As filed with the Securities and Exchange Commission on February 5, 2003
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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REVLON, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 13-3662955
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
625 MADISON AVENUE
NEW YORK, NY 10022
(212) 527-4000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of registrant's principal executive offices)
ROBERT K. KRETZMAN, ESQ.
REVLON, INC.
625 MADISON AVENUE
NEW YORK, NY 10022
(212) 527-4000
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent For Service)
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COPY TO:
STACY J. KANTER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036
(212) 735-3000
FAX: (212) 735-2000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
AMOUNT TO PROPOSED
TITLE OF EACH CLASS OF SECURITIES BE MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED AGGREGATE PRICE PER UNIT AGGREGATE OFFERING PRICE REGISTRATION FEE
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Common Stock, par value $0.01 per share 3,913,044(1) $ 2.30(1) $9,000,000 (2) $828
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Rights (3) N/A N/A $-0- (4)
===================================================================================================================================
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933, as amended.
(2) Represents the aggregate gross proceeds from the exercise of the maximum
number of rights that may be issued.
(3) Evidencing the rights to subscribe for 3,913,044 shares of Class A common
stock, par value $0.01 per share.
(4) The rights are being issued without consideration.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
EXPLANATORY NOTE
The subscription price for our shares of Class A common stock referred to in
this Registration Statement shall be equal to eighty percent (80%) of the
greater of the closing price per share of our Class A common stock on the New
York Stock Exchange on (i) the trading day before the date that our board of
directors approved this rights offering, which was $2.88 per share, and (ii)
the record date of this rights offering.
[SIDEBAR]
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
[END SIDEBAR]
Subject to Completion, dated February 5, 2003.
PROSPECTUS
21,739,130 Shares
REVLON, INC.
CLASS A COMMON STOCK
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We are distributing at no charge to the holders of our Class A and Class B
common stock transferable subscription rights to purchase up to an aggregate of
21,739,130 shares of our Class A common stock at a cash subscription price of
$ per share. This rights offering is being made to help fund a portion of
the costs and expenses of our plan.
The total purchase price of shares offered in this rights offering will be
approximately $50,000,000. You will not be entitled to receive any subscription
rights unless you are a stockholder of record as of the close of business on
, 2003.
The subscription rights will expire if they are not exercised by 5:00
p.m., New York City time, on , 2003, the expected expiration date of this
rights offering. We, in our sole discretion, may extend the period for
exercising the subscription rights. Subscription rights that are not exercised
by the expiration date of this rights offering will expire and will have no
value. You should carefully consider whether or not to exercise or sell your
subscription rights before the expiration date.
Shares of our Class A common stock are quoted on the New York Stock
Exchange under the symbol "REV." The last sale price of our Class A common
stock on February 4, 2003 was $2.97 per share. It is anticipated that the
subscription rights will be traded on the New York Stock Exchange under the
symbol " ".
PER SHARE AGGREGATE
----------- --------------------
Subscription Price .............. $ $ 50,000,000(1)
Estimated Expenses .............. $ $ 2,187,828
Net Proceeds to Revlon .......... $ $ 47,812,172
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(1) Includes proceeds from the back-stop agreement with MacAndrews &
Forbes described elsewhere in this prospectus.
AN INVESTMENT IN OUR CLASS A COMMON STOCK INVOLVES RISKS. YOU SHOULD
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 10 IN THIS PROSPECTUS
BEFORE EXERCISING OR SELLING YOUR SUBSCRIPTION RIGHTS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense. The securities are not being offered in any jurisdiction
where the offer is not permitted.
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The date of this prospectus is , 2003
TABLE OF CONTENTS
PAGE
----
Incorporation of Certain Documents by Reference ........................ i
Questions and Answers About the Rights Offering ........................ iii
Prospectus Summary ..................................................... 1
Risk Factors ........................................................... 10
Forward-Looking Statements ............................................. 19
Selected Historical and Unaudited Pro Forma Consolidated Financial Data 22
The Rights Offering .................................................... 28
Investment Agreement ................................................... 38
Use of Proceeds ........................................................ 39
Dilution ............................................................... 39
Capitalization ......................................................... 40
Certain United States Federal Income Tax Consequences .................. 41
Legal Matters .......................................................... 42
Experts ................................................................ 42
Where You Can Find More Information .................................... 42
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission, or the SEC, allows us to
"incorporate by reference" information that we file with them, which means that
we can disclose important information to you by referring you to those
documents. Specifically, we are incorporating by reference the following
documents listed below and any future filings that we will make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, until the completion of the offering:
o Our Annual Report on Form 10-K for the year ended December 31, 2001,
filed on February 25, 2002;
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2002, June 30, 2002 and September 30, 2002, filed on May 15, 2002,
August 14, 2002 and November 14, 2002, respectively;
o Our two Current Reports on Form 8-K, filed on August 14, 2002 and our
Current Report on Form 8-K filed on February 5, 2003; and
o The section captioned "Description of Capital Stock" in Amendment No. 4
to our Registration Statement on Form S-1 (File No. 33-99558), filed on
February 26, 1996, as incorporated by reference into our Registration
Statement on Form 8-A/A-1 (File No. 33-99558), filed on February 28,
1996.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Robert K. Kretzman, Esq.
Senior Vice President,
General Counsel and Secretary
Revlon, Inc.
625 Madison Avenue
New York, NY 10022
Telephone: (212) 527-4000
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information provided in this prospectus or
incorporated by reference. We have not authorized anyone else to provide you
with different information. You should not assume that the information in
i
this prospectus is accurate as of any date other than the date on the front of
the document. We are not making an offer of these securities in any state where
the offer is not permitted.
Any statement contained in this prospectus or in a document, all or a
portion of which is incorporated or deemed to be incorporated by reference in
this prospectus, shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained in this prospectus or
in any other subsequently filed document that also is deemed to be incorporated
by reference in this prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
ii
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING
Q: What is this rights offering?
A: This rights offering is a distribution to holders of our Class A and Class
B common stock of transferable subscription rights to purchase
additional share[s] of our Class A common stock for each share of Class A
or Class B common stock owned as of , 2003 (or the "rights
offering record date").
Q: What is a subscription right?
A: Each subscription right is a right to purchase share[s] of our Class A
common stock and carries with it a basic subscription privilege and an
over-subscription privilege.
Q: What is the basic subscription privilege?
A: The basic subscription privilege of each subscription right entitles you to
purchase share[s] of our Class A common stock at the subscription
price of $ per share.
Q: What is the over-subscription privilege?
A: The over-subscription privilege of each subscription right entitles you, if
you fully exercise your basic subscription privilege, to subscribe for
additional shares of our Class A common stock at the same subscription
price per share if any shares are not purchased by other holders of
subscription rights under their basic subscription privileges as of the
expiration date.
Q: Why are we engaging in this rights offering?
A: This rights offering is being made to help fund a portion of the costs and
expenses of our plan. MacAndrews & Forbes Holdings Inc. ("MacAndrews
Holdings"), a corporation wholly owned through Mafco Holdings Inc. ("Mafco
Holdings" and, together with MacAndrews Holdings, "MacAndrews & Forbes")
by Ronald O. Perelman, has proposed to provide us up to $150 million to
help fund a portion of the costs and expenses of our plan. Under this
proposal, we are making this $50 million rights offering. MacAndrews &
Forbes has agreed to purchase the full number of shares of our Class A
common stock it would have been entitled to subscribe for in this rights
offering pursuant to its basic subscription privilege. To enhance your
over-subscription privilege, MacAndrews & Forbes has agreed not to
exercise its over-subscription privilege. In addition, if any shares
remain following the exercise of the basic subscription privilege and the
over-subscription privilege, MacAndrews & Forbes has agreed to back-stop
this rights offering by purchasing the remaining shares offered.
MacAndrews & Forbes is also providing us with a $100 million term loan
(this loan is referred to in this prospectus as the "MacAndrews & Forbes
$100 million term loan"). If, prior to the consummation of this rights
offering, we have fully drawn the MacAndrews & Forbes $100 million term loan
and the implementation of our plan requires some or all of the $50 million
of funds that we would raise from this rights offering, MacAndrews & Forbes
has agreed to advance us these funds prior to closing this rights offering
by purchasing up to $50 million of newly-issued shares of our non-voting,
non-dividend paying, non-convertible, Series C preferred stock. We will
redeem these shares with the proceeds we receive from the rights offering
and the back-stop by MacAndrews & Forbes (as described below). In addition,
if we have fully drawn the MacAndrews & Forbes $100 million term loan and
MacAndrews & Forbes has purchased an aggregate of $50 million of shares of
our Series C preferred stock (or if we have consummated the rights offering
and redeemed any outstanding shares of Series C preferred stock), MacAndrews
& Forbes has agreed to provide us with up to $40 million of additional
liquidity under an unsecured supplemental line of credit during 2003 and
2004, which will increase to a commitment of $65 million on January 1, 2004
(this line of credit is referred to in this prospectus as the
"$40-65 million line of credit").
The stabilization and growth phase of our plan involves increasing
advertising and media spending, increasing the effectiveness of our
in-store wall displays in the United States, reducing the number of our
stock keeping units, or SKUs, in the United States, selectively adjusting
iii
prices on certain of our products in the United States, optimizing product
availability to consumers and further strengthening our new product
development process.
Q: What happens if I choose not to exercise my subscription rights?
A: You will retain your current number of shares of Class A common stock even
if you do not exercise your subscription rights. However, because
MacAndrews & Forbes has agreed to purchase the full number of shares of
our Class A common stock it would have been entitled to subscribe for in
this rights offering in accordance with its basic subscription privilege
and to purchase all of such shares not purchased by the other stockholders
pursuant to their basic subscription privileges and over-subscription
privileges, if you do not exercise your subscription privileges, the
percentage of our Class A common stock that you own will decrease, and
your voting and other rights will be diluted.
Q: Can our board of directors cancel this rights offering?
A: Yes. Our board of directors may decide to cancel this rights offering at
any time prior to the expiration of the rights offering and for any
reason. If we cancel this rights offering, any money received from
subscribing stockholders will be refunded promptly, without interest or
deduction.
Q: What should I do if I want to participate in this rights offering but my
shares are held in the name of my broker, custodian bank or other nominee?
A: If you hold shares of our common stock through a broker, custodian bank or
other nominee, we will ask your broker, custodian bank or other nominee to
notify you of this rights offering. If you wish to sell or exercise your
subscription rights, you will need to have your broker, custodian bank or
other nominee act for you. To indicate your decision, you should complete
and return to your broker, custodian bank or other nominee the form
entitled "Beneficial Owner Election Form." You should receive this form
from your broker, custodian bank or other nominee with the other rights
offering materials. You should contact your broker, custodian bank or
other nominee if you do not receive this form, but you believe you are
entitled to participate in this rights offering.
Q: Will I be charged a sales commission or a fee if I exercise or sell my
subscription rights?
A: We will not charge a brokerage commission or a fee to subscription rights
holders for exercising their subscription rights. However, if you exercise
your subscription rights through a broker, custodian bank or nominee, you
will be responsible for any fees charged by your broker, custodian bank or
nominee. If you sell your subscription rights, you will be responsible for
any fees arising from any such sale.
Q: Are there any conditions to my right to exercise my subscription rights?
A: Yes. This rights offering is subject to certain limited conditions. Please
see "The Rights Offering--Conditions to the Rights Offering."
Q: May I transfer my subscription rights if I do not want to purchase any
shares?
A: Yes. The subscription rights are transferable through usual investment
channels until the close of business on the last trading day preceding the
expiration date of this rights offering. However, the subscription rights
are a new issue of securities with no established trading market and we can
give no assurance that a market for the subscription rights will develop, or
if a market does develop, how long it will continue. Therefore, we cannot
assure you that you will be able to sell any of your subscription rights.
Q: How may I sell my subscription rights?
A: You may sell your subscription rights through usual investment channels.
However, the subscription rights are a new issue of securities with no
established trading market and we can give no assurance that a market for
the subscription rights will develop, or if a market does
iv
develop, as to how long it will continue. Therefore, we cannot assure you
that you will be able to sell any of your subscription rights.
Q: Will I be able to trade my subscription rights on the New York Stock
Exchange?
A: Yes. We anticipate that the subscription rights will be listed for trading
on the New York Stock Exchange under the symbol " " and we expect that the
subscription rights may be purchased or sold through usual investment
channels until the close of business on the last trading day preceding the
expiration date of this rights offering.
Q: What is the recommendation of our board of directors regarding this rights
offering?
A: Neither our board of directors nor its special committee is making any
recommendation as to whether or not you should exercise or sell your
subscription rights. You are urged to make your decision based on your own
assessment of this rights offering and after considering all of the
information in this prospectus, including the "Risk Factors" section of
this prospectus and all of the information incorporated by reference in
this prospectus. You should not view MacAndrews & Forbes' agreement to
purchase the full number of shares of our Class A common stock it would
have been entitled to subscribe for in this rights offering in accordance
with its basic subscription privilege or to back-stop this rights offering
as a recommendation or other indication that the exercise or sale of your
subscription rights is in your best interests.
Q: How many shares may I purchase if I exercise my subscription rights?
A: You will receive transferable subscription right for each share of
Class A and Class B common stock that you owned on , 2003, the
rights offering record date. Each subscription right contains the basic
subscription privilege and the over-subscription privilege. Each basic
subscription privilege entitles you to purchase share[s] of our Class
A common stock for $ per share. See "The Rights Offering--Basic
Subscription Privilege." Each over-subscription privilege entitles you to
subscribe for additional shares of our Class A common stock at the same
subscription price per share on a pro rata basis provided you fully
exercise your basic subscription privilege. "Pro rata" means in proportion
to the number of shares of our Class A common stock that you and the other
subscription rights holders have purchased by exercising your basic
subscription privileges on your common stock holdings. See "The Rights
Offering--Over-Subscription Privilege."
We are distributing an aggregate of subscription rights to
stockholders. MacAndrews & Forbes has agreed to purchase the full number of
shares of our Class A common stock it would have been entitled to subscribe
for in this rights offering in accordance with its basic subscription
privilege. In addition, to enhance your over-subscription privileges,
MacAndrews & Forbes has agreed not to exercise its over-subscription
privilege. If any shares remain following the exercise of the basic
subscription privilege and the over-subscription privilege of all other
subscription rights holders, MacAndrews & Forbes will back-stop this rights
offering by purchasing the remaining shares offered.
Q: How was the $ per share subscription price established?
A: The subscription price per share for the rights offering was set by our
board of directors based on the recommendation of the special committee of
independent directors of our board of directors after negotiations between
the special committee and MacAndrews & Forbes. The board set the
subscription price at a formula equal to eighty percent (80%) of the
greater of the closing price per share of our Class A common stock on the
New York Stock Exchange on (i) the trading day before the date that our
board of directors approved this rights offering, which was $2.88 per
share, and (ii) the record date of this rights offering. In determining
the subscription price, the special committee and our board of directors
considered a number of factors, including: our need for capital; our
business prospects; the need to offer shares at a price that would be
attractive to our investors relative to the current trading price of our
Class A common stock; an analysis of prior rights offerings; the historic
and current market price of our Class A common stock; general conditions
in the securities market and the difficult market conditions prevailing
for the raising of equity capital; our operating history; and the
liquidity of our Class A common stock.
v
Q: Is exercising my subscription rights risky?
A: The exercise of your subscription rights involves risks. Exercising your
subscription rights means buying additional shares of our Class A common
stock and should be considered as carefully as you would consider any
other equity investment. Among other things, you should carefully consider
the risks described under the heading "Risk Factors."
Q: Am I required to subscribe in this rights offering?
A: No.
Q: How many shares of Class A and Class B common stock will be outstanding
after this rights offering?
A: The number of shares of Class A and Class B common stock that will be
outstanding immediately after the completion of this rights offering and
the back-stop will be shares and 31,250,000 shares, respectively.
The number of shares of Class B common stock will not be affected by this
rights offering.
Q: How will this rights offering affect MacAndrews & Forbes' ownership of our
common stock?
A: As of the date of this prospectus, MacAndrews & Forbes indirectly owns
approximately 57% of our Class A common stock and 100% of our Class B
common stock, together representing approximately 83% of our combined
outstanding common stock and approximately 97% of the combined voting
power of our Class A and Class B common stock.
If no other subscription rights holders exercise their subscription rights
in this rights offering, after giving effect to MacAndrews & Forbes'
back-stop, MacAndrews & Forbes will beneficially own approximately % of
our outstanding Class A common stock, 100% of our outstanding Class B
common stock and approximately % of the combined voting power of our
Class A and Class B common stock.
If all subscription rights holders fully exercise their subscription
rights in this rights offering, MacAndrews & Forbes will beneficially own
approximately 57% of our outstanding Class A common stock, 100% of our
outstanding Class B common stock and approximately % of the combined
voting power of our Class A and Class B common stock.
Q: After I exercise my subscription rights, can I change my mind and cancel my
purchase?
A: No. Once you send in your subscription certificate and payment you cannot
revoke the exercise of your subscription rights, even if the market price
of our Class A common stock is below the $ per share subscription
price. You should not exercise your subscription rights unless you are
certain that you wish to purchase additional shares of our Class A common
stock at a price of $ per share. See "The Rights Offering--No
Revocation."
Q: What are the federal income tax consequences of exercising my subscription
rights?
A: A holder should not recognize income or loss for federal income tax
purposes in connection with the receipt or exercise of subscription rights
in this rights offering. However, you should consult with your own
financial and tax advisor. See "Certain United States Federal Income Tax
Consequences."
Q: If this rights offering is not completed, will my subscription payment be
refunded to me?
A: Yes. The subscription agent will hold all funds it receives in escrow until
completion of this rights offering. If this rights offering is not
completed, the subscription agent will return promptly, without interest
or deduction, all subscription payments.
Q: What should I do if I have other questions?
A: If you have questions or need assistance, please contact D.F. King & Co.,
Inc., the information agent, at: (800) 949-2583.
vi
Banks and brokerage firms please call collect at: (212) 269-5550.
