Document:

Ex 10.56 2012

    
[Avon Letterhead]
EXHIBIT 10.56
                                                    

February 1, 2013
Personal & Confidential
Mr. John Owen
[Home Address]

Re:    Agreement and Release of Claims

Dear John:
Avon Products, Inc.'s (“Avon's”) commitment to meet the competitive challenges of business climates means that the composition of our workforce will require change from time to time.  At this time, Avon has decided to terminate your employment.  Knowing that change is never easy, Avon wants to assist you in this transitional period.  Pursuant to our conversation today, this Letter Agreement and General Release of Claims (this “Agreement”) sets forth your benefits under the Avon Products, Inc. Severance Pay Plan (the “Plan”).  The Plan was designed to help affected employees as much as feasible under these difficult circumstances.
The Plan automatically pays you two weeks of your base salary (the “automatic severance”).  A total of two weeks of base salary, then, is payable to you at this time.
However, the Plan provides that: (1) if you sign and submit this Agreement within the time specified in the last numbered paragraph of this Agreement (numbered paragraphs in the Agreement will be called “Paragraphs”); and (2) you do not revoke the Agreement, again, within the time specified in the last Paragraph, you will be entitled to additional severance amounts in excess of the automatic severance and you will be entitled to certain other benefits (hereinafter, for clarity, this collection of payments and benefits will be called the “Program”).  The Program is payable instead of the automatic severance.  If you sign this Agreement and accept the Program, your election will become effective on the eighth day after you sign the Agreement, assuming you do not timely revoke it, as described in the last Paragraph.  
Please note, however, that if you sign the Agreement earlier than your last day of active employment, Avon is requesting that you sign another general release (the “Second General Release”) containing release provisions similar to those contained in this Agreement.  This Second General Release may also be revoked within the time specified in the last Paragraph and will only become effective on the eighth day after it is signed.  Until this Agreement and the 

Second General Release becomes effective, you do not have a binding right to severance benefits beyond the automatic severance (two weeks).  If you elect not to sign the Agreement, you are entitled to retain the automatic severance (two weeks of base salary).
The below Paragraphs describe the treatment of your benefits after your Separation Date (defined in Paragraph 1) and, where applicable, describe the additional benefits available under the Program, assuming you accept the offer contained in this Agreement and do not timely revoke your acceptance and the Second General Release:
		
	1.
	Last Day of Active Employment

Your last day of active employment with Avon will be August 31, 2013 (the “Separation Date”).  You must work through your designated last day of employment to receive Program benefits.  You will receive a separate payment for any earned, but unused, vacation benefits.
If you accept the offer contained in this Agreement, a Lump Sum Cash Payment (defined in Paragraph 2 below), less all applicable deductions, will be made to you in 2013, no earlier than the first paycheck date which occurs after the eighth day following the execution of the Second General Release.  Note that the Second General Release may be executed no earlier than the Separation Date.  
You will receive a separate payment for any earned, but unused, vacation benefits.  
		
	2.
	Lump Sum Cash Payment

If you elect to participate in the Program, you will receive a cash payment based upon 104 weeks of your current annual base salary of $565,000, as calculated by Avon payroll in accordance with Avon's normal payroll practices equal to what would be payable as base salary to you for the 104-week period beginning September 1, 2013 through August 31, 2015 (the “Lump Sum Cash Payment”).  The Lump Sum Cash Payment will be paid in one lump sum, less applicable deductions as specified in Paragraph 1 above.
For the avoidance of doubt, note that the Lump Sum Cash Payment is exempt from the requirements of Internal Revenue Code Section 409A (“409A') because it satisfies the requirements to be a “short term deferral.”
If you do not accept the Program, you will receive no severance benefits other than your automatic severance (for a total of two weeks of base salary).

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	3.
	Retirement Plans and Retirement Medical Plan

PRA:  Regardless of whether you accept the Program, you may retire under the Avon Products, Inc. Personal Retirement Account Plan (the “PRA”).  Your benefit will be calculated as of the Separation Date both under the “Old Plan” formula and the Cash Balance benefit formula and you will receive the greater of the two benefits.  You may first retire and receive your PRA benefit in September 2013.
Restoration Plan:  As with the PRA, regardless of whether you accept the Program, you may retire under the Benefit Restoration Pension Plan of Avon Products, Inc. (the “Restoration Plan”).  Again, your benefit will be calculated as of the Separation Date under both formulas and you will receive the greater of the two benefits.  Your Restoration Plan benefit will be paid in accordance with the terms of the Restoration Plan in the form that you have already elected or in the default form of payment under the Restoration Plan (80% lump sum, 20% payable in 60 equal monthly installments).  Because through March 31, 2013, under 409A, you qualify as a “key employee” (one of the top 50 highest-paid Avon employees), and because Avon believes that after Avon determines its key employees for the period April 1, 2013 through March 31, 2014 you will again qualify as a key employee, you are hereby deemed to be a “key employee” under 409A for all of Avon's nonqualified deferred compensation plans as of August 31, 2013, even if later analysis yields a different result.  Therefore, as a deemed key employee under 409A and pursuant to the Restoration Plan, though the Restoration Plan benefit will be calculated as of the Separation Date, the first payment will not be paid to you until March 2014.  Interest calculations on the delayed amount are pursuant to the terms of the Restoration Plan.
Retirement Medical Plan:  As with the retirement plans, regardless of whether you accept the Program, you are eligible to begin participating in the Avon Products, Inc. Medical Plan for Retired Employees (the “Retirement Medical Plan”) in September 2013, assuming you satisfy the other eligibility requirements under the Retirement Medical Plan.  
		
	4.
	Avon Personal Savings Account Plan:  With respect to the Avon Personal Savings Account Plan (the “PSA”), also known as the 401(k) Plan, you are considered a terminated employee on your Separation Date.  Upon your Separation Date, you may take a distribution of your benefits immediately.  You may roll over the contents of your PSA account into an Individual Retirement Account or other tax-deferred savings account in accordance with applicable tax rules.  Please consult with your accountant or tax advisor before doing so.  Any outstanding loans you may have are payable within three months after your Separation Date. 

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	5.
	Cash Incentive Awards

Annual EIP:  You are currently a participant in the Avon Products, Inc. Executive Incentive Plan (the “Annual EIP”).  Payments, if any, are governed by the terms of the Annual EIP, and are triggered by the attainment of Avon performance measures and individual performance goals, as determined in accordance with Company policies.  You will be entitled to a 2012 Annual EIP award, if any, payable in 2013, assuming you satisfy the 2012 Annual EIP requirements.  You will be eligible for a pro-rated 2013 Annual EIP award, if any, assuming you satisfy the 2013 Annual EIP requirements, which will be payable, if at all, in 2014.
Long-Term Cash Plans under the EIP
You are currently a participant in four long-term cash incentive plans under the EIP (hereinafter called the “Long-Term Cash Plans”):  (1) the 2011 Transition Cash Plan; (2) the 2011-2012 Transition Cash Plan; (3) the 2011-2013 Long-Term Incentive Program; and (4) the 2012-2014 Long-Term Incentive Program.  Terminations under the Long-Term Cash Plans are governed by the terms of each such plan.  Please look at the summary of each plan for details about distributions following a termination of employment.
Generally, however:
		
	•
	2011 Transition Cash Plan - It has been determined this Plan will not pay out.

		
	•
	2011-2012 Transition Cash Plan - This Plan will pay out, if at all, in 2014.  Your award is pro-rated based upon the number of completed months from January 1, 2011 to your Separation Date (32/36).

		
	•
	2011-2013 Long-Term Incentive Program - This Plan will pay out, if at all, in 2014.  Your award is pro-rated based upon the number of completed months from January 1, 2011 to your Separation Date (32/36).

		
	•
	2012-2014 Long-Term Incentive Program -- This Plan will pay out, if at all, in 2015.  Your award is pro-rated based upon the number of completed months from January 1, 2012 to your Separation Date (20/36).

		
	•
	You will not be eligible to receive a 2013 Long-Term Incentive Grant.

As a reminder, all of your Long Term Cash Plans are subject to Avon's compensation recoupment policies.
		
	6.
	Deferred Compensation Plan:  Under the Avon Products, Inc. Deferred Compensation Plan (the “DCP”), distributions will begin in accordance with the terms of such plan and any elections you may have made under such plan, including any amendments to such 

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plan that may be enacted from time to time.  Your DCP form and timing of payment elections are available online at www.mullinconsulting.com.  Generally, you will receive the first distribution from your DCP Retirement Accounts no earlier than January 2014 (for pre-2005 accounts only).  You will receive your distribution from your Current Retirement Accounts under the DCP no earlier than January 2015.  Note that different distribution election (both form and timing) may apply for your pre-2005 and post-2004 (Current) accounts under the DCP.
		
	7.
	Equity Plans 

Stock Options
You have nine outstanding option grants (2003, 2004, two 2005, 2006, 2007, 2008, 2009 and 2010).  You are currently 100% vested in all stock options (though 1/3 of your 2010 grant is not exercisable until March 2013).  Note that you have partially exercised your 2003 and 2009 options.  Each of these options will remain exercisable through the end of their respective 10-year terms and will continue to be governed by the applicable stock option agreement(s) and the stock incentive plan(s). 
RSUs
You have one outstanding time-based retention restricted stock unit (“RSU”) (2010).  It will vest in August 2013 and will settle within 60 days.  Please see your individual agreement and the 2010 Stock Incentive Plan for details.
PRSUs
You have two outstanding performance-restricted stock units (“PRSUs”) (2011 and 2012).
		
	•
	2011 Grant - Your 2011 Grant will be pro-rated based upon the completed months from January 1, 2011 to your Separation Date (32/36) and will settle, if at all, in 2014.  

		
	•
	2012 Grant - Your 2012 Grant will be pro-rated based upon the completed months from January 1, 2012 to your Separation Date (20/36) and will settle, if at all, in 2015.

		
	•
	You will not be eligible to receive a 2013 Long-Term Incentive Grant.

Please see the equity plan brochure(s), your individual PRSU agreements and the 2010 Stock Incentive Plan for details.
As a reminder, your equity arrangements may be subject to Avon's clawback and compensation recoupment policies.

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	8.
	Career Transition and Development Services:  If you accept the Program, you will also receive career transition and development services provided by Mullin Associates.  Please contact Keith Mullin for more information on outplacement services (kmullin@mullinassociates.com, 212-768-3900 Ext: 250).  Your eligibility for outplacement services will begin on September 1, 2013 and will continue for twelve months. If, at the conclusion of this initial career transition and development period, you have not found new employment, you may be eligible for a maximum of twelve additional months of career transition and development services, to be granted in one-month increments at the sole discretion of Avon.

If you do not accept the Program, no career and transitional services will be provided to you.
		
