Exhibit F
Form of Amended Non-Employee Director Stock Option Plan
FRENCH FRAGRANCES, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to help attract, retain and
compensate highly qualified individuals who are not current employees of French
Fragrances, Inc. (the "Company") as members of the Board of Directors and, by
encouraging ownership of a stock interest in the Company, to gain for the
Company the advantages inherent in directors having a greater personal financial
investment in the Company.
2. DEFINITIONS. As used herein, the following terms shall have the meanings
indicated:
"Annual Meeting Date" means 5:00 p.m. on the date of the annual meeting
of the Company's shareholders at which the Directors are elected.
"Board" means the Company's Board of Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Common Stock, par value $.01 per share, of
the Company.
"Company" refers to French Fragrances, Inc., a Florida corporation, or
any successor thereof.
"Director" means a member of the Board.
"Effective Date" is the date specified in Section 16.1.
"Eligible Director" means any person who is a member of the Board and
who, at the time of the grant, is not an "employee" of the Company and/or
any of its subsidiaries, within the meaning of the Employee Retirement
Security Act of 1974, as amended ("ERISA").
"Fair Market Value" of the Common Stock on any date of reference means
shall be determined in good faith by the Board and may, among other
methods, be the Closing Price of the Common Stock preceding the grant date
or the average of the Closing Prices of the Common Stock on each of the 30
business days immediately preceding such date. For this purpose, the
Closing Price of the Common Stock on any business day shall be (i) if such
Common Stock is listed or admitted for trading on any United States
national securities exchange, or if actual transactions are otherwise
reported on a consolidated transaction reporting system, the last reported
sale price of Common Stock on such exchange or reporting system, as
reported in any newspaper of general circulation; (ii) if the Common Stock
is quoted on the National Association of Securities Dealers Automated
Quotations System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the closing
bid quotation for such day of the Common Stock on such system; or (iii) if
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neither clause (i) or (ii) is applicable, the mean between the high bid and
low ask quotations for the Common Stock as reported by the National
Quotation Bureau, Incorporated if at least two securities dealers have
inserted both bid and ask quotations for the Common Stock on at least 5 of
the 10 preceding days.
"Initial Grant Date" means the date on which a person is first elected
as a member of the Board.
"Option" (when capitalized) means any stock option granted under this
Plan.
"Option Agreement" means the agreement between the Company and the
Optionee for the grant of an option.
"Option Period" means the ten-year period between the date an Option is
granted and the expiration date of the Option.
"Optionee" means a person to whom a stock option is granted under this
Plan or any person who succeeds to the rights of such person under this
Plan by reason of the death of such person.
"Plan" shall mean this Non-Employee Director Stock Option Plan for the
Company.
"Share(s)" shall mean a share or shares of the Common Stock.
3. SHARES AND OPTIONS. Subject to Section 11 of this Plan, the maximum
number of shares of Common Stock which may be issued pursuant to Options granted
under the Plan shall be 500,000 shares. Shares of Common Stock shall be made
available for issuance pursuant to the Plan either from shares of Common Stock
reacquired by the Company (either directly or indirectly through an agent,
trustee or other person or entity) or from authorized but unissued shares. Any
shares of Common Stock with respect to which Options have expired or terminated
for any reason other than exercise of such Options, shall again be available for
issuance pursuant to the Plan, to the extent permitted under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
4. GRANTS OF OPTIONS. Each Eligible Director elected after the Effective
Date shall receive an initial grant of an Option to purchase 7,000 Shares on the
Initial Grant Date. In addition, commencing in 1996 and provided that a
sufficient number of shares remain available under this Plan, each Eligible
Director who is re-elected to serve as a director on the Annual Meeting Date,
shall be granted an option to purchase 15,000 shares each year on the Annual
Meeting Date. Upon the grant of each Option, the Company and the Eligible
Director shall enter into an Option Agreement, which shall specify the grant
date and the exercise price and shall include or incorporate by reference the
substance of this Plan and such other provisions consistent with this Plan as
the Board may determine. The options to be granted under this Plan shall be
nonqualified stock options (stock options which do not constitute "incentive
stock options" within the meaning of Section 422A of the Code).
5. EXERCISE PRICE. The exercise price per Share of any Option shall be the
Fair Market Value of the Shares underlying such Option on the date such Option
is granted.
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6. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i) the
Company has received written notice of such exercise in accordance with the
terms of the Option; (ii) full payment of the aggregate exercise price of the
Shares as to which the Option is exercised has been made; and (iii) arrangements
that are satisfactory to the Board in its sole discretion have been made for the
Optionee's payment to the Company of the amount that is necessary for the
Company to withhold in accordance with applicable Federal or state tax
withholding requirements. The exercise price of any Shares purchased, and any
required tax payment, shall be paid, at the election of the Company, in cash, by
the tender of Shares, or both. If payment is made in cash, it may be made by
certified or official bank check, personal check or money order. If payment is
made by the tender of Shares, the Fair Market Value of each Share shall be
determined as of the day the Shares are tendered for payment or, if no sale or
bid has been made on such date, then on the last preceding day on which such
sale or bid shall have been made. Any excess of the value of the tendered Shares
over the purchase price will be returned to the Optionee as follows:
(i) any whole Shares remaining in excess of the purchase price will be
returned to the Optionee in kind, and may be represented by one or more
certificates as determined by the Company in its sole discretion;
(ii) any partial Shares remaining in excess of the purchase price will
be returned to the Optionee in cash.
