PROPOSAL 1-ELECTION OF DIRECTORS
Effective from and after the date of the 2004 Annual Meeting, the Board of
Directors has fixed the number of directors at 11. The Board is divided into
three classes as nearly equal in number as possible, as follows:
Three incumbent directors whose term expires in 2004 and who are nominated for
the class of 2007 ("Class of 2007"); four incumbent directors in the class whose
term expires in 2005 ("Class of 2005"); and four incumbent directors in the
class whose term expires in 2006 ("Class of 2006").
PROPOSAL 1: The Board of Directors has nominated Edward T. Fogarty, Susan J.
Kropf, and Maria Elena Lagomasino for election to the Class of 2007, each to
serve for a three-year term to expire at the Annual Meeting in 2007.
All Shares duly voted will be voted for the election of directors as specified
by the Shareholders. Unless otherwise specified, it is the intention of the
persons named on the enclosed proxy card to vote FOR the election of Edward T.
Fogarty, Susan J. Kropf, and Maria Elena Lagomasino, to the Class of 2007. Each
of the nominees has consented to serve as a director of the Company if elected.
We have no reason to believe that any of the nominees will be unable or decline
to serve as a director.
You may withhold your votes from the entire slate of nominees by so indicating
in the space provided on the enclosed proxy card or by following the
instructions for voting by telephone or via the Internet. You may withhold your
votes from any particular nominee by writing that nominee's name in the space
provided for that purpose on the enclosed proxy card or so indicating by
telephone or via the Internet.
In voting for the election of directors, you are entitled to vote cumulatively.
Each Shareholder is entitled to cast in each election the number of votes equal
to the number of Shares held of record by the Shareholder, multiplied by the
number of directors to be elected in the election. In the election of three
directors to the Class of 2007, you will be entitled, under cumulative voting,
to a total of three votes per Share held of record by you, and you may cast all
of such votes in this election for a single nominee, or distribute them among
any two or more nominees, as you see fit. You may (but need not) cumulate your
votes in the election of directors for the Class of 2007 by indicating the
distribution of your votes among the nominees in the space provided on the
enclosed proxy card. If you wish to cumulate your votes, you must vote by using
the proxy card; cumulative voting by telephone or via the Internet is not
possible. If votes are not so distributed on the proxy card, the persons named
as proxies may exercise the right to vote your Shares represented by such proxy
cumulatively in the Class of 2007 election and may distribute the votes
represented by such proxy among one or more of the nominees for the Class of
2007 listed below in any manner they see fit.
4
Set forth below is certain information furnished to the Company by each nominee
and each director continuing in office after the Annual Meeting.
Your Board of Directors recommends that you vote FOR the election as directors
of the nominees listed below.
Nominees for the Board of Directors for a Three-Year Term Expiring 2007
[[Image Removed: LOGO]] EDWARD T. FOGARTY
Director since 1995 Age: 67
Mr. Fogarty was the Chairman, President and Chief Executive
Officer of Tambrands, Inc., a major global consumer products
company, from September 1996 to July 1997. Prior to assuming that
position, Mr. Fogarty was President and Chief Executive Officer
of Tambrands from May 1994 to September 1996. Previously, he was
President-USA/Canada/Puerto Rico for the Colgate-Palmolive
Company from 1989 to 1994. From 1983 to 1989, he was President,
Worldwide Consumer Products, at Corning Inc. Mr. Fogarty is a
director of UST, Inc.
[[Image Removed: LOGO]] SUSAN J. KROPF
Director since 1998 Age: 55
Mrs. Kropf was elected President and Chief Operating Officer of
the Company in January 2001, previously having been Executive
Vice President and Chief Operating Officer, North America and
Global Business Operations, since November 1999. She had been
Executive Vice President and President, North America, since
March 1997 and a member of the Board of Directors of the Company
effective January 5, 1998. Prior to that, she had been
President-Avon U.S. and President, New and Emerging Markets. Mrs.
