EXHIBIT 10.7
BENEFIT RESTORATION PENSION PLAN
OF
AVON PRODUCTS, INC.
Effective as of January 1, 1994
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions 1
ARTICLE 2
Membership
2
ARTICLE 3
Amount and Payment of Benefits
3
ARTICLE 4
General Provisions 5
ARTICLE 5
Amendment or Termination 7
<PAGE 1>
BENEFIT RESTORATION PENSION PLAN
OF
AVON PRODUCTS, INC.
Introduction
This amendment and restatement of the Excess Benefit Pension
Plan of Avon Products, Inc., which is hereby renamed the Benefit
Restoration Pension Plan of Avon Products, Inc. (the "Plan"), has
been adopted by Avon Products, Inc. effective as of January 1,
1994. The Plan is designed to pay supplemental benefits to
certain Employees who have qualified or may qualify for benefits
under the Retirement Plan, as defined below.
All benefits payable under this Plan shall be paid out of
the general assets of the Company. The Company may establish a
trust in order to aid it in providing benefits due under the
Plan.
ARTICLE 1
Definitions
1.1 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.2 "Company" shall mean Avon Products, Inc. or any
successor by merger, purchase or otherwise, with respect to its
employees; or any other affiliated company authorized by the
Board of Directors to participate in the Plan.
1.3 "Compensation Committee" shall mean the Compensation
Committee of the Board of Directors of the Company.
1.4 "Effective Date" shall mean January 1, 1994.
1.5 "Employee" shall mean an individual who is employed by
the Company at any time on or after the Effective Date.
1.6 "Equivalent Actuarial Value" shall mean a benefit of
equivalent value when computed on the basis of the same mortality
table and rate or rates of interest and/or empirical tables which
are being used to determine the Member's Retirement Allowance
under the Retirement Plan.
1.7 "Member" shall mean any Employee or former Employee who
has become a participant in the Plan for so long as his benefits
under the Plan have not been fully distributed pursuant to the
Plan.
1.8 "Normal Retirement Date" shall mean the first day of
the calendar month next following the Member's attainment of age
65.
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1.9 "Plan" shall mean the Benefit Restoration Pension Plan
of Avon Products, Inc., as described herein or as hereafter
amended.
1.10 "Retirement Allowance" shall mean the accrued benefit
available under the Retirement Plan, determined without regard to
any benefit provided under Section 17 of that Retirement Plan, in
the event of a change of control.
1.11 "Retirement Board" shall mean the administrative board
appointed to administer the Retirement Plan.
1.12 "Retirement Plan" shall mean the Employees' Retirement
Plan of Avon Products, Inc. as in effect on the Effective Date
and as may thereafter be amended from time to time.
1.13 "Supplemental Benefit" shall mean the accrued
retirement benefit payable under the Plan.
1.14 "Supplemental Executive Retirement Plan" or "SERP"
shall mean the Supplemental Executive Retirement Plan and
Supplemental Life Plan of Avon Products, Inc. as in effect on the
Effective Date and as may thereafter be amended from time to
time.
ARTICLE 2
Membership
2.1 Eligibility
(a) Every Employee who is a participant in the
Retirement Plan shall become a Member of this Plan on the
first day of the calendar month coincident with or next
following the date his accrued Retirement Allowance is
limited as a result of the application of Code Section 415
or 401(a)(17).
(b) Each Employee who was a Member on December 31,
1993 shall continue to be a Member as of the Effective Date.
2.2 Termination of Membership
A Member's participation in the Plan shall terminate on the
later of the date of the Member's death or termination of
employment with the Company or the date benefits payable under
the Plan have been fully distributed.
<PAGE 3>
ARTICLE 3
Amount and Payment of Benefits
3.1 Amount of Supplemental Benefit
The annual amount of Supplemental Benefit payable with respect to
a Member, expressed as a single life annuity, shall be equal to:
(a) the amount of the Retirement Allowance that would
be payable in the form of a single life annuity if (i) the
limitations of Code Section 415 were not applicable, (ii) if the
Member has not been a participant in the Supplemental Executive
Retirement Plan of Avon Products, Inc, the annual compensation
limitations under Code Section 401(a)(17) were equal to $250,000,
or, if the Member was a participant under the Supplemental
Executive Retirement Plan of Avon Products, Inc., the annual
compensation limitations under Code Section 401(a)(17) were not
applicable, and (iii) the definition ofcompensation under the
Retirement Plan included compensation electively deferred by the
Member for the plan year (as deferred compensation plan or
program maintained by the Company; less
(b) the Retirement Allowance that is actually payable
to the Member.
For purposes of this Plan Section 3.1, if any benefit under
Section 3.1(b) is payable in a form other than a single life
annuity or at a time other than the time Supplemental Benefits
are payable under this Plan, such benefit shall be converted to a
single life annuity of Equivalent Actuarial Value effective as of
the day Supplemental Benefits would commence under this Plan.
3.2 Normal and Optional Forms of Payment
(a) Except as otherwise provided for married Members
pursuant to paragraph (b) below, or unless an optional form
of Supplemental Benefit has been requested by the Member
under paragraph (c) and approved by the Retirement Board,
the annual supplemental benefit provided pursuant to Section
3.1 shall be payable in monthly installments for the life of
the Member only, ending with the last monthly payment during
the month of the Member's death.
(b) Unless an optional form of benefit has been
requested by the Member under paragraph (c) and has been
approved by the Retirement Board, the automatic form of
payment of a Supplemental Benefit to a Member who is married
at the date the applicable benefit begins shall be a joint
and 50% survivor benefit. Such benefit shall be of
Equivalent Actuarial Value of a single life annuity payable
for the life of the Member and payable during the lifetime
of the Member with the provision that after the Member's
death an annual Supplemental Benefit shall be paid to the
surviving spouse to whom the Member was married at the date
the Member's benefits commenced, but only if such person is
also married to the Member at the time of the Member's
death, equal to one-half the annual Supplemental Benefit
payable during the Member's life.
