{"id":38277,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1997-long-term-incentive-plan-avon-products-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1997-long-term-incentive-plan-avon-products-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1997-long-term-incentive-plan-avon-products-inc.html","title":{"rendered":"1997 Long Term Incentive Plan &#8211; Avon Products Inc."},"content":{"rendered":"<pre>\n\n                              AVON PRODUCTS, INC.\n\n                        1997 Long Term Incentive Plan\n\n\n\nI.    INTRODUCTION\n\n     1.1   Purpose    The purpose of this Plan is to provide additional\nincentives for officers and key employees of the Company to operate and \nmanage the Company's business in a manner that will achieve long-term \ngrowth and profitability and to provide a means of recruiting and \nretaining such officers and key employees.  \n\n     1.2   Relationship to 1993 Stock Incentive Plan    This Plan is \nsubject to the Avon Products, Inc. 1993 Stock Incentive Plan which has \nbeen approved by the Company's shareholders.  Accordingly, this Plan \nshall be deemed a 'Stock Incentive Program' as defined therein and shall \nbe subject to the terms and conditions of the 1993 Stock Incentive Plan.  \nIn the event of any conflict, the terms and conditions of the 1993 Stock \nIncentive Plan shall govern.  \n\n     1.3   General Description    This Plan provides for the grant to \neligible Participants of two forms of incentive awards with respect to a \nperformance period covering the three years 1997 - 1999, namely \nPerformance Units and Stock Options.  While Performance Units will \nconsist of potential cash incentives, both types of awards shall be \nconsidered as 'Stock Incentives' eligible for grants under the 1993 \nStock Incentive Plan.  The Plan also provides for the grant of shares of \nRestricted Stock Awards as set forth in Part V hereof.  \n\n     1.4   Definitions    Capitalized words and phrases in this Plan \nshall have the same meaning as the definitions set forth in the 1993 \nStock Incentive Plan, to the extent that they are defined therein, \nexcept as otherwise indicated.  Definitions used in this Plan shall have \nthe meanings set forth below:\n\n\n     'Committee' means the Compensation Committee of the Board of \nDirectors, each member of which is an 'outside director', within the \nmeaning of Section 162(m) of the 1986 Internal Revenue Code.\n\n     'Performance Period' means the period of three consecutive \ncalendar years commencing with the year 1997.  \n\n     'Plan' means the Avon Products, Inc. 1997 Long Term Incentive \nPlan.  \n\n     'Senior Officers' means those Company Executive Officers who are \nsubject to Section 16 of the Exchange Act and all other officers who \nreport to the Company's Chief Executive Officer.  \n\n\nII.    PARTICIPATION\n\n     2.1   General Rule    The Committee shall determine the levels and \ncategories of officers and key employees of the Company and its \nSubsidiaries who shall be Participants in the Plan.  The initial grant \nof Plan awards shall be made during the first 90 days of the first year \nof the Performance Period.  \n\n     2.2   Participants Not Eligible at Time of Initial Grant    If an \nemployee becomes eligible for Participation subsequent to the date of \ninitial grant, he or she may become a Participant at such later date, \nwith awards to such a Participant to be subject to the terms set forth \nbelow. \n\n\nIII.   PERFORMANCE UNIT AWARDS\n\n     3.1   Performance Objectives    Performance Units will realize a \ncash payout value following the end of the Performance Period, only to \nthe extent applicable Performance Objectives have been attained for such \nperiod.  Performance Objectives applicable to Performance Units awarded \nto Global Participants, i.e. participants who are not principally \nmembers of management of an Operating Business Unit ('OBU') or Country, \nshall solely be the Cumulative EPS Objectives described below.  With \nrespect to Participants who are principally members of management of an \nOBU or Country, 60% of their awarded units shall be subject to the \nCumulative EPS Objectives and 40% subject to their applicable Non-EPS \nPerformance Objectives, as described below.  \n\n     Appropriate adjustments in Performance Objectives may be made with \nrespect to the Performance Units of Participants who during the course \nof the Performance Period transfer between OBU's or Countries or have \ntheir status changed to or from that of a Global Participant to reflect \nfor the balance of the Period the Performance Objectives associated with \neach Participant's new status or location.  