[Company Letterhead] May 18, 2011 Ms. Kimberly Ross [Address]<\/p>\n
Dear Kimberly:
\nWe are pleased to offer you the position of Executive Vice President and Chief
\nFinancial Officer for Avon Products, Inc. (“Avon”) reporting to Andrea Jung,
\nChairman and CEO. Your annual base salary will be $750,000. Although this
\nsalary is quoted on an annual basis, it does not imply a specific period of
\nemployment.
\nYou will be eligible to participate in Avon’s annual incentive program available
\nto Executive Vice President level associates beginning with the 2012 plan year.
\nWe will recommend to the Compensation Committee that your annual target award be
\n90% of your earned base salary for the performance period, with the opportunity
\nfor a maximum payout of 200% of target. Annual awards are contingent on relevant
\nindividual and business performance goals being achieved. Payment, if any, will
\nbe in 2013.
\nShould joining Avon result in the forfeiture of your 2011 annual incentive cash
\naward with your current company (Ahold), Avon will pay you a cash bonus equal to
\nthe amount you forfeited, calculated as your current annual incentive target
\nmultiplied by the payout percentage as disclosed in Ahold’s 2011 annual report,
\nless any payment made to you for such bonus by Ahold and converted from EURO to
\nUSD using a 2011 average exchange rate. This payment will be made within 30 days
\nof Ahold’s annual report public filing date.
\nYou will be eligible to participate in the long-term incentive program available
\nto all Executive Vice President level associates. Long-term incentives are
\ncurrently delivered 70% in performance-based restricted stock units (“PRSUs”)
\nand 30% in performance-based cash. PRSUs are generally settled in shares of Avon
\ncommon stock. The number of PRSUs that vest and the payout percentage for
\nperformance cash are subject to performance against pre-set goals. Cycles are
\ngenerally three years in duration. We will recommend to the Compensation
\nCommittee that your target award be 230% of base salary. If your hire date with
\nAvon is prior to December 1, 2011, you will receive your first grant in 2011 and
\nparticipate in the 2011-2013 performance cycle. If your hire date is on or after
\nDecember 1, 2011, you will receive your first regular award in 2012 and
\nparticipate in the 2012-2014 performance cycle.
\nWe recognize that you will be forfeiting a significant amount of value in
\nunvested equity and other benefits when you leave your current employer. In
\norder to help offset this loss, we<\/p>\n
Kimberly Ross May 18, 2011 Page 2
\nwill recommend to the Compensation Committee that you receive the cash sign-on
\nbonus and time-based restricted stock unit (“RSU”) award as described in the two
\nparagraphs below.
\nWe will provide a total cash sign-on bonus of $300,000, paid in two equal
\ninstallments less applicable taxes. The first installment (50% of the award) is
\npayable within 30 days of your start date with Avon. The second installment is
\npayable as soon as practicable after your one-year anniversary with Avon but no
\nlater than the end of such calendar year. Should you leave Avon voluntarily
\nwithin one year of your first date of employment, you will be required to repay
\nthe first installment of this sign-on bonus to Avon, prorated to reflect the
\nnumber of months you have not worked over the twelve month period. Such
\nrepayment would be due within 45 days of your termination of employment.
\nWe will also recommend that you receive a one-time RSU award in accordance with
\nAvon’s off-cycle granting policy under the Avon Products Inc. 2010 Stock
\nIncentive Plan. Should your start date be prior to December 1, 2011, then this
\nRSU award will be granted at a value equal to $1,800,000 and vest 50% per year
\nover two years. If your start date is on or after December 1, 2011, this RSU
\naward will be granted at a value equal to $2,400,000 and vest 40% on the first
\nanniversary of grant, 40% on the second anniversary of grant and 20% on the
\nthird anniversary of grant. Settlement is generally in shares of Avon common
\nstock.
\nAs a senior executive of Avon, you will need to adhere to stock ownership
\nguidelines, which encourage executive share ownership and align executive
\ninterests with those of shareholders consistent with best practices among
\nhigh-performing companies. You will be required to own Avon stock equal to three
\ntimes base salary within five years from the date of hire.
