BOARD OF DIRECTORS
DEFERRED COMPENSATION PLAN
(As amended and Restated Effective
as of January 1, 1997)
ELIGIBILITY Any member of the Board of Directors of Avon
Products, Inc. (the 'Company') who is not also an
officer may participate in the Plan.
ELECTION TO
DEFER Each eligible Director may elect to defer all or
part of his or her cash compensation (annual
retainers and meeting fees) payable for the
succeeding calendar year of service. Once made,
this election is irrevocable for such calendar
year.
With regard to amounts deferred, the participant
may choose between crediting these amounts to a
Deferred Stock Account or a Deferred Cash Account.
The percentage allocated to these accounts is at
the discretion of the participant.
CREDITING OF
DEFERRED
AMOUNTS The Company shall establish and maintain
individual accounts in the name of each
participant who elects to defer compensation.
Compensation deferred during any calendar quarter
will be credited to the applicable account on the
last day of such quarter.
CASH ACCOUNT-
INTEREST All deferred compensation, inclusive of
accumulated interest, credited to a Deferred
Cash Account as of the end of each calendar year
will be credited with additional interest for
such year at a rate which shall be the prime rate
charged by Morgan Guaranty Trust Company of New
York, in effect on the last business day of the
year. The account balance as of the beginning of
such year will be credited with a full year's
interest. The compensation amounts newly deferred
in each subsequent quarter will be credited with a
portion of such annualized interest commencing as
of the end of the applicable quarter, e.g. half of
a full year's interest would be credited for
compensation newly deferred in the second quarter
of a year.
The foregoing notwithstanding, any and all
compensation deferred by a participant prior
to 1992, inclusive of accumulated interest,
will continue to be credited at the end of each
calendar year with an interest rate equal to the
sum of Moody's Composite Bond Rate, plus four
percentage points, through the end of the year
in which the Director's service is terminated.
STOCK ACCOUNT
- DIVIDENDS Compensation deferred for any calendar
quarter which is allocated to a Participant's
Deferred Stock Account will be credited to such
account as of the last day of the applicable
quarter and its total dollar amount converted
into a number of shares of Avon Common Stock
equivalents, including fractions,
('Stock Units'). The number of Stock Units so
credited will be equal to the number of shares of
Avon Common Stock, including fractions, that could
have been purchased with the amount of compensation
deferred for the calendar quarter at the closing
price of a share of such stock on the New York
Stock Exchange averaged over the last 10 trading
days during the calendar quarter.
As of the date any dividend is paid to
shareholders of Common Stock, the participant's
Deferred Stock Account shall also be credited with
additional Stock Units equal to the number of
shares of Common Stock (including fractions of a
share) that could have been purchased at the
closing price of Common Stock on such date with
the dividends paid on the number of shares of
Common Stock to which the Participant's Stock
Units are then equivalent.
If at any time the number of the Company's
outstanding shares of Common Stock shall be
increased as the result of any stock split, stock
dividend or other reclassification of shares, the
number of Stock Units to which such stock is
equivalent will be increased in the same
proportion.
As of the end of the calendar year in which
the participant for any reason ceases to be a
Director, including retirement, termination, or
death, the total number of the participant's Stock
Units, including fractions, will be converted to a
cash value amount. In determining such amount,
each Stock Unit will be deemed to have a value
equal to the closing price of a share of Avon
Common Stock on the New York Stock Exchange
averaged over the last 10 trading days of such
year. The resulting cash value will then b
merged with the value of any separate Deferred
Cash Account that may be maintained for the
participant.
VALUATION
OF ACCOUNTS The cash value of a participant's total account
including any accumulated interest and Stock Units
will be determined each December 31st ('Valuation
Date'). For years during which the participant
continues to be a Director, Stock Units will be
valued for this purpose based on the closing price
of a share of Avon Common Stock on the New York
Stock Exchange on the last trading day of the
year.
PAYMENT OF
DEFERRED
COMPENSATION The value of the participant's entire deferred
compensation account shall be payable in cash in a
single payment on or about January 15th of the
year next following termination of service as a
Director of the Company. If otherwise previously
elected by the participant, however, such value
may be paid out in consecutive annual installments
up to a maximum of fifteen annual installments.
All installment payments will be made on or about
January 15th commencing with the year next
following termination of service as a Director of
the Company.
Should a participant elect installment payments,
the amount of the first installment payment will
be a fraction of the value of the participant's
total deferred compensation account on the
preceding Valuation Date, the numerator of which
is one (1) and the denominator of which is the
total number of annual installments elected.
Thereafter, the amount of each subsequent payment
will be a fraction of the remaining value of the
participant's deferred compensation account on the
Valuation Date preceding each subsequent
installment payment, the numerator of which is one
(1) and the denominator of which is the
total number of installments elected minus the
number of installments previously paid. Interest
shall continue to accrue on the unpaid balance of
the account, credited annually, at the prime rate
described above.
DEATH OF A
PARTICIPANT In the event of a participant's death any time
prior to complete distribution of all amounts
payable, the unpaid balance of the participant's
account, including any unpaid installments, will
be determined as of the Valuation Date as of the
end of the calendar year in which death has
occurred, and will be paid in a single sum on the
January 15th following such Valuation Date, or as
soon as reasonably possible thereafter. All Stock
Units credited to a Deferred Stock Account will be
converted to a cash value as described above.
Payment will be made to the beneficiary designated
by the Director in writing. In the event that a
participant is not survived by a designated
beneficiary, payment of the account balance will
be made to the participant's surviving spouse, if
any, otherwise to the participant's estate.
MANNER OF
ELECTION The election to defer cash compensation for any
calendar year must be in writing and received by
the Company prior to the beginning of such year.
An election to receive payments of deferred
compensation in annual installments must be made
prior to the end of the year in which service with
the Board has terminated; i.e. before the first
installment payment has been distributed.
ADMINISTRATION The Plan shall be administered by the Secretary of
the Company. The right to receive deferred
compensation may not be transferred, assigned, or
subject to attachment or other legal process.
AMENDMENT The Plan may be amended at any time by action of
the Nominating and Directors' Activities Committee
of the Board of Directors, provided, that no
amendment may adversely effect rights to deferred
compensation accrued prior to the effective date
of such amendment.
Board of Directors Deferred Compensation Plan - Avon Products Inc.
Was this helpful?