At the discretion of the \nCommittee, however, a Participant's compensation payable pursuant to \nthis Article III may be reduced to the amount otherwise payable solely \nbased on the Performance Objectives applicable to such Participant as of \nthe time of his or her initial grant of Performance Units.\n\n     3.2   Definitions for Performance Award Units    Terms applicable \nto Performance Unit awards shall have the meanings set forth below:\n\n     a.  'Base Grant Value' means the target cash value of each \n          Performance Unit which shall be $100.\n\n     b.  'Ultimate Payment Value' means the cash value of each \n          Performance Unit, which shall be determined by the Committee \n          following the end of the Performance Period.  Such value may \n          be as high as $200 if the Maximum Growth Rate has been \n          attained, or zero if the Threshold Growth Rate has not been \n          attained. \n\n     c.  'Earnings Per Share' means the fully diluted earnings per \n          share of Stock calculated on the weighted average number\n          of shares outstanding as reported in the Company's Annual\n          Report based on consolidated net income (before\n          extraordinary items and income taxes related thereto) of\n          the Company, as determined by the Company's independent\n          public accountants. Such determination and report shall\n          be made as of the end of the Performance Period with respect\n          to such Period and the applicable Base Year in conformity with\n          generally accepted accounting principles consistently applied.\n\n     d.  'Cumulative EPS' means the aggregate total Earnings Per Share \n          for the entire Performance Period.\n\n     e.  'Target EPS Objective' means the Cumulative EPS established \n          by the Committee for the Performance Period which, if exactly \n          attained, shall result in an Ultimate Payment Value of $100\n          per Performance Unit.  \n\n     f.  'Maximum EPS Objective' means the Cumulative EPS established \n          by the Committee for the Performance Period which, if \n          attained or exceeded, shall result in an Ultimate Payment \n          Value of $200 per Performance Unit.  \n\n\n     g.  'Threshold EPS Objective' means the Cumulative EPS \n          established by the Committee for the Performance Period \n          which, if exactly attained, shall result in an Ultimate \n          Payment Value of $50 per Performance Unit and, if not \n          attained, shall result in an Ultimate Payment Value of zero \n          for all Performance Units.\n\n     h.  'Cumulative Operating Profit' means the aggregate total \n          operating profit achieved for the entire Performance Period \n          of a designated OBU or Country business unit.\n\n     i.  'Cumulative Pretax Contribution' means the aggregate total \n         pretax contribution to the Company achieved for the entire \n         Performance Period by a designated Country business unit.\n\n     j.  'Non-EPS Performance Objectives' means the Cumulative \n         Operating Profit or Cumulative Pretax Contribution \n         objectives, as established by the Committee, which are \n         applicable to that portion of a Participant's Performance \n         Units whose value will be determined by the degree to which \n         such objectives have been achieved.  The value of such units \n         will be zero, however, if the Threshold EPS Objective has not \n         been achieved.  \n     k.  'Target Non-EPS Performance Objectives' means the level of \n         Cumulative Operating Profit or Cumulative Pretax \n         Contribution, whichever is applicable, as established by the \n         Committee, which, if exactly attained, shall result in an \n         Ultimate Payment Value of $100 for each Performance Unit \n         whose value is to be determined by Non-EPS Performance \n         Objectives. \n\n     l.  'Maximum Non-EPS Performance Objectives' means the level of \n         Cumulative Operating Profit or Cumulative Pretax \n         Contribution, whichever is applicable, as established by the \n         Committee, which, if attained or exceeded, shall result in an \n         Ultimate Payment Value of $200 for each Performance Unit \n         whose value is to be determined by Non-EPS Performance \n         Objectives.\n\n     m.  'Threshold Non-EPS Performance Objectives' means the level of \n         Cumulative Operating Profit or Cumulative Pretax \n         Contribution, whichever is applicable, as established by the \n         Committee which, if exactly attained, shall result in an \n         Ultimate Payment Value of $50 for each Performance Unit whose \n         value is to be determined by Non-EPS Performance Objectives.  \n\n     n.  