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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2017
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 001-35964
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Delaware
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13-3823358
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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350 Fifth Avenue, New York, NY
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10118
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(Address of principal executive offices)
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(Zip Code)
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Page
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Three Months Ended
March 31, |
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Nine Months Ended
March 31, |
||||||||||||
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2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net revenues
|
$
|
2,032.1
|
|
|
$
|
950.7
|
|
|
$
|
5,409.0
|
|
|
$
|
3,273.5
|
|
Cost of sales
|
816.1
|
|
|
369.0
|
|
|
2,153.2
|
|
|
1,280.4
|
|
||||
Gross profit
|
1,216.0
|
|
|
581.7
|
|
|
3,255.8
|
|
|
1,993.1
|
|
||||
Selling, general and administrative expenses
|
1,092.4
|
|
|
494.2
|
|
|
2,741.5
|
|
|
1,493.9
|
|
||||
Amortization expense
|
102.6
|
|
|
20.9
|
|
|
219.0
|
|
|
59.0
|
|
||||
Restructuring costs
|
155.8
|
|
|
6.6
|
|
|
179.0
|
|
|
79.3
|
|
||||
Acquisition-related costs
|
57.7
|
|
|
37.0
|
|
|
275.1
|
|
|
98.3
|
|
||||
Asset impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
||||
Operating (loss) income
|
(192.5
|
)
|
|
23.0
|
|
|
(158.8
|
)
|
|
257.1
|
|
||||
Interest expense, net
|
60.8
|
|
|
25.1
|
|
|
159.1
|
|
|
55.7
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
||||
Other (income) expense, net
|
(0.5
|
)
|
|
6.6
|
|
|
0.2
|
|
|
30.4
|
|
||||
(Loss) income before income taxes
|
(252.8
|
)
|
|
(8.7
|
)
|
|
(318.1
|
)
|
|
167.9
|
|
||||
(Benefit) provision for income taxes
|
(93.4
|
)
|
|
11.6
|
|
|
(220.6
|
)
|
|
(42.5
|
)
|
||||
Net (loss) income
|
(159.4
|
)
|
|
(20.3
|
)
|
|
(97.5
|
)
|
|
210.4
|
|
||||
Net income attributable to noncontrolling interests
|
3.5
|
|
|
2.4
|
|
|
14.2
|
|
|
12.1
|
|
||||
Net income attributable to redeemable noncontrolling interests
|
1.3
|
|
|
4.1
|
|
|
5.7
|
|
|
10.4
|
|
||||
Net (loss) income attributable to Coty Inc.
|
$
|
(164.2
|
)
|
|
$
|
(26.8
|
)
|
|
$
|
(117.4
|
)
|
|
$
|
187.9
|
|
Net (loss) income attributable to Coty Inc. per common share:
|
|
|
|
|
|
|
|
|
|
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Basic
|
$
|
(0.22
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.54
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|
Diluted
|
(0.22
|
)
|
|
(0.08
|
)
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|
(0.19
|
)
|
|
0.53
|
|
||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
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Basic
|
747.3
|
|
|
337.9
|
|
|
607.9
|
|
|
347.8
|
|
||||
Diluted
|
747.3
|
|
|
337.9
|
|
|
607.9
|
|
|
356.9
|
|
||||
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|
|
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|
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||||||||
Cash dividend declared per common share
|
$
|
0.125
|
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|
$
|
—
|
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$
|
0.525
|
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|
$
|
0.250
|
|
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Three Months Ended
March 31, |
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Nine Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net (loss) income
|
$
|
(159.4
|
)
|
|
$
|
(20.3
|
)
|
|
$
|
(97.5
|
)
|
|
$
|
210.4
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
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Foreign currency translation adjustment
|
87.1
|
|
|
57.4
|
|
|
(9.2
|
)
|
|
38.6
|
|
||||
Net unrealized derivative gains on cash flow hedges, net of taxes of $(1.8) and $1.0, and $(10.5) and $0.3 during the three and nine months ended, respectively
|
3.0
|
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|
(21.9
|
)
|
|
44.9
|
|
|
(14.6
|
)
|
||||
Pension and other post-employment benefits (losses) adjustment, net of tax of nil and nil, and $(5.8) and nil during the three and nine months ended, respectively
|
—
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—
|
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|
10.1
|
|
|
0.2
|
|
||||
Total other comprehensive income, net of tax
|
90.1
|
|
|
35.5
|
|
|
45.8
|
|
|
24.2
|
|
||||
Comprehensive (loss) income
|
(69.3
|
)
|
|
15.2
|
|
|
(51.7
|
)
|
|
234.6
|
|
||||
Comprehensive income attributable to noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
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|
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Net income
|
3.5
|
|
|
2.4
|
|
|
14.2
|
|
|
12.1
|
|
||||
Foreign currency translation adjustment
|
0.3
|
|
|
1.2
|
|
|
(0.2
|
)
|
|
0.9
|
|
||||
Total comprehensive income attributable to noncontrolling interests
|
3.8
|
|
|
3.6
|
|
|
14.0
|
|
|
13.0
|
|
||||
Comprehensive income attributable to redeemable noncontrolling interests:
|
|
||||||||||||||
Net income
|
1.3
|
|
|
4.1
|
|
|
5.7
|
|
|
10.4
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Total comprehensive income attributable to redeemable noncontrolling interests
|
1.3
|
|
|
4.3
|
|
|
5.7
|
|
|
10.6
|
|
||||
Comprehensive (loss) income attributable to Coty Inc.
|
$
|
(74.4
|
)
|
|
$
|
7.3
|
|
|
$
|
(71.4
|
)
|
|
$
|
211.0
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
767.0
|
|
|
$
|
372.4
|
|
Restricted cash
|
25.0
|
|
|
—
|
|
||
Trade receivables—less allowances of $81.7 and $35.2, respectively
|
1,380.9
|
|
|
682.9
|
|
||
Inventories
|
1,034.3
|
|
|
565.8
|
|
||
Prepaid expenses and other current assets
|
380.4
|
|
|
206.8
|
|
||
Deferred income taxes
|
158.6
|
|
|
110.5
|
|
||
Total current assets
|
3,746.2
|
|
|
1,938.4
|
|
||
Property and equipment, net
|
1,555.8
|
|
|
638.6
|
|
||
Goodwill
|
8,111.8
|
|
|
2,212.7
|
|
||
Other intangible assets, net
|
8,968.8
|
|
|
2,050.1
|
|
||
Deferred income taxes
|
100.9
|
|
|
15.7
|
|
||
Other noncurrent assets
|
289.8
|
|
|
180.1
|
|
||
TOTAL ASSETS
|
$
|
22,773.3
|
|
|
$
|
7,035.6
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,456.5
|
|
|
$
|
921.4
|
|
Accrued expenses and other current liabilities
|
1,558.7
|
|
|
748.4
|
|
||
Short-term debt and current portion of long-term debt
|
193.0
|
|
|
161.8
|
|
||
Income and other taxes payable
|
9.7
|
|
|
18.7
|
|
||
Deferred income taxes
|
39.8
|
|
|
4.9
|
|
||
Total current liabilities
|
3,257.7
|
|
|
1,855.2
|
|
||
Long-term debt, net
|
6,909.3
|
|
|
3,936.4
|
|
||
Pension and other post-employment benefits
|
603.6
|
|
|
230.6
|
|
||
Deferred income taxes
|
1,480.2
|
|
|
339.2
|
|
||
Other noncurrent liabilities
|
385.5
|
|
|
233.8
|
|
||
Total liabilities
|
12,636.3
|
|
|
6,595.2
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 22)
|
|
|
|
|
|
||
REDEEMABLE NONCONTROLLING INTERESTS
|
506.4
|
|
|
73.3
|
|
||
EQUITY:
|
|
|
|
|
|
||
Preferred Stock, $0.01 par value; 20.0 shares authorized, 4.2 and 1.7 issued and outstanding at March 31, 2017 and June 30, 2016, respectively
|
—
|
|
|
—
|
|
||
Class A Common Stock, $0.01 par value; 1,000.0 and 800.0 shares authorized, 812.6 and 138.7 issued and 747.6 and 75.1 outstanding, at March 31, 2017 and June 30, 2016, respectively
|
8.1
|
|
|
1.4
|
|
||
Class B Common Stock, $0.01 par value; 0.0 and 262.0 shares authorized, 0.0 and 262.0 issued and outstanding at March 31, 2017 and June 30, 2016, respectively
|
—
|
|
|
2.6
|
|
||
Additional paid-in capital
|
11,391.5
|
|
|
2,038.4
|
|
||
Accumulated deficit
|
(154.4
|
)
|
|
(37.0
|
)
|
||
Accumulated other comprehensive loss
|
(193.7
|
)
|
|
(239.7
|
)
|
||
Treasury stock—at cost, shares: 65.0 and 63.6 at March 31, 2017 and June 30, 2016, respectively
|
(1,441.8
|
)
|
|
(1,405.5
|
)
|
||
Total Coty Inc. stockholders’ equity
|
9,609.7
|
|
|
360.2
|
|
||
Noncontrolling interests
|
20.9
|
|
|
6.9
|
|
||
Total equity
|
9,630.6
|
|
|
367.1
|
|
||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
|
$
|
22,773.3
|
|
|
$
|
7,035.6
|
|
|
Preferred Stock
|
|
Class A
Common Stock |
|
Class B
Common Stock |
|
Additional
Paid-in |
|
(Accumulated
|
|
Accumulated
Other Comprehensive |
|
Treasury Stock
|
|
Total Coty Inc.
Stockholders’ |
|
Noncontrolling
|
|
Total
|
|
Redeemable
Noncontrolling |
||||||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit)
|
|
Loss
|
|
Shares
|
|
Amount
|
|
Equity
|
|
Interests
|
|
Equity
|
|
Interests
|
||||||||||||||||||||||||||
BALANCE—July 1, 2016
|
1.7
|
|
|
$
|
—
|
|
|
138.7
|
|
|
$
|
1.4
|
|
|
262.0
|
|
|
$
|
2.6
|
|
|
$
|
2,038.4
|
|
|
$
|
(37.0
|
)
|
|
$
|
(239.7
|
)
|
|
63.6
|
|
|
$
|
(1,405.5
|
)
|
|
$
|
360.2
|
|
|
$
|
6.9
|
|
|
$
|
367.1
|
|
|
$
|
73.3
|
|
Issuance of Class A Common Stock for business combination
|
|
|
|
|
409.7
|
|
|
4.1
|
|
|
|
|
|
|
9,624.5
|
|
|
|
|
|
|
|
|
|
|
9,628.6
|
|
|
|
|
9,628.6
|
|
|
|
|||||||||||||||||||||
Issuance of Preferred Stock
|
2.5
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Conversion of Class B to Class A Common Stock
|
|
|
|
|
|
|
262.0
|
|
|
2.6
|
|
|
(262.0
|
)
|
|
(2.6
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|||||||||||||||||
Purchase of Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
(36.3
|
)
|
|
(36.3
|
)
|
|
|
|
(36.3
|
)
|
|
|
||||||||||||||||||||||
Exercise of employee stock options and restricted stock units and related tax benefits
|
|
|
|
|
2.2
|
|
|
—
|
|
|
|
|
|
|
|
19.5
|
|
|
|
|
|
|
|
|
|
|
19.5
|
|
|
|
|
19.5
|
|
|
|
||||||||||||||||||||
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
15.2
|
|
|
|
|
|
|
|
|
|
|
15.2
|
|
|
|
|
15.2
|
|
|
|
|||||||||||||||||||||||
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
(281.2
|
)
|
|
|
|
|
|
|
|
|
|
(281.2
|
)
|
|
|
|
(281.2
|
)
|
|
|
|||||||||||||||||||||||
Net (loss) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(117.4
|
)
|
|
|
|
|
|
|
|
(117.4
|
)
|
|
14.2
|
|
|
(103.2
|
)
|
|
5.7
|
|
|||||||||||||||||||||
Other comprehensive (loss) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46.0
|
|
|
|
|
|
|
46.0
|
|
|
(0.2
|
)
|
|
45.8
|
|
|
—
|
|
|||||||||||||||||||||
Distribution to noncontrolling interests, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.5
|
)
|
|||||||||||||||||||||||||
Redeemable noncontrolling interest due to business combination (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
410.9
|
|
|||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to redemption value
|
|
|
|
|
|
|
|
|
|
|
|
|
(24.9
|
)
|
|
|
|
|
|
|
|
|
|
(24.9
|
)
|
|
|
|
(24.9
|
)
|
|
24.9
|
|
||||||||||||||||||||||
Adjustment to repurchase of redeemable noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.9
|
)
|
|||||||||||||||||||||||||
BALANCE—March 31, 2017
|
4.2
|
|
|
$
|
—
|
|
|
812.6
|
|
|
$
|
8.1
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
11,391.5
|
|
|
$
|
(154.4
|
)
|
|
$
|
(193.7
|
)
|
|
65.0
|
|
|
$
|
(1,441.8
|
)
|
|
$
|
9,609.7
|
|
|
$
|
20.9
|
|
|
$
|
9,630.6
|
|
|
$
|
506.4
|
|
|
Preferred Stock
|
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional
Paid-in
|
|
(Accumulated
|
|
Accumulated
Other
Comprehensive
|
|
Treasury Stock
|
|
Total Coty Inc.
Stockholders’
|
|
Noncontrolling
|
|
Total
|
|
Redeemable
Noncontrolling
|
|||||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit)
|
|
Loss
|
|
Shares
|
|
Amount
|
|
Equity
|
|
Interests
|
|
Equity
|
|
Interests
|
|||||||||||||||||||||||||
BALANCE—July 1, 2015
|
1.9
|
|
|
—
|
|
|
134.0
|
|
|
$
|
1.3
|
|
|
262.0
|
|
|
$
|
2.6
|
|
|
$
|
2,044.4
|
|
|
$
|
(193.9
|
)
|
|
$
|
(274.0
|
)
|
|
35.2
|
|
|
$
|
(610.6
|
)
|
|
$
|
969.8
|
|
|
$
|
14.9
|
|
|
$
|
984.7
|
|
|
$
|
86.3
|
|
Cancellation of Preferred Stock
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
(0.1
|
)
|
|
|
|||||||||||||||||||||
Purchase of Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25.9
|
|
|
(727.9
|
)
|
|
(727.9
|
)
|
|
|
|
(727.9
|
)
|
|
|
|||||||||||||||||||||
Reclassification of Class A Common Stock from liability to APIC
|
|
|
|
|
|
|
|
|
|
|
|
|
13.8
|
|
|
|
|
|
|
|
|
|
|
13.8
|
|
|
|
|
13.8
|
|
|
|
||||||||||||||||||||||
Exercise of employee stock options and restricted stock units and related tax benefits
|
|
|
|
|
3.9
|
|
|
0.1
|
|
|
|
|
|
|
|
|
36.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36.8
|
|
|
|
|
|
36.8
|
|
|
|
|
||||||||||||
Series A Preferred share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
1.1
|
|
|
|
|
1.1
|
|
|
|
||||||||||||||||||||||
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.3
|
|
|
|
|
|
17.3
|
|
|
|
|
||||||||||||
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(89.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(89.7
|
)
|
|
|
|
|
(89.7
|
)
|
|
|
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187.9
|
|
|
|
|
|
|
|
|
|
|
|
187.9
|
|
|
12.1
|
|
|
200.0
|
|
|
10.4
|
|
||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
|
|
|
|
|
|
|
23.1
|
|
|
0.9
|
|
|
24.0
|
|
|
0.2
|
|
||||||||||||
Distribution to noncontrolling interests, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16.3
|
)
|
|
(16.3
|
)
|
|
(6.6
|
)
|
||||||||||||
Adjustment of redeemable noncontrolling interests to redemption value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.3
|
|
|
|
|
|
11.3
|
|
|
(11.3
|
)
|
||||||||||||
BALANCE—March 31, 2016
|
1.7
|
|
|
—
|
|
|
137.9
|
|
|
$
|
1.4
|
|
|
262.0
|
|
|
$
|
2.6
|
|
|
$
|
2,034.8
|
|
|
$
|
(6.0
|
)
|
|
$
|
(250.9
|
)
|
|
61.1
|
|
|
$
|
(1,338.5
|
)
|
|
$
|
443.4
|
|
|
$
|
11.6
|
|
|
$
|
455.0
|
|
|
$
|
79.0
|
|
Cash paid during the period for interest
|
$
|
132.9
|
|
|
$
|
57.8
|
|
Cash paid during the period for income taxes, net of refunds received
|
63.6
|
|
|
89.0
|
|
||
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Accrued capital expenditure additions
|
$
|
70.8
|
|
|
$
|
39.5
|
|
Non-cash Common Stock issued for business combination
|
9,628.6
|
|
|
—
|
|
||
Non-cash debt assumed for business combination
|
1,943.0
|
|
|
—
|
|
||
Non-cash capital contribution associated with special share purchase transaction
|
—
|
|
|
13.8
|
|
||
Non-cash redeemable noncontrolling interest for business combinations
|
410.9
|
|
|
—
|
|
|
Estimated
fair value as previously reported (a) |
|
Measurement period adjustments
(b)
|
|
Estimated fair value adjusted
|
|
Estimated
useful life (in years) |
||||||
Cash and cash equivalents
|
$
|
387.6
|
|
|
$
|
—
|
|
|
$
|
387.6
|
|
|
|
Inventories
|
506.7
|
|
|
(38.3
|
)
|
|
468.4
|
|
|
|
|||
Property, plant and equipment
|
770.4
|
|
|
(8.0
|
)
|
|
762.4
|
|
|
3 - 40
|
|||
Goodwill
|
5,081.8
|
|
|
60.2
|
|
|
5,142.0
|
|
|
Indefinite
|
|||
Trademarks — indefinite
|
1,890.0
|
|
|
—
|
|
|
1,890.0
|
|
|
Indefinite
|
|||
Trademarks — finite
|
879.1
|
|
|
5.6
|
|
|
884.7
|
|
|
10 - 30
|
|||
Customer relationships
|
1,795.8
|
|
|
11.3
|
|
|
1,807.1
|
|
|
1.5 - 17
|
|||
License agreements
|
1,836.0
|
|
|
1.0
|
|
|
1,837.0
|
|
|
10 - 30
|
|||
Product formulations
|
183.8
|
|
|
—
|
|
|
183.8
|
|
|
5 - 29
|
|||
Other net working capital
|
65.8
|
|
|
(27.6
|
)
|
|
38.2
|
|
|
|
|||
Net other assets
|
54.9
|
|
|
(5.3
|
)
|
|
49.6
|
|
|
|
|||
Unfavorable contract liabilities
|
(130.0
|
)
|
|
—
|
|
|
(130.0
|
)
|
|
|
|||
Pension liabilities
|
(394.9
|
)
|
|
(9.8
|
)
|
|
(404.7
|
)
|
|
|
|||
Tax indemnification liability
|
(55.0
|
)
|
|
—
|
|
|
(55.0
|
)
|
|
|
|||
Deferred tax liability, net
|
(1,301.6
|
)
|
|
10.9
|
|
|
(1,290.7
|
)
|
|
|
|||
Total purchase price
|
$
|
11,570.4
|
|
|
$
|
—
|
|
|
$
|
11,570.4
|
|
|
|
|
|
|
Estimated
fair value as previously reported (a) |
|
Measurement period adjustments
(b)
|
|
Estimated fair value adjusted
|
|
Estimated
useful life (in years) |
||||||
Cash and cash equivalents
|
$
|
7.1
|
|
|
$
|
—
|
|
|
$
|
7.1
|
|
|
|
Inventories
|
79.8
|
|
|
—
|
|
|
79.8
|
|
|
|
|||
Property, plant and equipment
|
11.3
|
|
|
—
|
|
|
11.3
|
|
|
3 - 10
|
|||
Goodwill
|
175.5
|
|
|
(7.4
|
)
|
|
168.1
|
|
|
Indefinite
|
|||
Indefinite-lived other intangibles assets
|
163.8
|
|
|
—
|
|
|
163.8
|
|
|
Indefinite
|
|||
Customer relationships
|
44.2
|
|
|
(7.6
|
)
|
|
36.6
|
|
|
11 - 24
|
|||
Technology
|
138.6
|
|
|
8.0
|
|
|
146.6
|
|
|
11 - 16
|
|||
Other net working capital
|
(7.4
|
)
|
|
7.1
|
|
|
(0.3
|
)
|
|
|
|||
Net other assets
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
|
|||
Deferred tax liability, net
|
(75.3
|
)
|
|
(0.1
|
)
|
|
(75.4
|
)
|
|
|
|||
Total purchase price
|
$
|
538.5
|
|
|
$
|
—
|
|
|
$
|
538.5
|
|
|
|
|
|
|
Estimated
fair value |
|
Estimated
useful life (in years) |
||
Cash and cash equivalents
|
$
|
17.5
|
|
|
|
Inventories
|
106.5
|
|
|
|
|
Property, plant and equipment
|
64.1
|
|
|
3 - 7
|
|
Goodwill
|
559.5
|
|
|
Indefinite
|
|
Trademark — finite
|
121.0
|
|
|
20
|
|
Product formulations
|
0.6
|
|
|
5
|
|
Customer relationships
|
184.0
|
|
|
9 - 15
|
|
Other net working capital
|
(24.8
|
)
|
|
|
|
Short-term and long-term debt
|
(1.2
|
)
|
|
|
|
Total equity value
|
1,027.2
|
|
|
|
|
|
|
|
|
||
Redeemable noncontrolling interest
|
410.9
|
|
|
|
|
Net cash and debt acquired
|
16.3
|
|
|
|
|
Total purchase price
|
$
|
600.0
|
|
|
|
|
Estimated
fair value as previously reported (a) |
|
Measurement period adjustments
(b)
|
|
Estimated
fair value as adjusted |
|
Estimated
useful life (in years) |
||||||
Cash and cash equivalents
|
$
|
11.1
|
|
|
$
|
—
|
|
|
$
|
11.1
|
|
|
|
Inventories
|
45.6
|
|
|
—
|
|
|
45.6
|
|
|
|
|||
Property, plant and equipment
|
95.4
|
|
|
—
|
|
|
95.4
|
|
|
2 - 40
|
|||
Goodwill
|
553.7
|
|
|
(16.6
|
)
|
|
537.1
|
|
|
Indefinite
|
|||
Trademarks — indefinite
|
147.1
|
|
|
—
|
|
|
147.1
|
|
|
Indefinite
|
|||
Trademarks — finite
|
10.3
|
|
|
—
|
|
|
10.3
|
|
|
5 - 15
|
|||
Customer relationships
|
44.6
|
|
|
—
|
|
|
44.6
|
|
|
13 - 28
|
|||
Product formulations
|
12.8
|
|
|
—
|
|
|
12.8
|
|
|
3
|
|||
Other net working capital
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
|
|||
Net other assets
|
2.1
|
|
|
(0.7
|
)
|
|
1.4
|
|
|
|
|||
Deferred tax liability, net
|
(21.5
|
)
|
|
17.3
|
|
|
(4.2
|
)
|
|
|
|||
Total purchase price
|
$
|
901.9
|
|
|
$
|
—
|
|
|
$
|
901.9
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
2017
(a)
|
|
2016
(b)
|
|
2017
(a)
|
|
2016
(b)
|
||||||||
Pro forma Net revenues
|
$
|
2,063.7
|
|
|
$
|
2,070.4
|
|
|
$
|
6,647.9
|
|
|
$
|
7,049.4
|
|
Pro forma Net income (loss)
|
(77.5
|
)
|
|
(28.6
|
)
|
|
68.9
|
|
|
126.0
|
|
||||
Pro forma Net income (loss) attributable to Coty Inc.
