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EXHIBIT 10.4
FRENCH FRAGRANCES, INC.
1995 Stock Option Plan
1. Definitions: As used
herein, the following definitions shall apply:
(a) "Compensation
Committee" shall mean a committee appointed from time to time by
the Board to administer the plan and consisting of not fewer than
two members. Upon the registration by the Company of the Common
Stock pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), all members of the
Compensation Committee shall be "disinterested persons" as defined
by Rule 16b-3.
(b) "Common
Stock" means the Common Stock, par value $.01 per share, of the
Company.
(c) "Company"
shall mean French Fragrances, Inc., a Florida corporation, or any
successor thereof.
(d) "Eligible
Person" means any individual who performs services for the Company
or a Subsidiary, including any individual who is an employee,
officer or director of the Company or a Subsidiary, regardless of
whether such individual is included on the regular payroll of the
Company or a Subsidiary, or is a full or part time employee.
(e) "Incentive
Option" shall mean an option to purchase Common Stock which meets
the requirements set forth in the Plan and also meets the
definition of an incentive stock option set forth in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"). The
stock option agreement for an Incentive Option shall state that the
option is intended to be an Incentive Option.
(f) "Nonqualified
Option" shall mean an option to purchase Common Stock which meets
the requirements set forth in the Plan but does not meet the
definition of an incentive stock option set forth in Section 422 of
the Code. The stock option agreement for a Nonqualified Option
shall state that the option is intended to be a Nonqualified
Option.
(g) "Participant"
shall mean any Eligible Person designated by the Compensation
Committee under Paragraph 6 for participation in the Plan.
(h) "Plan"
shall mean this Stock Option Plan for the Company.
(i) "Rule 16b-3" shall mean Rule 16b-3
promulgated under the Securities Exchange Act, or any successor
thereto.
(j) "Subsidiary" shall mean any Company in
which the Company owns, directly or indirectly, stock possessing
more than fifty percent of the total combined voting power of all
classes of stock.
2. Purpose of Plan: The purpose of
the Plan is to provide key employees, officers and directors of the
Company and its Subsidiaries with incentives to make significant
and extraordinary contributions to the long-term performance and
growth of the Company and its Subsidiaries, to join the interests
of such persons with the interests of the shareholders of the
Company, and to increase their personal interest in the continued
success and progress of the Company.
3. Administration: The Plan shall
be administered by the Compensation Committee. Subject to the
provisions of the Plan, the Compensation Committee shall determine,
from those eligible to be Participants under the Plan, the persons
to be granted stock options, the amount of stock options to be
granted to each such person, and the terms and conditions of such
stock options. Subject to the provisions of the Plan, the
Compensation Committee is authorized to interpret the Plan, to
promulgate, amend and rescind rules and regulations relating to the
Plan and to make all other determinations necessary or advisable
for its administration. Interpretation and construction of any
provision of the Plan by the Compensation Committee shall be final,
conclusive and binding. Acts approved by either a majority of the
members present at any meeting at which a quorum is present, or
without a meeting by the unanimous written approval of the members
of the Compensation Committee, shall be the acts of the
Compensation Committee.
4. Indemnification of Compensation
Committee Members: In addition to such other rights of
indemnification as they may have, the members of the Compensation
Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any
stock option granted hereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is approved by
the Board of Directors of the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Compensation Committee
member has acted in bad faith; provided, however, that within 60
days after receipt of notice of institution of any such action,
suit or proceeding a Compensation Committee member shall offer the
Company in writing the opportunity, at its own cost, to handle and
defend the same.
5. Maximum Number of Shares Subject to
Plan: The maximum number of shares of Common Stock which may be
issued pursuant to stock options granted under the Plan shall be
2,200,000 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 stock options have expired or terminated for any
reason other than exercise of such stock options, shall again be
available for issuance pursuant to the Plan to the extent permitted
under Rule 16b-3.
