-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LeTz+i6gJdaoa6FmGv8ow6P2ppzbCAHnPxeJjpMyXQnMEPEesaaWgkuNpARBLB7v OybBabgQzvWRwn50ANb4Xw== 0000008868-98-000021.txt : 19981023 0000008868-98-000021.hdr.sgml : 19981023 ACCESSION NUMBER: 0000008868-98-000021 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19981022 EFFECTIVENESS DATE: 19981022 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AVON PRODUCTS INC CENTRAL INDEX KEY: 0000008868 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 130544597 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-65989 FILM NUMBER: 98728915 BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105-0196 BUSINESS PHONE: 2122825000 MAIL ADDRESS: STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105-0196 S-8 1 S-8 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on October 21, 1998. Registration No. 333-______ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AVON PRODUCTS, INC. (Exact name of registrant as specified in its charter) New York 13-0544597 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1345 Avenue of the Americas New York, NY 10105-0196 (Address of principal executive offices) AVON PRODUCTS, INC. DEFERRED COMPENSATION PLAN (Full title of the Plan) WARD M. MILLER, JR., Esq. Senior Vice President, General Counsel and Secretary Avon Products, Inc. 1345 Avenue of the Americas New York, NY 10105-0196 (Name and address of agent for service) (212) 282-5000 (Telephone number, including Area Code, of Agent for Service) --------------------- Copies of Communications to: KATHERINE M. KOOPS, Esq. Powell, Goldstein, Frazer & Murphy LLP Sixteenth Floor 191 Peachtree Street, N.E. Atlanta, Georgia 30303 (404) 572-6600 ------------------------- CALCULATION OF REGISTRATION FEE Title of Securities Amount Proposed Maximum Proposed Maximum Amount of to be to be Offering Price per Aggregate Offering Registration Registered Registered Unit Price Fee Avon Products, Inc. $75,000,000(1) 100%(2) $75,000,000(2) $22,125 (2) (1) The Avon Products, Inc. Deferred Compensation Plan Obligations are unsecured obligations of the Registrant to pay benefits in the future in accordance with the terms of The Avon Products, Inc. Deferred Compensation Plan (the "Plan") for a select group of eligible employees. (2) Estimated solely for the purpose of determining the registration fee. PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS The documents containing the information specified in Part I of the Instructions to the Registration Statement on Form S-8 will be sent or given to employees of the Registrant as required by Rule 428(b)(1) promulgated under the Securities Act of 1933, as amended (the "Securities Act"). I- PART II Item 3. Incorporation of Certain Documents by Reference. The following documents previously filed by the Company with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated herein by reference: (1) Annual Report on Form 10-K for the year ended December 31, 1997 ( Commission File No. 1-04881); (2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 (Commission File No. 1-04881); (3) Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (Commission File No. 1-04881); and (4) Current Report on Form 8-K filed with the Commission on March 18, 1998 (Commission File No. 1-04881). All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the date upon which this offering is terminated shall be deemed to be incorporated by reference herein and to be part hereof from the date any such document is filed. II-1 Item 4. Description of Securities. The Deferred Compensation Plan Obligations (the "Obligations") are unsecured general obligations of the Registrant to pay benefits in the future in accordance with the terms of the Registrant's Deferred Compensation Plan (the "Plan"). Under the Plan, a participant may elect to defer a portion of his or her compensation otherwise payable to the participant. Deferred amounts will be credited with rates of return selected by the participant, including a Registrant stock fund rate of return, in accordance with investment elections made by a participant. Benefits under the Plan are generally payable upon termination of employment, retirement or death. The form of payment will be selected by the participants of the Plan and will be in either a lump sum or annual installments. Benefits will be paid in cash. Under the Plan, a participant's right to the Obligations cannot be transferred, assigned, subject to garnishment, attachment or other legal equitable process without the prior written consent of the Company or by operation of law. The Obligations are not convertible into another security of the Registrant. No trustee has been appointed having the authority to take action with respect to the Obligations and each participant will be responsible for acting independently with respect to, among other things, the making of investment elections and giving of notices. The Registrant may modify, amend or terminate the Plan at any time. No such modifications or amendment shall have the effect of retroactively changing or depriving any participants of benefits already accrued under the Plan. All benefits provided under the Plan will be paid from the general assets of the Registrant and no separate fund has been established to secure payment. Item 5. Interests of Named Experts and Counsel. Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia, has rendered an opinion regarding the legality of the Obligations registered hereby. II-2 Item 6. Indemnification of Directors and Officers. Article XII of the By-Laws of Avon Products, Inc. provides as follows: Section 1. Indemnification-Third Party and Derivative Actions. (a) The corporation shall indemnify any person made, or threatened to be made, a party to an action or proceeding, whether civil or criminal (other than one by or in the right of the corporation to procure a judgment in its favor), including an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director, officer or employee of the corporation served in any capacity at the request of the corporation, by reason of the fact that he is or was a director or officer of the corporation, or is or was serving such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, including excise taxes, amounts paid in settlement and expenses, including attorney's fees, incurred in connection with any such action or proceeding, or any appeal therein, provided that no indemnification may be made to or on behalf of such person if a judgment or other final adjudication adverse to such person establishes that (i) his acts were committed in bad faith or were the result of his active or deliberate dishonesty and were material to such action or proceeding or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. (b) The corporation shall indemnify any person made, or threatened to be made, a party to an action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of any other corporation of any type or kind, domestic or foreign, or of any partnership, joint venture, trust, employee benefit plan or other enterprise, against amounts paid in settlement and expenses, including attorneys' fees, incurred in connection with such action, or any appeal therein, provided that no indemnification may be made to or on behalf of such person if (i) his acts were committed in bad faith or were the result of his active and deliberate dishonesty and were material to such action or (ii) he personally gained in fact a financial profit or other advantage to which he was not legally entitled. (c) The termination of any civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such person has not met the standard of conduct set forth in this Section 1. Section 2. Payment of Indemnification; Repayment. (a) A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in Section 1 of this Article shall be entitled to indemnification as authorized in such Section. (b) Any indemnification under Section 1 of this Article, unless ordered by a court, shall be made by the corporation in such manner as provided by law. II- (c) Expenses incurred by a person referred to in Section 1 of this Article in defending a civil or criminal action or proceeding shall be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount in case he is ultimately found, in accordance with this Article, not to be entitled to indemnification or, where indemnity is granted, to the extent the expenses so paid exceed the indemnification to which he is entitled. (d) Any indemnification of a person under Section 1 of this Article, or advancement of expenses under Section 2(c) of this Article, shall be made promptly, and in any event within 60 days, upon the written request of such person. Section 3. Enforcement; Defenses. The right to indemnification or advancement of expenses granted by this Article shall be enforceable by the person in question in any court of competent jurisdiction if the corporation denies such request, in whole or in part, or if no disposition thereof is made within 60 days. Such person's expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advancement of expenses under Section 2(c) of this Article where the required undertaking has been received by the corporation) that the claimant has not met the standard of conduct set forth in Section 1 of this Article, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation to have made a determination that indemnification of the claimant is proper, nor the fact that there has been an actual determination by the corporation that indemnification of the claimant is not proper, shall be a defense to the action or create a presumption that the claimant is not entitled to indemnification. Section 4. Survival; Savings Clause; Preservation of Other Rights. (a) The foregoing indemnification provisions shall be deemed to be a contract between the corporation and each person who serves in such capacity at any time while these provisions as well as the relevant provisions of the New York Business Corporation Law are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a contract right may not be modified retroactively without the consent of such person. (b) If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each such person against judgments, fines, amounts paid in settlement and expenses, including attorneys' fees incurred in connection with any actual or threatened action by or in the right of the corporation, or any appeal therein, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the full extent permitted by applicable law. II- (c) The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of shareholders or directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer or employee of the corporation and shall inure to the benefit of the heirs, executors and administrators of such a person. The corporation is hereby authorized to provide further indemnification if it deems it advisable by resolution of shareholders or directors, by amendment of these by-laws or by agreement. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. The following exhibits are filed herewith or incorporated by reference herein: Exhibit Number Description 3(a) Restated Certificate of Incorporation. [Incorporated herein by reference to Exhibit 3.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No.1-04881).] 3(b) By-laws, as restated, effective June 6, 1996. [Incorporated herein by reference to Exhibit 3.2 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No.1-04881).] 4(a) Restated Certificate of Incorporation, filed as Exhibit 3(a), and By-laws of Registrant, as restated, effective June 6, 1996, filed as Exhibit 3(b), are incorporated herein by reference. 4(b) Form of Avon Products, Inc. Deferred Compensation Plan. 5 Opinion of Powell, Goldstein, Frazer & Murphy LLP. 23(a) Consent of Powell, Goldstein, Frazer & Murphy LLP (included in Exhibit 5) 23(b) Consent of PricewaterhouseCoopers L.L.P. 24 Power of Attorney (see signature pages to this Registration Statement). II- Item 9. Undertakings. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post- effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II- Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction to the questions whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II- SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this the 21st day of October, 1998. AVON PRODUCTS, INC. By: /s/ Ward M. Miller, Jr. Ward M. Miller, Jr. Senior Vice President, General Counsel and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints WARD M. MILLER, JR. as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, could lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated. Signature Title /s/ James E. Preston Chairman of the Board Date: October 21, 1998 James E. Preston and Chief Executive Officer /s/ Charles R. Perrin Vice Chairman of the Date: October 21, 1998 Charles R. Perrin Board and Chief Operating Officer /s/ Andrea Jung Director and President Date: October 21, 1998 Andrea Jung /s/ Susan J. Kropf Director, Executive Date: October 21, 1998 Susan J. Kropf Vice President and President, North America II- /s/ Robert J. Corti Executive Vice President, Date: October 21, 1998 Robert J. Corti Chief Financial Officer and Controller (principal financial officer and principal accounting officer) /s/ Brenda C. Barnes Director Date: October 21, 1998 Brenda C. Barnes /s/ Richard S. Barton Director Date: October 21, 1998 Richard S. Barton /s/ Edward T. Fogarty Director Date: October 21, 1998 Edward T. Fogarty /s/ Stanley C. Gault Director Date: October 21, 1998 Stanley C. Gault /s/ George V. Grune Director Date: October 21, 1998 George V. Grune /s/ Charles S. Locke Director Date: October 21, 1998 Charles S. Locke /s/ Ann S. Moore Director Date: October 21, 1998 Ann S. Moore /s/ Remedios Diaz Oliver Director Date: October 21, 1998 Remedios Diaz Oliver /s/ Paula Stern Director Date: October 21, 1998 Paula Stern II- EXHIBIT INDEX Exhibit Number Description 3(a) Restated Certificate of Incorporation. [Incorporated herein by reference to Exhibit 3.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No.1- 04881).] 3(b) By-laws, as restated, effective June 6, 1996. [Incorporated herein by reference to Exhibit 3.2 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (File No.1-04881).] 4(a) Restated Certificate of Incorporation, filed as Exhibit 3(a), and By-laws of Registrant, as restated, effective June 6, 1996, filed as Exhibit 3(b), are incorporated herein by reference. 4(b) Form of Avon Products, Inc. Deferred Compensation Plan. 5 Opinion of Powell, Goldstein, Frazer & Murphy LLP. 23(a) Consent of Powell, Goldstein, Frazer & Murphy LLP (included in Exhibit 5) 23(b) Consent of PricewaterhouseCoopers L.L.P. 24 Power of Attorney (see signature page to this Registration Statement). II-1 EX-4.B 2 EXHIBIT 4(B) AVON DEFERRED COMPENSATION PLAN (Restated as of January 1, 1998) (1) Purpose: Subject to the terms of the Avon Products, Inc. Deferred Compensation Plan (the "Plan"), an eligible employee of Avon Products, Inc. (the "Company") may elect to defer receipt of some or all of the following forms of compensation: (a) All or part of his or her annual bonus awarded under the Company's Management Incentive Plan, U.S. Incentive Plan or other specified annual incentive awards (collectively referred to as "Annual Bonus"); (b) All or part of his or her cash award component otherwise payable under the Company's 1997 Long Term Incentive Plan or successor long term incentive plans (collectively referred to as "LTIP bonus"); (c) If a Participant in the Company's qualified (401(k)) Personal Savings Plan, up to 6% of any Base Salary in excess of the limitation on compensation that is eligible for pre-tax contributions under a qualified Section 401(k) savings plan; and (d) Effective July 1, 1998, up to 50% of Base Salary. (2) Eligibility: Any employee of the Company may participate in the Plan who is both on the U.S. payroll and eligible to participate in the Company's 1997 LTIP or successor long term incentive plan (collectively referred to as "Participants"). 3. Deferral of Annual Bonus: A Participant may elect to defer all or a portion of his Annual Bonus for each calendar year. The amount or percentage of the Annual Bonus to be deferred for a calendar year is at the discretion of the Participant, except that the elected amount or percentage must be at least equal to the lesser of $5,000 or 100% of such Bonus. An election by a Participant to defer all or part of such Bonus must be made prior to the end of the calendar year for which the Annual Bonus is paid by completing, signing and returning an election form provided by the Company by no later than a date established by the Company at its discretion. (For example, the Annual Bonus for 1998 will be paid in 1999, but the election t defer has to be made by October 1, 1998.) Each such election is only valid for the calendar year in which it is made and a new election must be made for each subsequent calendar year in which the Participant chooses to defer an annual bonus. 