Avon 2011 Annual Report Download - page 86

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The total fair value of restricted stock units that vested during 2011 was $20.9, based upon market prices on the vesting dates. As of
December 31, 2011, there was approximately $33.4 of unrecognized compensation cost related to restricted stock units and performance
restricted stock units compensation arrangements. That cost is expected to be recognized over a weighted-average period of 2.0 years.
NOTE 11. Stock Repurchase Program
In October 2007, our Board of Directors approved a five-year $2,000.0 share repurchase program (“$2.0 billion program”) which began in
December 2007. We have repurchased approximately 4.8 million shares for $180.4 under the $2.0 billion program through December 31,
2011.
NOTE 12. Employee Benefit Plans
Savings Plan
We offer a qualified defined contribution plan for U.S.-based employees, the Avon Personal Savings Account Plan (the “PSA”), which allows
eligible participants to contribute up to 25% of eligible compensation through payroll deductions. We match employee contributions dollar
for dollar up to the first 3% of eligible compensation and fifty cents for each dollar contributed from 4% to 6% of eligible compensation.
We made matching contributions in cash to the PSA of $12.6 in 2011, $12.5 in 2010 and $12.1 in 2009, which were then used by the PSA
to purchase our shares in the open market through June 30, 2011. Beginning July 1, 2011, matching contributions follow the same
allocation as the participant has selected for his or her own contributions.
Defined Benefit Pension and Postretirement Plans
Avon and certain subsidiaries have contributory and noncontributory retirement plans for substantially all employees of those subsidiaries.
Benefits under these plans are generally based on an employee’s years of service and average compensation near retirement. Plans are
funded based on legal requirements and cash flow.
We provide health care and life insurance benefits for the majority of employees who retire under our retirement plans in the U.S. and
certain foreign countries. In the U.S., the cost of such health care benefits is shared by us and our retirees for employees hired on or before
January 1, 2005. Employees hired after January 1, 2005, will pay the full cost of the health care benefits upon retirement. In August 2009,
we announced changes to our postretirement medical and life insurance benefits offered to U.S. retirees. The changes to the retiree medical
benefits reduced the plan’s obligations by $36.3. This amount is being amortized as a negative prior service cost over the average future
service of active participants which is approximately 12 years. The changes to the retiree life insurance benefits reduced the plan’s
obligations by $27.7. This amount is being amortized as a negative prior service cost over 3.3 years, which is the remaining term of the plan.
We are required, among other things, to recognize the funded status of pension and other postretirement benefit plans on the balance
sheet. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability. The recognition of prior service
costs or credits and net actuarial gains or losses, as well as subsequent changes in the funded status, were recognized as components of
accumulated other comprehensive income in shareholders’ equity.