|
(89.7
|
)
|
|
(47.2
|
)
|
|
37.4
|
|
|
102.6
|
|
||||
Pro forma Net income (loss) attributable to Coty Inc. per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.12
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.05
|
|
|
$
|
0.14
|
|
Diluted
|
$
|
(0.12
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.05
|
|
|
$
|
0.13
|
|
|
|
(b)
|
For the
three months ended March 31, 2016
, the pro forma information excluded
$64.8
of non-recurring acquisition-related costs and
$4.9
of amortization of inventory step up. For the
nine months ended March 31, 2016
, the pro forma information included
$54.7
of non-recurring acquisition-related costs and
$104.1
of amortization of inventory step up.
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
SEGMENT DATA
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
Luxury
|
$
|
634.6
|
|
|
$
|
405.9
|
|
|
$
|
1,918.6
|
|
|
$
|
1,433.4
|
|
Consumer Beauty
|
988.6
|
|
|
488.5
|
|
|
2,562.2
|
|
|
1,653.7
|
|
||||
Professional Beauty
|
408.9
|
|
|
56.3
|
|
|
928.2
|
|
|
186.4
|
|
||||
Total
|
$
|
2,032.1
|
|
|
$
|
950.7
|
|
|
$
|
5,409.0
|
|
|
$
|
3,273.5
|
|
Operating (loss) income:
|
|
|
|
|
|
|
|
||||||||
Luxury
|
$
|
60.9
|
|
|
$
|
29.7
|
|
|
$
|
203.6
|
|
|
$
|
206.1
|
|
Consumer Beauty
|
63.0
|
|
|
39.2
|
|
|
178.6
|
|
|
210.2
|
|
||||
Professional Beauty
|
(18.2
|
)
|
|
12.8
|
|
|
81.5
|
|
|
53.4
|
|
||||
Corporate
|
(298.2
|
)
|
|
(58.7
|
)
|
|
(622.5
|
)
|
|
(212.6
|
)
|
||||
Total
|
$
|
(192.5
|
)
|
|
$
|
23.0
|
|
|
$
|
(158.8
|
)
|
|
$
|
257.1
|
|
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Operating (loss) income
|
$
|
(192.5
|
)
|
|
$
|
23.0
|
|
|
$
|
(158.8
|
)
|
|
$
|
257.1
|
|
Interest expense, net
|
60.8
|
|
|
25.1
|
|
|
159.1
|
|
|
55.7
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
||||
Other (income) expense, net
|
(0.5
|
)
|
|
6.6
|
|
|
0.2
|
|
|
30.4
|
|
||||
(Loss) income before income taxes
|
$
|
(252.8
|
)
|
|
$
|
(8.7
|
)
|
|
$
|
(318.1
|
)
|
|
$
|
167.9
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
GEOGRAPHIC DATA
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
685.1
|
|
|
$
|
311.1
|
|
|
$
|
1,727.4
|
|
|
$
|
1,072.8
|
|
Europe
|
848.4
|
|
|
402.0
|
|
|
2,429.4
|
|
|
1,494.8
|
|
||||
ALMEA
|
498.6
|
|
|
237.6
|
|
|
1,252.2
|
|
|
705.9
|
|
||||
Total
|
$
|
2,032.1
|
|
|
$
|
950.7
|
|
|
$
|
5,409.0
|
|
|
$
|
3,273.5
|
|
Long-lived assets:
|
March 31,
2017 |
|
June 30,
2016 |
||||
United States
(a)
|
$
|
13,472.8
|
|
|
$
|
2,688.7
|
|
Switzerland
|
1,917.2
|
|
|
508.0
|
|
||
All other
|
3,246.4
|
|
|
1,713.6
|
|
||
Total
|
$
|
18,636.4
|
|
|
$
|
4,910.3
|
|
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||
PRODUCT CATEGORY
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
|
|
|
||||
Fragrance
|
32.1
|
%
|
|
43.8
|
%
|
|
38.5
|
%
|
|
48.6
|
%
|
Color Cosmetics
|
31.4
|
|
|
39.6
|
|
|
28.9
|
|
|
34.9
|
|
Skin & Body Care
|
10.0
|
|
|
16.6
|
|
|
12.4
|
|
|
16.5
|
|
Hair Care
|
26.5
|
|
|
—
|
|
|
20.2
|
|
|
—
|
|
Total Coty Inc.
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Global Integration Activities
|
$
|
156.5
|
|
|
$
|
—
|
|
|
$
|
170.1
|
|
|
$
|
—
|
|
Acquisition Integration Program
|
(0.7
|
)
|
|
1.4
|
|
|
3.9
|
|
|
47.0
|
|
||||
Organizational Redesign
|
(0.1
|
)
|
|
4.6
|
|
|
4.4
|
|
|
28.0
|
|
||||
Other Restructuring
|
0.1
|
|
|
0.6
|
|
|
0.6
|
|
|
4.3
|
|
||||
Total
|
$
|
155.8
|
|
|
$
|
6.6
|
|
|
$
|
179.0
|
|
|
$
|
79.3
|
|
|
Cost of sales
(a)
|
|
Selling, general and administrative
(b)
|
|
Restructuring
|
|
Total
|
||||||||
Nine months ended March 31,
|
$
|
8.1
|
|
|
$
|
5.5
|
|
|
$
|
170.1
|
|
|
$
|
183.7
|
|
|
|
|
Severance and
Employee Benefits |
|
Third-Party
Contract Terminations |
|
Other
Exit Costs |
|
Total
Program Costs |
||||||||
Balance—July 1, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring charges
|
158.7
|
|
|
10.6
|
|
|
0.8
|
|
|
170.1
|
|
||||
Acquisition
(a)
|
1.8
|
|
|
—
|
|
|
10.0
|
|
|
11.8
|
|
||||
Payments
|
(6.6
|
)
|
|
—
|
|
|
(2.1
|
)
|
|
(8.7
|
)
|
||||
Effect of exchange rates
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
||||
Balance—March 31, 2017
|
$
|
153.0
|
|
|
$
|
10.6
|
|
|
$
|
8.7
|
|
|
$
|
172.3
|
|
|
|
|
Severance and
Employee Benefits |
|
Third-Party
Contract Terminations |
|
Other
Exit Costs |
|
Total
Program Costs |
||||||||
Balance—July 1, 2016
|
$
|
35.7
|
|
|
$
|
7.6
|
|
|
$
|
0.1
|
|
|
$
|
43.4
|
|
Restructuring charges
|
0.8
|
|
|
—
|
|
|
6.6
|
|
|
7.4
|
|
||||
Payments
|
(8.7
|
)
|
|
(3.7
|
)
|
|
(2.0
|
)
|
|
(14.4
|
)
|
||||
Changes in estimates
|
(0.8
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(1.7
|
)
|
||||
Effect of exchange rates
|
(1.0
|
)
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|
(1.5
|
)
|
||||
Balance—March, 31, 2017
|
$
|
26.0
|
|
|
$
|
2.9
|
|
|
$
|
4.3
|
|
|
$
|
33.2
|
|
|
Severance and
Employee Benefits |
|
Third-Party
Contract Terminations |
|
Other
Exit Costs |
|
Total
Program Costs |
||||||||
Balance—July 1, 2016
|
$
|
33.6
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
$
|
34.5
|
|
Restructuring charges
|
6.2
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
||||
Payments
|
(27.6
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(27.8
|
)
|
||||
Changes in estimates
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
||||
Effect of exchange rates
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Balance—March, 31, 2017
|
$
|
10.4
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
10.9
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
Raw materials
|
$
|
241.9
|
|
|
$
|
159.8
|
|
Work-in-process
|
34.0
|
|
|
9.5
|
|
||
Finished goods
|
758.4
|
|
|
396.5
|
|
||
Total inventories
|
$
|
1,034.3
|
|
|
$
|
565.8
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
Land, buildings and leasehold improvements
|
$
|
623.7
|
|
|
$
|
284.8
|
|
Machinery and equipment
|
812.3
|
|
|
523.1
|
|
||
Marketing furniture and fixtures
|
427.8
|
|
|
295.2
|
|
||
Computer equipment and software
|
469.6
|
|
|
346.7
|
|
||
Construction in progress
|
244.6
|
|
|
79.6
|
|
||
Property and Equipment, gross
|
2,578.0
|
|
|
1,529.4
|
|
||
Accumulated depreciation and amortization
|
(1,022.2
|
)
|
|
(890.8
|
)
|
||
Property and equipment, net
|
$
|
1,555.8
|
|
|
$
|
638.6
|
|
|
Luxury
|
|
Consumer Beauty
|
|
Professional Beauty
|
|
Total
|
||||||||
Gross balance at June 30, 2016
|
$
|
1,294.5
|
|
|
$
|
1,288.2
|
|
|
$
|
270.8
|
|
|
$
|
2,853.5
|
|
Accumulated impairments
|
(403.7
|
)
|
|
(237.1
|
)
|
|
—
|
|
|
(640.8
|
)
|
||||
Net balance at June 30, 2016
|
$
|
890.8
|
|
|
$
|
1,051.1
|
|
|
$
|
270.8
|
|
|
$
|
2,212.7
|
|
|
|
|
|
|
|
|
|
||||||||
Changes during the period ended March 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Measurement Period Adjustments
(a)
|
4.2
|
|
|
33.4
|
|
|
(1.4
|
)
|
|
36.2
|
|
||||
Acquisitions
(b)
|
347.4
|
|
|
4,786.0
|
|
|
683.4
|
|
|
5,816.8
|
|
||||
Foreign currency translation
|
4.8
|
|
|
37.0
|
|
|
4.3
|
|
|
46.1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross balance at March 31, 2017
|
$
|
1,650.9
|
|
|
$
|
6,144.6
|
|
|
$
|
957.1
|
|
|
$
|
8,752.6
|
|
Accumulated impairments
|
(403.7
|
)
|
|
(237.1
|
)
|
|
—
|
|
|
(640.8
|
)
|
||||
Net balance at March 31, 2017
|
$
|
1,247.2
|
|
|
$
|
5,907.5
|
|
|
$
|
957.1
|
|
|
$
|
8,111.8
|
|
|
|
|
March 31, 2017
|
|
June 30, 2016
|
||||
Indefinite-lived other intangible assets
|
$
|
3,442.8
|
|
|
$
|
1,417.0
|
|
Finite-lived other intangible assets, net
|
5,526.0
|
|
|
633.1
|
|
||
Total Other intangible assets, net
|
$
|
8,968.8
|
|
|
$
|
2,050.1
|
|
|
Luxury
|
|
Consumer Beauty
|
|
Professional Beauty
|
|
Total
|
||||||||
Gross balance at June 30, 2016
|
$
|
401.2
|
|
|
$
|
551.5
|
|
|
$
|
662.1
|
|
|
$
|
1,614.8
|
|
Accumulated impairments
|
(118.8
|
)
|
|
(75.9
|
)
|
|
(3.1
|
)
|
|
(197.8
|
)
|
||||
Net balance at June 30, 2016
|
282.4
|
|
|
475.6
|
|
|
659.0
|
|
|
1,417.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Changes during the period ended March 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Acquisitions
(a)
|
—
|
|
|
1,390.0
|
|
|
663.8
|
|
|
2,053.8
|
|
||||
Foreign currency translation
|
(10.9
|
)
|
|
(14.2
|
)
|
|
(2.9
|
)
|
|
(28.0
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross balance at March 31, 2017
|
390.3
|
|
|
1,927.3
|
|
|
1,323.0
|
|
|
3,640.6
|
|
||||
Accumulated impairments
|
(118.8
|
)
|
|
(75.9
|
)
|
|
(3.1
|
)
|
|
(197.8
|
)
|
||||
Net balance at March 31, 2017
|
$
|
271.5
|
|
|
$
|
1,851.4
|
|
|
$
|
1,319.9
|
|
|
$
|
3,442.8
|
|
|
|
|
Cost
|
|
Accumulated Amortization
|
|
Accumulated Impairment
|
|
Net
|
||||||||
June 30, 2016
|
|
|
|
|
|
|
|
||||||||
License agreements
|
$
|
798.3
|
|
|
$
|
(532.2
|
)
|
|
$
|
—
|
|
|
$
|
266.1
|
|
Customer relationships
|
611.7
|
|
|
(274.2
|
)
|
|
(5.5
|
)
|
|
332.0
|
|
||||
Trademarks
|
128.3
|
|
|
(108.6
|
)
|
|
—
|
|
|
19.7
|
|
||||
Product formulations
|
48.0
|
|
|
(32.7
|
)
|
|
—
|
|
|
15.3
|
|
||||
Total
|
$
|
1,586.3
|
|
|
$
|
(947.7
|
)
|
|
$
|
(5.5
|
)
|
|
$
|
633.1
|
|
March 31, 2017
|
|
|
|
|
|
|
|
||||||||
License agreements
(a)
|
$
|
2,542.7
|
|
|
$
|
(585.5
|
)
|
|
$
|
—
|
|
|
$
|
1,957.2
|
|
Customer relationships
(a)
|
2,633.5
|
|
|
(389.4
|
)
|
|
(5.5
|
)
|
|
2,238.6
|
|
||||
Trademarks
(a)
|
1,133.0
|
|
|
(131.2
|
)
|
|
—
|
|
|
1,001.8
|
|
||||
Product formulations and technology
(a)
|
380.6
|
|
|
(52.2
|
)
|
|
—
|
|
|
328.4
|
|
||||
Total
|
$
|
6,689.8
|
|
|
$
|
(1,158.3
|
)
|
|
$
|
(5.5
|
)
|
|
$
|
5,526.0
|
|
|
|
2017, remaining
|
$
|
104.4
|
|
2018
|
403.3
|
|
|
2019
|
359.9
|
|
|
2020
|
354.7
|
|
|
2021
|
346.0
|
|
|
2022
|
329.0
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
Advertising, marketing and licensing
|
$
|
430.2
|
|
|
$
|
180.2
|
|
Customer returns, discounts, allowances and bonuses
|
306.5
|
|
|
164.8
|
|
||
Compensation and other compensation related benefits
|
270.6
|
|
|
157.5
|
|
||
Restructuring costs
|
183.4
|
|
|
60.8
|
|
||
VAT, sales and other non-income taxes
|
58.4
|
|
|
36.2
|
|
||
Tax indemnification liability
|
55.0
|
|
|
—
|
|
||
Acquisition-related costs
|
39.4
|
|
|
42.4
|
|
||
Deferred income
|
25.3
|
|
|
3.8
|
|
||
Interest
|
17.4
|
|
|
9.4
|
|
||
Audit and consulting
|
9.1
|
|
|
6.3
|
|
||
Lease related liabilities
|
4.4
|
|
|
3.7
|
|
||
Derivative liabilities
|
3.0
|
|
|
20.9
|
|
||
Other
|
156.0
|
|
|
62.4
|
|
||
Total accrued expenses and other current liabilities
|
$
|
1,558.7
|
|
|
$
|
748.4
|
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
Noncurrent income tax liabilities
|
$
|
154.2
|
|
|
$
|
131.9
|
|
Unfavorable contract liabilities
|
108.2
|
|
|
—
|
|
||
Deferred rent
|
47.5
|
|
|
47.2
|
|
||
Restructuring
|
44.6
|
|
|
23.5
|
|
||
Other
|
31.0
|
|
|
31.2
|
|
||
Total other noncurrent liabilities
|
$
|
385.5
|
|
|
$
|
233.8
|
|
|
March 31, 2017
|
|
June 30,
2016 |
||||
Short-term debt
|
$
|
3.4
|
|
|
$
|
19.8
|
|
Galleria Credit Agreement
|
|
|
|
||||
Galleria Revolving Credit Facility due September 2021
|
—
|
|
|
—
|
|
||
Galleria Term Loan A Facility due September 2021
|
944.3
|
|
|
—
|
|
||
Galleria Term Loan B Facility due September 2023
|
1,000.0
|
|
|
—
|
|
||
Coty Credit Agreement
|
|
|
|
||||
Coty Revolving Credit Facility due October 2020
|
825.0
|
|
|
670.0
|
|
||
Coty Term Loan A Facility due October 2020
|
1,806.3
|
|
|
1,883.6
|
|
||
Coty Term Loan A Facility due October 2021
|
962.8
|
|
|
—
|
|
||
Coty Term Loan B Facility due October 2022
|
1,641.6
|
|
|
1,596.0
|
|
||
Other long-term debt and capital lease obligations
|
1.4
|
|
|
0.7
|
|
||
Total debt
|
7,184.8
|
|
|
4,170.1
|
|
||
Less: Short-term debt and current portion of long-term debt
|
(193.0
|
)
|
|
(161.8
|
)
|
||
Total Long-term debt
|
6,991.8
|
|
|
4,008.3
|
|
||
Less: Unamortized debt issuance costs
(a) (b)
|
(71.7
|
)
|
|
(64.6
|
)
|
||
Less: Discount on Long-term debt
|
(10.8
|
)
|
|
(7.3
|
)
|
||
Total Long-term debt, net
|
$
|
6,909.3
|
|
|
$
|
3,936.4
|
|
|
|
•
|
the LIBOR of the applicable qualified currency plus the applicable margin; or
|
•
|
ABR plus the applicable margin.
