Exhibit 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

This amendment (this “Amendment”) is entered into as of the 27th day of March,
2008, by and between Avon Products, Inc., a New York corporation (the
“Corporation”), and Brian Connolly (the “Executive”).

WHEREAS, the parties hereto previously entered into an employment agreement
dated as of March 23, 2007 (the “Employment Agreement”); and

WHEREAS, the Executive has since announced his intent to retire from employment
with the Corporation on March 31, 2008; and

WHEREAS, in order to comply with recent guidance issued under Section 409A of
the Internal Revenue Code of 1986, as amended (“Section 409A”), the parties
hereto wish to amend the Employment Agreement solely for the purpose of
complying with Section 409A in accordance with the terms set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. The third sentence in the second paragraph of Section 5(b) of the Employment
Agreement is hereby deleted in its entirety.

2. Sections 5(b)(i), 5(b)(ii), and 5(b)(iii) of the Employment Agreement are
hereby deleted in their entirety and replaced with the following paragraph:

“For purposes of this Agreement, the Separation Date is expected to be, and will
be no later than, March 31, 2008. As a severance payment, the Executive will
receive his twenty-four (24) months of Base Salary as follows: (A) nine
(9) months of Base Salary will be paid in equal bi-weekly installments over the
period beginning October 1, 2008 and ending on December 31, 2008; (B) twelve
(12) months of Base Salary will be paid in equal bi-weekly installments over the
period beginning January 1, 2009 and ending on May 31, 2009; and (C) three
(3) months of Base Salary will be paid in a lump sum in June 2009.

3. The last two sentences of Section 5(b) of the Employment Agreement are hereby
deleted in their entirety and replaced with the following:

“In addition to the cash payments specified above in this Section 5(b), the
Executive will be entitled to continued coverage under the Corporation’s
medical, dental, and life insurance plans through May 31,

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2009. The continuation of all other perquisites will be subject to the
Corporation’s standard severance terms and conditions then in effect and as they
may be amended by the Corporation from time to time.”

4. The last sentence of Section 5(c)(i) of the Employment Agreement is hereby
deleted and replaced with the following:

“Such special MIP award may not be deferred into the Avon Products, Inc.
Deferred Compensation Plan (the “DCP”). Such special MIP award will be paid to
the Executive by the Corporation during the calendar year following the calendar
year in which the Executive’s Separation Date occurs, but in no event during the
six-month period immediately following the Separation Date.”

5. Section 5(c)(ii) of the Employment Agreement is hereby deleted in its
entirety and replaced with the following:

“(ii) SERP Benefits. This Section 5(c)(ii) is an “Outside Agreement” under
Section 4.6 of the Supplemental Executive Retirement and Life Plan of Avon
Products, Inc. (the “SERP”). Capitalized terms used in this Section 5(c)(ii) but
not defined herein shall have the meaning set forth in the SERP. For purposes of
this Section 5(c)(ii), “Severance Period” shall mean the period of time
beginning on the day after the Executive’s Separation Date and continuing
through the last day on which the Executive receives a payment under
Section 5(b) above, if any, but in no event later than May 31, 2009.

Except with the written consent of the Executive, no amendment to the SERP after
March 23, 2007 will reduce the amount of the SERP benefits payable to the
Executive (or his Beneficiary or Dependent Children) under the terms of this
Section 5(c)(ii).

In order to comply with Internal Revenue Code Section 409A, this agreement makes
certain changes to the SERP and, for purposes of Section 409A compliance, this
agreement will be deemed to have amended the non-conforming provisions of the
SERP. To the extent that the provisions of the SERP are inconsistent with the
terms of this agreement, the terms of this agreement will control. By entering
into this agreement, the Executive (I) acknowledges that his SERP benefits will
be payable in accordance with the provisions of this agreement, (II) consents to
the amendments to the SERP contained in this agreement, and (III) waives any
rights to benefits that the Executive otherwise may have

 

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under Section 10 of the SERP by virtue of the amendments contained in this
agreement. The Executive also waives any rights that he may have under the rabbi
trust agreement that may provide a source of SERP benefits. By virtue of
receiving benefits under the SERP, the Executive will not be entitled to any
retirement benefit under the Benefit Restoration Pension Plan of Avon Products,
Inc. (the “BRP”) and hereby waives any right that he may otherwise have to a
benefit under the BRP.