	9.
	Health and Welfare Plans

Your coverage under the Avon Products, Inc. Medical Plan for Active Employees will end on your Separation Date (for the Medical, Dental, Vision, Health Savings Account and Employee Assistance subplans).  You will then be entitled to elect continued coverage under COBRA for your active health insurance at your own expense, assuming you satisfy the requirements of COBRA.  Alternatively, you can elect to begin participating in the Retirement Medical Plan as of September 1, 2013, assuming you satisfy the requirements for participation.  Note that dependent eligibility rules different between the active and retiree medical plans.
Your Group Life Insurance, Supplemental Life Insurance, Group Accidental Death and Dismemberment (“AD&D”) and Supplemental AD&D and the Short-Term and Long-Term Disability plans will also all terminate on your Separation Date.  Note that you may be entitled to convert the Group Life coverage to individual life insurance coverage.  Please contact MetLife before your Group Life insurance coverage terminates for details.
In addition, if you participate in the Flexible Spending Accounts and the Transit Incentive Plan, these, too, will cease on your Separation Date (except that you may continue to participate for the remainder of the calendar year in the Health Care Flexible Spending Account in accordance with the federal law known as COBRA, assuming you satisfy the requirements of COBRA and assuming that you elect COBRA).  You will receive separate paperwork required to elect COBRA continuation coverage for the Health Care Flexible Spending Account.
If you participate in the Transit Incentive Plan, you will have 90 days after you Separation Date to spend the remaining funds on your WageWorks Transit Commuter Card.  At the end of the 90-day period, any post-tax funds remaining on the card will be returned to you and any pre-tax funds will be forfeited.  Federal regulations prohibit Avon from returning forfeited funds back to you.  For more information please contact WageWorks at 877-924-3967.

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	10.
	Perquisites 

Personal Auto and Excess Liability:  Your Personal Auto and Excess Liability insurance ceases on your Separation Date.
SLIP:  Your participation in the SLIP will cease as of your Separation Date. 
Executive Health Insurance:  If you have not already received your annual Executive Health Exam by your Separation Date, you may still receive the exam no later than November 30, 2013.
Transportation Allowance:  You will be entitled to receive a transportation allowance for the three-month period following your last day of active employment.  Normally this will paid in the same manner as it is paid as when you were an active employee, except that because you are a deemed key employee, you will be paid this benefit in a lump sum payment no earlier than the end of the calendar quarter which is at least six months after your last day of active employment, as required by Internal Revenue Code Section 409A.  This means that you will be paid your transportation allowance no earlier than March 31, 2014.
Home Security: You may continue to receive home security through the end of the annual contract period.
Financial Planning and Tax Preparation:  You will be eligible for Financial Planning and Tax Preparation services through December 2015.  Reimbursements will generally be quarterly on the last day of the quarter.   However, because you are a key employee, your first reimbursement will not be made until the end of the calendar quarter which is at least six months after your last day of active employment.  Thereafter, reimbursements will be made on a quarterly basis on the last day of the calendar quarter.  This means that you will not be reimbursed for your first Financial Planning and Tax Preparation earlier than March 31, 2014.
Your continued receipt of the above perquisite(s) is subject to the following rules:  (x) to the extent that any such perquisite is provided via reimbursement to you, no such reimbursement will be made by Avon later than the end of the year following the year in which the underlying expense is incurred; (y) any such perquisite provided by Avon in any year will not be affected by the amount of any such perquisite provided by Avon in any other year; and (z) under no circumstances will you be permitted to liquidate or exchange any such perquisite for cash or any other benefit. 
		
	11.
	Your Obligations to Avon

In consideration of the benefits being provided to you under the Program, if you accept the Program, you further agree to the following:

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	(a)
	You will not knowingly use or disclose, directly or through persons interposed, without Avon's prior written consent (which may only be provided by a Senior Vice President or higher officer), as and from this date, and at any time, any secret, confidential, or proprietary information or knowledge relating to Avon or any of its affiliated companies, and their respective businesses, agents, employees, customers and independent sales representatives, that you obtained or generated during or as a result of your employment at Avon, such as, but not limited to, financial information and projections, marketing information and plans, product formulations, samples, processes, production methods, intellectual property and trade secrets, data, know-how, sales, market development programs and plans, and other types of information not generally available to the public. 

		
	 (b)
	You will not knowingly take any action or make any statement, whether written or oral, whether in public or private, that disparages or defames the goodwill or reputation of Avon, its associated companies, or their directors, officers, and employees.  Nor will you disclose the terms and conditions of this Agreement to anyone, except as required by law or to your immediate family, accountant, and legal counsel after securing their similar commitments of strict confidentiality.

		
	(c)
	You will not, without Avon's prior written consent (which may only be provided by a Senior Vice President or higher officer) through August 31, 2015 (the “Noncompetition Period”), directly or indirectly hire, solicit, or aid in the solicitation of, any employee of Avon or an affiliated company, including any solicitation of an employee to leave his or her Avon employment to work for any other employer.

		
	(d)
	Notwithstanding anything else in this Agreement, you will not, during the Noncompetition Period, without Avon's prior written consent (which may only be provided by the Chief Executive Officer), accept employment with, or act as a consultant or independent contractor to, any company engaged in the direct selling business or the beauty business within or without the United States including, but not limited to, the following:  Amway Corp./Alticor Inc., Beiersdorf (Nivea), De Millus S.A., Ebel Int'l/Belcorp Corp., Faberlic, Forever Living Products LLC USA, Gryphon Development/Limited Brands Inc., Herbalife Ltd., Hermès, Lady Racine/LR Health & Beauty Systems GmbH, L'Oréal Group/Cosmair Inc., Mary Kay Inc., Mistine/Better Way (Thailand) Co. Ltd., Natura Cosmetics S.A., Neways Int'l, NuSkin Enterprises Inc., O Boticário, Oriflame Cosmetics S.A., Reckitt Benckiser PLC, Revlon Inc., Sara Lee Corporation, Shaklee Corp., The Body Shop Int'l PLC, The Estée Lauder Companies Inc., The Procter & Gamble Company, Tupperware Corp., Unilever Group (N.V. and PLC), Virgin Vie, Virgin Ware, Vorwerk & Co. KG/Jafra Worldwide Holdings (Lux) S.à.R.L. Inc., Yanbal Int'l (Yanbal, Unique), or any of their affiliates.  Notwithstanding the foregoing, this provision does not prohibit you from accepting employment or acting as a consultant or independent 

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contractor to any entity whose divisions or units are engaged in the direct selling or beauty business, so long as you do no work for or with such divisions or units.
		
	(e)
	By signing this Agreement and the Second General Release, you are agreeing that you may be reasonably requested from time to time by Avon:  (x) to advise and consult on matters within or related to your expertise and knowledge in connection with the business of Avon; (y) to make yourself available to Avon to respond to requests for information concerning matters involving facts or events relating to Avon; and (z) to assist with pending and future litigation, investigations, arbitrations, and/or other dispute resolution matters.  If you provide such consultation before the end of the Noncompetition Period, Avon will only reimburse you for reasonable related out-of-pocket expenses.  If you provide such consultation after the end of the Noncompetition Period, you shall be paid at your current salary rate for time expended by you at Avon's request on such matters, and shall also receive reimbursement for reasonable out-of-pocket expenses incurred in connection with such assistance.  You understand that, with respect to any consultation services provided by you under this paragraph, you 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, unless such employee benefit plan specifically provides for such credit.

		
	(f)
	By signing this Agreement and the Second General Release, you acknowledge that you understand that violations of any of the preceding covenants are material and that any violations may result in a forfeiture, at Avon's sole discretion, of your benefits and payments under this Agreement (including the lump sum cash payment), but do not relieve you of your continuing obligations under this Agreement.  You agree that Avon's remedies at law for any breach by you of the preceding covenants will be inadequate and that Avon will also have the right to obtain immediate injunctive relief so as to prevent any continued breach of any of these covenants, in addition to any other available legal remedies.  It is understood that any remedy available at law or in equity shall be available to Avon should the preceding covenants be breached.

		
	12.
	E-Mail and Voicemail:  Your e-mail and voicemail will be discontinued as of your Separation Date.

		
	13.
	Return of Avon Property:  On your Separation Date, you agree to promptly deliver to Avon, and not keep in your possession, duplicate, or deliver to any other person or entity, any and all property which belongs to Avon or any of its affiliated companies, including, without limitation, automobiles, computer hardware and software, cell phones, Blackberrys, iPhones, iPads, Androids, other electronic equipment, keys, credit cards, identification cards, records, data, and other documents and information, including any and all copies of the foregoing.

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	14.
	Employment Inquiries:  You 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.

		
	15.
	Entire Agreement and Amendments to Agreement: You acknowledge that the only consideration for both your execution of this Agreement (which includes a general release of claims) and your execution of the Second General Release is what is expressly stated in this document.  All other promises or agreements of any kind that have been made by or between the parties or by any other person or entity whatsoever that are related to the subject matter of this Agreement are superseded by this Agreement, except that any nondisclosure, intellectual property protection, non-solicit, non-compete or classified information agreements with the Company continue to apply and any plans (such as the PRA), agreements (such as any equity award agreement), or policies (such as Avon's clawback policy) that are referenced in this Agreement as continuing to be applicable are not superseded.  You agree that this Agreement and the Second General Release may not be changed orally, by email, or by any other form of electronic communication, but only by a mutually signed, written agreement.

		
	16.
	Severability:  You agree that the provisions of this Agreement and the Second General Release are severable.  If a provision or any part of a provision is held to be invalid under any law or ruling, the remaining parts of the provision will remain valid and in force to the extent allowed by law.  All of the remaining provisions of this Agreement and the Second General Release will remain in full force and effect and be enforceable.  If any restriction contained in this Agreement or the Second General Release is held to be excessively broad as to duration, activity, or scope, then that restriction will be construed, “blue-penciled” or judicially modified so as to be limited or reduced to the extent required to be enforceable under applicable law.

		
	17.
	Voluntary Participation in the Program:  You are not required to elect to participate in the Program.  Any election to do so by you is completely voluntary.  By signing this Agreement and the Second General Release, you warrant and represent that you have read this entire Agreement and the Second General Release, that you have had an opportunity to consult fully with an attorney, and that you fully understand the meaning and intent of this Agreement and the Second General Release.  Further, you knowingly and voluntarily, of your own free will, without any duress, being fully informed, and after due deliberation, accept its terms and sign below as your own free act.  You understand that as a result of executing this Agreement and the Second General Release, you will not have the right to assert that Avon or any other Avon Released Party (as defined both in the Agreement in Paragraph 20 below and in the Second General Release) unlawfully terminated your employment or violated any of your rights in connection with your employment.