Kropf joined the Company in 1970 and held various positions in
manufacturing, marketing and product development. Mrs. Kropf is a
director of MeadWestvaco Corporation, the Sherwin-Williams
Company and the Wallace Foundation.
[[Image Removed: LOGO]] MARIA ELENA LAGOMASINO
Director since 2000 Age: 55
Ms. Lagomasino is Chairman and Chief Executive Officer of J.P.
Morgan Private Bank, a division of J.P. Morgan Chase & Co. Prior
to assuming this position in September 2001, Ms. Lagomasino was
Managing Director at The Chase Manhattan Bank in charge of its
Global Private Banking Group. Ms. Lagomasino had been with Chase
Manhattan since 1983 in various positions in private banking.
Prior to 1983 she was a Vice President at Citibank. She is a
director of the Coca-Cola Company and a trustee of the Synergos
Institute.
5
Members of the Board of Directors-Term Expiring 2006
[[Image Removed: LOGO]] W. DON CORNWELL
Director since January 2002 Age: 56
Mr. Cornwell is Chairman and Chief Executive Officer of Granite
Broadcasting Corp., a group broadcasting company that owns and
operates television stations across the U.S., which he founded in
1988. Previously, Mr. Cornwell was Chief Operating Officer for
the Corporate Finance Department at Goldman, Sachs & Co. from
1980 to 1988 and Vice President of the Investment Banking
Division of Goldman, Sachs from 1976 to 1980. Mr. Cornwell is a
director of Granite Broadcasting Corp., CVS, Inc. and Pfizer,
Inc. He is also a director of the Wallace Foundation and serves
as chairman of the Telecommunications Development Fund.
[[Image Removed: LOGO]] STANLEY C. GAULT
Director since 1985 Age: 78
Mr. Gault was elected Chairman of the Board of Directors in a
non-executive capacity, effective November 4, 1999 and served as
Chairman until September 6, 2001. Mr. Gault was the Chairman of
the Board of The Goodyear Tire & Rubber Company from June 1991 to
June 1996, a manufacturer of tires, chemicals, polymers, plastic
film and other rubber products. Mr. Gault was Chief Executive
Officer of that Company from June 1991 to December 1995.
Previously, he was Chairman of the Board and Chief Executive
Officer of Rubbermaid Incorporated from May 1980 to May 1991. He
also is a director of The Timken Company and Wal-Mart Stores,
Inc. He is Chairman Emeritus of the Board of The College of
Wooster and a director of the National Association of
Manufacturers.
[[Image Removed: LOGO]] ANDREA JUNG
Director since 1998 Age: 45
Ms. Jung was elected Chairman of the Board of Directors and Chief
Executive Officer of the Company effective September 6, 2001,
having previously served as Chief Executive Officer since
November 4, 1999. Ms. Jung had been a member of the Board of
Directors since January 5, 1998 and President from January 5,
1998 to January 2001 and Chief Operating Officer from July 1,
1998 to November 4, 1999. She had been elected an Executive Vice
President of the Company in March 1997 concurrently continuing as
President, Global Marketing, a position she held from July 1996
to the end of 1997. Ms. Jung joined the Company in January 1994
as President, Product Marketing for Avon U.S. Previously, she was
Executive Vice President for Neiman Marcus and a Senior Vice
President for I. Magnin. Ms. Jung is a director of the General
Electric Company. She is a member of the N.Y. Presbyterian
Hospital Board of Trustees, Chairman of the Board of Directors of
the Cosmetic, Toiletry and Fragrance Association (CTFA) and a
director of Catalyst.
[[Image Removed: LOGO]] PAULA STERN, Ph.D
Director since 1997 Age: 58
Dr. Stern is Chairwoman of The Stern Group, Inc., an economic
analysis and trade advisory firm established in 1988. She was
Commissioner of the U.S. International Trade Commission from 1978
to 1986, and was its Chairwoman from 1984 to 1986. Dr. Stern is a
director of The Neiman Marcus Group, Inc., Hasbro, Inc. and
Avaya, Inc. She serves on the boards of a number of academic and
international organizations.
