General
This Information Statement is being furnished by Revlon, Inc., a Delaware corporation (‘‘we,’’ ‘‘us,’’ ‘‘our’’ or the ‘‘Company’’), in connection with action taken by the holders of at least a majority of the Company’s issued and outstanding voting securities, approving, by written consent dated April 10, 2008, an amendment to our restated certificate of incorporation to effect a reverse stock split of our Class A and Class B common stock at a reverse stock split ratio of 1-for-10 (the ‘‘Transaction’’ or the ‘‘reverse stock split’’).
The Company is controlled by Ronald O. Perelman who, directly or indirectly, through various affiliates, including MacAndrews & Forbes Holdings Inc., a Delaware corporation, and REV Holdings LLC, a Delaware limited liability company (collectively, ‘‘MacAndrews & Forbes’’), owned, as of March 31, 2008, all of our issued and outstanding Class B common stock, approximately 58% of the Company’s issued and outstanding shares of Class A common stock and approximately 60% of the Company’s issued and outstanding shares of Class A and Class B common stock combined (including 45,616,141 shares of our Class A common stock beneficially owned by a family member of Ronald O. Perelman with respect to which shares MacAndrews & Forbes holds a voting proxy), with such shares of Class A and Class B common stock together representing approximately 74% of the combined voting power of the Company’s common stock.
As the matters set forth in this Information Statement have been duly authorized and approved by the written consent of the holders of at least a majority of our issued and outstanding voting securities, we are not seeking any consent, authorization or proxy from you. This Information Statement is being furnished pursuant to the requirements of Rule 14c-2 of the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’), to our stockholders who would otherwise have been entitled to vote or give an authorization or consent in regard to the Transaction. Our Board of Directors has fixed the close of business on April 21, 2008 as the record date for the determination of stockholders entitled to notice of the action by written consent (the ‘‘Record Date’’). This Information Statement is first being mailed on April 21, 2008 to our stockholders of record as of the April 21, 2008 Record Date. Pursuant to Rule 14c-2 under the Exchange Act, the corporate action authorized by our majority stockholders can be taken no sooner than 20 calendar days after the accompanying Information Statement is first mailed to the Company’s stockholders. Accordingly, following expiration of such 20-day period, we anticipate filing with the Delaware Secretary of State an amendment to our restated certificate of incorporation, implementing the reverse stock split in the manner so authorized, on or about May 12, 2008, subject to the prior abandonment of the reverse stock split as may be determined in our Board’s discretion.
Our principal executive offices are located at 237 Park Avenue, New York, New York 10017, and our telephone number is (212) 527-4000.
Corporate Action Taken — Reverse Stock Split
Effective Date
The effective date of the reverse stock split (the ‘‘Effective Date’’), if implemented by our Board of Directors, will be the date and time on which the Amendment is accepted and recorded by the Delaware Secretary of State (subject to any specific future time and date of effectiveness stated therein) in accordance with Section 103 of the DGCL, which is anticipated to be on or about May 12, 2008, but in no case will the Effective Date be earlier than 20 calendar days after the date this Information Statement is first mailed to stockholders.
If, at any time prior to the filing of the Amendment, our Board of Directors, in its discretion, determines that the reverse stock split is no longer in our best interests and the best interests of our stockholders, the reverse stock split may be abandoned, without any further action by our stockholders. If the Board of Directors does not implement the reverse stock split prior to December 31, 2008, its authorization to implement the reverse stock split will terminate.
Reasons For The Reverse Stock Split
Our Board of Directors authorized the reverse stock split of our Class A common stock with the primary intent of increasing the per share trading price of our Class A common stock, which is publicly traded and listed on the NYSE. Our Class A common stock is listed on the NYSE under the symbol ‘‘REV.’’ On April 21, 2008, the closing price per share of our Class A common stock on the NYSE consolidated tape was $0.93. The reverse stock split would also reduce certain of our costs, such as NYSE listing fees, and would be intended to satisfy compliance with the NYSE’s price criteria for continued listing. Accordingly, for these and other reasons discussed below, the Company believes that effecting the reverse stock split would be in the Company’s and our stockholders’ best interests.