		
	18.
	Governing Law:  You agree that this Agreement (which includes a general release of claims) and the Second General Release will be governed by and construed in accordance 

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with the laws of the State of New York, without regard to its conflict of laws principles, and federal law where applicable.  Any action at law or in equity for the enforcement of this Agreement, by either party, shall be instituted only in state or federal court located within the City of New York, State of New York except that, to the extent that Avon is seeking equitable relief to enforce your obligations under this Agreement, Avon may, instead of relying on this jurisdiction provision, seek such relief as provided in the last subparagraph under Your Obligations to Avon.
		
	19.
	Election Not to Participate in the Program and Basic Severance Benefits:  Should you elect not to execute this Agreement and/or to execute the Second General Release, you will be provided only with the automatic severance (two weeks base salary) and continued coverage under certain Avon benefit plans during that period (or, for some plans, until the last day of the month in which such payments end).  Following this two-week salary continuation period, you will be notified by a separate letter of your right to elect continued health insurance coverage, at your own expense, under COBRA. 

		
	20.
	General Release

In consideration of the severance benefits herein (i.e., the acceptance of the Program benefits) and the other terms and conditions of this Agreement, you agree, on behalf of yourself and your heirs, executors, administrators, and assigns, to forever release, dismiss, and discharge (except as provided by this Agreement) Avon and its affiliated companies and each of 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 (“Claims”), that you and your 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:
		
	•
	All Claims arising from your employment relationship with Avon and the termination of such relationship;

		
	•
	All Claims arising under any federal, state, or local constitution, statute, rule, or regulation, or principle of contract law or common law;

		
	•
	All Claims for breach of contract, wrongful discharge, tort, breach of common-law duty, or breach of fiduciary duty;

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	•
	All Claims for violation of laws prohibiting any form of employment discrimination or other unlawful employment practice, including without limitation, as applicable:

		
	◦
	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. §§ 2000e 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 Family and Medical Leave Act of 1993, as amended, 29 U.S.C. §§ 2601 et seq. (the “FMLA”);

		
	◦
	The Genetic Information Nondiscrimination Act of 2008, as amended, 42 U.S.C. §§ 2000ff et seq.; 

		
	◦
	The National Labor Relations Act of 1935, as amended, 29 U.S.C. §§ 151 et seq.;

		
	◦
	The 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 the New York State Worker Adjustment and Retraining Notification Act, as amended, N.Y. Labor Law §§ 860 et seq.;

		
	◦
	Any other state's and local government's human rights laws, anti-discrimination laws, and “plant closing”/mini-WARN Act laws;

		
	◦
	 “Whistleblower” laws and laws protecting “whistleblowers” from retaliation; and

		
	◦
	Any other federal, state, or local statute, rule, or regulation; 

provided, that you do not release or discharge the Avon Released Parties:  (x) from any Claims arising after the date on which you execute this Agreement; (y) from any Claims for a breach by Avon of its obligations under this Agreement; or (z) from any Claims that 

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by law cannot be released or waived.  It is understood that the release herein does not release the Avon employee benefit plans from any claims for vested benefits that you have under the terms of any of Avon's employee benefit plans applicable to you.  It is further understood that nothing in this release shall preclude or prevent you from challenging the validity of this release solely with respect to any waiver of any Claims arising under the ADEA on or before the date on which you execute this Agreement. 
Nothing in this Agreement is to be construed as an admission on behalf of the Avon Released Parties of any wrongdoing with respect to you, any such wrongdoing being expressly denied. 
You represent and warrant that you 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 your employment and the cessation thereof.  You agree that, if you or any other person or entity files an action, complaint, charge, claim, or proceeding against any of the Avon Released Parties, you will not seek or accept any monetary, equitable, or other relief in such action, complaint, charge, claim, or proceeding (including without limitation, relief that would provide you with reinstatement to employment with Avon) and that you will take all available steps/procedures to withdraw and/or dismiss the complaint, charge, claim or proceeding.
If you are employed in, or, formerly employed in the State of California, you additionally acknowledge that you are aware of and familiar with the provisions of Section 1542 of the California Civil Code, which provides as follows:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the general release which if known by him must have materially affected his settlement with the debtor.”
If you are employed in, or, formerly employed in the State of California, by signing this Agreement, you hereby waive and relinquish all rights and benefits which you may have under Section 1542 of the California Civil Code and under the law of any other state or jurisdiction to the same or similar effect.  You represent and warrant that you have the authority to enter into this general release on your behalf individually and to bind all persons and entities claiming through you.
You acknowledge that Avon has advised you to consult with legal counsel prior to signing this Agreement and the Second General Release.  You represent and warrant that you fully understand the terms of this Agreement, and the Second General Release, and you knowingly and voluntarily, of your own free will, without any duress, being fully informed, and after due deliberation, accept its terms and sign below as your own free act.  You understand that, as a result of signing this Agreement and the Second General Release, you will not have the right to assert that Avon or any other Avon Released Party 

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unlawfully terminated your employment or violated any of your rights in connection with your employment.
		
	21.
	Additional Representations

		
	(a)
	You acknowledge that you have been paid in full (or will be paid in full pursuant to the Company's normal payroll practice policy) for all hours that you have worked for Avon and other than what is provided for in this Agreement, you have no other rights to any other compensation or benefits.

		
	(b)
	You further acknowledge that you have not been denied any leave requested under the FMLA or applicable state leave laws and that, to the extent applicable, you have been returned to your job, or an equivalent position, following any FMLA or state leave taken pursuant to the FMLA or state laws.

		
	(c)
	You acknowledge, understand and agree you have reported to Avon any work related injury or illness that occurred up to and including the Separation Date. 

		
	22.
	Compliance with Laws/Tax Treatment:  Avon will comply with all payroll/tax withholding requirements and will include in income these benefits as required by law.  Avon cannot guarantee the tax treatment of any of these benefits and makes no representation regarding the tax treatment.

		
	23.
	Internal Revenue Code Section 409A:  The parties hereto have a made a good faith effort to comply with current guidance under Internal Revenue Code Section 409A (“409A”).  The intent of the parties hereto is that payments and benefits under this Agreement comply with or be exempt from 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith, including, without limitation, that references to “termination of employment” and like terms, with respect to payments and benefits that are provided under a “nonqualified deferred compensation plan” (as defined in 409A) that is not exempt from 409A, will be interpreted to mean “separation from service” (as defined in 409A).  In the event that amendments to this Agreement are necessary in order to comply with 409A or to minimize or eliminate any income inclusion and penalties under 409A (e.g., under any document or operational correction program), Avon and you agree to negotiate in good faith the applicable terms of such amendments and to implement such negotiated amendments, on a prospective and/or retroactive basis, as needed.  To the extent that any amount payable or benefit to be provided under this Agreement constitutes an amount payable or benefit to be provided under a “nonqualified deferred compensation plan” (as defined in 409A) that is not exempt from 409A, and such amount or benefit is payable or to be provided as a result of a “separation from service” (as defined in 409A), and you are a “specified employee” (as defined in 409A and determined pursuant to procedures adopted by Avon from time to time) on your separation from service date, then, notwithstanding any other provision in this Agreement to the contrary, such payment or

14

Initials  JO

benefit will not be made or provided to you before the day after the date that is six (6) months following your separation from service.  Notwithstanding the foregoing, Avon makes no representation to you about the effect of 409A on the provisions of this Agreement and Avon shall have no liability to you in the event that you become subject to taxation under 409A (other than any tax reporting and/or withholding obligations that Avon may have under applicable law).
		
	24.
	Advice of Counsel:  You acknowledge that you have been and are hereby advised by Avon to consult with an attorney in regard to this matter.  You understand that you are responsible for the costs of any such legal services incurred in connection with such consultation.

		
	25.
	Permissible Time to Sign Agreement and Second General Release.  If you do not sign this Agreement and return it to Avon within 21 days of the date on which you receive this Agreement and if you do not sign the Second General Release and return it within the time specified, then you will not be entitled to any benefits under the Program beyond the automatic severance provided to all terminating.  As long as you sign and return this Agreement within this time period, you will have seven (7) days immediately thereafter to revoke your decision by delivering, within the seven (7) day period, written notice of revocation to the Senior Vice President, Human Resources or a designated Human Resources employee.  If you do not revoke your decision during that seven-day period, then this Agreement will become effective on the eighth day.  Note that similar revocation rules apply to the Second General Release.  If you sign and return this Agreement and the Second General Release within the times specified, each will become effective on the eighth day.

You understand that the present offer of the Program is made without prejudice and is conditional upon its unqualified acceptance and the execution and delivery by you of this Agreement, and the execution and delivery of the Second General Release.  Note that the Agreement includes a confidentiality agreement regarding confidential information obtained while you were in the employ of Avon.
Your signature below signifies your voluntary acceptance of the terms of this Agreement, its confidentiality clauses regarding information obtained while you were in the employ of Avon and your election to receive benefits under the Program, which benefits you acknowledge are in excess of those provided under Avon's regular severance pay policies.
A duplicate copy of this Agreement and the Second General Release is attached for your files.  Please sign and date both copies of this Agreement, in the spaces provided, returning one copy to Avon and retaining the other copy for your records.  If you elect not to participate in the Program, please notify Avon, in writing, as soon as practicable of your decision.
[Signatures on next page]

15

Initials  JO

We thank you for your contributions to Avon, and wish you success with your future career.
Sincerely,
AVON PRODUCTS, INC.

	
			
	 
	By: /s/Sheri McCoy                                
	 

	 
	SHERI MCCOY
	 

	 
	CHIEF EXECUTIVE OFFICER
	 

You have carefully reviewed, understood and agree with the terms and conditions specified in this Agreement above.  You have signed to indicate your acceptance thereof.

	
			
	Date: 2/11/2013
	 
	By: /s/John Owen                              

	 
	 
	JOHN OWEN

	 
	 
	 

    

16

Initials  JOCORP 10K 2012 Exhibit 10.23

Exhibit 10.23

JPMORGAN CHASE & CO. LONG-TERM INCENTIVE PLAN
TERMS AND CONDITIONS OF JANUARY 17, 2013
RESTRICTED STOCK UNIT AWARD
OPERATING COMMITTEE (Protection-Based Vesting Provisions)

	
		
	Award 
Agreement
	These terms and conditions are made part of the Award Agreement dated as of January 17, 2013 (“Grant Date”) awarding restricted stock units pursuant to the terms of the JPMorgan Chase & Co. Long-Term Incentive Plan (“Plan”). To the extent the terms of the Award Agreement (all references to which will include these terms and conditions) conflict with the Plan, the Plan will govern. The Award Agreement, the Plan and Prospectus supersede any other agreement, whether written or oral, that may have been entered into by the Firm and you relating to this award.