No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares are
issued to such person(s) under the terms of the Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 11 hereof.
7. ISSUANCE OF SHARES. No shares shall be issued and delivered upon
exercise of any option unless and until in the opinion of the Company's legal
counsel, any applicable registration requirements of the Securities Act of 1933,
as amended, any applicable listing requirements of any national securities
exchange on which stock of the same class is then listed, and any other
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery, shall have been fully complied with.
8. VESTING; EXERCISABILITY.
8.1 Each Option granted hereunder on an Annual Meeting Date shall vest
and become nonforfeitable on the next Annual Meeting Date, if the Optionee has
continued to serve as a Director until that meeting. An Option granted other
than on an Annual Meeting Date shall vest and become nonforfeitable on the first
anniversary of the day on which such Option was granted, if the Optionee has
continued to serve as a Director until that day. An Option shall on that day and
thereafter be exercisable, subject only Section 8.2.
8.2 The expiration date of an Option shall be 10 years from the date of
grant of the Option, subject to earlier termination pursuant to Section 10.
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9. CHANGE OF CONTROL PROVISIONS. Notwithstanding any other provision of the
Plan, the following acceleration provisions shall apply in the event of a
"Change of Control" as defined in this Section 9:
9.1 Any Option previously granted under the Plan to an Eligible
Director on the date of a "Change of Control" (as defined in Section 9.2)
automatically shall become fully exercisable and vested, subject only to legal
restrictions on the issuance of Shares set forth in Section 13 and the
provisions of the next sentence. Unless an Optionee can transfer an Option or
Shares issued upon exercise of an Option without incurring liability under
Section 16(b) of the Exchange Act, at least six months shall elapse from the
date of acquisition of the Option to the date of disposition of the Option
(other than upon exercise) or the underlying Shares.
9.2 For purposes of Section 9.1, a "Change of Control" shall mean:
(a) Individuals who, as of the effective date of the Plan, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened solicitation to
which Rule 14a-11 of Regulation 14A promulgated under the Exchange Act applies
or other actual or threatened solicitation of proxies or consents; or
(b) Approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or consolidation
beneficially own, directly or indirectly, more than 51% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
organization, merger or consolidation; or
(c) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company; or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other disposition,
more than 51% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition.
The term "the sale or other disposition of all or substantially all of the
assets of the Company" shall mean a sale or other disposition transaction or
series of related transactions involving assets of the Company or of any direct
or indirect subsidiary of the Company (including the stock of any direct or
indirect subsidiary of the Company) in which the value of the assets or stock
being sold or otherwise disposed of (as measured by the purchase price being
paid therefor or by such other method as the Board determines is appropriate in
a case where there is no readily ascertainable purchase price) constitutes more
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than two-thirds of the fair market value of the Company (as hereinafter
defined). The "fair market value of the Company" shall be the aggregate market
value of the then Outstanding Company Common Stock (on a fully diluted basis)
plus the aggregate market value of the Company's other outstanding equity
securities. The aggregate market value of the shares of Outstanding Company
Common Stock shall be determined by multiplying the number of shares of
Outstanding Company Common Stock (on a fully diluted basis) outstanding on the
date of the execution and delivery of a definitive agreement with respect to the
transaction or series of related transactions (the "Transaction Date") by the
average Fair Market Value per share for the ten trading days immediately
preceding the Transaction Date. The aggregate market value of any other equity
securities of the Company shall be determined in a manner similar to that
prescribed in the preceding sentence for determining the aggregate market value
of the shares of Outstanding Company Common Stock.
10. TERMINATION OF OPTION PERIOD. An Optionee whose directorship terminates
for any reason other than death or disability (as defined in Section 105(d)(4)
of the Code) shall be entitled to exercise any Options which are then
exercisable only within the six-month period after the date he ceases to serve
as a director; after such six-month period, such Options shall be null and void.
In the case of termination of the directorship by reason of the Director's death
or disability within the meaning of Section 105(d)(4) of the Code, the Option or
any portion thereof which was not exercisable on the date of termination shall
be accelerated and become immediately exercisable, and the period to exercise
such Option shall be twelve months, subject to the earlier expiration of the
Option Period. The estate of an Optionee who dies, or a person who acquires the
right to exercise an Option, including any portion of such Option which was not
exercisable at the time of death, by bequest or inheritance or by reason of the
death of the Optionee, may exercise the Option only within the twelve-month
period after the death of the Optionee, subject to the earlier expiration of the
Option Period.
11. ADJUSTMENT OF SHARES.
11.1 Option Agreements evidencing Options shall be subject to
adjustment by the Board as to the number and price of Shares subject to such
Options in the event of changes in the outstanding Shares by reason of stock
dividends, stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the date of grant of any such Option. In the
event of any such change in the outstanding Shares, the aggregate number of
Shares available under the Plan shall be appropriately adjusted by the Board,
whose determination shall be conclusive.
