Document:

EXHIBIT 10.1

EXHIBIT 10.1

ELIZABETH ARDEN, INC.

2004 Stock Incentive Plan

1.    Purpose. The Elizabeth Arden, Inc. 2004 Stock Incentive Plan (the "Plan") is intended to provide incentives which will attract, retain and motivate highly competent persons as officers and employees of, and consultants and advisors to, Elizabeth Arden, Inc. (the "Company") and its subsidiaries and affiliates, by providing them opportunities to acquire shares of the Company's common stock, par value $.01 per share (the "Common Stock"), or to receive monetary payments based on the value of such shares pursuant to the Benefits (as defined below) described herein. Additionally, the Plan is intended to assist in further aligning the interests of the Company's officers, employees and consultants and advisors to those of its other shareholders.

2.    Administration.

       (a)    The Plan will be administered by a committee (the "Committee") appointed by the Board of Directors of the Company from among its members (which may be the Compensation Committee) and shall be comprised, unless otherwise determined by the Board of Directors, solely of not less than two members who shall be (i) "Non-Employee Directors" within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) "outside directors" within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and (iii) "independent directors" as defined under the applicable rules of the Nasdaq Stock Market or the Securities and Exchange Commission ("SEC"). The Committee is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and interpretations and to take such action in connection with the Plan and any Benefits granted hereunder as it deems necessary or advisable. All determinations and interpretations made by the Committee shall be binding and conclusive on all participants and their legal representatives. No member of the Committee and no employee of the Company shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith, gross negligence or willful misconduct, or for any act or failure to act hereunder by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated. The Company shall indemnify members of the Committee and any agent of the Committee who is an employee of the Company, a subsidiary or an affiliate against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan, except in circumstances involving such person's bad faith, gross negligence or willful misconduct.

         (b)    To the extend permitted by law, the Committee may delegate to one or more of its members, or to one or more agents, such administrative duties as it may deem advisable, and the Committee, or any person to whom it has delegated duties as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. The Committee may employ such legal or other counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion or computation received from any such counsel, consultant or agent. Expenses incurred by the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company, or the subsidiary or affiliate whose employees have benefited from the Plan, as determined by the Committee.

3.    Participants. Participants will consist of such officers and employees of, and such consultants and advisors to, the Company and its subsidiaries and affiliates as the Committee in its sole discretion determines to be important or responsible for the success and future growth and profitability of the Company and whom the Committee may designate from time to time to receive Benefits under the Plan. Designation of a participant in any year shall not require the Committee to designate such person to receive a Benefit in any other year or, once designated, to receive the same type or amount of Benefit as granted to the participant in any other year. The Committee shall consider such factors as it deems pertinent in selecting participants and in determining the type and amount of their respective Benefits.

4.    Type of Benefits. Benefits under the Plan may be granted in any one or a combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Stock Awards, (d) Performance Awards, and (e) Stock Units (each as described below, and collectively, the "Benefits"). Any Benefit granted pursuant to the Plan may, as determined by the Committee in its discretion, constitute a Performance Award or Performance-Based Award, as described in Section 10 hereof. Benefits shall be evidenced by agreements (which need not be identical) in such forms as the Committee may from time to time approve; provided, however, that in the event of any conflict between the provisions of the Plan and any such agreements, the provisions of the Plan shall prevail. For purposes of this Plan, (i) a "Stock Option" means a Benefit described in Section 6, (ii) a "Stock Appreciation Right" means a Benefit described in Section 7, (iii) a "Stock Award" means a Benefit described in Section 8, and (iv) a "Performance Award" means a Benefit described in Section 10.

5.    Common Stock. 

       (a)    Common Stock Available Under the Plan. The aggregate number of shares of Common Stock that may be subject to Benefits granted under this Plan shall be 2,000,000 shares of Common Stock, which may be authorized and unissued or treasury shares, subject to any adjustments made in accordance with Section 12 hereof. The maximum number of shares of Common Stock with respect to which Benefits may be granted or measured to any individual participant under the Plan during the term of the Plan shall not exceed 600,000 shares of Common Stock during any calendar year, subject to adjustments made in accordance with Section 12 hereof. 

       (b)    Any shares of Common Stock subject to Benefits under this Plan or Benefits under the 1995 Stock Option Plan or the 2000 Stock Incentive Plan (the "Prior Plans") which for any reason is cancelled or terminated without having been exercised, or is settled for cash or otherwise settled without the issuance of shares (including where any such shares are withheld to satisfy tax withholding obligations) and any shares tendered by a participant to pay the exercise price of, or delivered to satisfy tax obligations in respect of, any Benefit under this Plan or any benefit under the Prior Plans shall again be available for Benefits under the Plan. The preceding sentence shall apply only for purposes of determining the aggregate number of shares of Common Stock subject to Benefits but shall not apply for purposes of determining the maximum number of shares of Common Stock with respect to which Benefits may be granted to any individual participant under the Plan.

