{"id":38469,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/2011-transition-incentive-cash-program-avon-products.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"2011-transition-incentive-cash-program-avon-products","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/2011-transition-incentive-cash-program-avon-products.html","title":{"rendered":"2011 Transition Incentive Cash Program – Avon Products"},"content":{"rendered":"

AVON PRODUCTS, INC. <\/strong><\/p>\n

2011 TRANSITION INCENTIVE CASH PROGRAM <\/strong><\/p>\n

EFFECTIVE JANUARY 1, 2011 <\/strong><\/p>\n<\/p>\n\n\n\n
I.<\/strong><\/td>\nPURPOSE. <\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The purpose of this Avon Products, Inc. 2011 Transition Incentive Cash
\nProgram is to link a portion of the total pay of eligible participants to the
\nbusiness growth success of Avon Products, Inc. and its Affiliates during 2011.
\nThis Program is part of the transition of Avon Products, Inc. implementation of
\nproviding incentive compensation during overlapping three-year Long-Term
\nPerformance Periods.<\/p>\n<\/p>\n\n\n\n
II.<\/strong><\/td>\nDEFINITIONS. <\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Capitalized terms used in this Program and not defined herein shall have the
\nmeaning set forth in the Avon Products, Inc. 2008-2012 Executive Incentive Plan,
\nas amended, or any successor plan (“Executive Incentive Plan”). Additionally,
\nthe following terms shall have the following meanings:<\/p>\n

“Disability” <\/em>has the meaning provided in the long-term disability
\nplan or policy maintained or, if applicable, most recently maintained, by the
\nCompany or, if applicable, any Affiliate of the Company. If no long-term
\ndisability plan or policy was ever maintained on behalf of the Participant,
\nDisability shall mean that condition described in Section 22(e)(3) of the Code,
\nas amended from time to time. In the event of a dispute, the determination of a
\nDisability shall be made by the Committee and shall be supported by advice of a
\nphysician competent in the cure to which such Disability relates. Subject to the
\napproval of the Committee, a different definition of Disability may be
\napplicable to a Participant employed outside of the U.S. who is subject to local
\ndisability laws and programs.<\/p>\n

“Performance Period”<\/em> means 2011.<\/p>\n

“Performance Period Bonus”<\/em> means the cash bonus payable to a
\nParticipant pursuant to this Program with respect to 2011 as determined pursuant
\nto Article V.<\/p>\n

“Potential Change in Control”<\/em> means:<\/p>\n

(i) the commencement of a tender or exchange offer by any third person for
\n30% or more of the then outstanding shares of common stock or combined voting
\npower of the Company’s then outstanding voting securities;<\/p>\n

(ii) the execution of an agreement by the Company, the consummation of which
\nwould result in the occurrence of a Change in Control;<\/p>\n

(iii) the public announcement by any person, including the Company, of an
\nintention to take or to consider taking actions which if consummated would
\nconstitute a Change in Control; or<\/p>\n<\/p>\n

\n

(iv) the adoption by the Board, as a result of other circumstances, including
\ncircumstances similar or related to the foregoing, of a resolution to the effect
\nthat a Potential Change in Control has occurred.<\/p>\n

“Program”<\/em> means this Avon Products, Inc. 2011 Transition Incentive
\nCash Program.<\/p>\n

