EXHIBIT 10.6
ELIZABETH ARDEN,
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 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.
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.
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 in Control" (as defined in Section 13.2)
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 upo