6
Members of the Board of Directors Continuing in Office-Term Expiring 2005
[[Image Removed: LOGO]] BRENDA C. BARNES
Director since 1994 Age: 50
Ms. Barnes was an Adjunct Professor at the Kellogg Graduate
School of Management and Guest Lecturer at North Central College
in 2002. Prior to 2002, Ms. Barnes served as interim President of
Starwood Hotels from November 1999 through March 2000. Prior to
1998, she served as President and Chief Executive Officer of
Pepsi-Cola North America. She is a director of Sears, Roebuck &
Co., The New York Times Co., PepsiAmericas, Inc. and Staples,
Inc. Ms. Barnes is also a director of Lucas Film, LTD, and is
Chair of the Board of Trustees for Augustana College.
[[Image Removed: LOGO]] FRED HASSAN
Director since 1999 Age: 58
Mr. Hassan is the Chairman and Chief Executive Officer of
Schering-Plough Corporation, a research-based global
pharmaceutical company. Prior to assuming this position in April
2003, Mr. Hassan had been Chairman and Chief Executive Officer of
Pharmacia Corporation since February 2001. Prior to that time, he
served as President and Chief Executive Officer of Pharmacia
after its creation in March 2000 from the merger of Pharmacia &
Upjohn, Inc. with Monsanto Company. Before that he served as
President and CEO of Pharmacia & Upjohn since May 1997. Mr.
Hassan previously held senior positions with Wyeth, including
that of Executive Vice President and Board member. Mr. Hassan is
a director of Schering-Plough Corporation. He is also the
immediate past Chairman of PhRMA (Pharmaceutical Research and
Manufacturers Association).
[[Image Removed: LOGO]] ANN S. MOORE
Director since 1993 Age: 53
Mrs. Moore is Chairman and Chief Executive Officer of Time, Inc.
Prior to assuming this position in July 2002, Mrs. Moore had been
Executive Vice President of Time, Inc. since September 2001,
where she had executive responsibilities for a portfolio of
magazines including Time, The Parenting Group, People, InStyle,
Teen People, People en Espanol and Real Simple. Mrs. Moore joined
Time, Inc. in 1978 in Corporate Finance. Since then, she has held
consumer marketing positions at Sports Illustrated, Fortune,
Money and Discover, moving to general management of Sports
Illustrated in 1983. She is also a director of the Wallace
Foundation.
--------------------------------------------------------------------------------------------
[[Image Removed: LOGO]] LAWRENCE A. WEINBACH
Director since 1999 Age: 64
|
Mr. Weinbach is Chairman of the Board, President and Chief
Executive Officer of Unisys Corporation, a worldwide information
services and technology company. He was elected to that position
in September 1997. He previously was Managing Partner-Chief
Executive of Andersen Worldwide, a global professional services
organization from 1989 to 1997 and had held various senior
executive positions with Andersen for a number of years prior
thereto. Mr. Weinbach is a director of Unisys Corporation and
UBS, AG.
7
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company's Board of Directors held eight meetings in 2003. The Board has the
following regular standing committees: Audit Committee, Compensation Committee,
Nominating and Corporate Governance Committee, and Finance and Strategic
Planning Committee. Directors are expected to attend all meetings of the Board
of Directors and the Board Committees on which they serve and to attend the
Annual Meeting of Shareholders. No director attended less than 75% of the
aggregate number of meetings of the Board and of each Board Committee on which
he or she served. All directors attended the 2003 Annual Meeting. In addition to
participation at Board and Committee meetings and the Annual Meeting of
Shareholders, our directors discharge their duties throughout the year through
communications with senior management regarding issues relating to the Company.