This award was granted on the Grant Date subject to the Award Agreement. Unless you decline by the deadline and in the manner specified in the Award Agreement, you will have agreed to be bound by these terms and conditions, effective as of the Grant Date. If you decline the award, it will be cancelled as of the Grant Date.

Capitalized terms that are not defined in “Definitions” below or elsewhere in the Award Agreement will have the same meaning as set forth in the Plan.

JPMorgan Chase & Co. will be referred to throughout the Award Agreement as “JPMorgan Chase,” and together with its subsidiaries as the “Firm.”

	Form and 
Purpose of 
Award
	Each restricted stock unit represents a non-transferable right to receive one share of Common Stock as of the applicable vesting date as set forth in your Award Agreement.

The purpose of this award is to motivate your future performance for services to be provided during the vesting period and to align your interests with those of the Firm and its shareholders.

	Dividend 
Equivalents
	If dividends are paid on Common Stock while restricted stock units under this award are outstanding, you will be paid an amount equal to the dividend paid on one share of Common Stock, multiplied by the number of restricted stock units outstanding under this award.

	Protection-
Based Vesting
	This award is intended and expected to vest on the applicable vesting date, provided that you are continuously employed by the Firm through such vesting date, or you meet the requirements for continued vesting described under the captions “Job Elimination,” “Full Career Eligibility,” “Government Office” and “Disability.” However, vesting is subject to the sections of these terms and conditions captioned “Bonus Recoupment” and “Recapture Provisions” and the following protection-based vesting provisions.

Up to a total of fifty percent of your award (“At Risk restricted stock units”) may be cancelled under (i) and (ii): 

(i)  The Chief Executive Officer of JPMorgan Chase (“CEO”) determines that cancellation of all or portion of the At Risk restricted stock units is appropriate in light of any one or a combination of the following factors:
•    Your performance in relation to the priorities for your position, or the Firm’s performance in relation to the priorities for which you share responsibility as a member of the Operating Committee, have been unsatisfactory for a sustained period of time. Among the factors the CEO may consider in assessing performance are net income, net revenue, return on equity, earnings per share and capital ratios of the Firm, both on an absolute basis and, as appropriate, relative to peer firms.
•    For any calendar year ending during the vesting period, JPMorgan Chase’s annual pre-provision net income reported at the Firm level is negative.
•    Awards granted to participants in a Line of Business, for which you exercise, or during the vesting period exercised, direct or indirect responsibility, were in whole or in part cancelled because the Line of Business did not meet its annual Line of Business Financial Threshold.

(ii)     To the extent that the full number of At Risk restricted stock units have not been cancelled pursuant to the circumstances described in (i) above, then any remaining At Risk restricted stock units scheduled to vest on January 13, 2016 will be cancelled if, for the three calendar years preceding that date, the Firm does not meet the Firmwide Financial Threshold, unless the CEO determines that it is appropriate that some or all of such At Risk restricted stock units should vest with respect to a particular individual or individuals due to extraordinary circumstances.

	
		
	 
	In the event that your employment terminates due to “Job Elimination,” ”Full Career Eligibility,” Government Office” or “Disability” entitling you to continued vesting in your award, the cancellation circumstances described in (i) and (ii) above will continue to apply to your At Risk restricted stock units. 

Any determination above with respect to protection-based vesting provisions is subject to ratification by the Compensation and Management Development Committee of the Board of Directors of JPMorgan Chase (“Committee”).  In the case of an award to the CEO, all such determinations shall be made by the Committee.

	Vesting Period
	The period from the Grant Date to the last vesting date is the “vesting period.” (See “Administrative Provision--No Ownership Rights” pursuant to which the Firm may place restrictions on delivered shares of Common Stock following a vesting date.)

	Bonus 
Recoupment
	In consideration of the grant of this award, you agree that you are subject to the JPMorgan Chase Bonus Recoupment Policy as in effect from time to time as it applies both to the cash incentive compensation awarded to you for 2012 and to this award. You can access this policy through the following link:
http://www.jpmorganchase.com/corporate/About-JPMC/corporate-governance-principles.htm#recoupment

	Recapture Provisions
(Detrimental Conduct, 
Risk-Related 
and Other Recapture Provisions)
	Notwithstanding any terms of this Award Agreement to the contrary, JPMorgan Chase reserves the right in its sole discretion to cancel your outstanding restricted stock units under this award and/or to recover from you an amount equal to the Fair Market Value (determined as of the applicable vesting date) of the gross number of shares of Common Stock distributable to you under this award:
•    If you engaged in conduct detrimental to the Firm insofar as it causes material financial or reputational harm to the Firm or its business activities, or
•    If this award was based on materially inaccurate performance metrics, whether or not you were responsible for the inaccuracy, or
•    If this award was based on a material misrepresentation by you, or
•    If you improperly or with gross negligence failed to identify, raise or assess, in a timely manner and as reasonably expected, risks and/or concerns with respect to risks material to the Firm or its business activities, or
•    If your employment was terminated for Cause (see “Definitions” below) or the Firm determines after the termination of your employment that your employment could have been terminated for Cause. 

See “Remedies” below for additional information.  

The Firm’s right to cancel and/or recover value of this award (or any cash bonus) under the JPMorgan Chase Bonus Recoupment Policy and the other provisions of this award relate to the “organizational goals” of the Firm as that term is defined by regulations issued under Section 409A of the Internal Revenue Code (“Code”).

	Termination of Employment
	Except as explicitly set forth below under the sections captioned “Job Elimination,” “Full Career Eligibility,” “Government Office,” “Disability” and “Death,” any restricted stock units outstanding under this award will be cancelled effective on the date your employment with the Firm terminates for any reason.

	 
	Subject to these terms and conditions (including, but not limited to, sections captioned  “Protection-Based Vesting,” “Bonus Recoupment,” “Recapture Provisions,” “Recovery,” “Your Obligations”), you will be eligible to continue to vest ( on the original vesting schedule) with respect to your award following the termination of your employment if one of the following circumstances applies to you:

	Ø Job 
Elimination
	Job Elimination:
In the event that
•    the Director Human Resources of the Firm or nominee in his or her sole discretion determines that the Firm terminated your employment because your job was eliminated, and
•    after you are notified that your job will be eliminated, you provide such services as requested by the Firm in a cooperative and professional manner, and
•    you satisfy the Release/Certification Requirements set forth below.

	Ø Full 
Career
Eligibility
	Full Career Eligibility:
In the event that 
•    you voluntarily terminate your employment with the Firm, have completed at least five years of continuous service with the Firm immediately preceding your termination date, and the sum of your age and Recognized Service (as defined below) on your date of termination equals or exceeds 60, and
•    you provide at least 90 days advance written notice to the Firm of your intention to voluntarily terminate your employment under this provision, during which notice period you provide such services as requested by the Firm in a cooperative and professional manner and you do not perform any services for any other employer, and
•    the Firm determines prior to the date your employment terminates that continued vesting is appropriate, which determination will be based on your performance and conduct (before and after providing notice), and

	
		
	 
	•    from your date of termination of employment through the applicable vesting date, you do not (i) perform services in any capacity (including self-employment) for a Financial Services Company (as defined below) or (ii) work in your profession (whether or not for a Financial Services Company); provided that you may work for a government, education or Not-for-Profit Organization (as defined below), and
•    you satisfy the Release/Certification Requirements set forth below.

After receipt of such advance written notice, the Firm may choose to have you continue to provide services during such 90-day period or shorten the length of the 90-day period at the Firm’s discretion, but to a date no earlier than the date you would otherwise meet the age and service requirements.

Additional advance notice requirements may apply for employees subject to notice period policies. (See “Notice Period” below.)

	Ø Government Office
	Government Office:
In the event that you voluntarily terminate your employment with the Firm to accept a Government Office or become a candidate for an elective Government Office, as described at the end of these terms and conditions under the section captioned “Government Office.”

	Ø Disability
	Disability: 
In the event that 
•    your employment with the Firm terminates because (i) you are unable to return to work while you are receiving benefits under the JPMorgan Chase Long Term Disability Plan, or for non-U.S. employees, under the equivalent JPMorgan Chase-sponsored local country plan (in either case, “LTD Plan”),  or (ii) if you are not covered by a LTD Plan, you are unable to return to work due to a long-term disability that would qualify for benefits under the applicable LTD Plan, as determined by the Firm or a third-party designated by the Firm; provided that  you (x) request in writing continued vesting due to such disability within 30 days of the date your employment terminates, and (y) provide any requested supporting documentation and (z) receive the Firm’s written consent to such treatment, and
•    you satisfy the Release/Certification Requirements set forth below.

	Release/
Certification
	To qualify for continued vesting after termination of your employment under any of the foregoing circumstances:
•    you must timely execute and deliver a release of claims in favor of the Firm, having such form and terms as the Firm shall specify,
•    with respect to Full Career Eligibility, prior to the termination of your employment, you must confirm with management that you meet the eligibility criteria (including providing at least 90 days advance written notification), advise that you are seeking to be treated as an individual eligible for Full Career Eligibility, and receive written consent to such continued vesting, 
•    with respect to Disability, you must satisfy the  notice and documentation described above and receive written consent to such continued vesting,  and 
•    except in the case of a Job Elimination, it is your responsibility to take the appropriate steps to certify to the Firm prior to each vesting date on the authorized form of the Firm that you have complied with the employment restrictions applicable to you (as described above) from your date of termination of employment through the applicable vesting date and in all cases, otherwise complied with all other terms of the Award Agreement.   (See “Your Obligations” below.)

	Death
	If you die while you are eligible to vest in restricted stock units under this award, the restricted stock units will immediately vest and will be distributed in shares of Common Stock (after applicable tax withholding) to your designated beneficiary on file with the Firm’s Stock Administration Department, or if no beneficiary has been designated or survives you, then to your estate.  Any shares will be distributed by the later of the end of the calendar year in which you die or the 15th day of the third month following your date of death.

	Your Obligations
	In consideration of the grant of this award, you agree to comply with and be bound by the obligations set forth below next to the sections captioned “Non-Solicitation of Employees and Customers,”  “Confidential Information,” “Non-Disparagement,” ”Cooperation,” “Compliance with Award Agreement,” and “Notice Period.”

	
		
	Ø Non-Solicitation of Employees and Customers
	During your employment by the Firm and for one year following the termination of your employment, or if longer, during the vesting period, if you continue to vest after your employment with the Firm terminates, you will not directly or indirectly, whether on your own behalf or on behalf of any other party, without the prior written consent of the Director Human Resources of JPMorgan Chase: (i) solicit, induce or encourage any of the Firm’s then current employees to leave the Firm or to apply for employment elsewhere, (ii) hire any employee or former employee who was employed by the Firm at the date your employment terminated, unless the individual’s employment terminated because his or her job was eliminated, or the individual’s employment with the Firm has been terminated for more than six months, (iii) to the fullest extent enforceable under applicable law, solicit or induce or attempt to induce to leave the Firm, or divert or attempt to divert from doing business with the Firm, any then current customers, suppliers or other persons or entities that were serviced by you or whose names became known to you by virtue of your employment with the Firm, or otherwise interfere with the relationship between the Firm and such customers, suppliers or other persons or entities.  This does not apply to publicly known institutional customers that you service after your employment with the Firm without the use of the Firm’s confidential or proprietary information. 

