AVON PRODUCTS INC (Form: 8-K, Received: 09/06/2005 17:27:23)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): September 6, 2005

Avon Products, Inc.

(Exact name of registrant as specified in its charter)


New York	1-4881	13-0544597
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


1345 Avenue of the Americas
New York, New York 10105-0196
(Address of principal executive offices) (Zip Code)

(212) 282-5000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

Item 8.01 Other Events.

Avon Products, Inc. grants various awards to its executive officers under the Avon Products, Inc. 2005 Stock Incentive Plan. Forms of award agreements are attached hereto as exhibits and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1		Form of U.S. Stock Option Agreement under the Avon Products, Inc. 2005 Stock Incentive Plan

Exhibit 99.2		Form of U.S. Restricted Stock Unit Award Agreement under the Avon Products, Inc. 2005 Stock Incentive Plan

(Page 2 of 3 Pages)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AVON PRODUCTS, INC.
	(Registrant)


By	/s/ Gilbert L. Klemann, II

	Gilbert L. Klemann, II
	Senior Vice President and General Counsel

Date: September 6, 2005

(Page 3 of 3 Pages)

EXHIBIT INDEX

Exhibit No.		Description

Exhibit 99.1		Form of U.S. Stock Option Agreement under the Avon Products, Inc. 2005 Stock Incentive Plan

Exhibit 99.2		Form of U.S. Restricted Stock Unit Award Agreement under the Avon Products, Inc. 2005 Stock Incentive Plan

Exhibit 99.1

AVON PRODUCTS, INC.
2005 STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT

1. Grant of Option. Pursuant to the provisions of its 2005 Stock Incentive Plan (the “Plan”), Avon Products, Inc. (the “Company”) has granted to you (the “Optionee”) the right and option to purchase from the Company shares of Stock (the “Option”) at a fixed price (the “Grant Price”) per share as set forth in the Optionee’s grant notification. All capitalized terms used in this Stock Option Agreement (this “Agreement”) shall have the meaning set forth in the Plan, unless the context requires a different meaning.

2. Exercise of Option.

(a) This Option shall be exercisable in the installments outlined in the Optionee’s grant notification. The entire Option is fully exercisable after the final vesting date. To the extent that any of the installments is not exercised when it becomes exercisable, it shall not expire, but shall continue to be exercisable at any time thereafter until this Option shall terminate, expire or be surrendered. An exercise shall be for whole shares only.

(b) In accordance with the Plan, all shares covered by this Option shall become immediately fully exercisable as of the date of any “Change in Control.”

(c) Shares may be purchased through Smith Barney: (i) on-line, (ii) via the telephone or (iii) through a broker. The Optionee shall designate one, or a combination, of the following methods of purchase:

(i) tender to Smith Barney of a check for the full Grant Price of the shares with respect to which such Option or portion thereof is exercised, or

(ii) by delivery to Smith Barney of a number of shares of Stock which have been owned by the holder for at least six (6) months prior to the date of exercise having an aggregate Fair Market Value of not less than the product of the Grant Price multiplied by the number of shares the Optionee intends to purchase upon exercise of the Option on the date of delivery, or

(iii) instructions to Smith Barney that shares of Stock acquired as a result of the option exercise be immediately sold and that Smith Barney deliver the full Grant Price to the Company, together with any tax withholdings, whereupon the net cash proceeds and/or shares of Stock shall be forwarded to the Optionee. The Company may establish special terms and conditions for this “cashless” exercise, and at any time may terminate availability of this form of purchase.

3. Expiration of Option. The Option shall expire or terminate and may not be exercised to any extent by the Optionee as of the first to occur of the following events:

(a) The tenth anniversary of the date of grant (the “Grant Date”), or such earlier time as the Company may determine is necessary or appropriate in light of applicable laws; or

(b) The second anniversary of the date of the Optionee’s termination of employment by reason of death; or

(d) The date that is ninety days after termination of employment of the Optionee for a reason other than for Cause, death, Disability or Retirement, but only to the extent the Option is exercisable as of the date of such termination of employment (with any unexercisable portion of the Option terminating on the date of any such termination of employment); or

(e) Unless otherwise determined by the Chief Executive Officer or the Chief Operating Officer of the Company, the Optionee’s violation of any non-disclosure, non-compete or non-solicitation covenant applicable to the Optionee as set forth in Section 4 of this Agreement or in his or her severance agreement, employment contract or any Company policy, regardless of whether or not the Optionee has terminated employment due to Disability, Retirement or otherwise.

