Exhibit 10.25

ELIZABETH ARDEN, INC.

SEVERANCE POLICY

 

1. Introduction

This Policy was adopted by the Compensation Committee of the Board of Directors
of Elizabeth Arden, Inc. (the “Company”) and was last amended on February 3,
2014. The Policy is intended to help the Company achieve its goals of attracting
and retaining key management personnel who are critical to the long-term success
and competitiveness of the Company.

 

2. Definitions

For purposes of this Policy, the following capitalized terms shall have the
meanings set forth below. Non-capitalized terms shall have their ordinary
meanings.

“Affiliate” shall mean any person, limited liability company, corporation,
partnership, association or any other entity controlling, controlled by or under
common control with the Company. “Control” shall mean the ownership by the
Company of greater than fifty (50%) of the voting interests of such person or
any other such arrangement as constitutes the possession, directly or
indirectly, of power to direct or cause the direction of management or policies
of any such person, corporation or entity, through ownership of voting
securities, by contract or otherwise.

“Base Amount” shall mean the then-current Base Salary plus then-current Target
Bonus applicable to a Covered Employee.

“Base Salary” shall mean the weekly or monthly base salary, as the context
requires, of a Covered Employee as of the effective date of termination of a
Covered Employee’s employment. For purposes of calculating the Base Amount under
Section 4, the Base Salary shall be the covered Employee’s annualized Base
Salary.

“Cause” shall mean

(a) any material violation by a Covered Employee of the Company’s Code of
Business Conduct or any other material Company policy applicable to the Covered
Employee;

(b) the commission of an intentional act of fraud, embezzlement, theft or
dishonesty against the Company by the Covered Employee;

(c) the conviction of a Covered Employee for (or the pleading by a Covered
Employee of nolo contendere to) any crime which constitutes a felony, or a
misdemeanor involving moral turpitude, or which, in the reasonable opinion of
the Company, has caused material embarrassment to the Company;

(d) the gross neglect or willful failure by a Covered Employee to perform
his/her duties and responsibilities in all material respects, if such breach of
duty is not cured within 10 days after receipt of written notice thereof to the
Covered Employee by the Company or its Board of Directors; or

(e) a Covered Employee’s failure to obey the reasonable and lawful orders or
instructions of the Chief Executive Officer, the Covered Employee’s supervisor
or the Board of Directors, unless such failure is cured within 10 days after
receipt of written notice thereof to the Covered Employee by the Company or the
Board of Directors.

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For purposes of clause (d), no act, or failure to act, on the part of a Covered
Employee shall be deemed “willful” unless done, or omitted to be done, by the
Covered Employee other than in good faith and without reasonable belief that
such act, or failure to act, was in the best interest of the Company.

“Change of Control” shall mean the occurrence of any of the following events:

(i) the consummation of any transaction or series of transactions (including,
without limitation, any merger or consolidation) the result of which is that any
“person” (as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as
such term is defined in Rule 13d–3 and Rule 13d–5 under the Exchange Act),
directly or indirectly, of (a) 35% or more of the voting interests of the
Company and (b) more of the voting interests of the Company than are, in the
aggregate, beneficially owned by the Principals and their Affiliates at the time
of such consummation; or

(ii) during any period of two (2) consecutive years, the individuals who at the
beginning of such period constitute the Company’s Board of Directors or any
individuals who would be Continuing Directors cease for any reason (other than
due to death or voluntary resignation) to constitute at least a majority
thereof; or

(iii) the Company’s Board of Directors shall approve a sale, lease, transfer,
conveyance or other disposition of all or substantially all of the assets of the
Company, and such transaction shall have been consummated; or

(iv) the Company’s Board of Directors shall approve any merger, consolidation,
or like business combination or reorganization of the Company, the consummation
of which would result in the occurrence of any event described in clause (i)
above, and such transaction shall have been consummated.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Compensation Committee” shall mean the Compensation Committee of the Board of
Directors of the Company.

“Continuing Directors” shall mean (x) the directors of the Company in office on
March 22, 2002 (the “Effective Date”) and (y) any successor to any such director
and any additional director, in each case, who after the Effective Date was
nominated or selected by a majority of the Continuing Directors (or the
Nominating and Corporate Governance Committee of the Board of Directors of the
Company consisting of Continuing Directors) in office at the time of his or her
nomination or selection.

 

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“Covered Employee” shall mean any U.S.-based executive officer, senior vice
president or vice president of the Company and any officer of an Affiliate of
the Company that is an “executive officer” of the Company for purposes of the
Securities Exchange Act of 1934, as amended.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, as such may be amended from time to time.