\nAs you are currently working as an expatriate, Avon will repatriate you to the
\nUnited States and provide the repatriation benefits as described under our
\nLong-Term International Assignment Policy. Should you accept this offer, Avon
\nwill also provide assistance to you in finding and either renting or purchasing
\na home in the New York area, provided you decide to rent or purchase a home
\nwithin twelve months from your start date with Avon. This assistance includes
\nhome finding support and reasonable closing costs associated with a home
\npurchase. Should you decide to purchase a home, in order to assist with your
\nmove to a higher cost-of-living area, Avon will provide a special bonus in three
\ninstallments, intended to reimburse you for three percentage points of interest
\non your mortgage in year one, two percentage points of interest on your mortgage
\nin year two and one percentage point of interest on your mortgage in year three
\n(up to a mortgage of $1,000,000). The first, second and third payments will be
\nmade to you in approximately 12 months, 24 months and 36 months after you
\npurchase your home in New York, respectively. Should you decide to rent a home,
\nyou will instead receive a special bonus in line with the rental subsidy benefit
\nprovided under our relocation policy. Should you leave prior to your first
\nanniversary date, you will not be eligible for these payments. Should you leave
\nthe company after your first anniversary, but prior to any of the payment dates
\nreference above, you will receive a<\/p>\n
Kimberly Ross May 18, 2011 Page 3
\nprorated bonus reflecting the time you have been with Avon. In addition, Avon
\nwill also provide tax preparation services for the first calendar year of your
\nrelocation.
\nYou will be eligible to participate in the benefit programs generally available
\nto all associates who satisfy certain eligibility requirements as of your date
\nof hire. Accordingly, you will be eligible for our health and welfare benefits
\nsuch as medical, dental, vision and long-term disability plans as of your date
\nof hire. In addition, assuming you satisfy the eligibility requirements, the
\nAvon Personal Savings Account Plan (Avon’s 401(k) plan) is available to you on
\nyour date of hire. Also, assuming you are in an eligible class and you satisfy
\nthe eligibility requirements under the Avon Products, Inc. Personal Retirement
\nAccount Plan (the “PRA”), Avon’s retirement plan, we will automatically open a
\nPRA account for you after you complete one year of service. The PRA is a cash
\nbalance pension account designed to provide you with a source of retirement
\nincome if you should leave Avon at any time after becoming vested. You will also
\nbe covered under other Avon compensation plans and policies in which similarly
\nsituated Avon executives participate, including Avon’s change in control policy
\nand compensation recoupment policy.
\nUnder the Avon Products, Inc. Severance Pay Plan (the “Severance Plan”),
\ngenerally, you are eligible to receive 24 months base pay as severance in the
\nform of salary continuation. Please note that payment of your severance benefits
\nwill be in accordance with the provisions of Section 409A, including any
\napplicable six-month delay for certain payments made upon termination of
\nemployment. In order to be eligible for severance benefits under the Severance
\nPlan, you will be required to sign a general release of all claims. The
\nSeverance Plan may be amended at any time.
\nYou will be eligible for a transportation allowance equal to $11,000 per year
\nand paid monthly (approximately $916.67 per month). You will also be eligible
\nfor a financial planning allowance up to $12,500 per year. This allowance will
\nbe reduced to $9,500 in your first calendar year in order to account for the
\nfact that tax filing support will be provided as part of your relocation to New
\nYork, as described above. These benefits are subject to the terms of Avon’s
\nexecutive perquisite program as in effect from time to time.
\nYou will be eligible for four weeks of vacation. If you leave Avon’s employment
\nyou will be paid for any unused vacation earned and not used until the
\ntermination date. Your employment at Avon is contingent upon your passing a
\nsatisfactory background investigation, reference checks, compliance with
\nimmigration law and passing a drug screening test. As you may be aware,
\nimmigration law requires that Avon verify the employment authorization status of
\nall new employees. Therefore, on your first day you will be asked to provide
\ndocuments which establish your identity and employment eligibility. We will
\nforward a list of acceptable documents for verification purposes in due course.
\n
\nAvon maintains a drug free work environment and requires that all new hires pass
\na drug screen as a condition of employment. The results of this test must be
\nreceived prior to your date of employment; you should allow 3-4 business days
\nfor the results to be processed.<\/p>\n
Kimberly Ross May 18, 2011 Page 4
\nKimberly, I very much look forward to your joining Avon. We appreciate that you
\nhave an obligation to provide a certain amount of notice to your current
\nemployer, however, I am hopeful that your start date with Avon is as soon as
\npossible but not later than the end of this calendar year (unless mutually
\nagreed). I am confident your career at Avon will be rewarding. If you have any
\nquestions, please feel free to call me at [telephone number].<\/p>\n
Sincerely,
\n\/s\/ Lucien Alziari
\nLucien Alziari Senior Vice President, Human Resources and Corporate
\nResponsibility<\/p>\n
cc: Andrea Jung, Chief Executive Officer Gina Fitzsimons, Executive
\nDirector, Global Compensation and Benefits<\/p>\n
Accepted and Agreed to:<\/p>\n
\/s\/ Kimberly Ross May 20, 2011 Kimberly
\nRoss Date<\/p>\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-39761","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\/39761","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=39761"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39761"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39761"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}