       (c)    Reduction of Shares Available for Benefits. Upon the granting of a Benefit, the number of shares of Common Stock available under the Plan for the granting of further Benefits shall be reduced as follows:

               (i)    In connection with the granting of a Benefit that may be settled in shares of Common Stock, the number of shares of Common Stock shall be reduced by the maximum number of shares of Common Stock subject to the Benefit.

               (ii)    In connection with the exercise or settlement of a Benefit, the number of shares of Common Stock shall be increased by the number of shares of Common Stock that remain unissued (for example, if a Stock Appreciation Right is settled in shares, only the net shares will reduce the shares of Common Stock subject to the Plan).

               (iii)    The shares of Common Stock available under the Plan shall not be reduced for awards that will be settled in cash.

6.    Stock Options. Stock Options will consist of awards from the Company that will enable the holder to purchase a number of shares of Common Stock, at set terms. Stock Options may be "incentive stock options" ("Incentive Stock Options"), within the meaning of Section 422 of the Code, or Stock Options that do not constitute Incentive Stock Options ("Nonqualified Stock Options"). The Committee will have the authority to grant to any participant one or more Incentive Stock Options, Nonqualified Stock Options, or both types of Stock Options (in each case with or without Stock Appreciation Rights). Each Stock Option shall be subject to such terms and conditions consistent with the Plan as the Committee may impose from time to time, subject to the following limitations:

       (a)    Exercise Price. Each Stock Option granted hereunder shall have such per-share exercise price as the Committee may determine at the date of grant; provided, however, subject to subsection (d) below, that the per-share exercise price shall not be less than 100% of the Fair Market Value (as defined below) of the Common Stock on the date the Stock Option is granted.

       (b)    Payment of Exercise Price. The option exercise price may be paid in cash or, in the discretion of the Committee, to the extent permitted by applicable law, by the delivery of shares of Common Stock of the Company then owned by the participant, or by delivery to the Company of (x) irrevocable instructions to deliver directly to a broker the stock certificates representing the shares for which the Option is being exercised, and (y) irrevocable instructions to such broker to sell such shares for which the Option is being exercised, and promptly deliver to the Company the portion of the proceeds equal to the Option exercise price and any amount necessary to satisfy the Company's obligation for withholding taxes, or any combination thereof. For purposes of making payment in shares of Common Stock, such shares shall be valued at their Fair Market Value on the date of exercise of the Option and shall have been held by the participant for at least six months, or any other period of time required by applicable accounting standards to avoid a charge to earnings. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. The Committee may prescribe any other method of paying the exercise price that it determines to be consistent with applicable law and the purpose of the Plan, including, without limitation, in lieu of the exercise of a Stock Option by delivery of shares of Common Stock of the Company then owned by a participant, providing the Company with a notarized statement attesting to the number of shares owned, where upon verification by the Company, the Company would issue to the participant only the number of incremental shares to which the participant is entitled upon exercise of the Stock Option or by the Company retaining from the shares of Common Stock to be delivered upon the exercise of the Stock Option that number of shares having a Fair Market Value on the date of exercise equal to the option price of the number of shares with respect to which the participant exercises the Stock Option.

       (c)    Exercise Period. Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee; provided that no Stock Option shall be exercisable later than ten years after the date it is granted except in the event of a participant's death, in which case, the exercise period of such participant's Stock Options may be extended beyond such period but no later than one year after the participant's death and provided further that, except as provided by the Committee in the case of a Change in Control or a termination of employment, no Stock Option shall be exercisable prior to the first anniversary of the date of grant. All Stock Options shall terminate at such earlier times and upon such conditions or circumstances as the Committee shall in its discretion set forth in such option agreement at the date of grant; provided, however, the Committee may, in its sole discretion, later waive any such condition.

       (d)    Limitations on Incentive Stock Options. Incentive Stock Options may be granted only to participants who are employees of the Company or one of its subsidiary corporations (within the meaning of Section 424(f) of the Code) at the date of grant. The aggregate Fair Market Value (determined as of the time the Stock Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under all option plans of the Company and of any parent corporation or subsidiary corporation (as defined in Sections 424(e) and (f) of the Code, respectively)) shall not exceed $100,000. For purposes of the preceding sentence, Incentive Stock Options will be taken into account in the order in which they are granted. The per-share exercise price of an Incentive Stock Option shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, and no Incentive Stock Option may be exercised later than ten years after the date it is granted; provided, however, Incentive Stock Options may not be granted to any participant who, at the time of grant, owns stock possessing (after the application of the attribution rules of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company, unless the exercise price is fixed at not less than 110% of the Fair Market Value of the Common Stock on the date of grant and the exercise of such option is prohibited by its terms after the expiration of five years from the date of grant of such option. In addition, no Incentive Stock Option may be issued to a participant in tandem with a Nonqualified Stock Option.

