SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _)
----------------------
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FRENCH FRAGRANCES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSONS(S) FILING PROXY STATEMENT IF OTHER THAN 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee previously paid 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 No.: ______________________________
(3) Filing Party: __________________________________________________
(4) Date Filed: ___________________________________________________
<PAGE>
FRENCH FRAGRANCES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 1997
Notice is hereby given that the Annual Meeting of Shareholders of French
Fragrances, Inc. (the "Company"), will be held on June 20, 1997 at 10:00 a.m.,
local time, at the Company's principal executive offices at 14100 N.W. 60th
Avenue, Miami Lakes, Florida 33014, for the following purposes, as described in
the attached proxy statement:
1. To elect a board of six directors to serve until the next annual
meeting of shareholders or until their successors are duly
elected and qualified.
2. To ratify the appointment of Deloitte & Touche LLP as the
independent auditors of the Company for the fiscal year ending
January 31, 1998.
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 28, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting and at any adjournment thereof. Accordingly, only
shareholders of record at the close of business on that date will be entitled to
vote at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting
regardless of the size of your holdings. Whether or not you intend to be present
at the meeting in person, we urge you to please complete, date and sign the
enclosed proxy card and return it in the envelope provided for that purpose.
By Order of the Board of Directors.
OSCAR E. MARINA
Secretary
Miami, Florida
May 21, 1997
YOU ARE URGED TO COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED
PROXY IN THE ACCOMPANYING POSTAGE-FREE ENVELOPE. THE PROXY IS REVOCABLE
AT ANY TIME PRIOR TO ITS USE.
<PAGE>
FRENCH FRAGRANCES, INC.
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 1997
GENERAL
This Proxy Statement has been prepared and is furnished by the Board of
Directors of French Fragrances, Inc. (the "Company"), in connection with the
solicitation of proxies for use at the Annual Meeting of Shareholders of the
Company to be held at the Company's principal executive offices at 14100 N.W.
60th Avenue, Miami Lakes, Florida 33014, at 10:00 a.m., Eastern Standard Time,
on June 20, 1997, and at any adjournment thereof, for the purposes set forth in
the accompanying notice of meeting.
It is anticipated that the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1997, this Proxy Statement and the accompanying
form of proxy card will be mailed to shareholders on or about May 21, 1997.
The Annual Report is not to be regarded as proxy soliciting material.
The Company was organized in Florida in 1960, and until the November 30,
1995 merger (the "Merger") of a privately-held Florida corporation named French
Fragrances, Inc. ("FFI"), with and into the Company, was known as Suave Shoe
Corporation and had been engaged in the manufacture and importation of casual,
athletic and leisure footwear. Following the Merger, the Company, as the
surviving corporation, changed its name to "French Fragrances, Inc" and
management of FFI became the management of the Company. Since the Merger, the
Company's principal business operations consist of the business operations
previously conducted by FFI, which is the manufacture, distribution and
marketing of prestige fragrances and related cosmetic products.
OUTSTANDING SHARES AND VOTING RIGHTS
Only shareholders of record of the Common Stock, $.01 par value (the
"Common Stock") on the books of the Company at the close of business on April
28, 1997 (the "Record Date"), are entitled to notice of and to vote at the
Annual Meeting. On the Record Date, there were 13,258,311 shares of Common Stock
entitled to vote on each matter to be presented at the Annual Meeting. Holders
of the Common Stock have one vote per share on all matters. No other class of
stock of the Company has voting rights.
A majority of the shares of Common Stock entitled to vote on a matter,
represented in person or by proxy, shall constitute a quorum for action on a
matter at a meeting of shareholders. In determining the presence of a quorum at
the Annual Meeting, abstentions are counted and broker non-votes are not. The
Company's Bylaws provide that the affirmative vote of a majority of the shares
of the voting stock represented, in person or by proxy, and entitled to vote on
a matter at a meeting in which a quorum is present shall be the act of the
shareholders, except as otherwise provided by law. The Florida Business
Corporation Act provides that directors are elected by a plurality of the votes
cast. Abstentions and broker non-votes have no legal effect on whether a nominee
for director is elected, but will have the same effect as votes against the
ratification of the appointment of Deloitte & Touche, LLP as the independent
auditors of the Company for the fiscal year ending January 31, 1998.
As of April 28, 1997, the directors and executive officers of the Company
(including companies under their control) beneficially owned approximately 40%
of the Common Stock. The aggregate beneficial ownership of such persons permits
them to have effective control of the Company and to direct the management and
affairs of the Company.
Shares represented by a properly executed proxy received in time to permit
its use at the Annual Meeting or any adjournment thereof will be voted in
accordance with the instructions indicated therein. If no instructions are
indicated, the shares represented by the proxy will be voted FOR the election of
all nominees for director, FOR the ratification of the appointment of Deloitte &
Touche LLP as the independent auditors of the Company for the fiscal year ending
January 31, 1998, and in the discretion of the proxy holders as to any other
matter which may properly come before the meeting.
You are requested, regardless of the number of shares you hold, to sign
the proxy and return it promptly in the enclosed envelope. Each shareholder
giving a proxy has the power to revoke it at any time before it is voted, either
in person at the Annual Meeting, by written notice to the Secretary of the
Company or by delivery of a later-dated proxy.
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of April 28, 1997 (unless otherwise
noted): (i) the ownership of Common Stock by all persons known by the Company to
own beneficially more than 5% of the outstanding shares of Common Stock; and
(ii) the beneficial ownership of Common Stock, Series B Convertible Preferred
Stock of the Company, $.01 par value ("Series B Convertible Preferred"), and
Series C Convertible Preferred Stock of the Company, $.01 par value ("Series C
Convertible Preferred"), by (a) directors and nominees (listed by name) of the
Company, (b) the Company's chief executive officer and its four other most
highly compensated executive officers for the fiscal year ended January 31,
1996, and (c) all directors and executive officers of the Company as a group,
without naming them.