For a more complete description of this rights offering, see "The Rights
Offering" section included elsewhere in this prospectus.
Q: If I exercise my subscription rights, when will I receive shares of Class A
common stock purchased in this rights offering?
A: We will deliver to you or your broker certificates representing the shares
of our Class A common stock that you purchased in this rights offering as
soon as practicable after the expiration date of this rights offering and
after all pro rata allocations and adjustments have been completed.
vii
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus includes specific terms of this rights offering, as well as
information regarding our business. We encourage you to read this prospectus in
its entirety. You should pay special attention to the "Risk Factors" section of
this prospectus. All references to "we," "our," "ours," and "us," or "Revlon"
in this prospectus are to Revlon, Inc. and its subsidiaries, unless otherwise
indicated. However, in the descriptions of the subscription rights and related
matters, these terms refer solely to Revlon, Inc. and not to any of our
subsidiaries. United States market share and market position data herein for
our brands are based upon retail dollar sales, which are derived from AC
Nielsen data. AC Nielsen measures retail sales volume of products sold in the
United States mass-market distribution channel. Such data represent AC
Nielsen's estimates based upon data gathered by AC Nielsen from market samples
and are therefore subject to some degree of variance. Additionally, as of
August 4, 2001, AC Nielsen's data does not reflect sales volume from Wal-Mart,
Inc.
OUR COMPANY
We manufacture, market and sell an extensive array of cosmetics and skin
care, fragrances and personal care products. Revlon is one of the world's
best-known names in cosmetics and is a leading mass-market cosmetics brand. We
believe that our global brand name recognition, product quality and marketing
experience have enabled us to create one of the strongest consumer brand
franchises in the world. Our products are sold worldwide and are marketed under
such well-known brand names as Revlon, Colorstay, Revlon Age Defying, and
Skinlights, as well as Almay in cosmetics; Almay Kinetin, Vitamin C Absolutes,
Eterna 27 and Jeanne Gatineau in skin care; Charlie and Fire & Ice in
fragrances; and High Dimension, Flex, Mitchum, Colorsilk, Jean Nate and Bozzano
in personal care products.
Revlon was founded by Charles Revson, who revolutionized the cosmetics
industry by introducing nail enamels matched to lipsticks in fashion colors
over 70 years ago. Today, we have leading market positions in a number of our
principal product categories in the U.S. mass-market distribution channel,
including the lip, face makeup and nail enamel categories. We also have leading
market positions in several product categories in certain markets outside of
the United States, including in Australia, Canada, Mexico and South Africa. Our
products are sold in more than 100 countries across five continents.
The Company's Plan
Our plan consists of three main components: (1) the cost rationalization
phase; (2) the stabilization and growth phase; and (3) the accelerated growth
phase.
Phase 1 -- Cost Rationalization
In 1999 and 2000, we faced a number of strategic challenges. Accordingly,
in 2001 we initiated a plan focused on lowering costs and improving operating
efficiency.
During 2001, we implemented several key elements of this phase of our
plan. For example, we:
o reduced departmental general and administrative expenses in our
ongoing operations;
o reduced manufacturing and warehousing square footage by approximately
55% during the period from November 2000 to December 31, 2001;
o launched a number of major new products, including Skinlights skin
brighteners, Super Top Speed Nail Enamel, Illuminance eye shadow, as
well as the Almay Kinetin skincare line;
o closed our in-house advertising division and consolidated all
advertising for our Revlon and Almay brands with a single, prominent
advertising agency; and
o implemented revised trade terms with our U.S. customers intended to
increase sell-through of our products, reduce merchandise returns and
claims for damages and drive market growth.
1
We believe that our actions during 2000 and 2001 lowered our cost
structure overall and improved our manufacturing and operating efficiency,
creating a platform for the stabilization and growth stage of our plan.
Phase 2 -- Stabilization and Growth
In February 2002, we announced the appointment of Jack L. Stahl, former
president and chief operating officer of The Coca-Cola Company, as our new
President and Chief Executive Officer.
Following the appointment of Mr. Stahl, we undertook an extensive review
and evaluation of our business to establish specific integrated objectives and
actions to advance the next stage in our plan. As a result of this review, we
established three principal objectives:
o creating and developing the most consumer-preferred brands;
o becoming the most valuable partner to our retailers; and
o becoming a top company where people want to work.
We also conducted detailed evaluations and research of the strengths of the
Revlon brand (and we are continuing to conduct similar evaluations and research
for our other major brands); our advertising and promotional efforts; our
relationships with our retailers and consumers; our retail in-store presence;
and the strength and skills of our organization. As a result, we developed the
following key actions to support the stabilization and growth phase of our plan:
o Increase advertising and media spending. We expect to increase our
media spending and advertising support to more competitive levels. We
will also seek to improve the effectiveness of our marketing,
including our advertising, by, among other things, ensuring consistent
messaging and imagery in both our advertising and in the graphics
included in our wall displays.
o Increase the effectiveness of our wall displays. Beginning in the first
quarter of 2003, we intend to make significant improvements to our
retail wall displays in the United States by reconfiguring them to make
them easier for consumers to navigate, which we believe will optimize
cross-selling among our various product categories on the wall displays
and make the displays easier to merchandise and stock. We also intend
to continue to roll out our new wall displays, which we began in 2002.
In addition, we intend to enhance merchandiser coverage to improve
in-store stock levels, continue to develop our tamper evident program
to reduce damages and ensure that adequate inventory of key SKUs remain
in stock. We intend to work with our retail customers to improve
replenishment of our products on the wall displays and to minimize out
of stocks.
o Adopt revised pricing strategies. We believe that we can increase sales
by selectively adjusting prices on certain SKUs in the United States to
better align our pricing with product benefits and competitive
benchmarks.
o Further strengthen our new product development process. We are
developing a cross-functional new product development process intended
to optimize our product offerings to ensure that we have products in
key trend categories.
o Implement a comprehensive program to develop and train our employees.
We are implementing a comprehensive program to further develop the
management, leadership and communication skills of our employees, which
we will regularly assess as part of our goal to become a top company
where people want to work.
Phase 3 -- Accelerated Growth
We intend to capitalize on the actions taken during our stabilization and
growth phase of our plan, with the objective of increasing revenues and
adjusted EBITDA over the long term.
2
RECENT DEVELOPMENTS
In December 2002, our principal stockholder, MacAndrews & Forbes, wholly
owned by Ronald O. Perelman, proposed providing us with up to $150 million in
cash in order to help fund a portion of the costs and expenses associated with
implementing our plan and for general corporate purposes. Our board of directors
appointed a special committee of independent directors to evaluate the proposal
made by MacAndrews & Forbes. The special committee reviewed and considered the
proposal and negotiated enhancements to the terms of the proposal. The enhanced
proposal was recommended to our board of directors by the special committee of
our board of directors and approved by our full board. MacAndrews & Forbes has
agreed to purchase the full number of shares of our Class A common stock it
would have been entitled to subscribe for in this rights offering in accordance
with its basic subscription privilege (approximately 83%, or $41.5 million), to
waive its over-subscription privilege and to back-stop this rights offering by
purchasing all of the Class A common stock not purchased by other stockholders
(approximately 17%, or an additional $8.5 million).
In addition, in accordance with the proposal, MacAndrews & Forbes has also
provided a $100 million term loan to our subsidiary, Revlon Consumer Products
Corporation, referred to herein as "Products Corporation." If, prior to the
consummation of this rights offering, we have fully drawn the MacAndrews &
Forbes $100 million term loan and the implementation of our plan causes us to
require some or all of the $50 million of funds that we would raise from this
rights offering, MacAndrews & Forbes has agreed to advance us these funds prior
to closing this rights offering by purchasing up to $50 million of newly-issued
shares of our Series C preferred stock which would be redeemed with the proceeds
we receive from this rights offering (this investment in our Series C preferred
stock is referred to in this prospectus as the "$50 million Series C preferred
stock investment"). The MacAndrews & Forbes $100 million term loan has a final
maturity date of December 1, 2005 and interest on such loan of 12.0% is not
payable in cash, but will accrue and be added to the principal amount each
quarter and be paid in full at final maturity.
Additionally, MacAndrews & Forbes has also agreed to provide Products
Corporation with an additional $40 million line of credit during 2003, which
amount will increase to $65 million on January 1, 2004, and which will be
available to Products Corporation through December 31, 2004, provided that the
MacAndrews & Forbes $100 million term loan is fully drawn and MacAndrews &
Forbes has purchased an aggregate of $50 million of our Series C preferred stock
(or if we have consummated this rights offering and redeemed any outstanding
shares of Series C preferred stock). The $40-65 million line of credit will be
available through December 31, 2004 and will bear interest payable in cash at a
rate of the lesser of (i) 12.0% and (ii) 0.25% less than the rate payable from
time to time on Eurodollar loans under Products Corporation's existing credit
agreement (which rate, after giving effect to the amendment to Products
Corporation's existing credit agreement discussed below, is 8.25%).
In connection with the transactions with MacAndrews & Forbes described
above, and as a result of our operating results for the fourth quarter of 2002,
we entered into an amendment in January 2003 of our existing credit agreement
with our bank lenders and secured a waiver under our existing credit agreement
of compliance with our EBITDA and leverage ratio covenants for the fourth
quarter of 2002, an amendment to eliminate the EBITDA and leverage ratio
covenants for the first three quarters of 2003, a waiver of compliance with such
covenants for the fourth quarter of 2003 expiring on January 31, 2004,
substitution of a minimum liquidity covenant through January 31, 2004 and
certain other amendments to allow for the MacAndrews & Forbes $100 million term
loan, the $40-65 million line of credit, and this rights offering. The amendment
also increased the applicable margin on loans under the existing credit
agreement by 0.5%.
3
In December 2002, we announced that we would accelerate the implementation
of the stabilization and growth phase of our plan and that as a result we
expected that our operating income for 2002, 2003 and perhaps into 2004 would be
reduced by approximately $90 to $130 million due to various aspects of the
stabilization and growth phase of our plan, including returns for discontinued
SKUs, allowances to retailers for price adjustments, costs for reconfiguring
wall displays, and inventory write downs for discontinued products. We currently
estimate that the reductions to operating income from these aspects of our plan,
as well as certain other actions, would be in the range of approximately $90 to
$160 million.
4
ORGANIZATION
The following sets forth a summary organizational chart for Revlon:
[GRAPHIC OMITTED]
+-------------------------+
| |
| Mafco Holdings Inc. |
| ("Mafco Holdings") |
| |
+-------------------------+
| 100%
|
+-------------------------+
| |
| MacAndrews & Forbes |
| Holdings Company |
| ("MacAndrews Holdings") |
| |
+-------------------------+
| 100%
|
+-------------------------+
| |
| REV Holdings LLC |
| ("REV Holdings") |
| |
+-------------------------+
| 83%
|
+-------------------------+
| |
| REVLON INC. |
| |
+-------------------------+
| 100%
|
+-------------------------+
| |
| Revlon Consumer |
| Products Corporation |
| |
+-------------------------+
|
|
+-------------------------+
| |
| Operating Subsidiaries |
| Revlon Consumer |
| Products Corporation |
| |
+-------------------------+
* REV Holdings currently beneficially owns 11,650,000 shares of the Class
A common stock, par value $.01 per share, of Revlon, Inc. (representing
approximately 57% of the outstanding shares of Class A common stock of
Revlon, Inc.) and all of the outstanding 31,250,000 shares of Class B
common stock, par value $.01 per share (each of which is entitled to 10
votes), of Revlon, Inc., which together represent approximately 83% of
the outstanding shares of common stock of Revlon, Inc. REV Holdings
also currently beneficially owns all of the outstanding 4,333 shares of
Series B Convertible Preferred Stock, par value $.01 per share, of
Revlon, Inc. (each of which is entitled to 100 votes and each of which
is convertible into 100 shares of Class A common stock), which,
together with the Class A and Class B common stock, represents
approximately 97% of the combined voting power of the outstanding
shares of common and preferred stock of Revlon, Inc.
5
SUMMARY OF THE RIGHTS OFFERING
RIGHTS........................ We will distribute to each stockholder of
record of our Class A and Class B common stock,
as of the close of business on ,
2003, at no charge, one transferable
subscription right for each share of Class A
and Class B common stock owned, for a total of
approximately subscription rights.
BASIC SUBSCRIPTION PRIVILEGE... Each right will enable its holder to purchase
share[s] of our Class A common stock.
MAXIMUM AMOUNT OF THE RIGHTS
OFFERING..................... The amount of this rights offering will be
$50,000,000.
OVER-SUBSCRIPTION PRIVILEGE... Each holder of Class A and Class B common
stock who elects to exercise its subscription
rights in full may also subscribe for
additional shares at the same subscription
price per share, to the extent that other
stockholders do not exercise their subscription
rights in full. Although MacAndrews & Forbes,
as a holder of Class A and Class B common
stock, would otherwise be entitled to this
over-subscription privilege, it has agreed to
waive this right to enhance the
over-subscription privilege of our other
stockholders. If an insufficient number of
shares is available to fully satisfy the
over-subscription privilege requests, the
available shares will be sold pro rata among
subscription rights holders who exercised their
over-subscription privilege based on the number
of shares each subscription rights holder
subscribed for under the basic subscription
privilege. Any excess subscription payments
will be returned, without interest or
deduction, promptly after the expiration of
this rights offering.
CONDITIONS TO THE
RIGHTS OFFERING............... This rights offering is subject to the
conditions described under "The Rights
Offering--Conditions to the Rights Offering."
BACK-STOP..................... MacAndrews & Forbes will back-stop this
rights offering by purchasing all of our shares
of Class A common stock that are not purchased
by other stockholders in this rights offering
as part of either their basic subscription
privilege or their over-subscription privilege.
SUBSCRIPTION PRICE............ $ per share.
RIGHTS OFFERING RECORD DATE. , 2003.
EXPIRATION DATE............... The subscription rights will expire, if not
exercised, at 5:00 p.m., New York City time, on
, 2003, unless we decide to extend
this rights offering until some later time.
6
TRANSFERABILITY OF RIGHTS..... The subscription rights will be evidenced by
transferable subscription rights certificates.
The subscription rights are transferable until
the close of business on the last trading day
preceding the expiration date, at which time
they will cease to have any value. However, we
can give no assurance that a market for the
subscription rights will develop, or, if a
market does develop, how long it will continue.
See "The Rights Offering--Method of
Transferring and Selling Subscription Rights."
PROCEDURE FOR
EXERCISING RIGHTS............. You may exercise your subscription rights by
properly completing and signing your
subscription rights certificate. You must
deliver your subscription rights certificate
with full payment of the subscription price to
the subscription agent on or prior to the
expiration date of this rights offering. If you
use the mail, we recommend that you use
insured, registered mail, return receipt
requested. If you cannot deliver your
subscription rights certificate to the
subscription agent on time, you may follow the
guaranteed delivery procedures described under
"The Rights Offering -- Guaranteed Delivery
Procedures."
Once you have exercised your basic
subscription privilege or your
over-subscription privilege, you may not
revoke your exercise. Subscription rights not
exercised prior to the expiration of this
rights offering will have no value.
HOW RIGHTS HOLDERS CAN EXERCISE
SUBSCRIPTION RIGHTS
THROUGH OTHERS................ If you hold shares of our common stock as of
the rights offering record date through a
broker, custodian bank or other nominee, we
will ask your broker, custodian bank or other
nominee to notify you of this rights offering.
If you wish to sell or exercise your
subscription rights, you will need to have your
broker, custodian bank or other nominee act for
you. To indicate your decision, you should
complete and return to your broker, custodian
bank or other nominee the form entitled
"Beneficial Owner Election Form." You should
receive this form from your broker, custodian
bank or other nominee with the other
subscription rights offering materials. You
should contact your broker, custodian bank or
other nominee if you do not receive this form,
but you believe you are entitled to participate
in this rights offering.
HOW FOREIGN STOCKHOLDERS AND
STOCKHOLDERS WITH APO OR FPO
ADDRESSES CAN
EXERCISE RIGHTS............... The subscription agent will mail subscription
rights certificates to you if you are a
stockholder of record as of the rights offering
record date whose address is outside the United
States or if you have an Army Post Office or a
Fleet Post Office address. To exercise your
subscription rights, you must notify the
subscription agent on or prior
7
to 5:00 p.m. New York City time, on ,
2003, and take all other steps that are
necessary to exercise your subscription
rights, on or prior to the date on which this
rights offering expires. If you do not follow
these procedures prior to the expiration of
this rights offering, your subscription rights
will expire without value.
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES........ For United States federal income tax
purposes, the receipt of subscription rights in
this rights offering and the exercise of the
subscription rights will not be a taxable
event. You should, however, consult your own
financial and tax advisor.
ISSUANCE OF OUR CLASS A COMMON
STOCK........................ We will issue certificates representing
shares of our Class A common stock purchased in
this rights offering as soon as practicable
after the expiration of this rights offering.
NO RECOMMENDATION TO RIGHTS
HOLDERS...................... We are not making any recommendations as to
whether or not you should subscribe for shares
of our Class A common stock. You should decide
whether to subscribe for such shares based upon
your own assessment of your best interests and
after considering all of the information in
this prospectus, including the "Risk Factors"
section of this prospectus and all of the
information incorporated by reference in this
prospectus. You should not view MacAndrews &
Forbes' agreement to purchase the full number
of shares of our Class A common stock it would
have been entitled to subscribe for in this
rights offering in accordance with its basic
subscription privilege or to back-stop this
rights offering as a recommendation or other
indication that the exercise or sale of your
subscription rights is in your best interests.
NYSE SYMBOL FOR OUR CLASS A
COMMON STOCK................. "REV"
NYSE LISTING OF OUR CLASS A COMMON
STOCK........................ On February 4, 2003, the last trading day
prior to our public announcement of the
decision of our board of directors to commence
this rights offering, the closing price of our
Class A common stock on the New York Stock
Exchange, or NYSE, was $2.97 per share. On
, 2003, the last trading day before
the date of this prospectus, the closing price
of our Class A common stock on the NYSE was $
per share.
