Corporate Governance > Guidelines and Principles

These Corporate Governance Guidelines and Principles were adopted by the Board of Directors (the "Board") of Elizabeth Arden, Inc. (the "Company") on March 10, 2004.

These Corporate Governance Guidelines and Principles are intended as a component of the flexible governance framework within which the Board, assisted by its committees, directs the affairs of the Company. While they should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Company's Certificate of Incorporation and By-Laws, they are not intended to establish by their own force any legally binding obligations.

1. DIRECTOR RESPONSIBILITIES
   
   The role of the Board is to direct the affairs of the Company in the interests of the shareholders, including their interest in optimizing financial returns and the value of the Company over the long term.
   
   
   1. Board Role
      
      The Board fulfills its role (directly or by delegating certain responsibilities to its committees) by:
      
      
      1. providing advice and counsel to the Company's Chief Executive Officer ("CEO") and principal senior executives;
      2. selecting, regularly evaluating, fixing the compensation of, and, where appropriate, replacing the CEO;
      3. overseeing the conduct of the Company's business and strategic plans to evaluate whether the business is being properly managed;
      4. reviewing and approving the Company's financial objectives and major corporate plans and actions;
      5. reviewing and approving major changes in auditing and accounting principles and practices;
      6. providing oversight of internal and external audit processes and financial reporting;
      7. providing oversight of risk assessment and protection processes and processes designed to promote legal compliance; and
      8. performing, such other functions as the Board believes appropriate or necessary, or as otherwise prescribed by rules or regulations.
      
      
   2. Care, Candor and Avoidance of Conflicts
      
      The Company's directors recognize their obligation individually and collectively as the Board to pay careful attention and be properly informed. This requires regular attendance at Board meetings and preparation for Board meetings, including the advance review of circulated materials. The directors also recognize that candor and the avoidance of conflicts in fact and in perception are hallmarks of the accountability owed to the shareholders. Directors have a personal obligation to disclose a potential conflict of interest to the Chairman of the Board prior to any Board decision related to the matter and, if the Chairman in consultation with legal counsel determines a conflict exists or the perception of a conflict is likely to be significant, to recuse themselves from any discussion or vote related to the matter.
   
   
2. EXECUTIVE SESSIONS and PRESIDING DIRECTOR
   
   The independent directors meet regularly without members of management or other directors present in executive session, no less frequently than twice a year, and as otherwise determined by such directors.
   
   The executive sessions have such agendas and procedures as determined by the independent directors. The authority in such sessions to act on behalf of the Company or the Board on any matters requires an express delegation of authority by the Board.
   
   
3. FORMAL EVALUATION OF THE CHIEF EXECUTIVE OFFICER
   
   The Board has delegated to the Compensation Committee the task of evaluating the CEO annually and reporting its recommendations to the Board. The Chairperson of the Compensation Committee communicates the Board's conclusions to the CEO.
   
   The evaluation is based on objective criteria including performance of the business, accomplishment of long-term strategic objectives, development of management, etc. The evaluation is used by the Compensation Committee in determining the CEO's compensation.
   
   
4. MANAGEMENT DEVELOPMENT and SUCCESSION PLANNING
   
   The CEO reports at least annually to the Board on the Company's program for management development and on succession planning, which the Board views as closely related issues. In its consideration of these issues, it is the policy of the Board to consider issues related to CEO and senior executive selection and performance.
   
   In addition, there is available on a continuing basis, and the Board and CEO periodically discuss, the CEO's recommendation as to a successor in the event of the sudden resignation, retirement or disability of the CEO.
   
   
5. DIRECTOR QUALIFICATION STANDARDS
   
   
   1. Selection of Board Nominees
      
      The Board is responsible for recommending director nominees to shareholders for election. The Board has delegated the screening process to the Nominating and Governance Committee.
      
      The Nominating and Governance Committee is responsible for reviewing with the Board, on an annual basis, the appropriate skills and characteristics required of directors in the context of the current make-up of the Board. This assessment includes issues of judgment, diversity, age, skills (such as understanding of relevant business experience, financial background, etc.), in the context of an assessment of the perceived needs of the Board at that point in time. The Nominating and Governance Committee considers recommendations for Board candidates submitted by shareholders using the same criteria it applies to recommendations from Committee and directors and members of management. Shareholders may submit recommendations by writing to the Committee at:
      
      Nominating and Governance Committee,
      c/o Elizabeth Arden, Inc.
      2400 S.W. 145th Avenue
      Miramar, FL 33027
      
      Invitations to serve as a nominee are extended by the Board itself via the Chairman of the Board and the Chairman of the Nominating and Governance Committee.
      