|
Pricing Tier
|
|
Total Net Leverage Ratio:
|
|
LIBOR plus:
|
|
Alternative Base Rate Margin:
|
1.0
|
|
Greater than or equal to 5.00:1
|
|
2.000%
|
|
1.000%
|
2.0
|
|
Less than 5.00:1 but greater than or equal to 4.00:1
|
|
1.750%
|
|
0.750%
|
3.0
|
|
Less than 4.00:1 but greater than or equal to 2.75:1
|
|
1.500%
|
|
0.500%
|
4.0
|
|
Less than 2.75:1 but greater than or equal to 2.00:1
|
|
1.250%
|
|
0.250%
|
5.0
|
|
Less than 2.00:1 but greater than or equal to 1.50:1
|
|
1.125%
|
|
0.125%
|
6.0
|
|
Less than 1.50:1
|
|
1.000%
|
|
—%
|
|
March 31, 2017
|
|
June 30, 2016
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
Galleria Credit Agreement
|
$
|
1,944.3
|
|
|
$
|
1,949.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Coty Credit Agreement
|
5,235.7
|
|
|
5,244.9
|
|
|
4,149.6
|
|
|
4,106.9
|
|
Fiscal Year Ending June 30
|
|
||
2017, remaining
|
$
|
32.6
|
|
2018
|
124.0
|
|
|
2019
|
110.4
|
|
|
2020
|
94.4
|
|
|
2021
|
81.6
|
|
|
Thereafter
|
375.2
|
|
|
|
818.2
|
|
|
Less: sublease income
|
(32.3
|
)
|
|
Total minimum payments required
|
$
|
785.9
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest expense
|
$
|
59.0
|
|
|
$
|
33.1
|
|
|
$
|
157.9
|
|
|
$
|
73.4
|
|
Foreign exchange (gains) losses, net of derivative contracts
(a)
|
2.6
|
|
|
(6.2
|
)
|
|
3.8
|
|
|
(14.9
|
)
|
||||
Interest income
|
(0.8
|
)
|
|
(1.8
|
)
|
|
(2.6
|
)
|
|
(2.8
|
)
|
||||
Total interest expense, net
|
$
|
60.8
|
|
|
$
|
25.1
|
|
|
$
|
159.1
|
|
|
$
|
55.7
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||||||||||||||||||
|
Pension Plans
|
|
Other Post-
Employment Benefits
|
|
|
||||||||||||||||||||||||||||||||||
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15.4
|
|
|
$
|
1.7
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
16.0
|
|
|
$
|
2.0
|
|
Interest cost
|
0.2
|
|
|
0.8
|
|
|
2.0
|
|
|
0.9
|
|
|
0.4
|
|
|
0.5
|
|
|
0.1
|
|
|
—
|
|
|
2.7
|
|
|
2.2
|
|
||||||||||
Expected return on plan assets
|
—
|
|
|
(0.6
|
)
|
|
(2.6
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
|
(0.9
|
)
|
||||||||||
Amortization of prior service cost (credit)
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
(1.5
|
)
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
(1.3
|
)
|
||||||||||
Amortization of net loss
|
0.4
|
|
|
0.3
|
|
|
1.1
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
1.1
|
|
||||||||||
Settlement loss recognized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Net periodic benefit cost (credit)
|
$
|
0.6
|
|
|
$
|
0.5
|
|
|
$
|
16.0
|
|
|
$
|
3.2
|
|
|
$
|
(0.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
16.2
|
|
|
$
|
3.1
|
|
|
Nine Months Ended March 31,
|
||||||||||||||||||||||||||||||||||||||
|
Pension Plans
|
|
Other Post-
Employment Benefits
|
|
|
||||||||||||||||||||||||||||||||||
|
U.S.
|
|
International
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.5
|
|
|
$
|
5.1
|
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
26.0
|
|
|
$
|
6.0
|
|
Interest cost
|
1.5
|
|
|
2.4
|
|
|
4.7
|
|
|
2.7
|
|
|
1.2
|
|
|
1.5
|
|
|
0.2
|
|
|
—
|
|
|
7.6
|
|
|
6.6
|
|
||||||||||
Expected return on plan assets
|
(0.9
|
)
|
|
(1.8
|
)
|
|
(4.4
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
(2.7
|
)
|
||||||||||
Amortization of prior service cost (credit)
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
(4.5
|
)
|
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|
(3.9
|
)
|
||||||||||
Amortization of net loss
|
1.4
|
|
|
0.9
|
|
|
3.3
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
3.3
|
|
||||||||||
Settlement loss recognized
|
15.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.9
|
|
|
—
|
|
||||||||||
Net periodic benefit cost (credit)
|
$
|
17.9
|
|
|
$
|
1.5
|
|
|
$
|
28.4
|
|
|
$
|
9.6
|
|
|
$
|
(2.4
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
44.7
|
|
|
$
|
9.3
|
|
|
Pension Plans
|
|
Other Post-Employment Benefits
|
|
Total
|
||||||
Benefit obligation
|
$
|
545.9
|
|
|
$
|
15.4
|
|
|
$
|
561.3
|
|
Fair value of plan assets
|
156.2
|
|
|
0.4
|
|
|
156.6
|
|
|||
Funded status
|
$
|
(389.7
|
)
|
|
$
|
(15.0
|
)
|
|
$
|
(404.7
|
)
|
|
Pension Plans
|
|
Other Post-Employment Benefits
|
|
Total
|
||||||
Noncurrent assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
|||
Noncurrent liabilities
|
(388.8
|
)
|
|
(15.0
|
)
|
|
(403.8
|
)
|
|||
Funded Status
|
(389.7
|
)
|
|
(15.0
|
)
|
|
(404.7
|
)
|
|||
Net amount recognized
|
$
|
(389.7
|
)
|
|
$
|
(15.0
|
)
|
|
$
|
(404.7
|
)
|
|
Pension plans with accumulated benefit obligations in excess of plan assets
|
|
Pension plans with projected benefit obligations in excess of plan assets
|
||||
Projected benefit obligation
|
$
|
545.9
|
|
|
$
|
545.9
|
|
Accumulated benefit obligation
|
479.1
|
|
|
479.1
|
|
||
Fair value of plan assets
|
156.2
|
|
|
156.2
|
|
|
Pension Plans
|
|
Other Post-Employment Benefits
|
||
Discount rates
|
1.1
|
%
|
|
1.6
|
%
|
Future compensation growth rates
|
2.5
|
%
|
|
4.2
|
%
|
|
Pension Plans
|
|
Other Post-Employment Benefits
|
||
Discount rates
|
1.1
|
%
|
|
1.6
|
%
|
Future compensation growth rates
|
2.5
|
%
|
|
4.2
|
%
|
Expected long-term rates of return on plan assets
|
4.4
|
%
|
|
6.0
|
%
|
|
Target
|
|
% of Plan Assets
|
||
|
|
|
October 1, 2016
|
||
Equity securities
|
56.3
|
%
|
|
32.9
|
%
|
Fixed income securities
|
35.7
|
%
|
|
20.8
|
%
|
Cash and other investments
|
8.1
|
%
|
|
46.3
|
%
|
Gain (Loss) Recognized in OCI
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign exchange forward contracts
|
$
|
(0.9
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
5.5
|
|
Interest rate swap contracts
|
2.8
|
|
|
(22.1
|
)
|
|
48.1
|
|
|
(19.6
|
)
|
||||
Net investment hedge
|
(9.0
|
)
|
|
(26.1
|
)
|
|
29.1
|
|
|
(17.0
|
)
|
Condensed Consolidated Statements of Operations Classification of Gain (Loss) Reclassified from AOCI/(L)
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign exchange forward contracts:
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
0.5
|
|
|
$
|
1.7
|
|
|
$
|
2.1
|
|
|
$
|
4.5
|
|
Cost of sales
|
(1.5
|
)
|
|
0.3
|
|
|
(1.2
|
)
|
|
0.4
|
|
||||
Interest rate swap contracts:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
(1.9
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(8.5
|
)
|
|
$
|
(4.1
|
)
|
Condensed Consolidated Statements of Operations
Classification of Gain (Loss) Recognized in Operations |
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Selling, general and administrative expenses
|
$
|
(2.3
|
)
|
|
$
|
(0.1
|
)
|
|
(1.9
|
)
|
|
1.2
|
|
Interest expense, net
|
(5.9
|
)
|
|
(39.3
|
)
|
|
4.1
|
|
|
(15.6
|
)
|
||
Other (expense) income, net
(a)
|
(0.1
|
)
|
|
(5.4
|
)
|
|
(0.5
|
)
|
|
(29.6
|
)
|
|
|
|
Gain (Loss) on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustments
|
|
Pension and Other Post-Employment Benefit Plans
|
|
Total
|
||||||||||||
|
|
Gain (Loss) on Net Investment Hedges
|
|
Other Foreign Currency Translation Adjustments
|
|
|
|||||||||||||
Balance—July 1, 2016
|
$
|
(28.9
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(164.0
|
)
|
|
$
|
(44.3
|
)
|
|
$
|
(239.7
|
)
|
Other comprehensive (loss) income before reclassifications
|
40.7
|
|
|
29.1
|
|
|
(38.1
|
)
|
|
0.4
|
|
|
32.1
|
|
|||||
Net amounts reclassified from AOCI/(L)
|
4.2
|
|
|
—
|
|
|
—
|
|
|
9.7
|
|
|
13.9
|
|
|||||
Net current-period other comprehensive (loss)
income |
44.9
|
|
|
29.1
|
|
|
(38.1
|
)
|
|
10.1
|
|
|
46.0
|
|
|||||
Balance—March 31, 2017
|
$
|
16.0
|
|
|
$
|
26.6
|
|
|
$
|
(202.1
|
)
|
|
$
|
(34.2
|
)
|
|
$
|
(193.7
|
)
|
|
Losses on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustments
|
|
Pension and Other Post-Employment Benefit Plans
|
|
Total
|
||||||||||||
|
|
Loss on Net Investment Hedge
|
|
Foreign Currency Translation Adjustments
|
|
|
|||||||||||||
Balance—July 1, 2015
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(249.3
|
)
|
|
$
|
(24.6
|
)
|
|
$
|
(274.0
|
)
|
Other comprehensive (loss) income before reclassifications
|
(14.7
|
)
|
|
(17.0
|
)
|
|
54.5
|
|
|
0.2
|
|
|
23.0
|
|
|||||
Net amounts reclassified from AOCI/(L)
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Net current-period other comprehensive (loss)
income |
(14.6
|
)
|
|
(17.0
|
)
|
|
54.5
|
|
|
0.2
|
|
|
23.1
|
|
|||||
Balance—March 31, 2016
|
$
|
(14.7
|
)
|
|
$
|
(17.0
|
)
|
|
$
|
(194.8
|
)
|
|
$
|
(24.4
|
)
|
|
$
|
(250.9
|
)
|
|
March 31, 2017
|
Historical volatility
|
30.9%
|
Implied volatility
|
32.3%
|
Risk-free rate of return
|
1.94% - 2.22%
|
Dividend yield on Class A Common Stock
|
2.8%
|
Yield on cash
|
4.9%
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions, except per share data)
|
||||||||||||||
Net income (loss) attributable to Coty Inc.
|
$
|
(164.2
|
)
|
|
$
|
(26.8
|
)
|
|
$
|
(117.4
|
)
|
|
$
|
187.9
|
|
Weighted-average common shares outstanding—Basic
|
747.3
|
|
|
337.9
|
|
|
607.9
|
|
|
347.8
|
|
||||
Effect of dilutive stock options and Series A Preferred Stock
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
||||
Effect of restricted stock and RSUs
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
||||
Weighted-average common shares outstanding—Diluted
|
747.3
|
|
|
337.9
|
|
|
607.9
|
|
|
356.9
|
|
||||
Net income attributable to Coty Inc. per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.22
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.54
|
|
Diluted
|
(0.22
|
)
|
|
(0.08
|
)
|
|
(0.19
|
)
|
|
0.53
|
|
|
|
(a)
|
For the
three and nine months ended March 31, 2017
and the
three months ended March 31, 2016
,
no
outstanding stock options and Series A Preferred Stock with purchase or conversion rights to purchase shares of common stock were included in the computation of diluted loss per share due to the net loss incurred during the respective periods. For the nine months ended March 31, 2016, outstanding stock options and Series A Preferred Stock with purchase or conversion rights to purchase
3.2 million
options were excluded in the computation of EPS as their inclusion would be anti-dilutive.
|
(b)
|
For the
three and nine months ended March 31, 2017
and the
three months ended March 31, 2016
,
no
RSU were excluded in the computation of diluted loss per share due to the net loss incurred during the period. For the nine months ended March 31, 2016,
0.1 million
RSU were excluded in the computation of diluted loss per share as their inclusion would be anti-dilutive.
|
•
|
strategic plans and annual budgets are prepared using the Adjusted Performance Measures;
|
•
|
senior management receives a monthly analysis comparing budget to actual operating results that is prepared using the Adjusted Performance Measures; and
|
•
|
senior management’s annual compensation is calculated, in part, by using the Adjusted Performance Measures.
|
•
|
Costs related to acquisition activities: We have excluded acquisition-related costs and acquisition accounting impacts such as those related to transaction costs and costs associated with the revaluation of acquired inventory in connection with business combinations because these costs are unique to each transaction. The nature and amount of such costs vary significantly based on the size and timing of the acquisitions and the maturities of the businesses being acquired. Also, the size, complexity and/or volume of past acquisitions, which often drives the magnitude of such expenses, may not be indicative of the size, complexity and/or volume of any future acquisitions.
|
•
|
Restructuring and other business realignment costs: We have excluded costs associated with restructuring and business structure realignment programs to allow for comparable financial results to historical operations and forward-looking guidance. In addition, the nature and amount of such charges vary significantly based on the size and timing of the programs. By excluding the referenced expenses from our non-GAAP financial measures, our management is able to further evaluate our ability to utilize existing assets and estimate their long-term value. Furthermore, our management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of our operating performance.
|
•
|
Amortization expense: We have excluded the impact of amortization of finite-lived intangible assets, as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Our management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Although we exclude amortization of intangible assets from our non-GAAP expenses, our management believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.
|
•
|
Asset impairment charges: We have excluded the impact of asset impairments as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Our
|
•
|
Share-based compensation adjustment: We have excluded the impact of the fiscal 2013 accounting modification from liability plan to equity plan accounting for the share-based compensation plans as well as other share-based compensation transactions that are not reflective of the ongoing and planned pattern of recognition for such expense. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” contained in the respective forms filed with the SEC for a full discussion of the share-based compensation adjustment.
|
•
|
Interest and other (income) expense: We have excluded foreign currency impacts associated with acquisition-related and debt financing related forward contracts as the nature and amount of such charges are not consistent and are significantly impacted by the timing and size of such transactions.
|
•
|
Loss on early extinguishment of debt: We have excluded loss on extinguishment of debt as this represents a non-cash charge, and the amount and frequency of such charges is not consistent and is significantly impacted by the timing and size of debt financing transactions.
|
•
|
Tax: This adjustment represents the impact of the tax effect of the pretax items excluded from Adjusted net income. The tax impact of the non-GAAP adjustments are based on the tax rates related to the jurisdiction in which the adjusted items are received or incurred.
|
•
|
the scale of the combined company by evaluating consolidated and segment financial metrics;
|
•
|
the expansion of product offerings by evaluating segment, brand, and geographic performance and the respective strength of the brands;
|
•
|
the evaluation of market share expansion in categories and geographies;
|
•
|
the earnings per share accretion and substantial incremental free cash flow generation providing financial flexibility for us; and
|
•
|
the comparison of actual and projected results, including achievement of projected synergies, post integration; provided that timing for any such comparison will depend on the size and complexity of the acquisition.
|
|
Three Months Ended
March 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change %
|
|||||
OPERATING (LOSS) INCOME
|
|
|
|
|
|
|||||
Luxury
|
$
|
60.9
|
|
|
$
|
29.7
|
|
|
>100%
|
|
Consumer Beauty
|
63.0
|
|
|
39.2
|
|
|
61
|
%
|
||
Professional Beauty
|
(18.2
|
)
|
|
12.8
|
|
|
<(100%)
|
|
||
Corporate
|
(298.2
|
)
|
|
(58.7
|
)
|
|
<(100%)
|
|
||
Total
|
(192.5
|
)
|
|
23.0
|
|
|
<(100%)
|
|
|
Three Months Ended
March 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change %
|
|||||
Reported operating (loss) income
|
$
|
(192.5
|
)
|
|
$
|
23.0
|
|
|
<(100%)
|
|
% of Net revenues
|
(9.5
|
%)
|
|
2.4
|
%
|
|
|
|||
Costs related to acquisition activities
|
122.3
|
|
|
42.4
|
|
|
>100%
|
|
||
Amortization Expense
|
102.6
|
|
|
20.9
|
|
|
>100%
|
|
||
Restructuring and other business realignment costs
|
175.9
|
|
|
15.3
|
|
|
>100%
|
|
||
Share-based compensation expense adjustment
|
—
|
|
|
1.0
|
|
|
(100
|
%)
|
||
Total adjustments to reported Operating income
|
400.8
|
|
|
79.6
|
|
|
>100%
|
|
||
Adjusted operating income
|
$
|
208.3
|
|
|
$
|
102.6
|
|
|
>100%
|
|
% of Net revenues
|
10.3
|
%
|
|
10.8
|
%
|
|
|
•
|
We incurred restructuring costs of
$155.8
primarily related to Global Integration Activities, included in the Condensed Consolidated Statements of Operations.
|
•
|
We incurred business structure realignment costs of
$20.1
primarily related to our Global Integration Activities, Organizational Redesign and certain other programs. Of this amount, $12.0 is included in Selling, general and administrative expenses and $8.1 is included in Cost of sales.
|
•
|
We incurred restructuring costs of
$6.6
primarily related to Organizational Redesign and Acquisition Integration Program costs, included in the Condensed Consolidated Statements of Operations.
|
•
|
We incurred business structure realignment costs of
$8.7
primarily related to our Organizational Redesign and the 2013 Productivity Program, included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.
|
|
Three Months Ended
March 31, 2017 |
|
Three Months Ended
March 31, 2016 |
||||||||||||||||||
(in millions)
|
(Loss) Income Before Income Taxes
|
|
(Benefit) Provision for Income Taxes
|
|
Effective Tax Rate
|
|
(Loss)Income Before Income Taxes
|
|
Provision for Income Taxes
|
|
Effective Tax Rate
|
||||||||||
Reported loss before income taxes
|
$
|
(252.8
|
)
|
|
$
|
(93.4
|
)
|
|
36.9
|
%
|
|
$
|
(8.7
|
)
|
|
$
|
11.6
|
|
|
(133.3
|
%)
|
Adjustments to reported Operating income
(a) (b)
|
400.8
|
|
|
126.3
|
|
|
|
|
79.6
|
|
|
6.5
|
|
|
|
||||||
Adjustments to Interest expense
(b) (c)
|
—
|
|
|
—
|
|
|
|
|
(4.6
|
)
|
|
(0.4
|
)
|
|
|
||||||
Other adjustments
(b)(c)
|
—
|
|
|
|
|
|
|
|
6.2
|
|
|
0.5
|
|
|
|
||||||
Adjusted Income before income taxes
|
$
|
148.0
|
|
|
$
|
32.9
|
|
|
22.2
|
%
|
|
$
|
72.5
|
|
|
$
|
18.2
|
|
|
25.1
|
%
|
|
|
(a)
|
See “Reconciliation of Reported Operating Income to Adjusted Operating Income under “Adjusted Operating Income”.
|
(b)
|
The tax effects of each of the items included in adjusted income are calculated in a manner that results in a corresponding income tax expense/provision for adjusted income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non-GAAP measure of profitability.
|
(c)
|
See “Reconciliation of Reported Net (Loss) Income Attributable to Coty Inc. to Adjusted Net Income Attributable to Coty Inc.”.
|
|
Three Months Ended
March 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change %
|
|||||
Reported net loss attributable to Coty Inc.