<TABLE>
<CAPTION>
SERIES B SERIES C
COMMON STOCK CONVERTIBLE PREFERRED CONVERTIBLE PREFERRED
---------------------------- ---------------------------- -----------------------------
AMOUNT AND AMOUNT AND AMOUNT AND
NAME AND ADDRESS NATURE OF NATURE OF NATURE OF
OF BENEFICIAL BENEFICIAL PERCENTAGE OF BENEFICIAL PERCENTAGE OF BENEFICIAL PERCENTAGE OF
OWNER(1) OWNERSHIP(2) CLASS(2) OWNERSHIP CLASS OWNERSHIP CLASS
<S> <C> <C> <C> <C> <C> <C>
Rafael Kravec(3) 2,779,851 20.3% 5,419 1.9% 8,835 1.5%
E. Scott Beattie(4)(5) 251,225 1.9 5,961 2.0 9,185 1.6
Gretchen Cuzydlo(6) 57,970 * - - - -
Joseph M. Gilfarb(6) 58,734 * - - - -
Saul Kravec(6) 56,734 * - - - -
William J. Mueller(6) 61,734 * - - - -
J.W. Nevil Thomas(4)(7) 119,101 * 7,587 2.6 11,682 2.0
Fred Berens(8) 812,753 6.1 - - - -
Richard C.W. Mauran (9) 1,871,992 13.3 84,232 29.0 131,518 23.0
George Dooley(10) 16,000 * - - - -
Estate of
Eugene Ramos(11) 987,290 7.5
Bedford Capital
Financial
Corporation(4)(12) 713,251 5.3
All directors and
executive officers
as a group
(11 persons)(10)(13) 6,102,728 40.1 103,199 35.5 161,220 12.8
</TABLE>
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* Less than one percent of the class.
(1) The address of each of the persons shown in the above table other than
Bedford Capital Financial Corporation ("BCFC") and Messrs. Thomas
and Mauran is c/o French Fragrances, Inc., 14100 NW 60th Avenue, Miami
Lakes, Florida 33014. The address of BCFC is Charlotte House, Second
Floor, Shirley Street, P.O. Box N964, Nassau, Bahamas. The address of
Messrs. Thomas and Mauran is Scotia Plaza, Suite 4712, Toronto,
Canada M5H 3Y2.
(2) Includes shares of Common Stock issuable upon the conversion of Series B
Convertible Preferred and the Series C Convertible Preferred, and upon the
exercise of options to acquire Common Stock ("Options"), held by such
persons which may be converted
2
<PAGE>
or exercised within 60 days after April 28, 1997. A total of 7.12 shares
of Common Stock are issuable upon conversion of one share of Series B
Convertible Preferred. One share of Common Stock is issuable upon
conversion of one share of Series C Convertible Preferred. Unless
otherwise indicated, the Company believes that all persons named in the
table above have sole voting power and investment power with respect to
all shares of Common Stock, Series B Convertible Preferred and Series C
Convertible Preferred beneficially owned by them.
(3) The information relating to the Common Stock is based on Amendment No. 1
to Schedule 13D, dated August 14, 1996, which was filed by Mr. Kravec.
The Common Stock includes (i) 2,349,000 shares of Common Stock owned by
Mr. Kravec, including 1,000 shares which are owned by Mr. Kravec's
daughter and as to which he disclaims beneficial ownership, (ii) 38,583
shares of Common Stock issuable upon the conversion of Series B
Convertible Preferred owned by National Trading Manufacturing, Inc.
("National Trading"), (iii) 8,835 shares of Common Stock issuable upon
the conversion of Series C Convertible Preferred owned by National
Trading, (iv) 80,100 shares of Common Stock issuable upon the exercise of
Options held by Mr. Kravec, (v) 68,750 shares of Common Stock issuable
upon conversion of 7.5% Convertible Debentures Due 2006 ("7.5%
Convertible Debentures") held by Mr. Kravec, and (vi) 234,583 shares of
Common Stock issuable upon conversion of 7.5% Convertible Debentures
owned by National Trading.
(4) The information relating to the Common Stock is based on a Schedule 13D,
dated March 15, 1997, which was filed by BCFC.
(5) The Common Stock includes (i) 134,234 shares of Common Stock issuable
upon the exercise of Options held by Mr. Beattie, (ii) 64,201 shares of
Common Stock owned by E.S.B. Consultants, Inc. ("ESB"), (iii) 42,442
shares of Common Stock issuable upon the conversion of Series B
Convertible Preferred owned by ESB, (iv) 9,185 shares of Common Stock
issuable upon the conversion of Series C Convertible Preferred owned by
ESB, and (v) 1,163 shares of Common Stock issuable upon conversion of
7.5% Convertible Debentures held by ESB.
(6) Includes 56,734 shares of Common Stock issuable upon the exercise of
Options.
(7) The Common Stock includes (i) 53,400 shares of Common Stock issuable upon
the exercise of Options held by Mr. Thomas, (ii) 54,019 shares of Common
Stock issuable upon the conversion of Series B Convertible Preferred
owned by Nevcorp, Inc. ("Nevcorp"), and (iii) 11,682 shares of Common
Stock issuable upon the conversion of Series C Convertible Preferred
owned by Nevcorp.
(8) The information relating to the Common Stock is based on Amendment No. 1
to Schedule 13D, dated July 26, 1996, which was filed by Mr. Berens. The
Common Stock includes (i) 712,000 shares of Common Stock owned by Mr.
Berens, (ii) 24,920 shares of Common Stock issuable upon the exercise of
Options held by Mr. Berens, and (iii) 75,833 shares of Common Stock
issuable upon conversion of 7.5% Convertible Debentures owned by Mr.
Berens. Does not include 987,290 shares of Common Stock held by the
Estate of Eugene Ramos, as to which Mr. Berens serves as a personal
representative.
(9) The Common Stock includes (i) 879,859 shares of Common Stock owned by Mr.