'Proration Tables' mean the tables established by the \n         Committee which shall determine the Ultimate Values of \n         Performance Units where the applicable performance attained \n         exceeds its Threshold Objective but is less than its Maximum \n         Objective (and is not exactly at Target).\n\n     All of the foregoing Performance Objectives and Proration Tables \nshall be established by the Committee during the first 90 days of the \nPerformance Period.\n\n     3.3    Grants of Performance Units    The Committee shall \nauthorize grants of Performance Units to Participants and establish the \nPerformance Objectives to be applied for such units, including the \nTarget, Maximum and Threshold levels of all relevant objectives and \ntheir Proration Tables.  The Committee shall approve (a) all specific \ngrants of Performance Units to Senior Officers and (b) an aggregate \nnumber of Performance Units to be granted other Participants, which \nshall be allocated by the Company's Chief Executive Officer.  \n\n     The number of Performance Units to be initially granted a \nParticipant shall be determined as follows:  (a) an annualized cash \ntarget amount shall be established, (b) such cash target amount shall be \ndivided by the Base Grant Value of $100 and (c) the resulting number \nshall be multiplied by the number of years in the Performance Period \n(three).  \n\n     When a Participant is promoted to a higher level position, \nsupplemental grants of Performance Units shall be awarded to such \nParticipant determined by the amount of base salary increase \nattributable to the promotion and the same cash target percentage used \nin calculating his or her prior initial grant.  The Committee reserves \nthe right, however, to decline to grant such supplemental Performance \nUnits.  At any time during the Performance Period, grants of Performance \nUnits may be made, at the Committee's sole discretion, to employees \nhired subsequent to the initial grant date or who otherwise have \nsubsequently become eligible for Participation.  All Performance Units \ngranted subsequent to the initial grant date shall take into account the \nshorter period of time remaining between the date of the grant and the \nend of the Performance Period.  If, for example, a grant was made \neffective as of the first day of the second year of the Performance \nPeriod, the cash target amount referred to in the preceding paragraph \nwould be multiplied by two rather than three.  \n\n     In no event, however, may the total cash value for aggregate \nPerformance Units awarded to any one Participant exceed $6,000,000.  All \nPerformance Units, regardless of when granted, shall be subject to the \nsame performance criteria in determining Ultimate Payment Value, \nincluding the relevant three-year Performance Objectives.  \n\n     3.4   Value Determination and Payment    The Ultimate Payment \nValue(s) of all Performance Units shall be determined by the Committee \nas soon as practicable after the end of the Performance Period and its \nreview of a report concerning actual Cumulative EPS for the period \nsubmitted to the Committee by the Company's independent public \naccountants, and the Cumulative Operating Profit and Cumulative Pretax \nContribution totals submitted by the Company's Chief Financial Officer.  \nThe Ultimate Payment Value initially so determined for Performance Units \nshall be increased by 10% if an Avon Value Added ('AVA') growth \nobjective for the Performance Period has been attained or exceeded.  \nSuch AVA 'kicker' objective shall be established by the Committee during \nthe first 90 days of the Performance Period.  \n\n     Payment to a Participant shall be made in a single sum in cash \nequal to the applicable Ultimate Payment Value(s), adjusted by any AVA \nkicker, multiplied by his or her total Performance Units and reduced by \napplicable tax withholding.  Such payments shall be made as soon as \npracticable after the Committee determines such Ultimate Payment \nValue(s).  \n\n     3.5   Termination of Employment During Performance Period    If \nprior to the end of the Performance Period but after completion of the \nperiod's first calendar year, a Participant (a) dies while employed by \nthe Company, (b) retires under the terms of a Company retirement plan or \n(c) is involuntarily terminated by the Company, other than for cause, \nsuch Participant shall remain entitled to a portion of the Performance \nUnits granted to him or her.  Such portion shall be the Participant's \ntotal number of Performance Units multiplied by a fraction, the \nnumerator of which is the number of months in which such Participant was \nactively employed during the Participant's Performance Period (including \nthe month during which employment terminated) and the denominator of \nwhich is 36 or, if fewer, the number of months from the effective date \nof the grant of the Participant's Performance Units to the end of the \nPerformance Period (applicable in the case of grants first made after \nthe initial grant).