LISTING OF THE RIGHTS......... The subscription rights will be listed on the
NYSE under the symbol " ".
8
USE OF PROCEEDS............... Our total gross proceeds from this rights
offering will be $50 million, which could
include proceeds from MacAndrews & Forbes
pursuant to its agreement to back-stop this
rights offering. The net proceeds from this
rights offering, combined with the proceeds
from the MacAndrews & Forbes $100 million term
loan and the proceeds from the $40-65 million
line of credit, if any, will be used to help
fund a portion of the costs and expenses of our
plan and for general corporate purposes.
However, if MacAndrews & Forbes has advanced us
money by purchasing any of our Series C
preferred stock, we will use the proceeds from
this rights offering to redeem such Series C
preferred stock.
SUBSCRIPTION AGENT............ The subscription agent is American Stock
Transfer & Trust Company.
The addresses for delivery to the subscription
agent are as follows:
If by mail to:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
If by hand delivery or overnight courier to:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
You may call the subscription agent at
(718) 921-8200.
Your delivery to an address other than the
addresses set forth above will not constitute
valid delivery.
INFORMATION AGENT............. The information agent is D.F. King & Co.,
Inc.
You may call the information agent at
(800) 949-2583.
Banks and brokerage firms please call collect
at (212) 269-5550.
For additional information concerning the subscription rights and our
common stock, see "The Rights Offering" below.
----------
RISK FACTORS
You should carefully consider the information under "Risk Factors" and all
other information in this prospectus before deciding to exercise or sell your
subscription rights.
----------
Our principal executive offices are located at 625 Madison Avenue, New
York, New York 10022. Our telephone number is (212) 527-4000.
9
RISK FACTORS
An investment in our Class A common stock involves risks. You should
carefully consider the following factors and all of the information contained
elsewhere in this prospectus and in the documents incorporated by reference
herein before deciding to exercise or sell your subscription rights.
RISKS RELATED TO THE COMPANY
We have a limited operating history under our plan.
We have recently implemented material changes in our business plan intended
to improve operating results, and we are in the process of implementing further
changes to our plan in connection with the stabilization and growth phase of our
plan. There can be no assurance that our plan will be successful or that it will
enable us to achieve or maintain profitable operations. We expect to experience
significant increases in sales as a result of our plan. If we fail to execute
our plan effectively, we may not achieve expected increases in sales, which
could adversely affect our liquidity. Additionally, it is possible that the
changes may have unanticipated consequences that could be adverse to our
business. The stabilization and growth phase of our plan involves a number of
significant changes, including:
o increasing our advertising and media spending to increase our
competitiveness and to support new product launches and core products;
o realigning and improving our wall displays in the United States to
enhance brand image, improve cross-selling and make products easier to
merchandise and rolling out our newly-configured wall displays and
reconfiguring existing wall displays at our retail accounts in the
United States on an accelerated basis;
o simplifying our product assortment in the United States by a reduction
in SKUs;
o selectively adjusting prices on certain products in the United States;
o increasing merchandiser coverage to improve in-store stock levels; and
o further strengthening our new product development process.
Each of these components of the stabilization and growth phase of our plan
carries significant risks, as well as the possibility of unexpected
consequences. Potential risks include:
o increased advertising and media expenses may fail to achieve their
intended effects;
o our changes to our wall displays in the United States may fail to
achieve their intended effects;
o we may experience returns exceeding our expectations as a result of our
reduction of SKUs in the United States;
o we may incur costs exceeding our expectations as a result of the roll
out of our newly-configured wall displays and the reconfiguration of
our existing wall displays at our retail accounts in the United States
or the newly-configured wall displays may fail to achieve their
intended effects;
o our selective price adjustments in the United States may fail to
achieve their intended effect of increasing sales of those products;
o we will incur increased costs arising from our plan to increase
in-store merchandiser coverage, and the increased merchandiser coverage
may not achieve its intended effect;
o our strengthened new product development process may not be as
successful as we contemplated, and consumers may not accept our new
product offerings to the degree we envisioned; and
o our competitors could increase their spending on advertising and media
and increase their new product development spending or take other steps
in response to the stabilization and
10
growth phase of our plan, which could impact the effectiveness of the
stabilization and growth phase of our plan and our ability to achieve
our objective of increased sales and operating income.
We are a holding company with no business operations of our own and are
dependent on our subsidiaries to pay certain expenses and dividends.
We are a holding company with no business operations of our own. Our only
material asset is all of the outstanding capital stock of Products Corporation,
through which we conduct our business operations. As such, our net (loss)
income has historically consisted predominantly of our equity in the net (loss)
income of Products Corporation, which for the nine-month periods ended
September 30, 2001 and 2002, was approximately $(123.9) million and $(105.0)
million, respectively, which excluded approximately $1.5 million and $2.1
million, respectively, in expenses primarily related to being a public holding
company, and for 1999, 2000 and 2001 was approximately $(369.7) million,
$(128.0) million and $(152.2) million, respectively, which excluded
approximately $1.2 million, $1.7 million and $1.5 million, respectively, in
expenses primarily related to being a public holding company. We will be
dependent on the earnings and cash flow of, and dividends and distributions
from, Products Corporation to pay our expenses incidental to being a public
holding company, including, among other things, professional fees such as legal
and accounting fees and regulatory fees such as SEC filing fees. We cannot
assure you that Products Corporation will generate sufficient cash flow to pay
dividends or distribute funds to us or that state law and contractual
restrictions, including negative covenants contained in our various debt
instruments, will permit such dividends or distributions. See "--The terms of
Products Corporation's debt instruments and Products Corporation's existing
bank credit agreement significantly limit our ability to pay dividends."
Our substantial indebtedness could adversely affect our operations and
flexibility, our ability to service our debt and your investment in our Class A
common stock.
We have a substantial amount of outstanding indebtedness. As of September
30, 2002, our total indebtedness was approximately $1,742.1 million. In
addition, on February 5, 2003, MacAndrews & Forbes provided Products Corporation
with the MacAndrews & Forbes $100 million term loan. Additionally, MacAndrews &
Forbes will provide to Products Corporation the additional $40-65 million line
of credit through December 31, 2004. We have substantial debt maturing in 2005
which will require refinancing in addition to the funds provided under the
MacAndrews & Forbes $100 million term loan, the $40-65 million line of credit
and the proceeds of this rights offering. We are subject to the risks normally
associated with substantial indebtedness, including the risk that our cash flow
from operations will be insufficient to meet required payments of principal and
interest, and the risk that we will be unable to refinance existing indebtedness
when it becomes due or that the terms of any such refinancing will be less
favorable than the current terms of such indebtedness. Should any such risks
materialize, they could have a material adverse effect on our business,
financial condition and/or results of operations and could materially and
adversely affect your investment in our Class A common stock.
Our substantial indebtedness could have important consequences to you. For
example, it could:
o limit our ability to fund our plan, future working capital, capital
expenditures, advertising expenses, new product development costs,
product displays, acquisitions, investments, restructurings and other
general corporate requirements;
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow for our plan and other general corporate
purposes;
o place us at a competitive disadvantage compared to our competitors that
have less debt;
o limit our flexibility in responding to changes in our business and the
industry in which we operate; and
o make us more vulnerable in the event of adverse economic conditions or
a downturn in our business.
11
Our ability to service our debt, meet our debt covenants and meet our cash
requirements depends on many factors.
We currently anticipate that operating cash flow, cash on hand, funds
available for borrowing under our existing bank credit agreement and under the
MacAndrews & Forbes $100 million term loan, the proceeds from this rights
offering (which may be advanced to us as a result of the $50 million Series C
preferred stock investment prior to the consummation of this rights offering if
we have fully drawn the MacAndrews & Forbes $100 million term loan) and the
$40-65 million line of credit, will be sufficient to cover our operating
expenses, including cash requirements in connection with our ongoing operations,
our plan and our debt service requirements for 2003. The MacAndrews & Forbes
$100 million term loan, the $40-65 million line of credit and the proceeds from
this rights offering are intended to help fund our plan and to decrease the risk
that would otherwise exist if we would fail to meet our debt and ongoing
obligations as they become due in 2003. However, if such funds are insufficient
to cover our expenses, we could be required to adopt one or more alternatives
listed below. For example, we could be required to:
o delay the implementation of or revise certain aspects of our plan;
o reduce or delay purchases of displays or advertising and promotional
expenses;
o reduce or delay capital spending;
o delay, reduce or revise restructuring programs;
o sell additional equity securities;
o sell assets or operations;
o restructure our indebtedness;
o seek additional capital contributions or loans from MacAndrews &
Forbes, our other affiliates and/or third parties; and/or
o reduce other discretionary spending.
If we are required to take any of these actions, it could have a material
adverse effect on our business, financial condition and results of operations
and could adversely affect your investment in our Class A common stock. In
addition, we cannot assure you that we would be able to take any of these
actions, that these actions would enable us to continue to satisfy our cash
requirements or that these actions would be permitted under the terms of our
various debt instruments then in effect. Other than MacAndrews & Forbes'
obligations pursuant to the Investment Agreement described below (which
includes MacAndrews & Forbes' commitment to provide us with the MacAndrews &
Forbes $100 million term loan, the $50 million Series C preferred stock
investment and the $40-65 million line of credit), none of our affiliates has
any obligation to contribute or loan to us any capital.
Restrictions and covenants in debt agreements limit our ability to take certain
actions and impose consequences in the event of failure to comply.
The indentures governing Products Corporation's outstanding indebtedness,
the agreements governing the MacAndrews & Forbes $100 million term loan and the
$40-65 million line of credit and the existing bank credit agreement contain a
number of significant restrictions and covenants that limit our ability, among
other things, to:
o borrow money;
o use assets as security in other borrowings or transactions;
o pay dividends on stock or purchase stock;
o sell assets;
o enter into certain transactions with affiliates; and
o make certain investments or acquisitions.
12
In addition, our existing bank credit agreement requires us to maintain
certain financial ratios, meet certain financial tests and restricts our ability
and the ability of our subsidiaries to make capital expenditures. These
financial covenants affect our operating flexibility. Our existing bank credit
agreement has been amended to permit this rights offering, the MacAndrews &
Forbes $100 million term loan and the $40-65 million line of credit. Further,
the effect on adjusted EBITDA of certain aspects of the implementation of the
stabilization and growth phase of our plan and our results from the fourth
quarter of 2002 required us to obtain waivers under our existing credit
agreement of compliance with our EBITDA and leverage ratio covenants for the
fourth quarter of 2002, an amendment to eliminate the EBITDA and leverage ratio
covenants for the first three quarters of 2003 and a waiver of compliance with
such covenants for the fourth quarter of 2003 expiring on January 31, 2004 and
required us to substitute a minimum liquidity covenant through January 31, 2004.
We have obtained these waivers and amendments.
We will need to seek further amendments to or waivers of certain covenants
under our existing credit agreement in 2004.
The amendments to and waivers of various provisions in our existing credit
agreement provide for, among other things, a waiver through January 31, 2004 of
compliance with the EBITDA and leverage ratio covenants for the fourth quarter
of 2003. This means that we will need to seek a further amendment to our
existing credit agreement or waiver of these covenants or take actions referred
to below before January 31, 2004.
While we expect that our bank lenders will consent to such amendment or
waiver request, we cannot assure you that they will or that they will do so on
terms which are favorable to us. If we fail to secure the amendment or waiver
we could be required to take one or more of the following actions:
o refinance the existing credit agreement;
o sell additional equity securities;
o sell assets or operations; and/or
o seek additional capital contribution and/or loans from MacAndrews &
Forbes, our other affiliates and/or third parties.
If we are required to take any of these actions, it could have a material
adverse effect on our business, financial condition and/or results of
operations. In addition, we cannot assure you that we would be able to take any
of these actions, that these actions would enable us to continue to satisfy our
cash requirements or that these actions would be permitted under the terms of
our various debt instruments then in effect. Should any such risks materialize,
they could materially and adversely affect your investment in our Class A common
stock. Other than MacAndrews & Forbes' obligations pursuant to the Investment
Agreement described above, the MacAndrews & Forbes $100 million term loan and
the $40-65 million line of credit, none of our affiliates has any obligation to
contribute or loan to us any capital.
Dependence on Oxford, North Carolina facility.
Following our rationalization and consolidation of our global
manufacturing, a substantial portion of our products were produced at our
Oxford, North Carolina facility. Significant unscheduled downtime at this
facility due to equipment breakdowns, power failures, natural disasters or any
other cause, could adversely affect our results of operations and financial
condition. Although we maintain insurance, including business interruption
insurance, that we consider to be adequate under the circumstances, there can
be no assurance that we will not incur losses beyond the limits or outside the
coverage of our insurance.
Dependence on Maesteg, Wales facility.
In July 2001, we sold our principal European manufacturing facility in
Maesteg, Wales and entered into a long-term supply contract with the purchaser
under which the purchaser produced substantially all Revlon color cosmetics and
other products for the European market. In October 2002,
13
after experiencing production difficulties with this supplier, we and the
supplier terminated the long-term supply agreement and entered into a new
agreement with significantly reduced volume commitments and we agreed to loan
such supplier $2.0 million. To address the past production difficulties, under
the new arrangement the supplier can earn performance-based payments of
approximately $6.3 million (less the unpaid balance of such loan) over a
four-year period contingent on the supplier achieving specific production
service level goals. As a part of this new arrangement, we and the supplier
agreed that the manufacturing of certain product lines would transfer from the
Maesteg, Wales facility to our other plants or other third party suppliers. If
the supplier is unable to fulfill its obligations under this new supply contract
because of manufacturing difficulties or disruption at the Maesteg, Wales
facility or for any other reason, or if we encounter difficulties in
transferring certain product lines out of the Maesteg, Wales facility to our
other plants or other third party suppliers, this could adversely affect our
sales in the European market, which could have an adverse effect on our overall
results of operations and financial condition.
We depend on a limited number of customers for a large portion of our net
sales.
For the nine-month periods ended September 30, 2001 and 2002, Wal-Mart,
Inc. and its affiliates accounted for approximately 19.6% and 20.3%,
respectively, and for 1999, 2000 and 2001 Wal-Mart, Inc. and its affiliates
accounted for approximately 13.1%, 16.5% and 19.7%, respectively, of our net
sales (after giving effect to the adjustments resulting from the adoption of
FASB Emerging Issues Task Force, Issue 01-9 (the "Guidelines") in 2000 and
2001). We expect that for 2003 and future periods, Wal-Mart and a small number
of other customers will, in the aggregate, account for a large portion of our
net sales. The loss of Wal-Mart or one or more of our other customers that may
account for a significant portion of our net sales, or any significant decrease
in sales to these customers or any significant decrease in our retail display
space in any of these customers' stores, could have a material adverse effect
on our business, financial condition and results of operations.
In January 2002, Kmart Corporation filed a petition for reorganization
under Chapter 11 of the U.S. Bankruptcy Code. On January 24, 2003, Kmart
announced that it had filed its proposed plan of reorganization with the U.S.
Bankruptcy Court and that it was positioned to emerge from bankruptcy on or
about April 30, 2003. In the second quarter of 2002, Kmart closed 283
underperforming stores and announced on January 14, 2003 that it would close an
additional 323 underperforming stores. Kmart accounted for less than 5% of our
net sales in 2001 and in the nine-month period ended September 30, 2002.
Although we plan to continue doing business with Kmart for the foreseeable
future and, based upon the information currently available, believe
that Kmart's bankruptcy proceedings and store closings will not have a material
adverse effect on our business, financial condition or results of operations,
there can be no assurances that Kmart's financial condition will not have such
an effect on us.
In January 2002, J.C. Penney Corp. announced that it will be discontinuing
color cosmetics in most of its stores. J.C. Penney carries our Ultima brand,
however our sales to J.C. Penney accounted for less than 1% of our total sales
during 2001 and for the nine-month period ended September 30, 2002. Accordingly,
we do not believe that this discontinuance will have a material adverse effect
on our business, financial condition and results of operations.
Competition in the consumer products business could materially adversely affect
our business, financial condition and results of operations.
The consumer products business is highly competitive. We compete on the
basis of numerous factors. Brand recognition, product quality, performance and
price, product availability at the retail stores, and the extent to which
consumers are educated on product benefits have a marked influence on consumers'
choices among competing products and brands. Advertising, promotion,
merchandising and packaging, and the timing of new product introductions and
line extensions also have a significant impact on buying decisions, and the
structure and quality of the sales force, as well as consumer consumption of our
products, affect in-store position, permanent display space and inventory levels
in retail outlets. An increase in the amount of competition that we face could
have a material adverse effect on our business, financial condition and/or
results of operations. We experienced declines in our United States market share
in various product categories from late 1998 through the first half of 2002
14
(although for the second half of 2002 and for the full year 2002, the market
share for our Revlon branded color cosmetics in the United States mass market
increased over the prior year), and there can be no assurance that declines in
market share will not occur in the future or that the recent share increases
will continue. In addition, we compete in selected product categories against a
number of multinational manufacturers, some of which are larger and have
substantially greater resources than we do, and which may therefore have the
ability to spend more aggressively on advertising and marketing and more
flexibility to respond to changing business and economic conditions than we do.
In addition to products sold in the mass-market and demonstrator-assisted
channels, our products also compete with similar products sold door-to-door or
through mail order or telemarketing by representatives of direct sales
companies.
Social, political and economic risks may affect our foreign operations and we
may be affected by foreign currency fluctuation.
As of December 31, 2002, we had operations based in 17 foreign countries.
We are exposed to the risk of changes in social, political and economic
conditions inherent in operating in foreign countries, including those in Asia,
Eastern Europe and Latin America. Such changes include changes in the laws and
policies that govern foreign investment in countries where we have operations,
as well as, to a lesser extent, changes in United States laws and regulations
relating to foreign trade and investment. In addition, fluctuations in foreign
currency exchange rates may affect the results of our operations and the value
of our foreign assets, which in turn may adversely affect reported earnings
and, accordingly, the comparability of period-to-period results of operations.