Mauran, (ii) 125,000 shares of Common Stock owned by Devonshire Trust
("Devonshire"), a trust of which Mr. Mauran is a trustee, (iii) 110,680
shares of Common Stock issuable upon the conversion of Series B
Convertible Preferred owned by Devonshire, (iv) 489,051 shares of Common
Stock issuable upon the conversion of Series B Convertible Preferred
owned by Euro Credit Investments Limited ("Euro Credit"), a company
controlled by Mr. Mauran, (v) 108,254 shares of Common Stock issuable
upon the conversion of Series C Convertible Preferred owned by Mr.
Mauran, (vi) 23,264 shares of Common Stock issuable upon the conversion
of Series C Convertible Preferred owned by Devonshire, (vii) 24,920
shares of Common Stock issuable upon the exercise of Options held by Mr.
Mauran, and (viii) 110,964 shares of Common Stock issuable upon
conversion of 7.5% Convertible Debentures owned by Mr. Mauran. The
information relating to the Common Stock is based on a Schedule 13D,
dated March 15, 1997, which was filed by Mr.
Mauran.
(10) The following shares are owned together with his spouse as joint tenants
with right of survivorship: (i) 9,000 shares of Common Stock beneficially
owned by Mr. Dooley, and (ii) 3,300 shares owned by an unnamed executive
officer.
(11) Prior to the Merger, Eugene Ramos was the President and principal
shareholder of Suave Shoe Corporation.
(12) The Common Stock includes (i) 417,801 shares of Common Stock, (ii)
240,378 shares of Common Stock issuable upon the conversion of Series B
Convertible Preferred, and (iii) 55,072 shares of Common Stock issuable
upon the conversion of Series C Convertible Preferred.
(13) The Common Stock includes (i) 734,775 shares of Common Stock issuable
upon the conversion of Series B Convertible Preferred, (ii) 161,220 shares
of Common Stock issuable upon the conversion of Series C Convertible
Preferred, and (iii) 564,843 shares of Common Stock issuable upon the
exercise of Options.
3
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
Six directors are to be elected at the Annual Meeting. The six nominees
named below are currently serving as the directors of the Company and have been
designated by the Board of Directors (the "Board") as nominees for election as
directors, to serve until the next annual meeting of shareholders and until
their successors are duly elected and qualified. In the event that any nominee
is unable or unwilling to serve, discretionary authority is reserved to the
persons named in the accompanying form of proxy to vote for substitute nominees.
The Board does not anticipate that such an event will occur. Each director must
be elected by a plurality of the votes cast.
The names of the nominees and information about them are set forth
below.
RAFAEL KRAVEC, age 65, has served as Chairman of the Board since April
1997 and has served as Chief Executive Officer and as a director of the Company
since the Merger in November 1995. Mr. Kravec served as President and Chief
Executive Officer and a director of FFI from its formation in July 1992 until
the consummation of the Merger. Mr. Kravec has also served as President and
Chief Executive Officer and a director of (i) GB Parfums, Inc., a wholly-owned
subsidiary of the Company, since its formation in March 1996 (and of the
predecessor company), (ii) Halston Parfums, Inc., a wholly-owned subsidiary of
the Company, since its formation in March 1996, (iii) Fine Fragrances, Inc.
("Fine Fragrances"), a wholly-owned subsidiary of the Company, since March 1990,
(iv) FRM Services, Inc., a wholly-owned subsidiary of the Company, since
December 1996, and (v) National Trading, a company controlled by Mr. Kravec,
since 1981. Mr. Kravec is the father of Saul Kravec who serves as a Vice
President - Sales of the Company.
J.W. NEVIL THOMAS, age 59, has served as Vice Chairman of the Board of
the Company since April 1997 and previously served as Chairman of the Board of
the Company since the consummation of the Merger. Mr. Thomas served as Chairman
of the Board of FFI from its formation in July 1992 until the consummation of
the Merger. Since 1970, Mr. Thomas has served as President of Nevcorp, a
financial and management consulting firm which is controlled by Mr. Thomas. Mr.
Thomas is Chairman of the Board of Bedford Capital Corporation ("Bedford"), a
Toronto, Canada-based firm that is engaged in the business of providing merchant
banking services through two private pools of capital to middle-market companies
and is a wholly-owned subsidiary of BCFC, and as a director of BCFC, Pet Valu,
Inc., a pet food retailer, and PMC International Inc., an investment management
company.
E. SCOTT BEATTIE, age 38, has served as President and Chief Operating
Officer of the Company since April 1997, and has been a director of the Company
since the consummation of the Merger. From November 1995 until April 1997, Mr.
Beattie served as Vice Chairman of the Board and Assistant Secretary of the
Company (positions he held with FFI from January 1995 until the consummation of
the Merger). Since September 1989, Mr. Beattie has served as President of ESB, a
financial and management consulting firm which is controlled by Mr. Beattie and
has an agreement with the Company. Mr. Beattie has also served as Executive Vice
President of Bedford since March 1995 and as Vice President of Bedford from
September 1989 to March 1995. Mr. Beattie is a director of Bedford, BCFC,
Microbix Biosystems, Inc., a biotechnology company, Cash Converters, Inc., a
specialty retailer, and Janna Systems Inc., an applications software company.
FRED BERENS, age 54, has served as a director of the Company since the
Merger. Mr. Berens served as a director of FFI from its formation in July 1992
until the consummation of the Merger. Mr. Berens has served as Senior Vice
President - Investments of Prudential Securities, Inc., an investment banking
firm, since March 1965. Mr. Berens previously served as a director of the
Company, when it was known as Suave Shoe Corporation, until December 1994.
RICHARD C.W. MAURAN, age 63, has served as a director of the Company
since the Merger. Mr. Mauran served as a director of FFI from its formation in
July 1992 until the consummation of the Merger. Mr. Mauran is a private investor
and serves as Chairman and Chief Executive Officer of BCFC and as a director of
Bedford, Microbix Biosystems, Inc., Pet Valu, Inc., and US Physical Therapy,
Inc., which owns and operates physiotherapy centers.
