Exhibit 10.21
ELIZABETH ARDEN,
INC.
2005 Management Bonus
Plan
1. Purpose.
The Elizabeth Arden, Inc. 2005
Management Bonus Plan (the “Plan”) is intended to
provide cash incentives which will attract, retain and motivate
highly competent persons as executive officers of Elizabeth Arden,
Inc. (the “Company”) and its subsidiaries and
affiliates, on the basis of performance goals established for them
under the Plan and to ensure that cash bonus payments
(“Bonus”) are in accordance with the arrangements
established by the Committee (as defined in Section 4). Bonuses
paid under the Plan are intended to be exempt from the limitations
of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”).
2. Authority to Establish
Performance Goals and Bonuses
(a) The Committee will have the
authority to establish for a Participant (as defined in Section 5),
performance goals, and the formulas for calculating a
Participant’s Bonus on the basis of such performance goals or
criteria established under or pursuant to the Plan (each a
“Bonus Formula”), for any fiscal year of the Company,
or for a period which is shorter or longer than a single fiscal
year (the “Fiscal Period”). The performance goals may
be based on business criteria that apply to one or more business
units of the Company that Participant is involved in or the Company
as a whole (the “Company Criteria”), and may be a
single goal or a range with a minimum goal up to a maximum goal,
with corresponding increases in the Bonus up to the maximum award
set by the Committee and as may be limited by this Plan.
The Company Criteria shall be as
follows, individually or in combination: (i) the attainment of
certain target levels of, or a specified increase in, the
Company’s enterprise value or value creation targets; (ii)
the attainment of certain target levels of, or a percentage
increase in, the Company’s after-tax or pre-tax profits
including, without limitation, that are attributable to the
Company’s continuing and/or other operations; (iii) the
attainment of certain target levels of, or a specified increase
relating to, the Company’s operational cash flow or working
capital, or a component thereof including, without limitation,
inventory and accounts receivable; (iv) the attainment of certain
target levels of, or a specified decrease relating to, the
Company’s operational costs and other expense targets, or a
component thereof or planning or forecasting accuracy; (v) the
attainment of a certain level of reduction of, or other specified
objectives with regard to limiting the level of increase in all or
a portion of bank debt or other of the Company’s long-term or
short-term public or private debt or other similar financial
obligations of the Company, which may be calculated net of cash
balances and/or other offsets and adjustments as may be established
by the Committee; (vi) the attainment of a specified percentage
increase in earnings per share or earnings per share from the
Company’s continuing operations; (vii) the attainment of
certain target levels of, or a specified percentage increase in,
the Company’s net sales, revenues, market share, operating
margin, net income or earnings before income tax or other
exclusions; (viii) the attainment of certain target levels of, or a
specified increase in, the Company’s return on capital
employed or return on invested capital; (ix) the attainment of
certain target levels of, or a percentage increase in, the
Company’s after-tax or pre-tax return on shareholders equity
or total return to shareholders; (x) the attainment of certain
target levels in the fair market value of the Company’s
Common Stock, par value $.01 per share (the
“Common
Stock”); (xi) the growth in the value of
an investment in the Common Stock assuming the reinvestment of
dividends; and (xii) the attainment of certain target levels of, or
a specified increase in EBITDA (net income plus the provision for
income taxes (or net loss less the benefit from income taxes), plus
interest expense, plus depreciation and amortization expense). In
addition, Company Criteria may include comparisons to the
performance of other companies, such performance to be measured by
one or more of the foregoing Company Criteria. The Committee may
disregard, at its discretion, the effect of one-time charges and
extraordinary events such as asset write-downs, litigation
judgments or settlements, changes in tax laws, accounting
principles or other laws or provisions affecting reported results,
accruals for reorganization or restructuring, and acquisitions or
divestitures.
(b) The performance goals and Bonus
Formula for the Company Criteria shall be established in writing by
the Committee not later than 90 days after the commencement of the
period of service to which the Bonus Formula relates (provided that
the outcome is substantially uncertain at the time the Committee
actually establishes the Bonus Formula, and provided, further, that
the Bonus Formula is not established after 25% or more of the
period of service (as determined in good faith at the time the
Bonus Formula is established) has elapsed. The Bonus to which this
Plan relates may not be the exclusive bonus awarded to the
Participants, as Participants may also receive a cash bonus based
on goals that relate to individual criteria for a Participant under
a different plan that is not issued under an exemption from the
limitations of Section 162(m) of the Code.
(c) Each Participant will be
assigned maximum and threshold award levels of the Bonus. Maximum
award level represents the maximum amount of the Bonus that may be
paid to a Participant for a Fiscal Period of the Company. Threshold
award level represents the minimum level that must be achieved
before a Bonus will be paid to a Participant under the Plan.
Performance below threshold level will earn no Bonus under the
Plan. Each Participant’s maximum Bonus will be 200% of his or
her base salary. Under no circumstances will any Participant be
paid a Bonus exceeding U.S. $3 million for any fiscal year of the
Company.
(d) When the Committee establishes a
performance goal and Bonus Formula for a Participant, the Committee
may provide (i) that the Bonus will be paid in a single lump sum or
that the Bonus will be paid over a period of