Supplemental Retirement Allowance

Provided that the Executive does not resign (except for a Constructive
Termination) or is not terminated for “Cause” before March 31, 2008, the
Executive’s Supplemental Retirement Allowance (SERP retirement benefits) will be
calculated as follows:

(I) 2% of the Executive’s Average Final Compensation (in determining Average
Final Compensation, the SERP will include the Executive’s severance pay paid
during the Severance Period, and in no event will the Executive’s “compensation”
in 2008 and 2009 for this purpose be less than $600,000 for each year)
multiplied by the Executive’s Creditable Service up to twenty-five (25) years;
plus

(II) 1% of the Executive’s Average Final Compensation (in determining Average
Final Compensation, the SERP will include the Executive’s severance pay paid
during the Severance Period, and in no event will the Executive’s “compensation”
in 2008 and 2009 for this purpose be less than $600,000 for each year)
multiplied by the Executive’s Creditable Service in excess of twenty-five years
(where Creditable Service includes the Executive’s years of service during the
Severance Period); minus

(III) the Actuarial Equivalent of the benefit that would be payable to the
Executive as a single life annuity under the PRA on June 1, 2009, as if the
Executive elected to receive his benefit at such time in such form, regardless
of whether the Executive actually elects to begin payment of his benefits under
the PRA on June 1, 2009 and regardless of the form of payment the Executive
actually elects under the PRA.

The Supplemental Retirement Allowance is payable beginning June 2009. The
Supplemental Retirement Allowance will be payable as follows: (A) 80% of the
benefit as a lump-sum benefit payable in June 2009; and (B) 20% of the benefit
in sixty (60) equal monthly installments beginning in June 2009.

 

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If the Executive resigns (except for a Constructive Termination) before
March 31, 2008 or is terminated for “Cause,” his Supplemental Retirement
Allowance will be equal to the benefit he would have received under the BRP on
such date had he been eligible for the BRP, in accordance with the benefit
calculation terms of the BRP on his Separation Date. The Supplemental Retirement
Allowance in such circumstances will be payable beginning in June 2009. The
Supplemental Retirement Allowance as herein calculated in this paragraph will be
payable as follows: (A) 80% of the benefit as a lump-sum benefit payable in June
2009; and (B) 20% of the benefit in sixty (60) equal monthly installments
beginning in June 2009.

The Supplemental Retirement Allowance described in this Section 5(c)(ii)
overrides the provisions of the SERP where there is a conflict.

Beneficiary Allowance

In the event that the Executive should die (i) while actively employed with the
Corporation, or (ii) after such employment ends but before the Supplemental
Retirement Allowance begins to be paid to him in June 2009 (unless such
employment ends due to a resignation by the Executive (other than a Constructive
Termination) before March 31, 2008 or a termination by the Corporation with
“Cause”), then the Executive’s Beneficiary will receive a Beneficiary Allowance
(SERP death benefit) beginning in June 2009. In such case, the Beneficiary
Allowance will be payable to the Executive’s Beneficiary as if the Executive
continued to receive Creditable Service and severance pay includible in Average
Final Compensation through May 31, 2009, and the Beneficiary will receive a
Beneficiary Allowance in the same form and in the same amount as if the
Executive then began to receive his Supplemental Retirement Allowance. If the
Executive dies after the actual Supplemental Retirement Allowance begins to be
paid to him, then no Beneficiary Allowance will be payable.