During 2002, our operations in Latin America, which for the nine-month period
ended September 30, 2002 contributed 7.8% of our total net sales, have been
adversely affected by political and economic conditions and foreign currency
devaluations. Changes in currency exchange rates may affect the relative prices
at which we and foreign competitors sell products in the same market. Our net
sales outside of the United States and Canada for the nine-month periods ended
September 30, 2001 and 2002 were 31.2% and 28.8%, respectively, of our total
net sales, and for 1999, 2000 and 2001 were 45.3%, 38.0% and 31.9%,
respectively, of our total net sales (after giving effect to the implementation
of the Guidelines). In addition, changes in the value of relevant currencies
may affect the cost of certain items required in our operations. We enter into
forward foreign exchange contracts to hedge certain cash flows denominated in
foreign currency. At September 30, 2002, the notional amount of our foreign
currency forward exchange contracts was $17.1 million. We can offer no
assurances as to the future effect of changes in social, political and economic
conditions on our business or financial condition.
Terrorist attacks, such as the attacks that occurred in New York and
Washington, D.C. on September 11, 2001, and other attacks, acts of war or
military actions, such as possible military actions in Iraq, may adversely
affect the markets in which we operate, our operations and our profitability.
On September 11, 2001, the United States was the target of terrorist
attacks of unprecedented scope. These attacks have contributed to major
instability in the U.S. and other financial markets and reduced consumer
confidence. These terrorist attacks, the military response and future
developments, or other military actions such as the possible military actions
in Iraq, may adversely affect prevailing economic conditions, resulting in
reduced consumer spending and reduced demand for our products. These
developments subject our worldwide operations to increased risks and, depending
on their magnitude, could have a material adverse effect on our business.
Control by MacAndrews & Forbes.
MacAndrews Holdings is a corporation wholly owned through Mafco Holdings by
Ronald O. Perelman. MacAndrews & Forbes currently indirectly owns approximately
83% of our outstanding Class A and Class B common stock and controls
approximately 97% of the combined voting power of our common stock, and could
own as much as % of our outstanding Class A and Class B common stock and control
as much as % of the combined voting power of our common stock after this rights
offering, assuming the back-stop is exercised in full. MacAndrews & Forbes
currently is, and after this rights offering will continue to be, able to direct
and control our policies and those of our subsidiaries, including mergers, sales
of assets and similar transactions. The capital stock of Products Corporation
held by us is pledged to secure our guarantee under Products Corporation's
existing bank credit
15
agreement and Products Corporation's 12% Senior Secured Notes due 2005 (the "12%
Notes"), and shares of our common stock and shares of common stock of
intermediate holding companies are or may from time to time be pledged to secure
obligations of MacAndrews & Forbes or its affiliates. A foreclosure upon any
shares of our or Products Corporation's common stock could constitute a change
of control under the indenture governing the 12% Notes and the indentures
governing Products Corporation's other outstanding indebtedness. A change of
control constitutes an event of default under Products Corporation's existing
bank credit agreement, which would permit the lenders to accelerate Products
Corporation's existing bank credit agreement. In addition, holders of Products
Corporation's 12% Notes, 9% Senior Notes due 2006 (the "9% Notes"), 8 1/8%
Senior Notes due 2006 (the "8 1/8% Notes") and 8 5/8% Senior Subordinated Notes
due 2008 (the "8 5/8% Notes") may require Products Corporation to repurchase its
notes under those circumstances. Products Corporation may not have sufficient
funds at the time of the change of control to repay in full the borrowings under
Products Corporation's existing bank credit agreement or to repurchase the 12%
Notes and the other outstanding notes.
Attempting to accomplish all of the elements of the stabilization and growth
phase of our plan simultaneously may prove to be burdensome and may cause
disruption or difficulties in our business.
We have recently implemented the stabilization and growth phase of our
plan, which includes increasing advertising and media spending, changing our
newly-configured in-store wall displays in the United States, reducing the
number of our SKUs in the United States, selectively adjusting prices on certain
products in the United States, optimizing product availability to consumers and
further strengthening our new product development process. Attempting to
accomplish all of these elements simultaneously may prove to be a financial and
operational burden on us. If we are unable to successfully accomplish all of the
elements of the stabilization and growth phase of our plan simultaneously, it
may have a material adverse effect on our business.
The terms of Products Corporation's debt instruments and Products Corporation's
existing bank credit agreement significantly limit our ability to pay
dividends.
The terms of Products Corporation's existing bank credit agreement, the
12% Notes, the 9% Notes, the 8 1/8% Notes, the 8 5/8% Notes, the MacAndrews &
Forbes $100 million term loan and the $40-65 million line of credit, generally
restrict Products Corporation from paying dividends or making distributions,
except that Products Corporation is permitted to pay dividends and make
distributions to us, among other things, to enable us to pay expenses
incidental to being a public holding company, including, among other things,
professional fees such as legal and accounting fees, regulatory fees such as
SEC filing fees, fees associated with this filing and other miscellaneous
expenses related to being a public holding company and, subject to certain
limitations, to pay dividends or make distributions in certain circumstances to
finance the purchase by Revlon of its Class A common stock in connection with
the delivery of such Class A common stock to grantees under the Revlon, Inc.
Fourth Amended and Restated 1996 Stock Plan, or the "Stock Plan."
Delaware law provisions and control by MacAndrews & Forbes could make a
third-party acquisition of our company difficult.
We are a Delaware corporation. The Delaware General Corporation Law
contains provisions that could make it more difficult for a third party to
acquire control of our company. MacAndrews & Forbes currently indirectly owns
approximately 83% of our outstanding Class A and Class B common stock and
controls approximately 97% of the combined voting power of our common stock, and
could own as much as % of our outstanding Class A and Class B common stock and
control as much as % of the combined voting power of our common stock after this
rights offering, assuming the back-stop is exercised in full, and therefore has,
and after the rights offering will continue to have, the ability to elect all of
the members of our board of directors. Control by MacAndrews & Forbes may
discourage certain types of transactions involving an actual or potential change
of control of Revlon, including transactions in which the holders of our common
stock might receive a premium for their shares over prevailing market prices.
Future sales of our Class A common stock may depress our stock price.
No prediction can be made as to the effect, if any, that future sales of
our Class A common stock, or the availability of Class A common stock for future
sales, will have on the market price of our
16
Class A common stock. Sales in the public market of substantial amounts of our
Class A common stock, or the perception that such sales could occur, could
adversely affect prevailing market prices for our Class A common stock.
RISKS RELATED TO THE RIGHTS OFFERING
Stockholders who do not fully exercise their subscription rights will have
their interests diluted by MacAndrews & Forbes and those other stockholders who
do exercise their subscription rights.
If you choose not to exercise your basic subscription right in full, your
relative ownership interest in us will be diluted to the extent others exercise
their basic subscription and over-subscription rights. Your voting rights will
also be diluted if you do not exercise your subscription rights in full. This
rights offering will result in our issuance of up to an additional 21,739,130
shares of our Class A common stock. In addition, although MacAndrews & Forbes
has agreed not to exercise its over-subscription right, they have committed to
back-stop this rights offering by purchasing all of the shares of Class A common
stock that are not purchased by other stockholders in this rights offering,
which would increase their overall ownership position. If no subscription rights
holder other than MacAndrews & Forbes exercises their subscription rights in
this rights offering, the transactions contemplated by the Investment Agreement,
including the MacAndrews & Forbes back-stop, will result in the issuance of an
additional 21,739,130 shares of our Class A common stock to MacAndrews & Forbes.
Subscription rights holders who do not exercise or sell their subscription
rights will lose any value in their subscription rights.
The subscription price determined for this rights offering is not an indication
of our value.
The subscription price per share for the rights offering was set by our
board of directors based on the recommendation of the special committee of
independent directors of our board of directors after negotiations between the
special committee and MacAndrews & Forbes. The board set the subscription price
at a formula equal to eighty percent (80%) of the greater of the closing price
per share of our Class A common stock on the New York Stock Exchange on (i) the
trading day before the date that our board of directors approved this rights
offering, which was $2.88 per share, and (ii) the record date for this rights
offering. In determining the subscription price, the special committee and our
board of directors considered a number of factors, including: our need for
capital; our business prospects; the need to offer shares at a price that would
be attractive to our investors relative to the current trading price of our
Class A common stock; an analysis of prior rights offerings; the historic and
current market price of our Class A common stock; general conditions in the
securities market and the difficult market conditions prevailing for the
raising of equity capital; our operating history; and the liquidity of our
Class A common stock. The subscription price does not necessarily bear any
relationship to the book value of our assets, past operations, cash flows,
losses, financial condition or any other established criteria for value. You
should not consider the subscription price as an indication of the value of our
Class A common stock. After the date of this prospectus, our Class A common
stock may trade at prices above or below the subscription price.
You may not revoke your subscription exercise and could be committed to buying
shares above the prevailing market price.
Once you exercise your subscription rights, you may not revoke the
exercise, unless we amend this rights offering. The public trading market price
of our Class A common stock may decline before the subscription rights expire.
If you exercise your subscription rights and, afterwards, the public trading
market price of our Class A common stock decreases below the subscription price,
you will have committed to buying shares of our Class A common stock at a price
above the prevailing market price. Our Class A common stock is traded on the
NYSE under the symbol "REV" and the last reported sales price of our Class A
common stock on the NYSE on February 4, 2003 was $2.97 per share. Moreover, you
may be unable to sell your shares of Class A common stock at a price equal to or
greater than the subscription price you paid for such shares.
17
We may cancel this rights offering and you will not receive interest on
subscription funds returned to you if we do so.
If we elect to withdraw or terminate this rights offering, neither we nor
the subscription agent will have any obligation with respect to the subscription
rights except to return, without interest or deduction, any subscription
payments we or the subscription agent received from you.
If you do not act promptly and follow subscription instructions, your exercise
of subscription rights may be rejected.
Stockholders who desire to purchase shares in this rights offering must
act promptly to ensure that all required forms and payments are actually
received by the subscription agent prior to , 2003, the expiration date
of this rights offering. If you are a beneficial owner of shares, you must act
promptly to ensure that your broker, custodian bank or other nominee acts for
you and that all required forms and payments are actually received by the
subscription agent prior to , 2003. We shall not be responsible if your
broker, custodian or nominee fails to ensure that all required forms and
payments are actually received by the subscription agent prior to the ,
2003 expiration date of this rights offering. If you fail to complete and sign
the required subscription forms, send an incorrect payment amount, or otherwise
fail to follow the subscription procedures that apply to your exercise in this
rights offering, the subscription agent may, depending on the circumstances,
reject your subscription or accept it only to the extent of the payment
received. Neither we nor our subscription agent undertakes to contact you
concerning an incomplete or incorrect subscription form or payment, nor are we
under any obligation to correct such forms or payment. We have the sole
discretion to determine whether a subscription exercise properly follows the
subscription procedures.
No prior market exists for the subscription rights.
The subscription rights are a new issue of securities with no established
trading market. The subscription rights are transferable until the close of
business on the last trading day prior to the expiration date of this rights
offering, at which time they will cease to have any value. However, we can give
no assurance that a market for the subscription rights will develop, or if a
market does develop, as to how long it will continue.
Risk of personal check
Any personal check used to pay for shares to be issued in this rights
offering must clear prior to the expiration date of this rights offering, and
the clearing process may require five or more business days.
18
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those discussed in
such forward-looking statements. Such statements include, without limitation,
our expectations and estimates (whether qualitative or quantitative) as to:
o increases of our advertising and media spending to increase
competitiveness and to support new product launches and core products,
as well as improving the effectiveness of our advertising;
o the introduction of new products and further strengthening of our new
product development process;
o our plans to improve the effectiveness of our retail wall displays
in the United States;
o our plans to reduce the number of our SKUs in the United States,
selectively adjust prices on certain of our products in the United
States and optimize product availability to consumers by enhancing
merchandiser coverage, continuing to develop our tamper evident program
and reducing out of stocks;
o our plans to implement comprehensive programs to develop and train our
employees;
o our future financial performance;
o the effect on sales of political and/or economic conditions, adverse
currency fluctuations, military actions and competitive activities;
o our plans to accelerate the implementation of the stabilization and
growth phase of our plan and the charges and the cash costs resulting
from implementing such plan and the timing of such costs as well as our
expectations for improved revenue as a result of such phase of our
plan;
o restructuring activities, restructuring costs, and benefits from such
activities;
o our expectation that cash flow from operations, cash on hand, cash
available from this rights offering and the $50 million Series C
preferred stock investment, if any, and availability of borrowings
under the MacAndrews & Forbes $100 million term loan, the $40-65
million line of credit, and our existing bank credit agreement, will be
sufficient to satisfy our cash requirements in 2003, and the
availability of funds from capital contributions or loans from
MacAndrews & Forbes, our other affiliates and/or third parties;
o uses of funds, including for the purchase and reconfiguration of wall
displays, increases in advertising and media, and to help fund a
portion of the costs and expenses of the stabilization and growth phase
of our plan and our estimates of operating expenses, working capital
expenses, wall display costs, capital expenditures, restructuring costs
or debt service payments;
o the effects of the loss of one or more customers, including, without
limitation, Wal-Mart, and the status of our relationship with our
customers;
o the effects of competitive responses to the implementation of our plan;
and
o our ability to effectively execute the various elements of our plan.
In addition, the documents incorporated in this prospectus by reference
contain other forward-looking statements. Statements that are not historical
facts, including statements about our beliefs and expectations, are
forward-looking statements. Forward-looking statements can be identified by,
among other things, the use of forward-looking language, such as "believes,"
"expects," "estimates," "projects," "forecast," "may," "will," "should,"
"seeks," "plans," "scheduled to," "anticipates" or "intends" or the negative of
those terms, or other variations of those terms or comparable language, or by
discussions of strategy or intentions. A number of important factors could
19
cause actual results to differ materially from those contained in any
forward-looking statement. In addition to factors that may be described in our
filings with the SEC, including this filing, the following factors, among
others, could cause our actual results to differ materially from those
expressed in any forward-looking statements made by us:
o difficulties or delays in developing and/or presenting our increased
advertising programs and/or improving the effectiveness of our
advertising;
o difficulties or delays in developing and introducing new products or
failure of customers to accept new product offerings and/or in further
strengthening our new product development process;
o difficulties or delays or unanticipated costs associated with
improving our wall displays in the United States;
o difficulties or delays in implementing our plans to reduce the number
of SKUs in the United States, adjust prices of our products in the
United States and/or optimize product availability to consumers;
o difficulties or delays in implementing comprehensive programs to train
our employees;
o unanticipated circumstances or results affecting our financial
performance, including changes in consumer preferences, such as reduced
consumer demand for our color cosmetics and other current products, and
actions by competitors, including business combinations, technological
breakthroughs, new products offerings, promotional spending and
marketing and promotional successes, including increases in market
share;
o effects of and changes in political and/or economic conditions,
including inflation, monetary conditions and military actions, and in
trade, monetary, fiscal and tax policies in international markets;
o unanticipated costs or difficulties or delays in completing projects
associated with the stabilization and growth phase of our plan;
o difficulties, delays or unanticipated costs or less than expected
savings and other benefits resulting from our restructuring activities;
o lower than expected cash flow from operations, the inability to secure
capital contributions or loans from MacAndrews & Forbes, our other
affiliates and/or third parties or the unavailability of funds under
our existing bank credit agreement, the MacAndrews & Forbes $100
million term loan, the $50 million Series C preferred stock investment,
if any, the $40-65 million line of credit or from this rights offering;
o higher than expected operating expenses, working capital expenses, wall
display costs, capital expenditures, restructuring costs or debt
service payments;
o combinations among significant customers or the loss, insolvency or
failure to pay debts by a significant customer or customers;
o difficulties or delays in responding to competitive responses to the
implementation of our plan; and
o difficulties, delays or unanticipated costs in the execution of
elements of our plan.
You should consider the areas of risk described above, as well as those
set forth in other documents we have filed with the SEC and which are
incorporated by reference into this prospectus, in connection with any
forward-looking statements that may be made by us. Forward-looking statements
speak only as of the date they are made, and, except for our ongoing obligations
to disclose material information under the federal securities laws, we undertake
no obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise. You are advised, however,
to consult any additional disclosures we make in our Quarterly Reports on Form
10-Q, Annual Report on Form 10-K and Current Reports on Form 8-K to the SEC
20
(which, among other places, can be found on the SEC's website at
http://www.sec.gov, as well as on our website at www.revloninc.com.) See "Where
You Can Find More Information." The cautionary discussion of risks and
uncertainties under "Risk Factors" are factors that we think could cause our
actual results to differ materially from expected results. Factors other than
those listed above could cause our results to differ materially from expected
results. This discussion is provided as permitted by the Private Securities
Litigation Reform Act of 1995.
21
SELECTED HISTORICAL AND UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data for each of the years
in the five-year period ended December 31, 2001 has been derived from our
audited consolidated financial statements, except for net sales, gross profit
and selling, general and administrative expenses in 1997 and 1998 which have
been adjusted to reflect the required reclassifications discussed below. The
selected historical financial data for the nine-month periods ended September
30, 2001 and 2002 and as of September 30, 2002 have been derived from our
unaudited consolidated condensed financial statements which reflect, in the
opinion of our management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial data for such periods.
Results for interim periods are not necessarily indicative of the results for
the full year.
In November 2001, the FASB Emerging Issues Task Force (the "EITF") reached
consensus on the Guidelines, which address when sales incentives and discounts
should be recognized, as well as where the related revenues and expenses should
be classified in the financial statements. We adopted the earlier portion of
these new Guidelines (formerly EITF Issue 00-14) addressing certain sales
incentives effective January 1, 2001 and, accordingly, all prior period
financial statements reflect the implementation of the earlier portion of the
Guidelines. The second portion of the Guidelines (formerly EITF Issue 00-25)
addresses vendor income statement characterization of consideration to a
purchaser of the vendor's products or services, including the classification of
slotting fees, cooperative advertising arrangements and buy-downs. We adopted
the second portion of the Guidelines effective January 1, 2002 and,
accordingly, the accompanying selected historical financial data for the
nine-month periods ended September 30, 2001 and 2002 reflect the implementation
of the second portion of the Guidelines. For presentation purposes the
historical financial data for each of the years in the five-year period ended
December 31, 2001 has been restated to reflect the second portion of the
Guidelines. Such adoption did not have any impact on our reported operating
income (loss), net income (loss) or Adjusted EBITDA (as defined below).
