THAT SHOULD BE EVALUATED IN CONNECTION WITH THE MERGER.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORS HAVE
APPROVED THE COSMETIC CLASS C COMMON STOCK TO BE ISSUED UNDER THIS PROXY
STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS IS
ACCURATE OR
ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

PROXY STATEMENT/PROSPECTUS DATED FEBRUARY , 1997 AND
FIRST MAILED TO STOCKHOLDERS ON FEBRUARY , 1997

(CONTINUED FROM PREVIOUS PAGE)

The Merger requires the approval of the holders of a majority of the outstanding Cosmetic Class B common stock. The annual meeting of the Cosmetic stockholders has been scheduled for , February , 1997 at 10:00
a.m., at located at , Maryland (the "Meeting"). At the Meeting, holders of Cosmetic Class B common stock will vote upon the Merger Agreement (which provides for the Merger, an amendment to Cosmetic's Certificate of Incorporation authorizing the issuance of up to 40,000,000 shares of Cosmetic Class C common stock, the conversion of Cosmetic Class A and Class B common stock into Cosmetic Class C common stock and the appointment of nine directors upon consummation of the Merger who will replace the Cosmetic Board of Directors) and also will vote upon (i) an amendment to Cosmetic's Certificate of Incorporation repealing the classification of the Cosmetic Board of Directors, (ii) the election of two Class II directors (who will be replaced in connection with the appointment of nine directors upon consummation of the Merger) and (iii) the approval of the Cosmetic 1997 Stock Option Plan, which provides for the grant of options on the Cosmetic Class C common stock. Therefore, approval of the Merger Agreement will constitute, in addition to the approval of the Merger, the approval of an amendment to Cosmetic's Certificate of Incorporation authorizing the issuance of up to 40,000,000 shares of Cosmetic Class C common stock, the approval of the conversion of Cosmetic Class A and B common stock into Cosmetic Class C common stock and the approval of the appointment of the nine directors listed under "Election of Directors; Management of Cosmetic Following the Merger -- Directors Following the Merger" upon consummation of the Merger. Only holders of record of Cosmetic Class B common stock at the close of business on January , 1997 will be entitled to notice of, and to vote at, the Meeting. Holders of Cosmetic Class A common stock are not entitled to vote at the Meeting.

Cosmetic stockholders have no right under the Delaware General Corporation Law to an appraisal of the value of their shares of Cosmetic Class A or Class B common stock in connection with the Merger.

Whether or not you plan to attend the Meeting, if you are a holder of Cosmetic Class B common stock, please take time to vote by completing and mailing the enclosed proxy card to us. A stockholder who has executed and returned a proxy may revoke it at any time before it is voted by delivering to Cosmetic's Secretary a signed notice of revocation or a signed proxy bearing a later date or by attending the Meeting and voting in person. Attendance at the Meeting will not in itself constitute the revocation of a proxy.

Mark S. Weinstein, Anita J. Weinstein, Susan K. Magenheim and their family members own approximately 51.4% of the outstanding Cosmetic Class B common stock and have advised Cosmetic that they intend to vote in favor of the Merger Agreement, the amendments to Cosmetic's Certificate of Incorporation, the election of directors and the Cosmetic 1997 Stock Option Plan. See "The Stockholders Agreement." Accordingly, the approval of the Merger Agreement, the amendments to Cosmetic's Certificate of Incorporation (except the repeal of the classification of the Cosmetic Board of Directors, which requires the affirmative vote of the holders of 80% of the outstanding Cosmetic Class B common stock), the election of directors and the approval of the Cosmetic 1997 Stock Option Plan are assured without the vote of any other stockholder.

The attached Proxy Statement/Prospectus provides you with detailed information about the proposed Merger, the other matters to be voted on at the Meeting, Cosmetic and PFC. We encourage you to read this entire document carefully.

By order of the Board of Directors,

MARK S. WEINSTEIN
CHAIRMAN OF THE BOARD

THE MERGER

THE MERGER AGREEMENT IS ATTACHED AS ANNEX I TO THIS PROXY

STATEMENT/PROSPECTUS. WE ENCOURAGE YOU TO READ THE MERGER AGREEMENT BECAUSE IT IS THE LEGAL DOCUMENT THAT GOVERNS THE MERGER.

COSMETIC FOLLOWING THE MERGER; EFFECT ON STOCKHOLDERS

Following the Merger, Cosmetic will be a subsidiary of Revlon, and Cosmetic's current stockholders will hold a minority interest in Cosmetic. As a result of the Merger, the liquidity of Cosmetic's common stock may be reduced and may be subject to significant fluctuations in price.

Pursuant to the Merger, Revlon will receive 8,479,335 shares of Cosmetic Class C common stock for its one share of PFC common stock, and, assuming the Cash Election is made for all of the 4,299,884 outstanding shares of Cosmetic Class A and Class B common stock and 205,200 outstanding options with an exercise price of less than $7.63 per share, each Cosmetic stockholder, if he or she does not make the Cash Election, will receive one share of Cosmetic Class C common stock or, if he or she makes the Cash Election, 0.372 of a share of Cosmetic Class C common stock and $4.79 in cash for each share of Cosmetic Class A and Class B common stock, as described more fully herein. Based on the number of shares of Cosmetic Class C common stock to be issued to Revlon and the Principal Stockholders' agreement to make the Cash Election, Revlon will own at least 74% of the Cosmetic Class C common stock outstanding immediately after the Merger and will

own approximately 84% of such shares if, in addition to the Principal Stockholders' shares and options, the Cash Election is made in respect of all other outstanding shares and options for shares with an exercise price of less than $7.63 per share.

Revlon previously has stated publicly that the Merger is the first step in its plan to withdraw from operating retail cosmetic stores so that Revlon's management can focus on its core business of the manufacture and sale of cosmetic products. Although Revlon has not yet determined the timing or form that any such transaction might take, Revlon could, among other things, sell some or all of the shares of Cosmetic Class C common stock that it receives in the Merger in public or private transactions or cause the Combined Company to conduct primary offerings of Cosmetic common stock, issue Cosmetic common stock to acquire additional businesses or merge with another entity, any of which transactions would have the effect of reducing the interest of Revlon as well as other stockholders (and could have the effect of diluting the interests of existing stockholders) in the Combined Company. In connection with any such transaction, there can be no assurance as to the value that holders of Cosmetic Class C common stock might receive, and such value could be lower than the amount of cash offered in connection with the Cash Election available to Cosmetic stockholders in the Merger. In addition, if any such transaction resulted in a change of control of the Combined Company, as defined in certain employment and consulting agreements to be entered into with Mark S. Weinstein, Anita J. Weinstein and Susan K. Magenheim, the principal stockholders of Cosmetic, such persons would be entitled to all amounts payable to them under such agreements. Finally, there can be no assurance that Revlon will withdraw from operating retail cosmetic stores.

WHAT COSMETIC STOCKHOLDERS WILL RECEIVE (SEE PAGE 54)

As a result of the Merger, Cosmetic stockholders will receive, for each share of Cosmetic Class A or Class B common stock they own, one share of Cosmetic Class C common stock or, at each stockholder's election and subject to the limitation discussed below, $7.63 in cash. Following the Merger, the Cosmetic Class C common stock will be the only class of Cosmetic stock outstanding. Holders of options to purchase Cosmetic Class A or Class B common stock with an exercise price of less than $7.63 per share may elect to receive for each such option they hold an equivalent option to purchase Cosmetic Class C common stock or, at each such optionholder's election and subject to the limitation discussed below, cash equal to the difference between $7.63 and the exercise price per share of such options. The right of stockholders and optionholders to receive cash is limited to an aggregate of 2,829,065 shares and options for shares, and to the extent that holders of more than 2,829,065 shares and options for shares elect to receive cash, the Cash Election will be provided to such holders pro rata. Holders of options to purchase Cosmetic Class A or Class B common stock with an exercise price of more than $7.63 per share will receive equivalent options to purchase Cosmetic Class C common stock.

Cosmetic stockholders who wish to make the Cash Election must deliver their form of election to First Union National Bank of North Carolina (the "Exchange Agent") at P.O. Box 217950, Charlotte, North Carolina, 28254-3555 by 5:00 p.m. New York City time on the business day before the Meeting. Stockholders who are not record holders and who wish to make the Cash Election must have the broker, bank or other person that holds their shares make the Cash Election for them. Stockholders who do not make the Cash Election or do not comply with the Cash Election procedure will receive Cosmetic Class C common stock and will not receive any cash in the Merger. Stockholders who make the Cash Election may revoke the election by submitting written notice to the Exchange Agent prior to 5:00 p.m. New York City time on the business day before the Meeting.

ELECTION OF DIRECTORS; BOARD OF DIRECTORS AND MANAGEMENT OF COSMETIC

FOLLOWING THE MERGER (SEE PAGES 74 AND 75)

At the Meeting, the holders of the Cosmetic Class B common stock will vote upon the election to the Cosmetic Board of Mark S. Weinstein and Donald R. Rogers, the two members of the Cosmetic Board whose terms expire in 1997. However, in connection with the Merger the Cosmetic Board will be enlarged to nine members, and the nine persons named in the Merger Agreement will become the directors of the Combined Company. In connection with the Merger, Cosmetic's Certificate of Incorporation is proposed to be amended to repeal the classification of the Cosmetic Board so that all of the directors will be elected annually. See "The Merger -- Amendments to Cosmetic's Certificate of Incorporation."

The members of the Board of Directors of the Combined Company (the "Combined Company Board") will be Ronald O. Perelman, chairman of the executive committee and a director of Revlon, Howard Gittis, a director of Revlon, Jerry W. Levin, chairman, chief executive officer and a director of Revlon and a director of PFC, Howard Diener, the president of PFC, William J. Fox, executive vice president, chief financial officer and a director of Revlon and vice president and a director of PFC, Wade H. Nichols, senior vice president and general counsel of Revlon and vice president and a director of PFC, and Mark S. Weinstein, chairman of the Cosmetic Board. It is also anticipated that David N. Dinkins, a professor at Columbia University and the former Mayor of The City of New York, and Harvey Rosenthal, the former president of Melville Corporation (now known as CVS Corporation), will be the independent directors.

Mr. Levin will be appointed chairman of the Combined Company Board, Mr. Weinstein will be appointed vice chairman of the Combined Company Board and Mr. Diener will be appointed president and chief executive officer of the Combined Company.

The Principal Stockholders and Revlon have entered into a Stockholders Agreement dated November 27, 1996 (the "Stockholders Agreement") pursuant to which, among other things, for three years after the consummation of the Merger,
(i) the Principal Stockholders will vote all of their Cosmetic Class C common stock in favor of Revlon's nominees for director so that Revlon will at all times maintain representation on the Combined Company Board equal to Revlon's percentage ownership of Cosmetic Class C common stock, but not less than seven board seats, including two independent directors, and (ii) Revlon will vote its shares in favor of the Principal Stockholders' nominees for director equal to their aggregate percentage ownership of outstanding Cosmetic Class C common stock, after giving effect to the Merger and the Cash Election, but not less than one nor more than two board seats.

INTERESTS OF DIRECTORS AND OFFICERS IN THE MERGER (SEE PAGE 35)

In considering the Cosmetic Board's recommendation that you vote in favor of the Merger, you should be aware that several officers of Cosmetic, including some officers who are directors, following the Merger will have employment or consulting agreements that will provide them with interests in the Merger that are different from, or in addition to, yours. These persons will receive significant compensation following the Merger. In particular, Mr. Weinstein, Cosmetic's chairman, and Anita J. Weinstein, an officer and director of Cosmetic, will enter into four-year employment and non-competition agreements, Susan K. Magenheim, an officer and director of Cosmetic, will enter into a four-year consulting agreement and Ben S. Kovalsky, a director and Cosmetic's chief executive officer, will enter into an amendment to his existing employment agreement extending it through February 2000. Please refer to pages 35 and 36 for more information concerning employment and consulting agreements for these officers and directors. In addition, the Principal Stockholders will enter into the Stockholders Agreement and all options for Cosmetic Class A and Class B common stock held by Cosmetic's directors, officers and employees will vest in full upon the closing of the Merger.

CONDITIONS TO THE MERGER (SEE PAGE 55)

The completion of the Merger depends upon satisfaction of several conditions, including the following:

(i) the approval of the Merger Agreement by the holders of a majority of the outstanding Cosmetic Class B common stock;

(ii) Cosmetic shall have obtained financing of no less than $50 million to make the cash payments required by the Cash Election, to refinance existing indebtedness of Cosmetic and PFC, to pay fees and expenses and to provide future working capital for the Combined Company following the Merger;

(iii) neither Cosmetic nor PFC shall have suffered a material adverse change in its financial condition, business or results of operations;

(iv) the representations and warranties of Cosmetic, Revlon and PFC set forth in the Merger Agreement shall be accurate unless such failure to be accurate shall not have a material adverse effect;

(v) Cosmetic, Revlon and PFC shall have performed their obligations under the Merger Agreement in all material respects; and

(vi) Cosmetic, Revlon and PFC shall have obtained all necessary material governmental and third-party consents and approvals.

It is not a condition to completion of the Merger that the parties receive an opinion of counsel with respect to the tax consequences of the Merger. Cosmetic, however, has received an opinion of tax counsel with respect to the federal income tax consequences of the Merger to the Cosmetic stockholders. See page 26.

The Merger Agreement permits the party entitled to assert a condition to waive that condition, except certain conditions which by law may not be waived, such as the requirement of stockholder approval. Although each party reserves the right to do so, none of the parties to the Merger Agreement currently expects to waive any of the conditions to the Merger.

TERMINATION OF THE MERGER AGREEMENT (SEE PAGE 57)

Cosmetic and Revlon can agree to terminate the Merger Agreement without completing the Merger. In addition, either Cosmetic or Revlon can terminate the Merger Agreement if any of the following occurs:

(i) if the Merger has not occurred before March 17, 1997, unless the failure to consummate the Merger by this date is due to the action or failure to act of the party seeking to terminate the Merger Agreement;

(ii) if the Merger Agreement is not approved by the holders of a majority of the outstanding Cosmetic Class B common stock; or

(iii) if any governmental entity of competent jurisdiction enacts, enters or enforces a statute, rule, regulation, order, decree or injunction which restrains, enjoins or otherwise prohibits the consummation of the Merger.

In addition, Revlon may terminate the Merger Agreement if the Cosmetic Board withdraws or modifies its recommendation that the Cosmetic stockholders approve the Merger Agreement.

TERMINATION FEES AND EXPENSES (SEE PAGES 57 AND 58)

The Merger Agreement and the Stockholders Agreement generally require Cosmetic and the Principal Stockholders to pay up to $1 million of Revlon's expenses if the Merger Agreement is terminated under certain circumstances and, if Cosmetic consummates an alternate transaction with another party within 90 days after the later of March 17, 1997 or termination of the Merger Agreement, require Cosmetic and the Principal Stockholders to pay Revlon a termination fee of $1 million, and require the Principal Stockholders to pay to Revlon a fee equal to 25% of the difference between the consideration paid to the Principal Stockholders and $7.63 per share times the number of shares held by the Principal Stockholders. Cosmetic has no agreement, plan or understanding whereby it would be required to reimburse the Principal Stockholders in the event that they were required to pay any of the foregoing amounts or fees to Revlon.

The Merger Agreement also generally requires Revlon to pay up to $1 million of Cosmetic's expenses if the Merger Agreement is terminated under certain circumstances and requires Revlon to pay Cosmetic a termination fee of $1.25 million if PFC consummates an alternate transaction with another party within 90 days after the later of March 17, 1997 or termination of the Merger Agreement.

OPINION OF FINANCIAL ADVISOR (SEE PAGE 29)

In deciding to approve the Merger, the Cosmetic Board considered, among other factors, an opinion from its financial advisor, Legg Mason Wood Walker, Incorporated ("Legg Mason"), as to the fairness of the Merger consideration from a financial point of view. This opinion is attached as Annex III to this Proxy Statement/Prospectus. The holders of Cosmetic Class A and Class B common stock should read this opinion.

In connection with delivering its opinion, Legg Mason performed a variety of analyses. These analyses included (i) comparing the relevant historical and projected financial and operating results and financial multiples of Cosmetic and projected financial and operating results and financial multiples of the Combined Company with the historical and projected operating results and financial multiples of selected publicly traded companies, (ii) comparing some possible acquisition premiums in the Merger to the percentage premiums paid by acquirors in other transactions, (iii) comparing certain financial and operating statistics of Cosmetic with certain financial and operating statistics of selected retailers immediately prior to being acquired and (iv) calculating the discount value of Cosmetic's forecasted cash flow. Legg Mason did not consider the range of possible tax consequences facing individual Cosmetic stockholders, and the valuations per share derived by Legg Mason were prior to any tax impact on individual Cosmetic stockholders.

Legg Mason will receive a fee of $625,000 in connection with the Merger, $600,000 of which is contingent upon the closing of the Merger. In addition, Legg Mason received $50,000 in connection with providing its opinion.

REGULATORY APPROVALS (SEE PAGE 25)

The Merger is subject to the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder, which provide that certain merger transactions may not be consummated until required information and material have been furnished to the Antitrust Division of the Department of Justice and the Federal Trade Commission and certain waiting periods have expired or been terminated. The required information with respect to the Merger was filed on behalf of Cosmetic on December 27, 1996 and on behalf of PFC on December 31, 1996 and the waiting period was terminated on January 7, 1997.

ACCOUNTING TREATMENT (SEE PAGE 26)

For accounting and financial reporting purposes, the Merger will be treated as a reverse acquisition, which means that PFC will be considered to be the acquiring company even though Cosmetic will be the surviving corporation. As a result, PFC's historical financial statements will be the continuing historical financial statements of the Combined Company and Cosmetic's assets, liabilities and results of operations will be consolidated with the historical financial statements of PFC subsequent to the consummation of the Merger. Fair value adjustments will be made to Cosmetic's assets and liabilities to the extent of Revlon's ownership interest in the Combined Company.

NO APPRAISAL RIGHTS (SEE PAGE 26)

Cosmetic stockholders have no right under the Delaware General Corporation Law to an appraisal of the value of their shares in connection with the Merger.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE 26)

The exchange of Cosmetic Class A or Class B common stock for Cosmetic Class C common stock will be tax-free to Cosmetic stockholders for federal income tax purposes. A Cosmetic stockholder who receives only cash in exchange for all of his or her shares of Cosmetic Class A and Class B common stock (and is not treated for federal income tax purposes as owning Cosmetic Class C common stock owned by related persons or entities) will recognize a gain or loss for federal income tax purposes. A Cosmetic stockholder who receives both cash and Cosmetic Class C common stock will not recognize any loss for federal income tax purposes but will recognize some or all of any gain. Cosmetic stockholders should consult their own tax advisors with respect to their personal tax situation.

COSMETIC PER SHARE MARKET PRICE INFORMATION (SEE PAGE 38)

Cosmetic Class A and Class B common stock are listed on the Nasdaq National Market. On September 30, 1996, the last full trading day prior to the public announcement of the signing of a letter of intent with respect to the Merger, the Cosmetic Class A common stock closed at $6.50 per share and the Cosmetic Class B common stock closed at $7.25 per share. On February , 1997, the Cosmetic Class A common stock closed at per share and the Cosmetic Class B common stock closed at per share.