“Retirement”<\/em> means a Participant’s Separation from Service with the
\nCompany or an Affiliate on or after (i) the Participant’s 65th birthday;
\n(ii) the Participant’s 55th birthday if the Participant has completed at least
\n15 years of Credited Service (as described in the Company’s Personal Retirement
\nAccount Plan); (iii) the date the Participant is eligible for early or normal
\nretirement under any retirement plan of the Company or its Affiliates that
\napplies to such Participant; (iv) the Participant’s attainment of his 55th
\nbirthday and completion of ten years of service with the Company or an
\nAffiliate; or (v) the Participant’s attainment of his 60th birthday and the
\ncompletion of five years of service with the Company or an Affiliate. For those
\nParticipants located outside the U.S., Participants will be considered to have
\nretired based on the local policies, practices or benefit plans applicable to
\nthe Participant’s location.<\/p>\n<\/p>\n\n\n\n
III.<\/strong><\/td>\nADMINISTRATION. <\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The administration and operation of the Program shall be supervised by the
\nCommittee with respect to all matters. The Committee may delegate responsibility
\nfor the day-to-day administration and operation of the Program to such employees
\nof the Company as it shall designate from time to time. The Committee shall
\ninterpret and construe any and all provisions of the Program and any
\ndetermination made by the Committee under the Program shall be final and
\nconclusive. Neither the Board nor the Committee, nor any member of the Board or
\nthe Committee, nor any employee of the Company shall be liable for any act,
\nomission, interpretation, construction or determination made in connection with
\nthe Program (other than acts of willful misconduct) and the members of the Board
\nand the Committee and the employees of the Company shall be entitled to
\nindemnification and reimbursement by the Company to the maximum extent permitted
\nby law in respect of any claim, loss, damage or expense (including counsel’s
\nfees) arising from their acts, omissions and conduct in their official capacity
\nwith respect to the Program.<\/p>\n<\/p>\n\n\n\n
IV.<\/strong><\/td>\nELIGIBILITY AND PARTICIPATION. <\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Committee shall select the employees of the Company or its Affiliates to
\nparticipate in the Program. An Award to a Participant subject to Section 162(m)
\nof the Code shall be granted under the Executive Incentive Plan, and be subject
\nto the terms thereof.<\/p>\n<\/p>\n\n\n\n
V.<\/strong><\/td>\nPERFORMANCE PERIOD BONUS. <\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

5.1. Performance Goals<\/em>. The Performance Period Bonus will be
\nassessed against Performance Measures contained in the Company’s Executive
\nIncentive Plan and determined by the Committee within the first ninety (90) days
\nof the Performance Period.<\/p>\n<\/p>\n

2<\/p>\n<\/p>\n

\n

5.2. Performance Period Bonus<\/em>. The Committee shall establish during
\nthe first ninety (90) days of the Performance Period the formula for calculating
\nthe Performance Period Bonus for each Participant. The Performance Period Bonus
\nfor any Participant, when added to the payment under the Company’s annual
\nincentive program for 2011 to the Participant, may not exceed $6,000,000 (the
\nannual limitation set forth in the Executive Incentive Plan for annual incentive
\nawards).<\/p>\n

5.3. Determination of Achievement of Performance Goals<\/em>. The
\nCommittee shall determine and certify the level of achievement of the
\nperformance goals as soon as practicable after the end of the Performance
\nPeriod. The Committee may increase or decrease the Performance Period Bonus
\nbased on the Committee’s quantitative and qualitative assessment and in its sole
\ndiscretion; provided that the Performance Period Bonus may not be increased for
\nany Participant subject to Section 162(m) of the Code.<\/p>\n

5.4. Payment of Performance Period Bonus<\/em>.<\/p>\n

(a) Except as provided below, Participants who remain actively employed until
\nDecember 31, 2013 shall be entitled to receive payment of the Performance Period
\nBonus, if any, determined in accordance with this Article V.<\/p>\n

(i) A Participant who incurs an involuntary Separation from Service without
\nCause on or after January 1, 2012 but who will not be eligible for Retirement at
\nthe end of a salary continuation period for which the Participant is eligible
\nunder a severance pay plan of the Company or some other agreement between the
\nCompany and the Participant, in either case as in effect on the date hereof, but
\nprior to December 31, 2013, shall be eligible for a prorated Performance Period
\nBonus payable during 2014, provided that the performance goal(s) are satisfied
\nin accordance with this Article V.<\/p>\n