You should read "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the consolidated financial statements and
related notes, the report of our independent auditors included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2001, incorporated
by reference in this prospectus, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the unaudited consolidated
condensed financial statements and related notes included in our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2002, incorporated by
reference in this prospectus.
We have not implemented the new SEC rules regarding non-GAAP financial
measures as they apply to financial statements for periods ending after March
28, 2003. We will apply such rules to our results for the fiscal quarter ending
March 31, 2003.
22
SELECTED HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL DATA
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
1997(B) 1998(B) 1999(B) 2000(B) 2001(B)
---------- ---------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL STATEMENT OF OPERATIONS DATA (A):
Net sales ........................................ $ 2,076.5 $2,064.1 $1,629.8 $ 1,409.4 $1,277.6
Gross profit ..................................... 1,297.3 1,262.0(d) 903.5 835.1(f) 733.4(g)
Selling, general and administrative expenses ..... 1,079.5 1,104.2 1,075.3(e) 765.1 679.2(g)
Restructuring costs and other, net ............... 3.6(c) 33.1(d) 40.2(e) 54.1(f) 38.1(g)
--------- -------- -------- --------- --------
Operating income (loss) .......................... 214.2 124.7 (212.0) 15.9 16.1
Interest expense, net ............................ 129.5 132.7 145.1 142.4 136.6
Amortization of debt issuance costs .............. 6.6 5.1 4.3 5.6 6.2
Loss (gain) on sale of product line, brands and
facilities, net ................................. -- -- 0.9 (10.8) 14.4
Miscellaneous, net ............................... 12.2 9.2 (0.5) (0.2) 4.9
---------- --------- -------- --------- --------
Income (loss) from continuing operations
before income taxes ............................. 65.9 (22.3) (361.8) (121.1) (146.0)
Provision for income taxes ....................... 9.3 5.0 9.1 8.6 4.1
---------- --------- -------- --------- --------
Income (loss) from continuing operations ......... 56.6 (27.3) (370.9) (129.7) (150.1)
Income (loss) from discontinued operations ....... 0.7 (64.2) -- -- --
Extraordinary items -- early extinguishment
of debt ......................................... (14.9) (51.7) -- -- (3.6)
---------- --------- -------- --------- --------
Net income (loss) ................................ $ 42.4 $ (143.2) $ (370.9) $ (129.7) $ (153.7)
========== ========= ======== ========= ========
Basic income (loss) from continuing
operations per common share ..................... $ 1.09 $ (0.52) $ (7.12) $ (2.49) $ (2.87)
Diluted income (loss) from continuing
operations per common share ..................... $ 1.08 $ (0.52) $ (7.12) $ (2.49) $ (2.87)
OTHER DATA:
Net cash provided by (used for) operating
activities ...................................... $ 7.6 $ (52.2) $ (81.8) $ (84.0) $ (86.5)
Net cash (used for) provided by investing
activities ...................................... (84.3) (91.0) (40.7) 322.1 87.2
Net cash provided by (used for) financing
activities ...................................... 86.0 159.8 117.5 (203.7) 46.3
Adjusted EBITDA (i) .............................. 257.2 209.1 (73.5) 184.4 200.2
Capital expenditures ............................. 52.3 60.8 42.3 19.0 15.1
Purchase of permanent displays ................... 68.9 76.6 66.5 51.4 44.0
Net loss, excluding goodwill amortization
expense (j) ..................................... (358.1) (120.7) (146.0)
Basic and diluted net loss per common share,
excluding goodwill amortization
expense (j) ..................................... $ (6.88) $ (2.31) $ (2.80)
Pro forma net loss (k) ........................... $
Pro forma basic and diluted net loss per
common share (k) ................................ $
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------
2001 2002
-------------------- ----------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL STATEMENT OF OPERATIONS DATA (A):
Net sales ........................................ $ 955.9 $ 906.8
Gross profit ..................................... 551.5(g) 556.4(h)
Selling, general and administrative expenses ..... 522.3(g) 525.2(h)
Restructuring costs and other, net ............... 25.5(g) 9.3(h)
------ --------
Operating income (loss) .......................... 3.7 21.9
Interest expense, net ............................ 102.8 115.8
Amortization of debt issuance costs .............. 4.6 5.8
Loss (gain) on sale of product line, brand and
facilities, net ................................. 15.0 1.0
Miscellaneous, net ............................... 3.4 4.3
------- ----------
Income (loss) from continuing operations
before income taxes ............................. (122.1) (105.0)
Provision for income taxes ....................... 3.3 2.1
------- ----------
Income (loss) from continuing operations ......... (125.4) (107.1)
Income (loss) from discontinued operations ....... -- --
Extraordinary items -- early extinguishment
of debt ......................................... -- --
------- ----------
Net income (loss) ................................ $(125.4) $ (107.1)
======= ==========
Basic income (loss) from continuing
operations per common share ..................... $(2.40) $ (2.05)
Diluted income (loss) from continuing
operations per common share ..................... $(2.40) $ (2.05)
OTHER DATA:
Net cash provided by (used for) operating
activities ...................................... $(89.0) $ (110.9)
Net cash (used for) provided by investing
activities ...................................... 87.1 (7.6)
Net cash provided by (used for) financing
activities ...................................... (15.6) 78.5
Adjusted EBITDA (i) .............................. 142.8 122.5
Capital expenditures ............................. 10.4 9.4
Purchase of permanent displays ................... 35.6 53.5
Net loss, excluding goodwill amortization
expense (j) .....................................
Basic and diluted net loss per common share,
excluding goodwill amortization
expense (j) .....................................
Pro forma net loss (k) ........................... $
Pro forma basic and diluted net loss per
common share (k) ................................ $
DECEMBER 31, PRO FORMA
------------------------------------------------------------- SEPTEMBER 30, SEPTEMBER 30,
1997 1998 1999 2000 2001 2002 2002
-------- -------- --------- --------- --------- --------- ---------
BALANCE SHEET DATA (A):
Total assets ....................... $1,757.6 $1,831.0 $ 1,558.9 $ 1,101.8 $ 997.6 $ 961.6 $
Total indebtedness ................. 1,467.9 1,687.9 1,809.7 1,593.8 1,661.1 1,742.1
Total stockholders' deficiency ..... (458.8) (647.7) (1,015.0) (1,106.7) (1,282.7) (1,400.2)
----------
See accompanying notes to Selected Historical and Unaudited Pro Forma
Consolidated Financial Data
23
NOTES TO SELECTED HISTORICAL AND UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL DATA
(a) In March 2000 and May 2000, we completed the disposition of our
worldwide professional products line and our Plusbelle brand in
Argentina, respectively. In July 2001, we completed the disposition
of our Colorama brand and facility in Brazil. Accordingly, the
selected consolidated financial data include the results of
operations of the professional products line, Plusbelle and Colorama
brands through the dates of their respective dispositions.
(b) The impact of the second portion of the Guidelines for each of the
years in the five-year period ended December 31, 2001 on reported
net sales, gross profit and selling, general and administrative
expenses was $(79.9), $(85.6), $(80.1), $(38.4) and $(43.9),
respectively. The Guidelines do not affect our operating income
(loss), net income (loss) or Adjusted EBITDA.
(c) In 1997, we incurred restructuring costs of $20.6 million in
connection with the implementation of our business strategy to
rationalize factory operations. These costs primarily included
severance and other costs related to the rationalization of certain
factory and warehouse operations worldwide. Such costs were
partially offset by an approximately $12.7 million settlement of a
claim and gains of approximately $4.3 million on the sales of
certain factory operations outside the United States.
(d) In late 1998, we developed a strategy to reduce overall costs and
streamline operations. To execute against this strategy, we began to
develop a restructuring plan and executed the plan in several
phases, which has resulted in several restructuring charges being
recorded.
In the fourth quarter of 1998, we began to execute the 1998
restructuring program which was designed to realign and reduce
personnel, exit excess leased real estate, realign and consolidate
regional activities, reconfigure certain manufacturing operations and
exit certain product lines and recognized a charge of $44.2 million,
which includes $2.7 million charged to cost of sales. In 1998, we
recognized gains of approximately $8.4 million for the sales of
certain non-core assets.
(e) In the first nine months of 1999, we continued to execute the 1998
restructuring program and we recorded an additional net charge of
$20.5 million, principally for employee severance and other personnel
benefits and obligations for excess leased real estate primarily in
the United States. Also in 1999, we exited from a non-core business,
resulting in a charge of $1.6 million.
During the fourth quarter of 1999, we continued to restructure our
organization and began a new program in line with our original
restructuring plan developed in late 1998, principally for additional
employee severance and other personnel benefits and to restructure
certain operations outside the United States, including certain
operations in Japan, resulting in a charge of $18.1 million.
During the fourth quarter of 1999, we recorded a charge to selling,
general and administrative expenses of $22.0 million related to
executive separation costs related to this new program.
(f) In the first and second quarter of 2000, we recorded charges of $9.5
million and $5.1 million, respectively, relating to the 1999
restructuring program that began in the fourth quarter of 1999.
During the third quarter of 2000, we continued to re-evaluate our
organizational structure. As part of this re-evaluation, we initiated
a new restructuring program in line with our original restructuring
plan developed in late 1998 designed to improve profitability by
reducing personnel and consolidating manufacturing facilities. The
2000 restructuring program focused on closing our manufacturing
operations in Phoenix, Arizona and Mississauga, Canada and to
consolidate production into our plant in Oxford, North Carolina. The
2000 restructuring program also includes the remaining obligation for
excess leased real estate at our headquarters, consolidation costs
associated with closing our facility in New Zealand, and the
elimination of several domestic and international executive and
operational positions, each of which were effected to reduce and
streamline corporate overhead costs. In the third quarter of 2000, we
recorded a charge of $13.7 million for programs begun in the quarter
as well as for the expanded scope of programs previously commenced. In
the fourth quarter of 2000, we recorded a charge of $25.8 million
related to the 2000 restructuring program, principally for additional
employee severance and other personnel benefits and to consolidate
worldwide operations.
24
During the fourth quarter of 2000, we recorded $4.9 million to cost of
sales related to additional costs associated with the consolidation of
worldwide operations.
(g) In the first, second, third and fourth quarters of 2001, we recorded
charges of $14.6 million, $7.9 million, $3.0 million and $12.6 million,
respectively, related to the 2000 restructuring program, principally for
additional employee severance and other personnel benefits, relocation and
other costs related to the consolidation of worldwide operations and the
charge in the fourth quarter of 2001 also was for an adjustment to previous
estimates of approximately $6.6 million.
In the first nine months of 2001 and the fourth quarter of 2001, we
recorded $30.6 million and $7.6 million, respectively, to cost of sales
(which includes $6.1 million of increased depreciation in the first nine
months of 2001) and $6.9 million and ($1.5) million, respectively, to
selling, general and administrative expenses related to additional costs
associated with the shutdown of our Phoenix and Canadian facilities.
(h) During the nine-month period ended September 30, 2002, we continued to
implement the 2000 restructuring program, as well as other restructuring
actions, and recorded a charge of $9.3 million, principally for additional
employee severance and other personal benefits, primarily resulting from
reduction of our worldwide sales force, relocation and other costs related
to the consolidation of worldwide operations.
During the nine-month period ended September 30, 2002, we recorded a charge
of $1.3 million to cost of sales and $8.4 million ($8.3 million of which
are executive separation costs) to selling, general and administrative
expenses related to additional costs associated with the shutdown of our
Phoenix and Canadian facilities.
(i) We define Adjusted EBITDA as income (loss) from continuing operations
before (i) provision for income taxes, (ii) interest expense, net, (iii)
amortization of debt issuance costs, (iv) loss (gain) on sales of product
line, brands and facilities sold, net, (v) miscellaneous, net, (vi) EBITDA
from product line, brands and facilities sold and (vii) restructuring costs
and other, net, and additional costs associated with the consolidation of
our worldwide operations and executive separation costs, plus depreciation
and amortization other than that relating to early extinguishment of debt,
discount and debt issuance costs. Adjusted EBITDA is presented here as a
measure of our debt service ability, not of our operating results. Adjusted
EBITDA should not be considered in isolation, as a substitute for net
income or cash flow from operations prepared in accordance with accounting
principles generally accepted in the United States of America or as a
measure of our profitability or liquidity. Adjusted EBITDA does not take
into account our debt service requirements and other commitments and,
accordingly, is not necessarily indicative of amounts that may be available
for discretionary uses. Additionally, Adjusted EBITDA may be defined
differently for purposes of our credit agreement. Furthermore, other
companies may define Adjusted EBITDA differently and as a result our
Adjusted EBITDA may not be comparable to that of other companies.
25
The following table sets forth a reconciliation of income (loss) from
continuing operations to Adjusted EBITDA:
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
-------------- ---------------- ----------------- ----------------- -----------------
(DOLLARS IN MILLIONS)
Income (loss) from continuing
operations .......................... $ 56.6 $ (27.3) $ (370.9) $ (129.7) $ (150.1)
Provision for income taxes ............ 9.3 5.0 9.1 8.6 4.1
Interest expense, net ................. 129.5 132.7 145.1 142.4 136.6
Amortization of debt issuance
costs ............................... 6.6 5.1 4.3 5.6 6.2
Loss (gain) on sales of product
line, brand and facilities, net ..... -- -- 0.9 (10.8) 14.4
Miscellaneous, net .................... 12.2 9.2 (0.5) (0.2) 4.9
EBITDA from product line,
brands and facilities sold (a) ...... (53.7) (57.6) (45.4) (11.4) 1.5
Restructuring costs and other,
net ................................. 3.6(c) 35.8(d) 62.2(e) 59.0(f) 81.7(g)
Depreciation and amortization ......... 93.1 106.2 121.7 120.9 100.9
--------- --------- ---------- ---------- ----------
Adjusted EBITDA ....................... $ 257.2 $ 209.1 $ (73.5) $ 184.4 $ 200.2
========= ========= ========== ========== ==========
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
2001 2002
--------- -----------
(DOLLARS IN MILLIONS)
Income (loss) from continuing
operations .......................... $(125.4) $ (107.1)
Provision for income taxes ............ 3.3 2.1
Interest expense, net ................. 102.8 115.8
Amortization of debt issuance
costs ............................... 4.6 5.8
Loss (gain) on sales of product
line, brand and facilities, net ..... 15.0 1.0
Miscellaneous, net .................... 3.4 4.3
EBITDA from product line,
brands and facilities sold (a) ...... 1.5 --
Restructuring costs and other,
net ................................. 63.0(g) 19.0(h)
Depreciation and amortization ......... 74.6 81.6
------- --------
Adjusted EBITDA ....................... $ 142.8 $ 122.5
======= ========
(j) On January 1, 2002, we adopted FASB Statement 142, "Goodwill and Other
Intangible Assets." Statement 142 requires that goodwill and other
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of Statement 142. Intangible assets consist of net trademarks,
patents and goodwill. Amounts outstanding for those intangible assets are
as follows:
YEAR ENDED DECEMBER 31,
---------------------------------
1999 2000 2001
--------- --------- ---------
(DOLLARS IN MILLIONS)
Trademarks, net ......... $ 5.1 $ 5.7 $ 6.8
Patents, net ............ 7.1 6.7 5.8
Goodwill, net ........... 344.6 193.7 185.9
------- ------- -------
Total ................. $ 356.8 $ 206.1 $ 198.5
======= ======= =======
Amortization expense related to intangible assets was $14.0 million, $10.5
million and $9.2 million for the years ended December 31, 1999, 2000 and
2001, respectively.
In connection with the adoption of Statement 142, amortization of goodwill
ceased on January 1, 2002. Amortization expense related to goodwill was
$12.8 million, $9.0 million and $7.7 million for the years ended December
31, 1999, 2000 and 2001, respectively. Net loss and basic and diluted net
loss per common share presented exclude amortization expense related to
goodwill for the fiscal years ended December 31, 1999, 2000 and 2001.
(k) Pro forma basic and diluted loss per common share reflects an adjustment to
reflect the number of additional shares issued for the excess of the
subscription price of $ per share over the fair value of our Class A common
stock (the closing price per share of our Class A common stock on the NYSE
on the last day on which the shares are traded, together with the rights,
of $ per share). This difference is reflected in a manner similar to a
stock dividend in accordance with FASB Statement No. 128, Earnings per
Share. As a result, pro forma basic and diluted loss per common share
reflect a decrease in loss per common share of $ for the year ended
December 31, 2001 and $ for the nine months ended September 30, 2002.
26
Basic and diluted income (loss) from continuing operations per common share
for each of the years in the five-year period ended December 31, 2001 and
for the nine-month periods ended September 30, 2001 and 2002 have not been
restated to reflect this adjustment. If at the time of the consummation of
this rights offering, the fair value of the shares is more than the
subscription price determined pursuant to the formula described on page v,
basic and diluted earnings per share will be restated for all periods
presented, similar to a stock dividend.
In addition, pro forma results reflect the increase in interest expense of
$ million or $ pro forma basic and diluted loss per common share and $
million or $ pro forma basic and diluted loss per common share,
respectively, for the year ended December 31, 2001 and the nine months
ended September 30, 2002, as if the MacAndrews & Forbes $100 million term
loan was fully drawn on January 1, 2001 at an interest rate of 12.0% per
annum and the effects of the amendments to the credit agreement.
The $40-65 million line of credit is not assumed to be drawn for pro
forma purposes, nor is the $50 million Series C preferred stock investment
expected to be advanced. Therefore no adjustments to pro forma net loss and
pro forma basic and diluted net loss per common share are reflected for the
year ended December 31, 2001 and the nine-months ended September 30, 2002
for these transactions.