       (e)    Post-Employment Exercises. The exercise of any Stock Option after termination of employment of a participant with the Company, a subsidiary of the Company or with any company or person providing consulting or advisory services to the Company shall be subject to such conditions as imposed by the Committee at the time of the grant and satisfaction of the conditions precedent that the participant neither (i) competes with, or takes other employment with or renders services to a competitor of, the Company, its subsidiaries or affiliates without the written consent of the Company; provided that this clause (i) shall not apply to consultants or advisors of the Company, nor (ii) conducts himself or herself in a manner adversely affecting the Company; provided, however, that the Committee, in its sole discretion, may waive any conditions imposed in the grant letter or as set forth in (i) and (ii) above relating to the exercise of options after the date of termination of employment during the term of the option.

7.    Stock Appreciation Rights.

       (a)    The Committee may, in its discretion, grant Stock Appreciation Rights to the holders of any Stock Options granted hereunder. In addition, Stock Appreciation Rights may be granted independently of, and without relation to, Stock Options. A Stock Appreciation Right means a right to receive a payment in cash, Common Stock or a combination thereof, in an amount equal to the excess of (x) the Fair Market Value, or other specified valuation, of a specified number of shares of Common Stock on the date the right is exercised over (y) the Fair Market Value, or other specified valuation (which shall be no less than the Fair Market Value) of such shares of Common Stock on the date the right is granted, all as determined by the Committee; provided, however, that if a Stock Appreciation Right is granted in tandem with or in substitution for a Stock Option, the designated Fair Market Value in the award agreement may be the Fair Market Value on the date such Stock Option was granted. Each Stock Appreciation Right shall be subject to such terms and conditions as the Committee shall impose from time to time.

       (b)    Stock Appreciation Rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee; provided, however, that no Stock Appreciation Rights shall be exercisable later than ten years after the date it is granted except in the event of a participant's death, in which case, the exercise period of such participant's Stock Appreciation Rights may be extended beyond such period but no later than one year after the participant's death; and provided further that, except as provided by the Committee in the case of a Change in Control or a termination of employment, no Stock Appreciation Right shall be exercisable prior to the first anniversary of the date of grant. All Stock Appreciation Rights shall terminate at such earlier times and upon such conditions or circumstances as the Committee shall in its discretion set forth in such right at the date of grant.

       (c)    The exercise of any Stock Appreciation Right after termination of employment of a participant with the Company, a subsidiary of the Company or with any company or person providing consulting or advisory services to the Company shall be subject to satisfaction of the conditions precedent that the participant neither (i) competes with, or takes other employment with or renders services to a competitor of, the Company, its subsidiaries or affiliates without the written consent of the Company; provided that this clause (i) shall not apply to consultants or advisors of the Company, nor (ii) conducts himself or herself in a manner adversely affecting the Company; provided, however, that the Committee, in its sole discretion, may waive any conditions imposed in the grant letter or as set forth in (i) and (ii) above relating to the exercise of options after the date of termination of employment during the term of the option.

8.    Stock Awards. The Committee may, in its discretion, grant Stock Awards (which may include mandatory payment of bonus incentive compensation in stock) consisting of Common Stock issued or transferred to participants with or without other payments therefor. Stock Awards may be subject to such terms and conditions as the Committee determines appropriate, including, without limitation, vesting, restrictions on the sale or other disposition of such shares, the right of the Company to reacquire such shares for no consideration upon termination of the participant's employment within specified periods, and may constitute Performance-Based Awards, as described in Section 10 hereof. The Committee may require the participant to deliver a duly signed stock power, endorsed in blank, relating to the Common Stock covered by such Stock Award. The Committee may also require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon shall have lapsed. The Stock Award shall specify whether the participant shall have, with respect to the shares of Common Stock subject to a Stock Award, all of the rights of a holder of shares of Common Stock of the Company, including the right to receive dividends, distributions and to vote the shares. The Company may hold in escrow any dividend issued or distribution made in connection with the Common Stock underlying a Stock Award until the applicable restrictions on the Stock Award, if any, lapse. To the extent that dividends and distributions relating to a Stock Award are held in escrow by the Company, a participant shall not be entitled to any interest on any such amounts.

9.    Stock Units.

       (a)    The Committee may, in its discretion, grant Stock Units to participants hereunder. The Committee shall determine the criteria for the vesting of Stock Units. Stock Units may constitute Performance-Based Awards, as described in Section 10 hereof. A Stock Unit granted by the Committee shall provide payment in shares of Common Stock at such time as the award agreement shall specify. Shares of Common Stock issued pursuant to this Section 9 may be issued with or without other payments therefor as may be required by applicable law or such other consideration as may be determined by the Committee. The Committee shall determine whether a participant granted a Stock Unit shall be entitled to a Dividend Equivalent Right (as defined in subsection 9(d)).