LISTING OF COSMETIC CLASS C COMMON STOCK (SEE PAGE 90)

Cosmetic has made application for the listing of the Cosmetic Class C common stock on the Nasdaq National Market.

AMENDMENTS TO COSMETIC'S CERTIFICATE OF INCORPORATION (SEE PAGE 25)

The Merger Agreement provides that, as part of the Merger, Cosmetic will amend its Certificate of Incorporation to authorize the issuance of up to 40,000,000 shares of Cosmetic Class C common stock (the "Class C Amendment"). A vote by Cosmetic Class B stockholders in favor of the Merger is also a vote to approve the Class C Amendment.

The Merger Agreement also requires Cosmetic to seek the approval of an amendment to its Certificate of Incorporation to repeal the classification of the Cosmetic Board, resulting in the annual election of all of Cosmetic's directors (the "Board Amendment"). The Board Amendment, which requires the affirmative vote of the holders of 80% of the outstanding Cosmetic Class B common stock, is not a condition to the Merger.

The proposed forms of the amendments to Cosmetic's Certificate of Incorporation are attached as Annex II to this Proxy Statement/Prospectus.

                                                                                         NINE MONTHS ENDED SEPTEMBER 30,
                                                 YEAR ENDED DECEMBER 31, 1995                         1996
                                        ----------------------------------------------   -------------------------------
                                                              PRO FORMA                                       PRO FORMA
                                        COSMETIC     PFC     ADJUSTMENTS   AS ADJUSTED   COSMETIC    PFC     ADJUSTMENTS
                                        --------   -------   -----------   -----------   -------   -------   -----------
                                                         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net sales.............................  $132,304   $72,717     $    --      $ 205,021    $92,215   $48,970     $    --
                                        --------   -------   -----------   -----------   -------   -------   -----------
Gross margin..........................    27,210    23,541          --         50,751     18,874    16,736          --
Selling, general and administrative
  expenses............................    27,033    25,368          70         52,471     22,622    19,595          52
Restructuring charges                         --        --          --             --      4,024        --          --
                                        --------   -------   -----------   -----------   -------   -------   -----------
Operating income (loss)...............       177    (1,827)        (70)        (1,720)    (7,772)   (2,859)        (52)
Other (income) expense................      (670)       --         250           (420)       (66)       --         188
Interest expense......................       725     2,137       1,673          4,535        714       699       1,255
                                        --------   -------   -----------   -----------   -------   -------   -----------
Income (loss) from continuing
  operations before income taxes......       122    (3,964)     (1,993)        (5,835)    (8,420)   (3,558)     (1,495)
Income taxes (benefit)................      (157)       50          --           (107)    (2,930)       45          --
                                        --------   -------   -----------   -----------   -------   -------   -----------
Income (loss) from continuing
  operations..........................       279    (4,014)     (1,993)        (5,728)    (5,490)   (3,603)     (1,495)
Discontinued operations (a)
  Loss from discontinued operations...        --      (351)         --           (351)        --        --          --
  Loss on disposal....................        --      (897)         --           (897)        --        --          --
                                        --------   -------   -----------   -----------   -------   -------   -----------
Loss from discontinued operations.....        --    (1,248)         --         (1,248)        --        --          --
                                        --------   -------   -----------   -----------   -------   -------   -----------
Net income (loss).....................  $    279   $(5,262)    $(1,993)     $  (6,976)   $(5,490)  $(3,603)    $(1,495)
                                        --------   -------   -----------   -----------   -------   -------   -----------
                                        --------   -------   -----------   -----------   -------   -------   -----------
Income (loss) per common and common
  equivalent shares...................  $   0.06                            $   (0.69)   $ (1.28)
                                        --------                           -----------   -------
                                        --------                           -----------   -------


                                        AS ADJUSTED
                                        -----------

STATEMENT OF OPERATIONS DATA:
Net sales.............................   $ 141,185
                                        -----------
Gross margin..........................      35,610
Selling, general and administrative
  expenses............................      42,269
Restructuring charges                        4,024
                                        -----------
Operating income (loss)...............     (10,683)
Other (income) expense................         122
Interest expense......................       2,668
                                        -----------
Income (loss) from continuing
  operations before income taxes......     (13,473)
Income taxes (benefit)................      (2,885)
                                        -----------
Income (loss) from continuing
  operations..........................     (10,588)
Discontinued operations (a)
  Loss from discontinued operations...          --
  Loss on disposal....................          --
                                        -----------
Loss from discontinued operations.....          --
                                        -----------
Net income (loss).....................   $ (10,588)
                                        -----------
                                        -----------
Income (loss) per common and common
  equivalent shares...................   $   (1.05)
                                        -----------
                                        -----------

                                                                                            AS OF SEPTEMBER 30, 1996
                                                                                ------------------------------------------------
                                                                                                       PRO FORMA
                                                                                COSMETIC     PFC      ADJUSTMENTS    AS ADJUSTED
                                                                                -------    -------    -----------    -----------
BALANCE SHEET DATA:
Working capital..............................................................   $42,815    $30,797     $ (10,400)     $  63,212
Inventory....................................................................    56,479     32,686            --         89,165
Total assets.................................................................    72,522     44,776         3,281        120,579
Long-term debt and Due to Revlon.............................................    12,329     18,746        22,511         53,586
Stockholders' equity.........................................................   $37,181    $21,215     $ (29,630)     $  28,766

SHOULD BE CAREFULLY CONSIDERED IN EVALUATING THE MERGER AND THE CASH ELECTION, IN ADDITION TO THE RISKS AND OTHER INFORMATION DESCRIBED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS.

HISTORICAL NET LOSSES. Cosmetic had a net loss of $4.8 million for the fiscal year ended September 27, 1996, and PFC had net losses of $5.3 million and $1.2 million for the years ended December 31, 1995 and 1994, respectively, and a net loss of $3.6 million for the nine-month period ended September 30, 1996. Had the Merger occurred on January 1, 1995, the Combined Company (on a pro forma basis) would have had net losses of $7.0 million and $10.6 million for the year ended December 31, 1995 and the nine months ended September 30, 1996, respectively. Cosmetic's net loss for the fiscal year ended September 27, 1996 included a restructuring charge of $4.0 million associated with the closing of eight retail stores in Atlanta, Georgia. Although Cosmetic has no current plans for similar closings, there can be no assurance that similar closings and related restructuring charges would not occur in the future.

The ability of the Combined Company to generate operating income and net income after the Merger will depend upon, among other things, its ability to integrate successfully the operations of Cosmetic and PFC, the nature and extent of any future business developments, the Combined Company's capital structure and general economic conditions. There can be no assurance that the Combined Company will be profitable and will not incur losses. See "Management's Discussion and Analysis of Financial Condition and Results of Operations of Cosmetic," "Management's Discussion and Analysis of Financial Condition and Results of Operations of PFC" and "Pro Forma Financial Information."

UNCERTAINTIES REGARDING INTEGRATION OF COSMETIC AND PFC. The Combined Company will attempt to use the Merger to effect cost savings, including a reduction in operating expenses as a result of the elimination of duplicative facilities, functions and other overhead expenses. Significant uncertainties, however, accompany any business combination and its implementation with respect to the ability of the combined companies to integrate functions and management resources to achieve operating efficiencies. There can be no assurance that the Combined Company will be able to realize cost savings as a result of the Merger, that any such elimination of facilities, functions or overhead expenses will not result in a decrease in revenue and profits, or that there will not be other adverse effects from the integration. The inability to achieve the anticipated cost savings would have a material adverse effect on the Combined Company's operating results following the Merger. See "The Merger -- Operations After the Merger."

REQUIREMENT FOR FINANCING TO CONSUMMATE THE MERGER; SIGNIFICANT BORROWINGS; FUTURE FINANCING. Pursuant to the terms of the Merger Agreement, the availability of satisfactory financing of at least $50 million by the effective time of the Merger is a condition to the consummation of the Merger.

The Combined Company will incur substantial indebtedness to effect the Merger, refinance existing Cosmetic and PFC indebtedness, pay fees and expenses in connection with the Merger and the Financing (as defined herein) and provide for future working capital needs. If the Merger had occurred on September 30, 1996, the Combined Company (on a pro forma basis) would have had long-term debt and obligations under capital leases aggregating $49.8 million compared to Cosmetic's historical long-term debt, less current portion, of $12.3 million as of September 27, 1996 and PFC's debt to Revlon of $18.7 million as of September 30, 1996.

Upon consummation of the Merger and execution of a definitive credit agreement (currently under negotiation with several lenders), the Combined Company is expected to have a credit facility of up to $70 million, of which approximately $49.7 million is expected to be borrowed upon the consummation of the Merger ($20.9 million to fund the Cash Election, up to $27.2 million to refinance existing Cosmetic and PFC indebtedness and $1.6 million for fees and expenses related to the Merger) and up to $20.3 million is expected to be available for future working capital requirements and for general corporate purposes (the "Financing"). The Financing is expected to impose certain limitations on the Combined Company that do not differ materially from those imposed upon Cosmetic under its current credit facility, including, among other things, limitations relating to (i) engaging in mergers, consolidations and sales of assets, with certain exceptions, (ii) making distributions or paying dividends or changing its capital structure, with certain exceptions, (iii) entering into any transaction that materially and adversely affects the collateral under the Financing or the Combined Company's ability to repay its obligations, (iv) issuing any guarantees, with certain exceptions, (v) incurring any debt in excess of specified amounts, with certain exceptions, (vi) prepaying any debt before maturity, with certain exceptions, (vii) entering into certain transactions with affiliates, with certain exceptions, (viii) engaging in other lines of business, (ix) incurring any liens on its assets, with certain exceptions, (x) entering into sale and leaseback transactions, with certain exceptions, (xi) creating or acquiring any new subsidiaries, (xii) making acquisitions or investments, with certain exceptions or (xiii) allowing any subsidiary to have any

obligations to trade suppliers. In addition, the Financing is expected to contain certain financial covenants, including covenants requiring the Combined Company to maintain minimum adjusted tangible net worth and minimum interest coverage.

The Combined Company's level of indebtedness could have important consequences to the holders of Cosmetic Class C common stock, including the following: (i) a substantial portion of the Combined Company's cash flow from operations must be dedicated to the payment of the principal of and interest on its indebtedness and will not be available for other purposes; (ii) the ability of the Combined Company to obtain financing in the future for working capital needs, capital expenditures, acquisitions, investments, general corporate purposes or other purposes may be materially limited or impaired; and (iii) the Combined Company's level of indebtedness may reduce its flexibility to respond to changing business and economic conditions. However, Cosmetic believes that this level of indebtedness will not materially impair the Combined Company's ability to obtain capital for capital expenditures, acquisitions or investments or materially reduce the Combined Company's flexibility to respond to business or economic conditions. Subject to certain limitations contained in the Financing, the Revlon Notes (as defined herein) and Revlon's credit agreement, the Combined Company may incur additional indebtedness to finance working capital or capital expenditures, investments or acquisitions or for other purposes. See "Risk Factors -- Restrictions Imposed by the Terms of Revlon Indebtedness."

RESTRICTIONS IMPOSED BY THE TERMS OF REVLON INDEBTEDNESS. The terms and conditions of four series of Revlon's debt securities and the debt securities of Revlon's indirect parent, Revlon Worldwide Corporation (the "Revlon Notes"), impose restrictions on the ability of Revlon and its subsidiaries, which will include the Combined Company after the effective time of the Merger, to incur debt, make acquisitions or investments, sell assets, create liens and consent to restrictions on their ability to pay dividends or make distributions in respect of their capital stock. Although there can be no assurance, the Combined Company does not believe that such restrictions will limit the ability of the Combined Company to expand its business or to take advantage of business opportunities or transactions. It is anticipated that all of the Cosmetic Class C common stock held by Revlon will be pledged as collateral for Revlon's obligations under Revlon's credit agreement and a credit agreement of a subsidiary of Revlon. See "Risk Factors -- Requirement for Financing to Consummate the Merger; Significant Borrowings; Future Financing."

DETERMINATION OF CONVERSION RATIO. Prior to the Merger, there was no public market for the PFC common stock. The conversion ratio pursuant to which there are to be issued 8,479,335 shares of Cosmetic Class C common stock for all of the PFC common stock has been determined by negotiations among Cosmetic and Revlon and may not be indicative of the value of PFC.

CHANGE OF CONTROL OF COSMETIC; CONTROL OF THE COMBINED COMPANY BY REVLON. As a result of the Merger, assuming the Cash Election is made in respect of all outstanding shares and options for shares with an exercise price of less than $7.63 per share, Revlon will own approximately 84% of the Cosmetic Class C common stock (the only class of Cosmetic stock to be outstanding following the Merger). Revlon and the Principal Stockholders have entered into a Stockholders Agreement which provides that for three years from the consummation of the Merger, the Principal Stockholders will vote all of their Cosmetic Class C common stock in favor of Revlon's nominees for director so that Revlon will at all times maintain representation on the Combined Company Board equal to Revlon's percentage ownership of Cosmetic Class C common stock, but not less than seven board seats, including two independent directors, and Revlon will vote its shares in favor of the Principal Stockholders' nominees for director equal to their aggregate percentage ownership of Cosmetic Class C common stock, after giving effect to the Merger and the Cash Election, but not less than one nor more than two board seats. Accordingly, Revlon, the Combined Company's principal vendor, will control the management and policies of the Combined Company, including the terms of any agreements with Revlon as well as the vote on all matters submitted to a vote of the Combined Company's stockholders, including extraordinary transactions such as mergers and acquisitions, sales of all or substantially all of the Combined Company's assets or "going private" transactions. The maximum percentage of outstanding Cosmetic Class C common stock that the Principal Stockholders would beneficially own in the aggregate after consummation of the Merger is approximately 5%. See "Risk Factors -- Reliance on Vendors and Sources of Supply," "The Stockholders Agreement" and "Agreements with Revlon."

Revlon previously has stated publicly that the Merger is the first step in its plan to withdraw from operating retail cosmetic stores so that Revlon's management can focus on its core business of the manufacture and sale of cosmetic products. Although Revlon has not yet determined the timing or form that any such transaction might take, Revlon could, among other things, sell some or all of the shares of Cosmetic Class C common stock that it receives in the Merger in public or private transactions or cause the Combined Company to conduct primary offerings of Cosmetic common stock, issue Cosmetic common stock to acquire additional businesses or merge with another entity, any of which transactions would have the effect of reducing the interest of Revlon as well as other stockholders (and could have the effect of diluting the interests of

existing stockholders) in the Combined Company. In connection with any such transaction, there can be no assurance as to the value that holders of Cosmetic Class C common stock might receive, and such value could be lower than the amount of cash offered in connection with the Cash Election available to Cosmetic stockholders in the Merger. In addition, if any such transaction resulted in a change of control of the Combined Company, as defined in certain employment and consulting agreements to be entered into with Mark S. Weinstein, Anita J. Weinstein and Susan K. Magenheim, the principal stockholders of Cosmetic, such persons would be entitled to all amounts payable to them under such agreements. Finally, there can be no assurance that Revlon will withdraw from operating retail cosmetic stores.

COMPETITION. The retail cosmetic product business is very competitive. Cosmetic's and PFC's competitors include department stores, mass volume retailers, chain drug stores, independent drug stores, discount stores and other retail stores. Some of these competitors sell cosmetic products at discount prices, and many are part of large national or regional chains and have substantially greater resources and name recognition than Cosmetic and PFC. Additionally, some of the Combined Company's principal competitors are principal customers of Revlon. There can be no assurance that the Combined Company will not be adversely affected by such competition. See "Risk Factors -- Change of Control of Cosmetic; Control of the Combined Company by Revlon," "Business of Cosmetic -- Competition" and "Business of PFC -- Competition."

RELIANCE ON VENDORS AND SOURCES OF SUPPLY. Cosmetic purchases products from approximately 560 vendors, and its largest single vendor, Revlon, accounted for approximately 10% of total purchases for the fiscal year ended September 27, 1996. Cosmetic currently has no long-term or exclusive contract with any vendor. The loss of any of Cosmetic's largest vendors could have a material adverse effect on Cosmetic.

PFC purchases products from approximately 75 vendors. PFC's largest vendor, Revlon, and its indirect parent, Revlon Holdings Inc. ("Holdings"), accounted for approximately 29% of PFC's total purchases for the nine months ended September 30, 1996 and approximately 32% of PFC's total purchases for the year ended December 31, 1995. PFC's second largest supplier, Elizabeth Arden, with which PFC has a supply contract that expires in 1999, accounted for approximately 15% of PFC's total purchases during 1995. In connection with the Merger, the Combined Company and Revlon will enter into a supply contract with a term of at least two and a maximum of four years. The loss of Revlon as a supplier or a material change in the terms of the supply contract could have a material adverse effect on the Combined Company's business following the Merger. See "Agreements with Revlon."

Some of the products purchased by Cosmetic and PFC from their respective vendors may include products that were originally sold to department stores and other retailers. From time to time, certain manufacturers have taken actions to prohibit or restrict the resale of such products by department stores and other retailers. Some of the products purchased by Cosmetic and PFC from their respective vendors also may include products that are subject to copyright, trademark, trade dress and patent rights, either manufactured in foreign countries or manufactured in the United States and sold to foreign distributors. Periodically, litigation and administrative proceedings have been instituted and federal legislation has been proposed seeking to halt or restrict the importation of such merchandise. Any of the foregoing prohibitions or restrictions could have a material adverse effect on the Combined Company if the Combined Company could not obtain alternative sources for its products on terms at least as favorable as are currently available. See "Business of Cosmetic -- Purchasing" and "Business of PFC -- Purchasing."

Manufacturers of professional hair care products traditionally have allowed their products to be sold only by retail hair salons. Historically, Cosmetic purchased such products from secondary sources, and sales of these products accounted for about 6% of Cosmetic sales volume in fiscal 1994. With the growth of Cosmetic over the past three years, sufficient quantities of professional hair care products have been increasingly difficult to purchase through secondary sources. Cosmetic has added hair salons in its stores as an additional service with the anticipation of developing direct relationships with professional hair care products manufacturers, which required Cosmetic to discontinue sales of such products obtained from secondary sources. In July 1995, Cosmetic began receiving shipments of professional hair care products from one of the four major professional hair care manufacturers and continues to receive such products today. This manufacturer represented approximately one-third of Cosmetic's historical professional hair care product sales volume. The loss of the remaining professional hair care product sales has adversely affected Cosmetic's retail sales. There can be no assurance that the hair salon strategy will be successful or that the Combined Company will be able to secure sufficient quantities of professional hair care products directly from manufacturers. See "Management's Discussion and Analysis of Financial Condition and Results of Operations of Cosmetic -- Hair Salon Strategy."

SEASONALITY. Both Cosmetic's and PFC's businesses are, and the Combined Company's business will be, seasonal. Both Cosmetic's and PFC's highest sales volumes occur during the October to December quarter. The seasonality of the Combined Company's sales may cause a significant variation in its quarterly operating results, and a significant decrease in the October

to December quarter sales could have a material adverse effect on the Combined Company's results of operations for the corresponding fiscal year.

