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EXHIBIT 10.23
REVLON EXECUTIVE BONUS PLAN
(AMENDED AND RESTATED AS OF MARCH 1, 2000)
I. OBJECTIVES
This Executive Bonus Plan (the "Plan") for Revlon, Inc. ("Revlon") and
its participating affiliates (collectively, the "Company") is intended
to provide an annual cash incentive program which will:
o reinforce the Company's Strategic Principles and goals and
each eligible individual's role in achieving them;
o attract, retain, and motivate the executive human resources
necessary to operate the Company;
o encourage improved profitability, return on investment, and
growth of the Company;
o enhance the major values of the Company - innovation, quality,
growth, teamwork, and satisfied customers and consumers;
o reflect the Company's commitment to pay for performance; and
o in the case of Covered Employees as defined in Treasury
Regulation 1.162-27(c)(2) (or successors thereto), be directly
related to the performance results of the Company and
contingent upon the achievement of certain corporate goals.
II. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of Revlon from among its members
and shall be comprised, unless otherwise determined by the Board of
Directors, of not less than two members who shall be "outside
directors" within the meaning of Treasury Regulation Section
1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code").
The Committee shall have all the powers vested in it by the terms of
this Plan, such powers to include authority (within the limitations
described herein) to assign Participation Levels (described more fully
in Section IV), to determine Business Objectives and Personal
Performance Objectives (described more fully in Section V), to
determine whether such Objectives have been met, to determine
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whether an award will be paid out as described in Section VI or
deferred, and to determine whether an award should be reduced or
eliminated.
The Committee shall have full power and authority to construe,
administer and interpret the Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the
Plan and for the conduct of its business as the Committee deems
necessary or advisable. The Committee may at any time amend, modify,
suspend or terminate such rules, regulations, agreements, guidelines or
instruments. The Committee's interpretations of the Plan, and all
actions taken and determinations made by the Committee pursuant to the
powers vested in it hereunder shall be conclusive and binding on all
parties concerned, including the Company, Revlon stockholders and any
participant under the Plan.
Except as with respect to a Covered Employee, the Committee may
delegate all or a portion of its administrative duties under the Plan
to such officers or other employees of the Company as it shall
determine. With respect to a Covered Employee, the Committee may not
delegate any of its administrative duties under the Plan.
The Plan Year shall mean the calendar year.
III. ELIGIBILITY
(1) Executives whose positions are classified in salary grades 9 and
above of the Company's exempt salary program, and (2) general managers
and above and other key executives of the Company's operations outside
the United States are eligible for participation in the Plan. No
eligible executive may be a participant in the Plan unless he or she
shall have signed Revlon's Employee Agreement as to Confidentiality and
Non-Competition (as the same may be amended from time to time by the
Company).
IV. PARTICIPATION LEVELS/TARGET AWARDS
All participants will be assigned a Participation Level which will
determine their Target Award. The Target Award is the Bonus Award,
expressed as a percent of base salary. Target Awards shall be payable
provided that certain threshold, target and maximum Objectives
established by the Committee pursuant to Plan sections VI A and B are
met. Base salary earned during the Plan Year will be used in
calculating Bonus Awards under the Plan.
The maximum award payable with respect to any Plan Year to any
individual participant is 200% of the Target Award, not to exceed the
lesser of 100% of base salary earnings or $2,000,000.
Except where required to be determined by the Committee, Participation
Levels are generally based on an individual's grade level, reporting
level, and the impact
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the position has on the organization's results. Each participant's
Participation Level will be communicated to him/her at the time
Objectives are set for the Plan Year and any other time during the Plan
Year, as needed.
V. BUSINESS AND PERSONAL PERFORMANCE OBJECTIVES
For each Plan Year, the annual Objectives shall be determined by the
Committee in writing, by resolution of the Committee or other
appropriate action, not later than 90 days after commencement of such
Plan Year, and each such Objective shall state, in terms of an
objective formula or standard, the method for computing the amount of
compensation payable to the applicable participant if such Objective is
obtained; provided, however, that if an individual becomes eligible to
participate during a Plan Year and after such 90 day period, that
individual's Objectives may be determined by the Committee in writing,
by resolution of the Committee or other appropriate action, before no
more than 25% of the period of service to which the Objectives relate
has elapsed. The Committee shall determine the portion of the Target
Award assigned to Business Objectives and Personal Objectives.