In the event of termination of employment because of death, the entire Option shall immediately become exercisable as to all shares, notwithstanding Section 2(a) of this Agreement. In the event of termination of employment because of Disability or Retirement, the Option shall continue to vest according to the schedule set forth in the grant notification referred to in Section 2(a) of this Agreement and be exercisable through the tenth anniversary of the Grant Date.

“Cause” shall have the same meaning as that provided by the Company’s severance pay plan applicable to the Optionee. In addition, termination for Cause shall include any termination due to acts of dishonesty or gross misconduct on the part of the Optionee which result, or are intended to result, in damage to the Company’s business or reputation.

An unpaid/long-term leave of absence of the Optionee shall not constitute a termination of employment of the Optionee. During an unpaid/long-term leave of absence, the Option shall continue to vest according to the schedule set forth in the grant notification referred to in Section 2(a) of this Agreement. However, the Optionee may not exercise the Option while on an unpaid/long-term leave of absence.

For purposes of this Agreement, the Optionee’s employment by a Subsidiary shall be considered terminated on the date on which the Company sells or otherwise divests its equity interest in such Subsidiary.

4. Non-Competition/Non-Solicitation/Non-Disclosure. The Optionee agrees that, at any time prior to any exercise of the Option granted hereunder, and for a period of one year after the later of completion of all such exercises of the Option or termination of the Optionee’s employment with the Company for any reason whatsoever (including Retirement or Disability), he or she shall not, without the prior written consent of the Company, engage in any of the following activities:

(a) The Optionee shall not directly or indirectly engage or otherwise participate in any business which is competitive with any significant business of the Company or any Subsidiary, including without limitation, the Optionee’s acceptance of employment with, entrance into a consulting or advisory arrangement with, rendering services to or otherwise facilitating the business of Amway Corporation/Alticor Inc., Gryphon Development/Limited Brands, Inc., L’Oréal Group/Cosmair, Inc., Mary Kay Inc., Reckitt Benckiser PLC, Revlon, Inc., Sara Lee Corporation, The Estée Lauder Companies Inc., The Procter & Gamble Company, Tupperware Corporation, the Unilever Group (N.V. and PLC), or any of their affiliates;

(b) The Optionee shall not solicit or aid in the solicitation of any employees of the Company or any Subsidiary to leave their employment; or

(c) The Optionee shall not, unless compelled pursuant to an order of a court or other body having jurisdiction over such matter, communicate or divulge any secret or confidential information, knowledge or data, including without limitation any trade secrets, relating to the Company or a Subsidiary, and their respective businesses, obtained by the Optionee during his or her employment by the Company or a Subsidiary and which is not otherwise publicly known (other than by reason of an unauthorized act by the Optionee), to anyone other than the Company and those designated by it.

In the event the Company determines that the Optionee has breached any term of this Section 4 or any non-disclosure, non-compete or non-solicitation covenant set forth in his or her severance agreement, employment contract or any Company policy, in addition to any other remedies the Company may have available to it, unless otherwise determined by the Chief Executive Officer or the Chief Operating Officer of the Company, (i) all unexercised portions of the Option granted hereunder shall terminate to the extent the Option has not been exercised and (ii) if the Option has been exercised, the Optionee shall forfeit all shares of Stock issued to the Optionee in connection with the exercise of the Option hereunder; provided , however , that the Company shall return to the Optionee the lesser of any consideration paid by the Optionee in exchange for Stock issued to the Optionee hereunder or the Fair Market Value of the Stock forfeited hereunder at the time of forfeiture; and provided , further , that if the Optionee no longer holds shares of Stock issued to the Optionee hereunder, the Optionee shall pay to the Company in cash the excess of the Fair Market Value of any such shares of Stock on the date such shares of Stock were issued to the Optionee hereunder over any consideration paid by the Optionee in exchange for such shares of Stock.

5. Tax Withholding. No delivery of shares may be made to the Optionee until the Company has received all amounts required for federal, state or local tax withholding. The method of withholding shall be subject to such rules as the Company may adopt from time to time. It is recognized by both parties that, based on current laws, the difference between the Fair Market Value of the shares purchased by an option exercise and the Grant Price of such shares generally will constitute ordinary taxable income for U.S. federal income and social security tax purposes and for most state and local income tax purposes.

6. Notice. Any notice required to be given hereunder to the Optionee shall be addressed to the Optionee at his or her current address shown on the Company’s records. Notice shall be sent by mail, express delivery or, if practical, by electronic delivery or hand delivery.

