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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<CAPTION>
<S> <C>
Filed by the Registrant [X]
Filed by a party other than the Registrant []
Check the appropriate line:
[]Preliminary Proxy Statement [X]Definitive Proxy Statement
[]Definitive Additional Materials []Soliciting Material pursuant to
Rule 14a-11(c) or Rule 14a-12
</TABLE>
REVLON, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
(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 Number:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
REVLON, INC.
625 MADISON AVENUE
NEW YORK, NEW YORK 10022
March 12, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Revlon, Inc., which will be held at 10:00 a.m., local time,
on Tuesday, April 7, 1998, at Revlon's Research Center, 2121 Route 27,
Edison, New Jersey 08818. The matters to be acted upon at the meeting are
described in the attached Notice of Annual Meeting of Stockholders and Proxy
Statement.
While stockholders may exercise their right to vote their shares in
person, we recognize that many stockholders may not be able to attend the
Annual Meeting. Accordingly, we have enclosed a proxy which will enable you
to vote your shares on the issues to be considered at the Annual Meeting even
if you are unable to attend. If you desire to vote in accordance with
management's recommendations, you need only sign, date and return the proxy
in the enclosed postage-paid envelope to record your vote. Otherwise, please
mark the proxy to indicate your vote; date and sign the proxy; and return it
in the enclosed postage-paid envelope. In either case, you should return the
proxy as soon as conveniently possible. This will not limit your right to
vote in person or to attend the Annual Meeting.
Sincerely yours,
George Fellows
President and Chief Executive Officer
<PAGE>
REVLON, INC.
625 MADISON AVENUE
NEW YORK, NEW YORK 10022
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
Revlon, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of Revlon,
Inc., a Delaware corporation (the "Company"), will be held at 10:00 a.m.,
local time, on Tuesday, April 7, 1998, at the Company's Research Center, 2121
Route 27, Edison, New Jersey 08818, for the following purposes:
1. To elect all of the members of the Board of Directors of the Company to
serve until the next Annual Meeting and until such directors' successors are
elected and shall have qualified.
2. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for 1998.
3. To transact such other business as may properly come before the Annual
Meeting.
A proxy statement describing the matters to be considered at the Annual
Meeting is attached to this notice. Only stockholders of record at the close
of business on February 18, 1998 (the "Record Date") are entitled to notice
of, and to vote at, the Annual Meeting and at any adjournments thereof. A
list of stockholders entitled to vote at the Annual Meeting will be available
for inspection during normal business hours at the offices of the Company's
Secretary at 625 Madison Avenue, 16th Floor, New York, New York 10022 and at
the Company's Research Center, 2121 Route 27, Edison, New Jersey 08818 at
least ten days prior to the Annual Meeting and will also be available for
inspection at the Annual Meeting.
To ensure that your vote will be counted, please complete, date, sign and
return the enclosed proxy card promptly in the enclosed postage-paid
envelope, whether or not you plan to attend the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Robert K. Kretzman
Senior Vice President, Deputy
General Counsel
and Secretary
March 12, 1998
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND
RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THIS WILL ENSURE
THAT YOUR SHARES ARE VOTED IN ACCORDANCE WITH YOUR WISHES.
<PAGE>
REVLON, INC.
--------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 7, 1998
--------------------
This proxy statement is being furnished by and on behalf of the Board of
Directors of Revlon, Inc. (the "Company") in connection with the solicitation
of proxies to be voted at the Annual Meeting of Stockholders to be held at 10
a.m., local time, on Tuesday, April 7, 1998, at the Company's Research
Center, 2121 Route 27, Edison, New Jersey 08818, and at any adjournments
thereof. This proxy statement and the enclosed proxy card are first being
sent to stockholders on or about March 12, 1998.
At the Annual Meeting, stockholders will be asked to (1) elect the
following persons as directors of the Company until the Company's next Annual
Meeting and until such directors' successors are elected and shall have
qualified: Ronald O. Perelman, Donald G. Drapkin, Meyer Feldberg, George
Fellows, William J. Fox, Howard Gittis, Morton L. Janklow, Vernon E. Jordan,
Henry A. Kissinger, Edward J. Landau, Jerry W. Levin, Linda Gosden Robinson,
Terry Semel and Martha Stewart; (2) ratify the selection of KPMG Peat Marwick
LLP as the Company's independent auditors for 1998 and (3) take such other
action as may properly come before the Annual Meeting or any adjournments
thereof.
The principal executive offices of the Company are located at 625 Madison
Avenue, New York, New York 10022 and the telephone number is (212) 527-4000.
SOLICITATION AND VOTING OF PROXIES; REVOCATION
All proxies duly executed and received by the Company, unless such proxies
have been previously revoked, will be voted on all matters presented at the
Annual Meeting in accordance with the instructions given therein by the
person executing such proxy or, in the absence of such instructions, will be
voted FOR (1) the election to the Board of Directors of each of the fourteen
nominees identified in this Proxy Statement and (2) the ratification of the
selection of KPMG Peat Marwick LLP as the Company's independent auditors for
1998. The Company has no knowledge of any other matters to be brought before
the meeting. The deadline for receipt by the Secretary of the Company of
stockholder proposals for inclusion at the Annual Meeting was November 10,
1997, and no proposals were so received. However, if any other matters are
properly presented before the Annual Meeting for action, in the absence of
other instructions it is intended that the persons named on the proxy card
and acting thereunder will vote in accordance with their best judgment on
such matters.
The submission of a signed proxy will not affect a stockholder's right to
attend, or to vote in person at, the Annual Meeting. Stockholders who execute
a proxy may revoke it at any time before it is voted by filing a written
revocation with the Secretary of the Company at 625 Madison Avenue, 16th
Floor, New York, New York 10022 Attention: Secretary, by executing a proxy
bearing a later date or by attending the Annual Meeting and voting in person.
The accompanying form of proxy is being solicited on behalf of the Board
of Directors. Solicitation of proxies may be made by mail and also may be
made by personal interview, telephone and facsimile transmission and by
directors, officers and employees of the Company without special compensation
therefor. The Company expects to reimburse banks, brokers and other persons
for their reasonable out-of-pocket expenses incurred in handling proxy
materials for beneficial owners.
RECORD DATE; VOTING RIGHTS
Only holders of record of shares of the Company's Class A common stock,
par value $.01 per share ("Class A Common Stock"), and Class B common stock,
par value $.01 per share ("Class B Common Stock" and, together with the Class
A Common Stock, the "Common Stock"), at the close of business on February 18,
1998 (the "Record Date") will be entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. On the Record Date, there were
issued and outstanding 19,888,375 shares
1
<PAGE>
of Class A Common Stock, each of which is entitled to one vote, and
31,250,000 shares of Class B Common Stock, each of which is entitled to ten
votes. Of that total, 11,250,000 shares of Class A Common Stock (or
approximately 56.6% of the outstanding shares of Class A Common Stock) and
all of the shares of Class B Common Stock, which together represent 97.4% of
the combined voting power of the outstanding shares of Common Stock, are
beneficially owned by MacAndrews & Forbes Holdings Inc. ("MacAndrews
Holdings"), a corporation wholly owned indirectly through Mafco Holdings Inc.
("Mafco Holdings" and, collectively with MacAndrews Holdings, "MacAndrews &
Forbes") by Ronald O. Perelman, the Chairman of the Executive Committee of
the Board of Directors of the Company. The presence in person or by duly
executed proxy of the holders of a majority in total number of votes of the
issued and outstanding shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum in order to transact business.
MacAndrews & Forbes has informed the Company that it will vote FOR (1) the
election to the Board of Directors of each of the fourteen nominees
identified in this Proxy Statement and (2) the ratification of the selection
of KPMG Peat Marwick LLP as the Company's independent auditors for 1998.
Accordingly, the affirmative vote of MacAndrews & Forbes is sufficient,
without the concurring vote of any other stockholder of the Company, to
approve and adopt each of the proposals to be considered at the Annual
Meeting.
ELECTION OF DIRECTORS
The Board of Directors of the Company, pursuant to the By-laws of the
Company, has fixed the number of directors at fourteen. All of the Company's
fourteen directors will be elected at the Annual Meeting to serve until the
next succeeding Annual Meeting of the Company and until their successors are
elected and shall have qualified. All of the nominees are currently members
of the Board of Directors. All nominees, if elected, are expected to serve
until the next succeeding Annual Meeting. The proxies solicited hereby will
be voted FOR the election of the nominees listed herein.
The Board of Directors has been informed that all of the nominees are
willing to serve as directors, but if any of them should decline or be unable
to act as a director, the individuals named in the proxies will vote for the
election of such other person or persons as they, in their discretion, may
choose. The Board of Directors has no reason to believe that any such
nominees will be unable or unwilling to serve.
The election to the Board of Directors of each of the fourteen nominees
identified in this Proxy Statement will require the affirmative vote of a
plurality of the votes cast by the holders of shares of Common Stock present
in person or represented by proxy at the Annual Meeting and entitled to vote.
In tabulating the vote, abstentions and broker non-votes will be disregarded
and have no effect on the outcome of the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE ELECTION TO THE BOARD OF DIRECTORS OF EACH OF THE FOURTEEN NOMINEES
IDENTIFIED BELOW.
NOMINEES FOR ELECTION AS DIRECTORS
The name, age, principal occupation for the last five years, selected
biographical information and period of service as a director of the Company
of each of the nominees for election as a director are set forth below.
Information regarding the nominees is as of February 13, 1998.
MR. PERELMAN (55) has been Chairman of the Executive Committee of the
Board of the Company and of the Company's wholly owned subsidiary Revlon
Consumer Products Corporation ("Products Corporation") since November 1995,
and a Director of the Company and of Products Corporation since their
respective formations in 1992. Mr. Perelman was Chairman of the Board of the
Company and of Products Corporation from their respective formations in 1992
until November 1995. Mr. Perelman has been Chairman of the Board and Chief
Executive Officer of Mafco Holdings Inc. ("Mafco Holdings") and MacAndrews
Holdings and various of its affiliates for more than the past five years. Mr.
Perelman also is Chairman of the Executive Committees of the Boards of The
Coleman Company, Inc. ("Coleman"), Consolidated Cigar Holdings Inc. ("Cigar
Holdings") and M&F Worldwide Corp. ("M&F Worldwide") and Chairman of the
Board of Meridian Sports Incorporated ("Meridian"). Mr. Perelman is a
Director of the following corporations which file reports pursuant to the
Securities Exchange Act of 1934, as amended
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<PAGE>
(the "Exchange Act"): California Federal Bank, a Federal Savings Bank ("Cal
Fed"), Cigar Holdings, CLN Holdings Inc. ("CLN"), Coleman, Coleman Worldwide
Corporation ("Coleman Worldwide"), Consolidated Cigar Corporation
("Consolidated Cigar"), First Nationwide Holdings Inc. ("FN Holdings"), First
Nationwide (Parent) Holdings Inc. ("First Nationwide Parent"), M&F Worldwide,
Meridian, Products Corporation and REV Holdings Inc. ("REV Holdings"). (On
December 27, 1996, Marvel Entertainment Group, Inc. ("Marvel"), Marvel
Holdings Inc. ("Marvel Holdings"), Marvel (Parent) Holdings Inc. ("Marvel
Parent") and Marvel III Holdings Inc. ("Marvel III"), of which Mr. Perelman
was a Director on such date, and several subsidiaries of Marvel filed
voluntary petitions for reorganization under Chapter 11 of the United States
Bankruptcy Code.)