4. LTIP Bonus A participant may elect to defer all or a portion of his or her cash award earned and payable as an LTIP Bonus, provided, that the elected amount or percentage must be at least equal to the lesser of $5,000 or 100% of such bonus. Such election must be made prior to the end of the performance period for which an LTIP bonus is payable, by completing, signing and returning an election form provided by the Company by no later than a date established by the Company at its discretion. 5. Deferral of Excess Personal Savings Account Plan Contributions: A Participant (i) may elect to defer receipt of all or a portion of the Before-Tax Participant Contributions as defined in the Personal Savings Account Plan ("Savings Plan") which would have been permitted to be made as "Basic Contributions" under such plan for a Plan year, as if subsections (a) through (c) below applied, in excess of the Before-Tax Participant Contributions actually made by such Participant to the Savings Plan for such Plan Year, and (ii) shall be concurrently credited with those Company matching contributions which would have been made under the Savings Plan in excess of those matching contributions actually made to that Plan for such Plan Year, as if (a) the limitations of Code Section 415 were not applicable, and (b) the limitations of Code Section 401(a)(17) were not applicable, and (c) the limitations of Code Section 402(g) were not applicable. Any election to defer pursuant to this Section 5 must be made independently from any bonus deferral election pursuant to Sections 3 or 4, and prior to the year in which the performance of the services to which the compensation deferral relates. Each such election is valid only for the calendar year for which it was made, and a new election must be made in advance for each year thereafter in which the Participant chooses to make deferrals under Section 5. 6. Deferral of Base Salary: A Participant may elect to defer up to Fifty Percent (50%) of his or her regular bi-weekly Base Salary payable on and after July 1, 1998 subject to a minimum annual deferral of $5,000 ($2,500 for 1998). Such deferral would be implemented through regular payroll deductions of up to 50% of the gross amount of each regular paycheck, as soon as practicable after the Company's receipt of a properly completed and signed approved deferral election form provided by the Company. An elected deferral of Base Salary will remain in effect until and unless the Participant submits a signed approved form electing to discontinue such deferral which discontinuance would take place as of the beginning of the next calendar quarter. 7. Crediting of Deferred Amounts: The Company shall establish and maintain individual accounts under the name of each Participant who elects to defer compensation under the Plan. Bonus deferrals under the Plan will be credited effective as of the date the Bonus would otherwise be payable. Deferred compensation under Sections 5 or 6 will be credited effective as of the applicable dates of payroll withholding. 8. Distribution Accounts. At the time each deferral election is made, a Participant shall also irrevocably designate that his or her deferred compensation is to be allocated, in whole or in part, to one or both of two distribution accounts: a "Retirement/Termination Distribution Account", distributions from which are subject to the terms of Section 12 of the Plan, or an "In-Service Distribution Account", distributions from which are subject to the terms of Section 13 of the Plan. Separate accounts will be maintained for each type of distribution allocation and amounts may not be transferred from one distribution account to the other. Allocations of any form of deferred compensation between the two accounts shall be in 10% increments. In the event no allocation has been elected, deferred compensation shall be wholly credited to a Retirement/Termination Distribution Account. 9. Investment Credit Accounts. Effective on and after July 1, 1998, all deferred compensation, whether allocated to a Retirement/Termination Distribution Account or an In-Service Distribution Account, shall be deemed invested in one or more of three optional investment credit accounts described below, as elected by the Participant. All investment credits are hypothetical in that no funds are actually invested. Compensation deferred under the Plan prior to July 1, 1998 was credited with an amount of interest determined in accordance with the provisions of the Fixed Income Account. Effective on and after July 1, 1998, a Participant may elect to have compensation deferred prior to that date thereafter alternatively credited, in whole or in part, to one of the other two investment credit accounts. The three investment credit account options are as follows: (a) Fixed Income Account Deferred compensation amounts allocated to this account will be credited, at the end of each quarter, with imputed interest at an annualized rate of 7%, or if higher, the market interest rate payable on 30 year U.S. Treasury Bonds in effect on the last day of the prior quarter. Compensation deferred prior to the year 1990 