|
$
|
(164.2
|
)
|
|
$
|
(26.8
|
)
|
|
<(100%)
|
|
% of Net revenues
|
(8.1
|
%)
|
|
(2.8
|
%)
|
|
|
|||
Adjustments to reported Operating income
(a)
|
400.8
|
|
|
79.6
|
|
|
>100%
|
|
||
Adjustments to Other expense
(b)
|
—
|
|
|
6.2
|
|
|
(100
|
%)
|
||
Adjustments to Interest expense
(c)
|
—
|
|
|
(4.6
|
)
|
|
100
|
%
|
||
Change in tax provision due to adjustments to reported Net income attributable to Coty Inc.
|
(126.3
|
)
|
|
(6.6
|
)
|
|
<(100%)
|
|
||
Adjusted net income attributable to Coty Inc.
|
$
|
110.3
|
|
|
$
|
47.8
|
|
|
>100%
|
|
% of Net revenues
|
5.4
|
%
|
|
5.0
|
%
|
|
|
|
||
Per Share Data
|
|
|
|
|
|
|||||
Adjusted weighted-average common shares
|
|
|
|
|
|
|||||
Basic
|
747.3
|
|
|
337.9
|
|
|
|
|||
Diluted
|
751.5
|
|
|
346.0
|
|
|
|
|||
Adjusted net income attributable to Coty Inc. per common share
|
|
|
|
|
|
|||||
Basic
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
|
|
Diluted
|
0.15
|
|
|
0.14
|
|
|
|
(a)
|
See “Reconciliation of Reported operating income to Adjusted operating income.”
|
(b)
|
In the three months ended March 31, 2016, we incurred losses of $5.4 on foreign currency contracts related to payments for the Brazil Acquisition and expenses of $0.8 related to the purchase of the remaining mandatorily redeemable financial interest in a subsidiary, included in Other (income) expense, net in the Condensed Consolidation Statements of Operations.
|
(c)
|
In the
three months ended March 31, 2016
primarily represents a net gain of $4.6 on the revaluation of intercompany loans used to facilitate payments for the Brazil Acquisition, included in Interest expense, net in the Condensed Consolidated Statements of Operations.
|
|
Nine Months Ended
March 31, |
|
|
||||||||
(in millions)
|
2017
|
|
2016
|
|
Change %
|
||||||
NET REVENUES
|
|
|
|
|
|
|
|||||
Luxury
|
$
|
1,918.6
|
|
|
|
$
|
1,433.4
|
|
|
34
|
%
|
Consumer Beauty
|
2,562.2
|
|
|
|
1,653.7
|
|
|
55
|
%
|
||
Professional Beauty
|
928.2
|
|
|
|
186.4
|
|
|
>100%
|
|
||
Total
|
$
|
5,409.0
|
|
|
|
$
|
3,273.5
|
|
|
65
|
%
|
|
Nine Months Ended
March 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change %
|
|||||
OPERATING INCOME (LOSS)
|
|
|
|
|
|
|||||
Luxury
|
$
|
203.6
|
|
|
$
|
206.1
|
|
|
(1
|
%)
|
Consumer Beauty
|
178.6
|
|
|
210.2
|
|
|
(15
|
%)
|
||
Professional Beauty
|
81.5
|
|
|
53.4
|
|
|
53
|
%
|
||
Corporate
|
(622.5
|
)
|
|
(212.6
|
)
|
|
<(100%)
|
|
||
Total
|
(158.8
|
)
|
|
257.1
|
|
|
<(100%)
|
|
|
Nine Months Ended
March 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change %
|
|||||
Reported Operating (loss) income
|
$
|
(158.8
|
)
|
|
$
|
257.1
|
|
|
<(100%)
|
|
% of Net revenues
|
(2.9
|
)%
|
|
7.9
|
%
|
|
|
|||
Costs related to acquisition activities
|
395.7
|
|
|
107.3
|
|
|
>100%
|
|
||
Amortization Expense
|
219.0
|
|
|
59.0
|
|
|
>100%
|
|
||
Restructuring and other business realignment costs
|
210.9
|
|
|
98.5
|
|
|
>100%
|
|
||
Pension settlement charges
|
15.9
|
|
|
—
|
|
|
N/A
|
|
||
Asset impairment charges
|
—
|
|
|
5.5
|
|
|
(100
|
%)
|
||
Share-based compensation expense adjustment
|
—
|
|
|
1.3
|
|
|
(100
|
%)
|
||
Total adjustments to reported Operating income
|
841.5
|
|
|
271.6
|
|
|
>100%
|
|
||
Adjusted Operating income
|
$
|
682.7
|
|
|
$
|
528.7
|
|
|
29
|
%
|
% of Net revenues
|
12.6
|
%
|
|
16.2
|
%
|
|
|
|
•
|
We incurred restructuring costs of
$179.0
primarily related to the Global Integration Activities, included in the Condensed Consolidated Statements of Operations.
|
•
|
We incurred business structure realignment costs of
$31.9
primarily related to our Global Integration Activities, Organizational Redesign and certain other programs. Of this amount $20.4 is included in Selling, general and administrative expenses and $11.5 is included in Cost of sales.
|
•
|
We incurred Restructuring costs of $79.3 primarily related to Organizational Redesign, included in the Condensed Consolidated Statements of Operations, which primarily relate to the Acquisition Integration Program and Organizational Redesign.
|
•
|
We incurred business structure realignment costs of $19.2 primarily related to our Organizational Redesign and the 2013 Productivity Program, included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.
|
|
Nine Months Ended
March 31, 2017 |
|
Nine Months Ended
March 31, 2016 |
||||||||||||||||||
(in millions)
|
(Loss)Income Before Income Taxes
|
|
(Benefit) Provision for Income Taxes
|
|
Effective Tax Rate
|
|
Income Before Income Taxes
|
|
(Benefit) Provision for Income Taxes
|
|
Effective Tax Rate
|
||||||||||
Reported (Loss) income before income taxes
|
$
|
(318.1
|
)
|
|
$
|
(220.6
|
)
|
|
69.3
|
%
|
|
$
|
167.9
|
|
|
$
|
(42.5
|
)
|
|
(25.3
|
%)
|
Adjustments to reported Operating income
(a)(b)
|
841.5
|
|
|
313.0
|
|
|
|
|
271.6
|
|
|
37.6
|
|
|
|
||||||
Adjustments to Interest expense
(b)(c)
|
1.4
|
|
|
0.6
|
|
|
|
|
(13.1
|
)
|
|
(1.8
|
)
|
|
|
||||||
Other adjustments
(b)(c)
|
—
|
|
|
—
|
|
|
|
|
33.5
|
|
|
4.6
|
|
|
|
||||||
Adjusted Income before income taxes
|
$
|
524.8
|
|
|
$
|
93.0
|
|
|
17.7
|
%
|
|
$
|
459.9
|
|
|
$
|
(2.1
|
)
|
|
(0.5
|
%)
|
|
|
(a)
|
See “Reconciliation of Reported Operating Income to Adjusted Operating Income”.
|
(b)
|
The tax effects of each of the items included in adjusted income are calculated in a manner that results in a corresponding income tax expense/provision for adjusted income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non-GAAP measure of profitability.
|
(c)
|
See “Reconciliation of Reported Net (Loss) Income Attributable to Coty Inc. to Adjusted Net Income Attributable to Coty Inc.”.
|
|
Nine Months Ended
March 31, |
|
|
|||||||
(in millions)
|
2017
|
|
2016
|
|
Change %
|
|||||
Reported net (loss) income attributable to Coty Inc.
|
$
|
(117.4
|
)
|
|
$
|
187.9
|
|
|
<(100%)
|
|
% of Net revenues
|
(2.2
|
%)
|
|
5.7
|
%
|
|
|
|||
Adjustments to reported Operating income
(a)
|
841.5
|
|
|
271.6
|
|
|
>100%
|
|
||
Adjustments to Other expense
(b)
|
—
|
|
|
30.4
|
|
|
(100
|
%)
|
||
Loss on early extinguishment of debt
(c)
|
—
|
|
|
3.1
|
|
|
(100
|
%)
|
||
Adjustments to Interest expense
(d)
|
1.4
|
|
|
(13.1
|
)
|
|
(100
|
%)
|
||
Change in tax provision due to adjustments to reported Net income attributable to Coty Inc.
|
(313.6
|
)
|
|
(40.4
|
)
|
|
<(100%)
|
|
||
Adjusted net income attributable to Coty Inc.
|
$
|
411.9
|
|
|
$
|
439.5
|
|
|
(6
|
%)
|
% of Net revenues
|
7.6
|
%
|
|
13.4
|
%
|
|
|
|
||
Per Share Data
|
|
|
|
|
|
|||||
Adjusted weighted-average common shares
|
|
|
|
|
|
|||||
Basic
|
607.9
|
|
|
347.8
|
|
|
|
|||
Diluted
|
613.4
|
|
|
356.9
|
|
|
|
|||
Adjusted net income attributable to Coty Inc. per common share
|
|
|
|
|
|
|||||
Basic
|
$
|
0.68
|
|
|
$
|
1.26
|
|
|
|
|
Diluted
|
0.67
|
|
|
1.23
|
|
|
|
(a)
|
See “Reconciliation of Operating Income to Adjusted Operating Income” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
(b)
|
In the nine months ended March 31, 2016, we incurred losses of $29.6 on foreign currency contracts related to payments for the Brazil Acquisition and expenses of $0.8 related to the purchase of the remaining mandatorily redeemable financial interest in a subsidiary, included in Other expense (income), net in the Condensed Consolidated Statements of Operations.
|
(c)
|
In the
nine months ended March 31, 2016
, the amount represents the write-off of deferred financing costs in connection with the refinancing of the prior Coty Inc. credit facilities, included in Loss on early extinguishment of debt in the Condensed Consolidated Statements of Operations.
|
(d)
|
The amount in the
nine months ended March 31, 2017
represents a net loss of $1.4 incurred in connection with the Brazil Acquisition and subsequent intercompany loans, included in Interest expense, net in the Condensed Consolidated Statements of Operations. The amount in the
nine months ended March 31, 2016
primarily represents one-time gains of $11.1 on short-term forward contracts to exchange Euros for U.S. Dollars related to the Euro-denominated portion of the Term Loan B Facility and a net losses of $2.0 on the revaluation of intercompany loans including the impact of derivative contracts used to hedge intercompany loans to facilitate payments in connection with the Brazil Acquisition, included in Interest expense, net in the Condensed Consolidated Statements of Operations.
|
|
March 31, 2017
|
|
June 30,
2016 |
||||
Short-term debt
|
$
|
3.4
|
|
|
$
|
19.8
|
|
Galleria Credit Agreement
|
|
|
|
||||
Galleria Revolving Credit Facility due September 2021
|
—
|
|
|
—
|
|
||
Galleria Term Loan A Facility due September 2021
|
944.3
|
|
|
—
|
|
||
Galleria Term Loan B Facility due September 2023
|
1,000.0
|
|
|
—
|
|
||
Coty Credit Agreement
|
|
|
|
||||
Coty Revolving Credit Facility due October 2020
|
825.0
|
|
|
670.0
|
|
||
Coty Term Loan A Facility due October 2020
|
1,806.3
|
|
|
1,883.6
|
|
||
Coty Term Loan A Facility due October 2021
|
962.8
|
|
|
—
|
|
||
Coty Term Loan B Facility due October 2022
|
1,641.6
|
|
|
1,596.0
|
|
||
Other long-term debt and capital lease obligations
|
1.4
|
|
|
0.7
|
|
||
Total debt
|
7,184.8
|
|
|
4,170.1
|
|
||
Less: Short-term debt and current portion of long-term debt
|
(193.0
|
)
|
|
(161.8
|
)
|
||
Total Long-term debt
|
6,991.8
|
|
|
4,008.3
|
|
||
Less: Unamortized debt issuance costs
(a)(b)
|
(71.7
|
)
|
|
(64.6
|
)
|
||
Less: Discount on Long-term debt
|
(10.8
|
)
|
|
(7.3
|
)
|
||
Total Long-term debt, net
|
$
|
6,909.3
|
|
|
$
|
3,936.4
|
|
•
|
the LIBOR of the applicable qualified currency plus the applicable margin; or
|
•
|
ABR plus the applicable margin.
|
Pricing Tier
|
|
Total Net Leverage Ratio:
|
|
LIBOR plus:
|
|
Alternative Base Rate Margin:
|
1.0
|
|
Greater than or equal to 5.00:1
|
|
2.000%
|
|
1.000%
|
2.0
|
|
Less than 5.00:1 but greater than or equal to 4.00:1
|
|
1.750%
|
|
0.750%
|
3.0
|
|
Less than 4.00:1 but greater than or equal to 2.75:1
|
|
1.500%
|
|
0.500%
|
4.0
|
|
Less than 2.75:1 but greater than or equal to 2.00:1
|
|
1.250%
|
|
0.250%
|
5.0
|
|
Less than 2.00:1 but greater than or equal to 1.50:1
|
|
1.125%
|
|
0.125%
|
6.0
|
|
Less than 1.50:1
|
|
1.000%
|
|
—%
|
Fiscal Year Ending June 30
|
|
||
2017, remaining
|
$
|
40.0
|
|
2018
|
203.2
|
|
|
2019
|
217.5
|
|
|
2020
|
217.5
|
|
|
2021
|
2,445.2
|
|
|
Thereafter
|
4,056.6
|
|
|
Total
|
$
|
7,180.0
|
|
|
Nine Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Condensed Consolidated Statements of Cash Flows Data:
(in millions)
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
706.7
|
|
|
$
|
445.3
|
|
Net cash used in investing activities
|
(1,056.1
|
)
|
|
(1,042.0
|
)
|
||
Net cash provided by financing activities
|
781.1
|
|
|
621.7
|
|
(in millions)
|
Total
|
|
Payments Due in Fiscal
|
|
Thereafter
|
|||||||||||||||||
2017, remaining
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
|||||||||||||
Long-term debt obligations
|
$
|
7,180.0
|
|
|
40.0
|
|
|
203.2
|
|
|
217.5
|
|
|
217.5
|
|
|
2,445.2
|
|
|
$
|
4,056.6
|
|
Interest on long-term debt obligations
(a)
|
1,332.7
|
|
|
45.2
|
|
|
198.2
|
|
|
215.8
|
|
|
232.7
|
|
|
265.5
|
|
|
375.3
|
|
||
Operating lease obligations
|
818.2
|
|
|
32.6
|
|
|
124.0
|
|
|
110.4
|
|
|
94.4
|
|
|
81.6
|
|
|
375.2
|
|
||
License agreements:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Royalty payments
|
723.3
|
|
|
12.4
|
|
|
93.6
|
|
|
99.4
|
|
|
81.4
|
|
|
57.5
|
|
|
379.0
|
|
||
Advertising and promotional spend obligations
|
120.7
|
|
|
6.6
|
|
|
27.6
|
|
|
29.5
|
|
|
31.0
|
|
|
13.0
|
|
|
13.0
|
|
||
Other contractual obligations
(c)
|
280.0
|
|
|
28.1
|
|
|
108.2
|
|
|
51.1
|
|
|
38.7
|
|
|
30.5
|
|
|
23.4
|
|
||
Other long-term obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pension obligations (mandated)
(d)
|
18.5
|
|
|
1.4
|
|
|
4.6
|
|
|
4.4
|
|
|
4.1
|
|
|
4.0
|
|
|
—
|
|
||
Total
|
$
|
10,473.4
|
|
|
166.3
|
|
|
759.4
|
|
|
728.1
|
|
|
699.8
|
|
|
2,897.3
|
|
|
$
|
5,222.5
|
|
|
|
•
|
Revenue Recognition
|
•
|
Goodwill, Other Intangible Assets and Long-Lived Assets
|
•
|
Business Combinations
|
•
|
Inventory
|
•
|
Pension and Other Post-Employment Benefit Costs
|
•
|
Share-Based Compensation
|
•
|
Income Taxes
|
•
|
Redeemable noncontrolling interests
|
•
|
our ability to achieve our global business strategy, compete effectively in the beauty industry and achieve the benefits contemplated by our recent strategic transactions within the expected time frame, including our joint ventures and recent acquisitions;
|
•
|
use of estimates and assumptions in preparing our financial statements, including with regard to revenue recognition, stock compensation expense, purchase price allocations, the market value of inventory and the fair value of acquired assets and liabilities associated with acquisitions;
|
•
|
managerial, integration, operational, regulatory, legal and financial risks, including management of cash flows, and expenses associated with our strategic transactions and internal reorganizations;
|
•
|
the integration of the P&G Beauty Business with our business, operations, systems, financial data and culture (including the recent exit and anticipated future exits of the Transition Services Agreement) and the ability to realize synergies and other potential benefits within the time frames currently contemplated;
|
•
|
changes in law, regulations and policies that affect our business or products;
|
•
|
our and our brand partners' and licensors' ability to obtain, maintain and protect the intellectual property rights, including trademarks, brand names and other intellectual property used in their respective businesses, products and software, and their abilities to protect their respective reputations and defend claims by third parties for infringement of intellectual property rights;
|
•
|
our ability to implement (and the cost of) the Global Integration Activities, Acquisition Integration Program, the Organizational Redesign restructuring program and the Post-Merger Reorganization as planned and the success of the programs or any anticipated programs in delivering anticipated improvements and efficiencies;
|
•
|
our ability to successfully execute our announced intent to divest and/or discontinue non-core brands and to rationalize wholesale distribution by reducing the amount of product diversion to the value and mass channels;
|
•
|
our ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products, including any relaunched or rebranded products;
|
•
|
risks related to our international operations and joint ventures, including reputational, compliance, regulatory, economic and foreign political risks;
|
•
|
our dependence on certain licenses, entities performing outsourced functions and third-party suppliers, including third party software providers;
|
•
|
administrative, development and other difficulties in meeting the expected timing of market expansions, product launches and marketing efforts;
|
•
|
global political and/or economic uncertainties or disruptions, including the impact of Brexit and the new U.S. administration;
|
•
|
the number, type, outcomes (by judgment or settlement) and costs of legal, tax, regulatory or administrative proceedings, and/or litigation;
|
•
|
our ability to manage seasonal variability;
|
•
|
increased competition, consolidation among retailers, shifts in consumers’ preferred distribution channels and other changes in the retail, e-commerce and wholesale environment in which we do business and sell our products;
|
•
|
disruptions in operations, including due to disruptions or consolidation in supply chain, manufacturing rights or information systems, labor disputes and natural disasters;
|
•
|
restrictions imposed on us through our license agreements and credit facilities and changes in the manner in which we finance our debt and future capital needs, including potential acquisitions;
|
•
|
increasing dependency on information technology and our ability to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, costs and timing of implementation and effectiveness of any upgrades to their respective information technology systems and our failure to comply with any privacy or data security laws or to protect against theft of customer, employee and corporate sensitive information;
|
•
|
our ability to attract and retain key personnel;
|
•
|
the distribution and sale by third parties of counterfeit and/or gray market versions of our products; and
|
•
|
other factors described elsewhere in this document and from time to time in documents that we file with the SEC.
|
Exhibit No.
|
|
Description
|
|
2.1
|
|
|
Contribution Agreement, dated as of January 10, 2017, by and among Coty Inc., Coty US Holdings Inc., Foundation, LLC, Younique, LLC, UEV Holdings, LLC, Aspen Cove Holdings, Inc., each of the other unit holders of Younique, LLC, and Derek Maxfield (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 1, 2017).
|
10.1
|
|
|
Coty Inc. Long-Term Incentive Plan, as amended and restated effective as of February 1, 2017.
|
10.2
|
|
|
Amended and Restated Coty Inc. Equity and Long-Term Incentive Plan, as amended and restated on February 1, 2017.
|
10.3
|
|
|
Amended and Restated Annual Performance Plan, as of February 1, 2017.
|
10.4
|
|
|
Nonqualified Stock Option Award Terms and Conditions under Coty Inc. Long-Term Incentive Plan, as amended February 1, 2017 and April 8, 2013 and effective as of February 1, 2017.
|
10.5
|
|
|
Amended Form of Elite Subscription and Stock Option Agreement.
|
10.6
|
|
|
Subscription Agreement, dated as of February 16, 2017, between Coty Inc. and Sébastien Froidefond.
|
10.7
|
|
|
Side Letter, dated as of March 31, 2017, between Coty Services UK Limited and Sébastien Froidefond.
|
10.8
|
|
|
Subscription Agreement, dated as of March 27, 2017, between Coty Inc. and Lambertus J.H. Becht.
|
21.1
|
|
|
List of significant subsidiaries.
|
31.1
|
|
|
Certification of Chief Executive Officer, pursuant to Rule 13a-14(a).
|
31.2
|
|
|
Certification of Chief Financial Officer, pursuant to Rule 13a-14(a).
|
32.1
|
|
|
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350.
|
32.2
|
|
|
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.
|
101.INS
|
|
*
|
XBRL Instance Document.
|
101.SCH
|
|
*
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
*
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
|
*
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
|
*
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
|
*
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
COTY INC.
|
|
|
|
|
|
Date: May 10, 2017
|
|
By:
|
/s/Camillo Pane
|
|
|
|
Name: Camillo Pane
|
|
|
|
Title: Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/Patrice de Talhouët
|
|
|
|
Name: Patrice de Talhouët
|
|
|
|
Title: Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
1.1
|
Purpose.