MR. FELLOWS (55) has been President and Chief Executive Officer of the
Company and of Products Corporation since January 1997. He was President and
Chief Operating Officer of the Company and Products Corporation from November
1995 until January 1997 and has been a Director of the Company since November
1995 and a Director of Products Corporation since September 1994. Mr. Fellows
was Senior Executive Vice President of the Company and of Products
Corporation and President and Chief Operating Officer of the Company's
Consumer Group from February 1993 until November 1995. From 1989 through
January 1993, he was a senior executive officer of Mennen Corporation and
then Colgate-Palmolive Company, which acquired Mennen Corporation in 1992.
From 1986 to 1989 he was Senior Vice President of Revlon Holdings Inc.
("Holdings"). Mr. Fellows is a Director of The Cosmetic Center, Inc.
("Cosmetic Center"), Products Corporation and VF Corporation, each of which
files reports pursuant to the Exchange Act.
MR. LEVIN (53) has been Chairman of the Board of the Company and of
Products Corporation since November 1995 and a Director of the Company and of
Products Corporation since their respective formations in 1992. Mr. Levin was
Chief Executive Officer of the Company and of Products Corporation from their
respective formations in 1992 until January 1997 and President of the Company
and of Products Corporation from their respective formations in 1992 until
November 1995. Mr. Levin has been Executive Vice President of MacAndrews
Holdings since March 1989. Mr. Levin has been Chairman of the Board and Chief
Executive Officer of Coleman since February 1997 and has been Chairman of the
Board of Cosmetic Center since April 1997. For 15 years prior to joining
MacAndrews Holdings, he held various senior executive positions with The
Pillsbury Company. Mr. Levin is a Director of the following corporations
which file reports pursuant to the Exchange Act: Coleman, Coleman Worldwide,
Cosmetic Center, Ecolab, Inc., U.S. Bancorp, Inc., Meridian and Products
Corporation.
MR. FOX (41) was appointed President, Strategic and Corporate Development,
Revlon Worldwide, of the Company and of Products Corporation and Chief
Executive Officer, Revlon Technologies in January 1998. He has been Senior
Executive Vice President of the Company and of Products Corporation since
January 1997. Mr. Fox was Chief Financial Officer of the Company and of
Products Corporation from their respective formations in 1992 until January
1998 and was also Executive Vice President of the Company and of Products
Corporation from their respective formations in 1992 until January 1997. Mr.
Fox was elected as a Director of the Company in November 1995 and of Products
Corporation in September 1994. He has been Senior Vice President of
MacAndrews Holdings since August 1990. He was Vice President of MacAndrews
Holdings from February 1987 to August 1990 and was Treasurer of MacAndrews
Holdings from February 1987 to September 1992. Prior to February 1987, he was
Vice President and Assistant Treasurer of MacAndrews Holdings. Mr. Fox joined
MacAndrews & Forbes Group, Incorporated in 1983 as Assistant Controller,
prior to which time he was a certified public accountant at the international
auditing firm of Coopers & Lybrand. Mr. Fox is Vice Chairman of the Board and
a Director of Cosmetic Center, and a Director of The Hain Food Group, Inc.
and Products Corporation, each of which files reports pursuant to the
Exchange Act.
MR. DRAPKIN (49) has been a Director of the Company and of Products
Corporation since their respective formations in 1992. He has been Vice
Chairman of the Board of MacAndrews Holdings and various of its affiliates
since March 1987. Mr. Drapkin was a partner in the law firm of Skadden, Arps,
Slate, Meagher & Flom for more than five years prior to March 1987. Mr.
Drapkin is a Director of the following corporations which file reports
pursuant to the Exchange Act: Algos Pharmaceutical Corporation, BlackRock
Asset Investors, Cardio Technologies, Inc., Coleman, Coleman Worldwide,
Cosmetic
3
<PAGE>
Center, Genta, Inc., Playboy Enterprises, Inc., Products Corporation, VIMRx
Pharmaceuticals Inc. and Weider Nutrition International, Inc. (On December
27, 1996, Marvel, Marvel Holdings, Marvel Parent and Marvel III, of which Mr.
Drapkin was a Director on such date, and several subsidiaries of Marvel filed
voluntary petitions for reorganization under Chapter 11 of the United States
Bankruptcy Code.)
PROFESSOR FELDBERG (55) has been a Director of the Company since February
1997. Professor Feldberg has been the Dean of Columbia Business School, New
York City, for more than the past five years. Professor Feldberg is a
Director of the following corporations which file reports pursuant to the
Exchange Act: Federated Department Stores, Inc., PRIMEDIA Inc. and Paine
Webber Group, Inc. (28 directorships within such fund complex).
MR. GITTIS (63) has been a Director of the Company and of Products
Corporation since their respective formations in 1992. He has been Vice
Chairman of the Board of MacAndrews Holdings and various of its affiliates
for more than five years. Mr. Gittis is a Director of the following
corporations which file reports pursuant to the Exchange Act: Cal Fed, Cigar
Holdings, CLN, Consolidated Cigar, First Nationwide Parent, FN Holdings,
Jones Apparel Group, Inc., Loral Space & Communications Ltd., M&F Worldwide,
Products Corporation, REV Holdings and Rutherford-Moran Oil Corporation.
MR. JANKLOW (67) has been a Director of the Company since July 1997. He
has been of counsel to Janklow, Newborn & Ashley and Senior Partner of
Janklow & Nesbit Associates, a New York City-based literary agency, since
1989 and Chairman of the Board and Chief Executive Officer of Morton L.
Janklow Associates, Inc., New York City since 1977. Mr. Janklow is also
trustee of the Managed Accounts Services Portfolio Trust/Pace.
MR. JORDAN (62) has been a Director of the Company since June 1996. Mr.
Jordan is a Senior Partner in the Washington, D.C. law firm of Akin, Gump,
Strauss, Hauer & Feld, LLP where he has practiced law since 1982. He is a
Director of the following corporations which file reports pursuant to the
Exchange Act: American Express Company, Bankers Trust Company, Bankers Trust
New York Company, Corning Incorporated, Dow Jones & Company, Inc., J.C.
Penney Company, Inc., Ryder System, Inc., Sara Lee Corporation, Union Carbide
Corporation and Xerox Corporation. He is also trustee of the Ford Foundation
and Howard University.
DR. KISSINGER (74) has been a Director of the Company since June 1996. Dr.
Kissinger has been Chairman of the Board and Chief Executive Officer of
Kissinger Associates, Inc., a New York City-based international consulting
firm, since 1982. Dr. Kissinger is an Advisor to the Board of Directors of
American Express Company, serves as Counselor to the Chase Manhattan Bank and
is a member of its International Advisory Committee. He is Chairman of the
International Advisory Board of American International Group, Inc. and is a
Director of Continental Grain Company, Freeport-McMoran Copper and Gold,
Inc., Gulfstream Aerospace Corporation and Hollinger International Inc., all
of which file reports pursuant to the Exchange Act.
MR. LANDAU (68) has been a Director of the Company since June 1996. Mr.
Landau has been a Senior Partner in the law firm of Wolf, Block, Schorr and
Solis-Cohen LLP (previously Lowenthal, Landau, Fischer & Bring, P.C.) for
more than the past five years. He has been a Director of Products Corporation
since June 1992. Mr. Landau is a Director of Offitbank Investment Fund, Inc.
and Products Corporation, each of which files reports pursuant to the
Exchange Act.
MS. ROBINSON (45) has been a Director of the Company since June 1996. Ms.
Robinson has been Chairman of the Board and Chief Executive Officer of
Robinson Lerer & Montgomery, LLC, a New York City strategic communications
consulting firm, since May 1996. For more than five years prior to May 1996
she was Chairman of the Board and Chief Executive Officer of Robinson Lerer
Sawyer Miller Group, or its predecessors. Ms. Robinson is a Director of VIMRx
Pharmaceuticals Inc. and Group Practice Services Corporation, each of which
files reports pursuant to the Exchange Act, and is also a trustee of New York
University Medical Center.
4
<PAGE>
MR. SEMEL (54) has been a Director of the Company since June 1996. Mr.
Semel has been Chairman of the Board and Co-Chief Executive Officer of the
Warner Bros. Division of Time Warner Entertainment LP ("Warner Brothers"),
Los Angeles, since March 1994 and of Warner Music Group, Los Angeles, since
November 1995. For more than ten years prior to that he was President of
Warner Brothers or its predecessor, Warner Bros. Inc. Mr. Semel is a Director
of Polo Ralph Lauren Corporation, which files reports pursuant to the
Exchange Act.
MS. STEWART (56) has been a Director of the Company since June 1996. Ms.
Stewart is the Chairman of the Board of Martha Stewart Living Omnimedia, LLC,
New York City. She has been an author, founder of the magazine Martha Stewart
Living, creator of a syndicated television series, a syndicated newspaper
column and a catalog company, and a lifestyle consultant and lecturer for
more than the past five years.
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors has an Executive Committee, an Audit Committee and
a Compensation and Stock Plan Committee (the "Compensation Committee").
The Executive Committee consists of Messrs. Perelman, Gittis, Fellows and
Levin. The Executive Committee may exercise all of the powers and authority
of the Board, except as otherwise provided under the Delaware General
Corporation Law. The Executive Committee also serves as the Company's
nominating committee for Board membership. The Audit Committee, consisting of
Mr. Landau, Professor Feldberg and Ms. Robinson, makes recommendations to the
Board of Directors regarding the engagement of the Company's independent
auditors, reviews the plan, scope and results of the audit, and reviews with
the auditors and management the Company's policies and procedures with
respect to internal accounting and financial controls, changes in accounting
policy and the scope of the non-audit services which may be performed by the
Company's independent auditors, among other things. The Audit Committee also
monitors policies to prohibit unethical, questionable or illegal activities
by the Company's employees. The Compensation Committee, consisting of Messrs.
Gittis, Drapkin, Janklow (since July 1997) and Semel, makes recommendations
to the Board of Directors regarding compensation and incentive arrangements
(including performance-based arrangements) for the Chief Executive Officer,
other executive officers, and officers and other key managerial employees of
the Company. The Compensation Committee also considers and recommends awards
of stock options to purchase shares of Class A Common Stock pursuant to the
Revlon, Inc. Amended and Restated 1996 Stock Plan (the "Stock Plan") and
administers the Stock Plan.
During 1997, the Board of Directors held four meetings, the Executive
Committee acted twice by unanimous written consent, the Audit Committee held
five meetings and the Compensation Committee held two meetings and acted five
times by unanimous written consent. During 1997, all Directors attended 75%
or more of the meetings of the Board of Directors and of the Committees of
which they were members.
COMPENSATION OF DIRECTORS
Directors who currently are not receiving compensation as officers or
employees of the Company or any of its affiliates are paid an annual retainer
fee of $25,000, payable in quarterly installments, and a fee of $1,000 for
each meeting of the Board of Directors or any committee thereof they attend.
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RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected, subject to ratification by the
stockholders, KPMG Peat Marwick LLP to audit the accounts of the Company for
the fiscal year ending December 31, 1998.
KPMG Peat Marwick LLP has audited the consolidated financial statements of
the Company and its predecessors for more than the past five years.
Representatives of KPMG Peat Marwick LLP will be present at the 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.
The ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent auditors for 1998 will require the affirmative vote of
a majority of the total number of votes of outstanding shares of Common Stock
present in person or represented by proxy at the Annual Meeting and entitled
to vote. In determining whether the proposal has received the requisite
number of affirmative votes, abstentions and broker non-votes will be counted
and will have the same effect as a vote against the proposal. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION
OF THE SELECTION OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR 1998.
6
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EXECUTIVE OFFICERS
The following table sets forth certain information concerning each of the
executive officers of the Company as of February 13, 1998.
<TABLE>
<CAPTION>
NAME POSITION
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<S> <C>
George Fellows President and Chief Executive Officer
Jerry W. Levin Chairman of the Board
William J. Fox Senior Executive Vice President
Frank J. Gehrmann Executive Vice President and Chief Financial Officer
Wade H. Nichols III Executive Vice President and General Counsel
M. Katherine Dwyer Senior Vice President
Ronald H. Dunbar Senior Vice President
</TABLE>
The following sets forth the age, positions held with the Company and
selected biographical information for the executive officers of the Company
who are not directors. Biographical information with respect to Messrs.
Fellows, Levin and Fox is set forth above under the caption "Nominees for
Election as Directors."
MR. GEHRMANN (43) was elected as Executive Vice President and Chief
Financial Officer of the Company and of Products Corporation in January 1998.
From January 1997 until January 1998 he had been Vice President of the
Company and of Products Corporation. Prior to January 1997 he served in
various appointed senior executive positions for the Company and for Products
Corporation, including Executive Vice President and Chief Financial Officer
of Products Corporation's Operating Groups from August 1996 to January 1998,
Executive Vice President and Chief Financial Officer of Products
Corporation's Worldwide Consumer Products business from January 1995 to
August 1996, and Executive Vice President and Chief Financial Officer of
Products Corporation's Revlon North America unit from September 1993 to
January 1994. From 1983 through September 1993, Mr. Gehrmann held positions
of increasing responsibility in the financial organizations of Mennen
Corporation and the Colgate-Palmolive Company, which acquired Mennen
Corporation in 1992. Prior to 1983, Mr. Gehrmann served as a certified public
accountant at the international accounting firm of Ernst & Young.
MR. NICHOLS (55) has been Executive Vice President and General Counsel of
the Company and of Products Corporation since January 1998 and served as
Senior Vice President and General Counsel of the Company and Products
Corporation from their respective formations in 1992 until January 1998. Mr.
Nichols has been Vice President of MacAndrews Holdings since 1988. Mr.
Nichols is a Director of Cosmetic Center, which files reports pursuant to the
Exchange Act.
MS. DWYER (48) was appointed President of Products Corporation's United
States Consumer Products business in January 1998. Ms. Dwyer was elected
Senior Vice President of the Company and of Products Corporation in December
1996. Prior to December 1996 she served in various appointed senior executive
positions for the Company and for Products Corporation, including President
of Products Corporation's United States Cosmetics unit from November 1995 to
December 1996 and Executive Vice President and General Manager of Products
Corporation's Mass Cosmetics unit from June 1993 to November 1995. From 1991
to 1993, Ms. Dwyer was Vice President, Marketing, of Clairol, a division of
Bristol-Myers Squibb Company. Prior to 1991, she served in various senior
positions for Victoria Creations, Avon Products Inc., Cosmair, Inc. and The
Gillette Company. Ms. Dwyer is a Director of WestPoint Stevens Inc. and, as
of February 24, 1998, Reebok International Ltd., each of which files reports
pursuant to the Exchange Act.
MR. DUNBAR (60) has been Senior Vice President, Human Resources of the
Company and of Products Corporation since their respective formations in
1992. He was elected Senior Vice President, Human Resources of Holdings in
July 1991. Mr. Dunbar was Vice President and General Manager of Arnold Menn
and Associates, a New York City career management consulting and executive
outplacement firm, from 1989 to 1991 and Executive Vice President and Chief
Human Resources Officer of Ryder System, Inc., a highway transportation firm,
from 1978 to 1989. Prior to that, Mr. Dunbar served in senior executive human
resources positions at Xerox Corporation and Ford Motor Company.
7
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EXECUTIVE COMPENSATION
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 Chief Executive Officer of the Company during 1997 and the four
most highly paid executive officers, other than the Chief Executive Officer,
who served as executive officers of the Company as of December 31, 1997
(collectively, the "Named Executive Officers"), for services rendered in all
capacities to the Company and its subsidiaries during such periods.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION (A) AWARDS
---------------------------------------- --------------
OTHER ANNUAL SECURITIES ALL OTHER
SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) OPTIONS ($)
- ----------------------------- ------ ----------- ----------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
George Fellows .............. 1997 1,250,000 1,250,000 22,191 170,000 30,917
President and Chief 1996 1,025,000 870,000 15,242 120,000 4,500
Executive Officer (b) 1995 841,667 531,700 68,559 0 4,500
Jerry W. Levin............... 1997 825,000 0 20,811 170,000 160,871
Chairman of the Board (c) 1996 1,500,000 1,500,000 93,801 170,000 307,213
1995 1,450,000 1,450,000 42,651 0 308,002
William J. Fox............... 1997 825,000 772,300 55,159 50,000 71,590
Senior Executive Vice 1996 750,000 598,600 50,143 50,000 56,290
President and Chief 1995 660,000 455,000 54,731 0 56,290
Financial Officer (d)
M. Katherine Dwyer........... 1997 500,000 800,000 5,948 125,000 18,377
Senior Vice President (e) 1996 500,000 326,100 90,029 45,000 4,500
Carlos Colomer............... 1997 700,000 330,700 0 37,000 62,645
Executive Vice President (f) 1996 700,000 192,600 0 37,000 3,062
1995 600,000 135,200 0 0 0
</TABLE>
- ------------
(a) The amounts shown in Annual Compensation for 1997, 1996 and 1995
reflect salary, bonus and other annual compensation awarded to,
earned by or paid to the persons listed for services rendered to the
Company and its subsidiaries. The Company has a bonus plan (the
"Executive Bonus Plan") in which executives participate (including
the Chief Executive Officer and the other Named Executive Officers).
The Executive Bonus Plan provides for payment of cash compensation
upon the achievement of predetermined corporate and/or business unit
and individual performance goals during the calendar year established
pursuant to the Executive Bonus Plan or by the Compensation
Committee.
(b) Mr. Fellows became Chief Executive Officer of the Company in January
1997. The amount shown for Mr. Fellows under Other Annual
Compensation for 1997 reflects payments in respect of gross ups for
taxes on imputed income arising out of personal use of a
Company-provided automobile and for taxes on imputed income arising
out of premiums paid or reimbursed by the Company in respect of life
insurance. The amount shown for Mr. Fellows under All Other
Compensation for 1997 reflects $11,117 in respect of life insurance
premiums, $4,800 in respect of matching contributions under the
Revlon Employees' Savings, Profit Sharing and Investment Plan (the
"401(k) Plan") and $15,000 in respect of matching contributions under
the Revlon Excess Savings Plan for Key Employees (the "Excess Plan").
The amount shown for Mr. Fellows under Other Annual Compensation for
1996 reflects payments in respect of gross ups for taxes on imputed
income arising out of personal use of a Company-provided automobile
and for taxes on imputed income arising out of premiums paid or
reimbursed by the Company in respect of life insurance. The amount
shown for Mr. Fellows under All Other Compensation for 1996 reflects
matching contributions under the 401(k) Plan. The amount shown for
Mr. Fellows under Other Annual Compensation for 1995 includes $43,251
in respect of membership fees and related expenses for personal use
of a health and country club and $9,458 in respect of gross ups for
8
<PAGE>
taxes on imputed income arising out of personal use of a
Company-provided automobile. The amount shown for Mr. Fellows under
All Other Compensation for 1995 reflects matching contributions under
the 401(k) Plan.
(c) Mr. Levin was Chief Executive Officer of the Company during 1995,
1996 and January 1997 and Chairman of the Board during the remainder
of 1997. The amount shown for Mr. Levin under Other Annual
Compensation for 1997 reflects payments in respect of gross ups for
taxes on imputed income arising out of personal use of a
Company-provided automobile. The amount shown for Mr. Levin under All
Other Compensation for 1997 reflects $150,971 in respect of
split-dollar life insurance premiums (under which the Company is
entitled to reimbursement of such premiums or the cash surrender
value of such insurance, whichever is less), $2,400 in respect of
matching contributions under the 401(k) Plan and $7,500 in respect of
matching contributions under the Excess Plan. The amount shown for
Mr. Levin under Other Annual Compensation for 1996 includes $26,400
in respect of personal use of a Company-provided automobile, payments
in respect of gross ups for taxes on imputed income arising out of
personal use of such Company-provided automobile and payments for
taxes on imputed income arising out of premiums paid or reimbursed by
the Company in respect of life insurance. The amount shown for Mr.
Levin under All Other Compensation for 1996 reflects $302,713 in
respect of life insurance premiums and $4,500 in respect of matching
contributions under the 401(k) Plan. The amount shown for Mr. Levin
under Other Annual Compensation for 1995 reflects payments in respect
of gross ups for taxes on imputed income arising out of personal use
of a Company-provided automobile and for taxes on imputed income
arising out of premiums paid or reimbursed by the Company in respect
of life insurance. The amount shown for Mr. Levin under All Other
Compensation for 1995 reflects $303,502 in respect of life insurance
premiums and $4,500 in respect of matching contributions under the
401(k) Plan.
(d) Mr. Fox became Senior Executive Vice President of the Company in
January 1997. Mr. Fox served as Chief Financial Officer of the
Company during 1995, 1996 and 1997. In January 1998 Mr. Fox was
appointed President, Strategic and Corporate Development, Revlon
Worldwide, and Mr. Gehrmann was elected Chief Financial Officer of
the Company. The amount shown for Mr. Fox under Bonus for 1997
includes an additional payment of $125,000 based upon Mr. Fox's
performance. The amount shown for Mr. Fox under Other Annual
Compensation for 1997 reflects payments in respect of gross ups for
taxes on imputed income arising out of personal use of a
Company-provided automobile and payments for taxes on imputed income
arising out of premiums paid or reimbursed by the Company in respect
of life insurance. The amount shown for Mr. Fox under All Other
Compensation for 1997 reflects $51,790 in respect of life insurance
premiums, $4,800 in respect of matching contributions under the
401(k) Plan and $15,000 in respect of matching contributions under
the Excess Plan. The amount shown for Mr. Fox under Other Annual
Compensation for 1996 reflects payments in respect of gross ups for
taxes on imputed income arising out of personal use of a
Company-provided automobile and for taxes on imputed income arising
out of premiums paid or reimbursed by the Company in respect of life
insurance. The amount shown for Mr. Fox under All Other Compensation
for 1996 reflects $51,790 in respect of life insurance premiums and
$4,500 in respect of matching contributions under the 401(k) Plan.
The amount shown for Mr. Fox under Other Annual Compensation for 1995
reflects payments in respect of gross ups for taxes on imputed income
arising out of personal use of a Company-provided automobile and for
taxes on imputed income arising out of premiums paid or reimbursed by
the Company in respect of life insurance. The amount shown for Mr.
Fox under All Other Compensation for 1995 reflects $51,790 in respect
of life insurance premiums and $4,500 in respect of matching
contributions under the 401(k) Plan.
(e) Ms. Dwyer became an executive officer of the Company in December
1996. The amount shown for Ms. Dwyer under Bonus for 1997 includes an
additional payment of $300,000 pursuant to her employment agreement.