If the Executive dies after his active employment with the Corporation ends but
before June 1, 2009 (and only if such employment ends due to a resignation by
the Executive (other than a Constructive Termination) before March 31, 2008 or a
termination by the Corporation with “Cause”), then the Executive’s Beneficiary
will be entitled to a Beneficiary Allowance equal to the amount that the
Executive would have

 

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received under the BRP on such date had he been eligible for the BRP, in
accordance with the benefit calculation terms of the BRP on the date of his
employment termination as if the Executive’s Beneficiary was his beneficiary
under the BRP. The time of payment and form of such Beneficiary Allowance shall
continue to be as set forth in the previous paragraph.

Unless the Executive elects in writing otherwise prior to his death, his
Beneficiary is deemed to be his spouse. In the event that the Executive elects
for a trust or his estate to be his Beneficiary, then the Beneficiary Allowance
will be determined as if the Beneficiary (his trust or estate) were five
(5) years younger than him on the date of his death.

The Beneficiary Allowance described in this Section 5(c)(ii) overrides the
provisions of Sections 5.1 and 5.2 of the SERP.

Dependent Child Allowance

In the event that the Executive should die (i) while actively employed with the
Corporation, or (ii) after such employment ends but before the Supplemental
Retirement Allowance begins to be paid to him in June 2009 (unless such
employment ends due to a resignation by the Executive (other than a Constructive
Termination) before March 31, 2008 or a termination by the Corporation with
“Cause”), each “Dependent Child” at the time of the Executive’s death, for up to
four (4) such children, will receive an annual Dependent Child Allowance (the
SERP dependent child death benefit) beginning in the first month following the
Executive’s death. This Dependent Child Allowance will continue to be paid to
each such Dependent Child on each anniversary of the initial payment date as
long as such child remains a “Dependent Child” on the subsequent payment date.
After the date of the Executive’s death, no individual can become a “Dependent
Child.” The Dependent Child Allowance is payable in addition to the death
benefit described in the “Beneficiary Allowance” subsection above. If the
Executive dies (A) after his active employment with the Corporation ends but
before June 1, 2009 (and only if such employment terminated due to a resignation
by the Executive (other than a Constructive Termination) before March 31, 2008
or a termination by the Corporation with “Cause”), or (B) after the Supplemental
Retirement Allowance begins to be paid to him, then no Dependent Child Allowance
will be payable.

 

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A “Dependent Child” is a child of the Executive that is unmarried and either:
(I) has not attained age 21 at the time of the Executive’s death; or (II) is
Incapacitated and has not attained age 25 at the time of the Executive’s death.
“Incapacitated” is defined in accordance with a child’s eligibility for federal
SSI benefits and means that the Executive’s child has a physical or mental
condition(s) on the date of the Executive’s death that began prior to the
child’s attainment of age 19, that very seriously limits his or her activities,
and that has lasted or can be expected to last for one year or to result in his
or her death. A “child” for these purposes is a child born to or legally adopted
by the Executive as of the date of the Executive’s death.

The amount of the annual Dependent Child Allowance is equal to ten percent
(10%) of the monthly Beneficiary Allowance, determined as if such Beneficiary
Allowance were payable as a monthly single life annuity, multiplied by twelve
(12). In the event that the Beneficiary of the Beneficiary Allowance is the
Executive’s spouse, the amount specified in this paragraph as being payable to
each Dependent Child will be increased to add an additional ten percent (10%) of
the amount payable to the Executive’s spouse under the PRA.

If there are more than four Dependent Children, the total amount otherwise
payable to the four Dependent Children shall be divided equally among all
Dependent Children at the time such payment is made. When a child ceases to be a
Dependent Child, the total allowance then payable will be reallocated among the
remaining Dependent Children to the extent applicable; provided that no
Dependent Child shall be entitled to an allowance in excess of the benefit set
forth above.