The number of
shares of Common Stock subject to each outstanding stock option,
the option price with respect to outstanding stock options, and the
aggregate number of shares available at any time under the Plan
shall be equitably adjusted by the Compensation Committee to
prevent dilution or enlargement of Participant's rights under the
Plan to reflect events such as stock dividends, stock splits,
recapitalizations, mergers, consolidations or reorganizations of or
by the Company; provided, however, that no fractional shares shall
be issued pursuant to the Plan, no rights may be granted under the
Plan with respect to fractional shares, and any fractional shares
resulting from such adjustments shall be eliminated from any
outstanding stock option; and provided further, with respect to
Incentive Stock Options, no such adjustment shall be authorized to
the extent that such authority would cause the Plan to violate
Section 422(b)(l) of the Code. 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 preference stock that would rank
above the shares of Common Stock 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.
6. Participants : The Compensation
Committee shall determine and designate from time to time, in its
sole discretion, those Eligible Persons to whom stock options are
to be granted or awarded and who thereby become Participants under
the Plan. Notwithstanding the foregoing, Incentive Options may be
granted only to key employees eligible to receive Incentive Options
pursuant to Section 422 of the Code.
7. Written Agreement: Each stock
option, shall be evidenced by a written agreement between the
Company and the Participant and shall contain such provisions as
may be approved by the Compensation Committee. Such agreements
shall constitute binding contracts between the Company and the
Participant, and every Participant, upon acceptance of such
agreement, shall be bound by the terms and restrictions of the Plan
and of such agreement. The terms of each such agreement shall be in
accordance with the Plan, but the agreements may include such
additional provisions and restrictions determined by the
Compensation Committee, provided that such additional provisions
and restrictions are not forbidden by the terms of the Plan.
8. Allotment of Shares: The
Compensation Committee shall determine and fix the number of shares
of Common Stock with respect to which each Participant may be
granted stock options provided, however, that no Incentive Option
may be granted under the Plan to any one Participant which would
result in an aggregate fair market value, determined as of the date
the option is granted, of Common Stock with respect to which
Incentive Options are exercisable for the first time by such
Participant during any calendar year in excess of $100,000.
9. Stock Options: Subject to the
terms of the Plan, the Compensation Committee may grant to
Participants either Incentive Options, Nonqualified Options or any
combination thereof. Each option granted under the Plan shall
designate the number of shares covered thereby, with respect to
which the option is an Incentive Option, and the number of shares
of Common Stock covered thereby, with respect to which the option
is a Nonqualified Option.
10. Stock Option Price: Subject to
the rules set forth in this Paragraph 10, at the time any stock
option is granted, the Compensation Committee shall establish the
price per share for which the shares of Common Stock covered by the
option may be purchased. With respect to an Incentive Option, such
option price shall not be less than 100% of the fair market value
of a share of Common Stock on the date on which such option is
granted; provided, however, that with respect to an Incentive
Option granted to an employee who at the time of the grant owns
(after applying the attribution rules of Section 424(d) of the
Code) more than 10% of the total combined voting power of all
classes of the stock of the Company or of any parent or subsidiary,
the option price shall not be less than 110% of the fair market
value of a share of Common Stock on the date such Incentive Option
is granted. With respect to a Nonqualified Option, the option price
shall not be less than the par value of a share of Common Stock.
For purposes of the Plan, the "fair market value" of a share of
Common Stock shall be determined in good faith by the Compensation
Committee 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 a day of the Common Stock on such system; or
(iii) if 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; or,
(iv) if none of clause (i), (ii), or (iii) is applicable, the fair
market value on a specified date of a share as determined by the
Compensation Committee in good faith. The option price shall be
subject to adjustment in accordance with the provisions of
Paragraph 5 of the Plan.
11. Payment of Stock Option Price:
At the time of the exercise in whole or in part of any stock option
granted hereunder, payment of the o
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