The amount shown for Ms. Dwyer under Other Annual Compensation for
1997 reflects payments in respect of gross ups for taxes on imputed
income arising out of personal use of a Company-provided automobile
and payments for taxes on imputed income arising out of premiums paid
or reimbursed by the Company in respect of life insurance. The amount
shown for Ms. Dwyer under All Other Compensation for 1997 reflects
$4,800 in respect of matching contributions under the 401(k) Plan,
$10,857 in respect of matching contributions under the Excess Plan
and $2,720 in respect of life insurance premiums. The amount shown
for Ms. Dwyer under Other Annual Compensation for 1996 reflects
$57,264 in expense reimbursements and payments in respect of gross
ups for taxes on imputed income arising out of personal use of a
Company-provided automobile. The amount shown for Ms. Dwyer under All
Other Compensation for 1996 reflects matching contributions under the
401(k) Plan.
(f) Mr. Colomer was an executive officer of the Company during 1995, 1996
and 1997. The amount shown for Mr. Colomer under Bonus for 1997
includes $148,815 which is being deferred at Mr. Colomer's election.
The amount shown for Mr. Colomer under All Other Compensation for
1997 reflects $59,583 in respect of an expatriate travel and hardship
allowance and $3,062 in respect of life insurance premiums. The
amount shown for Mr. Colomer under All Other Compensation for 1996
reflects life insurance premiums.
9
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
During 1997, the following grants of stock options were made pursuant to
the Stock Plan to the executive officers named in the Summary Compensation
Table:
<TABLE>
<CAPTION>
GRANT
DATE
INDIVIDUAL GRANTS VALUE (A)
----------------------------------------------------------------- ------------
PERCENT OF
NUMBER OF TOTAL OPTIONS GRANT
SECURITIES UNDERLYING GRANTED TO EXERCISE DATE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE VALUE $
- ----------------------------- --------------------- --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
George Fellows............... 170,000 11% $31.375 1/08/07 $2,703,255
President and Chief
Executive Officer (b)
Jerry W. Levin............... 170,000 11% $31.375 1/08/07 $2,703,255
Chairman of the Board (b)
William J. Fox............... 50,000 3% $31.375 1/08/07 $ 795,075
Senior Executive Vice
President and Chief
Financial Officer (b)
M. Katherine Dwyer........... 125,000 8% $31.375 1/08/07 $1,987,688
Senior Vice President (b)
Carlos Colomer............... 37,000 2% $31.375 1/08/07 $ 588,356
</TABLE>
Executive Vice President
The grants made during 1997 under the Stock Plan to Messrs. Fellows,
Levin, Fox and Colomer and Ms. Dwyer were made on January 9, 1997 and consist
of non-qualified options having a term of 10 years. The options vest 25% each
year beginning on the first anniversary of the grant date and will become
100% vested on the fourth anniversary of the grant date and have an exercise
price equal to the New York Stock Exchange ("NYSE") closing price per share
of the Class A Common Stock on the grant date, as indicated in the table
above. During 1997, the Company also granted an option to purchase 300,000
shares of the Company's Class A Common Stock pursuant to the Stock Plan to
Mr. Perelman, Chairman of the Executive Committee. The option will vest in
full on the fifth anniversary of the grant date and has an exercise price of
$34.875, the NYSE closing price per share of the Class A Common Stock on
April 4, 1997, the date of the grant.
- ------------
(a) Present values were calculated using the Black-Scholes option pricing
model. The model as applied used the grant date of January 9, 1997.
The model also assumes (i) a risk-free rate of return of 6.41%, which
was the rate as of the grant date for the U.S. Treasury Zero Coupon
Bond issues with a remaining term similar to the expected term of the
options, (ii) stock price volatility of 39.34% based upon the
volatility of the Company's stock price, (iii) a constant dividend
rate of zero percent and (iv) that the options normally would be
exercised on the final day of their seventh year after grant. No
adjustments to the theoretical value were made to reflect the waiting
period, if any, prior to vesting of the stock options or the
transferability (or restrictions related thereto) of the stock
options.
(b) Mr. Fellows served as President during all of 1997 and became Chief
Executive Officer in January 1997. Mr. Levin served as Chairman of
the Board during all of 1997 and as Chief Executive Officer during
January 1997. Mr. Fox was appointed President, Strategic and
Corporate Development, Revlon Worldwide in January 1998. Ms. Dwyer
was appointed President of Products Corporation's United States
Consumer Products business in January 1998.
10
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following chart shows the number of stock options exercised during
1997 and the 1997 year-end value of the stock options held by the executive
officers named in the Summary Compensation Table:
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED IN-THE-
NUMBER OF SECURITIES MONEY OPTIONS
UNDERLYING UNEXERCISED AT FISCAL YEAR-END
SHARES OPTIONS AT FISCAL EXERCISABLE/
ACQUIRED VALUE YEAR-END (#) UNEXERCISABLE
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE (A)($)
- ------------------------ --------------- ------------ ------------------------- -------------------
<S> <C> <C> <C> <C>
George Fellows .......... 0 0 0/290,000 0/2,026,875
President and Chief
Executive Officer
Jerry W. Levin .......... 0 0 0/340,000 0/2,592,500
Chairman of the Board
William J. Fox .......... 0 0 0/100,000 0/762,500
Senior Executive Vice
President and
Chief Financial
Officer
M. Katherine Dwyer ...... 0 0 0/170,000 0/1,001,250
Senior Vice President
Carlos Colomer .......... 0 0 0/74,000 0/564,250
Executive Vice
President .............
</TABLE>
- ------------
(a) Amounts shown represent the market value of the underlying shares of
Class A Common Stock at year-end calculated using the December 31,
1997 NYSE closing price per share of Class A Common Stock of $35 5/16
minus the exercise price of the stock option. The actual value, if
any, an executive may realize is dependent upon the amount by which
the market price of shares of Class A Common Stock exceeds the
exercise price per share when the stock options are exercised. The
actual value realized may be greater or less than the value shown in
the table.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Each of the Chief Executive Officer and the other Named Executive Officers
entered into an executive employment agreement with the Company's wholly
owned subsidiary, Products Corporation (except Mr. Colomer, who entered into
an executive employment agreement with a subsidiary of Products Corporation),
which became effective upon consummation of the Company's initial public
offering on March 5, 1996 (the "Offering"), providing for their continued
employment. Effective January 1, 1997, Mr. Fellows' employment agreement was
amended to provide that he will serve as the President and Chief Executive
Officer of the Company at a base salary of $1,250,000 for 1997; $1,350,000
for 1998; $1,450,000 for 1999; $1,550,000 for 2000 and $1,700,000 for 2001
and thereafter, and that management recommend to the Compensation Committee
that he be granted options to purchase 170,000 shares of Class A Common Stock
each year during the term of the agreement. At any time after January 1,
2001, the Company may terminate the term of Mr. Fellows' agreement by 12
months' prior notice of non-renewal. In connection with his assumption of
management responsibility for an affiliate, Mr. Levin and the Company agreed
to terminate his employment agreement as of June 30, 1997, with Mr. Levin
continuing as Chairman of the Board of the Company (the "Levin Amendment").
Pursuant to the Levin Amendment, Mr. Levin received a base salary of $825,000
for services provided to the Company in 1997. Effective January 1, 1998, Mr.
Colomer's employment agreement was amended to provide that he will serve as
Chairman, Revlon Professional Worldwide Strategic Committee and Chairman,
Revlon Professional International at a base salary of not less than $700,000
for 1998 and thereafter, and that management recommend to the Compensation
Committee that he be granted options to purchase 37,000 shares of Class A
Common Stock each year during the term of the agreement. Mr. Colomer's
agreement further provides that at any time on or after the second
anniversary of the effective date of his agreement, the Company may terminate
the term by 12 months' prior notice of non-renewal. Mr. Fox's agreement
provides for a base
11
<PAGE>
salary of not less than $750,000 and that management recommend to the
Compensation Committee that Mr. Fox be granted options to purchase 50,000
shares of Class A Common Stock each year during the term of the agreement,
and further provides that at any time on or after the second anniversary of
the effective date of his agreement, the Company may terminate the term by 12
months' prior notice of non-renewal. Effective January 1, 1998, Mr. Fox was
appointed President, Strategic and Corporate Development, Revlon Worldwide,
and Chief Executive Officer, Revlon Technologies. Effective January 1, 1998,
Ms. Dwyer's employment agreement was amended to provide that she will serve
as President of Products Corporation's United States Consumer Products
business at a base salary of $875,000 per annum for 1998 to be increased as
of January 1 of each year by not less than $75,000, and that management
recommend to the Compensation Committee that she be granted options to
purchase 75,000 shares of Class A Common Stock each year during the term of
the agreement. At any time on or after the fourth anniversary of the
effective date of her agreement, the Company may terminate Ms. Dwyer's
agreement by 12 months' prior notice of non-renewal. All of the agreements
currently in effect provide for participation in the Executive Bonus Plan,
continuation of life insurance and executive medical insurance coverage in
the event of permanent disability and participation in other executive
benefit plans on a basis equivalent to senior executives of the Company
generally. Pursuant to the Levin Amendment, Mr. Levin is entitled to
continued disability insurance and life insurance as well as certain other
benefits. The agreements with Messrs. Fellows and Colomer and Ms. Dwyer
provide for Company-paid supplemental term life insurance during employment
in the amount of three times base salary, while the terms of the agreements
with Mr. Levin and Mr. Fox provide that, in lieu of any participation in
Company-paid pre-retirement life insurance coverage, Products Corporation
will pay premiums and gross ups for taxes thereon in respect of, in the case
of Mr. Levin, whole life insurance policies on his life in the amount of
$14,100,000 under a split dollar arrangement pursuant to which Products
Corporation would be repaid the amount of premiums it paid up to the cash
surrender value of the policies from insurance proceeds payable under the
policies and, in the case of Mr. Fox, a whole life insurance policy on his
life in the amount of $5,000,000 under an arrangement providing for all
insurance proceeds to be paid to the designated beneficiary under such
policy. The agreements currently in effect provide that in the event of
termination of the term of the relevant executive employment agreement by
Products Corporation (otherwise than for "cause" as defined in the employment
agreements or disability) or by the executive for failure of the Compensation
Committee to adopt and implement the recommendations of management with
respect to stock option grants, the executive would be entitled to severance
pursuant to and subject to the terms of the Executive Severance Policy as in
effect on January 1, 1997 (see "--Executive Severance Policy") (or, at his or
her election, to continued base salary payments throughout the term in the
case of Mr. Fellows and Ms. Dwyer). In addition, the employment agreement
with Mr. Fellows provides that if he remains continuously employed by
Products Corporation or its affiliates until age 60, then upon any subsequent
retirement he will be entitled to a supplemental pension benefit in a
sufficient amount so that his annual pension benefit from all qualified and
non-qualified pension plans of Products Corporation and its affiliates
(expressed as a straight life annuity) equals $500,000. Upon any earlier
retirement with Products Corporation's consent or any earlier termination of
employment by Products Corporation otherwise than for "good reason" (as
defined in the Executive Severance Policy), Mr. Fellows will be entitled to a
reduced annual payment in an amount equal to the product of multiplying
$28,540 by the number of anniversaries, as of the date of retirement or
termination, of Mr. Fellows' fifty-third birthday (but in no event more than
would have been payable to Mr. Fellows under the foregoing provision had he
retired at age 60). In each case, Products Corporation reserves the right to
treat Mr. Fellows as having deferred payment of pension for purposes of
computing such supplemental payments.