SHARES ELIGIBLE FOR FUTURE SALE. Assuming the Cash Election is made in respect of all outstanding shares and options for shares with an exercise price of less than $7.63 per share, upon the consummation of the Merger, Revlon will own approximately 84% of the outstanding Cosmetic Class C common stock, all of which will be "restricted stock" as that term is defined in Rule 144 adopted under the Securities Act of 1933, as amended (the "Securities Act"), and initially will not be freely saleable in the public market without registration under the Securities Act. It is anticipated that all of the shares of Cosmetic Class C common stock owned by Revlon immediately after the effective time of the Merger will be pledged by Revlon to secure its obligations under Revlon's credit agreement and a credit agreement of a subsidiary of Revlon. Subject to applicable law and the terms of Revlon's credit agreement and the subsidiary's credit agreement, Revlon could sell any or all of the shares of Cosmetic Class C common stock owned by it from time to time for any reason. Following the Merger, Revlon will be entitled to demand on three occasions that Cosmetic file a registration statement under the Securities Act for the sale of its Cosmetic Class C common stock and will also be entitled to include its Cosmetic Class C common stock in certain registration statements filed for the benefit of Cosmetic. The Principal Stockholders will also be entitled to certain rights to the registration of their Cosmetic Class C common stock. Although Cosmetic can make no prediction as to the effect, if any, that sales of shares of Cosmetic Class C common stock by Revlon, any pledgee of such shares or the Principal Stockholders would have on the market price prevailing for the Cosmetic Class C common stock from time to time, sales of substantial amounts of Cosmetic Class C common stock or the availability of such shares for sale could adversely affect prevailing market prices. See "Risk Factors -- Restrictions Imposed by the Terms of Revlon Indebtedness," "Management's Discussion and Analysis of Financial Condition and Results of Operations of PFC -- Financial Condition, Liquidity and Capital Resources," "Agreements with Revlon -- Registration Rights Agreement," "Interests of Directors and Officers in the Merger -- Stockholders Agreement with Principal Stockholders," "The Stockholders Agreement" and "Description of Cosmetic Capital Stock -- Federal Securities Laws Consequences."

DIVIDENDS UNLIKELY. Cosmetic has not paid any dividends on its common stock to date, and it is unlikely that the Combined Company will pay any dividends in the foreseeable future. The payment of dividends after the Merger will be contingent upon the Combined Company's revenues and earnings, if any, capital requirements and general financial condition, and will be subject to the discretion of the Combined Company Board. See "Risk Factors -- Requirement for Financing to Consummate the Merger; Significant Borrowings; Future Financing" and "Description of Cosmetic Capital Stock -- Dividends."

REDUCED PUBLIC FLOAT; POSSIBLE VOLATILITY OF CLASS C COMMON STOCK PRICE. There will be substantially fewer shares of Cosmetic Class C common stock held by non-affiliated stockholders than Cosmetic Class A and Class B common stock held by non-affiliated stockholders prior to the effective time of the Merger. This reduced market capitalization could cause the market price of the Cosmetic Class C common stock to be subject to significant fluctuations. In addition, following the Merger, factors such as announcements by the Combined Company of variations in its quarterly financial results, analysts' estimates of the Combined Company's financial results, industry-wide results, changes in economic conditions, competitive developments, sales of substantial blocks of the securities of the Combined Company by the holders thereof, and the issuance of stock in connection with future financings or corporate transactions among other things, could cause dilution to existing stockholders and cause the market price of the Combined Company's shares to fluctuate significantly. See "Risk Factors -- Shares Eligible for Future Sale," "Risk Factors -- Authorization of Additional Common Stock for Future Issuance" and "Market Prices of Cosmetic's Securities."

AUTHORIZATIONS OF ADDITIONAL COMMON STOCK FOR FUTURE ISSUANCE. The Principal Stockholders and their family members have advised the Cosmetic Board that they intend to vote all of their shares in favor of the Merger Agreement, which includes a provision to amend Cosmetic's Certificate of Incorporation so as to authorize the issuance of 40,000,000 shares of Cosmetic Class C common stock, and such vote is sufficient under the General Corporation Law of Delaware and the Certificate of Incorporation for the approval of the Merger Agreement, without the vote of any other stockholders. Upon effectiveness of the Merger, the Combined Company Board will have the power, without further action of the stockholders, to issue any or all of such shares for cash, securities, other assets or businesses of third parties upon such terms as the Combined Company Board may determine, any of which transactions could have the effect of diluting the interests of existing stockholders of Cosmetic. See "The Merger -- Amendments to Cosmetic's Certificate of Incorporation."

THE MERGER

We are furnishing this Proxy Statement/Prospectus to the holders of the Cosmetic Class A and Class B common stock in connection with the solicitation of proxies by the Cosmetic Board for use at the Meeting and at any adjournments or postponements thereof. At the Meeting, holders of Cosmetic Class B common stock will be asked to vote upon a proposal to approve and adopt the Merger Agreement and the related transactions, including the Merger, the Class C Amendment, the conversion of Cosmetic Class A and Class B common stock into Cosmetic Class C common stock and the appointment of nine directors (who will replace the Cosmetic Board upon consummation of the Merger). A copy of the Merger Agreement is attached hereto as Annex I.

The Merger Agreement provides, among other things, for the Merger of PFC with and into Cosmetic, with Cosmetic surviving the Merger as a subsidiary of Revlon. The one share of PFC common stock outstanding at the Effective Time will be converted into 8,479,335 shares of Cosmetic Class C common stock as consideration for the Merger. The conversion ratio has been determined by negotiations between Cosmetic and Revlon and may not be indicative of the value of PFC. The Merger will become effective on the date on which the Certificate of Merger has been duly filed with the Delaware Secretary of State or such date and time as is agreed upon by Cosmetic and Revlon and specified in the Certificate of Merger (the "Effective Time"), which is currently expected to occur promptly following the receipt of Cosmetic Class B stockholder approval at the Meeting.

In the Merger, each share of Cosmetic Class A and Class B common stock outstanding immediately before the Effective Time shall be converted into the right to receive one share of Cosmetic Class C common stock or, at the election of each record stockholder and subject to the limitation discussed below, cash in the amount of $7.63 per share.

The Merger Agreement also provides that each option to purchase Cosmetic Class A or Class B common stock outstanding immediately prior to the Effective Time will, after the Effective Time, be exercisable for the same number of shares of Cosmetic Class C common stock, with the same exercise price and expiration date as such option was exercisable immediately prior to the Merger; PROVIDED, HOWEVER, that each holder of an option that has an exercise price of less than $7.63 per

share can elect, subject to the limitation discussed below, to receive, in return for cancellation of such option, cash in an amount equal to the difference between $7.63 and the exercise price of such option.

The Cash Election is subject to the limitation that not more than 2,829,065 shares of Cosmetic Class A and Class B common stock and options that have an exercise price of less than $7.63 per share will be exchangeable for cash pursuant to the Cash Election (the "Limit"). To the extent that the aggregate shares and options as to which a Cash Election has been made exceed the Limit, each stockholder's and optionholder's Cash Election will be reduced pro rata.

The Principal Stockholders have agreed to make the Cash Election for all of their 1,392,723 shares of Cosmetic Class A and Class B common stock and 61,000 options that have an exercise price of less than $7.63 per share. Accordingly, if other persons holding more than 1,375,342 shares and options for shares with an exercise price of less than $7.63 per share elect to receive cash, the Limit will be exceeded and all holders who have made the Cash Election will be subject to proration. As a result of the Principal Stockholders' agreement to make the Cash Election, the shares of Cosmetic Class C common stock received by Revlon will represent at least 74% of the Cosmetic Class C common stock outstanding immediately after the Merger and will represent approximately 84% of such shares if, in addition to the Principal Stockholders' shares and options, the Cash Election is made in respect of all other outstanding shares and options for shares with an exercise price of less than $7.63 per share.

BACKGROUND OF THE MERGER

The terms of the Merger Agreement are the result of arm's-length negotiations between representatives of Cosmetic and Revlon. The following is a brief discussion of the background of these negotiations, the Merger and the related transactions.

On July 8, 1995, Louis Weinstein, founder and chairman of the Cosmetic Board, died. As a result, Louis Weinstein's wife, Anita J. Weinstein, age 67, became the sole owner of the 425,086 shares of Cosmetic Class A common stock and 605,995 shares of Cosmetic Class B common stock she had held as joint tenant with her husband.

Since Louis Weinstein's death, Cosmetic and the Principal Stockholders have received several proposals with respect to transactions which, if implemented, would have resulted in extraordinary corporate transactions.

In August 1995, Perfumania, Inc., a publicly held company which owns a chain of retail cosmetic stores, submitted a proposal to the Cosmetic Board to acquire all of the outstanding Cosmetic common stock in a merger for $13 per share in cash. After a preliminary review, the Principal Stockholders, based upon the proposal's financing contingency and the Principal Stockholders' belief that Perfumania could not raise the funds necessary to finance the proposal, rejected the proposal. In December 1995, Perfumania submitted to Cosmetic a draft letter of intent proposing a transaction in which Perfumania would acquire Anita Weinstein's Cosmetic common stock for $7.00 per share in cash and would acquire all other stockholders' Cosmetic common stock for $7.00 per share in principal amount of Perfumania 9% senior subordinated notes. Cosmetic declined to pursue this proposal based upon concerns with respect to the unequal treatment of Cosmetic stockholders and the value of the proposed notes. In March 1996, Perfumania proposed to acquire all of the outstanding Cosmetic common stock in a merger for $10.00 per share in cash. Cosmetic also declined to pursue this proposal based upon the belief that Perfumania, especially in view of its own financial condition at that time, could not raise the funds necessary to finance the proposal.

In November 1995, Regis Corporation, a publicly held company which owns a national chain of beauty salons, submitted a proposal to the Cosmetic Board to acquire Cosmetic common stock from certain members of the Weinstein family for $5 million in cash and to acquire all of the remaining outstanding Cosmetic common stock in a merger in exchange for Regis common stock. The exchange ratio was not specified but, based upon discussions, was proposed to value Regis common stock at its market value and to value Cosmetic common stock at or near its book value. After an initial due diligence investigation, Regis withdrew its proposal and all discussions with respect to the proposed transaction were terminated.

Between October 1995 and January 1996, Cosmetic received a series of proposals from the chief executive officer of Phar-Mor, Inc., a publicly held company which owns a national chain of drug stores. All of the proposals were variations on a plan to acquire the Cosmetic common stock owned by members of the Weinstein family for cash and notes and to acquire all of the remaining outstanding Cosmetic common stock in a merger in exchange for Phar-Mor common stock on a share for share basis. Cosmetic declined to pursue these proposals based upon concerns with respect to their perceived inadequate value attributed to Cosmetic common stock, their perceived inadequate amount of cash consideration and their unequal treatment of Cosmetic stockholders.

While Cosmetic and the Principal Stockholders considered several of these proposals, neither Cosmetic nor the Principal Stockholders entered into any letter of intent or definitive agreement regarding any such proposals.

In May 1996, Jerry W. Levin, chairman of the board and chief executive officer of Revlon, contacted Mark S. Weinstein, chairman of the Cosmetic Board, to inquire if he was interested in meeting to discuss a possible business combination involving Cosmetic and PFC. (Mr. Levin had contacted Mr. Weinstein after Mr. Weinstein had indicated to an acquaintance of Mr. Levin that Mr. Weinstein would be interested in discussing with Revlon representatives a possible business combination involving Cosmetic and PFC.) Shortly thereafter, Mr. Weinstein met with Mr. Levin and other senior PFC officers and discussed a possible business combination. Thereafter, Mr. Weinstein advised certain Cosmetic Board members and officers, including Ben S. Kovalsky, Cosmetic's president and chief executive officer, and Bruce E. Strohl, Cosmetic's chief financial officer, of his meeting with Mr. Levin and PFC officers. On or about May 13, 1996, Revlon and Cosmetic executed a confidentiality letter agreement regarding a possible transaction involving Cosmetic and PFC. The confidentiality letter provides that, subject to certain exceptions, (i) each party and its representatives shall keep confidential certain non-public information provided by the other party, (ii) neither party shall disclose that any such information has been made available to it or that discussions are taking place or any of the terms of the Merger, (iii) neither party shall hire any employee or solicit any employee of the other party to terminate his or her employment and (iv) neither party shall solicit any customer or supplier to terminate, suspend or alter their business relations with the other party.

On or about June 5, 1996, Revlon submitted to Cosmetic a draft non-binding discussion sheet regarding a proposed merger of PFC into Cosmetic, pursuant to which, among other things, Cosmetic would, concurrently with such merger, offer to purchase up to 2,000,000 shares of its common stock at a price of $7.00 per share and, upon consummation of such transactions, Revlon would own approximately 81% of Cosmetic's outstanding common stock. Following receipt of the discussion sheet, a series of meetings and discussions occurred between PFC representatives and Cosmetic representatives, including Messrs. Weinstein, Kovalsky and Strohl.

On June 10, 1996, PFC's representatives met with the Cosmetic's representatives, Cosmetic's legal counsel and a representative of Legg Mason. The parties discussed the preliminary proposal, the opportunities in combining PFC and Cosmetic for cost savings and synergies, an overview of PFC's operations and preliminary unaudited historical and budgeted financial statements of PFC. At the meeting, Cosmetic's representatives expressed a preference for an all cash offer from Revlon.

On June 19, 1996, representatives of Legg Mason met with Cosmetic representatives and Cosmetic's legal counsel to discuss Cosmetic's alternatives for enhancing stockholder value. It was agreed that Legg Mason would propose to Revlon that Revlon make an all cash offer for Cosmetic. On June 20, 1996, a representative of Legg Mason discussed the proposal for a cash offer with Revlon, and Revlon rejected such proposal.

On August 1, 1996, Mark Weinstein, Anita Weinstein and a Legg Mason representative met with senior PFC representatives to discuss in greater detail how the Combined Company might function and the opportunities for enhancing the value of the Combined Company.

On August 7, 1996, a Revlon representative proposed to a representative of Legg Mason a modification of the proposal under which Revlon and Cosmetic's stockholders, immediately following the merger and without giving effect to the proposed offer to purchase a portion of the shares for cash, would own 70% and 30%, respectively, of the Cosmetic common stock. Revlon also proposed that the offer to purchase a portion of the shares for cash would be increased from $7.00 per share to $7.63 per share and the number of shares purchased would be increased from 2,000,000 to a number of shares sufficient to permit Revlon to own 80% of the Cosmetic's common stock after the cash purchase.

On August 8, 1996, representatives of Legg Mason continued negotiations with Revlon's representatives. Revlon's representatives agreed that, upon consummation of the merger and without giving effect to the cash offer, Revlon and Cosmetic's stockholders would own 65% and 35%, respectively, of Cosmetic's common stock, provided that the Principal Stockholders agreed to tender all of their shares pursuant to the cash offer.

On or about August 9, 1996, Revlon submitted a revised draft non-binding discussion sheet to Cosmetic regarding a proposed merger of PFC into Cosmetic, pursuant to which, among other things, Cosmetic would, concurrently with the merger, offer to purchase up to 2,336,000 shares of its common stock at a price of $7.63 per share and, upon consummation of the transactions, Revlon would own approximately 80% of Cosmetic's outstanding common stock (the "Proposal").

On August 20, 1996, a special meeting of the Cosmetic Board was held to discuss the Proposal. At the Cosmetic Board meeting, a Legg Mason representative provided the Cosmetic directors with a written presentation prepared by Legg Mason regarding the Proposal, which included a summary of the proposed terms, a preliminary valuation analysis of Cosmetic,

certain financial data relating to PFC and a summary comparison of market multiples for the fragrance distribution industry and for the women's retail industry. The Legg Mason representative noted that the preliminary conclusions were subject to the receipt of further information and projections to be provided by Cosmetic and PFC as a result of their respective due diligence, including projected operating performance and potential cost savings and anticipated one time costs arising out of the proposed merger.

Also discussed at the August 20, 1996 Cosmetic Board meeting was the background to the Proposal, including the several meetings between Cosmetic representatives and Revlon and PFC representatives and the material differences between the Proposal and the June 5th draft discussion sheet referred to above. It was noted that, while under the June 5th draft discussion sheet, Revlon and Cosmetic's existing stockholders would initially own, upon consummation of the merger, without giving effect to the cash offer, 70% and 30%, respectively, of Cosmetic's outstanding common stock and the cash offer would be for 2,000,000 shares at $7.00 per share, under the Proposal, upon consummation of the merger, without giving effect to the cash offer, Revlon and the existing Cosmetic stockholders would own 65% and 35%, respectively, of Cosmetic's outstanding common stock and the cash offer would be for 2,336,000 shares at $7.63 per share. It was also noted that Legg Mason had proposed to Revlon that Revlon acquire Cosmetic on an "all cash" basis, and that Revlon had firmly rejected this proposal. The Cosmetic Board determined, based upon Legg Mason's presentation and its own analysis, including its analysis of the potential synergies, that the Proposal's combination of cash and stock potentially provided Cosmetic stockholders greater value than any all cash offer that Cosmetic might reasonably expect to receive at that time.

At the August 20, 1996 meeting, the Cosmetic Board authorized Cosmetic to engage Legg Mason as exclusive financial advisor to Cosmetic in connection with Cosmetic's analysis of any investment in, merger with, acquisition of, or other business combination with PFC, and if requested by the Cosmetic Board, to render Legg Mason's opinion as to the fairness, from a financial point of view, of the proposed merger consideration to be received by Cosmetic's stockholders.

From August 20, 1996 until October 1, 1996, numerous discussions and negotiations occurred between Cosmetic representatives, including its legal advisors and Legg Mason representatives, and Revlon and PFC representatives, including their legal advisors, regarding the proposed merger, including a related proposed letter of intent and exclusivity agreement between Cosmetic, the Principal Stockholders, Revlon and PFC.

On October 1, 1996, a special meeting of the Cosmetic Board was held to consider and act on (i) a proposed letter of intent among Revlon, PFC, Cosmetic and the Principal Stockholders (the "Letter of Intent") and (ii) a related exclusivity agreement to be executed by the same parties (the "Exclusivity Agreement"), which collectively, provided for the negotiation of a merger agreement pursuant to which, among other things, PFC would merge into Cosmetic or a wholly owned subsidiary thereof. Copies of the Letter of Intent and Exclusivity Agreement, both dated October 1, 1996, were distributed to the Cosmetic directors at the meeting.

