UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 25, 2006
(Date of earliest event reported): (September 21, 2006)
Revlon, Inc.
(Exact name of Registrant as specified in its Charter)
Delaware 1-11178 13-3662955
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
237 Park Avenue
New York, New York 10017
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(Address of principal executive offices) (Zip code)
(212) 527-4000
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(Registrant's telephone number, including area code)
None
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.05 Costs Associated with Exit or Disposal Activities.
(1) Organizational Realignment and Restructuring. On September 25, 2006, Revlon,
Inc. ("Revlon" and together with Revlon Consumer Products Corporation ("RCPC"),
Revlon's wholly owned operating subsidiary, the "Company") announced an
organizational streamlining and restructuring plan that is expected to include,
among other things, the following primary components:
o consolidating responsibilities in certain related functions and reducing
layers of management to increase accountability and effectiveness;
o streamlining support functions to reflect the new organization structure;
o eliminating certain senior executive positions; and
o consolidating various facilities.
The Company announced that brand marketing and creative activities in the U.S.
will be further consolidated, eliminating redundancy and reducing layers of
management, and that this new structure is designed to enable more effective
innovation and creativity, while fostering more efficient decision-making and
appropriately aligning this decision-making with accountability. As a result,
the roles of Executive Vice President and Chief Marketing Officer, held by
Stephanie Klein-Peponis, and Executive Vice President and Chief Creative
Officer, held by Rochelle Udell, will be eliminated, and the Company's brand
marketing leadership will report directly to David Kennedy. The Company
announced that the marketing leadership will be responsible for all elements of
brand marketing, brand positioning and advertising, media and creative services,
category development and other promotional activities. In addition, the role of
Executive Vice President and President of International, currently held by
Thomas McGuire, is also being eliminated and the executives leading the
Company's three geographic International regions will now report directly to
David Kennedy, the Company's President and Chief Executive Officer.
The Company announced that the organizational streamlining, which will reduce
the Company's U.S. workforce by approximately 250 positions, or approximately
8%, will result in restructuring and related charges totaling approximately $29
million, with related ongoing annualized savings estimated at approximately $34
million. The Company announced that the $29 million in restructuring and related
charges is comprised primarily of employee-related costs, including severance
and other termination benefits, with approximately $15 million of the charges
expected to be incurred in the third quarter of 2006, another $8 million
expected to impact the fourth quarter of 2006 and the balance expected to be
incurred in 2007. Approximately $21 million of the charges are expected to
reflect cash charges that the Company will pay out over the 2006 to 2008 period.
Of the $34 million in expected ongoing annualized savings, the Company expects
approximately $5 million to benefit 2006 results.
(2) Discontinuation of Vital Radiance. In connection with announcing the
organizational realignment and restructuring, the Company also announced that it
was discontinuing its Vital Radiance brand. As a result of the Vital Radiance
discontinuance, the Company announced that it expects to incur charges of
approximately $63 million in the third quarter of 2006 related to discontinuing
the brand, including a provision for estimated returns and allowances of
approximately $40 million, as well as approximately $13 million for the
write-off of inventories and selling and promotional materials, and
approximately $10 million for the acceleration of display amortization.
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Item 2.06 Material Impairments.
See Item 2.05(2) above, which is incorporated by reference into this Item 2.06.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
As part of the organizational realignment and restructuring described in Item
2.05 above, effective September 29, 2006, Alan T. Ennis, currently the Company's
Senior Vice President, Internal Audit, will transfer to the position of Senior
Vice President, Corporate Controller and Chief Accounting Officer, replacing
John E. Matsen, who has resigned from the Company effective as of such date. Mr.
Matsen's resignation is not the result of any issue or concern with the
Company's accounting, financial reporting or internal control over financial
reporting, but rather is part of the Company's program to streamline its
organizational structure. Mr. Ennis and Mr. Matsen will work together to ensure
a smooth transition of the Company's accounting responsibilities.
Prior to his appointment as the Company's Senior Vice President, Corporate
Controller and Chief Accounting Officer, Mr. Ennis (36) served as the Company's
Senior Vice President, Internal Audit since March 2005. From 1997 through 2005,
Mr. Ennis held several senior financial positions with Ingersoll-Rand Company
Limited, a NYSE listed company, where his duties included regional
responsibility for Internal Audit in Europe and global responsibility for
financial planning and analysis. Mr. Ennis began his career in 1991 with Arthur
Andersen in Ireland. Mr. Ennis is a Chartered Accountant and member of the
Institute of Chartered Accountants in Ireland, has a Bachelor of Commerce degree
from University College, Dublin, Ireland, and has a Master of Business
Administration degree from the Leonard N. Stern School of Business at New York
University, New York.
Mr. Ennis does not have any family relationships with any of the Company's
directors or executive officers and is not a party to any transactions listed in
Item 404(a) of Regulation S-K.
Item 8.01 Other Events.