These restrictions do not apply to authorized actions you take in the normal course of your employment with the Firm, such as employment decisions with respect to employees you supervise or business referrals in accordance with the Firm’s policies.

	Ø Confidential Information
	You will not, either during your employment with the Firm or thereafter, directly or indirectly (i) use or disclose to anyone any confidential information related to the Firm’s business, or (ii) communicate with the press or other media about matters related to the Firm, its customers or employees, including matters and activities relating to your employment, or the employment of others, by the Firm, in the case of either (i) or  (ii), except as explicitly permitted by the JPMorgan Chase Code of Conduct and applicable policies or law or legal process.  “Confidential information” shall have the same meaning for the Award Agreement as it has in the JPMorgan Chase Code of Conduct.

	Ø Non-Disparagement
	You will not, either during your employment with the Firm or thereafter, make or encourage others to make any public statement or release any information in verbal, written, electronic or any other form, that is intended to, or reasonably could be foreseen to, disparage, embarrass or criticize the Firm or its employees, officers, directors or shareholders as a group.  This shall not preclude you from reporting to the Firm’s management or directors or to the government or a regulator conduct you believe to be in violation of the law or the Firm’s Code of Conduct or responding truthfully to questions or requests for information to the government, a regulator or in a court of law in connection with a legal or regulatory investigation or proceeding.

	Ø Cooperation
	You will cooperate fully with and provide full and accurate information to the Firm and its counsel with respect to any matter (including any audit, tax proceeding, litigation, investigation or governmental proceeding) with respect to which you may have knowledge or information, subject to reimbursement for actual, appropriate and reasonable out-of-pocket expenses incurred by you.

	Ø Compliance with Award Agreement
	You will provide the Firm with any information reasonably requested to determine compliance with the Award Agreement, and you authorize the Firm to disclose the terms of the Award Agreement to any third party who might be affected thereby, including your prospective employer.

	Ø Notice Period
	If you are subject to a notice period, whether by contract or by policy, that requires you to provide advance written notice of your intention to terminate your employment (“Notice Period”), then as consideration for this award and continued employment, you will provide the Firm with the necessary advance written notice that applies to you, as specified by such contract or policy.  

After receipt of your notice, the Firm may choose to have you continue to provide services during the applicable Notice Period or may place you on a paid leave for all or part of the applicable Notice Period.  During the Notice Period, you shall continue to devote your full time and loyalty to the Firm by providing services in a cooperative and professional manner and not perform any services for any other employer and shall receive your base salary and certain benefits until your employment terminates.  You and the Firm may mutually agree to waive or modify the length of the Notice Period. 

Regardless of whether a Notice Period applies to you, you must comply with the 90-day advance notice period described under the section captioned “Full Career Eligibility” in the event you wish to terminate employment under the Full Career Eligibility provision.

	 
	 

	
		
	Remedies
	 

	Ø Cancellation
	In addition to the cancellation provisions described under sections captioned “Protection-Based Vesting,” “Termination of Employment” and “Recapture Provisions”, your outstanding restricted stock units under this award may be cancelled if:
•    the Firm, in its sole discretion, determines that you are not in compliance with any of the advance notice/cooperation requirements or employment restrictions applicable to your termination of employment, or
•    you fail to return the required forms specified under the section captioned “Release/Certification” within the specified deadline, including the certification required immediately prior to a vesting date under Full Career Eligibility and Disability, or
•    you violate any of the provisions as set forth above in the section captioned “Your Obligations.”

	Ø Recovery
	In addition, you may be required to pay the Firm an amount equal to the Fair Market Value (determined as of the vesting date) of the gross number of shares of Common Stock distributable to you under this award as follows:
•    shares distributed, including shares withheld for tax purposes, within the one year period prior to your violation of any of the provisions as set forth above in the section captioned “Your Obligations,”  
•    shares distributed, including shares withheld for tax purposes, at any time following termination of employment when you were not in compliance with the employment restrictions then applicable to you during such period, 
•    shares distributed, including shares withheld for tax purposes, within the one year period immediately preceding and any time after your termination of employment, if your employment was terminated or the Firm determines that your employment could have been terminated, for Cause, 
•    shares distributed, including shares withheld for tax purposes, within the three year period immediately preceding and any time after your termination of employment, if the Firm determines that you committed a fraudulent act, or engaged in  knowing and willful misconduct related to your employment,
•    for a period up to one year after shares are distributed  (including shares withheld for tax purposes) under this award (or any longer period applicable in the case of termination for Cause), to the extent that the Firm determines appropriate pursuant to the section captioned “Recapture Provisions” above.

Payment may be made in shares of Common Stock or in cash.  You agree that this repayment will be a recovery of shares to which you were not entitled under the terms and conditions of your Award Agreement and is not to be construed in any manner as a penalty.  You also acknowledge that a violation or attempted violation of the obligations set forth herein will cause immediate and irreparable damage to the Firm, and therefore agree that the Firm shall be entitled as a matter of right to an injunction, from any court of competent jurisdiction, restraining any violation or further violation of such obligations; such right to an injunction, however, shall be cumulative and in addition to whatever other remedies the Firm may have under law or equity.  

	Administrative Provisions
	Withholding Taxes:  The Firm, in its sole discretion, may (i) retain from each distribution the number of shares of Common Stock required to satisfy applicable tax obligations (including, to the extent legally permissible, recovery by the Firm of fringe benefit taxes) or (ii) implement any other desirable or necessary procedures, so that appropriate withholding and other taxes are paid to the competent authorities with respect to the vested shares, dividend equivalents and the award.  This may include but is not limited to (i) a market sale of a number of such shares on your behalf substantially equal to the withholding or other taxes, (ii) to the extent required by law, withhold from cash compensation, an amount equal to any withholding obligation with respect to the award, vested shares, and/or  dividend equivalents, and  (iii) retaining vested shares or dividend equivalents until you pay any taxes associated with the award, vested shares and/or the dividend equivalents directly to the competent authorities.  For United States tax purposes, dividend equivalents are treated as wages and subject to tax withholding when paid. 

	 
	Right to Set Off:  The Firm may, to the maximum extent permitted by applicable law, retain for itself funds or securities otherwise payable to you pursuant to this award to satisfy any obligation or debt that you owe to the Firm. The Firm may not retain such funds or securities payable under this award until such time as they would otherwise be distributable to you in accordance with the Award Agreement.

	
		
	

	No Ownership Rights:  Restricted stock units do not convey the rights of ownership of Common Stock and do not carry voting rights.  No shares of Common Stock will be issued to you until after the restricted stock units have vested and any applicable restrictions have lapsed.  Prior to any vesting date, JPMorgan Chase may impose for any reason, as of such vesting date and for up to 90 days following such date, such restrictions on the Common Stock to be issued to you as it may deem appropriate, including, but not limited to, restricting the sale, transfer, pledge, assignment or encumbrance of such shares of Common Stock. By accepting this award, you agree to such restrictions without any further consent required.  Shares will be issued in accordance with JPMorgan Chase’s procedures for issuing stock.  By accepting this award, you authorize the Firm, in its discretion, to establish on your behalf a brokerage account in your name with the Firm and deliver to that brokerage account any vested shares derived from the award and, for avoidance of doubt, you further agree that it shall apply to prior unvested awards.  JPMorgan Chase’s obligation hereunder is unfunded.
Binding Agreement:  The Award Agreement will be binding upon any successor in interest to JPMorgan Chase, by merger or otherwise.
Not a Contract of Employment: Nothing contained in the Award Agreement constitutes a contract of employment or continued employment.  Employment is “at-will” and may be terminated by either you or JPMorgan Chase for any reason at any time.  This award does not confer any right or entitlement to, nor does the award impose any obligation on the Firm to provide, the same or any similar award in the future and its value is not compensation for purposes of determining severance.
Section 409A Compliance:  To the extent that Section 409A of the Code is applicable to this award, distributions of shares and cash hereunder are intended to comply with Section 409A of the Code, and the Agreement Award, including these terms and conditions, shall be interpreted in a manner consistent with such intent.
Notwithstanding anything herein to the contrary, if you (i) are subject to taxation under the Code, (ii) are a specified employee as defined in the JPMorgan Chase 2005 Deferred Compensation Plan and (iii) have incurred a  separation from service (as defined In that Plan) and if any units/shares under this award represent deferred compensation as defined in Section 409A and such shares are distributable to you as a result your separation from service, then those shares will be delivered to you on first business day of the first calendar month after  the expiration of six full months from date of your separation from service.  Further, if your award  is not subject to a substantial risk of forfeiture as defined by regulations issued under Section 409A of the Code,  then the  remainder of each calendar year immediately following (i) each  vesting date shall be a  payment date for purposes  of distributing the vested portion of the award  and (ii) each date that JPMorgan Chase specifies for payment of dividends declared on its Common Stock shall be the payment date(s) for purposes of distributing dividend equivalent payments.
Change in Outstanding Shares:  In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, issuance of a new class of common stock, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to stockholders of Common Stock other than regular cash dividends, the Committee will make an equitable substitution or proportionate adjustment, in the number or kind of shares of Common Stock or other securities issued or reserved for issuance pursuant to the Plan and to any restricted stock units outstanding under this award for such corporate events.
Interpretation/Administration:  The Committee has sole and complete authority to interpret and administer this Award Agreement, including, without limitation, the power to (i) interpret the Plan and the terms of this Award Agreement; (ii) determine the reason for termination of employment; (iii) determine application of the post-employment obligations and cancellation and recovery provisions; (iv) decide all claims arising with respect to this award; and (v) delegate such authority as it deems appropriate.  Any determination by such Committee or its delegate shall be binding on all parties.

	 
	Notwithstanding anything herein to the contrary, the Firm’s and the Committee’s determinations under the Plan and the Award Agreements are not required to be uniform.  By way of clarification, the Committee and the Firm shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.

	 
	Amendment:  The Committee or its delegate reserves the right to amend this Award Agreement in any manner, at any time and for any reason; provided, however, that no such amendment shall materially adversely affect your rights under this Award Agreement without your consent except to the extent that the Committee or its delegate considers advisable to (x) comply with applicable laws or changes in or interpretation of applicable laws, regulatory requirements and  accounting rules or standards and (y)  make  a change in a scheduled vesting date or impose the  restrictions described above  under  “No Ownership Rights,” in either case, to the  extent permitted by Section 409A of the Code.  This Award Agreement may not be amended except in writing signed by the Director Human Resources of JPMorgan Chase. 