A. BUSINESS OBJECTIVES
The Business Objectives to which a Bonus Award relates ("Business
Objectives") shall be based on one or more of the following
objective business performance factors, as it/they apply to the
Company or a business unit of Revlon and/or an Affiliate(s):
stock price; fair market value; book value; market share;
earnings per share; cash flow; return on equity, assets, capital
or investment; net income; operating profit or income; operating
income before restructuring charges, plus depreciation and
amortization other than relating to early extinguishment of debt
and debt issuance costs; net sales growth; expense targets;
working capital targets relating to inventory and/or accounts
receivable; operating margin; productivity improvement; cost or
expenses; planning accuracy (as measured by comparing planned
results to actual results); customer satisfaction based on market
share; and implementation or completion of critical projects or
processes.
In the Committee's discretion, Business Objectives (other than
with respect to Covered Employees) may be developed by each Group
Head and approved by the Executive Vice President, Chief
Financial Officer of Revlon and the President and CEO of Revlon,
subject to final review and approval by the Committee.
Once established, the Committee may not have discretion to
increase the amount payable under such Award, provided, however,
that whether or not a Bonus Award is intended to constitute
qualified performance based compensation within the meaning of
Code section 162(m), the Committee
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shall make appropriate adjustments in Business Objectives to
reflect the impact of extraordinary items not reflected in such
Objectives. For purposes of the Plan, extraordinary items shall
be defined as (1) any profit or loss attributable to acquisitions
or dispositions of stock or assets, (2) any changes in accounting
standards that may be required or permitted by the Financial
Accounting Standards Board or adopted by the Company after the
goal is established, (3) all items of gain, loss or expense for
the year related to restructuring charges for the Company, (4)
all items of gain, loss or expense for the year determined to be
extraordinary or unusual in nature or infrequent in occurrence or
related to the disposal of a segment of a business, all
determined in accordance with standards established by Opinion
No. 30 of the Accounting Principles Board (APB Opinion No. 30),
(5) all items of gain, loss or expense for the year related to
discontinued operations that do not qualify as a segment of a
business as defined in APB Opinion No. 30, and (6) such other
items as may be prescribed by Code Section 162(m) and the
Treasury Regulations thereunder as may be in effect from time to
time, and any amendments, revisions or successor provisions and
any changes thereto. Notwithstanding the attainment by the
Covered Employee of the applicable Business Objective(s), the
Committee has the discretion to reduce, prior to certification of
such Objective(s), some or all of the Section 162(m) Bonus Award
that otherwise would be paid.
Each Bonus Award shall specify the Business Objectives to be
achieved, a minimum acceptable level of achievement below which
no payment or award will be made, and a formula of determining
the amount of any payment or award to be made if performance is
at or above the minimum acceptable level but falls short of full
achievement of the Business Objectives.
B. PERSONAL PERFORMANCE OBJECTIVES
This portion of the Bonus Award will be based on Personal
Performance Objectives which are specific to each individual,
such as human resource management, advertising, account
penetration, new product development, etc. A maximum of five to
seven Personal Performance Objectives will be established each
year with appropriate standards of performance.
In the Committee's discretion, Personal Performance Objectives
(other than with respect to Covered Employees) may be developed
by each participant's Department Head, approved by the Group Head
and reviewed with the participant.
In no event shall any portion of a Section 162(m) Bonus Award
made to a Covered Employee be determined under this subsection B.
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VI. ACTUAL BONUS AWARDS
Actual Bonus Awards will be determined for each participant based on
the degree to which the participant's Business Objectives and Personal
Performance Objectives are achieved. The earned award for the
achievement of Business Objectives will be added to the earned award
for the achievement of Personal Performance Objectives to determine a
participant's total Bonus Award earned under the Plan, subject to the
maximums provided for in Section IV.