       (b)    Upon vesting of a Stock Unit, unless the Committee has determined to defer payment with respect to such unit or a participant has elected to defer payment under subsection 9(c), shares of Common Stock representing the Stock Units shall be distributed to the participant unless the Committee provides for the payment of the Stock Units in cash or partly in cash and partly in shares of Common Stock equal to the value of the shares of Common Stock which would otherwise be distributed to the participant.

       (c)    Prior to the year with respect to which a Stock Unit may vest, the Committee, in its discretion, may permit a participant to elect not to receive a distribution upon the vesting of such Stock Unit and for the Company to continue to maintain the Stock Unit on its books of account. In such event, the value of a Stock Unit shall be payable in shares of Common Stock pursuant to the agreement of deferral.

       (d)    A "Stock Unit" means a notional account representing one share of Common Stock. A "Dividend Equivalent Right" means the right to receive the amount of any dividend paid on the share of Common Stock underlying a Stock Unit, which shall be payable in cash or in the form of additional Stock Units.

10.    Performance Awards.

         (a)    Performance Awards may be granted to participants at any time and from time to time, as shall be determined by the Committee. 

                 (i)    Performance Awards may constitute Performance-Based Awards, as described in 10(b) hereof. The Committee shall have complete discretion in determining the number, amount and timing of awards granted to each participant. Such Performance Awards may be in the form of any Benefit permitted under the Plan. Performance Awards may be awarded as short-term or long-term incentives. Performance targets may be based upon, without limitation, Company-wide, divisional and/or individual performance.

                 (ii)    With respect to those Performance Awards that are not intended to constitute Performance-Based Awards, the Committee shall have the authority at any time to make adjustments to performance targets for any outstanding Performance Awards which the Committee deems necessary or desirable unless at the time of establishment of such targets the Committee shall have precluded its authority to make such adjustments.

                 (iii)    Payment of earned Performance Awards shall be made in accordance with terms and conditions prescribed or authorized by the Committee. The Committee may require or permit the deferral of the receipt of Performance Awards upon such terms as the Committee deems appropriate.

         (b)    Performance Awards granted under the Plan may be granted in a manner such that the Benefits qualify for the performance-based compensation exemption of Section 162(m) of the Code ("Performance-Based Awards"). 

                 (i)    As determined by the Committee in its sole discretion, either the granting or vesting of such Performance-Based Awards shall be based on achievement of various key performance indicators in one or more business criteria that apply to the individual participant, one or more business units or the Company as a whole. The business criteria shall be as follows, individually or in combination: (i) the attainment of certain target levels of, or a specified increase in, the Company's enterprise value or value creation targets; (ii) the attainment of certain target levels of, or a percentage increase in, the Company's after-tax or pre-tax profits including, without limitation, that attributable to the Company's continuing and/or other operations; (iii) the attainment of certain target levels of, or a specified increase relating to, the Company's operational cash flow or working capital, or a component thereof including, without limitation, inventory and accounts receivable; (iv) the attainment of certain target levels of, or a specified decrease relating to, the Company's operational costs and other expense targets, or a component thereof or planning or forecasting accuracy; (v) the attainment of a certain level of reduction of, or other specified objectives with regard to limiting the level of increase in all or a portion of bank debt or other of the Company's long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee; (vi) the attainment of a specified percentage increase in earnings per share or earnings per share from the Company's continuing operations; (vii) the attainment of certain target levels of, or a specified percentage increase in, the Company's net sales, revenues, market share, operating margin, net income or earnings before income tax or other exclusions; (viii) the attainment of certain target levels of, or a specified increase in, the Company's return on capital employed or return on invested capital; (ix) the attainment of certain target levels of, or a percentage increase in, the Company's after-tax or pre-tax return on shareholders equity or total return to shareholders; (x) the attainment of certain target levels in the fair market value of the Common Stock; (xi) the growth in the value of an investment in the Common Stock assuming the reinvestment of dividends; and (xii) the attainment of certain target levels of, or a specified increase in EBITDA (earnings before interest, taxes, depreciation and amortization). In addition, Performance-Based Awards may include comparisons to the performance of other companies, such performance to be measured by one or more of the foregoing business criteria. 

                 (ii)    When establishing performance goals for a performance period, the Committee shall exclude any or all extraordinary items or non-recurring items as determined by the Committee including, without limitation, the charges or costs associated with restructurings, discontinued operations, debt extinguishment charges, other unusual or non-recurring items, changes in applicable law and the cumulative effects of accounting changes.

                 (iii)    With respect to Performance-Based Awards, (i) the Committee shall establish in writing (x) the performance goals applicable to a given period, and such performance goals shall state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to the participant if such performance goals are obtained which shall in any event exclude non-recurring or extraordinary items and (y) the individual employees or class of employees to which such performance goals apply no later than 90 days after the commencement of such period (but in no event after 25% of such period has elapsed) and (ii) no Performance-Based Awards shall be payable to or vest with respect to, as the case may be, any participant for a given period until the Committee certifies in writing that the objective performance goals (and any other material terms) applicable to such period have been satisfied.