As of December 31, 1997, 1996, and 1995, Mr. Colomer had a loan
outstanding from the Company's subsidiary in Spain in the amount of 25.0
million Spanish pesetas (approximately $165,050 U.S. dollar equivalent as of
December 31, 1997) dating from 1991 pursuant to a management retention
program grandfathered under a 1992 change in the Spanish tax law which
currently covers certain executives of such subsidiary, including Mr.
Colomer. Pursuant to this management retention program, outstanding loans do
not bear interest but an amount equal to the one-year government bond
interest rate in effect at the beginning of the year is deducted from the
executives' annual compensation, and loans must be
12
<PAGE>
repaid in full upon termination of employment. The amount deducted from Mr.
Colomer's compensation was 1.4 million Spanish pesetas (approximately $9,210
U.S. dollar equivalent as of December 31, 1997) for 1997; 2.15 million
Spanish pesetas (approximately $16,988 U.S. dollar equivalent as of December
31, 1996) for 1996 and 2.25 million Spanish pesetas (approximately $18,097
U.S. dollar equivalent as of December 31, 1995) for 1995.
EXECUTIVE SEVERANCE POLICY
Products Corporation's Executive Severance Policy, as amended effective
January 1, 1996, provides that upon termination of employment of eligible
executive employees, including the Chief Executive Officer and the other
Named Executive Officers, other than voluntary resignation or termination by
Products Corporation for good reason, in consideration for the execution of a
release and confidentiality agreement and the Company's standard Employee
Agreement as to Confidentiality and Non-Competition (the "Non-Competition
Agreement"), the eligible executive will be entitled to receive, in lieu of
severance under any employment agreement then in effect or under Products
Corporation's basic severance plan, a number of months of severance pay in
semi-monthly installments based upon such executive's grade level and years
of service reduced by the amount of any compensation from subsequent
employment, unemployment compensation or statutory termination payments
received by such executive during the severance period, and, in certain
circumstances, by the actuarial value of enhanced pension benefits received
by the executive, as well as continued participation in medical and certain
other benefit plans for the severance period (or in lieu thereof, upon
commencement of subsequent employment, a lump sum payment equal to the then
present value of 50% of the amount of base salary then remaining payable
through the balance of the severance period). Pursuant to the Executive
Severance Policy, upon meeting the conditions set forth therein, Messrs.
Fellows, Levin, Fox and Colomer and Ms. Dwyer would be entitled to severance
pay equal to two years of base salary at the rate in effect on the date of
employment termination plus continued participation in the medical and dental
plans for two years on the same terms as active employees.
DEFINED BENEFIT PLANS
The following table shows the estimated annual retirement benefits payable
(as of December 31, 1997) at normal retirement age (65) to a person retiring
with the indicated average compensation and years of credited service, on a
straight life annuity basis, after Social Security offset, under the Revlon
Employees' Retirement Plan (the "Retirement Plan"), including amounts
attributable to the Pension Equalization Plan, each as described below:
<TABLE>
<CAPTION>
HIGHEST CONSECUTIVE ESTIMATED ANNUAL STRAIGHT LIFE ANNUITY BENEFITS AT RETIREMENT
FIVE-YEAR AVERAGE WITH INDICATED YEARS OF CREDITED SERVICE (A)
COMPENSATION -------------------------------------------------------------
DURING FINAL TEN YEARS 15 20 25 30 35
- ---------------------- --------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
600,000 $151,974 $202,632 $253,290 $303,948 $303,948
700,000 177,974 237,299 296,623 355,948 355,948
800,000 203,974 271,965 339,957 407,948 407,948
900,000 229,974 306,632 383,290 459,948 459,948
1,000,000 255,974 341,299 426,623 500,000 500,000
1,100,000 281,974 375,965 469,957 500,000 500,000
1,200,000 307,974 410,632 500,000 500,000 500,000
1,300,000 333,974 445,299 500,000 500,000 500,000
1,400,000 359,974 479,965 500,000 500,000 500,000
1,500,000 385,974 500,000 500,000 500,000 500,000
2,000,000 500,000 500,000 500,000 500,000 500,000
2,500,000 500,000 500,000 500,000 500,000 500,000
</TABLE>
- ------------
(a) The normal form of benefit for the Retirement Plan and the Pension
Equalization Plan is a straight life annuity.
13
<PAGE>
The Retirement Plan is intended to be a tax qualified defined benefit
plan. Retirement Plan benefits are a function of service and final average
compensation. The Retirement Plan is 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. Except
as otherwise indicated, credited service only includes all periods of
employment with the Company or a subsidiary prior to retirement. The base
salaries and bonuses of each of the Chief Executive Officer and the other
Named Executive Officers are set forth in the Summary Compensation Table
under columns entitled "Salary" and "Bonus," respectively.
The Employee Retirement Income Security Act of 1974, as amended, places
certain maximum limitations upon the annual benefit payable under all
qualified plans of an employer to any one individual. In addition, the
Omnibus Budget Reconciliation Act of 1993 limits the annual amount of
compensation that can be considered in determining the level of benefits
under qualified plans. The Pension Equalization Plan, as amended effective
January 1, 1996, is a non-qualified benefit arrangement 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 be payable
under the Retirement Plan but for such limitations, up to a combined maximum
annual straight life annuity benefit at age 65 under the Retirement Plan and
the Pension Equalization Plan of $500,000. Benefits provided under the
Pension Equalization Plan are conditioned on the participant's compliance
with his or her Non-Competition Agreement and, in any case, on the
participant not competing with Products Corporation for one year after
termination of employment.
The number of years of credited service under the Retirement Plan and the
Pension Equalization Plan as of January 1, 1998 (rounded to full years) for
Mr. Fellows is nine years (which includes credit for prior service with
Holdings), for Mr. Fox is 14 years (which includes credit for service with
MacAndrews Holdings) and for Ms. Dwyer is four years, and as of June 30, 1997
for Mr. Levin is eight years (which includes credit for service with
MacAndrews Holdings). Pursuant to the Levin Amendment, Mr. Levin retains all
benefits under the Retirement Plan and the Pension Equalization Plan accrued
by him as of June 30, 1997. Mr. Colomer does not participate in the
Retirement Plan or the Pension Equalization Plan. Mr. Colomer participates in
the Revlon Foreign Service Employees Pension Plan (the "Foreign Pension
Plan"). The Foreign Pension Plan is a non-qualified defined benefit plan. The
Foreign Pension Plan is designed to provide an employee with 2% of final
average salary for each year of credited service, up to a maximum of 30
years, reduced by the sum of all other Company-provided retirement benefits
and social security or other government-provided retirement benefits.
Credited service includes all periods of employment with the Company or a
subsidiary prior to retirement. Final average salary is defined as average
annual base salary during the five consecutive calendar years in which base
salary was highest out of the last 10 years prior to retirement. The normal
form of payment under the Foreign Pension Plan is a life annuity. Mr.
Colomer's credited service as of January 1, 1998 (rounded to full years)
under the Foreign Pension Plan is 18 years (which includes credit for service
with Holdings).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee (made up of Messrs. Gittis, Drapkin, Janklow
(since July 1997) and Semel) determined compensation of executive officers of
the Company for 1997.
Products Corporation has used an airplane which is owned by a corporation
of which Messrs. Gittis and Drapkin are the sole stockholders. See "Certain
Relationships and Related Transactions -- Other."
14
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report is submitted by the Compensation Committee of the Company's
Board of Directors, which consists of four members. Messrs. Gittis, Drapkin
and Semel have been members of the Compensation Committee during all of 1997,
and Mr. Janklow has been a member of the Compensation Committee since July
31, 1997.
Pursuant to the rules promulgated under the Exchange Act, set forth below
is the report of the Compensation Committee regarding its compensation
policies for 1997 for the Company's executive officers, including the Chief
Executive Officer. The key elements of compensation used by the Company are
base salary and performance-based incentives, including annual cash bonuses
and stock options. This report discusses the Company's practices regarding
each of these elements as applied to the executive officers generally and
concludes with a separate discussion of Mr. Fellows' compensation in
particular.
The Company's executive compensation practices are designed to support its
business goals of fostering profitable growth and increasing stockholder
value. The Company seeks to align the interests of executives and
stockholders through the use of a performance-based cash bonus plan and a
stock-based compensation plan. In addition, the Company's policy is to pay
for performance; that is, the better the individual, team, business unit
and/or global performance against established goals and objectives, the
greater the compensation reward. Finally, the Company's compensation package
is designed to be competitive with the compensation practices of other
leading consumer products companies.
In addition to Company sources, the Committee retains the services of
independent compensation consultants to help it assess the competitiveness
and effectiveness of the Company's executive compensation practices in
general and for the Chief Executive Officer in particular. In 1996, the
Compensation Committee consulted with KPMG Peat Marwick LLP ("KPMG") in its
review of, and in developing modifications to, existing executive officer
compensation plans. In 1997, the Committee consulted with KPMG on
compensation-related issues, as it deemed appropriate.
BASE SALARY
The Company's practice is to pay salaries that reflect the executive's
position in the Company and his or her contributions as determined by the
Compensation Committee and that are competitive with a comparison group of
other leading consumer products companies and certain other companies outside
of the consumer products field (the "Comparison Group"). While the Comparison
Group is comprised primarily of consumer products companies, companies
outside of the consumer products field are also included because the Company
believes, and the Compensation Committee concurs, that the market for
executive talent is broader than simply other consumer products companies.
The policy is to target the salary range for executive officers at a level
which is competitive with the Comparison Group, with salaries above that
level available to exceptional performers and key contributors to the success
of the Company. The annual salaries of Messrs. Fellows, Fox and Colomer and
of Ms. Dwyer, established in their respective employment agreements, are
based upon this policy. Annual salary adjustments are based on individual
performance, assumption of new responsibilities, competitive data from the
Comparison Group and the Company's overall annual salary budget guidelines.
If an executive officer is responsible for a particular business unit, such
unit's financial results are taken into account. In the case of Mr. Fellows
and Ms. Dwyer, annual salary adjustments are specified in their respective
employment agreements.
ANNUAL CASH BONUS
EXECUTIVE BONUS PLAN
The Company has a bonus plan (the "Executive Bonus Plan") in which
executives (including the Chief Executive Officer and the other Named
Executive Officers) participate. The Executive Bonus Plan provides for
payment of cash compensation upon the achievement of predetermined corporate
and/or business unit and individual performance goals during the calendar
year. Eligibility for awards under the
15
<PAGE>
Executive Bonus Plan is conditioned upon the executive having executed the
Non-Competition Agreement. The maximum award payable to any participant with
respect to any bonus year is 100% of base salary, not to exceed $2,000,000.
Bonuses for executive officers for 1997 were determined in accordance with
the Executive Bonus Plan based on the performance of the Company as a whole
in the case of Messrs. Fellows and Fox, and of the Company as a whole and the
business units to which he or she was assigned in the case of Ms. Dwyer and
Mr. Colomer, in each case against specific pre-established performance goals.
Pursuant to the Levin Amendment, Mr. Levin did not receive a bonus under the
Executive Bonus Plan for 1997 and no longer participates in the Executive
Bonus Plan. The Company-wide financial performance measures for Messrs.
Fellows and Fox were net income (before extraordinary items), operating
income and asset management. For Ms. Dwyer and Mr. Colomer the Company-wide
financial performance measure was net income (before extraordinary items),
and the business unit financial measures were operating income and asset
management. During 1997, the Company exceeded its net income and operating
income thresholds, and the business units for which Ms. Dwyer and Mr. Colomer
were responsible exceeded their operating income thresholds.