(ii) A Participant who incurs a voluntary Separation from Service due to
\nRetirement on or after January 1, 2012, or a Participant who incurs an
\ninvoluntary Separation from Service other than for Cause on or after January 1,
\n2012 who will be eligible for Retirement at the end of the payment period for
\nwhich the Participant is eligible under a severance pay plan of the Company or
\nsome other agreement between the Participant and the Company (as if the
\nParticipant made any available election under such plan or agreement to extend
\nthe salary continuation period by the maximum period available to the
\nParticipant), in either case as in effect on the date (disregarding any election
\npermitted by the Participant under such plan or agreement), then, provided that
\nthe performance goal(s) have been satisfied, the Participant shall be entitled
\nto a prorated Performance Period Bonus, payable during 2014.<\/p>\n

(iii) A Participant who dies or incurs a Separation from Service due to
\nDisability prior to December 31, 2013 will be eligible for a prorated
\nPerformance Period Bonus payable during 2014, provided that the performance
\ngoal(s) are satisfied in accordance with this Article V.<\/p>\n<\/p>\n

3<\/p>\n<\/p>\n

\n

(iv) A Participant is not eligible for a Performance Period Bonus if he or
\nshe: (w) incurs an involuntary Separation from Service by the Company for Cause
\nprior to payment of the Performance Period Bonus; (x) subject to Section 5.4(c),
\nincurs an involuntary Separation from Service by the Company without Cause prior
\nto January 1, 2012; (y) incurs a voluntary Separation from Service due to
\nRetirement prior to January 1, 2012; or (z) incurs a voluntary Separation from
\nService from the Company (excluding Retirement on or after January 1, 2012,
\nDisability, or a voluntary Separation from Service for a Change in Control Good
\nReason) at any time prior to December 31, 2013.<\/p>\n

(b) Payment of Performance Period Bonuses shall be made in 2014, except to
\nthe extent that such Participant elected to defer the receipt of a portion of
\nhis or her Performance Period Bonus in accordance with subsection (e) hereof or
\nas provided in Section 5.4(c) below, if applicable.<\/p>\n

(c) Prior to the payment of the Performance Period Bonus, if (w) and
\n(x) occurs, where (w) is a Change in Control which occurs prior to the payment
\nof the Performance Period Bonus, and where (x) is a Separation from Service
\nfollowing such Change in Control, either: (y) by the Company without Cause
\nwithin two years of the Change in Control; or (z) due to the Participant
\nincurring a Change in Control Good Reason, then the Performance Period Bonus
\nwill be calculated and paid, if payable, promptly following the Participant’s
\nSeparation from Service for (y) or (z) only, subject to Section 5.5, and in
\naccordance with (i), (ii) or (iii) below:<\/p>\n

(i) If the Separation from Service occurs before July 1, 2011, the
\nPerformance Period Bonus is fully vested and calculated as if the Award had been
\nachieved at target but prorated;<\/p>\n

(ii) If the Separation from Service occurs on or after July 1, 2011 but prior
\nto January 1, 2012, the Performance Period Bonus is fully vested and calculated
\nas if the Award had been achieved at target, without proration;<\/p>\n

(iii) If the Separation from Service occurs on or after January 1, 2012 but
\nprior to payment of the Performance Period Bonus, the Performance Period Bonus
\nis fully vested and calculated based on the achievement of the Performance
\nMeasures.<\/p>\n

Effective upon a Change in Control, each outstanding Performance Period Bonus
\nmust be continued in accordance with its terms and conditions in effect on the
\ndate of the Change in Control. If the Performance Period Bonus is not so
\ncontinued, notwithstanding the other provisions of this Section 5.4(c), the
\nPerformance Period Bonus shall be fully vested and paid in cash at target,
\nwithout proration, promptly following the Change in Control.<\/p>\n

(d) For purposes of this Section 5.4, a “prorated” Performance Period Bonus
\nmeans a bonus calculated by multiplying the Performance Period Bonus (or target
\nAward for purposes of Section 5.4(c)) by a fraction, which shall be the number
\nof complete months from the beginning of the Performance Period to the date of
\nSeparation from Service, divided by the number of months from the beginning of
\nthe Performance Period to December 31, 2013.<\/p>\n<\/p>\n