The purpose of this Coty Inc. Long-Term Incentive Plan is to promote the interests of Coty Inc. and its shareholders by (i) attracting and retaining exceptional executive personnel and other key employees of the Company and its Affiliates; (ii) motivating such employees by means of performance‑related incentives to achieve long‑range performance goals; and (iii) enabling such employees to participate in the long‑term growth and financial success of the Company.
|
1.2
|
Effective Date and Term of the Plan
.
|
(a)
|
The original effective date of the Plan was December 10, 1996. The effective date of this amended and restated plan document is the Effective Date.
|
(b)
|
The Plan will terminate upon the earlier of (i) the date on which all Shares available for issuance under the Plan have been issued pursuant to the exercise of Stock Options or the Award of Shares under the Plan, or (ii) the date specified by action of the Board. Upon such Plan termination, all Awards outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Terms and Conditions evidencing each Award.
|
2.1
|
“Affiliate”
means any entity (i) that, directly or indirectly, is controlled by the Company, or in which the Company has a significant equity interest, and (ii) as to which the Company is an “eligible issuer of service recipient stock” within the meaning of Treas. Reg. 1.409A-1(b)(5)(iii)(E), in any such case as determined by the Committee.
|
2.2
|
“Applicable Fraction”
means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest.
|
2.3
|
“Award”
means a grant under the Plan to a Participant of a Stock Option, Restricted Stock Award, or Other Stock-Based Award.
|
2.4
|
“Board”
means the Board of Directors of the Company.
|
2.5
|
“Business Day”
means any day other than a Saturday, Sunday, or legal holiday, or a day on which the national securities exchange that constitutes the principal market for the Shares is closed.
|
2.6
|
“Cause”
has the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Cause,” then “Cause” shall mean the occurrence of any of the following, as determined by the Committee in its sole discretion:
|
(a)
|
a Participant’s willful and continued failure substantially to perform his or her duties (other than as a result of total or partial incapacity due to physical or mental illness or as a result of termination by such Participant for Good Reason), which failure continues for more than 30 days after receipt by the Participant of written notice setting forth the facts and circumstances identified by the Company as constituting adequate grounds for termination under this clause (a);
|
(b)
|
any willful act or omission by a Participant constituting dishonesty, fraud or other malfeasance, and any act or omission by a Participant constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Company or any of its Affiliates;
|
(c)
|
a Participant’s indictment for a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or
|
(d)
|
a Participant’s breach of any nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound.
|
2.7
|
“Change in Control”
means the occurrence of any of the following:
|
(a)
|
Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), that is not the Majority Shareholder is or becomes the "beneficial owner" (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then outstanding securities, or (ii) 20% or more of the combined voting power of the Company's then outstanding securities at a time when the Majority Shareholder holds less than 30% of such combined voting power. For purposes of this clause (a), “beneficial owner” has the meaning given that term in Rule 13d‑3 under the Exchange Act, except that a Person shall be deemed to be the "beneficial owner" of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule;
|
(b)
|
Individuals who constitute the Board on the Restatement Effective Date (the “
Incumbent Board
”) cease for any reason to constitute at least a majority thereof,
provided,
that any Person becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors then comprising the Incumbent Board shall be, for purposes of this clause (b), considered as though such Person were a member of the Incumbent Board; and
provided
,
further
, that this clause (b) shall not apply as long as the Majority Shareholder is the beneficial owner of a majority of the voting power of
the Company’s outstanding securities;
|
(c)
|
The Majority Shareholder enters into any joint venture, joint operating arrangement, partnership, standstill agreement or other arrangement similar to any of the foregoing with any other Person or group, pursuant to which such Person or group assumes significant operational or managerial control of the Company; or
|
(d)
|
The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (d) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan.
|
2.8
|
“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time.
|
2.9
|
“Committee”
means the Remuneration and Nomination Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. or any other applicable exchange on which the Company’s common equity is at the time listed and, as applicable, the requirements for “outside directors” under Section 162(m) and the regulations thereunder, as in effect from time to time.
|
2.10
|
“Company”
means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 14.1.
|
2.11
|
“Designated Beneficiary”
means the Person or Persons the Participant designates from time to time on a signed form prescribed by the Committee, properly filed with the Committee during the Participant’s lifetime, as the beneficiary of any amounts or benefits the Participant owns or is to receive under the Plan, in accordance with Section 10.1. A properly filed beneficiary designation will revoke all prior designations by the same Participant. If no such form has been
|
2.12
|
“Disability”
means either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position(s) for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. Any question as to the existence of the Disability of a Participant as to which the Participant and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Participant and the Company. If the Participant and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Participant shall be final and conclusive for all purposes of the Plan. Following a Change in Control, the Company shall pay all expenses incurred in the determination of whether a Participant is disabled.
|
2.13
|
“Effective Date”
means February 2, 2017.
|
2.14
|
“Employee”
means an employee of the Company or an Affiliate (that is not a Joint Venture).
|
2.15
|
“Exchange Act”
means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
|
2.16
|
“Executive Officer”
means any Company employee who is an “executive officer” as defined in Rule 3b-7 promulgated under the Exchange Act.
|
2.17
|
“
Exercise Date
” shall mean any Business Day.
|
2.18
|
“Exercise Price”
means the price at which a Participant may purchase a Share pursuant to a Stock Option.
|
2.19
|
“Fair Market Value”
as it relates to a Share means, unless otherwise determined by the Committee, the most recent closing price of a Share on the principal national securities exchange on which the Shares are then listed, or if there were no sales on such date, on the next preceding day on which there were sales, or if such Shares are not listed on a national securities exchange, the last reported bid price in the over-the-counter market.
|
2.20
|
“Good Reason”
shall have the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Good Reason,” then “Good Reason” shall mean the occurrence of any of the following:
|
(a)
|
Before a Change in Control:
|
(i)
|
A Participant’s removal from, or the Company’s failure to reelect or reappoint the Participant to, his or her positions at the Company (other than as a result of a
|
(ii)
|
The relocation of a Participant’s principal workplace without his or her consent to a location more than 25 miles distant from its current location.
|
(b)
|
Following a Change in Control:
|
(i)
|
Any of the events described in clause (a) above,
|
(ii)
|
A material diminution in a Participant’s title, position, duties or responsibilities, or the assignment to a Participant of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with his or her position as of the Grant Date,
|
(iii)
|
The failure of the Company to continue a Participant’s participation in the Company’s Annual Performance Plan and in this Plan on a basis that is commensurate with his or her position, or
|
2.21
|
“Grant Date”
means the date on which an Award is granted.
|
2.22
|
“
Joint Venture
” has the meaning given that term in Section 6.9.
|
2.23
|
“Majority Shareholder”
means (i) the Company’s majority shareholder as of June 12, 2013 or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective as of the Effective Date or any other similarly situated Person as determined by the Committee.
|
2.24
|
“Other Stock-Based Awards”
has the meaning given that term in Section 8.
|
2.25
|
“Owned Shares”
means Shares that a Participant has acquired through the exercise of a Stock Option, the vesting of Restricted Stock or a distribution of Shares in connection with an Other Stock-Based Award.
|
2.26
|
“Participant”
means an Employee selected by the Committee to receive an Award under the Plan pursuant to Section 5.2, or who has an outstanding Award granted under the Plan.
|
2.27
|
“Person”
means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof.
|
2.28
|
“Plan”
means this Coty Inc. Long-Term Incentive Plan, as amended from time to time.
|
2.29
|
“Restricted Stock”
means a contingent grant of Shares awarded to a Participant pursuant to Section 7.
|
2.30
|
“Restriction
Period”
means the period during which the transfer of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance objectives, or the occurrence of other events as the Committee determines, in its sole discretion) and, except as provided in the Terms and Conditions, the Restricted Stock is not vested.
|
2.31
|
“Retirement”
means a termination of Service (other than a termination of Service for Cause):
|
(a)
|
after attaining age 60, but only if the Company or the employing Affiliate consents to the treatment of such termination as a “Retirement” for purposes of this Plan; or
|
(b)
|
qualifying as a retirement at normal retirement age under the laws and/or arrangements applicable to the Participant, as reasonably determined by the Committee.
|
2.32
|
“Section 409A”
means Section 409A of the Code and the applicable regulations and other legal authority promulgated thereunder.
|
2.33
|
“Service”
means the provision of services in the capacity of an Employee or a Director of the Company or an Affiliate. A transfer of Service from the Company to an Affiliate or from an Affiliate to the Company or another Affiliate shall not constitute a termination of Service under the Plan or any Terms and Conditions. All determinations regarding Service, including whether any leave of absence is a termination of Service, shall be made by the Committee in its sole discretion. For purposes of this paragraph, a “Continuing Director” shall mean any individual who, upon his or her termination of employment with the Company or an Affiliate, continues to serve as a member of the Board or the board of directors of an Affiliate. The Service of a Continuing Director shall terminate when he or she ceases to serve as a member of the Board or on the board of directors of an Affiliate.
|
2.34
|
“Share”
means a share of the Class A Common Stock, par value $.01 per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time.
|
2.35
|
“Stock Option”
means a nonqualified stock option, as described in Section 6, that is not intended to meet the requirements of Code Section 422.
|
2.36
|
“Stock Option Spread”
means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Option is exercised exceeds the aggregate Exercise Price with respect to such Shares.
|
2.37
|
“Successor”
means the Participant’s spouse, the Participant’s lineal descendants and/or any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, or to a corporation in which the Participant, the Participant’s spouse and/or the Participant’s lineal descendants own 100% of the economic interest and has the unfettered right to prevent further transfer or disposition of the Restricted Stock, Stock Option
|
2.38
|
“Terms and Conditions”
means any electronic or written agreement or other instrument or document evidencing an Award.
|
2.39
|
“Withholding Tax”
means the aggregate federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under the Plan.
|
3.1
|
Plan Administration.
The Plan shall be administered by the Committee.
|
3.2
|
Authority of the Committee.
Except as limited by law or the by-laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to: (a) select eligible Employees to participate in the Plan; (b) determine the size and type of Awards; (c) determine the terms and conditions of Awards in a manner consistent with the Plan;
(d)
determine whether, to what extent, and under what circumstances Awards may be settled or exercised in Shares, or other property, and the method or methods by which Awards may be settled or exercised; (e) determine the Fair Market Value of a Share; (f) construe and interpret the Plan and any agreement or instrument entered into under the Plan; (g) establish, amend or waive rules and regulations for the Plan’s administration; (h) specify the Exercise Price; and (i) subject to the provisions of Section 13.1, amend the terms and conditions of any outstanding Award to the extent the amended terms are within the Committee’s authority under the Plan. Further, the Committee shall make all other determinations that may be necessary or advisable to administer the Plan. The Committee may delegate some or all of its authority under the Plan to officers or employees of the Company or other Persons, except with respect to Awards to Executive Officers.
|
3.3
|
Decisions Binding.
All determinations and decisions made by the Committee or by a Person or Persons delegated authority by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, its shareholders, all Affiliates, Employees, Participants and their estates and beneficiaries.
|
4.1
|
Number of Shares Available for Grants.
Subject to adjustment as provided in Section 4.3 the number of Shares with respect to which Awards (including for this purpose awards granted under the Plan prior to the Restatement Effective Date) may be granted under the Plan shall be as set forth in a resolution adopted by the Board and as authorized by the Company’s shareholders.
|
4.2
|
Lapsed Awards.
If any Award granted under the Plan is canceled, terminates, expires, lapses or is forfeited for any reason, any Shares subject to the Award shall again be available for the grant of an Award under the Plan.
|
4.3
|
Adjustments in Authorized Shares.
If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including an IPO or other capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share that may become subject to an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be.
|
4.4
|
Sources of Shares Deliverable Under Awards.
Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.
|
4.5
|
Plan Frozen.
As of November 8, 2012, no Awards may be granted under the Plan.
|
5.1
|
Eligibility.
Any Employee, including any officer or employee‑director of the Company or an Affiliate, who is not a member of the Committee shall be eligible to be designated a Participant. To be eligible, a Participant shall have signed and delivered to the Company the Confidentiality and Non-Competition Agreement delivered by the Company to the Participant.
|
5.2
|
Actual Participation.
The Committee shall determine the eligible Employees to whom it will grant Awards.
|
6.1
|
Grant of Stock Options.
|
(a)
|
Subject to the terms and provisions of the Plan, the Committee may grant Stock Options to any Employee in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in Terms and Conditions.
|
(b)
|
Each Stock Option grant shall be evidenced by Terms and Conditions that specify the duration of the Stock Option, the number of Shares to which the Stock Option pertains, the manner, time, and rate of exercise and vesting of the Stock Option, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service.
|
(c)
|
The Company’s Chief Executive Officer, as long as he or she is a member of the Board, may grant, upon the recommendation of the Company’s Vice President, Corporate Human Resources, Stock Options covering up to a total of 2,000,000 Shares to Employees for retention, recognition or other appropriate purposes, provided that a report of any such grant shall be provided to the Committee at its next meeting following the grant.
|
6.2
|
Exercise Price.
The Terms and Conditions shall specify the Stock Option’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date.
|
6.3
|
Duration of Stock Options.
Each Stock Option will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions.
|
6.4
|
Exercise of Stock Options.
|
(a)
|
Stock Options shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in the Terms and Conditions. Restrictions and conditions on the exercise of a Stock Option need not be the same for each Award or for each Participant.
|
(b)
|
The holder of a Stock Option may exercise the Stock Option only by delivering a written notice of exercise to the Company setting forth the number of Shares as to which the Stock Option is to be exercised. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such exercise procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules.
|
(c)
|
Any exercisable Stock Option that has not been exercised by its holder shall be automatically exercised in accordance with subsection (a) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Option Spread with respect to such Stock Option.
|
6.5
|
Termination of Service.
Except as otherwise provided in the Terms and Conditions:
|
(a)
|
In the event a Participant’s Service terminates by reason of death, Disability, or Retirement:
|
(i)
|
The Applicable Fraction of the portion of any Stock Option held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable.
|
(ii)
|
All Stock Options held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service.
|
(iii)
|
Any unvested portion of the Participant’s Stock Options as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination.
|
(b)
|
Except as provided in Section 6.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement:
|
(i)
|
Any unvested portion of the Participant’s Stock Options as of the date of termination shall be forfeited and canceled on the date of termination, and
|
(ii)
|
The vested portion, if any, of the Participant’s Stock Options shall remain exercisable through (A) the date that is six months after the Participant’s termination of Service, if the six month period commences in an open trading window, or (B) if the six month period commences in a closed trading window, the date that is six months from the first day of the next open trading window. Any vested Stock Option remaining outstanding after such date shall thereafter expire.
|
(c)
|
Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Option at any time.
|
(d)
|
In no event shall a Stock Option be exercisable following its expiration date.
|
6.6
|
Nontransferability of Stock Options.
|
(a)
|
Except as otherwise provided in Section 6.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Options shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.
|
(b)
|
Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 6.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.
|
6.7
|
Dividend Equivalents and Other Distributions.
The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Options that are equivalent to dividends or other distributions declared and paid on the Shares underlying the Stock Options prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A.
|
6.8
|
Change in Control.
If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Option shall vest and become exercisable.
|
6.9
|
Employment in a Joint Venture.
If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “
Joint Venture
”), during the Restriction Period, vesting of the Participant’s Stock Options shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Stock Options shall be extended by the number of days the Participant was an employee of the Joint Venture.
|
7.1
|
Grant of Restricted Stock.
Subject to the terms and provisions of the Plan, the Committee may, at any time and from time to time, grant Restricted Stock to any Employee in such amounts as it determines and sets forth in Terms and Conditions.
|
7.2
|
Terms and Conditions.
Each grant of Restricted Stock shall be evidenced by Terms and Conditions that specify the Restriction Period, the number of Shares granted, the purchase price, if any, and such other provisions as the Committee determines.
|
7.3
|
Nontransferability.
|
(a)
|
Except as provided in Section 7.3(b), during the Restricted Period, (i) no Restricted Stock granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and (ii) all rights with respect to Restricted Stock shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.
|
(b)
|
Subject to applicable law, Restricted Stock may be transferred to a Successor. Such transferred Restricted Stock may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 7.3, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.
|
7.4
|
Termination of Service.
Except as provided in Section 7.5,
if a Participant’s Service terminates, then except as otherwise provided in the Terms and Conditions all unvested Restricted Stock
|
7.5
|
Change in Control.
If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Restricted Stock shall vest and become nonforfeitable.
|
7.6
|
Other Conditions.
|
(a)
|
The Committee may impose such other conditions and restrictions on any Restricted Stock as it deems advisable and sets forth in the Terms and Conditions, including, without limitation, vesting restrictions based upon the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service, and/or restrictions under applicable federal or state securities laws. The Committee may provide that restrictions established under this Section 7.6(a) as to any given Award will lapse all at once or in installments.
|
(b)
|
The Company may retain the certificates representing Shares of Restricted Stock in its possession until all conditions and/or restrictions applicable to the Shares have been satisfied.
|
7.7
|
Voting Rights.
Except as otherwise provided in the Terms and Conditions, a Participant holding Shares of Restricted Stock may exercise any voting rights that apply to those Shares during the Restriction Period.
|
7.8
|
Dividends and Other Distributions.
During the Restriction Period, a Participant holding Shares of Restricted Stock shall be credited with regular dividends and other distributions paid on those Shares. Such dividends and other distributions shall be subject to the same vesting conditions as the underlying Shares, and shall be paid within 30 days following the end of the Restriction Period.
|
7.9
|
Section 83(b) Elections on Restricted Stock.
The Participant, if subject to taxation in the United States with respect to any compensation derived under the Plan, shall indicate to the Company whether the Participant intends to make an election under Code Section 83(b) with respect to the Restricted Stock.
|
7.10
|
Employment in a Joint Venture.
If a Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Participant’s Restricted Stock shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture and shall recommence on the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Restricted Stock shall be extended by the number of days the Participant was an employee of the Joint Venture.
|
8.1
|
The Committee shall have authority to grant to eligible Employees an “
Other Stock‑Based Award
,” which shall consist of any right which (i) is not a Stock Option or Restricted Stock, and (ii) is an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Terms and Conditions, the Committee shall determine the terms and conditions of any such Other Stock‑Based Award.
|
9.1
|
Restrictions.
The Committee may impose such restrictions on any Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws.
|
9.2
|
Additional Conditions of Transfer.
The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Plan or any Terms and Conditions.
|
10.1
|
Each Participant may, from time to time, name any Designated Beneficiary (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die before receiving any or all of his or her benefits under the Plan. Each beneficiary designation shall revoke all prior designations by the same Participant, must be in a form prescribed by the Committee and must be made during the Participant’s lifetime. If a Designated Beneficiary predeceases the Participant or no beneficiary has been designated, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.
|
11.1
|
The Terms and Conditions may provide that if the Participant breaches, whether during or after termination of Service, a nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound, then in addition to any other penalties or restrictions that may apply under any such agreement, state law, or otherwise, the Participant shall forfeit:
|
(a)
|
Any Awards granted to him or her under the Plan, including Awards that have become exercisable;
|
(b)
|
The profit the Participant realized from the exercise of any Stock Options that the Participant exercised after terminating Service and within the six-month period
|
(c)
|
The Fair Market Value, as determined on the vesting date, of any Restricted Stock that vested within the six-month period immediately preceding the Participant’s termination of Service.
|
12.1
|
Service.
Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service at any time, or confer upon any Participant any right to continue in the Service of the Company or any Affiliate. The grant of any Award under the Plan shall not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
|
12.2
|
Participation.