LONG-TERM PERFORMANCE-BASED INCENTIVES
The Company's principal compensation vehicle for encouraging long-term
growth and performance is the grant of stock options under the Stock Plan.
THE STOCK PLAN
Under the Stock Plan, stock options generally are granted annually to
executive officers. Guidelines for the size of stock option awards are
developed based on factors similar to those used to determine salary and
bonus, including the executive's position in the Company and his or her
contributions as determined by the Compensation Committee and a review of the
practices of the Comparison Group. Since the Company, with the concurrence of
the Compensation Committee, views the granting of stock options as a way to
obtain competitive compensation advantage, it is the Company's policy to
target award levels so that, when taken together with salary and cash bonus,
total compensation would be competitive with the Comparison Group. Actual
grants may vary from target levels based on individual performance, business
unit performance or the assumption of increased responsibilities. In the
event of poor corporate performance, the Compensation Committee may decide
not to grant annual stock options.
The grants of options for 552,000 shares of Class A Common Stock in the
aggregate made under the Stock Plan during 1997 to Messrs. Fellows, Levin,
Fox and Colomer and Ms. Dwyer and the grants of options to all other
executive officers and employees of the Company during 1997 are comprised of
non-qualified options having a term of 10 years. The options will vest 25%
each year beginning on the first anniversary of the grant date and will
become 100% vested on the fourth anniversary of the grant date. This approach
is designed to motivate the creation of stockholder value over the long term
since the full benefit of the stock option grant cannot be realized unless
stock price appreciation occurs over a number of years.
Section 162(m) of the Internal Revenue Code of 1986 (as amended) (the
"Code") generally disallows a publicly held corporation a deduction for
compensation in excess of $1 million per year (other than "performance based
compensation" as defined in the Code) paid to the chief executive officer
(the "CEO") or any of the four most highly compensated executive officers of
the Company (other than the CEO) (the "Covered Officers"). Based upon a
special transition rule contained in the Treasury regulations for private
corporations that complete an initial public offering, the Company intends,
to the fullest extent possible under such regulations, to treat payments made
to Covered Officers until the Annual Meeting of Stockholders of the Company
held in the year 2000 as not subject to the deduction limitations of Section
162(m) of the Code. Nevertheless, the Compensation Committee will maintain
the discretion to authorize payments that do not qualify for an exception to
the deduction limitation if the Compensation Committee believes it is
necessary or appropriate under the circumstances.
16
<PAGE>
1997 CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee reviewed and recommended the overall
compensation of George Fellows, who is currently and who during 1997 served
as the Chief Executive Officer of the Company, set forth in his employment
agreement. In setting Mr. Fellows' 1997 base salary, the Compensation
Committee considered the Company's significant success during Mr. Fellows'
tenure as President and Chief Operating Officer, his individual performance
and contributions to the continuing success and increased value of the
Company, including his success in recruiting and retaining key executives,
the creation and success of significant new products and the Company's market
share growth as well as a comparison of base salaries of other chief
executive officers in the Comparison Group.
As discussed above in the Annual Cash Bonus section, Mr. Fellows' annual
bonus for 1997 was paid based upon the successful attainment of specific
performance measures established in advance. During 1997, the Company
exceeded the pre-established net income and operating income threshold
measures. Based upon exceeding such measures and taking into account his
performance, Mr. Fellows was awarded a cash bonus equal to the target amount
established for the year.
The stock option grant for Mr. Fellows was specified in his Employment
Agreement and, as with base salary and bonus eligibility, was determined by
the Compensation Committee with reference to Mr. Fellows' position in the
Company, his contribution to the Company's success, his individual
performance, his contributions to the continuing success and increased value
of the Company and the practices of the Comparison Group. The Compensation
Committee's intent was to condition a meaningful portion of Mr. Fellows'
total compensation upon Company performance and stockholder value and to
serve as a means to retain Mr. Fellows.
In summary, the Compensation Committee believes that executive performance
significantly influences Company performance and, therefore, the Compensation
Committee's approach to executive compensation has been guided by the
principle that executives should have the potential for increased earnings
when performance objectives are exceeded, provided there is appropriate
downside risk if performance targets are not met.
Compensation and Stock Plan
Committee
Howard Gittis (Chairman)
Donald Drapkin
Morton Janklow
Terry Semel
17
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
shares of Class A Common Stock with that of the S&P 500 Index, the S&P Health
Care Index, the S&P Household Products Index and the S&P Cosmetics Index. The
comparison for each of the periods presented assumes that $100 was invested
on February 29, 1996 (the date the Class A Common Stock was priced in
connection with the Company's Offering), in shares of Class A Common Stock
and the stocks included in the relevant index and that all dividends are
reinvested. These indexes, which reflect formulas for dividend reinvestment
and weighting of individual stocks, do not necessarily reflect returns that
could be achieved by individual investors.
#############################################################################
GRAPHIC OMITTED
IGT: "69484barcht"
#############################################################################
<TABLE>
<CAPTION>
FEBRUARY 29, 1996 DEC. 31, 1996 DEC. 31, 1997
----------------- --------------- ---------------
<S> <C> <C> <C>
Revlon, Inc. Class A Common Stock .. $100 $124.48 $147.13
S&P 500 Index ...................... 100 117.82 157.10
S&P Health Care Index .............. 100 121.38 177.32
S&P Household Products Index ...... 100 129.56 182.62
S&P Cosmetics Index ................ 100 136.60 173.09
</TABLE>
18
<PAGE>
OWNERSHIP OF COMMON STOCK
The following table sets forth as of February 9, 1998, the number of
shares of Common 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 the outstanding shares of Common Stock, (ii) each director of the Company,
(iii) the Chief Executive Officer during 1997 and each of the other Named
Executive Officers during 1997 and (iv) all current directors and executive
officers of the Company as a group. The number of shares owned are those
beneficially owned, as determined under the rules of the Securities and
Exchange Commission (the "SEC"), and such information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares of Common Stock as to which a person
has sole or shared voting power or investment power and any shares of Common
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.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------- -------------------- ----------------
<S> <C> <C>
Ronald O. Perelman.................................
35 E. 62nd St.
New York, NY 10021 42,500,000 (Class A and Class B) (1) 83.1%
Carlos Colomer...................................... 9,250 (Class A)(2) *
Donald Drapkin ..................................... 12,000 (Class A)(3) *
M. Katherine Dwyer ................................. 34,664 (Class A)(4) *
Meyer Feldberg ..................................... 0
George Fellows...................................... 50,972 (Class A)(5) *
William J. Fox...................................... 22,968 (Class A)(6) *
Howard Gittis ...................................... 15,000 (Class A) *
Morton L. Janklow................................... 0
Vernon E. Jordan.................................... 0
Henry A. Kissinger.................................. 0
Edward J. Landau ................................... 100 *
Jerry W. Levin ..................................... 68,989 (Class A)(7) *
Linda Gosden Robinson .............................. 0
Terry Semel ........................................ 5,000 (Class A)(8) *
Martha Stewart ..................................... 0
Massachusetts Financial Services Company............ 1,146,480 (Class A)(9) 5.8%
All Directors and Executive Officers as a Group 11,508,941 (Class A)(10) 57.9%
(19 Persons) ...................................... 31,250,000 (Class B) 100%
</TABLE>
- ------------
* Less than one percent.
(1) Mr. Perelman through Mafco Holdings (which through REV Holdings)
beneficially owns 11,250,000 shares of Class A Common Stock
(representing 56.6% of the outstanding shares of Class A Common
Stock) and all of the outstanding 31,250,000 shares of Class B Common
Stock, which together represent 83.1% of the outstanding shares of
Common Stock and has approximately 97.4% of the combined voting power
of the outstanding shares of Common Stock. All of the shares of
Common Stock owned by REV Holdings are pledged by REV Holdings to
secure obligations, and shares of intermediate holding companies are
or may from time to time be pledged to secure obligations of Mafco
Holdings or its affiliates.
(2) Reflects 9,250 shares which may be acquired under options which
vested on January 9, 1998
(3) All of such shares are held by trusts for Mr. Drapkin's children and
beneficial ownership is disclaimed.
(4) Includes 414 shares acquired pursuant to the Company matching under
the 401(k) Plan and the Excess Plan, and 31,250 shares which may be
acquired under options which vested on January 9, 1998.
19
<PAGE>
(5) Includes 472 shares acquired pursuant to the Company matching under
the 401(k) Plan and the Excess Plan and 42,500 shares which may be
acquired under options which vested on January 9, 1998.
(6) Includes 5,800 shares owned by Mr. Fox's wife and 4,200 shares owned
by his children as to which beneficial ownership is disclaimed, 468
shares acquired pursuant to the Company matching under the 401(k)
Plan and the Excess Plan and 12,500 shares which may be acquired
under options which vested on January 9, 1998.
(7) Includes 1,000 shares owned by Mr. Levin's daughter as to which
beneficial ownership is disclaimed, 489 shares acquired under the
401(k) Plan and the Excess Plan and 42,500 shares which may be
acquired under options which vested on January 9, 1998.
(8) Includes 2,000 shares owned by Mr. Semel's children as to which
beneficial ownership is disclaimed.
(9) Based upon a Schedule 13G filed by Massachusetts Financial Services
Company in February 1998, Massachusetts Financial Services Company
has sole voting power as to 1,137,280 shares and sole dispositive
power as to all 1,146,480 shares
(10) Includes 49,249 shares owned by executive officers not listed in the
table as to which beneficial ownership is disclaimed for 750 shares.
Included in this share number for such executive officers not listed
in the table are 7,250 shares which may be acquired under options
which vested on February 28, 1997, 15,750 shares which may be
acquired under options which vested on January 9, 1998, 7,250 shares
which may be acquired under options which vest on February 28, 1998,
and 1,446 shares acquired under the 401(k) Plan and the Excess Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MacAndrews & Forbes beneficially owns shares of Common Stock having
approximately 97.4% of the combined voting power of the outstanding shares of
Common Stock. As a result, MacAndrews & Forbes is able to elect the entire
Board of Directors of the Company and control the vote on all matters
submitted to a vote of the Company's stockholders. MacAndrews & Forbes is
wholly owned by Ronald O. Perelman, who is Chairman of the Executive
Committee of the Board and a Director of the Company.
TRANSFER AGREEMENTS
In June 1992, Revlon, Inc. and Products Corporation entered into an asset
transfer agreement with Holdings and certain of its wholly owned subsidiaries
(the "Asset Transfer Agreement"), and Revlon, Inc. and Products Corporation
entered into a real property asset transfer agreement with Holdings (the
"Real Property Transfer Agreement" and, together with the Asset Transfer
Agreement, the "Transfer Agreements"), and pursuant to such agreements, on
June 24, 1992 Holdings transferred assets to Products Corporation and
Products Corporation assumed all the liabilities of Holdings, other than
certain specifically excluded assets and liabilities (the liabilities
excluded are referred to as the "Excluded Liabilities"). Holdings retained
certain small brands that historically had not been profitable ("Retained
Brands"). Holdings agreed to indemnify Revlon, Inc. and Products Corporation
against losses arising from the Excluded Liabilities, and Revlon, Inc. and
Products Corporation agreed to indemnify Holdings against losses arising from
the liabilities assumed by Products Corporation. The amount reimbursed by
Holdings to Products Corporation for the Excluded Liabilities for 1997 was
$0.4 million.