The terms of the proposed Letter of Intent and Exclusivity Agreement included the following:

THE LETTER OF INTENT. The Letter of Intent provided that in connection with the Merger, (a) Cosmetic's Certificate of Incorporation would be amended to create Cosmetic Class C common stock, (b) Revlon would receive newly issued Cosmetic Class C common stock such that, immediately following the Merger (without giving effect to the Cash Election), Revlon would own at least 65% of the outstanding Cosmetic Class C common stock (on a fully diluted basis taking into account (x) all shares issuable upon the exercise of options then outstanding with an exercise price of $7.70 or less, (y) 10,000 shares issuable upon the exercise of options then outstanding with an exercise price of more than $7.70 and (z) cancellation at or prior to the effective time of the Merger of outstanding options exercisable for 20,000 shares that have an expiration date of January 15, 1997), (c) each existing Cosmetic stockholder could elect to receive, in exchange for each share of Cosmetic Class A or Class B common stock held by such stockholder, either (i) one share of Cosmetic Class C common stock or (ii) cash in the amount of $7.63 per share and (d) each stock option outstanding immediately prior to the effective time of the Merger would, after the effective time, be exercisable for the same number of shares of Cosmetic Class C common stock and with the same exercise price and expiration date as such option was exercisable immediately prior to the Merger; PROVIDED, HOWEVER, that each holder of an option that has an exercise price of less than $7.63 per share could elect, in lieu of retaining the stock option, to receive in cancellation thereof cash in an amount equal to the difference between $7.63 and the exercise price of such option. The Cash Election would be subject to the limitation that not more than 2,829,065 shares of Cosmetic Class A and Class B common stock, including outstanding Cosmetic Class A and Class B common stock and shares subject to outstanding options, would be exchangeable for cash pursuant to the Cash Election. To the extent that the aggregate shares and options as to which a Cash Election was made exceeded the Limit, each stockholder's and optionholder's Cash Election would be reduced pro rata. The Principal Stockholders would agree to elect to make the

Cash Election for all of their Cosmetic Class A and Class B common stock and options that have an exercise price of less than $7.63 per share.

The Letter of Intent provided that Cosmetic's bylaw would be amended to provide that the Cosmetic Board would consist of nine directors, of which there would be two independent directors. For three years from the consummation of the Merger, (i) the Principal Stockholders would agree to vote all of their Cosmetic Class C common stock in favor of Revlon's nominees for director so that Revlon would at all times maintain representation on the Combined Company Board equal to Revlon's percentage ownership of Cosmetic Class C common stock, but not less than five board seats, and (ii) Revlon would agree to vote its shares in favor of the Principal Stockholders' nominees for director equal to their aggregate percentage ownership of Cosmetic Class C common stock, after giving effect to the Merger and the Cash Election, but not less than one nor more than two board seats.

Jerry Levin, Revlon's chairman and chief executive officer, would be appointed as a director and chairman of the Combined Company Board, Mark Weinstein would be appointed as a vice chairman of the Combined Company Board and Howard Diener, the president of PFC, would be appointed as president and chief executive officer of the Combined Company.

Each of Mark Weinstein and Anita Weinstein would enter into an employment and non-competition agreement with Cosmetic, and Susan Magenheim would enter into a consulting and non-competition agreement with Cosmetic, each upon terms and conditions acceptable to the parties.

PFC would enter into lease agreements with Revlon for five stores located at Revlon's facilities, each upon terms and conditions acceptable to the parties.

The Principal Stockholders would together be entitled to demand on one occasion that Cosmetic file a registration statement under the Securities Act for the sale of their Cosmetic Class C common stock and would also be entitled to include their Cosmetic Class C common stock in certain registration statements filed for Cosmetic's benefit. Revlon would be entitled to demand on three occasions that Cosmetic file a registration statement under the Securities Act for the sale of its Cosmetic Class C common stock and would also be entitled to include its Cosmetic Class C common stock in certain registration statements filed for Cosmetic's benefit. All such registration statements would be prepared at Cosmetic's expense, except for fees and expenses of legal counsel of Revlon or the Principal Stockholders, as the case may be, and underwriting discounts, fees and expenses.

The Letter of Intent provided that the Merger would be subject to (i) Cosmetic's and Revlon's satisfaction with complete financial, operations, tax, legal, real estate, environmental, business and other due diligence, (ii) notice to, filings with and approvals by government agencies (including the Federal Trade Commission and/or The Department of Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements Act and the Securities and Exchange Commission ("SEC") pursuant to the federal securities laws), (iii) receipt of material third party consents, (iv) the availability of financing for Cosmetic to finance the Cash Election, refinance existing debt and provide working capital on terms and conditions acceptable to both Cosmetic and Revlon and (v) the negotiation, execution and delivery of a mutually acceptable definitive merger agreement. In addition, Revlon's obligations would be subject to approval of the transaction by Revlon's bank group and Revlon's board of directors. Cosmetic's obligations would be subject to approval of the transaction by the Cosmetic Board and the holders of Cosmetic's Class B common stock.

From and after October 1, 1996, the businesses of PFC and Cosmetic each would be operated in the ordinary course and consistent with past practices pending the Merger.

The Letter of Intent also provided that the merger agreement would include certain exclusivity, expense reimbursement and termination fee provisions substantially the same as those provided for in the Merger Agreement. See "The Merger Agreement -- Certain Covenants," " -- Expenses" and " -- Termination Fee" for a more detailed description of these provisions.

According to the Letter of Intent, the merger agreement would provide that unless the merger agreement was terminated in accordance with its terms, Cosmetic and the Principal Stockholders would be subject to exclusivity obligations substantially the same as Cosmetic's exclusivity obligations under the Exclusivity Agreement (briefly described below in the description of the Exclusivity Agreement), and if Cosmetic or the Principal Stockholders were to take certain actions or consummate certain transactions that were inconsistent with the Merger during the 90-day period immediately following the later of (i) the 110th day after the date the merger agreement was signed and (ii) certain events of termination under the merger agreement, Cosmetic and the Principal Stockholders would reimburse Revlon's expenses up to a maximum of $1 million. The merger agreement would also provide that if Cosmetic should consummate such a transaction prior to such date,

Cosmetic would pay Revlon a termination fee of $1 million. The Letter of Intent also provided that the Principal Stockholders would enter into a stockholders agreement with Revlon that would provide, among other things, that (i) if Cosmetic should consummate such a transaction prior to such date, the Principal Stockholders would be obligated to pay a termination fee equal to 25% of the excess of the amount of consideration received by the Principal Stockholders in such transaction over $7.63 and (ii) if the Principal Stockholders voted against the Merger, the Principal Stockholders also would be obligated to pay a fee of $1 million (with a credit for any amount of the fee paid by the Principal Stockholders pursuant to clause (i)).

The merger agreement would further provide that unless the merger agreement was terminated in accordance with its terms, Revlon would be subject to exclusivity obligations substantially the same as Revlon's exclusivity obligations under the Exclusivity Agreement (briefly described below in the description of the Exclusivity Agreement) and, if Revlon or PFC were to take certain actions or consummate certain transactions that were inconsistent with the Merger during the 90-day period immediately following the later of (i) the 110th day after the date the merger agreement was signed and (ii) certain events of termination under the merger agreement, Revlon would reimburse Cosmetic's expenses up to a maximum of $1 million. It also provided that if Revlon or PFC should consummate such a transaction prior to such date, Revlon would pay Cosmetic a termination fee of $1.25 million.

The Letter of Intent provided that it would terminate upon the earlier of the execution of the merger agreement or November 30, 1996.

THE EXCLUSIVITY AGREEMENT. The Exclusivity Agreement contemplated that Cosmetic and Revlon would conduct due diligence with respect to completing the Merger and that the due diligence activities would require each party to incur significant expenses. In view of these expenses, the Exclusivity Agreement provided that until the earlier of (i) November 30, 1996 or (ii) termination of the Letter of Intent (the "Exclusivity Period"), neither Cosmetic nor any of the Principal Stockholders nor any of their representatives or agents would solicit, engage in negotiations, provide information to or otherwise cooperate with any person or entity that sought to acquire or expressed an interest in acquiring all or a substantial part of the any class of the securities, business or assets of Cosmetic nor would they grant any proxy, option or other similar right to any third person or entity in connection with a transaction inconsistent with the Merger. The Exclusivity Agreement further provided that nothing contained therein would prohibit the Cosmetic Board from furnishing information to, or entering into discussions or negotiations with, any person or entity that made an unsolicited bona fide proposal in writing to acquire Cosmetic or substantially all of its assets on terms which, in an exercise of their fiduciary duty after the consideration of advice from Cosmetic's legal and financial advisors, a majority of Cosmetic's directors determined was likely to be more beneficial to Cosmetic's stockholders than the Merger. This proviso, however, would not permit Cosmetic to terminate the Exclusivity Agreement or to enter into an agreement with respect to (i) an alternate transaction prior to the expiration of the Exclusivity Period or (ii) affect any other obligation under the Exclusivity Agreement. In addition, the Principal Stockholders agreed that during the Exclusivity Period they would not sell, pledge, agree to sell or pledge or otherwise dispose of any of their Cosmetic common stock to any third person, would vote against any alternate transaction and, if available, would exercise appraisal rights with respect to any alternate transaction.

The Exclusivity Agreement also provided that, during the Exclusivity Period, Revlon and its representatives and agents would not solicit, engage in negotiations, provide information to or otherwise cooperate with any person or entity that expressed an interest in acquiring all or a substantial part of any class of the securities, business or assets of the PFC nor would Revlon grant any proxy, option or other similar right to any third person or entity in connection with a transaction inconsistent with the Merger.

The Exclusivity Agreement provided that, if Cosmetic or the Principal Stockholders breached the Exclusivity Agreement or took certain other actions inconsistent with the Merger during the Exclusivity Period and, in certain circumstances, during the 120-day period immediately following the Exclusivity Period, Cosmetic or the Principal Stockholders, as the case may be, would pay Revlon an amount equal to its documented fees and expenses in connection with the due diligence, preparation and negotiation of documents and preparation of PFC financial statements related to the Merger, up to a maximum of $0.5 million. It also provided that, if Revlon or PFC breached the Exclusivity Agreement or took certain other actions inconsistent with the Merger during the Exclusivity Period and, in certain circumstances, during the 120-day period immediately following the Exclusivity Period, Revlon would pay Cosmetic an amount equal to its documented fees and expenses in connection with the due diligence, preparation and negotiation of documents and preparation of financial statements related to the Merger, up to a maximum of $0.5 million.

In addition to the foregoing expense reimbursement provisions, the Exclusivity Agreement also provided that if Cosmetic consummated an alternate transaction at any time during the Exclusivity Period or during the 120-day period immediately following the Exclusivity Period, Cosmetic would pay to Revlon on the date of consummation of such alternate transaction a break-up fee of $1 million and the Principal Stockholders, jointly and severally, would pay to Revlon on the date of consummation of such alternate transaction a break-up fee equal to 25% of the difference between (a) the value of the consideration paid to them in such alternate transaction with respect to all of their shares minus (b) the product of (i) the number of shares held by the Principal Stockholders multiplied by (ii) $7.63.

If Revlon or PFC consummated an alternate transaction at any time during the Exclusivity Period or during the 120-day period immediately following the Exclusivity Period, the Exclusivity Agreement provided that Revlon would pay to Cosmetic on the date of consummation of such alternate transaction a break-up fee of $1.25 million.

Also, at the October 1, 1996 Cosmetic Board meeting, the Legg Mason representatives reviewed with the Cosmetic Board estimates of the potential projected "stockholder value creation" which could result from the transaction and the relative contribution made to such potential stockholder value creation by each of Cosmetic and PFC. Legg Mason's representatives noted that in developing their presentation, they relied upon historical and projected financial information independently provided to Legg Mason by the managements of PFC and Cosmetic. They also reviewed with the Cosmetic Board (i) a "line item" discussion of Cosmetic and PFC managements' estimated cost synergies expected to result from the combination of the two companies, including reductions in the costs for merchandising, information systems and various personnel savings; (ii) a summary of Cosmetic and PFC managements' estimates of "one-time" costs, including costs for integrating information systems, consolidating distribution operations, and specific transaction related expenses; (iii) the Combined Company valuation analysis, which included the valuation methodology, a comparison of current operating projections as compared to projections that had previously been presented to the Cosmetic Board on August 20, 1996, income statement information, balance sheet information and a preliminary valuation analysis; and (iv) a summary of Cosmetic and PFC managements' estimates of additional benefits not included in the analysis, including "payback" from installation of point of sale scanning systems, reduction of payroll expense at store level, other expense reductions, accelerated access to higher margin professional products, and reductions in freight costs. Legg Mason also presented a preliminary "stand alone" valuation analysis of Cosmetic, including its historical stock price and trading volume, income statement and balance sheet and a preliminary "stand alone" valuation analysis of PFC, including an income statement and balance sheet analysis, and comparable company trading multiples and transaction multiples for the drug store industry.

Legg Mason presented and the Cosmetic Board considered an analysis prepared by the managements of Cosmetic and PFC of the operating synergies which could result from combining PFC and Cosmetic. The synergy analysis included the consolidation of overhead expenses, elimination of duplicative functions, including those of distribution, information systems, human resources, financing, management and merchandising, and the realization of other savings, all of which are expected as a result of the anticipated consolidation of certain warehouse, distribution and headquarters operations of Cosmetic and PFC in Maryland. The synergies were estimated to be approximately $3.5 million per annum. The one-time costs necessary to achieve these synergies were estimated to be approximately $5.8 million (excluding legal and accounting costs for PFC and Cosmetic related to the Merger and severance). The plan to operate the Cosmetic stores and PFC stores as separate divisions was taken into account in these estimates.

Mr. Weinstein discussed with the Cosmetic Board the above-referenced previous contacts, discussions and negotiations in which he and the other Cosmetic representatives and advisors had participated over the past two years in respect of proposed business combinations involving Cosmetic or acquisitions of Cosmetic's securities. Mr. Weinstein stated that none of these discussions led to the execution of a letter of intent or definitive agreement and that he knew of no current prospects for a proposal from a party other than Revlon. Legg Mason's representative advised the Cosmetic Board that, while prior contacts, discussions and negotiations by Cosmetic indicated that there was a limited audience for other potential business combinations with Cosmetic, if the Letter of Intent were executed and a definitive merger agreement was not reached, Cosmetic could consummate an alternative transaction after the 180th day of the execution date of the Letter of Intent, without paying a termination fee to Revlon. Additionally, the Exclusivity Agreement would permit the Cosmetic Board to provide information to and engage in negotiations with any entity making an unsolicited proposal which they determined was likely to be more beneficial to Cosmetic stockholders.

After discussion, the Cosmetic Board on October 1, 1996 created a committee of the Cosmetic Board consisting of Ronald M. Hirschel and Donald R. Rogers to monitor the negotiations of the merger agreement and related documents and to keep the Cosmetic Board advised of the progress of such negotiations and of any unsolicited offers received from third parties to acquire all or a substantial portion of Cosmetic's business or equity before responding in any way to such offers.

Also, the Cosmetic Board determined that it was in the best interest of Cosmetic and its stockholders for Cosmetic to enter into the Letter of Intent and Exclusivity Agreement and, accordingly, authorized Cosmetic's execution and delivery of the Letter of Intent and Exclusivity Agreement.

After the Cosmetic Board meeting on October 1, 1996, Cosmetic, the Principal Stockholders, Revlon and PFC executed the Letter of Intent and the Exclusivity Agreement, and Revlon and Cosmetic issued a press release announcing the execution of such documents.

From October 1, 1996 until November 15, 1996, numerous discussions and negotiations occurred between Cosmetic representatives, including Messrs. Hirschel and Rogers, Cosmetic's legal counsel and Legg Mason representatives, and Revlon and PFC representatives, including their legal counsel, regarding the proposed merger and the definitive agreement and plan of merger and ancillary documents thereto. Messrs. Hirschel and Rogers reviewed drafts of the proposed merger agreement and certain ancillary agreements and participated in numerous telephone conferences with Cosmetic's legal counsel and Revlon's legal counsel on various terms and conditions of these agreements. In addition, Mr. Hirschel reviewed and discussed the real estate leases proposed to be entered into with Revlon for the Revlon stores.

On November 15, 1996, a special meeting of the Cosmetic Board was held to consider and act on the proposed merger agreement by and among Cosmetic, Revlon and PFC pursuant to which PFC would merge into Cosmetic or a wholly owned subsidiary thereof. At the Cosmetic Board meeting, Legg Mason representatives made a presentation to the Cosmetic Board regarding their opinion that, from a financial point of view, the consideration to be paid to Cosmetic's stockholders for their Cosmetic Class A and Class B common stock pursuant to the Merger Agreement was fair. See "Opinion of Financial Advisor."

The Cosmetic Board noted at its November 15, 1996 meeting that at no time since the initial public announcement of the proposed merger on October 1, 1996 had any person contacted Cosmetic, any Cosmetic Board member or any Principal Stockholder about any proposal or offer to acquire Cosmetic or any alternative transaction in respect of the Merger. The Cosmetic Board also noted that Messrs. Hirschel and Rogers had substantially participated in negotiating the definitive merger agreement, but that they had not formally met as a committee in view of
(i) such negotiations being conducted in a manner consistent with the detailed Letter of Intent and Exclusivity Agreement and (ii) no alternate transactions having been proposed since the initial public announcement of the proposed merger. In consideration of their significant involvement in the process of negotiating the Merger Agreement, the Cosmetic Board asked Messrs. Hirschel and Rogers to make a proposal to the Cosmetic Board regarding their compensation for serving as the committee members during the Merger Agreement negotiations and the resulting extraordinary amount of time they were devoting to such deliberations. The Cosmetic Board subsequently determined to pay them $10,000 each for their services on the committee.

The Cosmetic Board unanimously (i) approved Cosmetic's execution and delivery of the Merger Agreement, the Principal Stockholders' execution and delivery of the Stockholders Agreement and the agreements referred to therein or contemplated thereby, (ii) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of Cosmetic's stockholders, (iii) approved the transactions contemplated thereby for purposes of Section 203 of the General Corporation Law of Delaware, and (iv) resolved to recommend that the holders of the Cosmetic Class B common stock adopt the Merger Agreement and the transactions contemplated therein, including the Merger.

On November 27, 1996, as authorized by the Cosmetic Board, Cosmetic executed and delivered the Merger Agreement and the Principal Stockholders executed and delivered the Stockholders Agreement. Thereafter, on November 27, 1996, Cosmetic and Revlon issued a press release announcing the execution and delivery of such agreements.

REASONS FOR THE MERGER; RECOMMENDATION OF THE COSMETIC BOARD

The Cosmetic Board believes that the Merger is in the best interests of Cosmetic and its stockholders and unanimously recommends to its stockholders that they vote FOR approval and adoption of the Merger Agreement and the transactions contemplated thereby. The Cosmetic Board believes that Cosmetic and Cosmetic stockholders will benefit from the Merger.

As part of its review, the Cosmetic Board considered (i) information concerning the financial performance, condition, business operations and prospects of each of Cosmetic and PFC, including the fact that PFC has had net losses since 1992, (ii) the proposed terms and structure of the Merger, (iii) the terms of the Merger Agreement, including the parties' mutual representations, warranties and covenants and the conditions to their respective obligations, (iv) financial and other data with respect to other public companies in the cosmetic products retail industry, (v) the Legg Mason Opinion (as defined herein), (vi) the dilutive effect of the issuance of Cosmetic Class C common stock in the Merger, and (vii) the business advantages expected to result from the combination of Cosmetic and PFC. In considering the Legg Mason Opinion, the Cosmetic Board

took into account the fees payable to Legg Mason and the contingent nature of those fees. See "Opinion of Financial Advisor."