7. No Acquired Rights. The award of this Option does not entitle Optionee to any benefit other than that specifically granted under the Plan, nor to any future awards or other benefits under the Plan or any similar plan. Any benefits granted under the Plan are not part of Optionee’s ordinary compensation, and shall not be considered as part of such compensation in the event of severance, redundancy or resignation. Optionee understands and accepts that the benefits granted under the Plan are entirely at the grace and discretion of the Company and that the Company retains the right to amend or terminate the Plan, and/or Optionee’s participation therein, at any time, at the Company’s sole discretion and without notice.

8. Other Provisions. The provisions set forth in the Plan relating to stock options are specifically incorporated by reference in this Agreement, including, but not limited to, those provisions of Sections 9 and 10 pertaining to the following matters:

      (a) Adjustment Provisions
      (b) Transferability
      (c) Rights of Eligible Persons
      (d) Rights as a Shareholder
      (e) Applicable Law

IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Optionee have executed this Agreement as of the Grant Date.

AVON PRODUCTS, INC.	OPTIONEE



Andrea Jung	Name:
Chief Executive Officer

Exhibit 99.2

AVON PRODUCTS, INC.
2005 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

1. Grant of Restricted Stock Unit Award . Pursuant to the provisions of its 2005 Stock Incentive Plan (the “Plan”), Avon Products, Inc. (the “Company”) has awarded you (the “Grantee”) Restricted Stock Units (the “RSUs”), representing the right to receive in the future shares of Stock (the “Shares”) as set forth in the Grantee’s grant notification. These RSUs are subject to the terms and conditions set forth below, as well as those terms and conditions set forth in the Plan, all of which are hereby incorporated by this reference. All capitalized terms used in this Restricted Stock Unit Award Agreement (this “Agreement”) shall have the meaning set forth in the Plan.

2. Nature of RSUs; Issuance of Shares . These RSUs represent a right to receive Shares on the Vesting Date (as defined below) but do not represent a current interest in the Shares. If all the terms and conditions hereof and of the Plan are met, then the Grantee shall be issued certificates for the respective number of Shares on the Vesting Date. In lieu of issuance of Shares, the Company reserves the right to instead make a cash payment to the Grantee equal to the Fair Market Value of the Shares determined as of the Vesting Date.

3. Restrictions on Transfer of RSUs . These RSUs may not be sold, tendered, assigned, transferred, pledged or otherwise encumbered.

4. Vesting of RSUs; Voting; Dividends . (a) Subject to Section 5, vesting of the RSUs shall occur on the date set forth in the Grantee’s grant notification (such date the “Vesting Date”). Vesting is contingent upon the Grantee being employed on the Vesting Date by the Company or its Subsidiaries.

(b) The Grantee does not have the right to vote any of the Shares or to receive dividends on them prior to the date such Shares are to be issued to the Grantee pursuant to the terms hereof. However, unless otherwise determined by the Committee, the Grantee shall be entitled to “Dividend Equivalent Rights” so that the Grantee will receive cash payments in respect of the Shares in amounts that would otherwise be payable as dividends with respect to such number of shares of the Stock, when and as dividends are paid.

5. Termination of Employment. If the Grantee’s employment is terminated other than for Cause or voluntarily by the Grantee, a portion of the RSUs referred to in Section 4(a) above shall become vested and the appropriate number of such vested Shares shall forthwith be issued upon such termination. The number of Shares shall be determined by multiplying each installment’s full number of Shares by a fraction, which shall be the number of complete months of employment from the date of grant (the “Grant Date”) to the date of termination, divided by the number of months from the Grant Date, to the Vesting Date. In the event of termination of employment by reason of death, vesting, and the number of Shares to be distributable to the Grantee’s estate or designated beneficiary forthwith upon such termination, shall be determined in the same manner.

In the event of termination by the Company for Cause, or the Grantee’s voluntary termination of employment, all portions of the RSUs not otherwise vested as of the date of termination shall be forfeited. “Cause” shall have the same meaning as that provided in the Company’s severance pay plan. In addition, termination for Cause shall include any termination due to acts of dishonesty or gross misconduct on the part of the Grantee which result, or are intended to result, in damage to the Company’s business or reputation.

An unpaid/long-term leave of absence of the Grantee shall not constitute a termination of employment of the Grantee. During an unpaid/long-term leave of absence, the RSUs shall continue to vest according to the schedule set forth in the grant notification referred to in Section 4(a) of this Agreement.

For purposes of this Agreement, the Grantee’s employment by a Subsidiary shall be considered terminated on the date on which the Company sells or otherwise divests its equity interest in such Subsidiary.

