Exhibit 10.5

ELIZABETH ARDEN, INC.

2002 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE I. PURPOSE AND DEFINITIONS

 

1.01 Purpose; Administration. The Elizabeth Arden, Inc. 2002 Employee Stock
Purchase Plan, as amended from time to time (the “Plan”), provides a convenient
method of acquiring shares of stock of Elizabeth Arden, Inc. (the “Company”),
for persons eligible to participate. The Plan is intended to qualify as an
employee stock purchase plan under Section 423 of the Internal Revenue Code of
1986, as amended (the “Code”), but is not intended to be subject to
Section 401(a) of the Code or the Employee Retirement Income Security Act of
1974.

 

1.02 Definitions. A term defined in the Plan shall have the meaning ascribed to
it wherever it is used herein unless the context indicates otherwise.

ARTICLE II. PARTICIPATION

 

2.01 Adoption by Subsidiaries. The Board of Directors of the Company (the
“Board”) may authorize the adoption of the Plan by one or more subsidiary
companies or corporations of the Company (“Participating Subsidiaries”),
including subsidiaries in nations other than the United States.

 

2.02 Foreign Subsidiaries. The Committee (as defined in Paragraph 7.01) may set
terms and conditions under this Plan that the Committee determines are necessary
to comply with applicable foreign laws or advisable in light of such laws, as
well as take any action it deems advisable to obtain approval of this Plan and
its terms by an appropriate foreign governmental entity; provided, however, that
no such terms and conditions may be set nor action may be taken that would
result in a violation of the United States laws applicable to the Company,
including, without limitation, the Securities Exchange Act of 1934, as amended,
or that would cause this Plan to fail to qualify as an employee stock purchase
plan within the meaning of Section 423 of the Code for participants located in
the United States.

 

2.03 Eligibility to Participate. A person is eligible to participate in an
Offering under the Plan (as defined in Paragraph 4.02) if, as of the first day
of such Offering, such person is (i) an employee of the Company or a
Participating Subsidiary and (ii) scheduled to work more than five (5) months
per year for the Company or its participating subsidiaries (as determined by
reference to the Company’s employment records).

 

2.04 Participation Agreement. Participation in the Plan is voluntary with
respect to each Offering. To participate in an Offering, a person must be
eligible and must complete a written enrollment form provided by the Company
(“Participation Agreement”) authorizing payroll deductions from his or her
paycheck. The Participation Agreement will remain in effect through each
consecutive Offering unless the participant chooses to revise or revoke it, or
becomes ineligible to participate in the Plan.

 

2.05 Termination of Participation. A participant may withdraw at any time from
any Offering by written notice to the Committee in such form as it may require.
Participation will also end upon termination of a participant’s employment with
the Company and/or a Participating Subsidiary, if applicable, or when a
participant becomes ineligible to participate (including by reason of the
Company or any Participating Subsidiary terminating its participation in the
Plan).

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2.06 Designation of Beneficiary. A participant shall, by written notice to the
Committee, designate a person or persons to receive the value of his or her
Account (as defined in Paragraph 5.01) in the event of the participant’s death.
A participant may, by written notice to the Committee during employment, alter
or revoke such designation, subject always to any applicable law governing the
designation of beneficiaries. Such written notice shall be in such form and
shall be executed in such manner as the Committee may determine. If upon a
participant’s death the participant has not designated a beneficiary under the
Plan or such beneficiary does not survive the participant, the value of a
participant’s Account shall be paid to his or her estate.

ARTICLE III. CONTRIBUTIONS

 

3.01 Payroll Deductions. A participant may accumulate after-tax compensation to
purchase Shares in an Offering by authorizing payroll deductions pursuant to a
Participation Agreement, subject to such minimum and maximum limits (expressed
in dollars or as a percentage of base salary or base wages) as the Committee may
impose. Such savings shall be credited to a participant’s Account with respect
to the Offering to which they relate. Payroll deductions for an Offering shall
commence with the first paycheck a participant receives during such Offering and
shall end with the last paycheck a participant receives during such Offering.
Paychecks will be treated as having been received when they are sent out or
otherwise distributed.

 

3.02 Alternative Contributions. Where payroll deductions are not permitted by
applicable law in a jurisdiction outside of the United States, the Committee may
permit contributions by alternate means.

 

3.03 Change in Rate or Suspension of Contributions. A participant may increase
or decrease the rate of his or her payroll deductions one (1) time during an
Offering by written notice to the Committee in such form and manner as it
requires. In addition, a participant may, at any time during an Offering,
suspend his or her payroll deductions by written notice to the Committee in such
form and manner as it requires. Such change shall be effective as of the first
pay period thereafter by which the Company is able to process the change.