OPERATING SERVICES AGREEMENT
In June 1992, Revlon, Inc., Products Corporation and Holdings entered into
an operating services agreement (as amended and restated, and as subsequently
amended, the "Operating Services Agreement") pursuant to which Products
Corporation manufactures, markets, distributes, warehouses and administers,
including the collection of accounts receivable, the Retained Brands for
Holdings. Pursuant to the Operating Services Agreement, Products Corporation
is reimbursed an amount equal to all of its and Revlon, Inc.'s direct and
indirect costs incurred in connection with furnishing such services, net of
the amounts collected by Products Corporation with respect to the Retained
Brands, payable quarterly. The net amount reimbursed by Holdings to Products
Corporation for such direct and indirect costs for 1997 was $1.4 million.
Holdings also pays Products Corporation a fee equal to 5% of the net sales of
the Retained Brands, payable quarterly. The fees paid by Holdings to Products
Corporation pursuant to the Operating Services Agreement for services with
respect to the Retained Brands for 1997 was approximately $0.3 million.
20
<PAGE>
REIMBURSEMENT AGREEMENTS
Revlon, Inc., Products Corporation and MacAndrews Holdings have entered
into reimbursement agreements (the "Reimbursement Agreements") pursuant to
which (i) MacAndrews Holdings is obligated to provide (directly or through
affiliates) certain professional and administrative services, including
employees, to Revlon, Inc. and its subsidiaries, including Products
Corporation, and purchase services from third party providers, such as
insurance and legal and accounting services, on behalf of Revlon, Inc. and
its subsidiaries, including Products Corporation, to the extent requested by
Products Corporation, and (ii) Products Corporation is obligated to provide
certain professional and administrative services, including employees, to
MacAndrews Holdings (and its affiliates) and purchase services from third
party providers, such as insurance and legal and accounting services, on
behalf of MacAndrews Holdings (and its affiliates) to the extent requested by
MacAndrews Holdings, provided that in each case the performance of such
services does not cause an unreasonable burden to MacAndrews Holdings or
Products Corporation, as the case may be. The Company reimburses MacAndrews
Holdings for the allocable costs of the services purchased for or provided to
the Company and its subsidiaries and for reasonable out-of-pocket expenses
incurred in connection with the provision of such services. MacAndrews
Holdings (or such affiliates) reimburses the Company for the allocable costs
of the services purchased for or provided to MacAndrews Holdings (or such
affiliates) and for the reasonable out-of-pocket expenses incurred in
connection with the purchase or provision of such services. In addition, in
connection with certain insurance coverage provided by MacAndrews Holdings,
Products Corporation obtained letters of credit (which aggregated
approximately $27.7 million as of December 31, 1997) to support certain
self-funded risks of MacAndrews Holdings and its affiliates, including the
Company, associated with such insurance coverage. The costs of such letters
of credit are allocated among, and paid by, the affiliates of MacAndrews
Holdings, including the Company, which participate in the insurance coverage
to which the letters of credit relate. The Company expects that these
self-funded risks will be paid in the ordinary course and, therefore, it is
unlikely that such letters of credit will be drawn upon. MacAndrews Holdings
has agreed to indemnify Products Corporation to the extent amounts are drawn
under any of such letters of credit with respect to claims for which neither
Revlon, Inc. nor Products Corporation is responsible. The net amount
reimbursed by MacAndrews Holdings to the Company for the services provided
under the Reimbursement Agreements for 1997 was $4.0 million. Each of Revlon,
Inc. and Products Corporation, on the one hand, and MacAndrews Holdings, on
the other, has agreed to indemnify the other party for losses arising out of
the provision of services by it under the Reimbursement Agreements other than
losses resulting from its willful misconduct or gross negligence. The
Reimbursement Agreements may be terminated by either party on 90 days'
notice. The Company does not intend to request services under the
Reimbursement Agreements unless their costs would be at least as favorable to
the Company as could be obtained from unaffiliated third parties.
TAX SHARING AGREEMENT
Revlon, Inc., for federal income tax purposes, is included in the
affiliated group of which Mafco Holdings is the common parent, and Revlon,
Inc.'s federal taxable income and loss is included in such group's
consolidated tax return filed by Mafco Holdings. Revlon, Inc. also may be
included in certain state and local tax returns of Mafco Holdings or its
subsidiaries. In June 1992, Holdings, Revlon, Inc. and certain of its
subsidiaries, and Mafco Holdings entered into a tax sharing agreement (as
subsequently amended, the "Tax Sharing Agreement"), pursuant to which Mafco
Holdings has agreed to indemnify Revlon, Inc. against federal, state or local
income tax liabilities of the consolidated or combined group of which Mafco
Holdings (or a subsidiary of Mafco Holdings other than Revlon, Inc. or its
subsidiaries) is the common parent for taxable periods beginning on or after
January 1, 1992 during which Revlon, Inc. or a subsidiary of Revlon, Inc. is
a member of such group. Pursuant to the Tax Sharing Agreement, for all
taxable periods beginning on or after January 1, 1992, Revlon, Inc. will pay
to Holdings amounts equal to the taxes that Revlon, Inc. would otherwise have
to pay if it were to file separate federal, state or local income tax returns
(including any amounts determined to be due as a result of a redetermination
arising from an audit or otherwise of the consolidated or combined tax
liability relating to any such period which is attributable to Revlon, Inc.),
except that Revlon, Inc. will not be entitled to carry back any losses to
taxable periods ending prior to January 1, 1992. No payments are required by
Revlon, Inc. if and to the
21
<PAGE>
extent Products Corporation is prohibited under the Credit Agreement from
making tax sharing payments to Revlon, Inc. The Credit Agreement prohibits
Products Corporation from making such tax sharing payments other than in
respect of state and local income taxes. Since the payments to be made under
the Tax Sharing Agreement will be determined by the amount of taxes that
Revlon, Inc. would otherwise have to pay if it were to file separate federal,
state or local income tax returns, the Tax Sharing Agreement will benefit
Mafco Holdings to the extent Mafco Holdings can offset the taxable income
generated by Revlon, Inc. against losses and tax credits generated by Mafco
Holdings and its other subsidiaries. There were no cash payments in respect
of federal taxes made by Revlon, Inc. pursuant to the Tax Sharing Agreement
for 1997. The Company has a liability of $0.9 million to Holdings in respect
of federal taxes for 1997 under the Tax Sharing Agreement.
REGISTRATION RIGHTS AGREEMENT
Prior to the consummation of the Offering, Revlon, Inc. and Revlon
Worldwide Corporation (subsequently merged into REV Holdings), the then
direct parent of Revlon, Inc., entered into the Registration Rights Agreement
pursuant to which REV Holdings and certain transferees of Revlon, Inc.'s
Common Stock held by REV Holdings (the "Holders") have the right to require
Revlon, Inc. to register all or part of the Class A Common Stock owned by
such Holders and the Class A Common Stock issuable upon conversion of Revlon,
Inc.'s Class B Common Stock owned by such Holders under the Securities Act of
1933, as amended (a "Demand Registration"); provided that Revlon, Inc. may
postpone giving effect to a Demand Registration up to a period of 30 days if
Revlon, Inc. believes such registration might have a material adverse effect
on any plan or proposal by Revlon, Inc. with respect to any financing,
acquisition, recapitalization, reorganization or other material transaction,
or if Revlon, Inc. is in possession of material non-public information that,
if publicly disclosed, could result in a material disruption of a major
corporate development or transaction then pending or in progress or in other
material adverse consequences to Revlon, Inc. In addition, the Holders have
the right to participate in registrations by Revlon, Inc. of its Class A
Common Stock (a "Piggyback Registration"). The Holders will pay all
out-of-pocket expenses incurred in connection with any Demand Registration.
Revlon, Inc. will pay any expenses incurred in connection with a Piggyback
Registration, except for underwriting discounts, commissions and expenses
attributable to the shares of Class A Common Stock sold by such Holders.
OTHER
Pursuant to a lease dated April 2, 1993 (the "Edison Lease"), Holdings
leases to Products Corporation the Edison 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, are not to exceed $2.0 million per year. Pursuant to an
assumption agreement dated February 18, 1993, Holdings agreed to assume all
costs and expenses of the ownership and operation of the Edison facility as
of January 1, 1993, other than (i) the operating expenses for which Products
Corporation is responsible under the Edison Lease and (ii) environmental
claims and compliance costs relating to matters which occurred prior to
January 1, 1993 up to an amount not to exceed $8.0 million (the amount of
such claims and costs for which Products Corporation is responsible, the
"Environmental Limit"). In addition, pursuant to such assumption agreement,
Products Corporation agreed to indemnify Holdings for environmental claims
and compliance costs relating to matters which occurred prior to January 1,
1993 up to an amount not to exceed the Environmental Limit and Holdings
agreed to indemnify Products Corporation for environmental claims and
compliance costs relating to matters which occurred prior to January 1, 1993
in excess of the Environmental Limit and all such claims and costs relating
to matters occurring on or after January 1, 1993. Pursuant to an occupancy
agreement, during 1997 Products Corporation rented from Holdings a portion of
the administration building located at the Edison facility and space for a
retail store of Products Corporation. Products Corporation provides certain
administrative services, including accounting, for Holdings with respect to
the Edison facility pursuant to which Products Corporation pays on behalf of
Holdings costs associated with the Edison facility and is reimbursed by
Holdings for such costs, less the amount owed by Products Corporation to
Holdings pursuant to the Edison Lease and the occupancy agreement. The net
amount reimbursed by Holdings to Products Corporation for such costs with
respect to the Edison facility for 1997 was $0.7 million.
22
<PAGE>
During 1997, a subsidiary of Products Corporation sold an inactive
subsidiary to an affiliate for approximately $1.0 million.
Effective July 1, 1997, Holdings contributed to Products Corporation
substantially all of the assets and liabilities of the Bill Blass business
not already owned by Products Corporation. The contributed assets
approximated the contributed liabilities and were accounted for at historical
cost in a manner similar to that of a pooling of interests and, accordingly,
prior period financial statements were restated as if the contribution took
place prior to the beginning of the earliest period presented.
In June 1997, Products Corporation borrowed from Holdings approximately
$0.5 million, representing certain amounts received by Holdings from the sale
of a brand and inventory relating thereto. Such amount is evidenced by a
noninterest bearing promissory note. Holdings agreed not to demand payment
under such note so long as any indebtedness remains outstanding under
Products Corporation's Credit Agreement.
