan shall remain in
effect until all awards made under the Plan have been satisfied by the issuance
of shares of Common Stock or the payment of cash, or have terminated in
accordance with the terms of the Plan or the award.
6.2. Agreements Evidencing Awards. At the time of an award, the Board
may require a Participant to enter into an agreement with the Company in a form
specified by the Board agreeing to the terms and conditions of the Plan and to
such additional terms and conditions, not inconsistent with the Plan, as the
Board may in its discretion prescribe.
6.3. Non-transferability. No award under the Plan may be transferred,
pledged or assigned by the holder thereof (except, in the event of the holder's
death, by will or the laws of descent and distribution), and the Company shall
not be required to recognize any attempted assignment of such rights by any
Participant. During a Participant's lifetime, awards may be exercised only by
him or by his guardian or legal representative.
6.4. Compliance with Applicable Law and Withholding.
(a) Notwithstanding any other provision of the Plan, the Company
shall have no obligation to issue any shares of Common Stock
under the Plan if such issuance would violate any applicable
law or any applicable regulation or requirement of any
securities exchange or similar entity.
(b) Prior to the issuance of any shares of Common Stock under the
Plan, the Company may require a written statement that the
recipient is acquiring the shares for investment and not for
the purpose or with the intention of distributing the shares
and will not dispose of them in violation of the registration
requirements of Securities Act of 1933.
(c) If, at any time, the Company, in its sole discretion,
determines that the listing, registration or qualification (or
any updating of any such document) of any type of award, or
the shares of Common Stock issuable pursuant thereto, is
necessary on any securities exchange or under any federal or
state securities or blue sky law, or that the consent or
approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, any award,
the issuance of shares of Common Stock pursuant to any award,
or the removal of any restrictions imposed on shares subject
to an award, such award shall not be made and the shares of
Common Stock shall not be issued or such restrictions shall
not be removed, as the case may be, in whole or in part,
unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
(d) The Company shall collect as a condition of the exercise of
any option under the Plan any taxes required by law to be
withheld. To the extent permitted by the Board, a Participant
may elect to have any shares otherwise issuable under the Plan
to be
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withheld or to surrender to the Company shares of Common Stock
already owned by the Participant to fulfill any tax
withholding obligation.
6.5. No Continued Employment. The Plan does not constitute a contract
of employment, and participation in the Plan will not give any Participant the
right to be retained in the employ of the Company or any right or claim to any
benefit under the Plan unless such right or claim has specifically accrued
under the terms of the Plan or the terms of any award under the Plan.
6.6. Shareholder Status. No award to a Participant under the Plan
shall create any rights in such Participant as a shareholder of the Company
until shares of Common Stock are registered in the name of the Participant.
6.7. Amendment of the Plan. Subject to any approval of the
shareholders of the Company which may be required under applicable law, the
Board may at any time amend, suspend or terminate the Plan or any award
outstanding under the Plan; provided, however, that no such amendment,
suspension or termination shall materially impair the rights of any Participant
with respect to any award previously made under the Plan without the consent of
the holder thereof.
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APPENDIX A
PROXY CARD TEXT IS AS FOLLOWS:
(Front)
PARLUX FRAGRANCES, INC. PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS OCTOBER 1, 1996
(THIS PROXY IS SOLICTED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY)
The undersigned stockholder of Parlux Fragrances, Inc. (the "Company")
acknowledges receipt of the Notice of the Annual Meeting of Stockholders and
the accompanying Proxy Statement for the 1996 Annual Meeting and, revoking all
prior proxies, hereby appoints Frederick E. Purches and Frank A. Buttacavoli
with full power of substitution as proxy to vote all the shares of Common Stock
of the Company owned or held by the undersigned at the 1996 Annual Meeting of
Stockholders to be held at the Holiday Inn, 2905 Sheridan Street, Hollywood,
Florida, 33020, on October 1, 1996, at 10:00 a.m., or any adjournment of
postponement hereof.
1. Election of Directors
<TABLE>
<S> <C>
FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary) to vote for all nominees listed below
</TABLE>
Ilia Lekach, Zalman Lekach, Frank A. Buttacavoli, Frederick E. Purches, Albert
F. Vercillo, Glenn Gopman, Mayi de la Vega, Richard Barrie.
INSTRUCTION: To withhold authority to vote for any individual, write such
nominee's name in the space provided below.
================================================================================
(Continued and to be signed on reverse side)
<PAGE> 21
(Back)
1. Approval of Price Waterhouse L.L.P. as Independent Certified Public
Accountants.
FOR / / AGAINST / / ABSTAIN / /
2. Approval of the Parlux Fragrances, Inc. Stock Option Plan.
FOR / / AGAINST / / ABSTAIN / /
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Date:
----------------------------------
---------------------------------------
(Shareholder's signature)
---------------------------------------
(Shareholder's signature)
This Proxy should be dated, signed by
the stockholder(s) exactly as the name
appears on the envelope in which this
material was mailed, and returned at the
earliest convenience in the enclosed
return envelope. Persons singing in a
fiduciary capacity should so indicate.
