Avon 2012 Annual Report Download - page 96

A summary of performance restricted stock units at December 31, 2012, and changes during 2012, is as follows:
Performance
Restricted
Stock Units
(in 000’s)
Weighted-
Average
Grant-Date
Fair Value
January 1, 2012(1) 1,021 $27.72
Granted 1,998 19.45
Vested – –
Forfeited (110) 23.80
December 31, 2012(1) 2,909 $22.19
(1) Based on target payout
The total fair value of restricted stock units that vested during 2012 was $22.8, based upon market prices on the vesting dates. At
December 31, 2012, there was approximately $43.7 of unrecognized compensation cost related to restricted stock, restricted stock units
and performance restricted stock units compensation arrangements. That cost is expected to be recognized over a weighted-average period
of 1.8 years.
In addition to the amounts in the table above, in April 2012 we granted 200,000 restricted stock units that will be funded with treasury
shares, outside of the 2010 Plan, in reliance upon The New York Stock Exchange rules. These restricted stock units have a weighted-average
grant-date fair value of $21.69 and vest and settle ratably over five years. During 2012, we recognized compensation cost of $1.4 for these
restricted stock units. At December 31, 2012, there was $2.9 of unrecognized compensation cost related to these restricted stock units.
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. The program expired on December 17, 2012. We repurchased approximately 4.8 million shares for $180.8 under the $2.0
billion program through its expiration.
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 $12.2 in 2012, $12.6 in 2011 and $12.5 in 2010, 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 (through the end of 2012 only) subject to certain limitations to the majority of retired
employees 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 was amortized as a negative prior service cost over 3.3 years, which was the remaining
term of the plan.
A V O N 2012 F-31