27
THE RIGHTS OFFERING
REASONS FOR THE RIGHTS OFFERING
On February 5, 2003, we announced that our board of directors, at the
recommendation of its special committee of independent directors, had discussed
and authorized:
o the MacAndrews & Forbes $100 million term loan, the $50 million Series
C preferred stock investment, if any, and the $40-65 million line of
credit from MacAndrews & Forbes to Products Corporation;
o the commencement of this rights offering; and
o the Investment Agreement under which MacAndrews & Forbes agreed to
take certain actions with regard to this rights offering, including,
without limitation, its agreement to make the $50 million Series C
preferred stock investment if, prior to closing this rights offering,
we have fully drawn the MacAndrews & Forbes $100 million term loan.
This rights offering is being made in connection with the stabilization
and growth phase of our plan, which involves, among other things, increasing
advertising and media spending, making certain changes to our newly-configured
in-store wall displays in the United States and reconfiguring existing wall
displays at our retail accounts in the United States, reducing the number of
our SKUs in the United States, selectively adjusting prices on certain products
in the United States, optimizing product availability to consumers and further
strengthening our new product development process. If this rights offering is
canceled, any funds we or the subscription agent have received from you will be
promptly refunded, without interest or deduction.
In reaching its conclusion, our board of directors considered a number of
factors, including:
o our needs for cash to help fund a portion of the costs and expenses of
the stabilization and growth phase of our plan and to help satisfy
anticipated obligations arising from the implementation of such plan;
o the opportunity that this rights offering allows all of our
stockholders on the rights offering record date to participate and
acquire additional shares of our Class A common stock at a discount to
the market price;
o concerns as to the availability of other financing alternatives, in
light of the difficulties faced by the company in raising equity
capital or debt on terms as favorable as the MacAndrews & Forbes
proposal in light of the current state of the capital markets and our
business;
o the subscription price relative to our Class A common stock's
historical and recent trading price and pricing policies customary for
transactions of this type;
o MacAndrews & Forbes' willingness to purchase the full number of shares
of our Class A common stock it would have been entitled to subscribe
for in this rights offering in accordance with its basic subscription
privilege and to purchase all of the shares of our Class A common
stock not subscribed for by our other stockholders pursuant to their
basic subscription privileges and their over-subscription privileges,
which ensured that the maximum of $50 million would be raised in this
rights offering, as well as its willingness to subordinate its
over-subscription rights that it otherwise would be entitled to
exercise in order to enhance the over-subscription privileges of our
other stockholders;
o the potential impact of this rights offering on relative voting and
ownership interests of our stockholders as described under "Effects of
Rights Offering on the MacAndrews & Forbes' Securities and Ownership"
included elsewhere in this prospectus; and
o the potential tax consequences of this rights offering.
Neither our board of directors nor its special committee is making any
recommendation as to whether or not you should exercise or sell your
subscription rights.
28
THE RIGHTS
We will distribute to each holder of our Class A and Class B common stock
who is a record holder of our Class A and Class B common stock on the rights
offering record date, which is 5:00 p.m., New York City time, on , 2003, at no
charge, transferable subscription right for each share of Class A and Class B
common stock owned, for a total of approximately subscription rights. The
subscription rights will be evidenced by transferable subscription rights
certificates. Each subscription right will allow you to purchase share[s] of our
Class A common stock at a price of $ . If you elect to exercise your basic
subscription privilege in full, you may also subscribe, at the subscription
price, for additional shares of our Class A common stock under your
over-subscription privilege. If a sufficient number of shares of our Class A
common stock is unavailable to fully satisfy the over-subscription privilege
requests, the available shares of Class A common stock will be sold pro rata
among subscription rights holders who exercised their over-subscription
privilege based on the number of shares each subscription rights holder
subscribed for under the basic subscription privilege. If a sufficient number of
shares of our Class A common stock is unavailable to fully satisfy the
over-subscription privilege requests, the available shares of Class A common
stock will be sold pro rata among subscription rights holders who exercised
their over-subscription based on the number of shares of our Class A common
stock each subscription rights holder subscribed for under the basic
subscription privilege. MacAndrews & Forbes has agreed not to exercise its
over-subscription privilege in order to enhance the over-subscription privileges
of our other Class A common stockholders. We have not engaged an underwriter in
connection with this rights offering.
NO FRACTIONAL RIGHTS
We will not issue fractional subscription rights or cash in lieu of
fractional subscription rights. Fractional subscription rights will be rounded,
as appropriate, to the nearest whole number with such adjustments as may be
necessary to ensure that we will receive gross proceeds of $50 million from this
rights offering.
You may request that the subscription agent divide your subscription
rights certificate into transferable parts, for instance, if you are the record
holder for a number of beneficial holders of our common stock. However, the
subscription agent will not divide your subscription rights certificate so that
you would receive any fractional subscription rights.
EXPIRATION OF THE RIGHTS OFFERING
You may exercise your subscription rights at any time before 5:00 p.m.,
New York City time, on , 2003, the expiration date for this rights
offering. We may, in our sole discretion, extend the time for exercising the
subscription rights.
If you do not exercise your subscription rights before the expiration date
of this rights offering, your unexercised subscription rights will be null and
void. We will not be obligated to honor your exercise of subscription rights if
the subscription agent receives the documents relating to your exercise after
this rights offering expires, regardless of when you transmitted the documents,
except if you have timely transmitted the documents under the guaranteed
delivery procedures described below. We may extend the expiration date of this
rights offering by giving oral or written notice to the subscription agent and
information agent on or before the scheduled expiration date. If we elect to
extend the expiration of this rights offering, we will issue a press release
announcing such extension no later than 9:00 a.m., New York City time, on the
next business day after the most recently announced expiration date.
SUBSCRIPTION PRIVILEGES
Your subscription rights entitle you to a basic subscription privilege and
an over-subscription privilege.
Basic Subscription Privilege. With your basic subscription privilege, you
may purchase share[s] of our Class A common stock per subscription right,
upon delivery of the required documents
29
and payment of the subscription price of $ per share. You are not required
to exercise all of your subscription rights unless you wish to purchase shares
under your over-subscription privilege. We will deliver to you or your broker
certificates representing the shares that you purchased with your basic
subscription privilege as soon as practicable after this rights offering has
expired.
Over-Subscription Privilege. In addition to your basic subscription
privilege, you may subscribe for additional shares of our Class A common stock,
upon delivery of the required documents and payment of the subscription price
of $ per share, before the expiration of this rights offering. You may only
exercise your over-subscription privilege if you exercised your basic
subscription privilege in full and other holders of subscription rights do not
exercise their basic subscription privileges in full.
Pro Rata Allocation. If there are not enough shares of our Class A common
stock to satisfy all subscriptions made under the over-subscription privilege,
we will allocate the remaining shares of our Class A common stock pro rata,
after eliminating all fractional shares, among those over-subscribing rights
holders. "Pro rata" means in proportion to the number of shares of our Class A
common stock that you and the other subscription rights holders have purchased
by exercising your basic subscription privileges. If there is a pro rata
allocation of the remaining shares of our Class A common stock and you receive
an allocation of a greater number of shares than you subscribed for under your
over-subscription privilege, then we will allocate to you only the number of
shares for which you subscribed. We will allocate the remaining shares among
all other holders exercising their over-subscription privileges.
MacAndrews & Forbes will not be allocated any additional shares of our
Class A common stock as part of its over-subscription privilege because it has
agreed in the Investment Agreement not to exercise its over-subscription
privilege.
Full Exercise of Basic Subscription Privilege. You may exercise your
over-subscription privilege only if you exercise your basic subscription
privilege in full. To determine if you have fully exercised your basic
subscription privilege, we will consider only the basic subscription privileges
held by you in the same capacity. For example, suppose that you were granted
subscription rights for shares of our Class A common stock that you own
individually and shares of our Class A common stock that you own collectively
with your spouse. If you wish to exercise your over-subscription privilege with
respect to the subscription rights you own individually, but not with respect
to the subscription rights you own collectively with your spouse, you only need
to fully exercise your basic subscription privilege with respect to your
individually owned subscription rights. You do not have to subscribe for any
shares under the basic subscription privilege owned collectively with your
spouse to exercise your individual over-subscription privilege.
When you complete the portion of your subscription rights certificate to
exercise your over-subscription privilege, you will be representing and
certifying that you have fully exercised your subscription privileges as to
shares of our Class A common stock that you hold in that capacity. You must
exercise your over-subscription privilege at the same time you exercise your
basic subscription privilege in full.
Return of Excess Payment. If you exercised your over-subscription
privilege and are allocated less than all of the shares of our Class A common
stock for which you wished to subscribe, your excess payment for shares that
were not allocated to you will be returned to you by mail, without interest or
deduction, as soon as practicable after the expiration date of this rights
offering. We will deliver to you or your broker certificates representing the
shares of our Class A common stock that you purchased as soon as practicable
after the expiration date of this rights offering and after all pro rata
allocations and adjustments have been completed.
CONDITIONS TO THIS RIGHTS OFFERING
We may terminate this rights offering, in whole or in part, if at any time
before completion of this rights offering there is any judgment, order, decree,
injunction, statute, law or regulation entered, enacted, amended or held to be
applicable to this rights offering that in the sole judgment of our board of
directors would or might make this rights offering or its completion, whether
in whole or in
30
part, illegal or otherwise restrict or prohibit completion of this rights
offering. We may waive any of these conditions and choose to proceed with this
rights offering even if one or more of these events occur. If we terminate this
rights offering, in whole or in part, all affected subscription rights will
expire without value and all subscription payments received by the subscription
agent will be returned promptly, without interest or deduction. See also
"--Cancellation Rights".
METHOD OF SUBSCRIPTION--EXERCISE OF RIGHTS
You may exercise your subscription rights by delivering the following to
the subscription agent, at or prior to 5:00 p.m., New York City time, on
, 2003, the expiration date of this rights offering:
o Your properly completed and executed subscription rights certificate
with any required signature guarantees or other supplemental
documentation; and
o Your full subscription price payment for each share subscribed for
under your subscription privileges.
If you are a beneficial owner of shares of our common stock whose shares
are registered in the name of a broker, custodian bank or other nominee, you
should instruct your broker, custodian bank or other nominee to exercise your
rights and deliver all documents and payment on your behalf prior to 5:00 p.m.
New York City time on , 2003, the expiration date of this rights
offering.
Your subscription rights will not be considered exercised unless the
subscription agent receives from you, your broker, custodian or nominee, as the
case may be, all of the required documents and your full subscription price
payment prior to 5:00 p.m., New York City time, on , 2003, the
expiration date of this rights offering.
METHOD OF PAYMENT
Your payment of the subscription price must be made in U.S. dollars for
the full number of shares of Class A common stock for which you are subscribing
by either:
o check or bank draft drawn upon a U.S. bank or postal, telegraphic or
express money order payable to the subscription agent; or
o wire transfer of immediately available funds, to the subscription
account maintained by the subscription agent at JPMorgan Chase Bank,
ABA No. 021 000 021, Account No. 323-113109.
RECEIPT OF PAYMENT
Your payment will be considered received by the subscription agent only
upon:
o Clearance of any uncertified check;
o Receipt by the subscription agent of any certified check or bank draft
drawn upon a U.S. bank or of any postal, telegraphic or express money
order; or
o Receipt of collected funds in the subscription account designated
above.
CLEARANCE OF UNCERTIFIED CHECKS
If you are paying by uncertified personal check, please note that
uncertified checks may take at least five (5) business days to clear. If you
wish to pay the subscription price by uncertified personal check, we urge you
to make payment sufficiently in advance of the time this rights offering
expires to ensure that your payment is received by the subscription agent and
clears by the rights offering expiration date. We urge you to consider using a
certified or cashier's check, money order or wire transfer of funds to avoid
missing the opportunity to exercise your subscription rights should you decide
to exercise your subscription rights.
DELIVERY OF SUBSCRIPTION MATERIALS AND PAYMENT
You should deliver your subscription rights certificate and payment of the
subscription price or, if applicable, notices of guaranteed delivery, to the
subscription agent by one of the methods described below:
31
If by mail to:
AMERICAN STOCK TRANSFER & TRUST COMPANY
59 Maiden Lane
New York, NY 10038
If by hand delivery or overnight courier to:
AMERICAN STOCK TRANSFER & TRUST COMPANY
6201 15th Avenue
Brooklyn, NY 11219
Banks and brokerage firms should use the 59 Maiden Lane address.
You may call the subscription agent at (718) 921-8200.
Your delivery to an address other than the addresses set forth above will
not constitute valid delivery.
CALCULATION OF SUBSCRIPTION RIGHTS EXERCISED
If you do not indicate the number of subscription rights being exercised,
or do not forward full payment of the total subscription price payment for the
number of subscription rights that you indicate are being exercised, then you
will be deemed to have exercised your basic subscription privilege with respect
to the maximum number of subscription rights that may be exercised with the
aggregate subscription price payment you delivered to the subscription agent.
If your aggregate subscription price payment is greater than the amount you owe
for your subscription, you will be deemed to have exercised your
over-subscription privilege to purchase the maximum number of shares of our
Class A common stock with your over-payment. If we do not apply your full
subscription price payment to your purchase of shares of our Class A common
stock, we or the subscription agent will return the excess amount to you by
mail, without interest or deduction, as soon as practicable after the
expiration date of this rights offering.
EXERCISING A PORTION OF YOUR SUBSCRIPTION RIGHTS
If you subscribe for fewer than all of the shares of our Class A common
stock represented by your subscription rights certificate, you may receive from
the subscription agent a new subscription rights certificate representing your
unused subscription rights. However, all subscription rights must be exercised
prior to the expiration date of this rights offering, or else your subscription
rights will be null and void. We will not issue any subscription rights
certificates for unexercised subscription rights after the rights offering
expiration date.
YOUR FUNDS WILL BE HELD BY THE SUBSCRIPTION AGENT UNTIL SHARES OF OUR CLASS A
COMMON STOCK ARE ISSUED
The subscription agent will hold your payment of the subscription price
payment in a segregated account with other payments received from other
subscription rights holders until we issue your shares of our Class A common
stock to you upon consummation of the rights offering.
NO FRACTIONAL SHARES
No fractional shares will be issued upon exercise of the subscription
rights. We will instead round the number of shares upon exercise of the
subscription rights, as appropriate, to the nearest whole number.
MEDALLION GUARANTEE MAY BE REQUIRED
Your signature on each subscription rights certificate must be guaranteed
by an eligible institution, such as a member firm of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States, subject to standards and procedures adopted
by the subscription agent, unless:
32
o Your subscription rights certificate provides that shares are to be
delivered to you as record holder of those subscription rights; or
o You are an eligible institution.
NOTICE TO BENEFICIAL HOLDERS
If you are a broker, a trustee or a depositary for securities who holds
shares of our common stock for the account of others on , 2003, the
rights offering record date, you should notify the respective beneficial owners
of such shares of this rights offering as soon as possible to find out their
intentions with respect to exercising or selling their subscription rights. You
should obtain instructions from the beneficial owner with respect to their
subscription rights, as set forth in the instructions we have provided to you
for your distribution to beneficial owners. If the beneficial owner so
instructs, you should complete the appropriate subscription rights certificates
and submit them to the subscription agent with the proper payment. If you hold
shares of our common stock for the account(s) of more than one beneficial
owner, you may exercise the number of subscription rights to which all such
beneficial owners in the aggregate otherwise would have been entitled had they
been direct record holders of our common stock on the rights offering record
date, provided that, you, as a nominee record holder, make a proper showing to
the subscription agent by submitting the form entitled "Nominee Holder
Certification" that we will provide to you with your rights offering materials.
If you did not receive this form, you should contact the subscription agent to
request a copy.
BENEFICIAL OWNERS
If you are a beneficial owner of shares of our common stock or will
receive your subscription rights through a broker, custodian bank or other
nominee, we will ask your broker, custodian bank or other nominee to notify you
of this rights offering. If you wish to exercise or sell your subscription
rights, you will need to have your broker, custodian bank or other nominee act
for you. If you hold certificates of our common stock directly and would prefer
to have your broker, custodian bank or other nominee act for you, you should
contact your nominee and request it to effect the transactions for you. To
indicate your decision with respect to your subscription rights, you should
complete and return to your broker, custodian bank or other nominee the form
entitled "Beneficial Owners Election Form." You should receive this form from
your broker, custodian bank or other nominee with the other rights offering
materials. If you wish to obtain a separate subscription rights certificate,
you should contact the nominee as soon as possible and request that a separate
subscription rights certificate be issued to you. You should contact your
broker, custodian bank or other nominee if you do not receive this form, but
you believe you are entitled to participate in this rights offering. We are not
responsible if you do not receive the form from your broker, custodian bank or
nominee or if you receive it without sufficient time to respond.
INSTRUCTIONS FOR COMPLETING YOUR SUBSCRIPTION RIGHTS CERTIFICATE
You should read and follow the instructions accompanying the subscription
rights certificates carefully.
You are responsible for the method of delivery of your subscription rights
certificate(s) with your subscription price payment to the subscription agent.
If you send your subscription rights certificate(s) and subscription price
payment by mail, we recommend that you send them by registered mail, properly
insured, with return receipt requested. You should allow a sufficient number of
days to ensure delivery to the subscription agent prior to the time this rights
offering expires. Because uncertified personal checks may take at least five
(5) business days to clear, you are strongly urged to pay, or arrange for
payment, by means of a certified or cashier's check, money order or wire
transfer of funds.
DETERMINATIONS REGARDING THE EXERCISE OF YOUR SUBSCRIPTION RIGHTS
We will decide all questions concerning the timeliness, validity, form and
eligibility of the exercise of your subscription rights and any such
determinations by us will be final and binding. We, in our
33
sole discretion, may waive, in any particular instance, any defect or
irregularity, or permit, in any particular instance, a defect or irregularity
to be corrected within such time as we may determine. We will not be required
to make uniform determinations in all cases. We may reject the exercise of any
of your subscription rights because of any defect or irregularity. We will not
accept any exercise of subscription rights until all irregularities have been
waived by us or cured by you within such time as we decide, in our sole
discretion.