The Cosmetic Board believes that the Merger is in the best interest of Cosmetic's stockholders for the following reasons:

The Cosmetic Board believes that the Merger consideration is fair to the Cosmetic stockholders. In this regard, the Cosmetic Board relied in part upon the Legg Mason Opinion, including the financial analysis supporting the opinion presented to the Cosmetic Board. In considering the Legg Mason Opinion, the Cosmetic Board noted that certain valuation techniques yielded values for Cosmetic common stock of greater than $7.63 per share. The Cosmetic Board believed, however, that such values, for the reasons stated in the discussion below of the Legg Mason Opinion, were not reliable. See "Opinion of Financial Advisor."

The Cosmetic Board believes that the Combined Company can achieve reductions in operating expenses as the overhead expenses of Cosmetic and PFC are consolidated, duplicative functions are eliminated and other savings are realized. Although the amount of reduction in operating expenses cannot be quantified with certainty and there can be no assurances that such reductions will be realized, Cosmetic believes that cost of sales and selling, general and administrative expenses for the year ended December 31, 1995 and the nine months ended September 30, 1996 would have been decreased by approximately $4.0 million and $3.0 million, respectively, had the Merger been consummated on January 1, 1995. The Combined Company plans to consolidate certain warehouse, distribution and headquarters operations of Cosmetic and PFC in Maryland, which consolidation is expected to allow the Combined Company to achieve reduction of annual operating expenses related to distribution, information systems, human resources, financing, management, merchandising and other. Cosmetic believes that the Combined Company will incur certain one-time costs and capital expenditures to achieve these annual cost reductions, which will result in higher interest expense and partially offset these benefits. See "Forward-Looking Information," "Pro Forma Financial Information," "Risk Factors -- Historical Net Losses" and " -- Uncertainties Regarding Integration of Cosmetic and PFC."

The Cosmetic Board also believes that the Cash Election should provide Cosmetic stockholders liquidity at a premium to the market value of the Cosmetic Class A and Class B common stock prior to the announcement of the signing of the Letter of Intent.

The Cosmetic Board considered that the Exclusivity Agreement provided and the Merger Agreement provides that Cosmetic may not during a specified period of time solicit any alternate transaction. The Exclusivity Agreement provided and the Merger Agreement provides, however, that Cosmetic may furnish information to and enter into discussions or negotiations with, any party that makes an unsolicited bona fide written proposal to acquire Cosmetic or substantially all of its assets on terms which, in an exercise of the Cosmetic Board's fiduciary duty after the consideration of advice from Cosmetic's legal and financial advisors, a majority of Cosmetic's directors determines is likely to be more beneficial to Cosmetic's stockholders than the Merger. This provision, however, does not permit Cosmetic to (i) terminate the Merger Agreement, (ii) enter into an agreement with respect to an alternate transaction prior to the termination of the Merger Agreement or (iii) affect any other obligation under the Merger Agreement. The Cosmetic Board noted that the Merger Agreement provides for the payment of up to $1 million of Revlon's expenses if the Merger Agreement is terminated under certain circumstances and the payment to Revlon of a termination fee of $1 million if Cosmetic enters into an alternate transaction with another party within a specified period of time and was aware that Revlon would not have agreed to enter into the Merger Agreement without those provisions. The Cosmetic Board concluded that, while the existence of the expense and termination fee provisions might reduce the likelihood that a third party would propose an alternate transaction, the increased cost to a third party would not be material and the benefits of the Merger to Cosmetic outweighed the risks.

In considering the Merger, the Cosmetic Board acknowledged that there are certain risks associated with the Merger, including (i) the possibility that the potential benefits set forth above may not be realized, (ii) the lack of profitability of PFC, (iii) the dilutive effect of the issuance of the Cosmetic Class C common stock in the Merger, (iv) the possible reduced liquidity and increased price fluctuations of Cosmetic's common stock and (v) the possibility that the Merger might not be consummated, whether due to the failure to obtain financing or otherwise, resulting in a potential adverse effect on the market price of the Cosmetic Class A and Class B common stock. Notwithstanding the risks, the Cosmetic Board concluded that the positive factors described above outweighed the negative considerations. With respect to the risks associated with realizing the benefits of the Merger and with PFC's losses, the Cosmetic Board carefully evaluated the potential benefits associated with the Merger, including potential cost savings, the steps required to be taken to realize such benefits and the likelihood of realizing such benefits, and concluded that the opportunity to realize the potential benefits and their potential value to Cosmetic and its stockholders outweighed the risks associated with realizing such benefits. With respect to the dilutive effect of the issuance of the Cosmetic Class C common stock in the Merger and the potential for reduced liquidity, the Cosmetic Board

considered the possibility that Revlon might make a public offering of some or all of its Cosmetic common stock in the future. The Cosmetic Board also considered the potential for increasing the value of the Cosmetic common stock with and without the Merger. Based upon these considerations, the Cosmetic Board believes that the potential value of the Cosmetic common stock as a result of the Merger exceeds the potential value of the Cosmetic common stock without the Merger. Further, the Cosmetic Board considered the possibility that the Merger might not be consummated and concluded that the expressed interest of Revlon in completing the transaction and Revlon's ability to arrange the required financing made it likely (although not certain) that the Merger would be completed.

In view of the wide variety of factors considered in connection with its evaluation of the Merger Agreement, the Cosmetic Board did not find it practical to, and did not, quantify or otherwise attempt to assign relative weights to the specific factors considered in reaching its determinations.

THE COSMETIC BOARD UNANIMOUSLY RECOMMENDS THAT COSMETIC STOCKHOLDERS VOTE

"FOR" THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY. SEE "INTERESTS OF DIRECTORS AND OFFICERS IN THE MERGER."

                 SOURCES OF FUNDS                                  APPLICATION OF FUNDS
- --------------------------------------------------  --------------------------------------------------
Financing                           $ 70.0 million  Cash Election                       $ 20.9 million
                                                    Refinancing                           27.2 million
                                                    Fees and expenses                      1.6 million
                                                    Future working capital                20.3 million
                                    --------------                                      --------------
       Total                        $ 70.0 million         Total                        $ 70.0 million
                                    --------------                                      --------------
                                    --------------                                      --------------

To finance the Cash Election, refinance existing indebtedness of Cosmetic and PFC, pay fees and expenses in connection with the Merger and the Financing and provide financing for future working capital requirements and general corporate purposes, including certain non-recurring costs incurred after the Merger relating to the transaction and the consolidation of operations, Cosmetic intends to enter into an agreement with one or more financial institutions pursuant to which such financial institutions will lend up to $70 million to the Combined Company. It is anticipated that the Financing will be secured by all of the accounts receivable and inventory of the Combined Company and will contain certain restrictive covenants applicable to the Combined Company that do not differ materially from those imposed upon Cosmetic under its current credit facility, including, among other things, limitations relating to (i) engaging in mergers, consolidations and sales of assets, with certain exceptions, (ii) making distributions or paying dividends or changing its capital structure, with certain exceptions, (iii) entering into any transaction that materially and adversely affects the collateral under the Financing or the Combined Company's ability to repay its obligations, (iv) issuing any guarantees, with certain exceptions, (v) incurring any debt in excess of specified amounts, with certain exceptions, (vi) prepaying any debt before maturity, with certain exceptions,
(vii) entering into certain transactions with affiliates, with certain exceptions, (viii) engaging in other lines of business, (ix) incurring any liens on its assets, with certain exceptions, (x) entering into sale and leaseback transactions, with certain exceptions, (xi) creating or acquiring any new subsidiaries, (xii) making acquisitions or investments, with certain exceptions or (xiii) allowing any subsidiary to have any obligations to trade suppliers. In addition, the Financing is expected to contain certain financial covenants, including covenants requiring the Combined Company to maintain minimum adjusted tangible net worth and minimum interest coverage. See "Risk Factors -- Requirement for Financing to Consummate the Merger; Significant Borrowings; Future Financing." It is a condition to the consummation of the Merger that the Combined Company shall have available to it proceeds of the Financing of not less than $50 million on terms satisfactory to Cosmetic and Revlon.

OPERATIONS AFTER THE MERGER

Following consummation of the Merger, the Combined Company will continue to operate the Cosmetic stores and will also operate the PFC stores. It is anticipated that the Cosmetic stores and the PFC stores will be operated as separate divisions. It is also anticipated that certain warehouse, distribution and headquarters operations of Cosmetic and PFC will be consolidated in Maryland, and additional warehouse and distribution space will be secured. In connection with the anticipated consolidation, the State of Maryland has indicated that it is willing to consider providing the Combined Company with incentives to be paid in 1997 and 1998 consisting of grants, loans and tax credits aggregating up to approximately $1.2 million. Any incentive package would be subject to a number of conditions, including, without limitation, approval by the

Legislative Policy Committee of the State of Maryland and other appropriate authorities, and the Combined Company meeting specific job growth requirements. There can be no assurance that these conditions will be met and that the Combined Company will receive any such incentives. The Combined Company expects to spend approximately $2.7 million as a result of the Merger to integrate and enhance management information systems. See "Business of Cosmetic" and "Business of PFC."

At the Effective Time, the Combined Company's bylaws will be amended to provide that the Combined Company Board will consist of nine directors and the persons named in the Merger Agreement will become the directors of the Combined Company. Pursuant to the Stockholders Agreement, for three years after the consummation of the Merger, (i) the Principal Stockholders have agreed to vote all of their Cosmetic Class C common stock in favor of Revlon's nominees for director so that Revlon will at all times maintain representation on the Combined Company Board equal to Revlon's percentage ownership of Cosmetic Class C common stock, but not less than seven board seats, including two independent directors, and (ii) Revlon has agreed to vote its shares in favor of the Principal Stockholders' nominees for director equal to their aggregate percentage ownership of Cosmetic Class C common stock after giving effect to the Merger and the Cash Election, but not less than one nor more than two board seats. The members of the Combined Company Board immediately after the Merger will be Ronald O. Perelman, chairman of the executive committee and a director of Revlon, Howard Gittis, a director of Revlon, Jerry W. Levin, chairman, chief executive officer and a director of Revlon and a director of PFC, Howard Diener, the president of PFC, William J. Fox, executive vice president, chief financial officer and a director of Revlon and vice president and a director of PFC, Wade H. Nichols, senior vice president and general counsel of Revlon and vice president and a director of PFC, and Mark S. Weinstein, chairman of the Cosmetic Board. It is also anticipated that David M. Dinkins, a professor at Columbia University and former Mayor of The City of New York, and Harvey Rosenthal, the former president of Melville Corporation (now known as CVS Corporation), will be the independent directors. Messrs. Levin, Weinstein and Diener will be appointed chairman of the Combined Company Board, vice chairman of the Combined Company Board and president and chief executive officer of the Combined Company, respectively. See "Election of Directors; Management of Cosmetic Following the Merger."

Cosmetic's Certificate of Incorporation provides for the Cosmetic Board to be divided into three classes, with the members of each class serving staggered terms of three years. This provision, however, is proposed to be repealed by the Board Amendment. If the Board Amendment is adopted, after consummation of the Merger the Combined Company Board would not be classified and all of the directors would be elected annually.

AMENDMENTS TO COSMETIC'S CERTIFICATE OF INCORPORATION

The Merger Agreement provides that, as part of the Merger, Cosmetic's Certificate of Incorporation will be amended to authorize the issuance of up to 40,000,000 shares of Cosmetic Class C common stock. A vote in favor of the Merger by Cosmetic Class B stockholders is also a vote to approve the Class C Amendment.

Up to approximately 10.1 million shares of Cosmetic Class C common stock would be issued in connection with the Merger. The remaining 29.9 million shares would be available for issuance in connection with Cosmetic stock option plans, including the proposed Cosmetic 1997 Stock Option Plan, and also in connection with future public or private financings, acquisitions, employee stock benefit plans and other transactions. Other than the issuance in connection with the Merger and the stock option plans, there are no current plans or proposals for the issuance of Cosmetic Class C common stock.

The Merger Agreement also requires Cosmetic to seek the approval of an amendment to its Certificate of Incorporation to repeal the classification of the Cosmetic Board, which would result in the annual election of all of the Combined Company's directors. Approval of the Board Amendment is not a condition to the Merger. The Cosmetic Board recommends a vote FOR the approval of the Board Amendment.

The proposed forms of the Class C Amendment and of the Board Amendment are attached as Annex II to this Proxy Statement/Prospectus.

REGULATORY FILINGS AND APPROVALS

The Merger is subject to the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder, which provide that certain merger transactions may not be consummated until required information and material have been furnished to the Antitrust Division of the Department of Justice and the Federal Trade Commission and certain waiting periods have expired or been terminated. The required information with respect to the

Merger was filed on behalf of Cosmetic on December 27, 1996 and on behalf of PFC on December 31, 1996 and the waiting period was terminated January 7, 1997.

ACCOUNTING TREATMENT

Upon consummation of the Merger and assuming the Cash Election is made for all outstanding shares and options for shares with an exercise price of less than $7.63 per share, existing Cosmetic stockholders will hold securities with approximately 16% of the voting power of Cosmetic and Revlon will hold securities with approximately 84% of the voting power of the Combined Company. Accordingly, the Merger will be accounted for as a reverse acquisition under generally accepted accounting principles, pursuant to which PFC will be considered the acquiror. Because PFC will be deemed to be the acquiring company for accounting purposes, PFC's historical financial statements will be the Combined Company's continuing historical financial statements and Cosmetic's assets, liabilities and results of operations will be consolidated with PFC's historical financial statements subsequent to the consummation of the Merger. Fair value adjustments will be made to Cosmetic's assets and liabilities to the extent of Revlon's ownership interest in Cosmetic. The amount recorded by PFC as the cost of acquiring the net assets of Cosmetic will be the estimated aggregate fair value of Revlon's ownership of the outstanding Cosmetic common stock. This amount will also be recorded in the common stock and additional paid-in capital equity accounts of the Combined Company as if the Combined Company had issued such shares.

NO APPRAISAL RIGHTS

Holders of Cosmetic Class A and Class B common stock are not entitled to appraisal rights under the Delaware General Corporation Law in connection with the Merger because Cosmetic Class A and Class B common stock is listed on the Nasdaq National Market, Cosmetic Class C common stock will be listed on the Nasdaq National Market and no holder of Cosmetic Class A or Class B common stock will be required to accept any consideration in cancellation of such shares other than Cosmetic Class C common stock.

THE MERGER AGREEMENT

GENERAL

The Merger Agreement provides, among other things, for the Merger of PFC with and into Cosmetic, with Cosmetic remaining as the surviving company. The Merger will become effective at the Effective Time, which is currently expected to occur promptly following the receipt of stockholder approval at the Meeting. The following description of the Merger Agreement is qualified by reference to the complete text of the Merger Agreement, which is incorporated by reference herein and attached hereto as Annex I.

CONSIDERATION TO BE RECEIVED IN THE MERGER

At the Effective Time, each share of Cosmetic Class A and Class B common stock outstanding immediately before the Effective Time shall be converted into the right to receive one share of Cosmetic Class C common stock or, at the election of each record stockholder and subject to the limitation discussed below, cash in the amount of $7.63 per share.

The Merger Agreement also provides that each option to purchase Cosmetic Class A or Class B common stock outstanding immediately prior to the Effective Time will, after the Effective Time, be exercisable for the same number of shares of Cosmetic Class C common stock, with the same exercise price and expiration date as such option was exercisable immediately prior to the Effective Time; PROVIDED, HOWEVER, that each holder of an option that has an exercise price of less than $7.63 per share can elect, subject to the limitation discussed below, to receive, in return for cancellation of such option, cash in an amount equal to the difference between $7.63 and the exercise price of such option.

The Cash Election is subject to the limitation that not more than 2,829,065 shares of outstanding Cosmetic Class A and Class B common stock and shares subject to outstanding options, will be exchangeable for cash pursuant to the Cash Election. To the extent that the aggregate shares and options as to which a Cash Election has been made exceed the Limit, each stockholder's and optionholder's Cash Election will be reduced pro rata. The Principal Stockholders have agreed to elect to make the Cash Election for all of their 1,392,723 shares of Cosmetic Class A and Class B common stock and 61,000 options that have an exercise price of less than $7.63 per share.

The sole share of PFC common stock outstanding at the Effective Time will be converted into 8,479,335 shares of Cosmetic Class C common stock. The conversion ratio has been determined by negotiations among Cosmetic and Revlon and may not be indicative of the value of PFC. As a result of the Principal Stockholders' agreement to make the Cash Election, such shares will represent at least 74% of the Cosmetic Class C common stock outstanding immediately after the Merger and will represent approximately 84% of such shares if, in addition to the Principal Stockholders' shares and options, the Cash Election is made in respect of all other outstanding shares and options for shares with an exercise price of less than $7.63 per share. Accordingly, if other persons holding more than 1,375,342 shares and options for shares that have a price of less than $7.63 per share elect to receive cash, all holders who have made the Cash Election will be subject to proration.

CASH ELECTION

Cosmetic record stockholders who wish to make the Cash Election must complete, sign and return the enclosed form of election to the Exchange Agent prior to 5:00 p.m., New York City time, on the business day immediately preceding the Meeting. Stockholders who are not holders of record and who wish to make the Cash Election must have the broker, bank or other person that holds their shares make the Cash Election for them. Stockholders who do not make the Cash Election or do not comply with the Cash Election procedure will receive Cosmetic Class C common stock and will not receive any cash in the Merger. Stockholders of record who make the Cash Election may revoke the election by submitting written notice to the Exchange Agent prior to 5:00 p.m., New York City time, on the business day immediately preceding the Meeting.

EXCHANGE OF STOCK CERTIFICATES

As of the Effective Time, each certificate formerly representing Cosmetic Class A or Class B common stock ("Cosmetic Certificates") shall be deemed for all purposes to evidence ownership of the right to receive Cosmetic Class C common stock and/or cash as provided in the Merger Agreement until surrendered to the Exchange Agent.

As soon as practicable after the Effective Time, a form of letter of transmittal and instructions will be mailed to the holders of record of Cosmetic Certificates to be used by such holders in forwarding Cosmetic Certificates to the Exchange Agent. Each stockholder will be required to return a properly completed transmittal letter, together with any Cosmetic Certificates listed on the transmittal letter, to the Exchange Agent to receive shares of Cosmetic Class C common stock and, if

applicable, cash as provided herein. STOCKHOLDERS SHOULD NOT SEND COSMETIC
CERTIFICATES TO THE EXCHANGE AGENT UNTIL THEY RECEIVE A TRANSMITTAL LETTER.

On and after the Effective Time, upon surrender of a Cosmetic Certificate for cancellation to the Exchange Agent, subject to the effect of applicable laws, there shall be delivered to the holder of such Cosmetic Certificate a certificate for such holder's Cosmetic Class C common stock and, if applicable, cash as provided herein. From and after the Effective Time, the holders of Cosmetic Certificates shall cease to have any rights with respect to such stock, and their sole rights shall be to receive Cosmetic Class C common stock and, if applicable, cash as provided herein. No interest will be paid or will accrue on any cash payable under the Merger Agreement.