GEORGE DOOLEY, age 64, has served as a director of the Company since
March 1996. Mr. Dooley has served as President and Chief Executive Officer of
(i) Community Television Foundation of South Florida, Inc., a not-for-profit
corporation supporting, and a licensee of, public television station WPBT
Channel 2, since 1955, (ii) WPBT Communications Foundation, Inc., a
not-for-profit corporation supporting public television station WPBT Channel 2,
since 1981, and (iii) Comtel, Inc., a company providing television facilities to
television producers, since 1981.
4
<PAGE>
Except with respect to Mr. Kravec's relationship with Saul Kravec
described above, no family relationships exist between any of the executive
officers and directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH NOMINEE
FOR DIRECTOR.
COMPLIANCE WITH SECTION 16 UNDER THE 1934 ACT
Federal securities laws require the Company's directors, executive
officers, and persons who beneficially own more than 10 percent of the Common
Stock to file reports of initial ownership and reports of subsequent changes in
ownership with the Securities and Exchange Commission (the "Commission") and to
provide copies of these reports to the Company. Specific due dates have been
established and the Company is required to disclose in this Proxy Statement any
failure of the foregoing persons to file timely those reports during its fiscal
year ended January 31, 1997. To the best of the Company's knowledge, based
solely upon a review of copies of reports furnished to it and written
representations that no other reports were required, all of the Company's
directors, executive officers and 10 percent or greater beneficial owners of
Common Stock made all such filings timely, with the following exceptions: one
report reporting one transaction for each of (i) director and executive officer
E. Scott Beattie, (ii) director Richard C.W. Mauran and (iii) executive officer
Gretchen Cuzydlo, was inadvertently filed late.
MEETINGS AND COMMITTEES OF THE BOARD
GENERAL
During the fiscal year ended January 31, 1997, the Board of Directors
held six meetings and each director attended at least 75% of the total meetings
of the Board and at least 75% of the total meetings of the committees of the
Board in which he served. The Board has an Audit Committee and Compensation
Committee.
The Audit Committee consists of Messrs. Berens, Dooley and Thomas, none
of whom are presently or formerly employees of the Company. The Audit Committee
oversees the procedures, scope and results of the annual audit and reviews the
services provided by the Company's independent auditors. The Audit Committee met
once during the fiscal year ended January 31, 1997.
The Compensation Committee consists of Messrs. Berens and Dooley. The
Compensation Committee administers the Company's stock option plans and
determines the compensation of the Company's executive officers. The
Compensation Committee met once during the fiscal year ended January 31, 1997.
The Board does not have a standing nominating committee. The Board
performs this function.
DIRECTOR COMPENSATION
Directors who are employees of the Company or officers or employees of
Bedford do not receive any monetary compensation for serving on the Board or any
of its committees. Directors who are not employees or officers of the Company
(currently Messrs. Berens, Dooley, Thomas and Mauran) as attached receive an
annual retainer of $3,000 and a fee of $500 for each meeting of the Board or a
committee of the Board attended. The Board also reimburses all directors for all
expenses incurred in connection with their activities as directors. Under the
terms of the Non-Employee Director Stock Option Plan (the "Directors' Plan"),
non-employee directors receive stock options for 7,000 shares of Common Stock
upon their initial election to the Board and stock options for 7,500 shares of
Common Stock annually upon reelection to the Board at the annual meeting of
shareholders. All options granted under the Directors' Plan are exercisable one
year from the date of grant. During the fiscal year ended January 31, 1997, upon
his initial election to the Board in March 1996, Mr. Dooley was granted stock
options under the Directors' Plan for 7,000 shares exercisable at $6.00 per
share. During the fiscal year ended January 31, 1997, upon their reelection to
the Board at the annual meeting of shareholders in June 1996, each of Messrs.
Beattie, Thomas, Berens, Mauran and Dooley were granted stock options under the
Directors' Plan for 7,500 shares of Common Stock exercisable at $7.00 per share.
Directors who are not on the Compensation Committee may also be granted stock
options under the Company's 1995 Stock Option Plan (the "1995 Plan"). During the
fiscal year ended January 31, 1997 and in recognition of his extensive role in
connection with the management of the Company, Mr. Beattie was granted options
for 92,500 shares of Common Stock under the 1995 Plan exercisable at $6.50 per
share in three equal installments if and when the Common Stock of the Company
next trades at $8.00, $11.00 and $15.00, respectively. For information on
agreements which the Company
5
<PAGE>
has entered into with Bedford and companies affiliated with Messrs. Thomas and
Beattie, see "Certain Relationships and Related Transactions."
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
paid by the Company for the fiscal year ended January 31, 1997, by FFI until the
Merger and by the Company following the Merger for the fiscal year ended January
31, 1996, and by FFI for the seven months ended January 31, 1995 and the fiscal
year ended June 30, 1994 to the Company's Chief Executive Officer and the four
other most highly compensated executive officers of the Company whose
compensation exceeded $100,000 (the "Named Executives").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ --------------------------------
FISCAL OTHER ANNUAL STOCK OPTION
NAME AND PRINCIPAL POSITION PERIOD (1) SALARY BONUS (2) COMPENSATION(3) AWARDS (#)
<S> <C> <C> <C> <C> <C>
Rafael Kravec 1/31/97 $296,624 $120,000 -- --
Chairman of the Board and 1/31/96 $250,000 $ 90,000 -- --
Chief Executive Officer 1/31/95 $134,692 $125,000 -- 106,800
6/30/94 $174,308 $ 35,000 -- --
William J. Mueller 1/31/97 $166,502 $ 70,000 -- 10,000
Vice President - Operations 1/31/96 $130,000 $ 40,000 -- --
and Chief Financial Officer 1/31/95 $ 76,060 $ 40,000 -- 53,400
6/30/94 $113,173 $ 25,000 -- --
Joseph M. Gilfarb 1/31/97 $165,453 $ 70,000 -- 10,000
Vice President - Sales 1/31/96 $130,000 $ 25,000 -- --
1/31/95 $ 52,500 $ 97,746 -- 53,400
6/30/94 $ 90,000 $ 69,130 -- --
Gretchen Cuzydlo 1/31/97 $165,384 $ 70,000 -- 10,000
Vice President - Marketing 1/31/96 $123,077 $ 40,000 -- --
1/31/95 $ 52,500 $ 20,000 -- 53,400
6/30/94 $ 58,327 $ 5,000 -- --
Saul Kravec 1/31/97 $165,089 $ 70,000 -- 10,000
Vice President - Sales 1/31/96 $130,000 $ 40,000 -- --
1/31/95 $ 77,500 $ 40,000 -- 53,400
6/30/94 $ 99,462 $ 20,000 -- --
</TABLE>
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(1) The amounts shown for "1/31/95" are for the seven months ended January 31,
1995; the amounts shown for "1/31/97", "1/31/96" and "6/30/94" are for the
fiscal years ended January 31, 1997, January 31, 1996 and June 30, 1994,
respectively. Effective January 31, 1995, FFI changed its fiscal year end
from June 30 to January 31.