The non-management directors meet regularly in executive session, as needed,
without the management directors or other members of management. The Board,
based on the recommendation of the Nominating and Corporate Governance
Committee, has appointed Stanley Gault to preside at all executive sessions of
the Board and will review this appointment at least annually. In the absence of
the presiding director from any executive session, the non-management directors
will choose from among themselves one director to preside at such executive
session. A security holder who wishes to communicate with the Board, the
non-management directors as a group, the presiding director or any other
individual director may do so by addressing the correspondence to that
individual or group, c/o Corporate Secretary, Avon Products, Inc., 1345 Avenue
of the Americas, New York, NY 10105. All correspondence addressed to a director
will be forwarded to that director.
The Committee memberships listed below are effective as of January 1, 2004.
Audit Committee
Current Members Messrs. Weinbach (Chair), Ms. Barnes, and Messrs.
Cornwell and Fogarty
Number of Meetings Ten
in 2003
Primary The responsibilities of the Audit Committee are set
Responsibilities forth in the Committee's Charter, which is attached as
Appendix A to this Proxy Statement and is available on
the Company's website (www.avoninvestor.com). This
Charter was most recently revised on January 30, 2003;
any future revisions will be posted to the same
location on our website. In addition, a separate
report of the Audit Committee is set forth below.
Compensation Committee
Current Members Mrs. Moore (Chair), Messrs. Gault and Hassan and Ms.
Lagomasino
Number of Meetings Six
in 2003
Primary The responsibilities of the Compensation Committee are
Responsibilities set forth in the Committee's Charter, which is
attached as Appendix B to this Proxy Statement and is
available on the Company's website
(www.avoninvestor.com). This Charter was most recently
revised on January 30, 2003; any future revisions will
be posted to the same location on our website. In
addition, a separate report of the Compensation
Committee is set forth below.
8
Nominating and Corporate Governance Committee
Current Members Mr. Gault (Chair), Mr. Hassan, Ms. Lagomasino, Mrs.
Moore and Dr. Stern
Number of Meetings Five
in 2003
Primary The responsibilities of the Nominating and Corporate
Responsibilities Governance Committee are set forth in the Committee's
Charter, which is attached as Appendix C to this Proxy
Statement and is available on the Company's website
(www.avoninvestor.com). This Charter was most recently
revised on January 30, 2003; any future revisions will
be posted to the same location on our website.
Finance and Strategic Planning Committee
Current Members Mr. Fogarty (Chair), Ms. Barnes, Mr. Cornwell and Dr.
Stern
Number of Meetings Five
in 2003
Primary The responsibilities of the Finance and Strategic
Responsibilities Planning Committee are set forth in the Committee's
Charter, which is attached as Appendix D to this Proxy
Statement and is available on the Company's website
(www.avoninvestor.com). This Charter was most recently
revised on January 30, 2003; any future revisions will
be posted to the same location on our website.
Director Independence
The Board of Directors assesses the independence of its members at least
annually in accordance with the listing standards of the New York Stock
Exchange, the Sarbanes-Oxley Act of 2002 and the regulations of the Securities
and Exchange Commission, as well as the Company's Corporate Governance
Guidelines. As part of its assessment of the independence of the non-management
directors, the Board determines whether or not any such director has a material
relationship with Avon, either directly or indirectly as a partner, shareholder
or officer of an organization that has a relationship with Avon. In making this
determination, the Board broadly considers all relevant facts and circumstances,
including (i) the nature of the relationship; (ii) the significance of the
relationship to Avon, the other organization and the individual director; (iii)
whether or not the relationship is solely a business relationship in the
ordinary course of Avon's and the other organization's businesses and does not
afford the director any special benefits; and (iv) any commercial, banking,
consulting, legal, accounting, charitable and familial relationships; provided,
that ownership of a significant amount of Avon stock is not, by itself, a bar to
independence. In assessing the significance of the relationship to Avon and the
other organization, the Board has determined that a relationship in the ordinary
course of business involving the sale, purchase or leasing of goods or services
will not be deemed material if the amounts involved, on an annual basis,
represent less than one percent (1%) of Avon's revenues and of the revenues of
the other organization involved.