The Dependent Child Allowance described in this Section 5(c)(ii) overrides
Section 5.3 of the SERP.”

6. A new Section 5(c)(iv) is hereby added to the Employment Agreement as
follows:

“SLIP Benefits. The Executive will continue to participate in the SLIP portion
of the SERP plan document (the “SLIP”) while he is actively employed by the
Corporation, and during the period up to and including May 31, 2009 during which
he is receiving severance payments, if any. In order to comply with Internal
Revenue Code Section 409A, this agreement makes certain changes to the SLIP and,
for purposes of Internal Revenue Code Section 409A compliance, this agreement
will be deemed to have

 

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amended the non-conforming provisions of the SLIP. To the extent that the
provisions of the SLIP are inconsistent with the terms of this agreement, the
terms of this agreement will control. By signing this agreement, the Executive
consents to the amendments to the SLIP contained in this agreement, and waives
any rights to the benefits that he otherwise may have under Section 10 of the
SERP (relating to the SLIP) by virtue of the amendments contained in this
agreement.

The Executive’s SLIP benefit will become payable if the Executive dies while he
is actively employed by the Corporation, or during the period up to and
including May 31, 2009 during which he is receiving severance payments, if any,
provided that the Executive does not resign from employment (except for a
Constructive Termination) prior to March 31, 2008 and is not terminated for
“Cause.” In all other circumstances, no SLIP benefit will be payable. If the
SLIP benefit becomes payable due to the Executive’s death, the SLIP benefit
payable to the Executive’s Beneficiary will be $1,000,000.”

7. The first sentence of the penultimate paragraph in Section 7(g) of the
Employment Agreement is hereby deleted in its entirety and replaced with the
following:

“If at the time of a payment of the DCP benefit, the Executive has not violated
the covenants of this agreement, the Executive’s DCP benefit will be deemed to
be paid to him but the Executive hereby assigns and agrees to pay the
Corporation from the DCP benefit payment an amount equal to the entire DCP
benefit amount, or, if lesser: (a) twenty-four months’ of Base Salary;
multiplied by (b) a fraction, the numerator of which is 29 minus the number of
full months that have occurred since the Separation Date (the “DCP Assigned
Amount”), and the denominator of which is 29.”

8. The fourth sentence of the penultimate paragraph in Section 7(g) of the
Employment Agreement is hereby deleted in its entirety and replaced with the
following:

“Such payment will be made to the Executive by the Corporation within ten
(10) business days following, and no earlier than, the 29-month anniversary of
the Separation Date.”

9. A new paragraph is hereby added to the end of Section 9 of the Employment
Agreement as follows:

“In order to avoid unfavorable tax treatment for participants, including the
Executive, the Corporation must amend the SERP and the

 

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SLIP (and the related rabbi trust agreement) to comply with Section 409A. In
order to amend these plans, the documents require consent from each participant.
By signing this agreement, the Executive acknowledges that his SERP and SLIP
benefits will be payable in accordance with this agreement and the Executive is
waiving his right to approve and consent to the amendments that will be made to
the SERP, the SLIP document, and the related rabbi trust document, including to
comply with Section 409A, and such amendments may be made to such documents
without the Executive’s consent.”

10. Continued Validity of the Employment Agreement. Except as amended and
superseded by this Amendment, the Employment Agreement will remain in full force
and effect, will continue to bind the parties hereto, and will continue to
govern the terms and conditions of the Executive’s continued employment with the
Corporation. To the extent that the terms of this Amendment conflict or are
inconsistent with the terms of the Employment Agreement, the terms of this
Amendment will govern.

11. Effect of Equity Awards and Other Benefits. This Amendment will not
supersede, or otherwise derogate from, any restrictive covenant or other
obligation that the Executive may have under any equity award granted to the
Executive by the Corporation or in any Corporation benefit plan in which the
Executive participates (for example, forfeiture provisions and/or obligations
with respect to competition and confidentiality assumed by the Executive in
connection with his stock option awards, Section 9.5 of the SERP, and
Section 4.7 of the BRP).