11.2 Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or exercise price of the Shares then subject
to outstanding Options granted under the Plan.
11.3 Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
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preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceedings, whether of a similar
character or otherwise.
12. TRANSFERABILITY OF OPTIONS. Each Option shall provide that such Option
shall not be transferable by the Optionee otherwise than by will or the laws or
descent and distribution, and each Option shall be exercisable during the
Optionee's lifetime only by the Optionee.
13. ISSUANCE OF SHARES. As a condition of any sale or issuance of Shares
upon exercise of any Option, the Board may require such agreements or
undertakings, if any, as the Board may deem necessary or advisable to assure
compliance with any applicable law or regulation including, but not limited to,
the following:
(a) a representation and warranty by the Optionee to the Company, at
the time any Option is exercised, that Optionee is acquiring the Shares to
be issued for investment and not with a view to, or for sale in connection
with, the distribution of any such Shares; and
(b) a representation, warranty and/or agreement to be bound by any
legends that are, in the opinion of the Board, necessary or appropriate to
comply with the provisions of any securities law deemed by the Board to be
applicable to the issuance of the Shares and are endorsed upon the Share
certificates.
14. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board, which shall have the authority to adopt such rules and regulations and to
make such determinations as are not inconsistent with the Plan and as are
necessary or desirable for the implementation and administration of the Plan,
provided that the Board does not have any discretion with respect to the grant
of options under the Plan.
15. INTERPRETATION.
15.1 If any provision of the Plan should be held invalid or illegal for
any reason, such determination shall not affect the remaining provisions hereof,
but instead the Plan shall be construed and enforced as if such provision had
never been included in the Plan. Without limiting the generality of the
foregoing, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors promulgated under the
Exchange Act, and this Plan is intended to constitute a "Formula Plan" pursuant
to Rule 16b-3(c)(2)(ii) under the Exchange Act. To the extent any provision of
the Plan or action by the Board hereunder is inconsistent with the foregoing
requirements, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Board.
15.2 The determinations and the interpretation and construction of any
provision of the Plan by the Board shall be final and conclusive. This Plan
shall be governed by the laws of the State of Florida. Headings contained in
this Plan are for convenience only and shall in no manner be construed as part
of this Plan. Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
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16. TERM OF PLAN; AMENDMENT AND TERMINATION OF THE PLAN.
16.1 This Plan is effective as of January 26, 1995; provided, however,
that within one year after such date, the Plan shall have been approved by the
affirmative vote of the holders of a majority of the shares of Common Stock
present or represented and entitled to vote at a meeting of the Company's
shareholders, of any adjournment thereof. This Plan shall continue in effect
until all Options granted hereunder have expired or been exercised, unless
sooner terminated under the provisions relating thereto. No Option shall be
granted after 10 years from the Effective Date. Any Option granted under this
Plan prior to the date that shareholder approval is obtained pursuant to this
Section 16.1 shall be deemed to have been granted as of the date such
shareholder approval is obtained.
16.2 The Board may from time to time amend, terminate or suspend the
Plan or any Option; provided, however, that except to the extent provided in
Section 10, no such amendment may (i) without approval by the Company's
shareholders, increase the number of Shares reserved for Options or change the
class of persons eligible to receive Options or involve any other change or
modification requiring shareholder approval under Rule 16b-3 of the Exchange
Act; (ii) permit the granting of Options that expire beyond the maximum 10-year
period described in Section 8.2; (iii) extend the termination date of the Plan
as set forth in Section 16.1; or (iv) give the directors discretion with respect
to the grant of options; and, provided further, that except to the extent
otherwise specifically provided in Section 10, no amendment, termination or
suspension of the Plan or any Option issued hereunder shall substantially impair
any Option previously granted to any Optionee without the consent of such
Optionee. Any termination or suspension of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been terminated or suspended. No Option may be granted while
the Plan is suspended or after it is terminated.
16.3 Notwithstanding anything else contained herein, the provisions of
this Plan which govern the number of Options to be awarded to Directors, the
exercise price per share under each such Option, when and under what
circumstances an Option will be granted, and the period within which each Option
may be exercised, shall not be amended more than once every six months (even
with shareholder approval), other than to conform to changes in the Code, or the
rules promulgated thereunder, and under ERISA, or the rules promulgated
thereunder, or with rules promulgated by the Securities and Exchange Commission.
17. NO RIGHT TO SERVICE. Except as provided in this Plan, no Eligible
Director shall have any claim or right to be granted a stock option under the
Plan. Neither the Plan nor any action pursuant thereto shall be construed as
giving any Eligible Director a right to be retained in the service of the
Company. The adoption of this Plan shall not affect any other compensation,
retirement or other benefit plan or program in effect for the Company.
18. RESERVATION OF SHARES. The Company, during the term of the Plan, will
at all times reserve and keep available a number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
As adopted by the Board of Directors on January 26, 1995, and amended on
November 30, 1995, March 29, 1996 and December __, 2000.