No Employee shall have the right to receive an Award under the Plan, or, having received any Award, to receive a future Award.
|
13.1
|
Amendment, Modification and Termination.
The Board may at any time and from time to time alter, amend, modify or terminate the Plan in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. Subject to the terms and conditions of the Plan, the Committee may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised), in order to comply with the requirements of applicable law or otherwise. Notwithstanding the foregoing, no modification of an Award shall, without the prior written consent of the Participant, materially alter or impair any rights or obligations under any Award already granted under the Plan, except such an amendment made to comply with the requirements of applicable law.
|
13.2
|
Adjustment of Awards Upon the Occurrence of Certain Events
.
|
(a)
|
In General
. If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share underlying an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be, which shares or other securities
|
(b)
|
Reciprocal Transactions
. The Committee may, but shall not be obligated to, make an appropriate and proportionate adjustment to an Award or to the Exercise Price of any outstanding Award, and/or grant an additional Award to the holder of any outstanding Award, to compensate for the diminution in the intrinsic value of the Shares resulting from any reciprocal transaction.
|
(c)
|
Certain Unusual or Nonrecurring Events
. In recognition of unusual or nonrecurring events affecting the Company or its financial statements, or in recognition of changes in applicable laws, regulations, or accounting principles, and, whenever the Committee determines that adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee may, using reasonable care, make adjustments in the terms and conditions of, and the criteria included in, Awards. In no event will the Committee, unless otherwise approved by shareholders, be permitted (i) to reduce the Exercise Price of any outstanding Stock Option, (ii) cancel a Stock Option in exchange for cash or other Awards (except as provided in Section 13.4), (iii) exchange or replace an outstanding Stock Option with a new Stock Option with a lower Exercise Price, or (iv) take any other action that would be a "repricing" of Stock Options.
|
(d)
|
Notice
. The Committee shall give notice of any adjustment to each Participant who holds an Award that has been adjusted and the adjustment (whether or not such notice is given) shall be effective and binding for all Plan purposes.
|
(e)
|
Section 409A
. Notwithstanding any provision herein to the contrary, no adjustment shall be made under this Section 13.2 to the extent it would give rise to adverse tax consequences under Section 409A.
|
13.3
|
Fractional Shares.
Fractional Shares, whether resulting from any adjustment in Awards pursuant to Section 13.2 or otherwise, may be settled in cash or otherwise as the Committee determines.
|
13.4
|
Change in Control
.
|
(a)
|
If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Awards shall become fully vested.
|
(b)
|
Any Award that has not been fully exercised before the date of a Change in Control may be settled or otherwise terminated on such date in the discretion of the Committee, unless a provision has been made in writing in connection with such transaction for the
|
13.5
|
Tax Withholding.
The Company shall have the right to deduct or withhold, or require a Participant to remit to the Company, an amount (either in cash or Shares) sufficient to satisfy any Withholding Tax.
|
14.1
|
Successors.
All obligations of the Company under the Plan or the Terms and Conditions shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise.
|
14.2
|
Legal Construction.
|
(a)
|
Number
.
Except where otherwise indicated by the context, any plural term used in the Plan includes the singular and any singular term includes the plural.
|
(b)
|
Severability
.
If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
|
14.3
|
Business Day.
In the event the day prescribed for the performance of any act under the Plan, or deadline by which such act must be performed, shall fall on a day other than a Business Day, such day or deadline shall be extended until the close of business on the next succeeding Business Day.
|
14.4
|
Requirements of Law.
The granting of Awards, the issuance of Shares and the payment of cash under the Plan shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required.
|
14.5
|
Rights of a Shareholder.
A Participant shall not be, nor shall a Participant have any of the rights and privileges of, a shareholder until certificates for the underlying Shares of Restricted Stock have been issued.
|
14.6
|
Securities Law Compliance.
|
(a)
|
As to any individual who is, on the relevant date, an officer, director or greater than 10% percent beneficial owner of any class of the Company’s equity securities that is registered
|
(b)
|
To the extent the Committee deems it necessary, appropriate or desirable to comply with state securities laws or practice and to further the purposes of the Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Awards granted to Participants, including rules that differ from those set forth in the Plan, and (ii) grant Awards to such Participants in accordance with those rules that would require the application of the securities laws of any state.
|
14.7
|
Unfunded Status of the Plan.
The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company. The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan.
|
14.8
|
Non-U.S. Based Employee.
Notwithstanding any other provision of the Plan to the contrary, the Committee may make Awards to Employees who are not citizens or residents of the United States, or to Employees outside the United States, on terms and conditions that are different from those specified in the Plan as may, in the Committee’s judgment, be necessary or desirable to foster and promote achievement of the Plan’s purposes. In furtherance of such purposes, the Committee may, without amending the Plan, establish or modify rules, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company operates or has employees.
|
14.9
|
Governing Law.
To the extent not preempted by Federal law, the Plan and all agreements hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction.
|
1.1
|
Purpose
. The purpose of this Coty Inc. Equity and Long-Term Incentive Plan is to promote the interests of Coty Inc. and its shareholders by (i) attracting and retaining exceptional executive personnel and other key employees of the Company and its Affiliates; (ii) motivating such employees by means of performance-related incentives to achieve long-range performance goals; and (iii) enabling such employees to participate in the long-term growth and financial success of the Company.
|
(a)
|
The original effective date of the Plan is November 8, 2012. This Plan was first amended and restated on April 8, 2013, amended and restated again on October 28, 2015, again on November 3, 2016 and again on February 1, 2017. The effective date of this third amended and restated plan document is the Fourth Restatement Effective Date.
|
(b)
|
The Plan will terminate upon the earlier of (i) the date on which all Shares available for issuance under the Plan have been issued pursuant to the exercise of Stock Options or the Award of Shares under the Plan, or (ii) the date specified by action of the Board. Upon such Plan termination, all Awards outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Terms and Conditions evidencing each Award.
|
2.1
|
“Affiliate” means any entity (i) that, directly or indirectly, is controlled by the Company, or in which the Company has a significant equity interest, and (ii) as to which the Company is an “eligible issuer of service recipient stock” within the meaning of Treas. Reg. 1.409A-1(b)(5)(iii)(E), in any such case as determined by the Committee.
|
2.2
|
“Applicable Fraction” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest.
|
2.3
|
“Award” means a grant under the Plan to a Participant of a Stock Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Performance Award, or Other Stock-Based Award.
|
2.4
|
“Board” means the Board of Directors of the Company.
|
2.5
|
“Business Day” means any day other than a Saturday, Sunday, or legal holiday, or a day on which the national securities exchange that constitutes the principal market for the Shares is closed.
|
2.6
|
“Cause” has the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Cause,” then “Cause” shall mean the occurrence of any of the following, as determined by the Committee in its sole discretion:
|
(a)
|
a Participant’s willful and continued failure substantially to perform his or her duties (other than as a result of total or partial incapacity due to physical or mental illness or as a result of termination by such Participant for Good Reason), which failure continues for more than 30 days after receipt by the Participant of written notice setting forth the facts and circumstances identified by the Company as constituting adequate grounds for termination under this clause (a);
|
(b)
|
any willful act or omission by a Participant constituting dishonesty, fraud or other malfeasance, and any act or omission by a Participant constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Company or any of its Affiliates;
|
(c)
|
a Participant’s indictment for a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or
|
(d)
|
a Participant’s breach of any nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound.
|
(a)
|
Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that is not the Majority Shareholder is or becomes the “beneficial owner” (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then outstanding securities, or (ii) 20% or more of the combined voting power of the Company’s then outstanding securities at a time when the Majority Shareholder hold less than 30% of such combined voting power. For purposes of this clause (a), “beneficial owner” has the meaning given that term in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be the “beneficial owner” of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule;
|
(b)
|
Individuals who constitute the Board on the First Restatement Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided, that any Person
|
(c)
|
The Majority Shareholder enters into any joint venture, joint operating arrangement, partnership, standstill agreement or other arrangement similar to any of the foregoing with any other Person or group, pursuant to which such Person or group assumes significant operational or managerial control of the Company; or
|
(d)
|
The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (d) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan.
|
2.8
|
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.
|
2.9
|
“Committee” means the Remuneration and Nominating Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. or any other applicable exchange on which the Company’s common equity is at the time listed and, as applicable, the requirements for “outside directors” under Section 162(m) and the regulations thereunder, as in effect from time to time.
|
2.10
|
“Company” means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 16.1.
|
2.11
|
“Designated Beneficiary” means the Person or Persons the Participant designates from time to time on a signed form prescribed by the Committee, properly filed with the Committee during the Participant’s lifetime, as the beneficiary of any amounts or benefits the Participant owns or is to receive under the Plan, in accordance with Section 12.1. A properly filed beneficiary designation will revoke all prior designations by the same Participant. If no such form has been filed with the Committee, the Designated Beneficiary shall be the beneficiary named by the Participant in the Company’s qualified 401(k) savings plan or, if none, the Beneficiary’s estate.
|
2.12
|
“Director” means a member of the board of directors of the Company or an Affiliate.
|
2.13
|
“Disability” means either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position(s) for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. Any question as to the existence of the Disability of a Participant as to which the Participant and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Participant and the Company. If the Participant and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Participant shall be final and conclusive for all purposes of the Plan. Following a Change in Control, the Company shall pay all expenses incurred in the determination of whether a Participant is disabled.
|
2.14
|
“Employee” means an employee of the Company or an Affiliate (that is not a Joint Venture).
|
2.15
|
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
|
2.16
|
“Executive Officer” means any Company employee who is an “executive officer” as defined in Rule 3b-7 promulgated under the Exchange Act.
|
2.17
|
“Exercise Date” shall mean any Business Day.
|
2.18
|
“Exercise Price” means the price at which a Participant may purchase a Share pursuant to a Stock Option or Stock Appreciation Right.
|
2.19
|
“Fair Market Value” as it relates to a Share means, unless otherwise determined by the Committee, the most recent closing price of a Share on the principal national securities exchange on which the Shares are then listed, or if there were no sales on such date, on the next preceding day on which there were sales, or if such Shares are not listed on a national securities exchange, the last reported bid price in the over-the-counter market.
|
2.20
|
“First Restatement Effective Date” means the date on which the Amended and Restated Certificate of Incorporation of the Company that was adopted by the Company in connection with the first underwritten public offering of the Company’s common stock was filed with the Secretary of State of the State of Delaware.
|
2.21
|
“Fourth Restatement Effective Date” means February 1, 2017.
|
2.22
|
“Good Reason” shall have the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Good Reason,” then “Good Reason” shall mean the occurrence of any of the following:
|
(a)
|
Before a Change in Control:
|
(i)
|
A Participant’s removal from, or the Company’s failure to reelect or reappoint the Participant to, his or her positions at the Company (other than as a result of a promotion). For purposes of this clause (i), a mere change of title shall not constitute removal from, or non-reelection
|
(ii)
|
The relocation of a Participant’s principal workplace without his or her consent to a location more than 25 miles distant from its current location.
|
(b)
|
Following a Change in Control:
|
(i)
|
Any of the events described in clause (a) above;
|
(ii)
|
A material diminution in a Participant’s title, position, duties or responsibilities, or the assignment to a Participant of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with his or her position as of the Grant Date; or
|
(iii)
|
The failure of the Company to continue a Participant’s participation in the Company’s Annual Performance Plan and in this Plan or any successor plans thereto on a basis that is commensurate with his or her position.
|
2.23
|
“Grant Date” means the date on which an Award is granted.
|
2.24
|
“Joint Venture” has the meaning given that term in Section 6.9.
|
2.25
|
“Majority Shareholder” means (i) the Company’s majority shareholder as of the First Restatement Effective Date or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective on the First Restatement Effective Date or any other similarly situated Person as determined by the Committee.
|
2.26
|
“Original Effective Date” means November 8, 2012.
|
2.27
|
“Other Stock-Based Awards” has the meaning given that term in Section 10.
|
2.28
|
“Owned Shares” means Shares that a Participant has acquired through the exercise of a Stock Option or a Stock Appreciation Right, the vesting of Restricted Stock, the settlement of a Restricted Stock Unit or a distribution of Shares in connection with an Other Stock-Based Award.
|
2.29
|
“Participant” means an Employee selected by the Committee to receive an Award under the Plan pursuant to Section 5.2, or who has an outstanding Award granted under the Plan.
|
2.30
|
“Performance Award” means a right to receive cash or Shares (as determined by the Committee) upon the achievement, in whole or in part, of the applicable Performance Criteria pursuant to Section 9. A grant of Restricted Stock, Restricted Stock Units, or Other Stock Awards may be designed to qualify as Performance Awards.
|
2.31
|
“Performance-Based Exception” means the performance-based exception from the tax deductibility limitations of Code Section 162(m) and any regulations promulgated thereunder.
|
2.32
|
“Performance Criteria” means the objectives established by the Committee for a Performance Period for the purpose of determining the extent to which an Award of Performance Awards has been earned.
|
2.33
|
“Performance Period” means the 12-month time period during which Performance Criteria must be met in order for a Participant to earn Performance Awards granted under Section 9 or any other
|
2.34
|
“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof.
|
2.35
|
“Plan” means this Coty Inc. Equity and Long-Term Incentive Plan, as amended from time to time.
|
2.36
|
“Prior Plans” means the Coty Inc. Long-Term Incentive Plan and the Coty Inc. Executive Ownership Plan, each as in effect immediately prior to the Original Effective Date and as may be amended from time to time.
|
2.37
|
“Restricted Stock” means a contingent grant of Shares awarded to a Participant pursuant to Section 8.
|
2.38
|
“Restricted Stock Unit” means a Restricted Stock Unit granted to a Participant, as described in Section 8.
|
2.39
|
“Restriction Period” means the period during which the transfer of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance objectives, or the occurrence of other events as the Committee determines, in its sole discretion) and, except as provided in the Terms and Conditions, during which the Restricted Stock and any Restricted Stock Unit is not vested.
|
2.40
|
“Retirement” means a termination of Service (other than a termination of Service for Cause):
|
(a)
|
after attaining age 60, but only if the Company or the employing Affiliate consents to the treatment of such termination as a “Retirement” for purposes of this Plan; or
|
(b)
|
qualifying as a retirement at normal retirement age under the laws and/or arrangements applicable to the Participant, as reasonably determined by the Committee.
|
2.41
|
“Section 162(m)” means Section 162(m) of the Code and the applicable regulations and other legal authority promulgated thereunder.
|
2.42
|
“Section 409A” means Section 409A of the Code and the applicable regulations and other legal authority promulgated thereunder.
|
2.43
|
“Service” means the provision of services in the capacity of an Employee or Continuing Director of the Company or an Affiliate. A transfer of Service from the Company to an Affiliate or from an Affiliate to the Company or another Affiliate shall not constitute a termination of Service under the Plan or any Terms and Conditions. All determinations regarding Service, including whether any leave of absence is a termination of Service, shall be made by the Committee in its sole discretion. For purposes of this paragraph, a “Continuing Director” shall mean any individual who, upon his or her termination of employment with the Company or an Affiliate, continues to serve as a member of the Board or the board of directors of an Affiliate. The Service of a Continuing Director shall
|
2.44
|
“Share” means a share of the Class A Common Stock, par value $.01 per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time.
|
2.45
|
“Stock Appreciation Right” or “SAR” means an Award consisting of a right to receive any excess in value of shares of common stock over the exercise price and designated as an SAR pursuant to the terms of Section 7.
|
2.46
|
“Stock Appreciation Right Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Appreciation Right is exercised exceeds the aggregate Exercise Price with respect to such Stock Appreciation Right.
|
2.47
|
“Stock Option” means a nonqualified stock option, as described in Section 6, that is not intended to meet the requirements of Code Section 422.
|
2.48
|
“Stock Option Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Option is exercised exceeds the aggregate Exercise Price with respect to such Shares.
|
2.49
|
“Successor” means the Participant’s spouse, the Participant’s lineal descendants, any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, or to a corporation in which the Participant, the Participant’s spouse and/or the Participant’s lineal descendants own 100% of the economic interest and has the unfettered right to prevent further transfer or disposition of the Restricted Stock, Stock Option, Stock Appreciation Right, Restricted Stock Unit or Owned Shares, applicable. The Committee may, in its discretion, deem other parties to qualify as a Successor for purposes of this Plan.
|
2.50
|
“Terms and Conditions” means any electronic or written agreement or other instrument or document evidencing an Award.
|
2.51
|
“Third Restatement Effective Date” means November 3, 2016.
|
2.52
|
“Valuation Date” means any Business Day. A Valuation Date shall also occur upon the consummation of a transaction constituting a Change in Control.
|
2.53
|
“Withholding Tax” means the aggregate federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under the Plan.
|
3.1
|
Plan Administration. The Plan shall be administered by the Committee.
|
3.2
|
Authority of the Committee. Except as limited by law or the by-laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to: (a) select eligible Employees to participate in the Plan; (b) determine the size and type of Awards; (c) determine the
|
3.3
|
Decisions Binding. All determinations and decisions made by the Committee or by a Person or Persons delegated authority by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, its shareholders, all Affiliates, Employees, Participants and their estates and beneficiaries.
|
4.1
|
Number of Shares Available for Grants. Subject to adjustment as provided in Sections 4.2 and 4.3, the number of Shares that may be issued or transferred to Participants under the Plan is 68,000. No additional awards shall be made under the Prior Plans on or after the Original Effective Date. Subject to adjustment as provided in Section 4.3, to the extent necessary to comply with Section 162(m), the maximum number of Shares or Share equivalent units that may be granted during any fiscal year to any one Participant under Options, SARs, Restricted Stock, Restricted Stock Units, Performance Awards or other Stock-Based Awards is $25,000,000, which limit will (i) be calculated based on the Fair Market Value of the number of Shares subject to the applicable Award as of the applicable Grant Date and (ii) apply regardless of whether the compensation is paid in Shares or in cash. To the extent necessary to comply with Code Section 162(m) the maximum aggregate dollar amount that may be paid to any one Participant during any fiscal year under Performance Awards or any cash-based Award under Section 9 is $25,000,000.
|
4.2
|
Lapsed Awards. If any Award granted under this Plan or a Prior Plan is canceled, terminates, expires or lapses for any reason, any Shares subject to such award will again be available for the grant of an Award under the Plan. Common Stock issued through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan. In addition, if a Share subject to an Award is not delivered because the Award is settled in cash, then that Share will thereafter be deemed to be available for grant. If a Share subject to an Award is not
|
4.3
|
Adjustments in Authorized Shares. If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share that may become subject to an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be.
|
4.4
|
Sources of Shares Deliverable under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.
|
5.1
|
Eligibility. Any Employee, including any officer or employee-director of the Company or an Affiliate, shall be eligible to be designated a Participant. To be eligible, a Participant shall have signed and delivered to the Company the Confidentiality and Non-Competition Agreement delivered by the Company to the Participant.
|
5.2
|
Actual Participation. The Committee shall determine the eligible Employees to whom it will grant Awards.
|
6.1
|
Grant of Stock Options.
|
(a)
|
Subject to the terms and provisions of the Plan, the Committee may grant Stock Options to any Participant in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in the Terms and Conditions.
|
(b)
|
Each Stock Option grant shall be evidenced by the Terms and Conditions that specifies the duration of the Stock Option, the number of Shares to which the Stock Option pertains, the manner, time, and rate of exercise and vesting of the Stock Option, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service.
|
6.2
|
Exercise Price. The Terms and Conditions shall specify the Stock Option’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date.
|
6.3
|
Duration of Stock Options. Each Stock Option will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions.
|
6.4
|
Exercise of Stock Options.
|
(a)
|
Stock Options shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in each Terms and Conditions. Restrictions and conditions on the exercise of a Stock Option need not be the same for each Award or for each Participant.
|
(b)
|
The holder of a Stock Option may exercise the Stock Option only by delivering a written notice of exercise to the Company setting forth the number of Shares as to which the Stock Option is to be exercised. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules.
|
(c)
|
Any exercisable Stock Option that has not been exercised by its holder shall be automatically exercised in accordance with subsection (b) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Option Spread with respect to such Stock Option.
|
6.5
|
Termination of Service. Except as otherwise provided in the Terms and Conditions:
|
(a)
|
In the event a Participant’s Service terminates by reason of death, Disability, or Retirement:
|
(i)
|
The Applicable Fraction of the portion of any Stock Option held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable.
|
(ii)
|
All Stock Options held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service and shall thereafter expire.