6. Non-Competition/Non-Solicitation/Non-Disclosure. The Grantee agrees that, at any time prior to the vesting of the RSUs granted hereunder, and for a period of one year after the later of vesting of the RSUs or termination of the Grantee’s employment with the Company for any reason whatsoever (including Retirement or Disability), he or she shall not, without the prior written consent of the Company, engage in any of the following activities:

(a) The Grantee shall not directly or indirectly engage or otherwise participate in any business which is competitive with any significant business of the Company or any Subsidiary, including without limitation, the Grantee’s acceptance of employment with, entrance into a consulting or advisory arrangement with, rendering services to or otherwise facilitating the business of Amway Corporation/Alticor Inc., Gryphon Development/Limited Brands, Inc., L’Oréal Group/Cosmair, Inc., Mary Kay Inc., Reckitt Benckiser PLC, Revlon, Inc., Sara Lee Corporation, The Estée Lauder Companies Inc., The Procter & Gamble Company, Tupperware Corporation, the Unilever Group (N.V. and PLC), or any of their affiliates;

(b) The Grantee shall not solicit or aid in the solicitation of any employees of the Company or any Subsidiary to leave their employment; or

(c) The Grantee shall not, unless compelled pursuant to an order of a court or other body having jurisdiction over such matter, communicate or divulge any secret or confidential information, knowledge or data, including without limitation any trade secrets, relating to the Company or a Subsidiary, and their respective businesses, obtained by the Grantee during his or her employment by the Company or a Subsidiary and which is not otherwise publicly known (other than by reason of an unauthorized act by the Grantee), to anyone other than the Company and those designated by it.

In the event the Company determines that the Grantee has breached any term of this Section 6 or any non-disclosure, non-compete or non-solicitation covenant set forth in his or her severance agreement, employment contract or any Company policy, in addition to any other remedies the Company may have available to it, unless otherwise determined by the Chief Executive Officer or the Chief Operating Officer of the Company, (i) all unvested RSUs granted hereunder shall be forfeited, (ii) if shares of Stock have been issued to the Grantee in respect of vested RSUs hereunder, the Grantee shall forfeit all such shares of Stock so issued to the Grantee hereunder and (iii) if cash has been paid to the Grantee in lieu of shares of Stock in respect of vested RSUs hereunder, the Grantee shall pay to the Company all such cash so paid in lieu of shares of Stock to the Grantee hereunder; provided , however , that if the Grantee no longer holds shares of Stock issued to the Grantee hereunder, the Grantee shall pay to the Company in cash the Fair Market Value of any such shares of Stock on the date such shares of Stock were issued to the Grantee hereunder.

7. No Right to Employment, etc. (a) The execution and delivery of this Agreement and the granting of the RSUs hereunder shall not constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company to employ the Grantee for any specific period.

(b) The award of the RSUs hereunder does not entitle the Grantee to any benefit other than that specifically granted under this Agreement, nor to any future grants or other benefits under the Plan or any similar plan. Any benefits granted under this Agreement and the Plan are not part of the Grantee’s ordinary compensation, and shall not be considered as part of such compensation in the event of severance, redundancy or resignation. The Grantee understands and accepts that the benefits granted under this Agreement and the Plan are entirely at the grace and discretion of the Company and that the Company retains the right to amend or terminate the Plan, and/or the Grantee’s participation therein, at any time, at the Company’s sole discretion and without notice.

8. Change of Capitalization. If, prior to the time the restrictions imposed by Section 4 on the RSUs awarded hereunder lapse, the Company shall be reorganized, or consolidated or merged with another corporation, the appropriate amount of any stock, securities or other property exchangeable for shares of Stock pursuant to such reorganization, consolidation or merger shall be appropriately substituted for the Shares hereunder.

9. Application of Laws . The granting of these RSUs and the delivery of Shares hereunder shall be subject to all applicable laws, rules and regulations.

10. Taxes. By accepting this grant, the Grantee hereby irrevocably elects to satisfy any taxes required to be withheld by the Company on the date of delivery of any Shares hereunder by authorizing the Company to withhold a sufficient number of Shares to satisfy such tax obligation; provided , however , that if the Grantee elects pursuant to the Company’s Deferred Compensation Plan to defer the delivery of any portion of any installment of Shares hereunder, the Grantee hereby irrevocably elects to satisfy all applicable FICA and FUTA taxes due upon the applicable Vesting Date with respect to such Shares for which delivery is being deferred by delivering cash to the Company in an amount sufficient to satisfy all such FICA and FUTA taxes.

IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Grantee have executed this Agreement as of the Grant Date.

AVON PRODUCTS, INC.	GRANTEE



Andrea Jung	Name:
Chief Executive Officer