No fractional shares of Cosmetic Class C common stock will be issued as a result of the Merger and the Cash Election. Each holder of a fractional interest in Cosmetic Class C common stock will be entitled to receive a cash payment in lieu of such fractional amount equal to the fraction of $7.63 the fractional share represents. As soon as practicable after the determination of the amount of cash, if any, to be paid to the Cosmetic stockholders with respect to any fractional share interests and upon surrender of the Cosmetic Certificates, the Exchange Agent shall distribute in cash the amount payable to such fractional holder.

CONDITIONS TO THE MERGER

The Merger is subject to certain customary conditions, some of which may be waived by Cosmetic and/or Revlon to the extent the Merger Agreement provides that such condition is for their or its benefit.

The obligations of Cosmetic, Revlon and PFC are subject to the conditions, among others, that (i) the Merger Agreement shall have been approved by the holders of a majority of the Cosmetic Class B common stock, (ii) no statute, rule, regulation, order, decree or injunction shall have been enacted or entered which restrains, enjoins or otherwise prohibits the consummation of the Merger,
(iii) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act shall have been terminated or expired (the period was terminated on January 7, 1997), (iv) the registration statement of which this Proxy Statement/Prospectus is part shall not be the subject of a stop order or proceeding seeking a stop order and any material "blue sky" or other state securities laws shall have been complied with, (v) Legg Mason shall not have modified or withdrawn its opinion in a manner unfavorable to the adoption of the Merger Agreement or the consummation of the Merger and (vi) the Combined Company shall have available to it proceeds of the Financing on terms satisfactory to Cosmetic and Revlon of not less than $50 million. See "The Merger -- Financing."

The obligations of Cosmetic are subject to the conditions, among others, that (i) the representations and warranties of Revlon and PFC set forth in the Merger Agreement are accurate, unless such failure shall not have a material adverse effect (as defined in the Merger Agreement), (ii) Revlon and PFC shall have performed their obligations under the Merger Agreement in all material respects, (iii) PFC shall not have suffered a material adverse change in its financial condition, business or results of operations, (iv) Revlon and PFC shall have obtained all necessary material governmental and third-party consents and approvals, the failure to obtain which would have a material adverse effect,
(v) Revlon shall have entered into the Holmdel Lease (as defined herein) and PFC Employee Store Leases (as defined herein), (vi) Revlon shall have entered into the Services Agreement (as defined herein) and the Supply Agreement (as defined herein) and (vii) Cosmetic shall have received certain legal opinions from counsel to Revlon and PFC.

The obligations of Revlon and PFC are subject to the conditions, among others, that (i) the representations and warranties of Cosmetic set forth in the Merger Agreement are accurate, unless such failure shall not have a material adverse effect (as defined in the Merger Agreement), (ii) Cosmetic shall have performed its obligations under the Merger Agreement in all material respects,
(iii) Cosmetic shall not have suffered a material adverse change in its financial condition, business or results of operations, (iv) Cosmetic shall have obtained all necessary material governmental and third-party consents and approvals, the failure to obtain which would have a material adverse effect, (v) Cosmetic shall have entered into the Registration Rights Agreement (as defined herein), (vi) Cosmetic shall have entered into the Holmdel Lease and PFC Employee Store Leases, (vii) Cosmetic shall have entered into the Services Agreement and the Supply Agreement, (viii) Cosmetic shall have entered into the Employment and Non-Competition Agreements with Mark S. Weinstein and Anita J. Weinstein, the Consulting and Non-Competition Agreement with Susan K. Magenheim and the amendment to the Employment Agreement with Ben Kovalsky, (ix) Revlon and PFC shall have received certain legal opinions from counsel to Cosmetic, (x) the Principal Stockholders shall not have defaulted in the performance of their obligations under the Stockholders Agreement, (xi) certain Cosmetic directors and officers shall have resigned, (xii) certain amendments to the 1991 Option Plan (as defined herein) and option agreements shall have been adopted and
(xiii) the Cosmetic 1997 Stock Option Plan shall have been adopted and approved by the holders of the Cosmetic Class B common stock.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains representations and warranties by Cosmetic, PFC and Revlon relating to, among other things, (i) due incorporation and good standing and similar corporate matters; (ii) the respective capital structures of Cosmetic and PFC; (iii) the authorization, validity and enforceability of the Merger Agreement; (iv) governmental authorizations required to effect the Merger and absence of conflicting agreements and documents; (v) the absence of material changes; (vi) the absence of undisclosed liabilities; (vii) the absence of certain defaults and compliance with applicable laws; (viii) the absence of claims and litigation; (ix) title to assets; (x) properties and other assets;
(xi) contracts; (xii) intellectual property; (xiii) employment agreements; (xiv) employee benefit plans; (xv) labor relations; (xvi) taxes; (xvii) insurance coverage; (xviii) environmental matters; (xix) related party transactions; (xx) the absence of false or misleading statements in the Proxy Statement/Prospectus;
(xxi) broker's fees; and (xxii) the absence of false or misleading statements in the Merger Agreement and related schedules. The Merger Agreement contains further representations and warranties by Cosmetic concerning (i) the accuracy of documents it has filed with the SEC; (ii) the compliance of the Proxy Statement/Prospectus with applicable provisions of the securities laws; (iii) the vote required to approve the Merger; (iv) the absence of appraisal rights;
(v) compliance with state takeover statutes; (vi) the receipt of the Legg Mason Opinion; and (vii) the recommendation of the Cosmetic Board. The Merger Agreement contains further representations and warranties by PFC and Revlon concerning the accuracy of PFC's financial statements. Certain of the representations and warranties are subject to exceptions and limitations. Cosmetic stockholders are urged to read the Merger Agreement in its entirety.

The representations and warranties contained in the Merger Agreement will not survive beyond the Effective Time.

CONDUCT OF BUSINESS PRIOR TO MERGER

Pursuant to the Merger Agreement, Cosmetic and PFC have each agreed that, prior to the Merger, each of them will conduct its respective operations only in the ordinary course of business, consistent with past practices and will use its best efforts to preserve its respective businesses and its respective relationships with its officers, employees and other persons having business relationships with it. Each has agreed that, without the consent of the other, it will not, among other things, (i) amend its Certificate of Incorporation or bylaws; (ii) issue securities (except, in the case of Cosmetic, pursuant to outstanding stock options and except for the grant of 1,000 options to purchase Cosmetic Class A common stock at an exercise price of 100% of fair market value (as defined in the 1991 Option Plan) of the Cosmetic Class A common stock on the date of issuance of the options, and the grant of 20,000 options to purchase Cosmetic Class A common stock at an exercise price of not less than 110% of fair market value of the Cosmetic Class A common stock on the date of the options);
(iii) pay any dividend or acquire its securities; (iv) incur debt (except under certain existing arrangements), make loans or mortgage assets; (v) enter into new or alter existing employee compensation or benefit agreements or arrangements; (vi) pay any claims or liabilities (other than in the ordinary course of business); (vii) make capital expenditures (except pursuant to existing capital expenditure plans) or acquire or dispose of material assets (except in the ordinary course of business); (viii) make tax elections or compromise tax liabilities; (ix) change accounting practices; or (x) enter into, amend or terminate contracts (unless immaterial or in the ordinary course of business). Certain of these provisions are subject to exceptions and limitations. Cosmetic stockholders are urged to read the Merger Agreement in its entirety.

CERTAIN COVENANTS

In the Merger Agreement, Cosmetic has agreed that it will, among other things, (i) prepare and file this Proxy Statement/Prospectus with the SEC; (ii) cause a meeting of the holders of the Cosmetic Class B common stock to be duly called and held; (iii) use its best efforts to cause the Cosmetic Class C common stock to be listed on the Nasdaq National Market; and (iv) maintain in effect all of its present insurance policies.

Cosmetic and PFC have agreed to provide each other, upon reasonable notice, access to the other's facilities, books, records, employees and other representatives and to keep such information confidential. Cosmetic, PFC and Revlon have agreed to use commercially reasonable efforts to take all actions necessary, proper or advisable to consummate the transactions contemplated by the Merger Agreement as soon as practicable, including obtaining all required consents and approvals and making all required filings and applications with governmental agencies, and not to take any action or fail to take any action that is reasonably likely to make any representation or warranty in the Merger Agreement untrue or incorrect as of the date when made or as of any future date or that could prevent the satisfaction of any condition to closing set forth in the Merger Agreement. Cosmetic and Revlon have agreed to promptly inform the other party of material changes in the business of Cosmetic or PFC, respectively, and of the happening of any event that would cause any representation or warranty of Cosmetic, Revlon or PFC set forth in the Merger Agreement to be untrue.

Revlon has agreed to use commercially reasonable efforts, subject to normal conditions, to arrange the Financing, and Cosmetic has agreed to provide all necessary cooperation in connection with the arrangement of the Financing.

Cosmetic has agreed that Cosmetic, its subsidiaries and its affiliates, officers, directors, employees, representatives and agents will not solicit, engage in negotiations, provide information to or otherwise cooperate with any person or entity that expresses an interest in acquiring all or a substantial part of any class of the securities, business or assets of Cosmetic nor will they grant any proxy, option or other similar right to any third person or entity in connection with a transaction inconsistent with the Merger. The Merger Agreement further provides that nothing contained therein shall prohibit the Cosmetic Board from furnishing information to, or entering into discussions or negotiations with, any person or entity that makes an unsolicited bona fide proposal in writing to acquire Cosmetic or substantially all of its assets on terms which, in an exercise of their fiduciary duty after the consideration of advice from Cosmetic's legal and financial advisors, a majority of Cosmetic's directors determines is likely to be more beneficial to the holders of Cosmetic common stock than the Merger. This proviso, however, does not permit Cosmetic to
(i) terminate the Merger Agreement, (ii) enter into an agreement with respect to a Cosmetic Center Alternate Transaction (as defined below, see " -- Expenses") prior to the termination of the Merger Agreement or (iii) affect any other obligation under the Merger Agreement.

Revlon and PFC have agreed that Revlon, PFC and Revlon's affiliates, officers, directors, employees, representatives and agents will not solicit, engage in negotiations, provide information to or otherwise cooperate with any person or entity that expresses an interest in acquiring all or a substantial part of any class of the securities, business or assets of PFC nor will Revlon or PFC grant any proxy, option or other similar right to any third person or entity in connection with a transaction inconsistent with the Merger.

TERMINATION; AMENDMENT; WAIVER

The Merger Agreement may be terminated at any time prior to the Effective Time (i) by mutual agreement of Cosmetic and Revlon; (ii) by Cosmetic or Revlon if the Merger has not occurred before March 17, 1997, unless the failure to consummate the Merger by such date is due to the action or failure to act of the party seeking to terminate the Merger Agreement; (iii) by Cosmetic or Revlon if any governmental entity of competent jurisdiction shall have enacted, entered or enforced a statute, rule, regulation, order, decree or injunction which restrains, enjoins or otherwise prohibits the consummation of the Merger; (iv) by Revlon if the Cosmetic Board withdraws or modifies its recommendation that the Cosmetic stockholders approve the Merger Agreement in a manner not favorable to the adoption of the Merger Agreement or the consummation of the Merger; or
(v) by Cosmetic or Revlon if the Merger Agreement is not approved by the holders of a majority of the outstanding Cosmetic Class B common stock.

The Merger Agreement may be amended by written agreement of each of the parties, PROVIDED that, in accordance with the General Corporation Law of Delaware, after the approval of the Cosmetic stockholders no amendment may be made which changes the form or decreases the consideration per share to be paid in the Merger or which changes any of the terms or conditions of the Merger Agreement if such change would adversely affect the rights of such stockholders without the further approval of such stockholders. In addition, each party may at any time waive the other party's compliance with certain terms and conditions of the Merger Agreement.

EXPENSES

Whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby shall be paid by the party incurring such expenses, except as provided below and except that the filing fee under the Hart-Scott-Rodino Antitrust Improvements Act was paid 20% by Cosmetic and 80% by PFC.

If (a)(i) Cosmetic shall enter into, or publicly announce its intent to enter into an agreement in principle, letter of intent or definitive agreement with anyone other than Revlon and its affiliates with respect to any sale, merger or other similar transaction involving Cosmetic, any class of its equity securities or all or substantially all of its assets, (ii) the Cosmetic Board (A) recommends or approves that Cosmetic's stockholders sell shares of any class of Cosmetic's equity securities or all or substantially all of Cosmetic's assets to another person or group, (B) recommends or approves any transaction described in clause (a)(i) above to another person or group or (C) withdraws or modifies in a manner adverse to Revlon its support for the Merger (other than due to circumstances regarding PFC which could reasonably be expected to have a material adverse affect on PFC) or (iii) Cosmetic breaches in any material respect any of its obligations under the Merger Agreement, or (b) any Cosmetic Center Alternate Transaction is consummated during the 90-day period following the later of March 17, 1997 or the termination of the Merger Agreement in accordance with its terms, unless the Merger Agreement is

terminated by Revlon (other than due to a material breach by Cosmetic of its obligations under the Merger Agreement or a material breach by the Principal Stockholders of their obligations under the Stockholders Agreement) or as a result of the failure of a condition to either party's obligation to close under the Merger Agreement (other than due to a material breach by Cosmetic of its obligations under the Merger Agreement or a material breach by the Principal Stockholders of their obligations under the Stockholders Agreement) (the later of such dates being the "Cosmetic Center Termination Date"), Cosmetic shall pay to Revlon within two business days after such event, an amount equal to its documented fees and expenses in connection with the due diligence, preparation and negotiation of documents and preparation of PFC financial statements related to the Merger, up to a maximum of $1 million (the "Revlon Expense Reimbursement Fee"). The events described in (a)(i), (a)(ii) and (a)(iii) are referred to as "Cosmetic Center Triggering Events," and the events described in (a)(i),
(a)(ii)(A) and (a)(ii)(B) are referred to as a "Cosmetic Center Alternate Transaction."

If (a)(i) Revlon or PFC shall enter into, or publicly announce its intent to enter into an agreement in principle or definitive agreement with anyone other than Cosmetic and its affiliates with respect to any sale, merger or other similar transaction involving PFC, any of its equity securities or all or substantially all of its assets, (ii) Revlon's or PFC's board of directors (A) recommends or approves that PFC's stockholder sell shares of PFC's equity securities or all or substantially all of PFC's assets to another person or group, (B) recommends or approves any transaction described in clauses (a)(i) or
(a)(iii) of this paragraph or (C) withdraws or modifies in a manner adverse to Cosmetic its support of Cosmetic's proposal (other than due to circumstances regarding Cosmetic which could reasonably be expected to have a material adverse affect on Cosmetic), (iii) Revlon or PFC sells or agrees to sell any shares of PFC's equity securities to any group other than Cosmetic, or (iv) Revlon or PFC breaches in any material respect any of their respective obligations under the Merger Agreement, or (b) any PFC Alternate Transaction is consummated during the 90-day period following the later of March 17, 1997 or the termination of the Merger Agreement in accordance with its terms, unless the Merger Agreement is terminated by Cosmetic (other than due to a material breach by Revlon or PFC) or as a result of the failure of a condition to either party's obligation to close under the Merger Agreement (other than due to a material breach by Revlon or PFC) (the later of such dates being the "Revlon Termination Date"), Revlon shall pay Cosmetic within two business days after such event an amount equal to its documented fees and expenses in connection with the due diligence, preparation and negotiation of documents and preparation of Cosmetic financial statements related to the Merger, up to a maximum of $1 million. The events described in
(a)(i), (a)(ii), (a)(iii) and (a)(iv) are referred to as "Revlon Triggering Events," and the events described in (a)(i), (a)(ii)(A), (a)(ii)(B) and (a)(iii) are referred to as a "PFC Alternate Transaction."

TERMINATION FEE

In addition to the foregoing expense reimbursement provisions, the Merger Agreement also provides that if Cosmetic shall consummate any Cosmetic Center Alternate Transaction at any time prior to the Cosmetic Center Termination Date or during the 90-day period immediately following the Cosmetic Center Termination Date, Cosmetic shall pay to Revlon on the date of consummation of such Cosmetic Center Alternate Transaction a break-up fee of $1 million (the "Cosmetic Center Break-up Fee").

If Revlon or PFC shall consummate any PFC Alternate Transaction at any time prior to the Revlon Termination Date or during the 90-day period immediately following the Revlon Termination Date, Revlon shall pay to Cosmetic on the date of consummation of such PFC Alternate Transaction a break-up fee of $1.25 million (the "Revlon Break-up Fee").

THE STOCKHOLDERS AGREEMENT

Concurrent with the execution of the Merger Agreement, the Principal Stockholders and Revlon entered into the Stockholders Agreement. At January 27, 1997, the Principal Stockholders in the aggregate own approximately 23% of the outstanding Cosmetic Class A common stock and approximately 48% of the outstanding Cosmetic Class B common stock.

Pursuant to the Stockholders Agreement, the Principal Stockholders have agreed to elect to make the Stockholder Cash Election for all of their Cosmetic Class A and Class B common stock and to make the Option Cash Election with respect to each stock option held by each Principal Stockholder that has an exercise price of less than $7.63 per share.

The Principal Stockholders have agreed that neither they nor their representatives or agents shall solicit, engage in negotiations, provide information to or otherwise cooperate with any person or entity that expresses an interest in acquiring all or a substantial part of any class of the securities, business or assets of Cosmetic nor will they grant any proxy, option or other similar right to any third person or entity in connection with a transaction inconsistent with the Merger. In addition, the Principal Stockholders agreed that they will not sell, pledge, agree to sell or pledge or otherwise dispose of any of their shares

of any class of Cosmetic's securities to any third person, and with respect to any Stockholder Alternate Transaction (as defined below) or Cosmetic Center Alternate Transaction, each of the Principal Stockholders will vote against any such Stockholder Alternate Transaction or Cosmetic Center Alternate Transaction and, if available, will exercise appraisal rights with respect to their shares. A "Stockholder Alternate Transaction" is defined as a sale or agreement to sell by any one of the Principal Stockholders any shares of any class of the outstanding equity securities or securities convertible into equity securities of Cosmetic to any person or group other than Revlon or its affiliates.

If (a) any Stockholder Triggering Event or Cosmetic Center Triggering Event occurs prior to the termination of the Merger Agreement in accordance with its terms or (b) any Stockholder Alternate Transaction or Cosmetic Center Alternate Transaction is consummated prior to the Cosmetic Center Termination Date, each Principal Stockholder agrees, jointly and severally, to pay Revlon within two business days after such event the Revlon Expense Reimbursement Fee (without duplication of any amounts in respect of expense reimbursement paid to Revlon by Cosmetic pursuant to the Merger Agreement). A "Stockholder Triggering Event" shall have occurred if any of the Principal Stockholders breach any of its obligations under the Stockholders Agreement in any material respect or Cosmetic breaches any of its obligations under the Merger Agreement in any material respect.