4<\/p>\n<\/p>\n

\n

(e) A Participant may elect to defer the receipt of a portion of his or her
\nPerformance Period Bonus to the DCP, provided that such deferral election is
\nmade in accordance with the DCP and Section 409A of the Code. Such deferred
\namounts shall then be subject to the terms and conditions of the DCP and
\nSection 409A of the Code, including, without limitation, limitations on
\nreceiving payments from the DCP.<\/p>\n

(f) For purposes of determining proration under Section 5.4(d), a paid or
\nunpaid leave of absence of the Participant shall not constitute a Separation
\nfrom Service of the Participant, except to the extent that the leave of absence
\nconstitutes a “separation from service” (as defined in Section 409A of the
\nCode). The Participant’s employment by an Affiliate shall be considered a
\nSeparation from Service on the date on which such Affiliate ceases to be an
\nAffiliate; provided that, in such event, any Performance Period Bonus shall be
\npaid, if payable, after the Performance Period as herein specified and subject
\nto the achievement of the Performance Measures.<\/p>\n

5.5. Six-Month Wait under Section 409A<\/em>. To the extent that a
\nPerformance Period Bonus is a non-exempt amount payable under a “nonqualified
\ndeferred compensation plan” (as defined in Code Section 409A) upon a Separation
\nfrom Service (other than death) and if the Participant is a “specified employee”
\n(as that term is defined in Code Section 409A and pursuant to procedures
\nestablished by the Company) on a Participant’s Separation from Service, then any
\nPerformance Period Bonus payable pursuant to Section 5.4(c)(i), (ii) or
\n(iii) will not be paid to the Participant during the six-month period
\nimmediately following the Separation from Service. Instead, the Performance
\nPeriod Bonus that would have been payable to the Participant shall be paid on
\nthe first day of the seventh month following the Participant’s Separation from
\nService.<\/p>\n<\/p>\n\n\n\n
VI.<\/strong><\/td>\nGENERAL PROVISIONS. <\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

6.1. Amendment and Termination<\/em>.<\/p>\n

(a) The Committee may at any time amend, suspend, discontinue or terminate
\nthis Program; provided, however, that no such amendment, suspension,
\ndiscontinuance or termination made after the end of the Performance Period shall
\nadversely affect the rights of any Participant to any Performance Period Bonus;
\nand provided further that any termination of this Program shall comply with
\nSection 409A of the Code except to the extent otherwise permitted by the
\nCommittee at such time. All determinations concerning the interpretation and
\napplication of this Section 6.1 shall be made by the Committee. On and after a
\nChange in Control, the Committee may not amend or terminate any Performance
\nPeriod Bonus in a manner that adversely affects such Performance Period Bonus
\nwithout the consent of the holder of the Performance Period Bonus.<\/p>\n

(b) In the case of Participants employed outside of the United States, the
\nCompany or its Affiliates may vary the provisions of this Program as deemed
\nappropriate to conform with, as required by, or made desirable by, local laws,
\npractices and procedures or, in their respective discretion, to accelerate
\npayment to any such Participant in order to pay taxes associated with Awards
\nthat are deemed to be includible in income prior to actual payment.<\/p>\n<\/p>\n

5<\/p>\n<\/p>\n

\n

6.2. Designation of Beneficiary<\/em>. In the event a Participant dies
\nwhile entitled to a payment under the Program, such payments shall be made to
\nthe Participant’s estate.<\/p>\n

6.3. Rights Unsecured<\/em>. The right of any Participant to receive a
\nPerformance Period Bonus shall constitute an unsecured claim against the general
\nassets of the Company. The Committee may, however, in the event of a Potential
\nChange in Control, determine to deposit an amount sufficient to pay the
\nPerformance Period Bonus for each Participant calculated as set forth in
\nSection 5.4(c) into a grantor trust, subject to the claims of the Company’s
\ncreditors in the event of the Company’s insolvency. The grantor trust shall
\nserve as a source of payment of the Performance Period Bonus calculated as set
\nforth in Section 5.4(c) if the Participant is involuntarily terminated by the
\nCompany without Cause, or terminates for a Change in Control Good Reason, after
\nthe Change in Control but prior to payment of the Performance Period Bonus. If
\nthe Change in Control does not occur prior to payment of the Performance Period
\nBonus and the Company pays the Performance Period Bonus after the end of the
\nPerformance Period to each Participant in an amount not less than the amount set
\nforth in Section 5.4(c), the Company may recoup the amount so deposited in the
\ngrantor trust or other segregated arrangement together with earnings thereon.\n<\/p>\n