On February 2, 1998, Revlon Escrow Corp. ("Revlon Escrow"), an affiliate
of Products Corporation, issued and sold in a private placement $650 million
aggregate principal amount of 8 5/8% Senior Subordinated Notes due 2008 (the
"8 5/8% Notes") and $250 million aggregate principal amount of 8 1/8% Senior
Notes due 2006 (the "8 1/8% Notes" and, together with the 8 5/8% Notes, the
"Notes"), with the net proceeds deposited into escrow. The proceeds from the
sale of the Notes will be used to finance the redemption of Products
Corporation's $555 million aggregate principal amount of 10 1/2% Senior
Subordinated Notes due 2003 (the "Senior Subordinated Notes") and $260
million aggregate principal amount of 9 3/8% Senior Notes due 2001 (the
"Senior Notes" and, together with the Senior Subordinated Notes, the "Old
Notes"). Products Corporation delivered a redemption notice to the holders of
the Senior Subordinated Notes for the redemption of the Senior Subordinated
Notes on March 4, 1998, at which time Products Corporation assumed the
obligations under the 8 5/8% Notes and the related indenture (the "8 5/8%
Notes Assumption"), and to the holders of the Senior Notes for the redemption
of the Senior Notes on April 1, 1998, at which time Products Corporation will
assume the obligations under the 8 1/8% Notes and the related indenture (the
"8 1/8% Notes Assumption" and, together with the 8 5/8% Notes Assumption, the
"Assumption"). On or before March 19, 1998 either Revlon Escrow or Products
Corporation is required to file a registration statement with the SEC with
respect to an offer to exchange the Notes for registered notes with
substantially identical terms (the "Exchange Offer"). The Exchange Offer is
expected to occur on or before July 2, 1998. In connection with these
matters, Products Corporation entered into a Purchase Agreement and a
Registration Agreement with Revlon Escrow and the initial purchasers of the
Notes and entered into an agreement with Revlon Escrow pursuant to which each
of Products Corporation and Revlon Escrow agree to take all actions required
under the Purchase Agreement, the Registration Agreement and the other
documents governing the sale of the Notes, the redemptions of the Old Notes
and the Assumption within the periods prescribed in order to effect such
transactions in accordance with their terms. A nationally recognized
investment banking firm rendered its written opinion that the Assumption,
upon consummation of the redemptions of the Old Notes, and the subsequent
release from escrow to Products Corporation of any remaining net proceeds
from the sale of the Notes are fair from a financial standpoint to Products
Corporation under the indenture governing Products Corporation's 9 1/2%
Senior Notes due 1999.
During 1997, Products Corporation leased certain facilities to MacAndrews
& Forbes or its affiliates pursuant to occupancy agreements and leases. These
included space at Products Corporation's New York headquarters and at
Products Corporation's offices in London and Hong Kong. The rent paid by
MacAndrews & Forbes or its affiliates to Products Corporation for such leases
and agreements for 1997 was $3.8 million.
Products Corporation's Credit Agreement is supported by, among other
things, guarantees from Holdings and certain of its subsidiaries. The
obligations under such guarantees are secured by, among other things, (i) the
capital stock and certain assets of certain subsidiaries of Holdings and (ii)
a mortgage on Holdings' Edison, New Jersey facility.
23
<PAGE>
Products Corporation borrows funds from its affiliates from time to time
to supplement its working capital borrowings. No such borrowings were
outstanding as of December 31, 1997. The interest rates for such borrowings
are more favorable to Products Corporation than interest rates under the
Credit Agreement and, for borrowings occurring prior to the execution of the
Credit Agreement, the credit facility in effect at the time of such
borrowing. The amount of interest paid by Products Corporation for such
borrowings for 1997 was $0.6 million.
During 1997, Products Corporation used an airplane owned by a corporation
of which Messrs. Gittis and Drapkin are the sole stockholders, for which
Products Corporation paid approximately $0.2 million.
During 1997, Products Corporation purchased products from an affiliate,
for which it paid approximately $0.9 million.
During 1997, Products Corporation provided licensing services to an
affiliate, for which Products Corporation has been paid approximately $0.7
million.
An affiliate of the Company assembles lipstick cases for Products
Corporation. Products Corporation paid approximately $0.9 million for such
services in 1997.
The law firm of which Mr. Jordan is a senior partner provided legal
services to Revlon, Inc. and its subsidiaries during 1997, and it is
anticipated that it will provide legal services to Revlon, Inc. and its
subsidiaries during 1998.
Revlon, Inc. believes that the terms of the foregoing transactions are at
least as favorable to Revlon, Inc. or Products Corporation, as applicable, as
those that could be obtained from unaffiliated third parties.
ADDITIONAL INFORMATION
THE COMPANY WILL MAKE AVAILABLE A COPY OF ITS ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, AND ANY QUARTERLY REPORTS ON
FORM 10-Q FILED THEREAFTER, WITHOUT CHARGE, UPON WRITTEN REQUEST TO THE
CORPORATE SECRETARY, REVLON, INC., 625 MADISON AVENUE, NEW YORK, NEW YORK
10022. EACH SUCH REQUEST MUST SET FORTH A GOOD FAITH REPRESENTATION THAT, AS
OF THE RECORD DATE, FEBRUARY 18, 1998, THE PERSON MAKING THE REQUEST WAS A
BENEFICIAL OWNER OF SHARES OF COMMON STOCK ENTITLED TO VOTE.
In order to ensure timely delivery of such documents prior to the Annual
Meeting, any request should be received by the Company promptly.
Stockholders who are not stockholders of record who wish to attend the
Annual Meeting should bring evidence of beneficial ownership of the Common
Stock to the Annual Meeting.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company's executive officers, directors and 10% stockholders are
required under the Exchange Act to file reports of ownership and changes in
ownership with the SEC and the NYSE. Copies of these reports also must be
furnished to the Company.
Based solely upon a review of copies of such reports furnished to the
Company through the date hereof and written representations that no reports
were required, the Company believes that all filing requirements applicable
to its executive officers, directors and 10% holders were complied with
during 1997.
STOCKHOLDER PROPOSALS
Under the rules and regulations of the SEC as currently in effect, any
holder of at least one percent or $1,000 in market value of shares of Common
Stock held for at least one year who desires to have a proposal presented in
the Company's proxy material for use in connection with the Annual Meeting of
Stockholders to be held in 1999 must transmit that proposal (along with his
or her name, address, the number of shares of Common Stock that he or she
holds of record or beneficially, the dates on which the securities were
acquired and documentary support for a claim of beneficial ownership) in
writing by
24
<PAGE>
certified mail -return receipt requested to the Secretary of the Company at
Revlon, Inc., 625 Madison Avenue, New York, New York 10022. Proposals of
stockholders intended to be presented at the Annual Meeting of Stockholders
to be held in 1999 must be received by the Secretary of the Company not later
than November 13, 1998.
Holders of shares of Common Stock desiring to have proposals submitted for
consideration at future meetings of the stockholders should consult the
applicable rules and regulations of the SEC with respect to such proposals,
including the permissible number and length of proposals and other matters
governed by such rules and regulations.
OTHER BUSINESS
The Board of Directors is not aware of any matters other than those set
forth in this proxy statement that will be presented for action at the Annual
Meeting. If any other matters properly come before the Annual Meeting, the
persons named as proxies intend to vote the shares of Common Stock they
represent in accordance with their best judgment.
New York, New York
March 12, 1998 By Order of the Board of Directors
Robert K. Kretzman
Senior Vice President, Deputy
General Counsel
and Secretary
25
<PAGE>
REVLON, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 7, 1998
The undersigned hereby appoints Wade H. Nichols and Robert K. Kretzman,
as proxies, each with the full power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated on the reverse side of
this card, all shares of Class A Common Stock of Revlon, Inc. (the "Company")
held of record by the undersigned at the close of business on February 18,
1998, at the Annual Meeting of Stockholders to be held on April 7, 1998 or
any adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
REVLON, INC.
CLASS A COMMON STOCK
APRIL 7, 1998
Please Detach and Mail in the Envelope Provided
A [X] Please mark your
votes as in this
example.
WITHHOLD
AUTHORITY
to vote for all nominees
FOR listed at right
1. ELECTION OF [ ] [ ]
DIRECTORS
FOR all nominees listed
(except as marked to the contrary below):
- --------------------------------------------------
NOMINEES: Ronald O. Perelman
Jerry W. Levin
Donald G. Drapkin
Meyer Feldberg
George Fellows
William J. Fox
Howard Gittis
Morton L. Janklow
Vernon E. Jordan
Henry A. Kissinger
Edward J. Landau
Linda Gosden Robinson
Terry Semel
Martha Stewart
FOR AGAINST ABSTAIN
2. Proposal to ratify the selection of KPMG Peat [ ] [ ] [ ]
Marwick LLP to serve as the Company's independent
accountants for fiscal 1998.
3. In their discretion, upon such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE
FOURTEEN NOMINEES FOR ELECTION AND FOR PROPOSAL 2.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
SIGNATURES: Date: , 1998
--------------------------------------- ----------------
NOTE: Please sign exactly as name or names appear on stock certificate
(as indicated hereon.)
<PAGE>
REVLON, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 7, 1998
The undersigned hereby appoints Wade H. Nichols and Robert K. Kretzman,
as proxies, each with the full power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated on the reverse side of
this card, all shares of Class B Common Stock of Revlon, Inc. (the "Company")
held of record by the undersigned at the close of business on February 18,
1998, at the Annual Meeting of Stockholders to be held on April 7, 1998 or
any adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
REVLON, INC.
CLASS B COMMON STOCK
APRIL 7, 1998
Please Detach and Mail in the Envelope Provided
A [X] Please mark your
votes as in this
example.
WITHHOLD
AUTHORITY
to vote for all nominees
FOR listed at right
1. ELECTION OF [ ] [ ]
DIRECTORS
FOR all nominees listed
(except as marked to the contrary below):
- --------------------------------------------------
NOMINEES: Ronald O. Perelman
Jerry W. Levin
Donald G. Drapkin
Meyer Feldberg
George Fellows
William J. Fox
Howard Gittis
Morton L. Janklow
Vernon E. Jordan
Henry A. Kissinger
Edward J. Landau
Linda Gosden Robinson
Terry Semel
Martha Stewart
FOR AGAINST ABSTAIN
2. Proposal to ratify the selection of KPMG Peat [ ] [ ] [ ]
Marwick LLP to serve as the Company's independent
accountants for fiscal 1998.
3. In their discretion, upon such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE
FOURTEEN NOMINEES FOR ELECTION AND FOR PROPOSAL 2.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
SIGNATURES: Date: , 1998
--------------------------------------- ----------------
NOTE: Please sign exactly as name or names appear on stock certificate
(as indicated hereon.)
<PAGE>
REVLON, INC.
PROXY CARD FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 7, 1998
FOR REVLON EMPLOYEES' SAVINGS, INVESTMENT AND PROFIT SHARING PLAN PARTICIPANTS
The undersigned hereby appoints Wade H. Nichols and Robert K. Kretzman,
as proxies, each with the full power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated on the reverse side of
this card, all shares of Class A Common Stock of Revlon, Inc. (the "Company")
held of record by the undersigned at the close of business on February 18,
1998, at the Annual Meeting of Stockholders to be held on April 7, 1998 or
any adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
REVLON, INC.
PROXY CARD
APRIL 7, 1998
Please Detach and Mail in the Envelope Provided
A [X] Please mark your
votes as in this
example.
WITHHOLD
AUTHORITY
to vote for all nominees
FOR listed at right
1. ELECTION OF [ ] [ ]
DIRECTORS
FOR all nominees listed
(except as marked to the contrary below):
- --------------------------------------------------
NOMINEES: Ronald O. Perelman
Jerry W. Levin
Donald G. Drapkin
Meyer Feldberg
George Fellows
William J. Fox
Howard Gittis
Morton L. Janklow
Vernon E. Jordan
Henry A. Kissinger
Edward J. Landau
Linda Gosden Robinson
Terry Semel
Martha Stewart
FOR AGAINST ABSTAIN
2. Proposal to ratify the selection of KPMG Peat [ ] [ ] [ ]
Marwick LLP to serve as the Company's independent
accountants for fiscal 1998.
3. In their discretion, upon such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE
FOURTEEN NOMINEES FOR ELECTION AND FOR PROPOSAL 2.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
SIGNATURES: Date: , 1998
--------------------------------------- ----------------
NOTE: Please sign exactly as name or names appear on stock certificate
(as indicated hereon.)