                 (iv)    With respect to any Benefits intended to qualify as Performance-Based Awards, after establishment of a performance goal, except as provided in clause (ii) above, the Committee shall not increase the amount of compensation payable thereunder (as determined in accordance with Section 162(m) of the Code) upon the attainment of such performance goal. Notwithstanding the preceding sentence, the Committee may reduce or eliminate Benefits payable upon the attainment of such performance goal.

11.    Foreign Laws. The Committee may grant Benefits to individual participants who are subject to the tax laws of nations other than the United States, which Benefits may have terms and conditions as determined by the Committee as necessary to comply with applicable foreign laws or avoid unfavorable tax treatment to a participant. The Committee may take any action that it deems advisable to obtain approval of such Benefits by the appropriate foreign governmental entity; provided, however, that no such Benefits may be granted pursuant to this Section 11 and no action may be taken which would result in a violation of the Exchange Act, the Code or any other applicable law.

12.    Adjustment Provisions; Change in Control.

         (a)    If there shall be any change in the Common Stock or the capitalization of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to shareholders of the Company in order to prevent dilution or enlargement of participants' rights under the Plan, the Committee shall adjust, in an equitable manner, as applicable, the number and kind of shares that may be issued under the Plan, the individual limits, the number and kind of shares subject to outstanding Benefits, the exercise price applicable to outstanding Benefits, and the Fair Market Value of the Common Stock and other value determinations applicable to outstanding Benefits. Notwithstanding the foregoing, (i) each such adjustment with respect to an Incentive Stock Option shall comply with the rules of Section 424(a) of the Code, and (ii) in no event shall any adjustment be made which would cause any Incentive Stock Option granted hereunder to be treated as anything other than an incentive stock option for purposes of Section 422 of the Code. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on participants under the Plan.

         (b)    Notwithstanding any other provision of this Plan, if there is a Change in Control of the Company, all then outstanding Stock Options and Stock Appreciation Rights shall immediately vest and become exercisable. For purposes of this Section 12(b), a "Change in Control" of the Company shall be deemed to have occurred upon any of the following events:

                 (i)    a Change in Control of the Company that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act; 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" (as hereinafter defined) cease for any reason (other than due to death or voluntary resignation) to constitute at least a majority thereof; or

                 (iii)    the Common Stock shall cease to be publicly traded after initially being publicly traded; or

                 (iv)    the Company's Board of Directors shall approve a sale of all or substantially all of the assets of the Company, and such transaction shall have been consummated; or

                 (v)    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 Section 13(b)(i) above, and such transaction shall have been consummated.

       For purposes of this Section 13(b), "Continuing Directors" shall mean (x) the directors of the Company in office on the Effective Date (as defined below) and (y) any successor to any such director and any additional director who after the Effective Date was nominated or selected by a majority of the Continuing Directors (or the Nominating Committee of the Board of Directors of the Company) in office at the time of his or her nomination or selection.

       The Committee, in its discretion, may determine that, upon the occurrence of a Change in Control of the Company, each Stock Option and Stock Appreciation Right outstanding hereunder shall terminate within a specified number of days after notice to the holder, and such holder shall receive, with respect to each share of Common Stock subject to such Stock Option or Stock Appreciation Right, an amount equal to the excess of the Fair Market Value of such shares of Common Stock immediately prior to the occurrence of such Change in Control or such other event over the exercise price per share of such Stock Option or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine. The provisions contained in the preceding sentence shall be inapplicable to a Stock Option or Stock Appreciation Right granted within six (6) months before the occurrence of a Change in Control if the holder of such Stock Option or Stock Appreciation Right is subject to the reporting requirements of Section 16(a) of the Exchange Act and no exception from liability under Section 16(b) of the Exchange Act is otherwise available to such holder.

         (c)    Unless otherwise provided in an award agreement or otherwise determined by the Committee, in the event that an entity which was previously a part of the Elizabeth Arden Group (as defined below) is no longer a part of the Elizabeth Arden Group, as determined by the Committee in its sole discretion, the employment or other services of a participant employed by such entity may be treated in the sole discretion of the Committee as terminated if such participant is not employed by the Elizabeth Arden Group immediately after such event. For purposes of this provision, "Elizabeth Arden Group" means Elizabeth Arden, Inc. and all entities whose financial statements are required to be consolidated with the financial statements of Elizabeth Arden, Inc. pursuant to United States generally accepted accounting principles and any other entity determined to be an affiliate as determined by the Committee in its sole and absolute discretion.