 

3.04 Possession of Contributions. All payroll deductions made pursuant to the
Plan shall be held for a participant’s benefit and on his or her behalf by the
Company or any custodian selected by the Committee. Such payroll deductions
shall constitute a participant’s personal property notwithstanding that they may
be commingled with the general assets of the Company or such custodian.

ARTICLE IV. OPTIONS TO ACQUIRE SHARES

 

4.01 Maximum Number of Shares. The number of shares of common stock of the
Company (“Shares”) available for issuance under the Plan shall be 1,000,000 with
respect to the ten (10) years following the adoption of the Plan. Any Shares
that are not actually purchased under the Plan for any reason shall remain
available for purchase hereunder. In the event the number of shares of common
stock to be purchased by participants during any Offering exceeds the number of
Shares then available under the Plan, the Committee shall make a pro rata
allocation of the Shares of common stock remaining available in such uniform
manner as it shall determine to be equitable. Any excess cash amounts remaining
in a participant’s Account as a consequence of the implementation of the
provisions of this paragraph shall be returned to the participant, without
interest, as soon as is administratively feasible.

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4.02 Offerings. The Company will offer Shares for purchase under the Plan
(“Offering”) for six-month periods beginning on June 1 and December 1 of each
calendar year, commencing on June 1, 2004. The Company may make additional
Offerings for different periods, provided that no Offering shall extend for more
than 27 months.

 

4.03 Options. Each Offering shall constitute an option to purchase whole Shares
at a price per Share equal to 85% of the lesser of (i) the fair market value of
a Share on the first day of such Offering or (ii) the fair market value of a
Share on the last day of such Offering. The fair market value of a Share on any
date shall be its closing price reported by The Nasdaq Stock Market on which
Shares are traded for such date or for the next earliest date on which Shares
were traded.

 

4.04 Individual Limit on Options. In no event shall the fair market value of all
shares purchased by an employee under the Plan or other plans qualifying under
Section 423 of the Code exceed $25,000 (determined on the date of grant, which
is the first day of an Offering) with respect to any calendar year.

 

4.05 Purchase of Shares. Unless a participant withdraws or becomes ineligible
prior to the end of an Offering, the accumulated payroll deductions, and/or such
alternative contributions as permitted by the Committee, deposited to his or her
Account shall be automatically applied on the last day of the Offering to
purchase whole Shares to the extent feasible in accordance with the Offering.
Such purchase shall be treated as the exercise of an option represented by the
Offering. Any amount remaining in a participant’s Account after such purchase
shall be applied to the next Offering. A participant is not entitled or
permitted to make cash payments in lieu of payroll deductions to acquire Shares
in an Offering. In no event shall any Shares be purchased pursuant to an
Offering more than 27 months after the commencement of the Offering.

 

4.06 Source of Shares. Shares offered under the Plan may be authorized and
issued Shares, authorized but unissued Shares or treasury Shares. Shares may be
purchased directly from the Company or by the Custodian (as defined in Paragraph
5.02) pursuant to directions from the Committee. If the Custodian acquires
Shares pursuant to an open market transaction, such purchase shall be made at
the market price prevailing on the applicable exchange.

 

4.07 Restriction on 5% Owners. No employee shall be permitted to purchase Shares
under the Plan if, immediately after such purchase, such employee would possess
stock having five percent (5%) or more of the total combined voting power of all
classes of stock of the Company or any of its parent or subsidiary corporations,
determined by applying the stock ownership rules of Section 424(d) of the Code.

 

4.08 Prohibition Against Assignment. A participant’s right to purchase Shares
under the Plan is exercisable only by the participant and may not be sold,
pledged, assigned, surrendered or transferred in any manner other than by will
or the laws of descent and distribution. Any attempt to sell, pledge, assign,
surrender or transfer such rights shall be void and shall automatically cause
any purchase rights held by the participant to be terminated. In such event, the
Committee may refund in cash, without interest, all contributions credited to a
participant’s Account.

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ARTICLE V. ACCOUNTS

 

5.01 Establishment of Accounts. The Committee shall cause to be maintained a
separate account for each participant (“Account”) to record the amount of
payroll deductions with respect to each Offering, and the purchase price for and
the number of Shares, credited to such participant. No interest or other
earnings shall be credited to any contributions to an Account under the Plan.

 

5.02 Custody of Shares. The Committee shall select an administrator
(“Custodian”) which shall hold and act as custodian of Shares purchased pursuant
to the Plan. Absent written instructions to the contrary from a participant,
certificates for Shares purchased will not be issued by the Custodian to a
participant.

 

5.03 Voting of Shares. A participant shall direct the Custodian as to how to
vote the full Shares credited to his or her Account following the purchase of
such Shares.