(2) The Company creates an annual bonus pool for Mr. Kravec and the other
members of management equal to 6% of the pre-tax profit of the Company (the
"6% Bonus Pool"). On an annual basis, the Compensation Committee approves
the allocation of the 6% Bonus Pool among Mr. Kravec and the other members
of the Company's management and other key employees of the Company. For Mr.
Gilfarb, the amounts set forth under the "Bonus" column for the 1/31/95 and
6/30/94 periods represent sales commissions.
(3) The amounts reflected in the above table do not include any amounts for
perquisites and other personal benefits. The aggregate amount of such
compensation for each named executive did not exceed 10% of the total
annual salary and bonus of such Named Executive and, accordingly, has been
omitted from the table as permitted by the rules of the Commission.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding options
granted during the fiscal year ended January 31, 1997 by the Company to the
Named Executives.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
ASSUMED ANNUAL RATE OF STOCK
PERCENT OF TOTAL MARKET PRICE APPRECIATION FOR
OPTIONS GRANTED EXERCISE PRICE OPTION TERM(1)
OPTIONS TO EMPLOYEES OR BASE ON DATE EXPIRATION ----------------------------------
NAME GRANTED IN FISCAL YEAR PRICE(2) OF GRANT DATE 0%($) 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rafael Kravec............. 0 --% $ -- $ -- -- $ -- $ -- $ --
William J. Mueller........10,000 4.95 6.50 6.75 5/2/01 2,500 21,149 43,709
Joseph M. Gilfarb.........10,000 4.95 6.50 6.75 5/2/01 2,500 21,149 43,709
Gretchen Cuzydlo..........10,000 4.95 6.50 6.75 5/2/01 2,500 21,149 43,709
Saul Kravec...............10,000 4.95 6.50 6.75 5/2/01 2,500 21,149 43,709
</TABLE>
- ------------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 0%, 5% and 10%
compounded annually from the date the respective options were granted to
their expiration dates. Hypothetical gains are calculated based on rules
promulgated by the Commission and do not represent an estimate by the
Company of its future stock price growth. This table does not take into
account any appreciation in the price of the Common Stock to date. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the timing of such exercises and the future performance of the
Common Stock. There can be no assurances that the rates of appreciation
assumed in this table can be achieved or that the amounts reflected will be
received by the Named Executives.
(2) The exercise price for the options granted was based upon the average
closing sales price of the Common Stock on the Nasdaq National Market for
the 30 trading days prior to the date of grant, calculated in accordance
with the terms of the Company's 1981 Employee Stock Option and Stock
Appreciation Plan (the "1981 Plan"). The 1981 Plan was terminated by the
Company in June 1996.
AGGREGATED FISCAL YEAR END OPTION VALUE TABLE
The following table sets forth certain information concerning
unexercised stock options held by the Named Executives at January 31, 1997.
There were no exercises of stock options by the Named Executives during the
fiscal year ended January 31, 1997.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT JANUARY 31, 1996(#) JANUARY 31, 1997($)(1)
----------------------------------- ---------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Rafael Kravec...........................................80,100 26,700 $366,458 $122,153
William J. Mueller......................................56,734 6,666 248,889 9,166
Joseph M. Gilfarb.......................................56,734 6,666 248,889 9,166
Gretchen Cuzydlo........................................56,734 6,666 248,889 9,166
Saul Kravec.............................................56,734 6,666 248,889 9,166
</TABLE>
- ------------
(1) Value is based on the difference between the option exercise price and the
fair market value per share on January 31, 1997 ($7.875 per share which
represents the closing sales price of the Common Stock on the Nasdaq
National Market) multiplied by the number of shares underlying the option.
EMPLOYMENT AGREEMENT
The Company has an employment agreement (the "Employment
Agreement") with Rafael Kravec, its Chairman and Chief Executive Officer,
whereby he agrees to devote a majority of his business time and energies to the
business and affairs of the Company. The term of the Employment Agreement
extends to April 2000. The Employment Agreement is automatically renewable for
successive one-year periods unless either party gives written notice at least 90
days prior to the end of a term of
7
<PAGE>
his or its intention not to renew. The Employment Agreement provides for a base
annual salary to be determined by the Board. Mr. Kravec is also entitled to
participate in the Company's other employee benefits, including, without
limitation, the 1995 Plan and the 6% Bonus Pool. The Employment Agreement
provides that Mr. Kravec shall not engage or have an interest in any business
competitive with or similar to that engaged by the Company during the term of
the agreement and for a period of five years after its termination in the State
of Florida or any other geographic area where the Company does business or in
which its products are marketed. The Company has no other employment agreements
with its executive officers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Fred Berens served as a member of the Compensation Committee of
the Board for the fiscal year ended January 1, 1997. Mr. Berens owns $546,000
principal amount of the Company's outstanding 7.5% Convertible Debentures. See
"Certain Relationships and Related Transactions."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee submits the following report for fiscal
1997:
The function of the Compensation Committee is to determine the
compensation of the Company's senior management, including bonuses, and to
administer the Company's 1995 Stock Option Plan. The Company's executive
compensation program consists of three primary components: base salaries,
bonuses and grants of stock options. Bonuses for senior management are allocated
from the Company's 6% Bonus Pool pursuant to which 6% of the pre-tax profit of
the Company is available as a bonus pool for the Chief Executive Officer and
other members of management. The Compensation Committee may also, in its
discretion, supplement monetary compensation with incentive compensation in the
form of the grant of stock options under the 1995 Plan. All of the components of
executive compensation are designed to facilitate fulfillment of the
compensation objectives of the Board of Directors and the Compensation
Committee, which objectives include: (i) providing market competitive
compensation to attract and retain key management personnel; (ii) relating
management compensation to the achievement of Company goals and the Company's
performance; and (iii) aligning the interests of management with those of the
Company's shareholders.