13.    Nontransferability. Each Benefit granted under the Plan to a participant shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the participant's lifetime, only by the participant. In the event of the death of a participant, each Stock Option or Stock Appreciation Right theretofore granted to him or her shall be exercisable during such period after his or her death as the Committee shall in its discretion set forth in such option or right at the date of grant and then only by the executor or administrator of the estate of the deceased participant or the person or persons to whom the deceased participant's rights under the Stock Option or Stock Appreciation Right shall pass by will or the laws of descent and distribution. Notwithstanding the foregoing, at the discretion of the Committee, an award of a Benefit other than an Incentive Stock Option may permit the transferability of a Benefit by a participant solely to the participant's spouse, siblings, parents, children and grandchildren or trusts for the benefit of such persons or partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons, subject to any restriction included in the award of the Benefit.

14.    Other Provisions. The award of any Benefit under the Plan may also be subject to such other provisions (whether or not applicable to the Benefit awarded to any other participant) as the Committee determines appropriate, including, without limitation, for the acceleration of exercisability or vesting of Benefits in the event of a Change in Control of the Company, for the payment of the value of Benefits to participants in the event of a Change in Control of the Company, or to comply with federal and state securities laws, or understandings or conditions as to the participant's employment in addition to those specifically provided for under the Plan. The Committee shall have full discretion to interpret and administer the Plan.

15.    Fair Market Value. For purposes of this Plan and any Benefits awarded hereunder, Fair Market Value shall be the closing price of the Common Stock on the date of calculation (or on the last preceding trading date if Common Stock was not traded on such date) if the Common Stock is readily tradeable on a national securities exchange or other market system, and if the Common Stock is not readily tradeable, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

16.    Withholding. All payments or distributions of Benefits made pursuant to the Plan shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. If the Company proposes or is required to distribute Common Stock pursuant to the Plan, it may require the recipient to remit to it or to the corporation that employs such recipient an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company or the employing corporation shall have the right to withhold the amount of such taxes from any other sums due or to become due from such corporation to the recipient as the Committee shall prescribe. The Committee may, in its sole discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit an optionee or award or right holder to pay all or a portion of the federal, state and local withholding taxes arising in connection with any Benefit consisting of shares of Common Stock by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the minimum amount of tax required to be withheld, such tax calculated at rates required by statute or regulation.

17.    Notification of 83(b) Election. If in connection with the grant of any Benefit any participant makes an election permitted under Code Section 83(b), such participant must notify the Company in writing of such election within ten (10) days of filing such election with the Internal Revenue Service.

18.    Tenure. A participant's right, if any, to continue to serve the Company or any of its subsidiaries or affiliates as an officer, employee, or otherwise, shall not be enlarged or otherwise affected by his or her designation as a participant under the Plan.

19.    Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

20.    No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Benefit. The Committee shall determine whether cash, or Benefits, or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

21.    Violations of Law. The Company shall not be required to sell or issue any shares of Common Stock under any Benefit if the sale or issuance of such shares would constitute a violation by the individual exercising the Benefit, the participant or the Company of any provisions of any law or regulation of any governmental authority, including without limitation any provisions of the Sarbanes-Oxley Act, and any other Federal or state securities laws or regulations. Any determination in this connection by the Committee shall be final, binding, and conclusive. The Company shall not be obligated to take any affirmative action in order to cause the exercise of a Benefit, the issuance of shares pursuant thereto or the grant of a Benefit to comply with any law or regulation of any governmental authority.

22.    Duration, Amendment and Termination. No Benefit shall be granted more than ten years after the Effective Date. The Committee may amend the Plan from time to time or suspend or terminate the Plan at any time. No amendment of the Plan may be made without approval of the shareholders of the Company if the amendment will: (i) disqualify any Incentive Stock Options granted under the Plan; (ii) increase the aggregate number of shares of Common Stock that may be delivered through Benefits under the Plan; (iii) increase either of the maximum amounts which can be paid to an individual participant under the Plan as set forth in Section 5 hereof; (iv) change the types of business criteria on which Performance-Based Awards are to be based under the Plan; (v) modify the requirements as to eligibility for participation in the Plan; or (vi) modify the Plan in any other way that would require shareholder approval under any regulatory requirement that the Committee determines to be applicable, including, without limitation, the rules of the Nasdaq Stock Market. No outstanding Stock Option or Stock Appreciation Right may be amended or otherwise modified or exchanged (other than in connection with a transaction described in Section 12) in a manner that would have the effect of reducing its original exercise price or otherwise constitute repricing.

23.    Governing Law. This Plan, Benefits granted hereunder and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Florida (regardless of the law that might otherwise govern under applicable Florida principles of conflict of laws).