that continuously remains credited to the Fixed Income Account will be credited with a special enhanced interest rate, namely a rate based on Moody's Composite Bond Average, determined as of the end of each calendar quarter, plus an additional four percentage points, compounded annually. If pre-1990 deferred compensation is moved to a different account, such special enhanced rate will no longer be applicable when and if moved back to the Fixed Income Account. (b) Standard & Poors 500 Stock Index Account Deferred compensation amounts allocated to this account will be treated as if hypothetically invested in a manner that is closely linked to changes in the S&P 500 Index over the course of each calendar quarter. The Company will enter into a series of quarterly financial "swap" contracts intended to closely replicate the return provided by an investment in actual S&P 500 Index stocks over the term of such contract. (c) Avon Stock Unit Account Deferred compensation amounts allocated to this account will be treated as if hypothetically invested at the beginning of each quarter in the Company's Common Stock. The Company will enter into a series of quarterly financial "swap" contracts intended to closely replicate the return provided by an investment in the Company's Common Stock over the term of such contracts. The Company reserves the right to discontinue the use of swap contracts in which event the investment return credit for a quarter may be linked to the changes in the actual S&P 500 Index or prices of the Company's Stock, as reported in the Wall Street Journal. The aggregate balances credited to Participants' investment credit accounts on the first day of each calendar quarter will be sum of (1) the value of the specific account's balance, if any, updated as of the end of the prior quarter, (2) the value of any other investment account balances, updated as of the end of the prior quarter that are now, at the Participant's election, being initially transferred to the new account, and (3) compensation initially deferred during the immediately preceding quarter, together with an interest credit accrued from the effective date of such a deferral to the end of such quarter based on the applicable rate determined for the Fixed Income Account. 10. Investment Elections: Investment elections for each calendar quarter shall be made by submitting an Investment Election Change Form provided by the Company at least 10 days prior to the first day of the quarter for which it is to become effective. In the absence of any change in election, the Participant's deferred compensation, including any newly added deferred amounts, shall continue to be invested in the same accounts, with the same percentage allocations, as are in effect for the immediately preceding quarter. The allocation of investment elections among more than one investment account shall be in increments of one percent until and unless a new Investment Election Change Form is timely submitted. Separate elections can be made with respect to past and future deferrals. All investment election changes shall be effective only as of the beginning of a calendar quarter. Following retirement or termination of employment, if installment payments have been elected, a Participant may continue to make investment election changes each quarter subject to Section 10 of the Plan. Similarly, beneficiaries who continue to receive installment payments after a Participant's death will have such election option, provided, that if there is more than one beneficiary, all must sign any Investment Election Change Form. All distributions of deferred compensation will be payable in cash less applicable tax withholding. Accordingly, distributions derived from an S&P 500 Account or Avon Stock Unit Account will be converted to a cash amount on the basis of the account's value determined as of the end of the prior quarter. 11. Early Withdrawals: At any time prior to the date distributions of deferred compensation are otherwise scheduled to be made, a Participant may request, on 30 days written notice, an early withdrawal of all or a portion of his or her total deferred compensation account subject to the following conditions: (a) Hardship An early withdrawal request based on the Participant's personal financial hardship must meet the hardship eligibility requirements of the Savings Plan as well as such other requirements as the Company may establish in its discretion. No hardship withdrawal may be for less than $10,000. If approved, a hardship withdrawal will be provided without any forfeiture penalty. (b) Non-Hardship An early withdrawal that does not qualify as a hardship withdrawal will be subject to an irrevocable forfeiture of a deferred amount equal to 10% of the withdrawn amount. Any non-hardship withdrawal may be for no less than $25,000. When an early withdrawal is made, a Participant's participation in the Plan will be suspended for a period of 12 months, provided that any unwithdrawn deferred balance shall continue to be subject to the Plan. No more than one early withdrawal may be made in any 12 month period. 