The determination of the total compensation package for the Company's
senior management was made after reviewing and considering a number of factors,
including job responsibility, level of individual performance, achievement of
Company goals, Company performance, compensation levels at competitive
companies, as well as companies of similar size to the Company, and the
Company's historical compensation levels. Following the completion of the fiscal
year, the Compensation Committee met with the Chief Executive Officer and the
President to review their recommendations with respect to the compensation
package for other members of senior management. The Compensation Committee then
determined the allocation of bonuses from the 6% Bonus Pool and whether to grant
incentive stock options. Other than the 6% Bonus Pool which is specifically tied
to Company performance, the compensation decisions were based upon an overall
review of all of the relevant factors without giving specific weight to any one
factor.
Based on the Compensation Committee's evaluation that several members
of the Company's management (in addition to the senior executives) also
contributed to the Company's performance and achievement of its goals during
fiscal 1997, the Compensation Committee allocated the 6% Bonus Pool to a greater
number of management personnel than in prior years, as well as to other key
employees. The Compensation Committee's stock option grants reflected in the
Summary Compensation Table for the Named Executives were granted in May 1996 and
were grants based primarily on fiscal 1996 compensation. For fiscal 1997
performance, the Compensation Committee granted incentive stock options for
30,000 shares of Common Stock to key personnel other than the Named Executives.
The determination of salary and bonus during fiscal 1997 for Rafael
Kravec, the Chairman and Chief Executive Officer of the Company, was based
primarily on job responsibility, achievement of company goals (including his
role with respect to Company's growth, the Company's acquisitions of fragrance
brands or new distribution arrangements and the Company's public financing), the
Company's performance and the compensation levels for chief executive officers
at competitive companies. There was no specific relationship or formula by which
Mr. Kravec's specific compensation was tied to Company performance other than
the 6% Bonus Pool.
Fred Berens
George Dooley
8
<PAGE>
PERFORMANCE GRAPH
NOTE: Prior to the November 1995 Merger, the Company (which was then known as
Suave Shoe Corporation) had discontinued its shoe manufacturing and distribution
operations. Management of the Company believes that reflecting total return data
for the Company relating to the shoe operations prior to the Merger would be of
no relevance to its shareholders and potentially misleading. Accordingly,
management of the Company has omitted all historical data which does not relate
to the Company's fragrance operations following the Merger and has begun the
performance graph comparison as of the effective date of the Merger.
The performance graph data set forth below compares the cumulative total
returns, including the reinvestment of dividends, of the Common Stock with the
companies in the Nasdaq Stock Market (U.S.) Index and with four peer group
companies (the "Peer Group"), which include: Allou Health & Beauty Care, Inc.;
Jean Philippe Fragrances, Inc.; Parlux Fragrances, Inc.; and Perfumania, Inc.
The Peer Group consists of companies engaged in fragrance manufacturing,
distribution and sales with similar market capitalizations to the Company. The
comparison covers a period from the November 30, 1995 effective date of the
Merger in which the Company's operations became the fragrance operations of FFI
until January 31, 1997, and is based on an assumed $100 investment on November
30, 1995 in the Nasdaq Stock Market (U.S.) Index, the Peer Group and in the
Common Stock. The Common Stock is listed on the Nasdaq National Market under the
symbol "FRAG."
[GRAPHIC OMITTED]
CUMULATIVE TOTAL RETURN
11/30/95 01/31/96 01/31/97
---------------------------------
French Fragrances, Inc. 100 141 168
Peer Group 100 99 67
NASDAQ National Market (U.S.) 100 100 131
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATIONSHIPS
Rafael Kravec, the Chairman and Chief Executive Officer of the
Company and the President and Chief Executive Officer of Fine Fragrances, is the
controlling shareholder of National Trading. E. Scott Beattie, the President and
a director of the Company, is the controlling shareholder of ESB and a director
of BCFC and Bedford. J.W. Nevil Thomas, a director of the Company, BCFC and
Bedford, is the controlling shareholder of Nevcorp. Richard C.W. Mauran, a
director of the Company, BCFC and Bedford, is the controlling shareholder of
Euro Credit, the co-trustee of Devonshire and controls the corporation which is
the beneficiary of the trust named Devonshire Holdings. Fred Berens is a
director of the Company. Since the May 1997 acquisition by the Company of the
interest in Fine Fragrances not previously held by the Company (the "Fine
Fragrances Acquisition"), Fine Fragrances is a wholly-owned subsidiary of the
Company. Prior to the Fine Fragrances Acquisition, the Company had a 49.99%
ownership interest in Fine Fragrances.