“Good Reason” shall mean

(a) that without the Covered Employee’s prior written consent and in the absence
of Cause, one or more of the following events occurs:

(i) any materially adverse change in the Covered Employee’s authority, duties,
or responsibilities or any assignment to the Covered Employee of duties and
responsibilities materially inconsistent with those normally associated with the
Covered Employee’s position; or

(ii) the Covered Employee is required to be primarily based at any office more
fifty (50) miles outside the metropolitan area of the Covered Employee’s then
current business address, excluding travel reasonably required in the
performance of the Covered Employee’s responsibilities; and

(iii) relative to that which the Covered Employee received immediately prior to
the Change of Control, there is a reduction in (A) Base Salary, (B) targeted
annual or targeted long-term incentive compensation (provided that cash
compensation may be substituted for equity compensation for the purposes of
long-term incentive awards), or (C) employee benefits (but for the avoidance of
doubt, not Base Salary or targeted annual or targeted long-term incentive
compensation) to a level of employee benefits which is less favorable in the
aggregate than the level of employee benefits the participant received
immediately prior to the Change of Control, excluding any defined benefit or
supplemental pension plan (whether or not tax-qualified), and excluding any
post-retirement health, life or other welfare benefits; provided that Good
Reason shall not exist if the reduction in employee benefits results from a
change in the applicable program for all similarly-situated employees of the
surviving entity or its subsidiaries after the Change of Control (collectively,
the “Surviving Entity”) in the applicable jurisdiction so long as (x) the
Surviving Entity continues to offer benefits to such Covered Employee that
include medical, dental, vision, disability and life insurance, and a matching
program comparable to the Company’s 401(k) Plan or, as applicable, a Company
subsidiary’s existing defined contribution plan, (y) the aggregate employee
benefits provided to the Covered Employee are not less favorable than the
aggregate employee benefits provided to similarly-situated employees of the
Surviving Entity in the applicable jurisdiction, and (z) the total compensation
of the Covered Employee (including Base Salary, the targeted value of incentive
compensation and the value of other non-cash compensation and benefits) is not
materially less favorable than the total compensation of such employee as of
immediately prior to the Change of Control.

 

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(b) within sixty (60) calendar days of learning of the occurrence of any event
specified in clause (a), and in the absence of any circumstances that constitute
Cause, the Covered Employee terminates employment with the Company, by written
notice to the Company; provided, however, that the events set forth in
subparagraphs (a)(i), (a)(ii) or (a)(iii) shall not constitute Good Reason for
purposes of this Policy unless, within thirty (30) calendar days of a Covered
Employee’s learning of such event, the Covered Employee gives written notice of
the event to the Company, and the Company fails to remedy such event within
thirty (30) calendar days of receipt of such notice.

“Long-Term Service-Based Cash Award” shall mean any award made to an employee of
the Company or an Affiliate that vests 12 months or more after its date of grant
and is denominated and payable in cash, subject only to such employee’s
continued service with the Company or its Affiliate.

“Performance-Based Cash Award” shall mean any award made to an employee of the
Company or an Affiliate that vests on the achievement of specific performance
criteria and is denominated and payable in cash.

“Permanent Disability” shall mean the Covered Employee’s inability to perform
such Covered Employee’s duties and responsibilities for a period of 90
consecutive days or 120 non-consecutive days, in either event in any 12 month
period, due to illness, accident or any other physical or mental incapacity, as
reasonably determined by a physician selected in good faith by the Company.

“Principals” shall mean William Tatham, E. Scott Beattie, J. W. Nevil Thomas,
Fred Berens, Richard C. W. Mauran, Maura J. Clark, and Paul West.

“Section 409A” shall mean Section 409A of the Code.

“Specified Employee” shall have the same meaning as such term is given for
purposes of Section 409A.

“Target Bonus” shall mean the annual bonus payable as a percentage of the
Covered Employee’s Base Salary under the Company’s Management Bonus Plan (or any
successor annual bonus plan), assuming the applicable performance levels at
“target” were achieved for the year of termination.

 

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3. Termination without Cause

Subject to the provisions of Section 5 below, in the event that the employment
of a Covered Employee is terminated by the Company without Cause (other than (i)
after a Change of Control as discussed in Section 4 below for any Covered
Employee that is above a Vice President in title or (ii) upon the death or
Permanent Disability of the Covered Employee), such Covered Employee shall be
entitled to a lump sum severance payment equal to the greater of (a) two weeks
of Base Salary for every year of such Covered Employee’s employment with the
Company, not to exceed a maximum of one year of Base Salary, or (b) the
applicable amount calculated in accordance with the following schedule:

 

Tier    Severance I – Chief Executive Officer    24 months of Base Salary II –
President (if title not also held by CEO)    18 months of Base Salary III –
Executive Vice President    12 months of Base Salary IV – Senior Vice President
   9 months of Base Salary V – Vice President    6 months of Base Salary

For the avoidance of doubt, a Covered Employee that is a Vice President as noted
in this Section 3 and that is terminated without Cause or for Good Reason within
two (2) years after a Change of Control, shall be entitled to the lump sum
severance payment set forth in this Section 3.