A. BUSINESS OBJECTIVES
Bonuses earned under this portion of the Plan will be based on
achievement against each Business Objective's target in
accordance with its assigned weight. Proportionate awards will be
earned for achievement between the threshold, target, and maximum
Objectives.
B. PERSONAL PERFORMANCE OBJECTIVES
Bonuses earned under this portion of the Plan will be based on
each participant's performance against Personal Performance
Objectives in accordance with its assigned weight. Proportionate
awards will be earned for achievement between the threshold,
target, and maximum Objectives. Based on criteria established at
the beginning of the year by the President and CEO of Revlon,
participants may earn up to 200% of their personal performance
target award.
VII. SECTION 162(m) BONUS AWARDS
The Committee may designate any particular Bonus Award as being a
"Section 162(m) Bonus Award"; provided that any Bonus Award so
designated will be subject to the following requirements,
notwithstanding any other provision of the Plan to the contrary:
1. No Section 162(m) Bonus Award may be paid unless and until
the stockholders of the Company have approved the Plan in a
manner which complies with the stockholder approval
requirements of Section 162(m) of the Code.
2. A Section 162(m) Bonus Award may be made by a minimum of
two members of the Committee, each of whom must be an "outside
director" (within the meaning of Section 162(m) of the Code).
3. The performance goals to which a Section 162(m) Bonus Award
is subject must be based on Business Objectives in accordance
with plan section V.A. Such Business Objectives, and the Bonus
Award payable on
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attainment thereof, must be established by the Committee
within the time limits required in order for the Section
162(m) Bonus Award to qualify for the performance-based
compensation exception to Section 162(m) of the Code.
4. No Section 162(m) Bonus Award may be paid until the
Committee has certified the appropriate level of attainment of
the applicable Business Objectives.
5. The maximum amount of a Section 162(m) Bonus Award is
$2,000,000.
VIII. CORPORATE/GROUP BUSINESS OBJECTIVES
Without limiting in any way the Committee's discretion to establish
Bonus Awards, it is expected that targeted Business Objectives for
participants should include Corporate/Group/Division performance
factors to the extent applicable, in order to foster each executive's
commitment to teamwork and sharing in the Company's overall success.
IX. MISCELLANEOUS
In the event of a change of assignment or transfer prior to October 31
of the Plan year, the participant's Bonus Award will be calculated for
each position on a pro-rated basis. Similarly, an executive who is
newly hired or who joins the Plan after the start of the Plan year, and
prior to October 31, will be eligible for a pro-rated Bonus Award based
on the percentage of the Plan year actually worked while a participant.
Bonus Awards will be distributed on or about March 31 following the
applicable Plan Year. Bonus Awards will not be paid to a participant
who does not remain actively employed by the Company through the date
Bonus Awards are distributed except that, in the sole discretion of the
President and CEO of Revlon:
(a) an executive whose employment terminates due to death, disability,
or retirement at any time after the start of a Plan year, or
(b) an executive whose employment is terminated by the Company
otherwise than for "good reason" (as defined in the Revlon Executive
Severance Policy) or other like cause at any time after June 30 of a
Plan year, may receive a Bonus Award, pro-rated if appropriate, based
on the number of months of active employment during the Plan year. The
aforedescribed exception shall not be applicable to Section 162(m)
Bonus Awards.
The Plan shall be unfunded. The Company shall not be required to
establish any special segregation of assets to assure the payment of
Bonus Awards.
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The Plan is not intended to be subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
The Company shall have the right to deduct from Bonus Awards paid any
taxes or other amounts required by law to be withheld.
Participation in the Plan shall not confer upon any participant any
rights to continue in the employ of the Company, limit in any way a
participant's right or the right of the Company to terminate a
participant's employment at any time, or confer upon any participant
any claim to receive a Bonus Award other than as provided in the Plan,
and no participant's rights under the Plan may be assigned, attached,
pledged or alienated by operation of law or otherwise.
The Committee reserves the right to revise or terminate the Plan at any
time during or after a Plan performance period. The President and CEO
of Revlon, at his discretion, may also make exceptions to this Plan,
other than in the case of Covered Employees.
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