(a) Stock Plan Changes. As part of the organizational realignment and
restructuring described in Item 2.05 above and to enable RCPC to provide a
retention incentive to key employees that the Company believes will be essential
for it to continue to execute its business plan in a leaner, more efficient
environment, on September 21, 2006, Revlon's Board of Directors approved certain
amendments to its Amended and Restated Stock Plan (the "Stock Plan"), based upon
the recommendation of the Board's Compensation and Stock Plan Committee (the
"Compensation Committee") and after the Compensation Committee's consultation
with Mercer Human Resource Consulting, Inc. ("Mercer"). These amendments, which
are subject to the receipt and effectiveness of stockholder approval, and which
do not increase the total number of shares available for issuance under the
Stock Plan, include the following (together, the "Stock Plan Changes"):
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(1) increasing the number of shares that may be issued as restricted
and unrestricted stock and restricted stock units under the Stock Plan
from 5,935,000 to 15,000,000 shares;
(2) increasing the number of awards other than options and stock
appreciation rights that may be made without regard to the Stock Plan's
minimum vesting requirements from 300,000 to 4,065,000 shares;
(3) amending the Stock Plan to provide the Compensation Committee with
greater discretion in terms of accelerating the vesting of stock
options and stock appreciation rights ("SARs") in the event of a change
of control; and
(4) making certain technical amendments, including that restricted
stock awards under the Stock Plan may be in either book-entry or
certificated form.
The Stock Plan Changes would not increase the total number of shares available
for awards under the Stock Plan. While the Stock Plan Changes are subject to the
receipt and effectiveness of stockholder approval, MacAndrews & Forbes Holdings
Inc. (together with its affiliates other than the Company, "M&F"), which
controls, directly or indirectly, approximately 76% of the voting power of
Revlon's Class A and Class B common stock, has indicated that it would act by
written consent to approve the Stock Plan Changes discussed above. Revlon's
Board of Directors set October 5, 2006 as the record for the determination of
stockholders entitled to receive notice of M&F's action by written consent. The
Company anticipates that the Stock Plan Changes would become effective in
November 2006.
(b) Certain Other Changes. Also as part of the organizational realignment and
restructuring described in Item 2.05 above and to provide retention incentives
to employees that the Company believes will be essential in enabling it to
continue executing its business plan in a leaner, more efficient environment,
the Compensation Committee, based upon Mercer's recommendation, exercised its
discretion under the Stock Plan to provide that, following the effectiveness of
the Stock Plan Changes described in Item 8.01(a) above, for all participants
under the Stock Plan (which includes Revlon's named executive officers as well
as other employees), upon any "change of control" that may occur in the future
(and the Company noted that no change of control is currently contemplated), (1)
all stock option and SAR awards under the Stock Plan outstanding on the date
that the Stock Plan changes become effective would immediately become
exercisable upon any such change of control; and (2) all restrictions on all
restricted stock awards outstanding on the date the Stock Plan Changes become
effective would lapse upon any such change of control. The Compensation
Committee also amended the form of restricted stock and stock option agreements
effective on the date that the Stock Plan Changes become effective to reflect
such vesting on any "change of control".
Forward-Looking Statements
Statements in this Current Report on Form 8-K which are not historical facts,
including statements about the Company's plans, strategies, beliefs and
expectations, are forward-looking and subject to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
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speak only as of the date they are made. Accordingly, except for the Company's
ongoing obligations under the U.S. federal securities laws, the Company does not
intend to update or otherwise revise the forward-looking information to reflect
actual results of operations, changes in financial condition, changes in
estimates, expectations or assumptions, changes in general economic, industry or
cosmetic category conditions or other circumstances arising and/or existing
since the preparation of this Form 8-K or to reflect the occurrence of any
unanticipated events. Such forward-looking statements include, without
limitation, the Company's beliefs, expectations and estimates about its
restructuring activities, restructuring costs, the timing of restructuring
payments and annualized savings and other benefits from such activities, the
costs and charges related to the discontinuance of Vital Radiance and the
Company's plans to consummate the amendment and restatement of the Stock Plan.
Actual results may differ materially from such forward-looking statements for a
number of reasons, including those set forth in the Company's filings with the
SEC, including the Company's 2005 Annual Report on Form 10-K and the Company's
Form 10-Qs and Form 8-Ks that it files with the SEC during 2006, including this
Form 8-K (which may be viewed on the SEC's website at http://www.sec.gov or on
the Company's website at http://www.revloninc.com), as well as reasons including
difficulties, delays or unanticipated costs or less than expected savings and
other benefits resulting from the Company's restructuring activities, such as
less than anticipated annualized savings from the restructuring, higher than
expected charges and costs related to the discontinuance of Vital Radiance and
the Company's inability to consummate the amendment to the Stock Plan. Factors
other than those listed above could also cause the Company's results to differ
materially from expected results. Additionally, the business and financial
materials and any other statement or disclosure on, or made available through,
the Company's websites or other websites referenced herein shall not be
incorporated by reference into this Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REVLON, INC.
By: /s/ Robert K. Kretzman
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Robert K. Kretzman
Executive Vice President, Chief Legal
Officer, General Counsel and Secretary
Date: September 25, 2006
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