Maria Elena Lagomasino is Chairman and Chief Executive Officer of J.P. Morgan
Private Bank, a division of J.P. Morgan Chase & Co., an investment banking firm
that will perform services for the Company during the course of 2004, a
substantial portion of which would be a continuation of the banking, risk
management and administrative services regularly provided during 2003. The
Company conducts no business with J.P. Morgan Private Bank.
The Company, as is common for major global consumer products companies,
regularly advertises through various media, including television and magazines.
Some of these advertisements may appear from time to time on television stations
owned by or associated with Granite Broadcasting Corp., of which Mr. Cornwell is
9
Chairman and Chief Executive Officer, or in magazines owned by Time, Inc., of
which Mrs. Moore is Chairman and Chief Executive Officer. In 2003, the aggregate
cost of advertisements appearing on such television stations or in such
magazines was not material to Avon nor was the associated revenue material to
either Granite Broadcasting Corp. or Time, Inc.
Based on the materiality standard described above, none of the relationships
between the Company and Ms. Lagomasino, Mrs. Moore or Mr. Cornwell,
respectively, or any of the other non-management directors was material during
2003. The Board of Directors has concluded that each non-management director is
independent of the Company.
Director Nomination Process & Shareholder Nominations
As noted above, the Board of Directors has determined that each member of the
Nominating and Corporate Governance Committee is independent as defined by the
listing standards of the New York Stock Exchange and the Company's Corporate
Governance Guidelines.
The Committee's process for considering all candidates for election as
directors, including stockholder-recommended candidates, is designed to ensure
that the Committee fulfills its responsibility to recommend candidates that are
properly qualified and are not serving any special interest groups, but rather
the best interest of all of the shareholders.
Our Corporate Governance Guidelines and the charter of the Nominating and
Corporate Governance Committee require that our directors possess the highest
standards of personal and professional ethics, character and integrity and meet
the standards set forth in our Corporate Governance Guidelines. In identifying
candidates for membership on the Board, the Committee takes into account all
factors it considers appropriate, which may include professional experience,
knowledge, independence, diversity of backgrounds and the extent to which the
candidate would fill a present or evolving need on the Board.
If there is a need for a new director because of an open position on the Board
or because the Board has determined to increase the total number of directors,
the Committee may retain a third-party search firm to locate candidates that
meet the needs of the Board at that time. When a search firm is used, the firm
typically provides information on a number of candidates, for review and
discussion by the Committee. If appropriate, the Committee chair and some or all
of the members of the Committee may interview potential candidates. If in these
circumstances, in the Committee's judgment, the Committee determines that a
potential candidate meets the needs of the Board, has the relevant
qualifications, and meets the standards set forth in the Company's Corporate
Governance Guidelines, the Committee will vote to recommend to the Board the
election of the candidate as a director.
The Committee will consider director candidates recommended by shareholders if
properly submitted to the Committee. Shareholders wishing to recommend persons
for consideration by the Committee as nominees for election to the Board of
Directors can do so by writing to the Nominating and Corporate Governance
Committee, c/o Corporate Secretary, Avon Products, Inc., 1345 Avenue of the
Americas, New York, New York, 10105. Recommendations must include the proposed
nominee's name, detailed biographical data, work history, qualifications and
corporate and charitable affiliations, as well as a written statement from the
proposed nominee consenting to be named as a nominee and, if nominated and
elected, to serve as a director. The Committee will then consider the candidate
and the candidate's qualifications using the criteria as set forth above. The
Committee may discuss with the stockholder making the nomination the reasons for
making the nomination and the qualifications of the candidate. The Committee may
then interview the candidate and may also use the services of a search firm to
provide additional information about the candidate prior to making a
recommendation to the Board.
In addition, shareholders of record may nominate candidates for election to the
Board by following the procedures set forth in our By-laws. Information
regarding these procedures for nominations by shareholders will be provided upon
request to the Corporate Secretary of the Company.
10
|