\n\n     Except as provided below, no payment can be made for such retained \nPerformance Units prior to the time the Committee has determined the \nUltimate Payment Value(s) assigned to all Performance Units.  To the \nextent applicable, if a Threshold Objective has not been attained, no \npayment would be made for any Performance Units subject to such \nThreshold Objective.  \n\n     At the discretion of the Committee, however, a payment may be made \non behalf of a deceased Participant prior to the end of the Performance \nPeriod based on the above described proration formula and a Base Grant \nValue.  Any payment made with respect to a Participant who has died \nshall be paid to the beneficiary designated by the Participant to \nreceive the proceeds of any group life insurance coverage provided for \nthe Participant by the Company.  A Participant who has not designated \nsuch beneficiary, or who desires to designate a different beneficiary, \nmay file with the Company a written designation of a beneficiary under \nthe Plan, which designation may be changed or revoked only by the \nParticipant.  If no designation of beneficiary has been made under such \nlife insurance coverage or filed with the Company, distribution shall be \nmade to the Participant's spouse, if surviving, and if not, to the \nParticipant's estate.  \n\n     No payment will be due any Participant who voluntarily terminates \nemployment or whose employment has been involuntarily terminated by the \nCompany for 'cause' prior to the end of the Performance Period.  Unless \notherwise provided by an individual employment agreement, a Participant \nwho is deemed terminated for cause pursuant to the terms of the \napplicable Company Severance Pay Plan, shall be deemed terminated for \ncause for purposes of this Plan.  Except in the case of a 'Change of \nControl' situation, any Participant who is terminated for any reason \nduring the first year of the Performance Period is not entitled to any \npayment, provided that the Committee, at its discretion, may make a \npayment on behalf of a deceased Participant.  \n\n     No payment will be due any Participant who terminates employment \nand prior to the end of the Performance Period, without the written \nconsent to the Company, (a) knowingly discloses confidential information \nconcerning the Company, (b) accepts employment, or enters into a \nconsulting arrangement with, another direct selling company that \ncompetes with the Company or (c) solicits any Company employees to leave \nto work for another employer.  \n\n     3.6   Change of Control    In the event that a Change of Control \nshould occur, payment will be made with respect to all Performance Units \nas soon as practicable.  The amount to be paid per Performance Unit \nshall be the greater of the Base Grant Value ($100) or such higher \nUltimate Payment Value up to $200 as may be established by the Committee \nin its discretion.  In the event Change of Control occurs prior to the \nend of the first calendar year of the Performance Period, only Base \nGrant Value will be used.  \n\n\nIV.   STOCK OPTION GRANTS\n\n     4.1   Initial Option Grants    Any Participant eligible to receive \nan award of Performance Units at the time of initial grants for the \nPerformance Period shall also receive a grant of Stock Options.  Stock \nOptions may also be granted to certain Participants who are not \notherwise eligible to receive an award of performance units.  Additional \noptions may be granted to active Participants on the first and second \nanniversary dates of the initial grant or at such other times as the \nCommittee may determine.  The Committee shall approve (a) all specific \ngrants of Stock Options to Senior Officers and (b) an aggregate number \nof Stock Options to be granted other Participants, which shall be \nallocated by the Company's Chief Executive Officer.  \n\n     4.2   Supplemental Option Grants    Participants who are first \nawarded Performance Units subsequent to the date of the initial grants \nmay also receive a grant of Stock Options.  \n\n     4.3   Terms and Conditions    One-third of the shares covered by \neach Stock Option grant under the Plan shall be exercisable one year \nfollowing the date of grant with another one-third exercisable one year \nthereafter and the final one-third one year after that.  The \nexercisability of Stock Options is not affected by the Plan's \nperformance objectives affecting Performance Units.  All other terms and \nconditions shall be set forth in a form of Stock Option Agreement.  