ARTICLE VI. DISBURSEMENTS FROM ACCOUNT

 

6.01 Withdrawal of Contributions. Upon a participant’s withdrawal from any
Offering, all or any designated portion of the contributions credited to a
participant’s Account with respect to such Offering shall be disbursed, without
interest, to the participant.

 

6.02 Withdrawal of Shares. A participant may at any time withdraw all or any
number of whole Shares credited to his or her Account under the Plan by
directing the Custodian to cause his or her Shares to be (i) issued as
certificates in his or her name (subject to the charges described in
Section 7.03) or (ii) sold and the net proceeds (less applicable commissions and
other charges) distributed in cash to the participant. A participant may also
direct the Custodian to cause Shares to be transferred to another brokerage
account of the participant, provided the Shares are held by the participant for
at least two (2) years following the first day of the Offering pursuant to which
the Shares were acquired.

 

6.03 Distribution Upon Termination. Upon termination of a person’s participation
in the Plan as a whole prior to the expiration of all Offerings thereunder, all
contributions and Shares credited to a participant’s Account shall be disbursed
to, and as directed by, him or her in accordance with the Plan. All
contributions credited to a participant’s Account that have not been applied to
the purchase of Shares shall be returned to him or her without interest. Shares
credited to a participant’s Account shall, in accordance with instructions to
the Custodian from a participant and at his or her expense, be distributed in
the same manner as permitted upon any withdrawal.

 

6.04 Failure to Provide Directions. If within ninety (90) days after a
participant has withdrawn from the Plan a participant has not notified the
Custodian of his or her instructions as set forth herein, the Committee shall
direct the Custodian to issue Shares in a participant’s name and deliver the
same to the participant at his or her last known address.

 

6.05 Sale of Shares. If a participant elects to receive the proceeds from the
sale of his or her Shares, the amount payable shall be determined by the
Custodian on the date of sale, less any applicable commissions, fees and
charges. The Custodian, acting on a participant’s behalf, shall take such action
as soon as practicable, but in no event later than five (5) business days after
receipt of notification from the participant. The Company assumes no
responsibility in connection with such transactions, and all commissions, fees
or other charges arising in connection therewith shall be borne directly by the
participant. The amount thus determined shall be paid in a lump sum to the
participant.

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6.06 Unpaid Leave of Absence. Unless a participant has voluntarily withdrawn his
or her contributions from the Plan, Shares will be purchased with contributions
to his or her Account on the last day of the Offering next following
commencement of an unpaid leave of absence by such participant provided such
leave does not constitute a termination of employment. The number of Shares to
be purchased will be determined by applying to the purchase the amount of the
participant’s contributions made up to the commencement of such unpaid leave of
absence. Upon the termination of a participant’s unpaid leave of absence and the
participant’s return to work at the Company, payroll deductions and alternative
contributions shall resume at the rate in effect at the commencement of the
unpaid leave of absence.

ARTICLE VII. ADMINISTRATION AND EXPENSES

 

7.01 Committee. The Plan shall be administered by a Committee, which shall
consist of such members as determined by the Company (the “Committee”). The
Committee shall interpret and apply the provisions of the Plan in its good faith
discretion, and the Committee’s decision is final and binding. The Committee may
establish rules for the administration of the Plan.

 

7.02 Expenses for Purchase of Shares. The Company shall pay brokerage
commissions, fees and other charges, if any, incurred for purchases of Shares
with payroll deductions made under the Plan.

 

7.03 Expenses to Sell or Transfer Shares. All brokerage commissions, fees or
other charges in connection with any sale or other transfer of Shares shall be
paid by the participant. In addition, any charges by the Custodian in connection
with a participant’s request to have certificates representing Shares registered
in his or her name shall be paid by the participant.

 

7.04 Post-Termination Expenses. Upon a participant’s termination of employment
or his or her withdrawal from the Plan for any other reason, all commissions,
fees and other charges thereafter relating to the participant’s Account will be
the participant’s responsibility.

 

7.05 Exchange Rate Risk. Contributions of participants who are: (i) employed by
a Participating Subsidiary of the Company located outside of the United States,
(ii) paid in foreign currency and (iii) contributed in foreign currency to the
Plan (whether through payroll deductions or alternative contributions), will be
converted to U.S. dollars at an exchange rate determined in the manner
prescribed by the Committee. Each such participant shall bear the risk of
currency exchange fluctuations between the date on which contributions are
converted to U.S. dollars and the day Shares are purchased pursuant to Paragraph
4.05 of the Plan. In no event shall any exchange rate conversion cause the
purchase price of any Share to fall below the price determined pursuant to
Paragraph 4.03 of the Plan.