|
(iii)
|
Any unvested portion of the Participant’s Stock Options as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination.
|
(b)
|
Except as provided in Section 6.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement:
|
(i)
|
Any unvested portion of the Participant’s Stock Options as of the date of termination shall be forfeited and canceled on the date of termination, and
|
(ii)
|
The vested portion, if any, of the Participant’s Stock Options shall remain exercisable through (A) the date that is six months after the Participant’s termination of Service, if the six month period commences in an open trading window, or (B) if the six month period commences in a closed trading window, the date that is six months from the first day of the next open
|
(c)
|
Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Option at any time as permitted by Section 409A.
|
(d)
|
In no event shall a Stock Option be exercisable following its expiration date.
|
6.6
|
Nontransferability of Stock Options.
|
(a)
|
Except as otherwise provided in Section 6.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Options shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.
|
(b)
|
Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 6.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.
|
6.7
|
Dividend Equivalents and Other Distributions. The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Options that are equivalent to dividends or other distributions declared and paid on the Shares underlying the Stock Options prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A.
|
6.8
|
Change in Control. If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Option shall vest and become exercisable.
|
6.9
|
Employment in a Joint Venture. If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “Joint Venture”), during the Restriction Period, vesting of the Participant’s Stock Options shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Stock Options shall be extended by the number of days the Participant was an employee of the Joint Venture.
|
7.1
|
Grant of Stock Appreciation Rights.
|
(a)
|
Subject to the terms and provisions of the Plan, the Committee may grant Stock Appreciation Rights to any Participant in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in the Terms and Conditions.
|
(b)
|
Each Stock Appreciation Right grant shall be evidenced by the Terms and Conditions that specifies the duration of the Stock Appreciation Right, the number of Shares to which the Stock Appreciation Right pertains, the manner, time, and rate of exercise and vesting of the Stock Appreciation Right, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service.
|
7.2
|
Exercise Price. The Terms and Conditions shall specify the Stock Appreciation Right’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date.
|
7.3
|
Duration of Stock Appreciation Rights. Each Stock Appreciation Right will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions.
|
7.4
|
Exercise of Stock Appreciation Rights.
|
(a)
|
Stock Appreciation Rights shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in each Terms and Conditions. Restrictions and conditions on the exercise of a Stock Appreciation Right need not be the same for each Award or for each Participant.
|
(b)
|
The holder of a Stock Appreciation Right may exercise the Stock Appreciation Right only by delivering a written notice of exercise to the Company setting forth the number of Stock Appreciation Rights to be exercised. The Stock Appreciation Right Spread may be settled, as set forth in the Terms and Conditions, by delivery by the Company of the number of Shares equal to the Stock Appreciation Right Spread, in which case the Participant shall on or before the Exercise Date pay or provide for the applicable Withholding Tax in full, pursuant to such exercise procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. Any exercisable Stock Appreciation Right that has not been exercised by its holder shall be automatically exercised in accordance with subsection (b) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Appreciation Right Spread with respect to such Stock Appreciation Right.
|
7.5
|
Termination of Service. Except as otherwise provided in the Terms and Conditions:
|
(a)
|
In the event a Participant’s Service terminates by reason of death, Disability, or Retirement:
|
(i)
|
The Applicable Fraction of the portion of any Stock Appreciation Right held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable.
|
(ii)
|
All Stock Appreciation Rights held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service and shall thereafter expire.
|
(iii)
|
Any unvested portion of the Participant’s Stock Appreciation Rights as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination.
|
(b)
|
Except as provided in Section 7.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement:
|
(i)
|
Any unvested portion of the Participant’s Stock Appreciation Rights as of the date of termination shall be forfeited and canceled on the date of termination, and
|
(ii)
|
The vested portion, if any, of the Participant’s Stock Appreciation Rights shall remain exercisable through the ninetieth (90th) day after the Participant’s termination of Service. Any vested Stock Appreciation Right remaining outstanding after such date shall thereafter expire.
|
(c)
|
Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Appreciation Right at any time as permitted by Section 409A.
|
(d)
|
In no event shall a Stock Appreciation Right be exercisable following its expiration date.
|
7.6
|
Nontransferability of Stock Appreciation Rights.
|
(a)
|
Except as otherwise provided in Section 7.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Appreciation Right granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Appreciation Rights shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.
|
(b)
|
Subject to applicable law, vested Stock Appreciation Rights may be transferred to a Successor. Such transferred Stock Appreciation Rights may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 7.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof
|
7.7
|
Dividend Equivalents and Other Distributions. The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Appreciation Rights that are equivalent to dividends and other distributions declared and paid on the Shares underlying the Stock Appreciation Rights prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A.
|
7.8
|
Change in Control. If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Appreciation Right shall vest and become exercisable.
|
7.9
|
Employment in a Joint Venture. If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “Joint Venture”), during the Restriction Period, vesting of the Participant’s Stock Appreciation Rights shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Stock Appreciation Rights shall be extended by the number of days the Participant was an employee of the Joint Venture.
|
8.1
|
Grant of Restricted Stock and Restricted Stock Units. Subject to the terms and provisions of the Plan, the Committee may, at any time and from time to time, grant Restricted Stock or Restricted Stock Units to any Participant in such amounts as it determines and sets forth in the Terms and Conditions.
|
8.2
|
Terms and Conditions. Each grant of Restricted Stock or Restricted Stock Units shall be evidenced by the Terms and Conditions that specifies the Restriction Period, the number of Shares or Restricted Stock Units granted, the purchase price, if any, and such other provisions as the Committee determines.
|
8.3
|
Nontransferability.
|
(a)
|
Except as provided in Section 8.3(b), during the Restricted Period, (i) no Restricted Stock or Restricted Stock Unit granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and (ii) all rights with respect to Restricted Stock or Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or
|
(b)
|
Subject to applicable law, Restricted Stock may be transferred to a Successor. Such transferred Restricted Stock may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 8.3, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.
|
8.4
|
Termination of Service. Except as provided in Section 8.5, if a Participant’s Service terminates, then except as otherwise provided in the Terms and Conditions all unvested Restricted Stock and Restricted Stock Units held by such Participant will be forfeited and any vested Restricted Stock and Restricted Stock Units shall continue to be subject to the terms of the Plan and any applicable Award.
|
8.5
|
Change in Control. If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Restricted Stock and Restricted Stock Units shall vest and become nonforfeitable.
|
8.6
|
Other Conditions. The Committee may impose such other conditions and restrictions on any Restricted Stock and Restricted Stock Units as it deems advisable and sets forth in the Terms and Conditions, including, without limitation, vesting restrictions based upon the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service, and/or restrictions under applicable federal or state securities laws. The Committee may provide that restrictions established under this Section 8.6 as to any given Award will lapse all at once or in installments.
|
8.7
|
Voting Rights. Except as otherwise provided in the Terms and Conditions, and subject to Section 13.1(c), a Participant holding Shares of Restricted Stock may exercise any voting rights that apply to those Shares during the Restriction Period.
|
8.8
|
Dividends and Other Distributions. During the Restriction Period, a Participant holding Shares of Restricted Stock or Restricted Stock Units shall be credited with regular dividends or dividend equivalents and other distributions paid on those Shares. Such dividends or dividend equivalents and other distributions shall be subject to the same vesting conditions as the underlying Shares or Restricted Stock Units, and shall be paid within 30 days following the end of the Restriction Period.
|
8.9
|
Section 83(b) Elections on Restricted Stock. The Participant, if subject to taxation in the United States with respect to any compensation derived under the Plan, shall indicate to the Company whether the Participant intends to make an election under Code Section 83(b) with respect to the Restricted Stock.
|
8.10
|
Employment in a Joint Venture. If a Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Participant’s Restricted Stock and Restricted Stock Units shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture and shall recommence on the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Restricted Stock and Restricted Stock Units shall be extended by the number of days the Participant was an employee of the Joint Venture.
|
8.11
|
Payment of Restricted Stock Units. Each Restricted Stock Unit shall be payable to the Participant in such form provided in the Terms and Conditions following the last day of the Restriction Period, or on such later date provided in the Terms and Conditions or pursuant to a deferral agreement between the Participant and the Company.
|
9.1
|
Grant of Performance Awards. The Committee shall have the authority to determine (i) the Participants who shall receive Performance Awards, (ii) the size, number, amount or value, as applicable, of Performance Awards, and (iii) the Performance Criteria applicable in respect of such Performance Awards for each Performance Period. The Committee shall determine the duration of each Performance Period (which may differ from each other), and there may be more than one Performance Period in existence at any one time as to any Participant or all or any class of Participants. Each grant of Performance Awards shall be evidenced by the Terms and Conditions that shall specify the Performance Criteria applicable thereto and such other terms and conditions not inconsistent with the Plan as the Committee shall determine.
|
9.2
|
Earning of Performance Awards. The grant and/or vesting of Performance Awards shall be contingent, in whole or in part, upon the attainment of specified Performance Criteria or the occurrence of any event or events involving a Change in Control, death or Disability, as the Committee shall determine. In addition to the achievement of the specified Performance Criteria, the Committee may, at the grant date, condition earning of Performance Awards on the Participant completing a minimum period of service following the Grant Date or on such other conditions as the Committee shall specify.
|
9.3
|
Performance Awards and Code Section 162(m). The provisions of this Section 9.3 shall apply with respect to any Performance Award that is intended to meet the Performance-Based Exception.
|
(a)
|
Establishment of Performance Criteria. The Committee shall establish the Performance Criteria for the applicable Performance Period no later than the 90th day after the Performance Period begins (or by such other date as may be required under Section 162(m)) but in any event at a time when achievement of the Performance Criteria is substantially uncertain. The Committee may not in any event increase the amount of compensation payable to an Executive Officer upon attainment of the Performance Criteria above the maximum amount approved by the Committee at the time the Performance Criteria is established.
|
(b)
|
Certification of Attainment of Performance Criteria. As soon as practicable after the end of a Performance Period and prior to any payment in respect of such Performance Period, the
|
(c)
|
Payment of Awards. Earned Performance Awards shall be distributed to the Participant or, if the Participant has died, to the Participant’s Designated Beneficiary as soon as practicable after the expiration of the Performance Period and the Committee’s certification under Section 9.3(b) above, provided that, unless the payment of a Performance Award has been deferred in accordance with Section 409A of the Code, distributions of a Performance Award shall be made no later than March 15 of the year following the year in which the amount is earned.
|
10.1
|
The Committee shall have authority to grant to eligible Participants an “Other Stock-Based Award,” which shall consist of any right which (i) is not a Stock Option, Stock Appreciation Right, Restricted Stock Unit or Restricted Stock and (ii) is an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Terms and Conditions, the Committee shall determine the terms and conditions of any such Other Stock-Based Award.
|
11.1
|
Restrictions. The Committee may impose such restrictions on any Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws.
|
11.2
|
Additional Conditions of Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Plan or any Terms and Conditions.
|
12.1
|
Each Participant may, from time to time, name any Designated Beneficiary (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die before receiving any or all of his or her benefits under the Plan. Each beneficiary designation shall revoke all prior designations by the same Participant, must be in a form prescribed by the Committee and must be made during the Participant’s lifetime.
|
13.1
|
The Terms and Conditions may provide that if the Participant breaches, whether during or after termination of Service, a nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound, then in addition to any other penalties or restrictions that may apply under any such agreement, state law, or otherwise, the Participant shall forfeit:
|
(a)
|
Any Awards granted to him or her under the Plan, including Awards that have become exercisable;
|
(b)
|
The profit the Participant realized from the exercise of any Stock Options or Stock Appreciation Rights that the Participant exercised after terminating Service and within the six-month period immediately preceding the Participant’s termination of Service, which is the Stock Option Spread or Stock Appreciation Right Spread associated with any Shares acquired by the Participant upon his or her exercise of such Stock Options or such Stock Appreciation Rights; and
|
(c)
|
The Fair Market Value, as determined on the vesting date, of any Restricted Stock that vested or Restricted Stock Unit that was settled within the six-month period immediately preceding the Participant’s termination of Service.
|
14.1
|
Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service at any time, or confer upon any Participant any right to continue in the Service of the Company or any Affiliate. The grant of any Award under the Plan shall not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
|
14.2
|
Participation. No Employee shall have the right to receive an Award under the Plan, or, having received any Award, to receive a future Award.
|
15.1
|
Amendment, Modification and Termination. The Board may at any time and from time to time alter, amend, modify or terminate the Plan in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. Subject to the terms and conditions of the Plan, the Committee may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised), in order to comply with the requirements of applicable law or otherwise. Notwithstanding the foregoing, no modification of an Award shall, without the prior written consent of the Participant, materially alter or impair any rights
|
15.2
|
Adjustment of Awards upon the Occurrence of Certain Events.
|
(a)
|
In General. If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share underlying an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be, which shares or other securities shall be subject to the same terms and conditions as the underlying Award. Any such adjustment in an outstanding Stock Option or Stock Appreciation Right shall be made with a corresponding adjustment in the Exercise Price for each Share or other unit of any security covered by such Stock Option or Stock Appreciation Right but without change in the aggregate purchase price applicable to the unexercised portion of such Stock Option.
|
(b)
|
Reciprocal Transactions. The Committee may, but shall not be obligated to, make an appropriate and proportionate adjustment to an Award or to the Exercise Price of any outstanding Award, and/or grant an additional Award to the holder of any outstanding Award, to compensate for the diminution in the intrinsic value of the Shares resulting from any reciprocal transaction.
|
(c)
|
Certain Unusual or Nonrecurring Events. In recognition of unusual or nonrecurring events affecting the Company or its financial statements, or in recognition of changes in applicable laws, regulations, or accounting principles, and, whenever the Committee determines that adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee may, using reasonable care, make adjustments in the terms and conditions of, and the criteria included in, Awards. In no event will the Committee, unless otherwise approved by shareholders, be permitted (i) to reduce the Exercise Price of any outstanding Stock Option or Stock Appreciation Right, (ii) cancel a Stock Option or Stock Appreciation Right in exchange for cash or other Awards (except as provided in Section 15.4), (iii) exchange or replace an outstanding Stock Option or Stock Appreciation Right with a new Stock Option or Stock Appreciation Right with a lower Exercise Price, or (iv) take any other action that would be a “repricing” of Stock Options or Stock Appreciation Rights.
|
(d)
|
Notice. The Committee shall give notice of any adjustment to each Participant who holds an Award that has been adjusted and the adjustment (whether or not such notice is given) shall be effective and binding for all Plan purposes.
|
(e)
|
Section 409A. Notwithstanding any provision herein to the contrary, no adjustment shall be made under this Section 15.2 to the extent it would give rise to adverse tax consequences under Section 409A.
|
15.3
|
Fractional Shares. Fractional Shares, whether resulting from any adjustment in Awards pursuant to Section 15.2 or otherwise, may be settled in cash or otherwise as the Committee determines.
|
15.4
|
Change in Control.
|
(a)
|
If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Awards shall become fully vested.
|
(b)
|
Any Award that has not been fully exercised before the date of a Change in Control may be settled or otherwise terminated on such date in the discretion of the Committee, unless a provision has been made in writing in connection with such transaction for the assumption of all Awards theretofore granted, or the substitution for such Awards of awards to acquire the stock of the surviving, resulting or acquiring corporation, with any adjustments as the Committee determines appropriate, in which event the Awards theretofore granted shall continue in the manner and under the terms so provided. Notwithstanding anything in the Plan to the contrary, any underwater Award that has not been fully exercised, and any Award that the Committee determines cannot become vested, before the date of consummation of the Change in Control may be canceled without consideration in the discretion of the Committee.
|
15.5
|
Tax Withholding. The Company shall have the right to deduct or withhold, or require a Participant to remit to the Company, an amount (either in cash or Shares) sufficient to satisfy any Withholding Tax.
|
16.1
|
Successors. All obligations of the Company under the Plan or any Terms and Conditions shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise.
|
16.2
|
Legal Construction.
|
(a)
|
Number. Except where otherwise indicated by the context, any plural term used in the Plan includes the singular and any singular term includes the plural.
|
(b)
|
Severability. If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
|
16.3
|
Business Day. In the event the day prescribed for the performance of any act under the Plan, or deadline by which such act must be performed, shall fall on a day other than a Business Day, such day or deadline shall be extended until the close of business on the next succeeding Business Day.
|
16.4
|
Requirements of Law. The granting of Awards, the issuance of Shares and the payment of cash under the Plan shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required.
|
16.5
|
Rights of a Shareholder. A Participant shall not be, nor shall a Participant have any of the rights and privileges of, a shareholder until certificates for the underlying Shares have been issued or the underlying Shares have been registered as a book-entry in the name of the Participant.
|
16.6
|
Securities Law Compliance.
|
(a)
|
As to any individual who is, on the relevant date, an officer, director or greater than 10% percent beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.
|
(b)
|
To the extent the Committee deems it necessary, appropriate or desirable to comply with state securities laws or practice and to further the purposes of the Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Awards granted to Participants, including rules that differ from those set forth in the Plan, and (ii) grant Awards to such Participants in accordance with those rules that would require the application of the securities laws of any state.
|
16.7
|
Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company. The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan.
|
16.8
|
Non-U.S. Based Participant. Notwithstanding any other provision of the Plan to the contrary, the Committee may make Awards to Participants who are not citizens or residents of the United States, or to Participants outside the United States, on terms and conditions that are different from those specified in the Plan as may, in the Committee’s judgment, be necessary or desirable to foster and promote achievement of the Plan’s purposes. In furtherance of such purposes, the Committee may, without amending the Plan, establish or modify rules, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company operates or has employees.
|
16.9
|
Governing Law. To the extent not preempted by Federal law, the Plan and all agreements hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction.
|
16.10
|
Section 162(m). The Plan is intended to be administered, interpreted and construed so that Performance Awards may qualify for the Performance-Based Exception.
|
16.11
|
Recoupment. Notwithstanding any provision in the Plan to the contrary, Awards granted or paid under the Plan will be subject to recoupment by the Company pursuant to any “clawback” or similar compensation recoupment policy that may be established by the Company.
|
1.
|
Option Grant.
In accordance with the terms of the Plan and subject to these Terms and Conditions, the Company hereby grants to the Participant as of the Grant Date an option (the “
Option
”) to purchase all or any part of an aggregate of the number of shares of the Company’s Shares set forth in your total compensation letter (the “
Option Shares
”). This award is subject to cancellation unless the Participant executes and returns to the Company the Coty Inc. Confidentiality and Non-Competition Agreement by December 31 of the calendar year in which the Option was granted. This Option is a nonqualified stock option and is not intended to be an incentive stock option within the meaning of Code Section 422.
|
2.
|
Exercise Price.
The Exercise Price of the Option will be the price per Share set forth in your total compensation letter.
|
3.
|
Vesting and Exercisability of Option.
The Participant may exercise this Option only after it has become vested and exercisable in accordance with the following:
|
(a)
|
In General
.
The Option shall vest and become exercisable on the fifth anniversary of the Grant Date.
|
(b)
|
Change in Control
. If, within twelve months following a Change in Control,
(i) the Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) the Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason,
the Option shall vest and become exercisable.
|
(c)
|
Joint Venture
. If the Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Option shall be tolled beginning on the date the Participant becomes an employee of the Joint Venture and shall recommence on the date the Participant again becomes an Employee Accordingly, the Restriction Period shall be extended by the number of days the Participant was an employee of the Joint Venture.
|
(d)
|
Retirement, Death, or Disability
. The Option shall vest and become exercisable to the extent provided in paragraph 7 in the event of the Participant’s termination of Service by reason of Retirement, death, or Disability.
|
4.
|
Expiration.