 

4. Termination after a Change of Control

Subject to the provisions of Section 5 below, if (i) a Change of Control occurs
and (ii) the employment of a Covered Employee is terminated (other than upon the
death or Permanent Disability of the Covered Employee) either (a) without Cause
within two years after the Change of Control, or (b) by the Covered Employee for
Good Reason within two years after the Change of Control, then such Covered
Employee shall be entitled to a lump sum severance payment equal to the
applicable amount calculated in accordance with the following schedule:

 

Tier    Severance I – Chief Executive Officer    2.99 times the Base Amount II –
President (if title not also held by CEO)    2.0 times the Base Amount III –
Executive Vice President    1.5 times the Base Amount IV – Senior Vice President
   1.0 times the Base Amount

In addition, the Covered Employee shall be entitled to receive a lump sum
payment equal to (a) the Covered Employee’s Target Bonus for the year in which
the Covered Employee’s employment is terminated, pro-rated to the date of such
termination, and (b) the sum of (i) 24 months of the employer portion of monthly
health insurance premiums, and (ii) 24 months of the monthly executive
disability insurance premiums paid or reimbursed by the Company with respect to
the Covered Employee.

If the Total Benefits (as defined below) payable to a Covered Employee would
result in an excise tax under Section 4999 of the Code (the “Excise Tax”), then
the Total Benefits shall be reduced to the extent necessary to eliminate the
Excise Tax. This reduction of Total Benefits shall only be made, however, if the
Covered Employee’s resulting Net Retained Amount (as defined below) after such
reduction would be greater than if no such reduction were made and the full
amount of Total Benefits were paid and subject to the Excise Tax. All
determinations required to be made under this Section 4 shall be made by a tax
advisor selected by the Company and reasonably acceptable to the Covered
Employee (“Tax Advisor”), which determinations shall be conclusive and binding
on the Covered Employee and the Company absent manifest error. All fees and
expenses of the Tax Advisor shall be borne solely by the Company. Prior to any
reduction in the Covered Employee’s Total Benefits pursuant to this Section 4,
Tax Advisor shall provide the Covered Employee and the Company with a report
setting forth its calculations and containing related supporting information. In
the event any such reduction is required, the Total Benefits shall be reduced in
the following order: (i) the payments to be made under this Section 4, and (ii)
any Total Benefits that arise from any accelerated vesting of equity awards;
provided, however, that if any Total Benefits are subject to Section 409A, such
Total Benefits will be the last to be reduced.

 

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For purposes of this Section 4:

“Total Benefits” shall mean the payments described in this Section 4 (the “CIC
Severance Payments”) together with any other payment or benefit received or to
be received by a Covered Employee in connection with a “change in ownership or
control” (within the meaning of Section 280G of the Code) of the Company (such
as outstanding equity or performance or service- based cash awards); and

“Net Retained Amount” shall mean the present value (as determined in accordance
with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of the Total
Benefits net of all federal, state and local taxes imposed on the Covered
Employee with respect thereto.

 

5. Conditions to and Timing of Payments

No severance payment shall be made to a Covered Employee under this Policy
unless, within sixty (60) days of the effective date of the Covered Employee’s
termination, such Covered Employee shall have executed and delivered to the
Company a waiver and general release in favor of the Company and its Affiliates
releasing the Company and its Affiliates from any and all claims relating to
such Covered Employee’s (i) employment with the Company and (ii) termination of
employment (the “Release”). The Release shall be in the form of the Company’s
then-standard form of Release and shall include confidentiality and
non-disparagement provisions.

To the extent permissible under Section 409A, any severance payment made
pursuant to this Policy shall be made by the Company on the first business day
following the sixtieth day (60th) after the effective date of the Covered
Employee’s termination. For the avoidance of doubt, no payment shall be made
under this Policy if the Release referred to in the preceding paragraph is not
executed by the Covered Employee and delivered to the Company by the sixtieth
(60th) day following the effective date of the Covered Employee’ termination.

Notwithstanding the provisions of the preceding paragraph, to the extent (i) a
severance payment under this Policy is determined by the Company to be subject
to Section 409A and (ii) is to be made to a Specified Employee who would be
subject to a penalty tax under Section 409A, any such severance payment shall be
made by the Company on the first day of the seventh month following the
effective date of such Covered Employee’s termination.