12. Distribution Upon Retirement/Termination. A Participant's entire Retirement/Termination Distribution Account will be payable in cash in a single payment on or about January 15 of the first calendar year following severance of employment or, if so elected, and the account is at least $5,000, in annual installments commencing on or about January 15 of the first calendar year following severance of employment with additional installments continuing to be paid on or about each subsequent January 15 for the period elected. For purposes of this Plan, severance of employment means severance for any reason including, but not limited to, death, retirement, resignation or permanent disability under the Company's Long Term Disability Plan. In the event of disability, as defined under the Company's Long Term Disability Plan, the Participant, with the Company's consent, may elect to receive all or a portion of his or her deferred compensation as soon as practical after the commencement of such Disability; otherwise, the Participant's account will not become payable until after final separation from the Company. A Participant may elect to receive such account in up to fifteen (15)annual installments. Such election must be made, or changed, by written election at least 12 months prior to the date a full lump sum amount would otherwise be payable. Any new installment payment election made subsequent to such 12 month notice period would be effective only with the consent of the Company, which principally would be considered in situations of involuntary termination of employment on less than 12 months notice to the Participant. Should a Participant elect installment payments, the amount of the first installment payment will be a fraction of the value of the Participant's account as of the end of the year immediately preceding the date at which the installment is to be paid, the numerator of which is one (1) and the denominator of which is the total number of annual installments elected. The amount of each subsequent payment will be a fraction of the remaining value of the Participant's account as of the end of the year preceding each subsequent installment date, the numerator of which is one (1) and the denominator of which is the total number of installments elected minus the number of installments previously paid. Investment credits or losses shall continue to accrue on the unpaid balance of the account. (13). In-Service Distribution Accounts: Deferred compensation allocated to an In-Service Distribution Account will be distributed on or about January 15 of a future year as designated by the Participant at the time of deferred election. Such designated year must be no earlier than the second calendar year following the year in which the applicable deferred election was made. It is generally anticipated that the Participant would still be employed by the Company at the designated time of distribution. In the event that the Participant in fact should terminate employment with the Company for any reason prior thereto, the account will be distributed on or about January 15 of the year next following the date of termination. Only one In-Service Distribution Account may be maintained at any one time. All distributions from such an account will be in one lump sum. 14. Death of a Participant: In the event of a Participant's death at any time prior to severance of employment, the Participant's entire deferred account will be payable in a lump sum to his or her designated beneficiary or beneficiaries as soon as practicable following the date of death. If, however, the Participant had elected to have his or her Retirement/ Termination Distribution Account distributed in installments, such account will be distributed to such beneficiary or beneficiaries in accordance with such election commencing January 15th of the year next following the date of death. If a Participant dies after severance of employment but prior to the payout of all installments, such installments will continue to be paid for the balance of the elected period to such beneficiary or beneficiaries. Investment gains or losses will continue to accrue on all account balances. A beneficiary may elect to accelerate a full distribution of the deceased Participant's entire account upon submission of a hardship withdrawal request to the Company within 60 days of the date of death. If there is more than one designated beneficiary, all must sign the request. The Company reserves the right to temporarily delay distribution(s) to any beneficiary other than a surviving spouse if it has information that there may be disputes or claims affecting the account including tax claims or tax waivers. In the event that a Participant is not survived by a designated beneficiary, or such designated beneficiary subsequently dies before all installment payments have been made, remaining account payments will be made to the Participant's surviving spouse, if any, otherwise to the Participant's estate. 15. Deferral of Other Forms of Compensation: With the written consent of the Company, a Participant may defer the receipt of other forms of compensation including, but not limited to, lump sum non-qualified retirement benefits. Any such deferral election must be in accordance with the terms and conditions established at the Company's sole discretion and any election would have to be submitted in writing prior to the year in which the payment of such compensation would otherwise be due. Any amount so deferred would thereafter be subject to all terms and conditions of the Plan otherwise applicable to deferred Annual Bonuses. Severance compensation payable in the form of salary continuation, and disability compensation, may not be deferred. 16. Change of Control: Upon the occurrence of a Change of Control as defined in the Company's 1993 Stock Incentive Plan approved by the Company's shareholders, the Plan shall terminate and all deferred compensation account balances will be distributed to Participants, or the designated beneficiaries of any deceased Participants, as soon as practicable after the end of the calendar quarter in which such Change of Control occurs. 