12. Amendment Effective Date. This Amendment will become binding and effective
once both parties hereto have executed this Amendment.

13. Severability. The provisions of this Amendment are severable and it is the
intent of the parties hereto that the provisions of this Amendment be enforced
to the fullest extent permissible under the laws of each jurisdiction in which
enforcement is sought. The invalidity or unenforceability of any provision of
this Amendment will not affect the validity or enforceability of any other
provision of this Amendment.

14. Governing Law; Jurisdiction. This Amendment will be governed by and
construed in accordance with the laws of the State of New York without regard to
its conflict of laws principles. Any action at law or in equity for the
enforcement of this Amendment, by either party, shall be instituted only in
state or federal court having proper jurisdiction located within the State of
New York, County of New York.

 

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15. Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall be an original and all of which shall be deemed to
constitute one and the same instrument.

16. Successors. This Amendment is personal to the Executive and, without the
written consent of the Corporation, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Amendment
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives. This Amendment shall inure to the benefit of and be binding
upon the Corporation and its successors. The Corporation shall require any
successor to all or substantially all of the business and/or assets of the
Corporation, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to assume this
Amendment in the same manner and to the same extent as the Corporation would be
required to perform if no such succession had taken place.

[Remainder of page intentionally left blank. Signature page follows.]

 

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IN WITNESS WHEREOF, the Executive has signed this Amendment, and the Corporation
has caused this Amendment to be signed in its name and on its behalf, all
effective as of the day and year first written above.

 

AVON PRODUCTS, INC. By:  

/s/ Lucien Alziari

Name:   Lucien Alziari Title:   SVP, HR BRIAN CONNOLLY

/s/ Brian Connolly

 

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EXHIBIT A – GENERAL RELEASE

In consideration of the special severance benefits being provided to me under my
employment agreement dates March 23, 2007, as it was amended in March 2008
(collectively, the “Agreement”), I agree, on behalf of myself and my heirs,
executors, administrators, and assigns, to forever release, dismiss, and
discharge (except as provided by the terms and conditions of the Agreement) Avon
Products, Inc. (“Avon” or the “Company”) and its affiliated companies and their
respective current and former officers, directors, associates, employees,
agents, employee benefit plans, employee benefit plan fiduciaries, employee
benefit plan trustees, shareholders, and assigns, each and all of them in every
capacity, personal and representative (collectively referred to as the “Avon
Released Parties”), from any and all actions, causes of action, claims, demands,
judgments, charges, contracts, obligations, debts, and liabilities of whatever
nature (“Losses”), that I and my heirs, executors, administrators, and assigns
have or may hereafter have against the Avon Released Parties or any of them
arising out of or by reason of any cause, matter, or thing whatsoever from the
beginning of the world to the date hereof, including, without limitation, my
employment relationship with Avon and the termination of such relationship, all
matters arising under any federal, state, or local statute, rule, or regulation,
or principle of contract law or common law, any breach of contract, wrongful
discharge, tort, breach of common-law duty, breach of fiduciary duty and
violation of laws prohibiting any form of employment discrimination or other
unlawful employment practice, including without limitation: the Worker
Adjustment and Retraining Notification Act of 1988, as amended, 29 U.S.C. §§
2101 et seq.; Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
§§ 2000 et seq.; the Age Discrimination in Employment Act of 1967, as amended,
29 U.S.C. §§ 621 et seq. (the “ADEA”); the Americans with Disabilities Act of
1990, as amended, 42 U.S.C. §§ 12101 et seq.; the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. §§ 1001 et seq.; the National Labor
Relations Act of 1935, as amended, 29 U.S.C. §§ 151 et seq.; the Family and
Medical Leave Act of 1993, as amended, 29 U.S.C. §§ 2601 et seq.; New York Human
Rights Law, as amended, N.Y. Exec. Law §§ 290 et seq.; the New York City Human
Rights Law, as amended, N.Y.C. Admin. Code §§ 8-101 et seq.; and any other
equivalent federal, state, or local statute, rule, or regulation; provided that
I do not release or discharge the Avon Released Parties (i) from any Losses
arising under the ADEA that arise after the date on which I execute this general
release, and (ii) from any claims for a breach by the Company of its obligations
under the Agreement. It is understood that nothing in this general release shall
preclude or prevent me from challenging the validity of this general release
solely with respect to my waiver of any Losses arising under the ADEA on or
before the date on which I execute this general release. It is further
understood that nothing in this general release is to be construed as an
admission on behalf of the Avon Released Parties of any wrongdoing with respect
to me, any such wrongdoing being expressly denied.