All \nStock Options granted under this Plan shall be consistent with, and \nsubject to, the terms and conditions of the 1993 Stock Incentive Plan.  \n\n     4.4   Elective Stock Options    Within 60 days of the initial \ngrant, a Participant may irrevocably elect, subject to the approval of \nthe Committee, to exchange up to 50% of his or her initially granted \nPerformance Units for additional 'Elective Stock Options'.  Terms and \nconditions relating to the exchange of Performance Units for Elective \nStock Options will be established by the Committee; the exercise terms \nfor Elective Stock Options may be different than those for regular stock \noption grants under this Plan.  In no event may any one Participant, \nhowever, receive stock options which, when aggregated with all of his or \nher other stock options and stock incentives awarded pursuant to the \n1993 Plan, exceed 10% of the Maximum Plan Shares issuable under the 1993 \nPlan.\n\n\nV.   RESTRICTED STOCK GRANTS\n\n     At any time, and from time to time, during the Performance Period \nthe Committee, at its discretion, may make grants of Restricted Stock to \nselected key employees.  Such grants principally would be made for the \npurpose of attracting and retaining those individuals for whom such form \nof additional incentive compensation is deemed to be necessary and in \nthe best interests of the Company.  Such awards of Restricted Stock need \n\nnot be affected by the terms and conditions of this Plan applicable to \ngrants of Performance Units or Stock Options.  \n\n     The terms and conditions of any grant of Restricted Stock shall be \nset forth in a Stock Incentive Agreement executed by the employee and \nthe Company.  Such terms and conditions shall be consistent with the \n1993 Stock Incentive Plan.  Dividends on such shares, even though not \nvested, may, at the Committee's discretion, be paid out currently.  \n\n\nVI.   MISCELLANEOUS\n\n     6.1   The Company, the Board of Directors, the Committee and the \nofficers and other employees of the Company shall not be liable for any \naction taken in good faith in interpreting and administering the Plan. \n\n     6.2   Pursuant to the provisions of the 1993 Stock Incentive Plan, \nthe Company shall deduct from all cash payments and distributions under \nthe Plan any taxes required to be withheld by federal, state, or local \ngovernments.  \n\n     6.3   The establishment of the Plan shall not be construed as \nconferring on any Participant any right to continued employment or \nemployment in any position, and the employment of any Participant may be \nterminated by the Company or by the Participant without regard to the \neffect which such action might have upon him or her as a Participant in \nthe Plan.  \n\n     6.4   No benefit under the Plan shall be subject in any manner to \nanticipation, alienation, sale, transfer, assignment, pledge, \nencumbrance, or charge; and any attempt to do so shall be void.  No such \nbenefit shall, prior to receipt thereof by the Participant, be in any \nmanner liable for or subject to the debts, contracts, liabilities, \nengagements, or torts of the Participant.  No benefit or promise \nhereunder shall be secured by any specific assets of the Company, nor \nshall any assets of the Company be designated as attributable or \nallocated to the satisfaction of the Company's obligations under the \nPlan. \n\n     6.5   The Committee at any time may terminate and in any respect \namend or modify the Plan, so long as such amendment does not adversely \naffect the rights of any Participant with respect to Performance Units \nand Stock Options granted prior to such amendment.  The Committee shall \nhave the power to interpret the Plan and all interpretations, \ndeterminations and actions by the Committee shall be final, conclusive \nand binding upon all parties.  \n\n     6.6   The Plan shall be governed by and subject to the laws of the \nState of New York to the extent not preempted by federal law.  \n\n\nVII.   EFFECTIVE DATE\n\n     This Plan is effective as of January 1, 1997, and its three-year \nPerformance Period will commence with the Calendar Year 1997.  \n\n\n\n\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6822],"corporate_contracts_industries":[9395],"corporate_contracts_types":[9539,9546],"class_list":["post-38277","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-avon-products-inc","corporate_contracts_industries-consumer__cleaning","corporate_contracts_types-compensation","corporate_contracts_types-compensation__incentive"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38277"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38277"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38277"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}