 

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6. Benefits

The Compensation Committee shall have the discretion to increase any severance
payment due pursuant to this Policy to provide for COBRA health insurance
premiums and/or such other termination-related benefits (such as outplacement
services, relocation expenses and similar items) as the Compensation Committee
may determine are reasonable in the context, provided, however, that any amount
to be paid to a Covered Employee with respect to such health insurance premiums
and/or other termination-related benefits shall be paid in a single lump sum at
the same time as severance payments are to be made pursuant to the provisions of
Section 5 of this Policy.

 

7. Treatment of Other Outstanding Awards upon a Change of Control

The treatment of outstanding equity awards upon a Change of Control shall be in
accordance with the terms and conditions of the relevant equity incentive plans
and award agreements applicable to such awards.

Long-Term Service-Based Cash Awards shall immediately vest upon the occurrence
of a Change of Control, and shall be paid on the fifteenth (15th) day following
the Change of Control.

Performance-Based Cash Awards will immediately vest upon the occurrence of a
Change of Control at either (i) their target value (if the applicable
performance period has not yet elapsed) or (ii) the value resulting from any
achieved performance targets applicable to the elapsed performance measurement
period, and shall be paid on the fifteenth (15th) following the Change of
Control.

 

8. Policy Changes; Binding Obligations

The Company reserves the right to amend or modify this Policy at any time
without prior notice, provided that, without the written approval of any
affected Covered Employee, no such amendment or modification made subsequent to
the occurrence of a Change of Control shall alter or impair the benefits that
might be payable to a Covered Employee hereunder as a result of a termination of
employment following such Change of Control. This Policy will also change from
time to time as the terms and phrases used in this Policy are modified by rule
or law.

The obligations of the Company under Section 4 and Section 7 shall be binding
upon any successor corporation or organization resulting from the merger,
consolidation or other business combination of the Company, or upon any
successor corporation or organization succeeding to substantially all of the
assets and business of the Company. The Company agrees that it will make
appropriate provisions for the preservation of Company employee rights under
such sections of this Policy in any agreement or plan which it may enter into or
adopt to effect any such merger, consolidation, reorganization or transfer of
assets.

 

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9. Interpretation

The Compensation Committee shall administer and interpret this Policy. This
Policy is intended to comply with the provisions of Section 409A, if and to the
extent that the benefits payable pursuant to this Policy do not qualify for any
applicable exception to those provisions. The provisions of this Policy shall be
interpreted in a manner consistent with the applicable requirements of
Section 409A and any rules or regulations issued pursuant thereto, including
without limitation, the requirement in Section 409A(a)(2)(B)(i) that payments
subject to Section 409A made on account of a separation from service to a
“specified employee,” as defined therein, not be made before the date which is
six (6) months after the date of separation from service (or, if earlier, the
date of the specified employee’s death).

 

10. Claims Procedure

In the event that any Covered Employee or his or her beneficiary claims to be
entitled to benefits under this Policy or believes his or her benefits are
incorrect, that Covered Employee or his or her beneficiary (hereafter, a
“Claimant”) may file a claim for benefits by submitting a written statement
describing the basis of the claim for benefits under this Policy. The
Compensation Committee shall review the claim and respond within a reasonable
period of time, but no more than 90 days after receipt of the claim by the
Compensation Committee.

If the Compensation Committee makes an adverse determination as to the
Claimant’s claim, the Compensation Committee shall, within the time period
described above, notify the Claimant in a writing setting forth, in a manner
calculated to be understood by the Claimant:

(i) the specific reasons for the adverse determination,

(ii) the provisions of this Policy on which the determination is based,

(iii) a description of additional information or material necessary for the
Claimant to perfect the claim and an explanation of why such additional
information or material is necessary, and

(iv) a description of this Policy’s review procedures and the time limits
applicable to such procedures, including a statement of the Claimant’s right to
bring suit under Section 502(a) of ERISA following an adverse benefit
determination on review.

Within 60 days of receipt by a Claimant of a notice denying a claim, the
Claimant, or his or her duly authorized representative, may request in writing a
full and fair review of the claim by filing an appeal with the Compensation
Committee. In connection with such appeal, the Claimant or his or her duly
authorized representative:

(i) may submit written comments, documents, records, and other information
relating to the claim for benefits, and

(ii) shall be provided, upon request and free of charge, reasonable access to,
and copies of, all documents, records, and other information relevant to the
Claimant’s claim for benefits.

 

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The Compensation Committee shall provide for a full and fair review that takes
into account all comments, documents, records, and other information submitted
by the Claimant’s written presentation, as well as any evidence, facts or
circumstances the Compensation Committee deems relevant.

The Compensation Committee shall make a decision not later than 60 days after
the Compensation Committees receipt of a request for appeal.

As amended on June 16, 2016.

 

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