On April 11, 2008, we were notified by the NYSE that the trading price of our Class A common stock was below the price criteria of the NYSE’s continued listing standards, as the average per share closing price of our Class A common stock over a consecutive 30-trading day period was less than $1.00. After receiving the NYSE’s notice, we immediately notified the NYSE that on April 10, 2008 our Board of Directors and stockholders had approved the reverse stock split and that we intend to regain compliance with the NYSE’s price criteria, including by, among other things, implementing the reverse stock split. Under NYSE rules, we have 6 months following such notification to bring our share price and 30 trading day average closing price above $1.00, during which time our Class A common stock will continue to be listed on the NYSE.
We also believe that the reverse stock split should make our Class A common stock more attractive to a broader range of institutional and other investors, as we have been advised that the current market price of our Class A common stock may affect its acceptability to certain institutional investors, professional investors and other members of the investing public. However, some investors may view the reverse stock split negatively since it reduces the number of shares of Class A common stock available in the public market.
Reducing the number of outstanding shares of our Class A common stock through the reverse stock split is intended, absent other factors, to increase the per share market price of our Class A common stock. However, other factors, such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our Class A common stock. As a result, there can be no assurances that the reverse stock split, if completed, will result in the intended benefits described above, that the market price of our Class A common stock will increase following the reverse stock split or that the market price of our Class A common stock will not decrease in the future.
Effects Of The Reverse Stock Split
General
If we determine, upon the effectiveness of the Written Consent, to implement the reverse stock split, the principal result will be to proportionately decrease the number of outstanding shares of our Class A and Class B common stock based on the 1-for-10 Split Ratio. Our Class A common stock is currently registered under Sections 12(b) and 12(g) of the Exchange Act, and we are subject to the periodic reporting and other requirements of the Exchange Act. The reverse stock split will not affect the registration of our common stock under the Exchange Act or the listing of our Class A common stock on the NYSE. Following the reverse stock split, our common stock will continue to be listed on the NYSE under the symbol ‘‘REV,’’ although it will be considered a new listing with a new CUSIP number.
Effect On Our Stock Plan
As of March 31, 2008, there were approximately 21,388,134 outstanding stock options and 10,582,005 shares of unvested restricted stock under our Third Amended and Restated Revlon, Inc. Stock Plan (as amended from time to time, the ‘‘Stock Plan’’). Under Section 3.5 of our Stock Plan, in the event of a reverse stock split, if the Compensation and Stock Plan Committee of our Board of Directors (the ‘‘Compensation Committee’’) determines in its sole discretion that it is appropriate to do so, (i) the number and kind of shares of common stock which may thereafter be issued in connection with awards, (ii) the number and kind of shares of common stock to be issued in respect of outstanding awards, (iii) the exercise price, grant price or purchase price relating to any award, and (iv) the maximum number of shares subject to awards which may be awarded to any grantee during any period shall be proportionately adjusted to prevent the dilution or enlargement of the rights of grantees.
Accordingly, if the reverse stock split is effected, the Company expects that the number of all outstanding equity awards will be proportionately adjusted by our Compensation Committee, using the same 1-for-10 Split Ratio, pursuant to its existing authority under the Stock Plan to do so. In connection with the reverse stock split, the Compensation Committee will implement only applicable technical, conforming changes to the Stock Plan, including ratably reducing the authorized shares of common stock available for awards under the Stock Plan. For example, based upon the 1-for-10 Split Ratio, the 65,500,000 authorized shares under our Stock Plan would be adjusted to 6,550,000 shares. In addition, the exercise price for each stock option would be increased by 10 times, such that upon an exercise, the aggregate exercise price payable by the optionee to the Company would remain the same. For illustrative purposes only, an outstanding stock option for 3,000 shares of Class A common stock, exercisable at $2.00 per share, would be adjusted as a result of the 1-for-10 Split Ratio into an option exercisable for 300 shares of Class A common stock at an exercise price of $20.00 per share.
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