Neither we, nor the subscription agent, will be under any duty to notify
you of any defect or irregularity in connection with your submission of
subscription rights certificates and we will not be liable for failure to
notify you of any defect or irregularity. We reserve the right to reject your
exercise of subscription rights if your exercise is not in accordance with the
terms of this rights offering or in proper form. We will also not accept the
exercise of your subscription rights if our issuance of shares of our Class A
common stock to you could be deemed unlawful under applicable law or is
materially burdensome to us.
REGULATORY LIMITATION
We will not be required to issue to you shares of our Class A common stock
pursuant to this rights offering if, in our opinion, you would be required to
obtain prior clearance or approval from any state or federal regulatory
authorities to own or control such shares if, at the time this rights offering
expires, you have not obtained such clearance or approval.
GUARANTEED DELIVERY PROCEDURES
If you wish to exercise your subscription rights, but you do not have
sufficient time to deliver the subscription rights certificate evidencing your
subscription rights to the subscription agent on or before the time this rights
offering expires, you may exercise your subscription rights by the following
guaranteed delivery procedures:
o Deliver to the subscription agent on or prior to the rights offering
expiration date your subscription price payment in full for each share
you subscribed for under your subscription privileges in the manner
set forth above in "--Method of Payment";
o Deliver to the subscription agent on or prior to the expiration date
the form entitled "Notice of Guaranteed Delivery", substantially in
the form provided with the "Instructions as to Use of Revlon, Inc.
Subscription Rights Certificates" distributed with your subscription
rights certificates; and
o Deliver the properly completed subscription rights certificate
evidencing your subscription rights being exercised and the related
nominee holder certification, if applicable, with any required
signature guarantee, to the subscription agent within three (3) New
York Stock Exchange trading days following the date of your Notice of
Guaranteed Delivery.
Your Notice of Guaranteed Delivery must be delivered in substantially the
same form provided with the Instructions as to the Use of Revlon, Inc.
Subscription Rights Certificates, which will be distributed to you with your
subscription rights certificate. Your Notice of Guaranteed Delivery must come
from an eligible institution, or other eligible guarantee institutions which
are members of, or participants in, a signature guarantee program acceptable to
the subscription agent.
In your Notice of Guaranteed Delivery, you must state:
o Your name;
o The number of subscription rights represented by your subscription
rights certificates, the number of shares of our Class A common stock
you are subscribing for under your basic subscription privilege and
the number of shares of our Class A common stock you are subscribing
for under your over-subscription privilege, if any; and
o Your guarantee that you will deliver to the subscription agent any
subscription rights certificates evidencing the subscription rights
you are exercising within three (3) business days following the date
the subscription agent receives your Notice of Guaranteed Delivery.
34
You may deliver your Notice of Guaranteed Delivery to the subscription
agent in the same manner as your subscription rights certificates at the
address set forth above under "--Delivery of Subscription Materials and
Payment." You may alternatively transmit your Notice of Guaranteed Delivery to
the subscription agent by facsimile transmission (Telecopy No.: (718)
234-5001). To confirm facsimile deliveries, you may call (718) 921-8200.
The information agent will send you additional copies of the form of
Notice of Guaranteed Delivery if you request them. Please call (800) 949-2583
to request any copies of the form of Notice of Guaranteed Delivery. Banks and
brokerage firms please call collect at (212) 269-5550 to request any copies of
the form of Notice of Guaranteed Delivery.
QUESTIONS ABOUT EXERCISING SUBSCRIPTION RIGHTS
If you have any questions or require assistance regarding the method of
exercising your subscription rights or requests for additional copies of this
prospectus, the Instructions as to the Use of Revlon, Inc. Subscription Rights
Certificates or the Notice of Guaranteed Delivery, you should contact the
information agent at the address and telephone number set forth above under
"Questions and Answers About the Rights Offering" included elsewhere in this
prospectus.
SUBSCRIPTION AGENT AND INFORMATION AGENT
We have appointed American Stock Transfer & Trust Company to act as
subscription agent and D.F. King & Co., Inc. to act as information agent for
this rights offering. We will pay all fees and expenses of the subscription
agent and the information agent related to this rights offering and have also
agreed to indemnify the subscription agent and the information agent from
liabilities that they may incur in connection with this rights offering.
NO REVOCATION
Once you have exercised your subscription privileges, you may not revoke
your exercise. Subscription rights not exercised prior to the expiration date
of this rights offering will expire and will have no value.
PROCEDURES FOR DTC PARTICIPANTS
We expect that the exercise of your basic subscription privilege and your
over-subscription privilege may be made through the facilities of the
Depository Trust Company. If your subscription rights are held of record
through DTC, you may exercise your basic subscription privilege and your
over-subscription privilege by instructing DTC to transfer your subscription
rights from your account to the account of the subscription agent, together
with certification as to the aggregate number of subscription rights you are
exercising and the number of shares of our Class A common stock you are
subscribing for under your basic subscription privilege and your
over-subscription privilege, if any, and your subscription price payment for
each share of our Class A common stock that you subscribed for pursuant to your
basic subscription privilege and your over-subscription privilege.
SUBSCRIPTION PRICE
The subscription price is $ per share. For more information with
respect to how the subscription price was determined, see "Questions and
Answers About the Rights Offering" included elsewhere in this prospectus.
FOREIGN AND OTHER STOCKHOLDERS
Subscription rights certificates will be mailed to subscription rights
holders whose addresses are outside the United States or who have an APO or FPO
address. To exercise such subscription rights, you must notify the subscription
agent, and take all other steps which are necessary to exercise your
subscription rights on or prior to the expiration date of this rights offering.
Your subscription rights will expire and will have no value if the procedures
set forth in the preceding sentence are not followed prior to the expiration
date.
35
EXPIRATION DATE, EXTENSIONS AND TERMINATION
We may extend this rights offering and the period for exercising your
subscription rights, in our sole discretion. The subscription rights will
expire at 5:00 p.m., New York City time, on , 2003, unless we decide
to extend this rights offering. If the commencement of this rights offering is
delayed for a period of time, the expiration date of this rights offering will
be similarly extended. If you do not exercise your basic subscription privilege
prior to the expiration date of this rights offering, your subscription rights
will be null and void and will have no value. We will not be required to issue
shares of our Class A common stock to you if the subscription agent receives
your subscription certificate or your payment after that time, regardless of
when you sent the subscription certificate and payment, unless you send the
documents in compliance with the guaranteed delivery procedures described
above. In addition, we may terminate this rights offering, in whole or in part,
at any time prior to the time this rights offering expires.
METHOD OF TRANSFERRING AND SELLING SUBSCRIPTION RIGHTS
We anticipate that the subscription rights will be traded on the NYSE
under the symbol " ". We expect that subscription rights may be purchased or
sold through usual investment channels until the close of business on the last
trading day preceding the expiration date. However, there has been no prior
public market for the subscription rights, and we cannot assure you that a
trading market for the subscription rights will develop or, if a market
develops, that the market will remain available throughout the subscription
period. We also cannot assure you of the price at which the subscription rights
will trade, if at all. If you do not exercise or sell your subscription rights
you will lose any value inherent in the subscription rights. See "--General
Considerations Regarding the Partial Exercise, Transfer or Sale of Subscription
Rights" below.
Transfer of Subscription Rights. You may transfer subscription rights in
whole by endorsing the subscription rights certificate for transfer. Please
follow the instructions for transfer included in the information sent to you
with your subscription rights certificate. If you wish to transfer only a
portion of the subscription rights, you should deliver your properly endorsed
subscription rights certificate to the subscription agent. With your
subscription rights certificate, you should include instructions to register
such portion of the subscription rights evidenced thereby in the name of the
transferee (and to issue a new subscription rights certificate to the
transferee evidencing such transferred subscription rights). You may only
transfer whole subscription rights and not fractions of a subscription right.
If there is sufficient time before the expiration of this rights offering, the
subscription agent will send you a new subscription rights certificate
evidencing the balance of your subscription rights which you did not transfer
to the transferee. You may also instruct the subscription agent to send the
subscription rights certificate to one or more additional transferees. If you
wish to sell your remaining subscription rights, you may request that the
subscription agent send you certificates representing your remaining (whole)
subscription rights so that you may sell them through your broker or dealer.
If you wish to transfer all or a portion of your subscription rights, you
should allow a sufficient amount of time prior to the time the subscription
rights expire for the subscription agent to:
o receive and process your transfer instructions; and
o issue and transmit a new subscription rights certificate to your
transferee or transferees with respect to transferred subscription
rights, and to you with respect to any subscription rights you
retained.
If you wish to transfer your subscription rights to any person other than
a bank or broker, the signatures on your subscription rights certificate must
be guaranteed by an eligible institution.
General Considerations Regarding the Partial Exercise, Transfer or Sale of
Subscription Rights. The amount of time needed by your transferee to exercise
or sell its subscription rights depends upon the method by which you, as the
transferor, delivers the subscription rights certificates, the method of
payment made by your transferee and the number of transactions which the holder
instructs the subscription agent to effect. You should also allow up to ten
business days for your transferee to exercise or sell the subscription rights
that you transferred to it. Neither we nor the
36
subscription agent will be liable to a transferee or transferor of subscription
rights if subscription rights certificates or any other required documents are
not received in time for exercise or sale prior to the expiration time.
You will receive a new subscription rights certificate upon a partial
exercise, transfer or sale of subscription rights only if the subscription
agent receives your properly endorsed subscription rights certificate no later
than 5:00 p.m., New York City time, five business days before the expiration
date. The subscription agent will not issue a new subscription rights
certificate if your subscription rights certificate is received after that time
and date. If your instructions and subscription rights certificate are received
by the subscription agent after that time and date, you will not receive a new
subscription rights certificate and therefore will not be able to sell or
exercise your remaining subscription rights.
You are responsible for all commissions, fees and other expenses
(including brokerage commissions and transfer taxes) incurred in connection
with the purchase, sale or exercise of your subscription rights, except that we
will pay any fees of the subscription agent and information agent associated
with this rights offering. Any amounts you owe will be deducted from your
account.
If you do not exercise your subscription rights before the expiration
date, your subscription rights will expire without value and will no longer be
exercisable.
CANCELLATION RIGHTS
Our board of directors may cancel this rights offering, in whole or in
part, in its sole discretion at any time prior to the time this rights offering
expires for any reason (including a change in the market price of our Class A
common stock). If we cancel this rights offering, any funds you paid to the
subscription agent will be promptly refunded, without interest or deduction.
NO BOARD OR SPECIAL COMMITTEE RECOMMENDATION
An investment in shares of our Class A common stock must be made according
to each investor's evaluation of its own best interests and after considering
all of the information in this prospectus, including the "Risk Factors" section
of this prospectus and all of the information incorporated by reference in this
prospectus. Our board of directors and the special committee of our board of
directors makes no recommendation to subscription rights holders regarding
whether they should exercise or sell their subscription rights. You should not
view MacAndrews & Forbes' agreements under the Investment Agreement as a
recommendation or other indication by MacAndrews & Forbes or our board of
directors that the exercise of your subscription rights is in your best
interests.
SHARES OF COMMON STOCK OUTSTANDING AFTER THE RIGHTS OFFERING
Based on the shares of our Class A common stock issued and
outstanding as of , 2003, approximately million shares of our Class
A common stock will be issued and outstanding after this rights offering
expires, an increase in the number of outstanding shares of our Class A common
stock of approximately %. The 31,250,000 shares of our Class B common stock,
all of which are beneficially owned by MacAndrews & Forbes, will remain
outstanding.
EFFECTS OF RIGHTS OFFERING ON STOCK PLAN AND OTHER PLANS
As of December 31, 2002, there were outstanding 2,005,000 restricted
shares and options to purchase 7,886,064 shares of our Class A common stock
issued or committed to be issued pursuant to stock options granted by us and
our affiliates. None of the outstanding options or restricted shares have
antidilution or other provisions of adjustment that will be triggered by this
rights offering. Each outstanding and unexercised option will remain unchanged
and will be exercisable, subject to vesting, if any, for the same number of
shares of our Class A common stock and at the same exercise price as before
this rights offering. Similarly, each restricted share will remain unchanged.
EFFECTS OF RIGHTS OFFERING ON THE MACANDREWS & FORBES' SECURITIES AND OWNERSHIP
Even though the subscription rights will be offered on a one-for-one basis
to each holder of our Class A and Class B common stock, because of MacAndrews &
Forbes' commitment to back-stop this
37
rights offering, the percentage of common stock owned by other stockholders
will decrease unless all of the other stockholders exercise the subscription
rights they will receive in full.
Set forth below, for illustrative purposes only are two scenarios that
indicate the effect that this rights offering and related share issuance could
have on MacAndrews & Forbes' relative voting and economic interest. As of the
date of this prospectus, MacAndrews & Forbes controls approximately 97% of the
voting power of our outstanding capital stock and owns approximately 83% of our
outstanding common stock.
SCENARIO A -- All subscription rights are subscribed for on a pro rata
basis by all of the stockholders to whom the subscription rights were issued,
except MacAndrews & Forbes, and MacAndrews & Forbes purchases the full number
of shares of our Class A common stock it would have been entitled to subscribe
for in this rights offering in accordance with its basic subscription
privilege. Because all of the subscription rights are exercised in the basic
subscription privilege by holders other than MacAndrews & Forbes and MacAndrews
& Forbes purchases the number of shares equivalent to its full pro rata portion
of the shares offered pursuant to the basic subscription privilege to which it
would otherwise have been entitled, no shares are exercisable in the
over-subscription privilege and MacAndrews & Forbes does not need to back-stop
this rights offering.
SCENARIO B -- MacAndrews & Forbes is the only stockholder to acquire
shares of our Class A common stock, which number of shares is equivalent to the
full number of shares of our Class A common stock it would have been entitled
to subscribe for in this rights offering in accordance with its basic
subscription privilege and, through the back-stop, MacAndrews & Forbes acquires
all of the shares offered in this rights offering.
NO. OF SHARES
PURCHASED BY MACANDREWS MACANDREWS & FORBES
TOTAL RIGHTS MACANDREWS & FORBES ECONOMIC OWNERSHIP
SCENARIO OFFERED & FORBES CASH RAISED VOTING % PERCENTAGE
---------- -------------- -------------- ------------- ----------- -------------------------
AT MAXIMUM
UNDILUTED DILUTION
----------- -----------
A $50,000,000 % % %
B $50,000,000 % % %
OTHER MATTERS
We are not making this rights offering in any state or other jurisdiction
in which it is unlawful to do so, nor are we distributing or accepting any
offers to purchase any shares of our Class A common stock from subscription
rights holders who are residents of those states or other jurisdictions or who
are otherwise prohibited by federal or state laws or regulations to accept or
exercise the subscription rights. We may delay the commencement of this rights
offering in those states or other jurisdictions, or change the terms of this
rights offering, in whole or in part, in order to comply with the securities
law or other legal requirements of those states or other jurisdictions. We may
decline to make modifications to the terms of this rights offering requested by
those states or other jurisdictions, in which case, if you are a resident in
those states or jurisdictions or if you are otherwise prohibited by federal or
state laws or regulations from accepting or exercising the subscription rights
you will not be eligible to participate in this rights offering.
INVESTMENT AGREEMENT
Pursuant to an Investment Agreement between Revlon, Products Corporation
and MacAndrews Holdings, dated February 5, 2003, among other things, MacAndrews
& Forbes agreed:
o to purchase the full number of shares of our Class A common stock it
would have been entitled to subscribe for in this rights offering in
accordance with its basic subscription privilege;
o to subordinate and not exercise the over-subscription privilege that
it would otherwise be entitled to exercise in this rights offering;
38
o to back-stop this rights offering by purchasing all of the shares of
our Class A common stock that are not otherwise subscribed for by the
other holders of subscription rights under their basic subscription
privileges and over-subscription privileges; and
o to make available to us (i) the $50 million Series C preferred stock
investment, if any, which shares would be redeemed upon consummation
of this rights offering, (ii) the MacAndrews & Forbes $100 million
term loan and (iii) the $40-65 million line of credit.
The Investment Agreement also provides that any shares of our Class A
common stock acquired by MacAndrews & Forbes in transactions contemplated by
the Investment Agreement will be deemed to be registrable securities under the
existing registration rights agreement between us and REV Holdings LLC.
USE OF PROCEEDS
Our gross proceeds from this rights offering will be $50 million. The net
proceeds from this rights offering, combined with the proceeds from the
MacAndrews & Forbes $100 million term loan as well as the $40-65 million line
of credit, will be used to help fund a portion of the costs and expenses of our
plan, which includes increasing advertising and media spending, changing our
newly-configured in-store wall displays in the United States, reducing the
number of our SKUs in the United States, selectively adjusting prices on
certain products in the United States, optimizing product availability to
consumers and further strengthening our new product development process, and
for other general corporate purposes. Alternatively, the net proceeds from this
rights offering will be used to fund the costs of redeeming the $50 million
Series C preferred stock investment, if any.
DILUTION
Purchasers of our Class A common stock in this rights offering will
experience an immediate dilution of the net tangible book value per share of
our Class A common stock. Our net tangible book value as of September 30, 2002
was approximately $(1,624.5) million, or $(31.38) per share of our Class A and
Class B common stock. Net tangible book value per share is equal to our total
net tangible book value, which is our total tangible assets less our total
liabilities, divided by the number of shares of our outstanding Class A and
Class B common stock. Dilution per share equals the difference between the
amount per share paid by purchasers of shares of Class A common stock in this
rights offering and the net tangible book value per share of our Class A and
Class B common stock immediately after this rights offering. Based on a
subscription price of $ per share and after deducting estimated offering
expenses payable by us, and the application of the estimated net proceeds from
this rights offering, our pro forma net tangible book value as of September 30,
2002 would have been approximately $ million, or $ per share. This
represents an immediate increase in pro forma net tangible book value to
existing stockholders of $ per share and an immediate dilution to
purchasers in this rights offering of $ per share. The following table
illustrates this per share dilution:
Subscription price ...................................... $
Net tangible book value per share prior to
this rights offering ................................... $ (31.38)
Increase per share attributable to this
rights offering ......................................... $
Pro forma net tangible book value per share
after this rights offering ............................. $
Dilution in net tangible book value per share
to purchasers .......................................... $
39
CAPITALIZATION
The following table sets forth our capitalization as of September 30,
2002, as adjusted to give pro forma effect to this rights offering and the
MacAndrews & Forbes $100 million term loan as if such transactions had occurred
on September 30, 2002. The table should be read in conjunction with "Selected
Historical Financial Data" and with our consolidated financial statements and
the notes to those financial statements included in the documents incorporated
by reference in this prospectus.