If Cosmetic should consummate any Cosmetic Center Alternate Transaction or any Principal Stockholder shall consummate a Stockholder Alternate Transaction prior to the Cosmetic Center Termination Date or during the 90-day period immediately following the Cosmetic Center Termination Date, the Principal Stockholders agree to pay to Revlon a break-up fee equal to 25% of the difference between (i) the value of the consideration paid to the Principal Stockholders in such Cosmetic Center Alternate Transaction or such Stockholder Alternate Transaction, as the case may be, with respect to all of their shares minus (ii) the product of (A) the number of shares held by the Principal Stockholders multiplied by (B) $7.63 (the "Principal Stockholders Break-Up Fee").

If (i) at any meeting of Cosmetic stockholders held for the purpose of voting on the Merger, the Principal Stockholders do not vote in favor of the Merger or (ii) the Principal Stockholders vote in favor of any Stockholder Alternate Transaction or any Cosmetic Center Alternate Transaction prior to the Cosmetic Center Termination Date, the Principal Stockholders agree to pay Revlon a fee of $1 million, provided that if the Principal Stockholders Break-Up Fee is payable subsequently, the $1 million payable would be credited against such Principal Stockholders Break-Up Fee.

Cosmetic has no agreement, arrangement or understanding pursuant to which it would be required to reimburse the Principal Stockholders in the event that they were required to pay any of the Revlon Expense Reimbursement Fee or the Principal Stockholders Break-Up Fee.

Pursuant to the Stockholders Agreement, Principal Stockholders holding at least 25% of all Cosmetic Class C common stock held by the Principal Stockholders will be entitled to demand on one occasion that Cosmetic file a registration statement under the Securities Act for the sale of their Cosmetic Class C common stock. The Principal Stockholders will also be entitled to include their Cosmetic Class C common stock in certain registration statements filed for the benefit of Cosmetic. Cosmetic will bear all expenses of such registration statements, except for fees and expenses of counsel for the Principal Stockholders and underwriters' discounts, fees and expenses.

The Stockholders Agreement provides that for three years from the consummation of the Merger, the Principal Stockholders will agree to vote all of their Cosmetic Class C common stock in favor of Revlon's nominees for director so that Revlon will at all times maintain representation on the Combined Company Board equal to Revlon's percentage ownership of Cosmetic Class C common stock, but not less than seven board seats, including two independent directors, and Revlon will agree to vote its shares in favor of the Principal Stockholders' nominees for director equal to their aggregate percentage ownership of Cosmetic Class C common stock, after giving effect to the Merger and the Cash Election, but not less than one nor more than two board seats.

AGREEMENTS WITH REVLON

At the Effective Time, the Combined Company and Revlon (or with respect to the employee stores located in Edison, New Jersey, Holdings) will enter into the following agreements:

HOLMDEL LEASE

At the Effective Time, the Combined Company will enter into a lease with Revlon for the retail store and office, warehouse and distribution facility that PFC currently occupies in Holmdel, New Jersey for a period of up to five years at a base rental of $395,250 per annum plus its proportionate share (17.2%) of operating and tax expense escalations, which it is estimated will aggregate approximately $342,000 for the full year in 1997 (the "Holmdel Lease"). The Holmdel Lease can be terminated by the Combined Company upon 60 days' prior notice for any reason and can be terminated by Revlon upon 180 days' prior notice if (i) Revlon accepts an offer to sell or lease the facility to a third party or ceases or substantially reduces operations at the facility; (ii) Revlon or any of its affiliates no longer have the power to vote, directly or indirectly, a majority of the voting power of outstanding shares of the Combined Company; (iii) if all or substantially all of Combined Company's assets are sold to any person other than an affiliate of Revlon or (iv) an agreement is entered into by Revlon that would result in either (ii) or (iii).

PFC EMPLOYEE STORE LEASES

The Combined Company will continue to occupy the PFC employee stores located in Edison (currently two employee stores that may be consolidated) and Irvington, New Jersey; Oxford, North Carolina; and Phoenix, Arizona pursuant to leases with terms of one year at an annual rent of $73,150, $20,064, $27,500 and $18,200, respectively, for the first year, with the option to renew for nine additional one-year periods with rent increases of 5% of the annual base rent for each renewal year (the "PFC Employee Store Leases"). Operating costs are included in the rent. During the first year of the terms, the PFC Employee Store Leases would not be able to be terminated except that if at any time during the term Revlon enters into an agreement with a non-affiliate for the sale or lease of the facility in which a store is located, Revlon may terminate the relevant lease upon notice effective the earlier to occur of five business days before the closing of such sale or lease transaction, or 180 days following the giving of such notice. In addition, at any time during the term either party may terminate the applicable lease if Revlon ceases or substantially diminishes its operations in the portion of a building in which a store is located (a "Cessation of Operations"). If a Cessation of Operations occurs, Revlon may terminate the lease upon 120 days' notice, except that if the termination date would fall during the period between Thanksgiving and December 31, the termination date automatically will become the first business day following December 31. If a Cessation of Operations occurs, the Combined Company may terminate upon at least 90 days' prior notice. After the first year of the leases, the Combined Company may terminate at any time upon at least 90 days' prior notice. Revlon may terminate at any time after the second anniversary of the date of the leases if (i) Revlon or any of its affiliates no longer have the power to vote, directly or indirectly, a majority of the voting power of outstanding shares of the Combined Company; (ii) all or substantially all of the Combined Company's assets are sold to any person other than an affiliate of Revlon or (iii) an agreement is entered into by Revlon that would result in either (i) or (ii). If Revlon exercises such termination right after the second year of the leases but before the beginning of the fifth year, Revlon must give at least one year's notice. Thereafter, Revlon may terminate in such event on 180 days' notice. Revlon is not obligated to terminate any or all of the leases in such event, but may choose to retain the Combined Company as a tenant in one or more locations. At the Effective Time, the Combined Company will also sublease the New York employee store from Revlon at an annual rent of approximately $99,000, which includes such store's share of operating and tax escalations and which is subject to escalation each year. The sublease expires in December 2004. If Revlon or one of its affiliates no longer owns 50% or more of the voting stock of the Combined Company, the consent of Revlon's landlord to the sublease must be sought to permit continuation of the sublease. The landlord is not affiliated with Revlon and no assurance can be given that such consent will be forthcoming. If Revlon terminates the Supply Agreement with the Combined Company and does not agree to supply products for resale at the New York employee store, the Combined Company may terminate the sublease on 90 days' prior notice. The lease for the employee store located in Apex, North Carolina, which is with a third party and provides for a fixed annual rent of $17,444, including such store's share of operating and tax expense escalation, and which expires April 2000, will be assigned by a subsidiary of Revlon to the Combined Company at the Effective Time.

SERVICES AGREEMENT

Revlon and the Combined Company will enter into a services agreement at the Effective Time pursuant to which Revlon will provide services, including executive, treasury, legal, human resources, accounting, tax, real estate, management information services, corporate information services, including investor relations, risk management, participation in Revlon's insurance and self-insurance programs and warehouse and distribution services (collectively, the "Services"), as and to the

extent requested by the Combined Company (the "Services Agreement"). The Combined Company will pay Revlon the actual cost incurred by Revlon in providing the Services. To the extent the Services are secured from third party providers such as insurance carriers or outside advisors such as lawyers and accountants, the Combined Company will pay to Revlon that portion of the amounts due to such third party providers as is allocable to the Services purchased for and provided to or for the benefit of the Combined Company. Such payments shall be made within ten working days of the invoice therefor. Additionally, the Combined Company will reimburse Revlon for all other reasonable out-of-pocket expenses incurred by Revlon in providing the Services. Additionally, the Combined Company will pay Revlon a one-time payment of $340,000 to cover all severance costs expected to be incurred by Revlon with respect to the termination of certain Revlon employees who provided Services to PFC prior to the Merger as a result of the Combined Company's decision to consolidate certain warehouse, distribution and headquarters operations in Maryland. The Services Agreement provides that Revlon need not make available any Services to the Combined Company to the extent doing so would cause an unreasonable burden to Revlon or to the extent that Revlon discontinues such Services within its organization. Although there is no specific limit on the amount payable to Revlon for the Services, the charges are based upon Revlon's actual cost of providing such Services and amounts due to third party providers with respect to the Services. If Revlon were to provide the Combined Company with the same amount of Services in 1997 that had been provided to PFC in 1996, it is estimated that the total annual amount payable to Revlon in connection with the provision of such Services would not exceed $700,000 for 1997 (not including the one-time payment of $340,000 to cover severance costs). The Services Agreement or any severable part thereof may be terminated by either party on 180 days' notice. In addition, if at any time Revlon together with its affiliates no longer have the power to vote, directly or indirectly, a majority of the voting power of outstanding shares of the Combined Company or if all or substantially all of the Combined Company's assets are sold to any person other than an affiliate, Revlon may terminate the Services Agreement upon 30 days' prior notice.

SUPPLY AGREEMENT

Revlon and the Combined Company will enter into a purchase and supply agreement (the "Supply Agreement") at the Effective Time for a term of at least two and a maximum of four years pursuant to which Revlon would agree to supply to the Combined Company for resale in its retail stores, and not for wholesale distribution, first quality Revlon products and first quality excess Revlon products, and for resale only in the PFC division retail stores, and not for wholesale distribution, discontinued and returned and refurbished Revlon products (subject in all cases to the availability of product). Payments shall be made within 30 days net of shipment. The Supply Agreement provides that Revlon may terminate the agreement effective at any time after the second anniversary of the Merger on one year's notice if Revlon together with its affiliates no longer have the power to vote, directly or indirectly, a majority of the voting power of outstanding shares of the Combined Company or if all or substantially all of the Combined Company's assets are sold to any person other than an affiliate.

TAX SHARING AGREEMENT

Revlon and PFC are, and after the Effective Time, Revlon and, assuming Revlon owns more than 80% of the Cosmetic Class C common stock, the Combined Company will be, for federal income tax purposes, included in the affiliated group of which Mafco Holdings Inc. ("Mafco Holdings") is the common parent. As a result, Revlon's and the Combined Company's federal taxable income and loss will be included in such group's consolidated tax return filed by Mafco Holdings. Revlon and the Combined Company also may be included in certain state and local tax returns of Mafco Holdings or its subsidiaries.

In June 1992, Mafco Holdings, Holdings, Revlon, Inc. (Revlon's parent), Revlon and certain of Revlon's subsidiaries, including PFC entered into a tax sharing agreement (as amended by the second amendment, the "Tax Sharing Agreement"), pursuant to which Mafco Holdings has agreed to indemnify Revlon, Inc. and Revlon against federal, state or local income tax liabilities of the consolidated or combined group of which Mafco Holdings (or a subsidiary of Mafco Holdings other than Revlon, Inc. and Revlon or its subsidiaries) is the common parent for taxable periods beginning on or after January 1, 1992 during which Revlon, Inc., Revlon or a subsidiary of Revlon is a member of such group. Revlon, Inc. has agreed to pay Revlon its share of any payment received by Revlon, Inc. from Mafco Holdings under the Tax Sharing Agreement and Revlon has agreed to pay to each of its subsidiaries, including PFC, its share of any payment received by Revlon from Revlon, Inc. under the Tax Sharing Agreement. Pursuant to the Tax Sharing Agreement, for all taxable periods beginning on or after January 1, 1992, Revlon will pay to Revlon, Inc., which in turn will pay to Mafco Holdings, amounts equal to the taxes that such corporation would otherwise have to pay if it were to file separate federal, state or local income tax returns (including any amounts determined to be due as a result of a redetermination arising from an audit or otherwise of the consolidated or combined tax liability relating to any such period which is attributable to Revlon), except that Revlon will not be entitled to carry back any losses to taxable periods ending prior to January 1, 1992. No payments are required by Revlon or Revlon, Inc. if and to the extent Revlon is prohibited under the Revlon credit agreement from making cash tax sharing

payments to Revlon, Inc. The Revlon credit agreement prohibits Revlon from making cash tax sharing payments other than in respect of state and local income taxes.

Pursuant to the Tax Sharing Agreement, each of the subsidiaries of Revlon, including PFC, has agreed to pay to Revlon an amount equal to its liability for federal, state and local income taxes (including estimated taxes), if any. Since the payments to be made by subsidiaries of Revlon, including PFC, to Revlon under the Tax Sharing Agreement will be determined by the amount of taxes that such subsidiaries would otherwise have to pay if they were to file separate federal, state or local income tax returns, the Tax Sharing Agreement will benefit Revlon to the extent Revlon can offset the taxable income generated by such subsidiaries, including PFC, against losses and tax credits generated by Revlon and its other subsidiaries. PFC anticipates that, as a result of anticipated operating losses, no significant federal tax payments or payments in lieu of taxes pursuant to the Tax Sharing Agreement will be required by PFC for 1997. At the Effective Time, assuming Revlon owns 80% or more of the Combined Company, the Combined Company will become a party to the Tax Sharing Agreement.

REGISTRATION RIGHTS AGREEMENT

The Combined Company will enter into a registration rights agreement with Revlon pursuant to which Revlon will be entitled to demand on three occasions that the Combined Company file a registration statement under the Securities Act in connection with the sale of Revlon's Cosmetic Class C common stock and will also be entitled to include such shares in certain registration statements filed for the benefit of the Combined Company (the "Registration Rights Agreement"). The Combined Company will bear all expenses of such registration statements, except for fees and expenses of counsel for Revlon and underwriters' discounts, fees and expenses.

THE MEETING

This Proxy Statement/Prospectus is being furnished to holders of Cosmetic Class A and Class B common stock in connection with the solicitation of proxies by the Cosmetic Board from the holders of the Cosmetic Class B common stock for use at the Meeting. This Proxy Statement/Prospectus and the accompanying form of proxy are first being mailed to Cosmetic stockholders on or about February , 1997. This Proxy Statement/Prospectus also constitutes Cosmetic's Annual Report with respect to the fiscal year ended September 27, 1996.

COSMETIC'S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SEC WILL BE FURNISHED WITHOUT CHARGE TO COSMETIC STOCKHOLDERS UPON WRITTEN REQUEST TO MR. BRUCE E. STROHL, THE COSMETIC CENTER, INC., 8839 GREENWOOD PLACE, SAVAGE, MARYLAND 20763.

TIME AND PLACE; PURPOSES

The Meeting will be held at , Maryland, on February , 1997, starting at 10:00 a.m., Eastern Standard Time. At the Meeting, holders of Cosmetic Class B common stock will be asked to approve (i) the Merger Agreement, including the Class C Amendment, the conversion of Cosmetic Class A and Class B common stock into Cosmetic Class C common stock and the appointment of nine directors at the Effective Time, (ii) the Board Amendment, (iii) the election of two members of the Cosmetic Board (who will be replaced in connection with the appointment of nine directors upon consummation of the Merger) and (iv) the approval of the Cosmetic 1997 Stock Option Plan.

VOTING RIGHTS; VOTES REQUIRED FOR APPROVAL

The Cosmetic Board has fixed the close of business on January , 1997 as the record date for the determination of Cosmetic Class B stockholders entitled to notice of and to vote at the Meeting. Accordingly, only holders of record of Cosmetic Class B common stock at the close of business on January , 1997 are entitled to notice of and to vote at the Meeting. At the close of business on January , 1997, there were shares of Cosmetic Class B common stock outstanding. Holders of Cosmetic Class A common stock are not entitled to vote at the Meeting.

The Cosmetic Class B common stock is the only class of securities entitled to vote at the Meeting, and each share of Cosmetic Class B common stock is entitled to one vote on each matter properly submitted to a vote at the Meeting. The presence at the Meeting in person or by properly executed proxies of the holders of a majority of the outstanding Cosmetic Class B common stock is necessary to constitute a quorum for the transaction of business at the Meeting.

The affirmative vote of a majority of the outstanding Cosmetic Class B common stock is required to approve the Merger Agreement. Approval of the Board Amendment requires the affirmative vote of at least 80% of the outstanding Cosmetic Class B common stock, and the election of the directors and the approval of the Cosmetic 1997 Stock Option Plan requires the affirmative vote of a majority of the Cosmetic Class B common stock present and voting at the Meeting.

The Principal Stockholders and their family members, who in the aggregate beneficially own or control more than 51% of the outstanding Cosmetic Class B common stock as of the record date, have advised Cosmetic that they intend to vote their shares in favor of the Merger Agreement, the Board Amendment, the election of the directors and the approval of the Cosmetic 1997 Stock Option Plan. Accordingly, the approval of the Merger Agreement, the election of the directors and the approval of the Cosmetic 1997 Stock Option Plan (but not the Board Amendment) are assured without the vote of any other stockholder.

PROXIES

All shares of Cosmetic Class B common stock represented by properly executed proxies received prior to or at the Meeting and not revoked will be voted at the Meeting in accordance with the instructions indicated in such proxies. If no instructions are indicated in a properly executed proxy, such proxy will be voted FOR the approval of the Merger Agreement, the Board Amendment, the election of directors and the Cosmetic 1997 Stock Option Plan. A properly executed proxy marked "abstain," although counted for the purposes of determining whether there is a quorum and for purposes of determining the aggregate voting power and number of shares represented and entitled to vote at the Meeting, will not be voted. Accordingly, because the affirmative vote of a majority of the outstanding Cosmetic Class B common stock is required for approval of the Merger Agreement and the affirmative vote of 80% of the outstanding Cosmetic Class B common stock is required for approval of the Board Amendment, a proxy marked "abstain" will have the effect of a vote against such proposals. Shares represented by "broker non-votes" (that is, shares held by brokers or nominees which are represented at the Meeting but with respect to which the broker or nominee is not authorized to vote on a particular proposal) will be counted for purposes of determining whether there is a quorum at the Meeting. Brokers and nominees are precluded from exercising their voting discretion with respect to the approval of the Merger Agreement or the Board Amendment and therefore, absent specific instructions from the beneficial owner of such shares, are not authorized to vote such shares with respect to the approval of the Merger Agreement or the Board Amendment. Because the affirmative vote of a majority of the outstanding Cosmetic Class B common stock is required for the approval of the Merger Agreement and the affirmative vote of 80% of the outstanding Cosmetic Class B common stock is required for approval of the Board Amendment, a "broker non-vote" will have the effect of a vote against the Merger Agreement and the Board Amendment.

A stockholder who has executed and returned a proxy may revoke it at any time before it is voted by delivering to Cosmetic's Secretary a signed notice of revocation or a signed proxy bearing a later date or by attending the Meeting and voting in person. Attendance at the Meeting will not in itself constitute the revocation of a proxy.

The Cosmetic Board is not aware of any business to be acted upon at the Meeting other than as described in this Proxy Statement/Prospectus. If, however, other matters are properly brought before the Meeting, or any adjournment or postponement thereof, the persons appointed as proxies will have discretion to vote or to act thereon according to their best judgment. Such adjournments or postponements may be for the purpose of soliciting additional proxies.

The cost of soliciting proxies will be paid by Cosmetic. In addition to solicitation by mail, arrangements will be made with banks, brokerage houses and other custodians, nominees and fiduciaries to send proxy materials to beneficial owners, and Cosmetic will reimburse them for their reasonable expenses in so doing. To the extent necessary to ensure sufficient participation at the Meeting, Cosmetic's directors, officers and regular employees, without extra compensation, may request by telephone or telegram the return of proxy cards.