	 
	Severability: If any portion of the Award Agreement is determined by the Firm to be unenforceable in any jurisdiction, any court or arbitrator of competent jurisdiction or the Director Human Resources may reform the relevant provisions (e.g., as to length of service, time, geographical area or scope) to the extent the Firm (or court/arbitrator) considers necessary to make the provision enforceable under applicable law.  

	
		
	 
	Accelerated Distribution for Ethics or Conflict Reasons Resulting From Employment by a Government Entity:  Upon receipt of satisfactory evidence that applicable United States federal, state, local, foreign or supranational ethics or conflict of interest laws or regulations require you to divest your interest in JPMorgan Chase restricted stock units,  the Firm may accelerate the distribution of all or part of your outstanding award effective on or before the required divesture date; provided that no accelerated distribution shall occur if the Firm determines that such acceleration will violate Section 409A of the Code.  If you have voluntarily terminated your employment and have satisfied the requirements of the “Government Office” section of this award, acceleration shall apply (to extent required) to the percentage of your outstanding award that would continue to vest under that section. In the case of a termination of employment where the award is outstanding as a result of “Job Elimination” or “Full Career Eligibility”, then acceleration shall apply, to the extent required, to the full outstanding award. Notwithstanding accelerated distribution pursuant to the foregoing, you will remain subject to the applicable terms of your Award Agreement as if your award had remained outstanding for the duration of the original vesting period, including, but not limited to, repayment obligations and employment restrictions in the case of “Full Career Eligibility” or “Government Office.”
Use of Personal Data:  By accepting this award, you have acknowledged that the Firm  may use your personal data for purposes of (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, (iii) registration of shares and units, (iv) establishing  brokerage account on your behalf, and (v) all other lawful purposes related  to your employment and this award and that the Firm may provide such data to third party vendors with whom it has contracted to provide such services.  You may terminate this authorization at any time except with respect to tax and regulatory reporting.  In such case, your award will be cancelled.
Governing Law: This award shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.
Choice of Forum:  By accepting this award, you agree that to the extent not otherwise subject to arbitration under an arbitration agreement between you and the Firm, any dispute arising directly or indirectly in connection with this award or the Plan shall be submitted to arbitration in accordance with the rules of the American Arbitration Association if so elected by the Firm in its sole discretion.  In the event such a dispute is not subject to arbitration for any reason, you agree to accept the exclusive jurisdiction and venue of the United States District Court for the Southern District of New York with respect to any judicial proceeding in connection with this award or the Plan.  You waive, to the fullest extent permitted by law, any objection to personal jurisdiction or to the laying of venue of such dispute and further agree not to commence any action arising out of or relating to this award or the Plan in any other forum.
Waiver of Jury Trial/Class Claims:  By accepting this award, you agree, with respect to any claim brought in connection with your employment with the Firm in any forum (i) to waive the right to a jury trial and (ii) that any judicial proceeding or arbitration claim will be brought on an individual basis, and you hereby waive any right to submit, initiate, or participate in a representative capacity or as a plaintiff, claimant or member in a class action, collective action, or other representative or joint action.

Litigation:  By accepting any award, you agree that in any action or proceeding by the Firm (other than a derivative suit in the right of the Firm) to enforce the terms and conditions of this Award Agreement where the Firm is the prevailing party, the Firm shall be entitled to recover from you its reasonable attorney fees and expenses incurred in such action or proceeding. In addition, you agree that you are not entitled to, and agree not to seek, advancement of attorney fees and indemnification under the Firm’s By-Laws in the event of such a suit by the Firm. 
Nontransferability:  Neither this award or any other outstanding awards of restricted stock units, nor your interests or rights in any such awards, shall be assigned, pledged, transferred, hypothecated or subject to any lien.  An award may be transferred following your death by will, the laws of descent or by a beneficiary designation on file with the Firm.
Outstanding Awards:  The Administrative provisions set forth above shall apply to any  award of restricted stock units outstanding as of the date hereof, and such awards are hereby amended.

	
		
	Definitions
	“Cause” means a determination by the Firm that your employment terminated as a result of your (i) violation of any law, rule or regulation (including rules of self-regulatory bodies) related to the Firm's business, (ii) indictment or conviction of a felony, (iii) commission of a fraudulent act, (iv) violation of the JPMorgan Code of Conduct or other Firm policies or misconduct related to your duties to the Firm (other than immaterial and inadvertent violations or misconduct), (v) inadequate performance of the duties associated with your position or job function or failure to follow reasonable directives of your manager, or (vi) any act or failure to act that is injurious to the interests of the Firm or its relationship with a customer, client or an employee.

“Financial Services Company” means a business enterprise that employs you in any capacity (such as an employee, contractor, consultant, advisor, or self-employed individual, whether paid or unpaid) and engages in:
•        commercial or retail banking, including, but not limited to, commercial, institutional and personal trust, custody and/or lending and processing services, originating and servicing mortgages, issuing and servicing credit cards,
•         insurance, including but not limited to, guaranteeing against loss, harm, damage, illness, disability or death, providing and issuing annuities, acting as principal, agent or broker for purpose of the forgoing,
•       financial, investment or economic advisory services, including but not limited to, investment banking services (such as advising on mergers or dispositions, underwriting, dealing in, or making a market in securities or other similar activities), brokerage services, investment management services, asset management services, and hedge funds,
•       issuing, trading or selling instruments representing interests in pools of assets or in derivatives instruments; 
•       advising on, or investing in, private equity or real estate, or
•       any similar activities that JPMorgan Chase determines in its sole discretion constitute financial services.
"Firmwide Financial Threshold" means a Cumulative Return on Tangible Common Equity for 2013, 2014 and 2015 of less than 15%. Cumulative Return on Tangible Common Equity means (i) the sum of the Firm's reported net income for all three years, divided by (ii) reported year-end tangible equity averaged over the three years.
“Government Office” means (i) a full-time position in an elected or appointed office in local, state, or federal government (including equivalent positions outside the U.S. or in a supranational organization), not reasonably anticipated to be a full-career position, or (ii) conducting a bona fide full-time campaign for such an elective public office after formally filing for candidacy, where it is customary and reasonably necessary to campaign full-time for the office.
“Line of Business” means a business unit of the Firm (or one or more business units designated below under the definition “Line of Business Financial Threshold” of the Corporate Investment Bank).  All Corporate Functions (other than the functions of the Chief Investment Office) are considered a single Line of Business. 
“Line of Business Financial Threshold” means the financial threshold set forth below: for the following units:

	
							
	 
	 
	Asset Management
	Annual negative pre-provision net income
	 
	 

	 
	 
	Card Services
	Annual negative pre-tax, pre-loan loss reserve income
	 
	 

	 
	 
	Commercial Bank
	Annual negative pre-provision net income including loan charge-offs

	 
	 

	 
	 
	Chief Investment Office
	Annual trading loss in the mark-to-market portfolios in excess of $1.5bn

	 
	 

	 
	 
	Corporate Investment Bank
	Annual negative pre-provision net income for CIB overall and/or annual negative allocated product revenues (excluding DVA) for:
	 
	 

	 
	 
	 
	 
	n Global FX, Global Rates, Rates Exotics & Hybrids, Public Finance
	 
	 

	 
	 
	 
	 
	n Securitized Products
	 
	 

	 
	 
	 
	 
	n Credit Trading and Syndicate, Credit Exotics & Hybrids
	 
	 

	 
	 
	 
	 
	n Global Emerging Markets, GSOG
	 
	 

	 
	 
	 
	 
	n Commodities
	 
	 

	 
	 
	 
	 
	n Equities
	 
	 

	 
	 
	 
	 
	n Global Banking
	 
	 

	 
	 
	Consumer Banking Business
	Annual negative pre-provision net income

	 
	 

	 
	 
	Corporate Functions (other than Chief Investment Office)
	Annual negative pre-provision net income reported at the Firm level

	 
	 

	 
	 
	Home Lending
	Annual negative pre-provision net income excluding losses from liquidating portfolios and MSR Trading

	 
	 

	
		
	 
	“Not-for-Profit Organization” means an entity exempt from tax under state law and under Section 501(c)(3) of the Code. Section 501(c)(3) only includes entities organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, or to foster national or international amateur sports competition or for the prevention of cruelty to children or animals.

“Recognized Service” means the period of service as an employee set forth in the Firm’s applicable 
service-related policies.

Government Office

You may be eligible to continue vesting in all or part of your award if you voluntarily resign to accept a Government Office (as defined below) or to become a candidate for an elective Government Office.

Full Career Eligibility:  
The “Government Office” section of this award does not apply to you if you satisfy the requirement for “Full Career Eligibility” as of the date that you voluntarily terminate your employment with the Firm.
Eligibility:
Eligibility for continued vesting is conditioned on your providing the Firm:
		
	•
	At least 60 days’ advance written notice of your intention to resign to accept or pursue a Government Office, during which period you must perform in a cooperative and professional manner services requested by the Firm and not provide services for any other employer.  The Firm may elect to shorten this notice period at the Firm’s discretion.

		
	•
	Confirmation, in a form satisfactory to the Firm, that vesting in this award pursuant to this provision would not violate any applicable law, regulation or rule.

		
	•
	Documentation in a form satisfactory to the Firm that your resignation is for the purpose of accepting a Government Office or becoming a candidate for a Government Office.

Continued vesting:
Subject to the conditions below, the percentage of your outstanding awards with respect to each vesting date that will continue to vest in accordance with this award’s original schedule will be based on your years of continuous service completed with the Firm immediately preceding your termination date, as follows:
		
	•
	50% if you have at least 3 but less than 4 years of continuous service,

		
	•
	75% if you have at least 4 but less than 5 years of continuous service, or

		
	•
	100% if you have 5 or more years of continuous service. 

The portion of the award not subject to continued vesting will be cancelled on the date your employment terminates.

Conditions for Continued Vesting:
		
	•
	You must remain in a non-elective Government Office for two or more years after your employment with the Firm terminates. 

		
	•
	In the case of resignation from the Firm to campaign for an elective Government Office, your name must be on the primary or final public ballot for the election. (If you are not elected, see below for employment restrictions.)

Satisfaction of Conditions for Continued Vesting:
If your service in a Government Office ends two years or more after your employment with the Firm terminates, or in the case of resignation from the Firm to campaign for a Government Office, your name is on the primary or final public ballot for the election and you are not elected, any awards then outstanding and any awards that would have then been outstanding but for an accelerated distribution of shares (as described in the “Administrative Provisions” under the heading  “Accelerated Distribution for Ethics or Conflict Reasons Resulting From Employment by a Government Entity”) will be subject for the remainder of the applicable vesting period to the same terms and conditions of this Award Agreement, including employment restrictions during the vesting period, as if you had resigned from the Firm having met the  requirements for Full Career Eligibility. 