24.    Effective Date.

         (a)    The Plan shall be effective as of May 10, 2004, the date on which the Plan was adopted by the Committee (the "Effective Date"), provided that the Plan is approved by the shareholders of the Company at an annual meeting, any special meeting or by written consent of shareholders of the Company within 12 months of the Effective Date, and such approval of shareholders shall be a condition to the right of each participant to receive any Benefits hereunder. Any Benefits granted under the Plan prior to such approval of shareholders shall be effective as of the date of grant (unless, with respect to any Benefit, the Committee specifies otherwise at the time of grant), but no such Benefit may be exercised or settled and no restrictions relating to any Benefit may lapse prior to such shareholder approval, and if shareholders fail to approve the Plan as specified hereunder, any such Benefit shall be cancelled.

         (b)    This Plan shall terminate on the tenth anniversary of the Effective Date (unless sooner terminated by the Committee).

         As amended by the Board of Directors on November 2, 2006.EXHIBIT 10.2 (HTML)

EXHIBIT 10.2

ELIZABETH ARDEN, INC.

2004 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 Elizabeth Arden, 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 Elizabeth Arden, 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, is "a non-employee director" (as defined in Rule 16b-3 of the Exchange Act) of the Company

      "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 on the grant 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 is quoted on the National Association of Securities Dealers Automated Quotations Systems ("NASDAQ"), or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of Common Stock on such exchange, NASDAQ or reporting system, as reported in any newspaper of general circulation; or (ii) if clause (i) is not 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.

      "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 an Eligible Director 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 that may be issued pursuant to Options granted under the Plan shall be 350,000 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.  Commencing on the 2004 Annual Meeting Date, 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 on the Annual Meeting Date an option to purchase 7,000 shares of the Common Stock, or such other amount as determined by the Board based on a competitive review of comparable companies.  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, money order or wire transfer.  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.  The Company shall not be required to issue any Shares if the issuance of such Shares would constitute a violation by the individual exercising the Option or the Company of any provisions of any law or regulation of any governmental authority, including without limitation any provisions of the Sarbanes-Oxley Act of 2002, and any other Federal or state securities laws or regulations.  Any determination in this connection by the Board shall be final, binding and conclusive.  The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option, the issuance of Shares pursuant thereto or the grant of an Option to comply with any law or regulation of any governmental authority other than the registration of the Shares with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act").

8.    Vesting; Exercisability.

      8.1    Each Option granted hereunder on an Annual Meeting Date shall vest and become nonforfeitable on the third anniversary of that Annual Meeting Date, if the Optionee has continued to serve as a Director until that date.  An Option shall on that day and thereafter be exercisable, subject only to 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 9.2) 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.  

      9.2    For purposes of Section 9.1, a "Change of Control" shall be deemed to have occurred upon any of the following events:

             (a)    a change in control of the Company that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act; or

             (b)    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" (as hereinafter defined) cease for any reason (other than due to death or voluntary resignation) to constitute at least a majority thereof; or

             (c)    the Company's Common Stock shall cease to be publicly traded after initially being publicly traded; or

             (d)    the Board shall approve a sale of all or substantially all of the assets of the Company, and such transaction shall have been consummated; or

             (e)    the Board 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 Section 9.2(a) above, and such transaction shall have been consummated.

    For purposes of this Section 9.2, "Continuing Directors" shall mean (x) the directors of the Company in office on the Effective Date (as defined below) and (y) any successor to any such director and any additional director who after the Effective Date was nominated or selected by a majority of the Continuing Directors (or the Nominating Committee of the Board of Directors of the Company) in office at the time of his or her nomination or selection.

10.    Termination of Option Period.  An Optionee whose directorship terminates for any reason other than death, permanent and total disability (as defined in Section 22(e)(3) of the Code) or retirement from Board service in good standing after age 70, shall be entitled to exercise any Options which are then exercisable only within the twelve-month period after the date such director ceases to serve as a Director.  Any Options that are not exercised within such twelve-month period shall be null and void.  In the case of termination of the directorship by reason of the Director's death, permanent and total disability or retirement from Board service in good standing after age 70, the Options or any portion thereof which were not exercisable on the date of termination or retirement shall be accelerated and become immediately exercisable, and the period to exercise such Options shall be twelve months, subject to the earlier expiration of the Option Period.  The estate of an Optionee who dies, or a person who acquires the right to exercise an Option, including any portion of such Option which was not exercisable at the time of death, by bequest or inheritance or by reason of the death of the Optionee, may exercise the Option only within the twelve-month period after the death of the Optionee, subject to the earlier expiration of the Option Period.

11.    Adjustment of Shares.

       11.1    If there shall be any change in the Common Stock of the Company or the capitalization of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to shareholders of the Company in order to prevent dilution or enlargement of participants' rights under the Plan, the Board  shall adjust, in an equitable manner, as applicable, the number and kind of shares that may be issued under the Plan, the individual limits, the number and kind of shares subject to outstanding Options, the exercise price applicable to outstanding Options, and the Fair Market Value of the Common Stock and other value determinations applicable to outstanding Options. The determination of the Board as to the foregoing adjustments, if any, shall be conclusive and binding on participants under the Plan.