STOCKHOLDERS SHOULD NOT SEND IN ANY STOCK CERTIFICATES WITH THEIR PROXY CARDS. A TRANSMITTAL FORM WITH INSTRUCTIONS FOR THE SURRENDER OF STOCK CERTIFICATES FOR COSMETIC CLASS A AND CLASS B COMMON STOCK WILL BE MAILED BY COSMETIC TO COSMETIC STOCKHOLDERS OF RECORD ON FEBRUARY , 1997 AS SOON AS PRACTICABLE AFTER THE CONSUMMATION OF THE MERGER.

FOLLOWING THE MERGER

ELECTION OF DIRECTORS

The Cosmetic Board currently is classified, with two Class I directors, two Class II directors and two Class III directors. The current terms of the directors continue until the annual meeting of stockholders to be held in 1997, 1998 and 1999, respectively, and until their respective successors are elected and qualified. At each annual meeting, directors are elected for a full term of three years to succeed those directors whose terms expire at the annual meeting date. As described elsewhere in this Proxy Statement/Prospectus, at the Meeting, Cosmetic is seeking the approval of the holders of the Cosmetic Class B common stock to an amendment to Cosmetic's Certificate of Incorporation to repeal the classification of the Cosmetic Board and thereafter to elect all members of the Combined Company Board annually. See "The Merger -- Amendments to Cosmetic's Certificate of Incorporation."

The holders of the Cosmetic Class B common stock will vote upon the election of the Class II directors, whose terms expire at the Meeting. If for any reason the Merger is not completed, the term of the Class II directors elected at the Meeting would expire in 2000.

Notwithstanding the election of the Class II directors at the Meeting, the Merger Agreement provides that, at the Effective Time, the persons named in the Merger Agreement would become the directors of the Combined Company. See "Directors Following the Merger."

The persons named in the proxy will vote at the Meeting, unless the proxy is marked otherwise, to elect as Class II directors, Mark S. Weinstein and Donald R. Rogers. The proxy may not be voted for more than two directors. If a nominee will be unable to serve, the person acting under the proxy may vote the proxy for the election of a substitute. It is not currently contemplated that any nominee will be unable to serve. The following information is furnished with respect to the nominees listed above and to the other current directors of Cosmetic. All references to Cosmetic in this section include Cosmetic's predecessors.

Mark S. Weinstein, age 44, has been chairman of the Cosmetic Board since July 1995. He was vice chairman of the Cosmetic Board and chief executive officer of Cosmetic from April 1989 to July 1995 and has been a director of Cosmetic since September 1982. From June 1985 to April 1989, he served as Cosmetic's president. Mr. Weinstein is a Class II director.

Donald R. Rogers, age 50, has served as a director of Cosmetic since February 1983. For more than the past five years, he has been a member of the law firm of Shulman, Rogers, Gandal, Pordy & Ecker, P.A. in Rockville, Maryland. Mr. Rogers is a director of Allegiance Bank, N.A. Mr. Rogers is a Class II director.

Ronald M. Hirschel, age 46, has been a member of the law firm of Hirschel, Savitz, Parker & Hollman, P.A. (formerly Savitz, Kronthal & Hirschel, P.A.) since its inception in 1991. From 1988 to 1991, Mr. Hirschel was a consultant and lawyer in private practice. He has served as a director of Cosmetic since December 1994. Mr. Hirschel is a Class I director.

Susan K. Magenheim, age 39, has served as a director of Cosmetic since April 1989 and as vice president and assistant secretary of Cosmetic since April 1986. Ms. Magenheim also served as a director of Cosmetic from September 1982 to July 1987. Mrs. Magenheim is a Class I director.

Ben S. Kovalsky, age 58, has served as chief executive officer of Cosmetic since July 1995 and as a director, president and chief operating officer of Cosmetic since April 1989. Mr. Kovalsky is a Class III director.

Anita J. Weinstein, age 67, has served as vice chairwoman of the Cosmetic Board since July 1995, as a director and secretary of Cosmetic since September 1982 and as a vice president since April 1989. Mrs. Weinstein is a Class III director.

Mark S. Weinstein and Susan K. Magenheim are the son and daughter of Anita J. Weinstein.

The Cosmetic Board held five meetings during the fiscal year ended September 27, 1996. Cosmetic does not have a nominating committee. During 1996, each director attended at least 75% of the aggregate of the total number of meetings of the Cosmetic Board (held during the period for which he or she was a director) and the total number of meetings held by all Cosmetic Board committees on which he or she served (during the periods that he or she served as a member).

The Audit Committee, which during 1996 consisted of Messrs. Hirschel and Rogers, is responsible for reviewing, with the independent certified public accountants, the general scope of their audit services and the annual results of their audit and making recommendations to the Cosmetic Board regarding the selection and fees of the independent auditors. The Audit

Committee met twice during the fiscal year. The Audit Committee also met in December 1996 to discuss the results of the year end audit.

Based upon its review of Forms 3, 4 and 5 and any amendments thereto furnished to Cosmetic pursuant to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), all of such forms were filed on a timely basis by reporting persons during 1996.

DIRECTORS FOLLOWING THE MERGER

The following persons will become all of the directors of the Combined Company immediately following the Merger (biographies are as of January 24, 1997):

Ronald O. Perelman, age 54, has been chairman of the executive committee of the board of Revlon and of Revlon, Inc. since November 1995, and a director of Revlon and of Revlon, Inc. since their respective formations in 1992. Mr. Perelman has been chairman of the board and chief executive officer of MacAndrews & Forbes Holdings Inc. ("MacAndrews Holdings") and various of its affiliates for more than the past five years. Mr. Perelman also is chairman of the board of Andrews Group Incorporated ("Andrews Group"), Consolidated Cigar Holdings Inc. ("Cigar Holdings"), Mafco Consolidated Group Inc. ("Mafco Consolidated"), Meridian Sports Incorporated ("Meridian"), New World Communications Group Incorporated ("New World Group"), Power Control Technologies Inc. ("PCT"), Toy Biz, Inc. ("Toy Biz") and chairman of the executive committee of the board of Marvel Entertainment Group, Inc. ("Marvel"). Mr. Perelman is a director of the following corporations which file reports pursuant to the Exchange Act: Andrews Group, California Federal Bank, a Federal Savings Bank ("Cal Fed"), The Coleman Company, Inc. ("Coleman"), Coleman Holdings Inc. ("Coleman Holdings"), Coleman Worldwide Corporation ("Coleman Worldwide"), Cigar Holdings, Consolidated Cigar Corporation ("Consolidated Cigar"), First Nationwide Holdings, Inc. ("FN Holdings"), First Nationwide (Parent) Holdings Inc. ("First Nationwide Parent"), Mafco Consolidated, Pneumo Abex Corporation ("Pneumo Abex"), Marvel, Marvel Holdings Inc., Marvel (Parent) Holdings Inc., Marvel III Holdings Inc., Meridian, PCT, Revlon, Revlon, Inc., Revlon Worldwide Corporation ("Revlon Worldwide") and Toy Biz.

Howard Gittis, age 62, has been a director of Revlon and of Revlon, Inc. since their respective formations in 1992. He has been vice chairman of MacAndrews Holdings and various of its affiliates for more than five years. Mr. Gittis is a director of the following corporations which file reports pursuant to the Exchange Act: Andrews Group, Cal Fed, Cigar Holdings, Consolidated Cigar, FN Holdings, First Nationwide Parent, Mafco Consolidated, Pneumo Abex, PCT, Revlon, Revlon, Inc., Revlon Worldwide, Jones Apparel Group, Inc., Loral Space and Communications, Ltd. and Rutherford-Moran Oil Corporation.

Howard Diener, age 54, has served as the president of PFC since September 1995. Prior to joining PFC, Mr. Diener was executive vice president of marketing for McCrory's Stores from early 1993 until September 1995, executive vice president of Rita Ann Distributors from 1991 until late 1992, executive vice president of People's Drug Stores from 1988 until 1991, senior vice president of merchandising at Rite-Aid from 1979 until 1988 and vice president of merchandising for Dart Drug Corporation from 1968 until 1978.

William J. Fox, age 40, has been vice president and a director of PFC since June 1992 and executive vice president and chief financial officer of Revlon, Inc. and of Revlon since their respective formations in 1992. Mr. Fox was elected as a director of Revlon, Inc. in November 1995 and of Revlon in September 1994. He has been senior vice president of MacAndrews Holdings since August 1990. He was vice president of MacAndrews Holdings from February 1987 to August 1990 and was treasurer of MacAndrews Holdings from February 1987 to September 1992. Prior to February 1987, he was vice president and assistant treasurer of MacAndrews Holdings. Mr. Fox joined MacAndrews & Forbes Group, Incorporated in 1983 as assistant controller, prior to which time he was a certified public accountant at the international auditing firm of Coopers & Lybrand. Mr. Fox is a director of The Hain Food Group, Inc.

Jerry W. Levin, age 52, has served as a director of PFC since October 1995, has been chairman of the board of Revlon, Inc. and of Revlon since November 1995, and chief executive officer and a director of Revlon, Inc. and of Revlon since their respective formations in 1992. Mr. Levin was president of Revlon, Inc. and of Revlon from their respective formations in 1992 to November 1995. Mr. Levin has been executive vice president of MacAndrews Holdings since March 1989. For 15 years prior to joining MacAndrews Holdings, he held various senior executive positions with The Pillsbury Company. Mr. Levin is a director of the following corporations that file reports pursuant to the Exchange Act: Coleman, Coleman Holdings, Coleman Worldwide, Ecolab, Inc., First Bank System, Inc., Meridian, Revlon, Revlon, Inc. and Revlon Worldwide.

Wade H. Nichols, age 54, has been vice president and a director of PFC since June 1992 and has been senior vice president and general counsel of Revlon, Inc. and of Revlon since their respective formations in 1992. He was elected senior

vice president and general counsel of Holdings in March 1992. He was vice president and secretary of Holdings from 1984 to 1992 and secretary from 1981 to 1984. He joined Holdings in 1978. Mr. Nichols has been vice president-law of MacAndrews Holdings since 1988.

Mark S. Weinstein, age 44, has been chairman of the Cosmetic Board since July 1995, vice chairman and chief executive officer of Cosmetic from April 1989 to July 1995 and a director since September 1982. From June 1985 to April 1989, he served as Cosmetic's president.

David N. Dinkins, age 69, has been a professor at Columbia University School of International and Public Affairs since January 1994. Mr. Dinkins was Mayor of The City of New York from January 1990 through December 1993. Prior to serving as Mayor of The City of New York, Mr. Dinkins served as Manhattan Borough President from 1986 through 1989. Mr. Dinkins is a Director of the following corporations which file reports pursuant to the Exchange Act: AMREP Corporation, Carver Bancorp Inc., New World Group, and Transderm Laboratories Corporation. He is also a trustee of WSIS Series Trust.

Harvey Rosenthal, age 54, was president and chief operating officer of Melville Corporation, now known as CVS Corporation, from 1994 until October 1996. From 1984 to 1994, Mr. Rosenthal was president and chief executive officer of the CVS division of Melville Corporation. Mr. Rosenthal joined the CVS division of Melville Corporation in 1969 and held various executive positions in merchandising, marketing and operations until 1984. Mr. Rosenthal is a director of CVS, which files reports pursuant to the Exchange Act.

If the Merger is completed, but the Board Amendment is not approved, Mr. Diener, Mr. Dinkins and Mr. Rosenthal will be elected for a term expiring at the 1998 annual stockholders meeting, Mr. Fox, Mrs. Gittis and Mr. Nichols will be elected for a term expiring at the 1999 annual stockholders meeting and Mr. Perelman, Mr. Levin and Mr. Weinstein will be elected for a term expiring at the 2000 annual stockholders meeting.

The Stockholders Agreement provides that for three years from the consummation of the Merger, the Principal Stockholders agree to vote all of their Class C common stock in favor of Revlon's nominees for director so that Revlon will at all times maintain representation on the Combined Company Board equal to Revlon's percentage ownership of Class C common stock, but not less than seven board seats, including two independent directors, and Revlon agrees to vote its shares in favor of the Principal Stockholders' nominees for director equal to their aggregate percentage ownership of Class C common stock, after giving effect to the Merger and the Cash Election, but not less than one nor more than two board seats.

EXECUTIVE OFFICERS FOLLOWING THE MERGER

The Merger Agreement provides that, immediately following the consummation of the Merger, the Combined Company Board will appoint Jerry W. Levin as chairman of the Combined Company Board, Mark S. Weinstein as vice chairman of the Combined Company Board and Howard Diener as the Combined Company's president and chief executive officer. The following persons will be the other executive officers of the Combined Company immediately following the Merger.

Ben S. Kovalsky, age 58, will serve as the president and chief operating officer of the Cosmetic stores division of the Combined Company. Mr. Kovalsky has served as chief executive officer of Cosmetic since July 1995 and as a director, president and chief operating officer of Cosmetic since April 1989.

Bruce E. Strohl, age 46, will serve as the senior vice president and chief financial officer of the Combined Company. Mr. Strohl has served as vice president and chief financial officer of Cosmetic since April 1989. From 1988 to April 1989, Mr. Strohl was vice president-finance and controller for Dart Drug Stores, Inc.

Allan Goldman, age 42, will serve as senior vice president -- merchandising of the Combined Company. Mr. Goldman has served as senior vice president -- merchandising of Cosmetic since November 1995 and as senior vice president -- marketing of Cosmetic from March 1995 to November 1995. From July 1988 to February 1995, Mr. Goldman was vice president -- merchandising for Rite Aid Corporation.

Michael J. Lewis, age 57, will serve as vice president -- retail operations of the Combined Company. Mr. Lewis has served as vice president -- retail operations of Cosmetic since January 1990.

STATEMENT/PROSPECTUS TO VOTE ON THE MERGER. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS. THIS PROXY STATEMENT/PROSPECTUS IS DATED FEBRUARY , 1997. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN SUCH DATE, AND NEITHER THE MAILING OF THIS PROXY STATEMENT/PROSPECTUS TO STOCKHOLDERS NOR THE ISSUANCE OF THE COSMETIC CLASS C COMMON STOCK IN THE MERGER SHALL CREATE ANY IMPLICATION TO THE CONTRARY.

DEFINED TERM                                                                                  PAGE
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1991 Option Plan........................................................................            77
Acquired Companies......................................................................            33
Andrews Group...........................................................................            75
Board Amendment.........................................................................             7
Bonus Increase..........................................................................            80
Book Value Multiples....................................................................            31
Cal Fed.................................................................................            75
Cash Election...........................................................................    Cover page
Cash Offer..............................................................................            30
Cessation of Operations.................................................................            60
Cigar Holdings..........................................................................            75
Class C Amendment.......................................................................             7
Code....................................................................................            26
Coleman.................................................................................            75
Coleman Holdings........................................................................            75
Coleman Worldwide.......................................................................            75
Colours & Scents........................................................................            46
Colours & Scents stores.................................................................            68
Combined Company........................................................................    Cover page
Combined Company Board..................................................................             4
Comparable Companies....................................................................            31
Consolidated Cigar......................................................................            75
Cosmetic................................................................................    Cover page
Cosmetic Board..........................................................................             1
Cosmetic Center Alternate Transaction...................................................            58
Cosmetic Center Break-up Fee............................................................            58
Cosmetic Center Termination Date........................................................            58
Cosmetic Center Triggering Events.......................................................            58
Cosmetic Certificates...................................................................            54
Cosmetic Unaffected Stock Price.........................................................            32
EBIT....................................................................................            31
EBIT Multiples..........................................................................            31
EBITDA..................................................................................            31
EBITDA Multiples........................................................................            31
Effective Time..........................................................................            15
Enterprise Value........................................................................            31
Enterprise Value Multiples..............................................................            31
EPS.....................................................................................            31
Equity Value............................................................................            31
Equity Value Multiples..................................................................            31
Exchange Act............................................................................            75
Exchange Agent..........................................................................             4
Exclusivity Agreement...................................................................            18
Exclusivity Period......................................................................            20
Facility................................................................................            43
Financing...............................................................................            11
First Nationwide Parent.................................................................            75
FN Holdings.............................................................................            75
Holdings................................................................................            13
Holmdel Lease...........................................................................            60
IRS.....................................................................................            26
ISOs....................................................................................            78

DEFINED TERM                                                                                  PAGE
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LBO.....................................................................................            34
Legg Mason..............................................................................             6
Legg Mason Opinion......................................................................            29
Letter of Intent........................................................................            18
Limit...................................................................................            16
LTM.....................................................................................            31
LTM EPS Multiples.......................................................................            31
LTM Transaction Value Multiples.........................................................            33
MacAndrews Holdings.....................................................................            75
Mafco Consolidated......................................................................            75
Mafco Holdings..........................................................................            61
Marvel..................................................................................            75
Meeting.................................................................................    Cover page
Merger..................................................................................    Cover page
Merger Agreement........................................................................    Cover page
Meridian................................................................................            75
Net Unleveraged Cash Flow...............................................................            34
New Facility............................................................................            43
NOLs....................................................................................            32
Non-Discretionary Grant.................................................................            80
Non-Operating Items.....................................................................            32
Non-Qualified Options...................................................................            80
PCT.....................................................................................            75
PFC.....................................................................................    Cover page
PFC Alternate Transaction...............................................................            58
PFC Employee Store Leases...............................................................            60
Pneumo Abex.............................................................................            75
Prestige Fragrance & Cosmetics stores...................................................            68
Principal Stockholders Break-Up Fee.....................................................            59
Principal Stockholders..................................................................             1
Prior Year..............................................................................            80
Pro Rata Offer..........................................................................            30
Projected 1997 EPS Multiples............................................................            31
Projected 1998 EPS Multiples............................................................            31
Proposal................................................................................            17
Purchase Price of Equity................................................................            33
Purchase Price of Equity Multiples......................................................            33
Registration Rights Agreement...........................................................            62
Revenue Multiples.......................................................................            31
Revlon..................................................................................    Cover page
Revlon Break-up Fee.....................................................................            58
Revlon Expense Reimbursement Fee........................................................            58
Revlon Notes............................................................................            12
Revlon Termination Date.................................................................            58
Revlon Triggering Events................................................................            58
Revlon Worldwide........................................................................            75
SEC.....................................................................................            19
S G & A.................................................................................            41
Securities Act..........................................................................            14
Services................................................................................            60
Services Agreement......................................................................            61
Stock Offer.............................................................................            30
Stock Option Committee..................................................................            80
Stockholders Agreement..................................................................             5

DEFINED TERM                                                                                  PAGE
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Stockholder Alternate Transaction.......................................................            59
Stockholder Triggering Event............................................................            59
Subject Year............................................................................            80
Supply Agreement........................................................................            61
Tax Counsel.............................................................................            26
Tax Sharing Agreement...................................................................            61
Ten Percent Stockholder.................................................................            78
Terminal Value..........................................................................            33
The Salon...............................................................................            64
Toy Biz.................................................................................            75
Transaction Value.......................................................................            33
UPS.....................................................................................            71