Failure to Satisfy Conditions for Continued Vesting:
If you do not satisfy the above “Conditions for Continued Vesting,” your outstanding award will be cancelled. You also will be required to repay the Fair Market Value of the number of  shares (before tax and other withholdings) of Common Stock  distributed to you that would have been outstanding as restricted stock units on the date you failed to satisfy the “Condition for Continued Vesting” but for their accelerated distribution (as described in the “Administrative Provisions” under the heading “Accelerated Distribution for Ethics or Conflict Reasons Resulting From Employment by a Government Entity”). Fair Market Value for this purpose will be determined as the date that the shares were distributed.

	
		
	JPMORGAN CHASE & CO. LONG-TERM INCENTIVE PLAN
TERMS AND CONDITIONS OF JANUARY 17, 2013
STOCK APPRECIATION RIGHTS
OPERATING COMMITTEE

	Award Agreement
	These terms and conditions are made part of the Award Agreement dated as of January 17, 2013 (“Grant Date”) awarding Stock Appreciation Rights pursuant to the terms of the JPMorgan Chase & Co. Long-Term Incentive Plan (“Plan”). To the extent the terms of the Award Agreement (all references to which will include these terms and conditions) conflict with the Plan, the Plan will govern. The Award Agreement, the Plan and Prospectus supersede any other agreement, whether written or oral, that may have been entered into by the Firm and you relating to this award.

This award was granted on the Grant Date subject to the Award Agreement.  Unless you decline by the deadline and in the manner specified in the Award Agreement, you will have agreed to be bound by these terms and conditions, effective as of the Grant Date.  If you decline the award, it will be cancelled as of the Grant Date.

Capitalized terms that are not defined in “Definitions” below or elsewhere in the Award Agreement will have the same meaning as set forth in the Plan. 

JPMorgan Chase & Co. will be referred to throughout the Award Agreement as “JPMorgan Chase,” and together with its subsidiaries as the “Firm.”

	Form and Purpose of Award
	Stock Appreciation Rights represent the right, following exercise, to receive (without payment), a number of shares of JPMorgan Chase Common Stock, the Fair Market Value of which, as of the date of exercise, is equal to the excess of the Fair Market Value of one share of such Common Stock on such exercise date over the Exercise Price, multiplied by the number of Stock Appreciation Rights being exercised.  See “Exercise Procedures/Withholding Taxes” for further information.

The purpose of this award is to motivate your future performance for future services to be provided while the award is outstanding and to align your interests with those of the Firm and its shareholders.  

	Exercisable Dates/
Expiration Date
	This award is intended and expected to become exercisable on the “Exercisable Dates” set forth in your Award Agreement, provided that you are continuously employed by the Firm through the relevant Exercisable Date or you meet the requirements to allow your award to remain outstanding upon termination of employment under the captions “Job Elimination,” “Full Career Eligibility,” “Government Office,” and “Disability.”

However, the number of Stock Appreciation Rights that have not yet become exercisable may be reduced (and therefore may be cancelled) or Exercisable Dates may be deferred (but not beyond the Expiration Date) in the event that the Chief Executive Officer of JPMorgan Chase (“CEO”) determines that such cancellation or deferral is appropriate in light of (i) your performance in relation to the priorities for your position, or (ii) the Firm’s performance in relation to the priorities for which you share responsibility as a member of the Operating Committee has been unsatisfactory for a sustained period of time.  Among the factors the CEO may consider in assessing performance are net income, net revenue, return on equity, earnings per share and capital ratios of the Firm, both on an absolute basis and, as appropriate, relative to peer firms.  Such a determination is subject to ratification by the Compensation and Management Development Committee of the Board of Directors of JPMorgan Chase (“Committee”).  In the case of an award to the CEO, such determinations shall be made by the Committee.

Your award will remain exercisable until the earlier of the tenth anniversary of the Grant Date (the “Expiration Date”) or the date the award is cancelled pursuant to this Award Agreement. Notwithstanding any provision herein, including but not limited to those provisions governing Job Elimination, Full Career Eligibility, Death, and Total Disability, no Stock Appreciation Right may be exercised after its Expiration Date.

	Bonus Recoupment
	In consideration of the grant of this award, you agree that you are subject to the JPMorgan Chase Bonus Recoupment Policy as in effect from time to time, as it applies both to the cash incentive compensation awarded to you for 2012 and to this award of Stock Appreciation Rights.  You can access this policy through the following link:
http://www.jpmorganchase.com/corporate/About-JPMC/corporate-governance-principles.htm#recoupment

	
		
	Recapture Provisions
(Detrimental Conduct, 
Risk-Related and Other Recapture Provisions)
	Notwithstanding any terms of this Award Agreement to the contrary, JPMorgan Chase reserves the right in its sole discretion to cancel outstanding Stock Appreciation Rights under this award and/or to recover from you an amount equal to  the Fair Market Value (determined as of the exercise date) of the gross number of shares of Common Stock distributable to you on any exercise of Stock Appreciation Rights under this award as set forth in the section captioned “Remedies”:
•    If you engaged in conduct detrimental to the Firm, insofar as it causes material financial or reputational harm to the Firm or its business activities, or
•    If this award was based on materially inaccurate performance metrics, whether or not you were responsible for the inaccuracy, or
•    If this award was based on a material misrepresentation by you, or
•    If you improperly or with gross negligence failed to identify, raise or assess, in a timely manner and as reasonably expected, risks and/or concerns with respect to risks material to the Firm or its business activities, or. 
•    If your employment was terminated for Cause (see “Definitions” below) or the Firm determines after the termination of your employment that your employment could have been terminated for Cause. 

	Termination of Employment
	Except as explicitly set forth below under the sections captioned “Job Elimination,” “Full Career Eligibility”, “Death” and “Disability,” any Stock Appreciation Rights outstanding under this award will be cancelled effective on the date your employment with the Firm terminates for any reason.
Job Elimination: 
For the one year period commencing with the date of termination of your employment (or if longer the 90 day period commencing with an Exercisable Date occurring during such one year period), any Stock Appreciation Right that is exercisable on your termination date or becomes exercisable during such period may be exercised by you in the event that:  
•     the Director Human Resources of the Firm or nominee in his/her sole discretion determines that the Firm terminated your employment because your job was eliminated, and
•       after you are notified that your job will be eliminated, you provide such services as requested by the Firm in a cooperative and professional manner, and
•       you satisfy the Release/Certifications Requirement set forth below.

Full Career Eligibility:  
For the two year period commencing with the date of termination of your employment (or if longer the 90 day period commencing with the last Exercisable Date occurring during such two year period), any Stock Appreciation Right that is exercisable on your termination date or becomes exercisable during such period may be exercised by you in the event that:  
•     you voluntarily terminate your employment with the Firm, have completed at least five years of continuous service with the Firm immediately preceding your termination date, and the sum of your age and Recognized Service (as defined below) on your date of termination equals or exceeds 60, and
•       you provide at least 90 days advance written notice to the Firm of your intention to voluntarily terminate your employment under this provision, during which notice period you provide such services as requested by the Firm in a cooperative and professional manner and you do not perform any services for any other employer, and 
•      the Firm determines prior to the date your employment terminates  that the ability to  continue exercise the award  is appropriate, which determination will be based on your performance and conduct (before and after providing notice), and 
     •      for the exercise period, you do not (i) perform services in any capacity (including self-employment) for a Financial Services Company (as defined below) or (ii) work in your profession (whether or not for a Financial Services Company); provided that you may work for a government, education or Not-for-Profit Organization (as defined below), and
•       you satisfy the Release/Certification Requirements set forth below.

After receipt of such advance written notice, the Firm may choose to have you continue to provide services during the 90-day period or shorten the length of the 90-day notice period at the Firm's discretion, but to a date no earlier than the date you would otherwise meet the service requirement.  Additional advance notice requirements may apply for employees subject to notice period policies. (See “Notice Period” below.) 

Death:  
If you die while employed by the Firm, your designated beneficiary on file with the Human Resources Department (or if no beneficiary is on file or survives you, then your estate) may exercise for a two year period measured from date of your death (or if longer the 90 day period commencing with the last Exercisable Date occurring during such two year period) (i) any Stock Appreciation Rights that were exercisable as of that date and (ii) any Stock Appreciation Rights that would have become exercisable had you remained employed during such two year period. 

	
		
	 
	Disability:
In the event that your employment with the Firm terminates because:
(i)     you are unable to return to work while you are receiving benefits under the JPMorgan Chase Long Term Disability Plan, or for non-U.S. employees, under the equivalent JPMorgan Chase-sponsored local country plan, (“LTD Plan”), or
(ii)     if you are not covered by a LTD Plan, you are unable to return to work due to a long-term disability that would qualify for benefits under the  applicable LTD Plan, as determined by the Firm or a third-party designated by the Firm, and
(iii)    you request in writing the ability to continue to exercise due to such disability within 30 days of the date your employment terminates, and  
(iv)     you provide requested supporting documentation

then you may exercise for a two year period measured from the date that your employment terminates any Stock Appreciation Rights that were exercisable as of the date of your termination; provided that you satisfy the Release/Certification Requirements set forth below. 

Cancellation after the One or Two Year Period or Ninety Day Period:
Any Stock Appreciation Rights that are not exercised within the applicable one or two year period or ninety day period described above will be cancelled.

Release/Certification Requirements 
To qualify for continued exercisability of your award after the termination of your employment under any of the foregoing circumstances (other than death):
•    you must timely execute and deliver a release of claims in favor of the Firm, having such form and terms as the Firm shall specify,
•    with respect to Full Career Eligibility, prior to the termination of your employment, you must confirm with management that you meet the eligibility criteria (including providing at least 90 days advance written notification) and advise that you are seeking to be treated as an individual eligible for Full Career Eligibility, and receive written consent to such continued exercisability, 
•    with respect to Disability, you must satisfy the notice and documentation described above and receive written consent to such continued exercisability, and 
•    you also must certify compliance with the above requirements relevant to you and with all other terms of the Award Agreement (See “Your Obligations” below.), pursuant to procedures established by the Firm in connection with any exercise of Stock Appreciation Rights.  

