STOCK COMPENSATION PLAN AND OTHER INCENTIVE PROGRAMS

Revlon maintains the Fourth Amended and Restated Revlon, Inc. Stock Plan (the "Stock Plan"), which provides for awards of stock options, stock appreciation rights, restricted or unrestricted stock and restricted stock units ("RSUs") to eligible employees and directors of Revlon and its affiliates, including Products Corporation. An aggregate of 6,565,000 shares were reserved for issuance as Awards under the Stock Plan, of which there remained approximately 1.7 million shares available for grant as of September 30, 2019. In July 2014, the Stock Plan was amended to renew the Stock Plan for a 7-year renewal term expiring on April 14, 2021.

Revlon 2019 Transaction Incentive Program

On August 16, 2019, it was disclosed that MacAndrews & Forbes and Revlon have determined to explore strategic transactions involving Revlon and third parties. In light of this, the Compensation Committee of Revlon’s Board of Directors approved a Revlon 2019 Transaction Incentive Program (the “2019 TIP”) that enables the Company to award cash-based and RSU-based retention grants and transaction bonus awards, as well as providing for the accelerated vesting of time-based RSUs and restricted shares following a termination without cause or due to death or disability. On September 5, 2019, Revlon’s Board approved amendments to the Stock Plan: (1) to allow the Compensation Committee to delegate to Revlon’s Chief Executive Officer the authority to grant RSUs to the Company’s employees, other than its officers who are subject to Section 16 of the Securities Exchange Act of 1934, as amended (i.e., the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer & Controller); (2) to allow for accelerated vesting of equity awards upon a termination without cause; (3) to change the minimum vesting period for specified equity awards from 3 years to 2 years; and (4) to increase by 250,000 shares the number of shares of Revlon common stock that are not subject to the Stock Plan’s minimum vesting requirements. The Company’s President and Chief Executive Officer declined an award under the retention program and will receive a transaction bonus only if the Company completes a transaction.

Effective as of September 5, 2019, the Company granted a total of 206,812 time-based RSUs under the 2019 TIP which are scheduled to vest in equivalent amounts on each of December 31, 2020 and December 31, 2021, subject to continued employment (the “TIP RSUs”). The TIP RSUs vest in full upon an involuntary termination, other than if due to cause; provided that if a change of control occurs or a brand or business segment is sold and (i) the impacted grantee accepts an offer of employment from the buyer, then: (A) if the buyer assumes the TIP RSUs, the grantee will continue to vest in the assumed awards (with the grantee having the continued right to accelerated vesting upon an involuntary termination, other than if due to cause); and (B) if the buyer does not assume the TIP RSUs, the grantee’s TIP RSUs will vest upon closing the change of control; and (ii) the impacted grantee declines an offer of employment from the buyer for substantially comparable total compensation and benefits, the grantee will forfeit their unvested TIP RSUs (collectively, the “Special Vesting Rules”).

The 2019 TIP also provides for the following cash-based awards payable to certain employees, subject to continued employment through the respective vesting dates:

•$6.8 million payable in two equal installments as of December 31, 2020 and December 31, 2021; and

•$2.5 million payable in one installment as of December 31, 2020.

Such cash-based awards follow the same acceleration rules disclosed above following a termination without cause or due to death or disability.

Long-Term Incentive Program

The Company's LTIP RSUs consist of time-based RSUs and performance-based RSUs. Time-based RSUs are scheduled to vest ratably over a 3-year service period, while performance-based RSUs are scheduled to vest based on the achievement of certain Company performance metrics and cliff-vest at the completion of a 3-year performance period.

The fair value of the LTIP and TIP RSUs is determined based on the NYSE closing share price on the grant date.

In connection with the announcement of the 2019 TIP, in August 2019 the Company also approved applying the Special Vesting Rules to outstanding, pre-existing LTIP RSUs, except that accelerated vesting will apply only to any tranche of outstanding, pre-existing LTIP RSUs scheduled to vest in the 12-month period following termination, with any future tranches being forfeited. Prior to the approval of these Special Vesting Rules, while the outstanding, pre-existing LTIP RSUs would generally have accelerated vesting upon a change of control, they did not feature accelerated vesting for termination and, in such cases, they were entirely forfeited upon termination. As of September 30, 2019, there were no acceleration of vesting for pre-existing LTIP RSUs under the above-mentioned provisions.

During the three months ended September 30, 2019, the Company granted nil time-based and performance-based RSU awards under the Stock Plan (the "2019 LTIP RSUs").

During the nine months ended September 30, 2019, the activity related to time-based and performance-based RSUs previously granted to eligible employees and the grant date fair value per share related to these RSUs were as follows under the LTIP and TIP plans, respectively:



	Time-Based LTIP				Performance-Based LTIP
	RSUs (000's)		Weighted-Average Grant Date Fair Value per RSU		RSUs (000's)		Weighted-Average Grant Date Fair Value per RSU
Outstanding as of December 31, 2018
LTIP RSUs:
2018	434.7		$	19.11	434.7		$	19.11
2017 ^(a)	156.4		19.70		156.4		19.70
Total LTIP RSUs Outstanding as of December 31, 2018	591.1				591.1
Granted
2019 TIP RSUs Granted ^(b)	206.8		16.44		n/a
LTIP RSUs Granted:
2019	446.0		22.55		446.1		22.55
Total LTIP RSUs Granted	446.0				446.1
Vested
2019 TIP RSUs Vested ^(b)	—		—		n/a
LTIP RSUs Vested:
2019	—		—		—		—
2018	(132.8	)	19.06		—		—
2017 ^(a)	(67.4	)	19.70		—		—
Total LTIP RSUs Vested	(200.2	)			—
Forfeited/Canceled
2019 TIP RSUs Forfeited/Canceled ^(b)	—				n/a
LTIP RSUs Forfeited/Canceled:
2019	(2.2	)	22.55		(2.2	)	22.55
2018	(45.5	)	19.70		(51.4	)	19.70
2017 ^(a)	(28.1	)	19.70		(34.6	)	19.70
Total LTIP RSUs Forfeited/Canceled	(75.8	)			(88.2	)
Outstanding as of September 30, 2019
2019 TIP RSUs ^(b)	206.8		16.44		n/a
LTIP RSUs:
2019	443.8		22.55		443.9		22.55
2018	256.4		19.04		383.3		19.04
2017 ^(a)	60.9		19.70		121.8		19.70
Total LTIP RSUs	761.1				949.0
Total LTIP and TIP RSUs Outstanding as of September 30, 2019	967.9				949.0

^(a)The 2017 time-based and performance-based LTIP RSUs are recognized over a 2-year service and performance periods, respectively.

^(b) The 2019 TIP provides for RSU awards that are only time-based.

Time-Based LTIP RSUs

The Company recognized a net adjustment to compensation expense related to the time-based LTIP RSUs of $3.0 million for the nine months ended September 30, 2019. As of September 30, 2019, the Company had $12.7 million of total deferred compensation expense related to non-vested, time-based LTIP RSUs. The cost is recognized over the vesting period of the awards, as described above. One tranche of time-based LTIP RSUs vested during the nine months ended September 30, 2019.

Performance-based LTIP RSUs

The Company recognized a net adjustment to compensation expense related to the performance-based LTIP RSUs of $2.4 million for the nine months ended September 30, 2019. As of September 30, 2019, the Company had $14.2 million of total deferred compensation expense related to non-vested, performance-based LTIP RSUs. The cost is recognized over the service period of the awards, as described above. No performance-based LTIP RSUs vested during the nine months ended September 30, 2019.