<PAGE 4>
(c) Any Member may, by written notice received by a
member of the Retirement Board at least six months prior to
the date that his Supplemental Benefit would commence,
request that such benefit be converted into an optional form
of benefit of Equivalent Actuarial Value in accordance with
any optional form of payment as may be permitted under the
Retirement Plan, including a lump sum benefit. Such request
shall be subject to approval of the Retirement Board which
approval may be evidenced by the written consent of any two
members of the Retirement Board. The six month notice
requirement may be reduced with the consent of the
Retirement Board.
(d) The optional form of Supplemental Benefit
requested and approved under paragraph (c) shall become
effective on the first day of the month for which the
Member's Supplemental Benefit otherwise would be payable.
If the Member dies, or the designated beneficiary dies
before the first day of the month for which the Member's
Supplemental Benefit is payable under a contingent annuitant
option, such option shall thereby be revoked.
(e) A Member's Supplemental Benefit shall commence or
be payable on the date payment of his Retirement Allowance
commences or is payable.
3.3 Benefit Payable to the Surviving Spouse of a Member
If a Member's surviving spouse becomes entitled to a
spouse's benefit pursuant to Section 4 of the Retirement Plan and
such benefit is reduced by reason of the limitations of Section
415 or 401(a)(17) of the Code, a Supplemental Benefit shall be
payable under this Plan to such spouse. The Supplemental Benefit
payable to such spouse shall be determined in the manner
described in Section 3.1 by substituting the benefits payable to
the spouse in lieu of the benefits payable to the Member
thereunder.
3.4 Restoration to Service
If a Member who retired or otherwise terminated employment
with the Company is restored to service, any payment of his
Supplemental Benefit shall cease. Upon his subsequent retirement
or termination, his Supplemental Benefit shall be recomputed in
accordance with the provisions of this Article 3 and shall be
reduced by the Equivalent Actuarial Value of the Supplemental
Benefit payments he received prior to the resumption of
participation in the Plan, if any.
<PAGE 5>
ARTICLE 4
General Provisions
4.1 Administration
The Administration of the Plan, including but not limited to
the exclusive and discretionary power to interpret and carry out
its provisions, is the responsibility of the Retirement Board,
and the provisions of Section 8 of the Retirement Plan are hereby
incorporated by reference.
4.2 Funding
All amounts payable in accordance with this Plan shall
constitute a general unsecured obligation of the Company. Such
amounts, as well as any administrative costs relating to the
Plan, shall be paid out of the general assets of the Company,
unless the Company establishes, in its sole discretion, a trust
the assets of which will be used as a source of payment for some
or all benefits due hereunder. In the event a trust is
established for some or all the benefits payable hereunder, the
trust shall not be considered to fund, within the meaning of
ERISA, the benefits under this Plan.
4.3 No Contract of Employment
The establishment of the Plan shall not be construed as
conferring any legal rights upon any person for a continuation of
employment, nor shall it interfere with the rights of the Company
to discharge any employee and to treat him without regard to the
effect which such treatment might have upon him as a Member of
the Plan.
4.4 Facility of Payment
In the event that the Retirement Board shall find that a
Member is unable to care for his affairs because of illness or
accident, the Retirement Board may direct that any benefit
payment due him under this Plan, unless claim shall have been
made therefor by a duly appointed legal representative, be paid
to his spouse, a child, a parent or other blood relative, or to a
person with whom he resides, and any such payment so made shall
be a complete discharge of the liabilities of the Company
therefor.
4.5 Withholding Taxes
The Company shall have the right to deduct from each payment
to be made under the Plan any required withholding taxes.
<PAGE 6>
4.6 Nonalienation
Subject to any applicable law, no benefit payable under the
Plan shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, and
any attempt so to do shall be void, nor shall any such benefit be
in any manner liable for or subject to garnishment, attachment,
execution or levy, or liable for or subject to the debts,
contracts, liabilities, engagement or torts of the Member.
4.7 Forfeiture for Cause
In the event that a Member shall at any time be convicted of
a crime involving dishonesty or fraud on the part of such Member
in his relationship with the Company, all benefits that would
otherwise be payable to him under the Plan shall be forfeited.
4.8 Claims Procedure
In the event that a Member or his beneficiary claims that he
has improperly been denied an appropriate Supplemental Benefit
under this Plan he shall be entitled to the Claim Review
Procedure set forth in the Retirement Plan following any denial
of his claims by the Company.
4.9 Construction
(a) Except as otherwise provided by applicable law,
all rights hereunder shall be governed by and construed in
accordance with the laws of the State of New York and,
except to the extent otherwise herein provided, consistent
with the provisions of the Retirement Plan.
(b) The masculine pronoun shall mean the feminine
wherever appropriate.
ARTICLE 5
Amendment or Termination
The Compensation Committee reserves the right to modify or
amend, in whole or in part, or to terminate this Plan at any
time. However, no modification, amendment or termination of the
Plan shall adversely affect the right of any Member, his
surviving spouse or his beneficiary to receive the benefits
accrued under the Plan in respect of such Member as of the date
of modification, amendment or termination.
<PAGE 7>
IN WITNESS WHEREOF, the Company has executed this Plan as of
the day of March, 1995.
AVON PRODUCTS, INC.
By:
James E. Preston
Title: Chairman and Chief Executive
Officer
ATTEST:
Ward M. Miller, Jr.
Title: Secretary
[CORPORATE SEAL]