       11.2    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 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.

12.    Transferability of Options.  Each Option shall provide that such Option shall not be transferable by the Optionee otherwise than by will or the laws or descent and distribution, and each Option shall be exercisable during the Optionee's lifetime only by the Optionee.

13.    Issuance of Shares.  As a condition of any sale or issuance of Shares which have not been registered under the Securities Act upon exercise of any Option, the Board may require such agreements or undertakings, if any, as the Board may deem necessary or advisable to assure compliance with any applicable law or regulation including, but not limited to, the following:

       (a)    a representation and warranty by the Optionee to the Company, at the time any Option is exercised, that Optionee is acquiring the Shares to be issued for investment and not with a view to, or for sale in connection with, the distribution of any such Shares; and

       (b)    a representation, warranty and/or agreement to be bound by any legends that are, in the opinion of the Board, necessary or appropriate to comply with the provisions of any securities law deemed by the Board to be applicable to the issuance of the Shares and are endorsed upon the Share certificates.

14.    Administration of the Plan.  The Plan shall be administered by the Board, which shall have the authority to adopt such rules and regulations and to make such determinations as are not inconsistent with the Plan and as are necessary or desirable for the implementation and administration of the Plan, provided that the Board does not have any discretion with respect to the grant of options under the Plan.

15.    Interpretation.

       15.1    If any provision of the Plan should be held invalid or illegal for any reason, such determination shall not affect the remaining provisions hereof, but instead the Plan shall be construed and enforced as if such provision had never been included in the Plan.  Without limiting the generality of the foregoing, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors promulgated under the Exchange Act.  To the extent any provision of the Plan or action by the Board hereunder is inconsistent with the foregoing requirements, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Board.

       15.2    The determinations and the interpretation and construction of any provision of the Plan by the Board shall be final and conclusive.  This Plan shall be governed by the laws of the State of Florida.  Headings contained in this Plan are for convenience only and shall in no manner be construed as part of this Plan.  Any reference to the masculine, feminine, or neuter gender shall be a reference to such other gender as is appropriate.

16.    Term of Plan; Amendment and Termination of the Plan.

       16.1    This Plan is effective as of May 10, 2004 ("Effective Date"); provided, however, that within one year after such date, the Plan shall have been approved by the affirmative vote of the holders of a majority of the shares of Common Stock present or represented and entitled to vote at a meeting of the Company's shareholders, or any adjournment thereof at which a quorum is present.  This Plan shall continue in effect until all Options granted hereunder have expired or been exercised, unless sooner terminated under the provisions relating thereto.  No Option shall be granted after 10 years from the Effective Date.  Any Option granted under this Plan prior to the date that shareholder approval is obtained pursuant to this Section 16.1 shall be deemed to have been granted as of the date such shareholder approval is obtained.

       16.1    The Board may from time to time amend, terminate or suspend the Plan or any Option; provided, however, that except to the extent provided in Section 10, no such amendment may (i) without approval by the Company's shareholders, increase the number of Shares reserved for Options or change the class of persons eligible to receive Options or involve any other change or modification requiring shareholder approval under Rule 16b-3 of the Exchange Act; (ii) permit the granting of Options that expire beyond the maximum 10-year period described in Section 8.2; or (iii) extend the termination date of the Plan as set forth in Section 16.1; and, provided further, that except to the extent otherwise specifically provided in Section 10, no amendment, termination or suspension of the Plan or any Option issued hereunder shall substantially impair any Option previously granted to any Optionee without the consent of such Optionee.  Any termination or suspension of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if this Plan had not been terminated or suspended.  No Option may be granted while the Plan is suspended or after it is terminated.

       16.1    Notwithstanding anything else contained herein, the provisions of this Plan which govern the number of Options to be awarded to Directors, the exercise price per share under each such Option, when and under what circumstances an Option will be granted, and the period within which each Option may be exercised, shall not be amended more than once every six months (even with shareholder approval), other than to conform to changes in the Code, or the rules promulgated thereunder, and under the Employee Retirement Income Security Act of 1974, as amended, or the rules promulgated thereunder, or with rules promulgated by the Securities and Exchange Commission.

17.    No Right to Service.  Except as provided in this Plan, no Eligible Director shall have any claim or right to be granted a stock option under the Plan.  Neither the Plan nor any action pursuant thereto shall be construed as giving any Eligible Director a right to be retained in the service of the Company.  The adoption of this Plan shall not affect any other compensation, retirement or other benefit plan or program in effect for the Company.

18.    Reservation of Shares.  The Company, during the term of the Plan, will at all times reserve and keep available a number of Shares as shall be sufficient to satisfy the requirements of the Plan.

As adopted by the Board of Directors on May 10, 2004, and as amended on November 2, 2006.

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