6.4. Withholding Taxes<\/em>. The Company shall have the right to deduct
\nfrom each Performance Period Bonus any federal, state and local taxes required
\nby such laws to be withheld with respect to any payment of the Performance
\nPeriod Bonus.<\/p>\n

6.5. Compensation Recoupment Policy.<\/em> For those Participants who are
\nsubject to the Company’s Compensation Recoupment Policy as may be amended from
\ntime to time, Awards are subject to the Company’s Compensation Recoupment
\nPolicy.<\/p>\n

6.6. Miscellaneous<\/em>.<\/p>\n

(a) No Right of Continued Employment<\/em>. Nothing in this Program shall
\nbe construed as conferring upon any Participant any right to continue in the
\nemployment of the Company or any of its subsidiaries or Affiliates.<\/p>\n

(b) No Limitation on Corporate Actions<\/em>. Nothing contained in this
\nProgram shall be construed to prevent the Company or any Affiliate from taking
\nany corporate action which is deemed by it to be appropriate or in its best
\ninterest, whether or not such action would have an adverse effect on this
\nProgram or any awards made hereunder. No employee, Participant or other person
\nshall have any claim against the Company or any of its subsidiaries or
\nAffiliates as a result of any such action.<\/p>\n

(c) Nonalienation of Benefits<\/em>. Except as expressly provided herein,
\nno Participant shall have the power or right to transfer, anticipate, or
\notherwise encumber the Participant’s interest under this Program. The Company’s
\nobligations under this Program are not assignable or transferable except that
\nthe Company’s obligations hereunder shall become the obligations of a company
\nwhich acquires all or substantially all of the assets of the Company or any
\ncompany into which the Company may be merged or consolidated.<\/p>\n

(d) Severability<\/em>. If any provision of this Program is held
\nunenforceable, the remainder of the Program shall continue in full force and
\neffect without regard to such unenforceable provision and shall be applied as
\nthough the unenforceable provision were not contained in the Program.<\/p>\n<\/p>\n

6<\/p>\n<\/p>\n

\n

(e) Governing Law<\/em>. This Program shall be construed in accordance
\nwith and governed by the laws of the State of New York, without reference to the
\nprinciples of conflict of laws.<\/p>\n

(f) Section 162(m) and Section 409A of the Code<\/em>. To the extent that
\nany Award is intended to qualify as “performance-based compensation” within the
\nmeaning of Section 162(m) of the Code or is subject to Section 409A of the Code,
\nany provision, application or interpretation of this Program that is
\ninconsistent with such Sections shall be disregarded with respect to such Award,
\nas applicable. In no event shall the Company, any of its Affiliates, any of it
\nagents, or any member of the Board have any liability for any taxes imposed in
\nconnection with a failure of the Plan to comply with Section 409A of the Code.\n<\/p>\n

6.7. Change in Control Policy\/Employment Agreements<\/em>. This Program
\nshall not be subject to the Avon Products, Inc. Change in Control Policy. The
\nProgram shall be a long-term incentive program for purposes of any employment
\nagreement between the Company and a Participant.<\/p>\n

[Signature on Next Page] <\/em><\/p>\n<\/p>\n

7<\/p>\n<\/p>\n

\n

IN WITNESS WHEREOF<\/strong>, the Company has caused this Program to
\nbe executed on the 2nd<\/sup> day of March, 2011.<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
AVON PRODUCTS, INC.<\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Lucien Alziari<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name: Lucien Alziari<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title: SVP, HR<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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