Subject to paragraph 7, the Option will expire on the tenth anniversary of the Grant Date (the “
Expiration Date
”).
|
5.
|
Transferability of Option
.
|
(a)
|
Except as provided in Section 5(b), (i) the Participant may not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Option, other than by will or the laws of descent and distribution and (ii) the Option shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative.
|
(b)
|
Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 5(b), and shall be subject in all respects to the terms of these Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.
|
6.
|
Exercise of Option.
|
(a)
|
Notice of Exercise
. After the Option has become exercisable pursuant to paragraph 3, and while it remains exercisable in accordance with paragraph 7, the Participant may exercise the Option in whole or in part on any Exercise Date by delivering a signed, written exercise notice to the Company. The notice shall indicate the number of Shares being purchased. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. The Option must be exercised as to a whole number of Shares.
|
(b)
|
Withholding Obligation
. The withholding obligation upon the Participant’s exercise of the Option must be satisfied by paying the amount of required withholding to the Company. If the Participant does not pay the amount of required withholding to the Company, the Company will withhold from the Shares delivered to the Participant the minimum amount of funds required to cover any Withholding Tax required to be withheld by the Company by reason of such exercise of the Option.
|
(c)
|
Use of Shares
. Shares used to satisfy the Exercise Price and/or any required withholding tax (including Shares underlying surrendered Options) will be valued at their Fair Market Value, determined in accordance with the Plan.
|
(d)
|
Condition of Transfer
. The Company will issue no Shares pursuant to the Option before the Participant has paid the Exercise Price and any withholding obligation in full.
|
(e)
|
Automatic Exercise
. Any exercisable Option that has not been exercised by its holder shall be automatically exercised in accordance with Section 6(a) on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Option Spread with respect to such Option.
|
7.
|
Termination of Service.
Upon termination of Service with the Company or an Affiliate, the Participant’s right to exercise the Option will be subject to the following rules:
|
(a)
|
Retirement, Disability or Death
.
|
(i)
|
If the Participant’s Service terminates due to Retirement, Disability or death before the Option has otherwise become vested, then the Option shall immediately become vested and exercisable with respect to the Applicable Fraction of the Option Shares, and shall be immediately forfeited and canceled with respect to the remaining Option Shares. The “
Applicable Fraction
” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest.
|
(ii)
|
The portion of an Option that is vested (whether by application of paragraph 7(a)(i) above or otherwise) on the date the Participant terminates Service due to Retirement, Disability or death may be exercised on an Exercise Date occurring on or before the second anniversary of the date of the Participant’s termination.
|
(b)
|
Other Termination of Service
. Except as provided in paragraph 3(b), if the Participant’s Service terminates for any reason other than Retirement, Disability or death, the Participant may exercise the Option to the extent that it was exercisable on the date of such termination on any Exercise Date through (A) the date that is six months after the Participant’s termination of Service, if the six month period commences in an open trading window, or (B) if the six month period commences in a closed trading window, the date that is six months from the first day of the next open trading window. Any Option that is not vested on the date the Participant’s Service shall thereafter expire.
|
(c)
|
Option Expiration
. In no event may the Option be exercised after the Expiration Date.
|
8.
|
Plan and Terms and Conditions Not a Contract of Employment or Service.
Neither the Plan nor these Terms and Conditions are a contract of employment or Service, and no terms
|
9.
|
Participant to Have No Rights as a Shareholder.
Before the date as of which the Participant is recorded on the books of the Company as the holder of any Shares underlying the Option, the Participant will have no rights as a shareholder with respect to those Shares.
|
10.
|
Notice.
Any notice or other communication required or permitted under these Terms and Conditions must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given when delivered personally or, if mailed, three (3) days after the date of deposit in the United States mail or, if sent by overnight courier, on the regular business day following the date sent. Notice to the Company should be sent to:
|
11.
|
Governing Law.
To the extent not preempted by federal law, these Terms and Conditions will be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction.
|
12.
|
Plan Document Controls.
The rights granted under these Terms and Conditions are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in these Terms and Conditions. If the terms of these Terms and Conditions conflict with the terms of the Plan document, the Plan document will control.
|
13.
|
Amendment of these Terms and Conditions.
These Terms and Conditions may be amended unilaterally by the Committee to the extent provided under the Plan, or by a written instrument signed by both parties.
|
14.
|
Entire Agreement.
These Terms and Conditions, together with the Plan, constitutes the entire obligation of the parties with respect to the subject matter of these Terms and
|
15.
|
Administration.
The Committee administers the Plan and these Terms and Conditions. The Participant’s rights under these Terms and Conditions are expressly subject to the terms and conditions of the Plan, including any guidelines the Committee adopts from time to time. The Participant hereby acknowledges receipt of a copy of the Plan.
|
(a)
|
In General
.
The
Option shall vest and become exercisable on the fifth anniversary of the Grant Date, subject to the Participant’s continuous employment by the Company through such date.
|
(b)
|
Change in Control
. If, within twelve months following a Change in Control, (i) the Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) the Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the Option shall vest and become exercisable.
|
(c)
|
Joint Venture
. If the Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Option shall be tolled beginning on the date the Participant becomes an employee of the Joint Venture and shall recommence on the date the Participant again becomes an Employee. Accordingly, the Restriction Period shall be extended by the number of days the Participant was an employee of the Joint Venture.
|
(d)
|
Retirement, Death, or Disability
. The Option shall vest and become exercisable to the extent provided in Section 6.1 in the event of the Participant’s termination of Service by reason of Retirement, death, or Disability.
|
(e)
|
Forfeiture and Clawback
.
|
(a)
|
The Applicable Fraction of the portion of the Option remaining after application of the forfeiture provisions in Section 2.3(e) and which has not theretofore become exercisable shall immediately become vested and exercisable with respect to the Applicable Fraction of the Option Shares.
|
(b)
|
The portion of an Option that is vested (whether by application of Section 6.1(a) above or otherwise) on the date the Participant terminates Service due to Retirement,
|
(c)
|
Any unvested portion of the Option as of the date of termination (other than any portion thereof that becomes vested pursuant to Section 6.1(a)) shall be forfeited and canceled, without consideration, on the date of Termination of Service.
|
(a)
|
Any unvested portion of the Option as of the date of termination shall be forfeited and canceled on the date of termination, and
|
(b)
|
The vested portion, if any, of the Option shall remain exercisable through (A) the date that is six months after the Participant’s termination of Service, if the six month period commences in an open trading window, or (B) if the six month period commences in a closed trading window, the date that is six months from the first day of the next open trading window. Any vested Option remaining outstanding after such date shall thereafter expire.
|
(a)
|
If at any time the Committee determines that issuing Option Shares would violate applicable securities laws, the Company will not be required to issue such Option Shares. The Committee may declare any provision of these Terms and Conditions or action of its own null and void, if it determines the provision or action fails to comply with the short-swing trading rules. As a condition to exercise, the Company may require the Participant to make written representations it deems necessary or desirable to comply with applicable securities laws.
|
(b)
|
No Person who acquires Option Shares under this Agreement may sell the Option Shares, unless they make the offer and sale pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “
Securities Act
”), which is current and includes the Option Shares to be sold, or an exemption from the registration requirements of the Securities Act.
|
PARTICIPANT
|
|
By:
|
|
Name:
|
|
Title:
|
|
COTY INC.
|
|
By:
|
|
Name:
|
|
Title:
|
|
COTY INC.
|
Address for Notices:
|
|||
By:
|
/s/Michelle Garcia
|
|
||
Name:
|
Michelle Garcia
|
|
||
Title:
|
SVP Corporate & Assistant Secretary
|
|||
SUBSCRIBER
|
Address for Notices:
|
|||
By:
|
/s/Sébastien Froidefond
|
|
||
Name:
|
Sébastien Froidefond
|
|
(i)
|
If the Parent shall, at any time and from time to time while any shares of Series A Preferred Stock are outstanding, issue a dividend or make a distribution on its Class A Common Stock payable in shares of Class A Common Stock to all or substantially all holders of its Class A Common Stock, then each of the Share Exchange Price and the Cash Exchange Price will be adjusted by multiplying each by a fraction:
|
I
|
the numerator of which shall be the number of shares of Class A Common Stock outstanding at the close of business on the Business Day immediately preceding the applicable dividend or distribution date; and
|
II
|
the denominator of which shall be the sum of the number of shares of Class A Common Stock outstanding at the close of business on the Business Day immediately preceding the applicable dividend or distribution date, plus the total number of shares of Class A Common Stock constituting such dividend or other distribution.
|
(ii)
|
If the Parent shall, at any time or from time to time while any shares of Series A Preferred Stock are outstanding, subdivide or reclassify its outstanding shares of Class A Common Stock into a greater number of shares of Class A Common Stock, then each of the Share Exchange Price and the Cash Exchange Price in effect at the opening of business on the day upon which such subdivision becomes effective shall be proportionately decreased, and conversely, if the Parent shall, at any time or from time to time while any shares of Series A Preferred Stock are outstanding, combine or reclassify its outstanding shares of Class A Common Stock in to a smaller number of shares of Class A Common
|
(i)
|
any reclassification or exchange of the Class A Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination);
|
(ii)
|
any merger, consolidation or other combination to which the Parent is a constituent party;
|
(iii)
|
any sale, conveyance, lease, or other disposal of all or substantially all the properties and assets of the Parent to any other person; or
|
(iv)
|
the payment of an extraordinary cash dividend which would be treated as a “corporate transaction” within the meaning of the regulations promulgated under Section 424(a) of the U.S. Internal Revenue Code (or any successor provision); and
|
(i)
|
the record date of such stock split, combination, dividend or other distribution, or, if a record is not to be taken, the date as of which the holders of Class A Common Stock of record to be entitled to such stock split, combination, dividend or other distribution are to be determined, or
|
(ii)
|
the date on which such reclassification, change, dissolution, liquidation, winding up or other event constituting a Change in Control any other event that would cause or allow for the exchange of any Vested Series A Preferred Stock in accordance with this Section 2 is estimated to become effective, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their shares of Class A Common Stock for the capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) deliverable upon such reclassification, change, liquidation, dissolution, winding up or other Change in Control.
|
COTY INC.
|
Address for Notices:
|
|
|
|
|
By:
|
/s/Sébastien Froidefond
|
|
Name:
|
Sébastien Froidefond
|
|
Title:
|
Chief Human Resources Officer
|
|
SUBSCRIBER
|
Address for Notices:
|
|
|
|
|
By:
|
/s/Lambertus J.H. Becht
|
|
Name:
|
Lambertus J.H. Becht
|
|
Title:
|
Chairman, Coty Inc.
|
|
(i)
|
If the Company shall, at any time and from time to time while any shares of Series A Preferred Stock are outstanding, issue a dividend or make a distribution on its Class A Common Stock payable in shares of Class A Common Stock to all or substantially all holders of its Class A Common Stock, then each of the Share Exchange Price and the Cash Exchange Price will be adjusted by multiplying each by a fraction:
|
I
|
the numerator of which shall be the number of shares of Class A Common Stock outstanding at the close of business on the Business Day immediately preceding the applicable dividend or distribution date; and
|
II
|
the denominator of which shall be the sum of the number of shares of Class A Common Stock outstanding at the close of business on the Business Day immediately preceding the applicable dividend or distribution date, plus the total number of shares of Class A Common Stock constituting such dividend or other distribution.
|
(ii)
|
If the Company shall, at any time or from time to time while any shares of Series A Preferred Stock are outstanding, subdivide or reclassify its outstanding shares of Class A Common Stock into a greater number of shares of Class A Common Stock, then each of the Share Exchange Price and the Cash Exchange Price in effect at the opening of business on the day upon which such subdivision becomes effective shall be proportionately decreased, and
|
(i)
|
any reclassification or exchange of the Class A Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination);
|
(ii)
|
any merger, consolidation or other combination to which the Company is a constituent party;
|
(iii)
|
any sale, conveyance, lease, or other disposal of all or substantially all the properties and assets of the Company to any other person; or
|
(iv)
|
the payment of an extraordinary cash dividend which would be treated as a “corporate transaction” within the meaning of the regulations promulgated under Section 424(a) of the U.S. Internal Revenue Code (or any successor provision); and
|
(i)
|
the record date of such stock split, combination, dividend or other distribution, or, if a record is not to be taken, the date as of which the holders of Class A Common Stock of record to be entitled to such stock split, combination, dividend or other distribution are to be determined, or
|
(ii)
|
the date on which such reclassification, change, dissolution, liquidation, winding up or other event constituting a Change in Control any other event that would cause or allow for the exchange of any Vested Series A Preferred Stock in accordance with this Section 2 is estimated to become effective, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their shares of Class A Common Stock for the capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) deliverable upon such reclassification, change, liquidation, dissolution, winding up or other Change in Control.
|
Coty Brands Management GmbH
|
Germany
|
Coty Germany GmbH
|
Germany
|
Coty Services and Logistics GmbH
|
Germany
|
Ghd Deutschland GmbH
|
Germany
|
HFC Prestige International Germany GmbH
|
Germany
|
HFC Prestige Manufacturing Cologne Germany GmbH
|
Germany
|
HFC Prestige Manufacturing Germany GmbH
|
Germany
|
HFC Prestige Products GmbH
|
Germany
|
HFC Prestige Service Germany GmbH
|
Germany
|
Sebastian Europe GmbH
|
Germany
|
Wella Grundstuecks- und Vermoegensverwalturngs GmbH & Co. KG
|
Germany
|
Coty Hellas S.A.
|
Greece
|
Wella Hellas MEPE
|
Greece
|
Bourjois Limited
|
Hong Kong
|
Chi Chun Industrial Co. Ltd.
|
Hong Kong
|
Coty Hong Kong Limited (Kuiqui Holding Ltd.)
|
Hong Kong
|
Coty Prestige Hong Kong Ltd.
|
Hong Kong
|
Coty Prestige Shanghai (HK) Ltd.
|
Hong Kong
|
Coty Prestige Southeast Asia (HK) Limited
|
Hong Kong
|
GHD Hong Kong Limited
|
Hong Kong
|
HFC Prestige International Hong Kong Ltd.
|
Hong Kong
|
Ming-De Investment Co. Ltd.
|
Hong Kong
|
Super Globe Holdings Ltd.
|
Hong Kong
|
Younique Hong Kong, Limited
|
Hong Kong
|
Coty Hungary Kft.
|
Hungary
|
Coty India Beauty and Fragrance Products Private Limited
|
India
|
Wella India Private Limited
|
India
|
PT Star Asia Distributions Indonesia
|
Indonesia
|
PT. Coty Prestige Southeast Asia Indonesia
|
Indonesia
|
Coty Ireland Ltd.
|
Ireland
|
HFC Prestige Manufacturing Ireland Ltd.
|
Ireland
|
Wella Ireland
|
Ireland
|
Coty Italia S.R.L.
|
Italy
|
GHD Italia S.r.l.
|
Italy
|
Labocos Srl
|
Italy
|
Younique Products Italy S.r.l
|
Italy
|
HFC Prestige Japan Godo Kaisha
|
Japan
|
OPI-Japan K.K.
|
Japan
|
Coty Korea Ltd.
|
Korea, Republic Of
|
HFC Prestige International Holding Luxembourg SARL
|
Luxembourg
|
HFC Prestige International Luxembourg SARL
|
Luxembourg
|
Coty Malaysia Sdn. Bhd.
|
Malaysia
|
Coty Prestige Southeast Asia (M) Sdn. Bhd.
|
Malaysia
|
HFC Prestige International Malaysia Sdn. Bhd.
|
Malaysia
|
Coty Beauty Mexico, S.A. de C.V.
|
Mexico
|
Coty México, S.A. de C.V.
|
Mexico
|
Galería Productora de Cosméticos, S. de R.L. de C.V.
|
Mexico
|
HFC Cosmetics S. de R.L. de C.V.
|
Mexico
|
HFC Prestige International S. de R.L. de C.V.
|
Mexico
|
YQ Products MEX
|
Mexico
|
Coty Lancaster S.A.M.
|
Monaco
|
Coty B.V.
|
Netherlands
|
Coty Benelux B.V.
|
Netherlands
|
Coty Global 1 B.V.
|
Netherlands
|
Coty Global 2 B.V.
|
Netherlands
|
Coty Global 3 B.V.
|
Netherlands
|
Coty Global 4 B.V.
|
Netherlands
|
Coty Global 5 B.V.
|
Netherlands
|
Coty Investments B.V.
|
Netherlands
|
HFC Prestige International Netherlands B.V.
|
Netherlands
|
HFC Prestige International Netherlands Holding B.V.
|
Netherlands
|
Lancaster B.V.
|
Netherlands
|
Younique Products B.V
|
Netherlands
|
Younique Products Cooperatief U.A.
|
Netherlands
|
HFC Prestige International New Zealand Limited
|
New Zealand
|
Jemella New Zealand Limited
|
New Zealand
|
GHD Scandinavia NFU (Norwegian Branch)
|
Norway
|
HFC Prestige International Norway AS
|
Norway
|
Coty Prestige Southeast Asia Philippines, Inc.
|
Philippines
|
Coty Polska Sp z.o.o.
|
Poland
|
HFC Prestige International Poland Sp. z.o.o.
|
Poland
|
HFC Prestige Service Poland Sp. z.o.o.
|
Poland
|
Wella Prestige Products Portugal S.A.
|
Portugal
|
Coty Puerto Rico Inc.
|
Puerto Rico
|
HFC Prestige International Puerto Rico LLC
|
Puerto Rico
|
Coty Cosmetics Romania SRL
|
Romania
|
Bourjois Paris LLC
|
Russia
|
Coty Beauty LLC
|
Russia
|
Coty Russia ZAO
|
Russia
|
LLC Capella
|
Russia
|
Russwell Ltd
|
Russia
|
Coty Arabia Trading Company LLC
|
Saudi Arabia
|
Coty Asia Pte. Ltd.
|
Singapore
|
Coty Prestige Southeast Asia Pte. Ltd.
|
Singapore
|
Coty Singapore Pte. Ltd.
|
Singapore
|
Coty Southeast Asia Pte. Limited
|
Singapore
|
HFC Prestige International Operations Switzerland SARL Singapore Branch
|
Singapore
|
HFC Prestige International Singapore Pte. Ltd.
|
Singapore
|
Coty Slovenská Republika s.r.o.
|
Slovakia
|
Jemella Group Limited
|
United Kingdom
|
Jemella Limited
|
United Kingdom
|
Lancaster Group, Ltd.
|
United Kingdom
|
Lena White Limited
|
United Kingdom
|
Lion/Gloria Bidco Limited
|
United Kingdom
|
Lion/Gloria Holdco Limited
|
United Kingdom
|
Lion/Gloria Midco 2 Limited
|
United Kingdom
|
Lion/Gloria Midco 3 Limited
|
United Kingdom
|
Lion/Gloria Midco Limited
|
United Kingdom
|
Lion/Gloria Topco Limited
|
United Kingdom
|
Power Promotions Limited
|
United Kingdom
|
Power Wizards Limited
|
United Kingdom
|
Rimmel International Ltd.
|
United Kingdom
|
Wella (UK) Ltd
|
United Kingdom
|
Wonderful Life Limited
|
United Kingdom
|
Wonderful Life UK Limited
|
United Kingdom
|
Noxell Corporation
|
United Sates - MD
|
GHD Professional, North America, Inc.
|
United States - CA
|
HFC Prestige Products, Inc.
|
United States - CT
|
Beamly Inc.
|
United States - DE
|
Calvin Klein Cosmetic Corporation
|
United States - DE
|
Coty Brands Management Inc.
|
United States - DE
|
Coty Holdings, Inc.
|
United States - DE
|
Coty Inc.
|
United States - DE
|
Coty International LLC
|
United States - DE
|
Coty US Holdings Inc.
|
United States - DE
|
Coty US LLC
|
United States - DE
|
DLI International Holding I LLC
|
United States - DE
|
DLI International Holding II Corp
|
United States - DE
|
Foundation, LLC
|
United States - DE
|
Galleria Co.
|
United States - DE
|
Graham Webb International, Inc.
|
United States - DE
|
HFC Prestige International U.S. LLC
|
United States - DE
|
O P I Products, Inc.
|
United States - DE
|
Rimmel Inc.
|
United States - DE
|
The Wella Corporation
|
United States - DE
|
Younique DISC Corporation
|
United States - UT
|
Younique International Holdings LLC
|
United States - UT
|
Younique, LLC
|
United States - UT
|
Coty Beauty Vietnam Company Limited
|
Vietnam
|
Date:
|
May 10, 2017
|
/s/ Camillo Pane
|
|
|
Camillo Pane
|
|
|
Chief Executive Officer
|
Date:
|
May 10, 2017
|
/s/ Patrice de Talhouët
|
|
|
Patrice de Talhouët
|
|
|
Chief Financial Officer
|
Dated:
|
May 10, 2017
|
/s/ Camillo Pane
|
|
|
Camillo Pane
|
|
|
Chief Executive Officer
|
Dated:
|
May 10, 2017
|
/s/ Patrice de Talhouët
|
|
|
Patrice de Talhouët
|
|
|
Chief Financial Officer
|