{"id":38643,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/compensation-plan-for-non-employee-directors2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"compensation-plan-for-non-employee-directors2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/compensation-plan-for-non-employee-directors2.html","title":{"rendered":"Compensation Plan for Non-Employee Directors"},"content":{"rendered":"<pre>\n\n\n                                                  Adopted by Board\n                                                  of Directors 3\/6\/97\n\n\n                              AVON PRODUCTS, INC. \n\n                     COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS\n\n                             (Effective May 1, 1997)\n\n\nI.     GENERAL PROVISIONS\n\n     1.1  Purpose   The purpose of the Avon Products, Inc. Compensation\nPlan for Non-Employee Directors (the 'Plan') is to provide a\ncomprehensive revised compensation program which will attract and retain\nqualified individuals who are not employed by Avon Products, Inc. or its\nsubsidiaries (the 'Company') to serve on the Company's Board of\nDirectors.  In particular, the Plan aligns the interests of such\ndirectors with those of the Company's shareholders by providing that a\nsignificant portion of such compensation is directly linked to increases\nin the value of the Company's Common Stock.\n\n     1.2  Relationship to 1993 Stock Incentive Plan   The Company's 1993\nStock Incentive Plan ('1993 Plan') which was approved by the Company's\nshareholders at the Annual Meeting of Shareholders on May 6, 1993,\nprovides for the award of stock incentives, including stock options and \nrestricted stock, to key employees of the Company but not to non-\nemployee directors.  Accordingly, this Plan is subject to the approval\nby Company shareholders of an amendment to the 1993 Plan at the Annual\nMeeting of Shareholders scheduled for May 1, 1997, which amendment\nprovides that awards pursuant to the 1993 Plan may also be made to non-\nemployee directors.  Subject to such approval, the Plan will become\neffective as of May 1, 1997.\n\n     1.3  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 they are defined therein. \n\n     1.4  Prior Compensation Program:  Transition   Prior to the\neffective date of this Plan, the compensation program for the Company's\nnon-employee directors principally consisted of an annual retainer\npayable wholly in cash, fees for attendance at committee meetings and\nspecial Board meetings, and a retirement plan.  Such program remains\napplicable for all periods of service prior to May 1, 1997 with the\nformer annual cash retainer remaining in effect until June 30, 1997.\nNon-employee directors who as of May 1, 1997 are within five years of\nage 70 may elect to continue to accrue benefits under the terms of the\n\n\n\n\n\n\n\nretirement plan.  The retirement plan, however, will be discontinued for\nall other directors as of May 1, 1997 with the actuarial value of\nbenefits accrued to that date converted into a grant of restricted stock\nas set forth in Section 4.2 below. \n\n\nII.    ANNUAL RETAINER AND MEETING FEES\n\n       2.1  Annual Retainer   Each non-employee director shall be\nentitled to receive an annual retainer consisting of (a) $25,000 payable\nin cash and (b) Restricted Stock having a value as of the date of grant\nof approximately $25,000.  The cash portion shall be payable in\nquarterly installments of $6,250 each, effective July 1, 1997.  \n\n       2.2  Annual Restricted Stock Award   As part of the Annual\nRetainer compensation, each non-employee director will receive an award\nof shares of Restricted Stock immediately following each Annual Meeting\nof Shareholders, with the first such award being made immediately after\nthe Annual Meeting held May 1, 1997.  The number of shares so granted\neach year will be determined by dividing the sum of $25,000 by the\nclosing price of a share of the Company's Common Stock on the New York\nStock Exchange averaged over 10 consecutive trading days, ending with\nthe trading day immediately preceding the applicable Annual Meeting. \nAll grants of Restricted Stock shall be subject to the terms and\nconditions set forth in Article IV below.  \n\n       2.3  Meeting Fees   Each non-employee director shall receive a\nfee of $1,000, payable in cash, for each meeting of a committee of the\nBoard of Directors that he or she attends and each special meeting of\nthe Board of Directors that he or she attends.  No fee is payable with\nrespect to attendance at a regular meeting of the Board of Directors,\nincluding the annual organizational meeting occurring immediately after\nan Annual Meeting of Shareholders.  \n\n     2.4  Retainer Fee for Committee Chairs   A non-employee director\nappointed to chair any committee of the Board of Directors shall be paid\nan annual retainer of $3,000 in cash, such payment to be made within 30\ndays following the effective date of appointment.  \n\n\n\n\n\n\n\n\n       2.5  Deferred Cash Alternative   Each non-employee director\nannually may elect to have all or a part of his or her cash\ncompensation, including annual retainers and meeting fees, deferred for\npayment in accordance with the provisions of the Deferred Compensation -\nStock Credit Plan.  All such elections for each year shall be made prior\nto the beginning of the year.  \n\n\nIII.  STOCK OPTIONS\n\n      3.1  Annual Grants of Stock Options   Except as provided in\nSection 3.5 below, each non-employee director on the effective date of\nthe Plan shall be awarded an option ('Option') to purchase 2,000 shares \nof the Company's Common Stock ('Stock') if he or she continues as a\ndirector.  As of the close of business on the date of each successive\nAnnual Meeting of Shareholders held thereafter, each non -employee\ndirector who then continues as a director (whether or not re-elected at\nany such meeting) shall be granted an additional Option to purchase\n2,000 shares.  All Options granted pursuant to the Plan shall be non-\nqualified Options and shall expire ten (10) years from the date of\ngrant. \n\n       3.2  Option Exercise Price   The per share price to be paid to\nexercise an Option shall be the 'Fair Market Value' of the Stock on the\ndate of grant which, in accordance with the 1993 Plan, shall be the\nclosing price for the Stock as traded on the New York Stock Exchange on\nthe next preceding date during which trading occurred.  \n \n       3.3  Vesting and Exercise of Options   Each Option will become\nexercisable one year after the date of grant and may be exercised for a\nperiod of ten (10) years after the date of grant.  In the event of\ndeath, a vested Option may be exercised by the estate of the non-\nemployee director.  \n\n       3.4  Method of Exercise and Purchase   An Option shall be\nexercised by giving written notice to the Secretary, or an Assistant\nSecretary, of the Company specifying the number of shares to be\npurchased and the particular grant being exercised.  Such notice shall\nbe accompanied by a check as payment of the exercise price of the shares\nwith respect to which such Option, or portion thereof, is exercised.\nAlternatively, such notice may include an election to have such shares\ndelivered to a broker-dealer with whom arrangements have been made to\nimmediately sell the shares and withhold from the net sale proceeds the\nfull purchase price amount to be delivered to the Company.  The Company\nmay also require payment of all withholding taxes to exercise an Option,\nwhether or not a broker-dealer arrangement has been used.  \n\n       3.5   Continued Participation in Retirement Plan   A non-employee \ndirector who as of the effective date, is within five years of \nretirement due to attainment of age 70, is eligible to elect to continue \nto participate in the existing Retirement Plan for Non-Employee \nDirectors ('Retirement Plan') and thus accrue additional retirement \nbenefits for periods of service subsequent to the effective date.  No \nstock options will be granted to a director who so elects to continue in \nthat Plan.\n\n\n\n\n\n\nIV.    RESTRICTED STOCK\n\n       4.1  Annual Retainer Grants of Restricted Stock   Each non-\nemployee director on the effective date of the Plan who continues as a \ndirector shall be awarded shares of Stock that are restricted as to \ntransfer ('Restricted Stock').  At the close of business on the date of \neach successive Annual Meeting of Shareholders held thereafter, each \nnon-employee director who then continues as a director (whether or not \nre-elected at any such meeting) shall be granted additional shares of \nRestricted Stock.  The number of shares of Restricted Stock to be \ngranted at the effective date and at each successive Annual Meeting of \nShareholders will have a Fair Market Value of $25,000 on the date of \ngrant.  The Fair Market Value per share shall be deemed to be the \nclosing price of a share of Company Common Stock as reported on the New \nYork Stock Exchange averaged over the ten trading days next preceding \nthe date of grant.  A fractional share resulting from such calculation \nwill be rounded to the nearest whole share.  \n\n       4.2  Special Grants of Restricted Stock\n\n           (a)  Each non-employee director whose participation in the \nRetirement Plan is automatically discontinued as of the effective date \nof the Plan shall receive an award of shares of Restricted Stock having \na Fair Market Value equal to the actuarial present value of his or her \nretirement benefits accrued as of that date. \n\n           (b)  Each non-employee director who is eligible to continue \nto participate in the Retirement Plan after the effective date of the \nPlan may elect to convert all or one-half of the actuarial present value \nof his or her accrued retirement benefits into shares of Restricted \nStock having an equivalent Fair Market Value.  Such election would be \nirrevocable, and must be made prior to such effective date.  \n\n           (c)  In determining the actuarial present value of accrued \nretirement benefits it shall be deemed that the director has retired as \nof the effective date of the Plan and commenced to receive such benefits \nas soon thereafter as would be prescribed by the Retirement Plan.  All \nawards pursuant to this Section 4.2 shall be made as of the close of \nbusiness on the effective date of the Plan and shall be valued in the \nsame manner as set forth in Section 4.1\n\n       4.3  Restrictions and Terms and Conditions   All shares of \nRestricted Stock granted under this Plan may not be sold, traded, \nassigned, transferred or otherwise encumbered until and unless \nrestrictions are removed.  The Company shall retain custody of all \nshares until restrictions are removed or may hold such shares by book \nentry registration.  Each director granted Restricted Stock shall have \nall the rights of a Shareholder with respect to such shares, including \nthe right to vote such shares and receive dividends and other \ndistributions.\n\n\n\n\n\n\n\n       4.4  Removal of Restrictions   No shares of Restricted Stock will \nbecome free of restrictions and non-forfeitable for a director until the \ntermination of the director's services as a member of the Company's \nBoard of Directors.  Shares shall become non-forfeitable at the earliest \nto occur of:\n\n           (a) the director's death or permanent disability,\n \n           (b) mandatory retirement, pursuant to Company policy, \n               effective at the end of the term of service during which \n               the director has attained age 70, \n \n           (c) resignation, or failure to stand for re-election, prior \n               to such mandatory retirement provided that such action \n               must have the consent of at least 80% of all directors \n               then on the Board, with the affected director \n               abstaining, or\n \n           (d) the occurrence of a Change of Control as defined in the \n               1993 Stock Incentive Plan.\n\n\n     Termination of service as a director for any other reason shall \nresult in forfeiture of his or her shares of Restricted Stock.  \nForfeiture of shares will also result with respect to a director who, \nwithout the Company's written consent, becomes employed by, or provides \nconsulting services to, a major direct selling company substantially \nengaged in a business which is competitive to a principal business \nconducted by the Company.  The Company may require payment of all \nwithholding taxes that may become due upon the removal of restrictions. \n\n\nV.    ADDITIONAL PROVISIONS\n\n      5.1  The Plan shall be administered by the Compensation Committee \nof the Board of Directors which shall have the power to interpret the \nPlan and amend it from time to time as it deems proper.  To the fullest \nextent practicable, however, the terms and conditions of the 1993 Stock \nIncentive Plan shall be applicable to this Plan. \n\n      5.2  The number of shares of Stock covered by any Option or award \nof Restricted Stock shall be proportionately adjusted for any increase \nor decrease in the number of issued shares of Stock resulting from a \nsplit or subdivision of shares, a combination of shares, or the payment \nof a stock dividend. \n\n      5.3  All Options shall become fully exercisable and all shares of \nRestricted Stock will become vested, upon the occurrence of a Change of \nControl as defined in the 1993 Stock Incentive Plan. \n\n      5.4  The Plan shall be governed by and subject to the laws of the \nState of New York and applicable Federal laws.\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":[9539,9544],"class_list":["post-38643","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__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38643","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=38643"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38643"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38643"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}