RELATED TRANSACTIONS
Following the Merger on November 30, 1995, the Company entered into a
registration rights agreement with Bedford, for itself and on behalf of the
investors in the two funds managed by Bedford (the "Bedford Funds") holding
shares of Series B Convertible Preferred and Common Stock, Rafael Kravec, Eugene
Ramos (who was the President of Suave Shoe Corporation prior to the Merger) and
Fred Berens pursuant to which the Company granted certain demand and "piggyback"
registration rights to such persons with respect to the Common Stock owned by
them (including Common Stock issuable upon the conversion of the Series B
Convertible Preferred), provided that a demand can only be made for at least an
aggregate of 1,000,000 shares of Common Stock. "Piggyback" registration rights
permit such persons to require the Company to include their shares of Common
Stock in a registration for the account of the Company or other shareholders,
subject to certain limitations. Demand registration rights terminate November
30, 2000, and "piggyback" registration rights terminate on November 30, 2002. On
March 20, 1996, the agreement was amended to grant registration rights to the
investors in the Bedford Funds holding shares of the Series C Convertible
Preferred with respect to the Common Stock issuable upon the conversion thereof,
and on July 22, 1996, the agreement was further amended to grant similar
registration rights to the holders of 7.5% Convertible Debentures with respect
to the Common Stock issuable upon the conversion thereof.
The Company is a party to a one-year agreement dated as of April 1,
1997 (the "Chief Operating Officer Compensation Agreement") with ESB. The Chief
Operating Officer Compensation Agreement provides for a fee payable to ESB of
$300,000 per year, which fee is subject to increase as determined by the Board.
In addition, the Company reimburses ESB for pre-approved travel expenses. Mr.
Beattie does not draw a salary from the Company.
Prior to the date of the Chief Operating Officer Compensation
Agreement, the Company was a party to certain monitoring agreements with (i)
Bedford, (ii) Nevcorp, and (iii) ESB, pursuant to which such entities provided
financial advisory services to the Company. All of these monitoring agreements
were terminated and replaced by the Chief Operating Officer Compensation
Agreement. Pursuant to the monitoring agreements, (i) Bedford, Nevcorp and ESB
received fees of $132,000, $47,000, and 96,000, respectively, during the fiscal
year ended January 31, 1997. In addition, under these agreements the Company
reimbursed Bedford, Nevcorp, and ESB for pre-approved travel expenses.
In connection with certain management and financial advisory services
performed by Bedford Capital Financial Inc., a wholly owned subsidiary of
Bedford ("BCFI"), over several months on behalf of the Company with respect to
the March 1996 acquisition of the Halston fragrance brands (the "Halston
Acquisition"), the Company paid BCFI a management services fee of $200,000.
During the fiscal year ended January 31, 1997, the Company had
outstanding $7.4 million aggregate principal amount of the 8.0% Secured
Subordinated Debentures Series I Due 2005 (the "8% Series I Debentures"), of
which (i) $159,193 in aggregate principal amount were owned by National Trading,
(ii) $477,759 in aggregate principal amount were owned by BCFC, (iii) $1,894,397
in aggregate principal amount were owned by Richard C.W. Mauran and Devonshire
Holdings, and (iv) $175,112 in aggregate principal amount were owned by ESB. In
March 1996, the Company issued $3.0 million aggregate principal amount of 8.0%
Secured Subordinated Debentures Series II Due 2005 (the "8.0% Series II
Debentures") as part of the financing for the acquisition of the Halston brands
of which (i) $57,798 in aggregate principal amount were owned by National
Trading, (i) $173,391 in aggregate principal amount were owned by BCFC, (iii)
$680,922 in aggregate principal amount were owned by Mr. Mauran and Devonshire,
and (iv) $60,275 in aggregate principal amount
10
<PAGE>
were owned by ESB. The 8.0% Series I Debentures and 8.0% Series II Debentures
were repaid in May 1997 with a portion of the net proceeds of a senior note
offering consummated by the Company.
At January 31, 1997, the Company also has outstanding $5.46 million
aggregate principal amount of 7.5% Convertible Debentures, of which (i)
$2,184,000 in aggregate principal amount are owned by Mr. Kravec and National
Trading, (ii) $546,000 in aggregate principal amount are owned by Fred Berens,
(iii) $798,942 in aggregate principal amount are owned by Mr. Mauran and
Devonshire, and (iv) $8,374 in aggregate principal amount are owned by ESB.
At January 31, 1997, the Company had outstanding balances from
National Trading and Fine Fragrances in the principal amounts of $1.1 million
and $519,000, respectively. These loans bear interest at the prime rate and are
short-term in nature. As a result of the Fine Fragrances Acquisition, the loan
from Fine Fragrances will be canceled.
The Company is a party to a lease agreement dated as of July 2, 1992,
with National Trading, pursuant to which the Company leases from National
Trading a 55,000 square foot facility (the "National Trading Facility") which
prior to May 1997 served as the Company's executive offices. The property is
subject to a mortgage by National Trading to secure its obligation for
industrial development revenue bonds issued through the Dade County Industrial
Development Authority in the original amount of $3 million. Pursuant to the
lease, the Company is required to maintain a maximum leverage ratio, a minimum
tangible capital base, a minimum current ratio and a minimum interest coverage
ratio, and is subject to limits on capital expenditures. In addition, the
Company agreed not to assign the lease without the prior written consent of the
Industrial Development Authority and the trustee under the Bond Indenture. Under
the terms of the lease, the Company has an option to purchase the leased
property on or before the end of the lease term at a price of $1.8 million less
the amount equal to the product of $10,000 multiplied by the number of months
for which the Company has paid rent pursuant to the lease. The Company and
National Trading are pursuing a sale or lease of the National Trading Facility
to a third party that would discharge the Company from the lease obligation.
There is no assurance that any such sale or lease will be consummated. The
Company made lease payments to National Trading during the fiscal year ended
January 31, 1997 totaling $259,000.
Prior to the Fine Fragrances Acquisition, the Company had been a
party to a management agreement with Fine Fragrances (the "Management
Agreement"), pursuant to which the Company provided office space and equipment,
warehousing and delivery facilities and certain managerial, accounting and legal
services to Fine Fragrances in return for a management fee of 12% of the gross
sales of Fine Fragrances payable on a monthly basis. In addition, the Company
was reimbursed for certain business expenses incurred by the Company in
connection with the performance of the services under the Management Agreement.