 

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It also is understood that this release does not release the Avon employee
benefit plans from any claims for vested benefits that I have under the terms of
any of the Company’s employee benefit plans applicable to me.

I represent and warrant that I have not filed any complaint, charge, claim, or
proceeding against any of the Avon Released Parties before any federal, state,
or local agency, court, or other body relating to my employment and the
cessation thereof. I further agree that, if I or any other person files an
action, complaint, charge, claim, or proceeding against any of the Avon Released
Parties, I will not seek or accept any monetary relief in such action,
complaint, charge, claim, or proceeding.

I further represent and understand that by signing this release, I agree that I
will, as may be reasonably requested from time to time by Avon, (i) advise and
consult on matters within or related to my expertise and knowledge in connection
with the business of Avon, (ii) make myself available to Avon to respond to
requests for information concerning matters involving facts or events relating
to Avon, and (iii) assist with respect to pending and future litigation,
investigations, arbitration, or other dispute resolution matters. In agreed upon
circumstances, I understand that if the Salary Continuation Period is still
continuing, I will be reimbursed for reasonable out-of-pocket expenses only. In
agreed upon circumstances, I understand that if the Salary Continuation Period
has ended, I will be paid at the rate of my current salary as of my last day of
active employment for time expended by me at Avon’s request on such matters, and
that I will receive reimbursement for reasonable out-of-pocket expenses incurred
in connection with such assistance. I understand that I will not be credited
with any compensation, service or age credit for purposes of eligibility,
vesting, or benefit accrual under any employee benefit plan of Avon.

I further represent and warrant that I fully understand the terms of this
general release, that I have been encouraged to seek the benefit of advice of
counsel, and that I knowingly and voluntarily, of my own free will, without any
duress, being fully informed, and after due deliberation, accept its terms and
sign below as my own free act. I understand that as a result of executing this
general release, I will not have the right to assert that Avon or any other Avon
Released Party unlawfully terminated my employment or violated any of my rights
in connection with my employment.

I understand that in the event Avon receives any inquiries from prospective
employers, it shall be the policy of Avon to respond by advising that Avon’s
policy is to provide information only as to service dates and positions held and
by providing such information.

I acknowledge that I am hereby being advised by Avon to consult with

 

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legal counsel before signing this general release. Further, I have 45 days to
consider whether to sign this general release, during which time Avon will not
change or revoke the offer contained in the Agreement. I understand that if I do
not execute this general release and return it to Avon within 7 days of the date
on which I received the Agreement, then I will not be entitled to any benefits
under the Agreement. As long as I sign and return this general release and the
Agreement within such time period, I will have seven days immediately thereafter
to revoke my decision by delivering written notice of such revocation to the
Senior Vice-President Human Resources. If I do not revoke my decision during
that seven-day period, then this general release and the Agreement will become
effective on the eighth day.

This general release shall be governed by the laws of the State of New York
without giving effect to its conflict of laws principles and federal law where
applicable.

 

      3/27/2008    

/s/ Brian Connolly

              Date     Signature      

Brian Connolly

      Print Name

 

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