AS OF SEPTEMBER 30, 2002
---------------------------
ACTUAL AS ADJUSTED
------------ ------------
(DOLLARS IN MILLIONS,
EXCEPT SHARE DATA)
Short-term borrowings ........................................................ $ 24.4 $ 24.4
Long-term debt:
Credit agreement ............................................................ 191.3 191.3
Term loan (a) ............................................................... -- 100.0
12% Senior Secured Notes due 2005 ........................................... 352.7 352.7
8 1/8% Senior Notes due 2006 ................................................ 249.7 249.7
9% Senior Notes due 2006 .................................................... 250.0 250.0
8 5/8% Senior Subordinated Notes due 2008 ................................... 649.9 649.9
Advances from Holdings ...................................................... 24.1 24.1
--------- ---------
Total indebtedness ........................................................... 1,742.1 1,842.1
--------- ---------
Stockholders' deficiency:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized,
546 shares of Series A Preferred Stock are issued and outstanding ......... 54.6 54.6
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized,
4,333 shares of Series B Convertible Preferred Stock issued and
outstanding ............................................................... -- --
Class A Common Stock, par value $0.01 per share, 350,000,000 shares
authorized, 20,516,135 shares are issued and outstanding and pro
forma issued and outstanding (b) .......................................... 0.2
Class B Common Stock, par value $0.01 per share, 200,000,000 shares
authorized, 31,250,000 shares are issued and outstanding .................. 0.3 0.3
Capital deficiency .......................................................... (201.3) ( )
Accumulated deficit since June 24, 1992 ..................................... (1,182.5) (1,182.5)
Accumulated other comprehensive loss ........................................ (71.5) (71.5)
--------- ---------
Total stockholders' deficiency ............................................... (1,400.2)
--------- ---------
Total capitalization ......................................................... $ 341.9 $
========= =========
(a) Assumes total commitment under the MacAndrews & Forbes $100 million
term loan is outstanding and excludes funds available under the $40-65
million line of credit.
(b) Assumes shares of common stock are issued pursuant to this rights
offering.
40
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain federal income tax
consequences of this rights offering to holders of our common stock that hold
such stock as a capital asset for federal income tax purposes. This discussion
is based on laws, regulations, rulings and decisions in effect on the date
hereof, all of which are subject to change (possibly with retroactive effect)
and to differing interpretations. This discussion applies only to holders that
are U.S. persons and does not address all aspects of federal income taxation
that may be relevant to holders in light of their particular circumstances or
to holders who may be subject to special tax treatment under the Internal
Revenue Code, including, without limitation, holders of preferred stock or
warrants, holders who are dealers in securities or foreign currency, foreign
persons, insurance companies, tax-exempt organizations, banks, financial
institutions, broker-dealers, holders who hold common stock as part of a hedge,
straddle, conversion or other risk reduction transaction, or who acquired
common stock pursuant to the exercise of compensatory stock options or
otherwise as compensation.
We have not sought, and will not seek, an opinion of counsel or a ruling
from the Internal Revenue Service regarding the federal income tax consequences
of this rights offering or the related share issuance. The following summary
does not address the tax consequences of this rights offering or the related
share issuance under foreign, state, or local tax laws. ACCORDINGLY, EACH
HOLDER OF COMMON STOCK SHOULD CONSULT ITS TAX ADVISOR WITH RESPECT TO THE
PARTICULAR TAX CONSEQUENCES OF THIS RIGHTS OFFERING OR THE RELATED SHARE
ISSUANCE TO SUCH HOLDER.
For U.S. federal income tax purposes, neither the receipt nor the exercise
of the subscription rights will result in taxable income to you. Moreover, you
will not realize a loss if you do not exercise the subscription rights. The
holding period for a share acquired upon exercise of a subscription right
begins with the date of exercise. The basis for determining gain or loss upon
the sale of a share acquired upon the exercise of a subscription right will be
equal to the sum of:
o the subscription price per share;
o any servicing fee charged to you by your broker, bank or trust
company; and
o the basis, if any, in the subscription rights that you exercised.
A gain or loss recognized upon a sale of a share acquired upon the
exercise of a subscription right will be a capital gain or loss assuming the
share is held as a capital asset at the time of sale. This gain or loss will be
a long-term capital gain or loss if the share has been held at the time of sale
for more than one year.
As noted above, your basis in a share issued under the subscription rights
offer includes your basis in the subscription rights underlying that share. If
the aggregate fair market value of the subscription rights at the time they are
distributed is less than 15% of the aggregate fair market value of our common
stock at such time, the basis of the subscription rights issued to you will be
zero unless you elect to allocate a portion of your basis of previously owned
common stock to the subscription rights issued to you in this rights offering.
If the aggregate fair market value of the subscription rights at the time they
are distributed is 15% or more of the aggregate fair market value of our common
stock at such time, or if you elect to allocate a portion of your basis of
previously owned common stock to the subscription rights issued to you in this
offering, then your basis in previously owned common stock will be allocated
between such common stock and the subscription rights based upon the relative
fair market value of such common stock and the subscription rights as of the
date of the distribution of the subscription rights. Thus, if such an
allocation is made and the rights are later exercised, the basis in the common
stock you originally owned will be reduced by an amount equal to the basis
allocated to the subscription rights. An election must be made in a statement
attached to your federal income tax return for the year in which the
subscription rights are distributed. If the subscription rights expire without
exercise, you will realize no loss and no portion of your basis in the common
stock will be allocated to the unexercised subscription rights.
If you sell, exchange or otherwise dispose of subscription rights received
in the rights offering prior to the expiration date, you will recognize capital
gain or loss equal to the difference between (i)
41
the amount of cash and the fair market value of any property received, and (ii)
your tax basis (if any) in the subscription rights disposed of. Any such
capital gain or loss will be long-term capital gain or loss if your holding
period for the subscription rights exceeds one year at the time of disposition.
Your holding period for the subscription rights received in the rights offering
will include your holding period for the common stock with respect to which the
rights were received.
LEGAL MATTERS
The validity of the subscription rights and the shares of Class A common
stock offered pursuant to this rights offering will be passed upon for us by
Robert K. Kretzman, Esq., Senior Vice President, General Counsel and Secretary
of Revlon. Mr. Kretzman holds restricted shares of our Class A common stock and
options to acquire shares of our Class A common stock and has an interest in
shares of our Class A common stock held by our 401(K) plan.
EXPERTS
Our consolidated financial statements and the related financial statement
schedule incorporated in this prospectus by reference from our Annual Report on
Form 10-K for the year ended December 31, 2001 have been audited by KPMG LLP,
independent certified public accountants, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements other
information with the SEC. You may read or copy any document we file at the
public reference room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of this information may also be obtained by mail
from the SEC's Public Reference Branch at 450 Fifth Street, N.W., Washington,
D.C. 20549. In addition, our filings with the SEC are also available to the
public on the SEC's internet Web site at www.sec.gov. Our Class A common stock
is listed on the New York Stock Exchange, and our reports, proxy statements and
other information concerning us may also be read and copied at the offices of
the NYSE.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933 with respect to this rights offering. This prospectus
does not contain all of the information set forth in the registration statement
and its exhibits. Statements made by us in this prospectus as to the contents
of any contract, agreement or other document referred to in this prospectus are
not necessarily complete. For a more complete description of these contracts,
agreements or other documents, you should carefully read the exhibits to the
registration statement and the documents which we reference under the caption
"Incorporation of Certain Documents by Reference."
The registration statement, together with its exhibits and schedules,
which we filed with the SEC, may also be reviewed and copied at the public
reference facilities of the SEC located at the addresses set forth above.
Please call the SEC at 1-800-SEC-0330 for further information on its public
reference facilities.
You should rely only on the information contained, or incorporated by
reference in, this prospectus. We have not authorized anyone to provide
information different from that contained in, or incorporated by reference in,
this prospectus. This prospectus is not an offer to sell or a solicitation of
an offer to buy these securities in any state where the offer or sale is not
permitted. This prospectus is not an offer to sell or a solicitation of an
offer to buy these securities in any circumstance under which the offer or
solicitation is not permitted. The information contained in this prospectus is
correct only as of the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these securities.
42
================================================================================
21,739,130 SHARES
REVLON, INC.
CLASS A COMMON STOCK
---------------------
PROSPECTUS
---------------------
, 2003
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission Registration Fee .......... $ 828
Printing Expenses ............................................ 35,000
Accounting Fees and Expenses ................................. 75,000
Legal Fees and Expenses ...................................... 540,000
Miscellaneous (including financial advisor expenses) ......... 1,537,000
----------
Total ..................................................... $2,187,828
==========
All amounts shown are estimates, except the Securities and Exchange Commission
registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the General Corporation Law of the State of Delaware
allows a corporation to eliminate or limit the personal liability of directors
to a corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except where the director breached his duty of
loyalty, failed to act in good faith, engaged in intentional misconduct or
knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase or redemption in violation of Delaware corporate law or
obtained an improper personal benefit.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. The indemnity may
include expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding, provided that such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful. A Delaware corporation may indemnify directors, officers,
employees and other agents of such corporation in an action by or in the right
of a corporation under the same conditions against expenses (including
attorneys' fees) actually and reasonably incurred by the person in connection
with the defense and settlement of such action or suit, except that no
indemnification is permitted without judicial approval if the person to be
indemnified has been adjudged to be liable to the corporation. Where a present
or former director or officer of the corporation is successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to above or
in defense of any claim, issue or matter therein, the corporation must
indemnify such person against the expenses (including attorneys' fees) which he
or she actually and reasonably incurred in connection therewith.
Article X of the By-laws of Revlon, Inc. (the "Company") provides for
indemnification of the officers and directors of the Company to the fullest
extent permitted by applicable law.
Section 8 of Article X of the By-laws provides that the Company may
purchase and maintain insurance on behalf of its directors and officers. The
indemnification and advancement of expenses shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 11 of Article X of the By-laws provides that except for
proceedings to enforce rights to indemnification, the Company shall not be
obligated to indemnify any director or officer in connection
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with a proceeding (or part thereof) initiated by such person unless such
proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Company.
Article Fifth (4) of the Company's Amended and Restated Certificate of
Incorporation provides that no director shall be personally liable to the
Company or any of its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or that involve intentional misconduct or a knowing violation
of law, (iii) pursuant to Section 174 of the General Corporation Law of the
State of Delaware or (iv) for any transaction from which the director derived
an improper personal benefit. Any repeal or modification of this Article by the
stockholders of the Company shall not adversely affect any right or protection
of a director of the Company existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to such repeal
or modification.
ITEM 16. EXHIBITS
The following is a list of all exhibits filed as part of this registration
statement on Form S-3, including those incorporated in this registration
statement by reference.
LOCATION OR INCORPORATION
EXHIBIT NO. DESCRIPTION BY REFERENCE TO
------------- ----------------------------------------- --------------------------
2. PLAN OF ACQUISITION ETC.
2.1 Investment Agreement, dated as of Incorporated by reference to
February 5, 2003, among Revlon, Inc., Exhibit 2.1 to the Current
Revlon Consumer Products Corporation Report on Form 8-K of Revlon
and MacAndrews & Forbes Holdings Inc. Consumer Products Corporation,
filed with the Commission on
February 5, 2003
4. INSTRUMENTS DEFINING THE
RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES.
4.1 Specimen Class A Common Stock Included herein
Certificate
4.2 Form of Subscription Rights Certificate Included herein
5. OPINION RE LEGALITY.
5.1 Form of opinion of Robert K. Kretzman, Included herein
Esq.
23. CONSENTS.
23.1 Consent of Robert K. Kretzman, Esq. Included in Exhibit 5.1
23.2 Consent of KPMG LLP, Independent Included herein
Auditors
24. POWERS OF ATTORNEY.
24.1 Power of Attorney executed by Ronald Included herein
O. Perelman
24.2 Power of Attorney executed by Jack L. Included herein
Stahl
24.3 Power of Attorney executed by Howard Included herein
Gittis
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LOCATION OR INCORPORATION
EXHIBIT NO. DESCRIPTION BY REFERENCE TO
------------- ------------------------------------------- --------------------------
24.4 Power of Attorney executed by Douglas Included herein
H. Greeff
24.5 Power of Attorney executed by Donald Included herein
G. Drapkin
24.6 Power of Attorney executed by Meyer Included herein
Feldberg
24.7 Power of Attorney executed by Vernon Included herein
E. Jordan, Jr.
24.8 Power of Attorney executed by Edward Included herein
J. Landau
24.9 Power of Attorney executed by Linda Included herein
Gosden Robinson
24.10 Power of Attorney executed by Terry Included herein
Semel
24.11 Power of Attorney executed by Martha Included herein
Stewart
99. ADDITIONAL EXHIBITS.
99.1 Form of Instructions for Use of Revlon, Included herein
Inc. Subscription Rights Certificates
99.2 Form of Notice of Guaranteed Delivery Included herein
for Subscription Rights
99.3 Form of Letter to Stockholders Who Are Included herein
Record Holders
99.4 Form of Letter to Stockholders Who Are Included herein
Beneficial Holders
99.5 Form of Letter to Clients of Stockholders Included herein
Who Are Beneficial Holders
99.6 Form of Nominee Holder Certification Included herein
Form
99.7 Form of Beneficial Owner Election Form Included herein
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the
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event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel that matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered in any such amendment, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering of such
securities.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on the 5th day of
February, 2003.
REVLON, INC.
/s/ Robert K. Kretzman
By: ---------------------------------
Name: Robert K. Kretzman
Title: Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
* Chairman of the Board and February 5, 2003
------------------------- Director
Ronald O. Perelman
/s/ Jack L. Stahl President, Chief Executive Officer February 5, 2003
------------------------- and Director (Principal Executive
Jack L. Stahl Officer)
/s/ Douglas H. Greeff Executive Vice President and February 5, 2003
-------------------------
Douglas H. Greeff Chief Financial Officer (Principal
Financial Officer)
* Director February 5, 2003
-------------------------
Howard Gittis
* Director February 5, 2003
-------------------------
Donald G. Drapkin
* Director February 5, 2003
-------------------------
Meyer Feldberg
* Director February 5, 2003
-------------------------
Vernon E. Jordan, Jr.
* Director February 5, 2003
-------------------------
Edward J. Landau
* Director February 5, 2003
-------------------------
Linda Godsen Robinson
* Director February 5, 2003
-------------------------
Terry Semel
* Director February 5, 2003
-------------------------
Martha Stewart
/s/ Laurence Winoker Senior Vice President, Corporate February 5, 2003
------------------------- Controller and Treasurer (Principal
Laurence Winoker Accounting Officer)
* Robert K. Kretzman, by signing his name hereto, does hereby sign this
registration statement on behalf of the directors and officers of the
registrant above whose typed names asterisks appear, pursuant to powers
of attorney duly executed by such directors and officers and filed with
the Securities and Exchange Commission.
By:/s/ Robert K. Kretzman
-------------------------
Name: Robert K. Kretzman
Title: Attorney-in-fact
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EXHIBIT INDEX
LOCATION OR INCORPORATION
EXHIBIT NO. DESCRIPTION BY REFERENCE TO
------------- ----------------------------------------- --------------------------
2. PLAN OF ACQUISITION ETC.
2.1 Investment Agreement, dated as of Incorporated by reference to
February 5, 2003, among Revlon, Inc., Exhibit 2.1 to the Current
Revlon Consumer Products Corporation Report on Form 8-K of Revlon
and MacAndrews & Forbes Holdings Inc. Consumer Products Corporation,
filed with the Commission on
February 5, 2003
4. INSTRUMENTS DEFINING THE
RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES.
4.1 Specimen Class A Common Stock Included herein
Certificate
4.2 Form of Subscription Rights Certificate Included herein
5. OPINION RE LEGALITY.
5.1 Form of opinion of Robert K. Kretzman, Included herein
Esq.
23. CONSENTS.
23.1 Consent of Robert K. Kretzman, Esq. Included in Exhibit 5.1
23.2 Consent of KPMG LLP, Independent Included herein
Auditors
24. POWERS OF ATTORNEY.
24.1 Power of Attorney executed by Ronald Included herein
O. Perelman
24.2 Power of Attorney executed by Jack L. Included herein
Stahl
24.3 Power of Attorney executed by Howard Included herein
Gittis
24.4 Power of Attorney executed by Douglas Included herein
H. Greeff
24.5 Power of Attorney executed by Donald Included herein
G. Drapkin
24.6 Power of Attorney executed by Meyer Included herein
Feldberg
24.7 Power of Attorney executed by Vernon Included herein
E. Jordan, Jr.
24.8 Power of Attorney executed by Edward Included herein
J. Landau
24.9 Power of Attorney executed by Linda Included herein
Gosden Robinson
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LOCATION OR INCORPORATION
EXHIBIT NO. DESCRIPTION BY REFERENCE TO
------------- ------------------------------------------- --------------------------
24.10 Power of Attorney executed by Terry Included herein
Semel
24.11 Power of Attorney executed by Martha Included herein
Stewart
99. ADDITIONAL EXHIBITS.
99.1 Form of Instructions for Use of Revlon, Included herein
Inc. Subscription Rights Certificates
99.2 Form of Notice of Guaranteed Delivery Included herein
for Subscription Rights
99.3 Form of Letter to Stockholders Who Are Included herein
Record Holders
99.4 Form of Letter to Stockholders Who Are Included herein
Beneficial Holders
99.5 Form of Letter to Clients of Stockholders Included herein
Who Are Beneficial Holders
99.6 Form of Nominee Holder Certification Included herein
Form
99.7 Form of Beneficial Owner Election Form Included herein
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