      
   2. Board Independence
      
      A majority of the Board shall consist of independent directors as defined the interpretative materials of the Nasdaq Stock Market, Inc. ("Nasdaq") and the U.S. Securities and Exchange Commission (the "SEC").
      
      
   3. Commitment and Limits on Other Activities
      
      Directors service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Directors are asked to advise the Chairman of the Board and the Chairman of the Nominating and Governance Committee in advance of accepting an invitation to serve on another board.
      
      
   
   
6. DIRECTOR ORIENTATION AND CONTINUING EDUCATION
   
   The Board has delegated to the Nominating and Governance Committee the task of designing, with Company management, an appropriate orientation program for new directors that includes background material, meetings with senior management and visits to Company facilities. The Committee also explores, makes available, designs and provides continuing education opportunities for directors, from time to time.
   
   
7. DIRECTOR COMPENSATION AND STOCK OWNERSHIP
   
   The Compensation Committee recommends to the Board for approval general principles for determining the form and amount of director compensation and subject to such principles, evaluates from time to time the status of Board compensation in relation to comparable U.S. companies (in terms of size, business sector, etc.), reporting its findings and recommendations to the Board for approval.
   
   
8. BOARD AGENDA, MATERIALS, INORMATION AND PRESENTATIONS
   
   The Chairman of the Board, with input from senior members of management, establishes the agenda for each Board meeting. A schedule of agenda subjects to be discussed for the ensuing year is issued at the beginning of each year (to the degree these can be foreseen). Each director is free to suggest the inclusion of item(s) on the agenda.
   
   Information and data that is important to the Board's understanding, of the business is distributed in writing to the Board generally five to seven days before the Board meets, although this is not a strict standard, so as to allow for unusual circumstances. Management should ensure that material is as brief as possible while still providing the desired information.
   
   As a general rule, Board meeting time is reserved for discussion. Presentations on specific subjects may be forwarded to the directors in advance so that directors may prepare, Board meeting time may be conserved, and discussion time may be focused. It is recognized, however, that there may be occasions when an important issue arises without time for written background materials to circulate or the subject matter is not appropriate for written materials, such that more presentation time will be required.
   
   
9. DIRECTOR ACCESS TO SENIOR MANAGERS AND INDEPENDENT ADVISERS
   
   Directors have complete access to senior management and to the Board's advisors. Directors are expected to use good judgment to ensure that this contact is not distracting to the business operation of the Company, and that independent advisors are used efficiently.
   
   The Board welcomes regular attendance of senior managers at Board meetings. Should the Chairman and CEO wish to suggest that a senior manager attend on a regular basis, such suggestion is made to the Board for its concurrence. The Board encourages management to bring managers into Board meetings who can provide additional insight into the items being discussed because of personal involvement in these areas.
   
   
10. COMMUNICATIONS WITH THE PUBLIC
    
    If public comments from the Board are appropriate, they should come from the Chairman of the Board who speaks for the Board.
    
    
11. BOARD COMMITTEES
    
    The Board currently has three committees: Audit, Compensation and Nominating and Corporate Governance. Membership on such committees is limited to independent directors. The Board retains discretion to form new committees or disband current committees depending upon the circumstances.
    
    The Nominating and Governance Committee recommends, after consultation with the Chairman of the Board and CEO, and with consideration of the desires of individual directors, the appointment of directors to various committees and the appointment of committee chairperson, for Board approval.
    
    
12. CORPORATE GOVERNANCE GUIDELINES
    
    The Nominating and Governance Committee reviews these Guidelines periodically and recommends amendment to the Board as necessary.
    
    
13. COMMUNICATING WITH THE BOARD
    
    Shareholders are invited to communicate to the Board or its committees by writing to:
    
    Secretary,
    c/o Elizabeth Arden, Inc.
    2400 S.W. 145th Avenue
    Miramar, FL 33027