The Company received management fees under the Management Agreement totaling
$925,000 during the fiscal year ended January 31, 1997. The Management Agreement
was terminated upon consummation of the Fine Fragrances Acquisition.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Deloitte & Touche
LLP to continue as the independent auditors for the Company for the fiscal year
ending January 31, 1998. Deloitte & Touche LLP has been acting as the
independent auditors of the Company since February 22, 1996, and served as the
independent auditors of FFI, whose fragrance distribution operations became the
operations of the Company following the Merger, since FFI's inception in 1992.
In conjunction with the appointment of Deloitte & Touche LLP, on February 22,
1996, the Board of Directors of the Company, based on the recommendation of the
Audit Committee of the Board, dismissed Arthur Andersen LLP as the independent
auditors of the Company. Arthur Andersen LLP served as the independent auditors
of the Company when it was known as Suave Shoe Corporation and when its business
operations consisted of the manufacture of athletic footwear. The Board based
its decision to change independent auditors for the Company on FFI's experience
with Deloitte & Touche LLP and Deloitte & Touche LLP's familiarity with the
fragrance operations of the Company following the Merger.
The report issued by Arthur Andersen LLP for Suave Shoe Corporation's
fiscal year ended September 30, 1995 did not contain an adverse opinion or a
disclaimer of opinion, nor was any such opinion qualified or modified as to
uncertainty, audit scope or accounting principles, although such report gave
emphasis, in a separate paragraph, to the shareholders' approval of the Merger.
This "emphasis" paragraph did not modify or qualify the independent auditors'
report for the fiscal year ended September 30, 1995. During the fiscal year
ended September 30, 1995 and subsequent interim periods, there were no
disagreements between the Company and Arthur Andersen LLP concerning any matter
of accounting
11
<PAGE>
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Arthur
Andersen LLP, would have caused it to make a reference to the subject matter of
the disagreements in connection with any of its reports on the Company's
financial statements. During the fiscal year ended September 30, 1995 and
subsequent interim periods, there were no matters which may be construed as
"reportable events" within the meaning of Item 304(a)(1)(v)(A) through (D) of
Regulation S-K promulgated by the Commission.
Representatives of Deloitte & Touche LLP are expected to be present
at the Annual Meeting, will be given an opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions from shareholders.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY
FOR THE FISCAL YEAR ENDING JANUARY 31, 1998.
SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in the proxy
materials of the Company for its 1998 Annual Meeting of Shareholders must be
received by the Company by January 21, 1998.
OTHER MATTERS
The expense of soliciting proxies will be borne by the Company.
Proxies will be solicited principally by mail, but directors, officers and
regular employees of the Company may solicit proxies personally, by telephone or
by facsimile transmission. The Company will reimburse custodians, nominees or
other persons for their out-of-pocket expenses in sending proxy materials to
beneficial owners.
The Board of Directors is not aware of any matters to be presented at
the meeting other than the matters described herein and does not intend to bring
any other matters before the meeting. However, if any other matters should come
before the meeting, or any adjournment thereof, the persons named in the
enclosed proxy will have discretionary authority to vote all proxies in
accordance with their best judgment.
By Order of the Board of Directors
OSCAR E. MARINA
SECRETARY
Miami, Florida
May 21, 1997.
12
<PAGE>
REVOCABLE PROXY - COMMON STOCK
FRENCH FRAGRANCES, INC.
ANNUAL MEETING OF SHAREHOLDERS
JUNE 20, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Oscar E. Marina and William J.
Mueller as proxies each with full powers of substitution to act, as attorneys
and proxies for the undersigned, to vote all shares of Common Stock of French
Fragrances, Inc., which the undersigned is entitled to vote at the Annual
Meeting of Shareholders, to be held at the Company's executive offices at 14100
N.W. 60th Avenue, Miami Lakes, Florida 33014, on Friday, June 20, 1997 at 10:00
a.m., Eastern Standard Time, and at any postponement or adjournment thereof, as
stated on the reverse side.
THIS PROXY WHEN PROPERLY EXECUTED AND RETURNED IN A TIMELY MANNER
WILL BE VOTED AT THE ANNUAL MEETING AND AT ANY POSTPONEMENT OR ADJOURNMENT
THEREOF IN ACCORDANCE WITH THE DIRECTIONS SPECIFIED HEREIN. IF NO DIRECTIONS ARE
INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR
DIRECTORS LISTED IN PROPOSAL 1 AND FOR THE RATIFICATION OF THE APPOINTMENT OF
THE INDEPENDENT AUDITORS WHICH IS PROPOSAL 2, AND ON OTHER MATTERS PRESENTED FOR
A VOTE, IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS ACTING UNDER THIS PROXY.
IN THE EVENT ANY NOMINEE FOR ELECTION AS DIRECTOR BECOMES UNAVAILABLE TO SERVE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BALANCE OF THOSE NAMED AND A
SUBSTITUTE SELECTED BY THE PERSONS NAMED IN THE PROXY.
Each shareholder giving a proxy has the power to revoke it any
time before it is voted, either in person at the Annual Meeting, by written
notice to the Secretary of French Fragrances, Inc. or by delivery of a
later-dated proxy. Attendance at the Annual Meeting without further action will
not automatically revoke a proxy.
[CONTINUED AND TO BE MARKED, DATED AND SIGNED ON REVERSE SIDE]
13
<PAGE>
[REVERSE SIDE OF CARD
The Board of directors recommends a vote FOR
Items 1 and 2.
Item 1- ELECTION OF DIRECTORS
J.W. Nevil Thomas E. Scott Beattie
Rafael Kravec Fred Berens
Richard C.W. Mauran George Dooley
FOR WITHHOLD AUTHORITY
[ ] [ ]
Instruction: To withold authority to vote for any individual
nominee, write that nominee's name in the space provided
below:
_______________________________________________
_______________________________________________
_______________________________________________
Please mark your votes as indicated in this
example [X]
Item 2 - RATIFICATION OF APPOINTMENT OF
DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
OTHER BUSINESS
In their judgment, the proxies are authorized to vote
upon such other business as may properly come
before the Annual Meeting and any adjournment
or postponement thereof.
Signature(s): _____________________________
Signature(s): _____________________________
Date: _______________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
14