ARTICLE VIII. MERGERS AND OTHER SHARE ADJUSTMENTS

 

8.01 Mergers or Other Consolidations. In the event that the Company is a party
to a sale of substantially all of its assets, a merger or consolidation,
outstanding options to purchase Shares under the Plan shall be subject to the
agreement of sale, merger or consolidation. Such agreement, without the consent
of any participant, may provide for:

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  (a) the continuation of such outstanding options by the Company (if the
Company is the surviving corporation);

 

  (b) the assumption of the Plan and such outstanding options by the surviving
corporation or its parent;

 

  (c) the substitution by the surviving corporation or its parent of options
with substantially the same terms for such outstanding options, including the
substitution of shares of common stock of the surviving corporation with such
appropriate adjustments so as not to enlarge or diminish the rights of
participants;

 

  (d) the cancellation of such outstanding options without payment of any
consideration other than the return of contributions credited to participants’
Accounts, without interest; or

 

  (e) the shortening of any Offering then in progress by setting a new last day
of the Offering (the “New Purchase Date”). The New Purchase Date shall be before
the date of the proposed sale, merger or consolidation. Each participant will be
notified in writing that the last day of the Offering has been changed to the
New Purchase Date and that the applicable number of Shares will be purchased
automatically on the New Purchase Date, unless prior to such date the
participant has withdrawn from the Plan as provided in Paragraph 6.01.

 

8.02 Adjustments to Shares or Options. In the event of a subdivision of the
outstanding common stock, a declaration of a dividend payable in Shares, a
declaration of an extraordinary dividend payable in a form other than Shares in
an amount that has a material effect on the fair market value of the Shares, a
combination or consolidation of the outstanding Shares into a lesser number of
Shares, a recapitalization, a spin-off, a reclassification or a similar
occurrence, the Board shall make appropriate adjustments so as not to enlarge or
diminish the rights of participants, in one or more of (i) the number of Shares
available for purchase under the Plan, (ii) the number of Shares subject to
purchase under outstanding options, or (iii) the purchase price per Share under
each outstanding option.

ARTICLE IX. AMENDMENT AND TERMINATION

 

9.01 Authority. The Board may at any time terminate or amend the Plan in any
respect, including, but not limited to, terminating the Plan prior to the end of
an Offering Period or reducing the term of an Offering Period; provided,
however, that the number of Shares subject to purchase under the Plan shall not
be increased without approval of the Company’s shareholders.

 

9.02 Termination of the Plan. This Plan shall terminate at the earliest to occur
of:

 

  (a) the tenth anniversary following shareholder approval of the Plan;

 

  (b) the date the Board acts to terminate the Plan in accordance with paragraph
9.01; and

(c) the date when the total number of Shares to be offered under this Plan, as
set forth in Paragraph 4.01, have been purchased.

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9.03 Distributions on Plan Termination. Upon termination of the Plan at the end
of an Offering, Shares shall be issued to participants, and cash, if any,
remaining in the Accounts of the participants, shall be refunded to them. Upon
termination of the Plan prior to the end of an Offering, all amounts not
previously applied to the purchase of Shares shall be distributed to the
participants, as if the Plan had terminated at the end of an Offering.

 

9.04 Effect on Custodian. No amendments to the Plan which affects the
responsibilities or duties of the Custodian shall be effective without the
agreement and approval of the Custodian.

ARTICLE X. MISCELLANEOUS

 

10.01 Joint Ownership. Shares may be registered in the name of the participant,
or, if he or she so designates, in his or her name jointly with his or her
spouse, with a right of survivorship.

 

10.02 No Employment Rights. The Plan shall not be deemed to constitute a
contract of employment between the Company and any participant, nor shall it
interfere with the right of the Company to terminate a participant and treat a
participant without regard to the effect which such treatment might have upon
you under the Plan.

 

10.03 Tax Withholding. The Company shall withhold from amounts to be paid to a
participant as wages, any applicable Federal, state or local withholding or
other taxes which it is from time to time required by law to withhold.

 

10.04 Compliance with Laws. The Company may direct the Custodian to delay the
issuance of any certificate in the name of any person or the delivery of Shares
to any person if it determines that listing, registration or qualification of
such Shares upon any national securities market or exchange or under any law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares under the Plan, until such listing, registration, qualification, consent
or approval shall have been effected or obtained, or otherwise provided for,
free of any conditions not acceptable to the Company.

 

10.05 Governing Law. The Plan shall be governed by, and construed in accordance
with, the laws of the State of Florida and without regard to the conflict of
laws principles of such state.

As adopted by the Board of Directors on March 22, 2002.

As amended by the Board of Directors on March 18, 2003, and August 5, 2004.