17. Tax Withholding: All distributions of deferred compensation of any type shall be subject to all applicable Federal, state and local income tax withholding requirements. It is anticipated that all distributions will be fully taxable at ordinary income tax rates. 18. Administration of the Plan: The Company shall be the administrator of the Plan and shall have the discretionary authority to determine all questions arising in connection with the Plan including its interpretation, and may adopt procedural rules and may employ and rely on such legal counsel, accountants, and agents as it may deem advisable to assist in the administration of the Plan. Decisions of the Company shall be conclusive and binding on all persons. 19. Amendment or Termination of the Plan: The Company reserves the right, at any time, and from time to time, and retroactively as deemed necessary or appropriate, to amend or modify in whole or in part any or all of the provisions of the Plan, including the right to discontinue contributions, provided that no such amendment or modification shall adversely affect the benefits accrued under the Plan prior to the effective date of such amendment or modification. The Company may terminate the Plan for any reason at any time, provided that such termination shall not adversely affect the benefits accrued under the Plan prior to such effective date of such termination. 20. No Employment Rights: The existence of the Plan or of a deferral agreement does not constitute a contract for continued employment between a Participant and the Company. The Company reserves the right to modify a Participant's compensation and to terminate a Participant for any reason at any time, notwithstanding the existence of this program or of a deferral agreement. 21. Segregation of Monies Not Required: Nothing contained in this Plan or in a deferral agreement shall require the Company to segregate any monies from their general funds, or to create any trusts, or to make any special deposits for any amounts to be paid to any Participant, beneficiary or contingent beneficiary. Neither the Participant, his or her beneficiary, contingent beneficiary, heirs or personal representatives shall have any right, title or interest in or to any funds of the Company on account of this program or on account of having completed a deferral agreement. 22. Restriction on Transfer: The right to receive any benefits under this Plan may not be transferred, assigned, subject to garnishment, attachment or other legal equitable process without the prior written consent of the Company. 23. Application of Law: The provisions of this Plan shall be construed in accordance with the Employee Retirement Income Security Act of 1974, as amended, and to the extent not superseded thereby, in accordance with the laws of the State of New York. EX-5 3 EXHIBIT-5 [POWELL, GOLDSTEIN, FRAZER & MURPHY LLP letterhead] October 21, 1998 Avon Products, Inc. 1345 Avenue of the Americas New York, New York 10105-0196 Re: Registration Statement on Form S-8 Ladies and Gentlemen: We have served as counsel for Avon Products, Inc., a New York corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended, pursuant to a Registration Statement on Form S-8 (the "Registration Statement") of an aggregate of $75 million of obligations ("Obligations") of the Company pursuant to the Avon Products, Inc. Deferred Compensation Plan (the "Plan"). We have examined and are familiar with originals or copies (certified, photostatic or otherwise identified to our satisfaction) of such documents, corporate records and other instruments relating to the Company and the adoption of the Plan as we have deemed necessary and advisable. In all such examinations, we have assumed the genuineness of all signatures on all originals and copies of documents we have examined, the authenticity of all documents submitted to us as originals and the conformity to original documents of all certified, conformed or photostatic copies. As to questions of fact material and relevant to our opinion, we have relied upon certificates or representations of Company officials and of appropriate state, local and federal officials. We express no opinion as to matters under or involving laws other than the Business Corporation Law of the State of New York. Based upon and subject to the foregoing and having regard for such legal considerations as we have deemed relevant, it is our opinion that the Obligations, when issued by the Company in the manner provided for in the Plan, will be legally issued, fully paid and non-assessable, and will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject, as to enforcement, (i) to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights, and (ii) to general principles of equity, whether such enforcement is considered in a proceeding in equity or law. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement. Very truly yours, POWELL, GOLDSTEIN, FRAZER & MURPHY EX-23.B 4 EXHIBIT-23(B) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement of our reports dated February 5, 1998 included and incorporated by reference in Avon Products, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997 and to all references to our Firm in this Registration Statement. PricewaterhouseCoopers L.L.P New York, New York October 21, 1998 -----END PRIVACY-ENHANCED MESSAGE-----