	Restriction on Disposition of Shares Derived from an Exercise Under this Award
	If you exercise any part of your award before the fifth anniversary of the Grant Date, then you may not sell, assign, transfer, pledge or encumber the net number of shares of Common Stock derived from such exercise until the fifth anniversary of the Grant Date. Prior to the fifth anniversary of the Grant Date and prior to any exercise date thereafter, JPMorgan Chase may impose for any reason, as of such exercise date and for up to 90 days following such date, such restrictions on the Common Stock to be issued to you as it may deem appropriate, including, but not limited to, restricting the sale, transfer, pledge, assignment or encumbrance of such shares of Common Stock. By accepting this award, you agree to such restrictions without any further consent required.  In the Firm’s discretion, such shares may be held in an account with the Firm’s stock transfer agent. Notwithstanding the foregoing, this restriction on disposition and transfer of shares shall not apply to your beneficiary in the event of your death.

	Your Obligations
	In consideration of the grant of this award, you agree to comply with and be bound by obligations set forth below next to the sections captioned “Non-Solicitation of Employees and Customers,”  “Confidential Information,” “Non-Disparagement,” ”Cooperation,” “Compliance with Award Agreement,” and “Notice Period.”

	
		
	Ÿ    Non-Solicitation of Employees and Customers
	During your employment by the Firm and for one year following the termination of your employment (or if longer, the exercise period), you will not directly or indirectly, whether on your own behalf or on behalf of any other party, without the prior written consent of the Director Human Resources of JPMorgan Chase: (i) solicit, induce or encourage any of the Firm’s then current employees to leave the Firm or to apply for employment elsewhere, (ii) hire any employee or former employee who was employed by the Firm at the date your employment terminated, unless the individual’s employment terminated because his or her job was eliminated, or the individual’s employment with the Firm has been terminated for more than six months, or (iii) to the fullest extent enforceable under applicable law, solicit or induce or attempt to induce to leave the Firm, or divert or attempt to divert from doing business with the Firm, any then current customers, suppliers or other persons or entities that were serviced by you or whose names became known to you by virtue of your employment with the Firm, or otherwise interfere with the relationship between the Firm and such customers, suppliers or other persons or entities.  This does not apply to publicly known institutional customers that you service after your employment with the Firm without the use of the Firm’s confidential or proprietary information.  

These restrictions do not apply to authorized actions you take in the normal course of your employment with the Firm, such as employment decisions with respect to employees you supervise or business referrals in accordance with the Firm’s policies.

	Ÿ       Confidential Information
	You will not, either during your employment with the Firm or thereafter, directly or indirectly (i) use or disclose to anyone any confidential information related to the Firm’s business, or (ii) communicate with the press or other media about matters related to the Firm, its customers or employees, including matters and activities relating to your employment, or the employment of others, by the Firm, in the case of either (i) or (ii), except as explicitly permitted by the Firm’s  Code of Conduct and applicable policies or law or legal process.  “Confidential information” shall have the same meaning for the Award Agreement as it has in the Firm’s Code of Conduct.

	Ÿ        Non-Disparagement

	You will not, either during your employment with the Firm or thereafter, make or encourage others to make any public statement or release any information in verbal, written, electronic or any other form that is intended to, or reasonably could be foreseen to, embarrass or criticize the Firm or its employees, directors or shareholders as a group.  This shall not preclude you from reporting to the Firm’s management or directors or to the government or a regulator conduct you believe to be in violation of the law or the Firm’s Code of Conduct or responding truthfully to questions or requests for information to the government, a regulator or in a court of law in connection with a legal or regulatory investigation or proceeding.

	Ÿ        Cooperation
	You will cooperate fully with and provide full and accurate information to the Firm and its counsel with respect to any matter (including any audit, tax proceeding, litigation or governmental proceeding) with respect to which you may have knowledge or information, subject to reimbursement for actual, appropriate and reasonable out-of-pocket expenses incurred by you.

	Ÿ         Compliance with Award Agreement
	You will provide the Firm with any information reasonably requested to determine compliance with the Award Agreement, and you authorize the Firm to disclose the terms of the Award Agreement to any third party who might be affected thereby, including your prospective employer.

	Ÿ        Notice Period
	If you are subject to a notice policy, whether by contract or policy, that requires you to provide advance written notice of your intention to terminate your employment (“Notice Period”), then as consideration for this award and continued employment, you will provide the Firm with the necessary advance written notice that applies to you, as specified by such contract or policy. 

After receipt of such notice, the Firm may choose to have you continue to provide services during the applicable Notice Period or may place you on a paid leave for all or part of the applicable Notice Period.  During the Notice Period, you shall continue to devote your full time and loyalty to the Firm by providing services in a cooperative and professional manner and not perform any services for any other employer and shall receive your base salary and certain benefits until your employment terminates.  You and the Firm may mutually agree to waive or modify the length of the Notice Period.  

Regardless of whether a Notice Period applies to you, you must comply with the 90-day advance notice period described under the section captioned “Full Career Eligibility” in the event you wish to terminate employment under the Full Career Eligibility provision.

	
		
	Remedies
	 

	Ÿ       Cancellation
	In addition to the cancellation of the award  under the sections captioned  “Termination of Employment, ” and the “Recapture Provisions,” all or part of your award may be cancelled if: 
•    the Firm, in its sole discretion, determines that you are not in compliance with any of the advance notice/cooperation requirements or employment restrictions applicable to your termination of employment, 
•    you have not returned the required forms specified under the section captioned “Release/Certification” within the specified deadline, 
•    you violated any of the provisions as set forth above in the section captioned “Your Obligations,” or
•    the Firm in its sole discretion determines cancellation is appropriate pursuant to the  section captioned “Recapture Provision” above, and cancellation occurs within one year after the applicable Exercisable Date (except in the case of Cause, where the entire outstanding award may  be cancelled).

	Ÿ        Recovery
	In addition, you may be required to pay the Firm an amount equal to the Fair Market Value (determined as of the exercise date) of the gross number of shares of Common Stock distributable to you resulting from an exercise: 
Ÿ    shares distributed, including shares withheld for tax purposes, during the one year prior to the violation of any of the provisions as set forth above in the section captioned “Your Obligations,” 
Ÿ    shares distributed, including shares withheld for tax purposes, following termination of employment when you were not in compliance with the employment restrictions then applicable to you during the exercise period,
Ÿ    shares distributed, including shares withheld for tax purposes, during the one year period prior to the termination of your employment for Cause, including a later determination by the Firm that your employment could have been terminated for Cause (in which case the one year period will be measured from your actual termination date),
Ÿ    shares distributed, including shares withheld for tax purposes, within the three year period immediately preceding and any time after your termination of employment, if the Firm determines that you committed a fraudulent act, or engaged in knowing and willful misconduct related to your employment, or
Ÿ    shares distributed, including shares withheld for tax purposes, during the one year period immediately following the date that the Stock Appreciation Rights became exercisable, provided that during such one year period, the Firm, in its sole discretion, determines that the application of the “Recovery Provisions” above is appropriate to such exercise(s).

Payment may be made in shares of Common Stock or in cash and may be deducted by the Firm from any shares that are subject to restriction on disposition as described above. 

You agree that this payment represents recovery of shares to which you were not entitled under the terms and conditions of the Award Agreement and is not to be construed in any manner as a penalty. You also acknowledge that a violation or attempted violation of the obligations set forth herein will cause immediate and irreparable damage to the Firm, and therefore agree that the Firm shall be entitled as a matter of right to an injunction, from any court of competent jurisdiction, restraining any violation or further violation of such obligations; such right to an injunction, however, shall be cumulative and in addition to whatever other remedies the Firm may have under law or equity.  

	
		
	Administrative Provisions
	Exercise Procedures/Withholding Taxes:  The exercise of Stock Appreciation Rights shall be in accordance with the Firm’s procedures for exercises of such awards. The date of exercise shall be the date when the properly completed notice of exercise is received and accepted by the Firm or its designee in accordance with the Firm’s procedures.  Under these procedures, the Firm reserves the right to prohibit exercise of stock appreciation awards for a period of time, such as during a black-out period where trading in the Firm’s stock is restricted, or for legal, accounting or regulatory reasons.  In such an event, the Firm will not change expiration dates or make other adjustments to awards to compensate for the time that exercise is prohibited.
The Firm, in its sole discretion, may (i) retain from each exercise the number of shares of Common Stock required to satisfy applicable tax obligations (including, to the extent legally permissible, recovery by the Firm of fringe benefit taxes, if any) or (ii) implement any other desirable or necessary procedures, so that appropriate withholding and other taxes are paid to the competent authorities. This may include but is not limited to (i) a market sale of a number of such shares on your behalf substantially equal to the withholding or other taxes, (ii) to the extent required by law, withhold from cash compensation, an amount equal to any withholding obligation with respect to each exercise, and (iii) retaining shares until you pay any taxes associated with the exercise directly to the competent authorities.  

Right to Set Off:  The Firm may, to the maximum extent permitted by applicable law, retain for itself funds or securities otherwise payable to you pursuant to this award to satisfy any obligation or debt that you owe to the Firm.  

Assignment or Transfer: Except as otherwise provided in this Award Agreement, Stock Appreciation Rights shall not be assignable or transferable or subject to any lien, obligation or liability.  You may make a gift of unexpired, unexercised Stock Appreciation Rights, subject to the Firm’s prior consent, to an immediate family member or a trust (or similar vehicle) for the benefit of these immediate family members (or beneficiaries) as defined below.  JPMorgan Chase may condition its prior consent to receipt of an agreement by you and proposed transferee containing such terms and conditions and undertakings as JPMorgan Chase deems appropriate in its sole and absolute discretion.  No attempted transfer will be valid without the Firm’s prior consent.  “Immediate family members” include your parents, parents-in-law, children (including adopted children), grandchildren, and siblings or a trust exclusively for the benefit of one or more of these immediate family members. Your spouse is an Immediate Family Member but only if Stock Appreciation Rights are transferred to a trust (or similar vehicle) for the benefit of such spouse, which trust includes one or more other Immediate Family Members as beneficiaries.

Binding Agreement: The Award Agreement will be binding upon any successor in interest to JPMorgan Chase, by merger or otherwise.

Not a Contract of Employment: Nothing contained herein constitutes a contract of employment or continued employment. Employment is at-will and may be terminated by either you or JPMorgan Chase for any reason at any time.  This award does not confer any right or entitlement to, nor does the award impose any obligation on the Firm to provide, the same or any similar award in the future, nor is its value included in any severance calculation.

Cancellation/Substitution:  JPMorgan Chase may, in its sole discretion and for any reason, cancel outstanding unexercised Stock Appreciation Rights and substitute an equal number of non-qualified stock options to purchase the same number of shares of common stock of JPMorgan Chase represented by the cancelled Stock Appreciation Rights.  Such substituted options shall have the same exercise price, Expiration Date and other terms and conditions that were applicable to the Stock Appreciation Rights; provided that the method of exercise and the payment of exercise price, as well as the method of payment of withholding taxes, may be changed by JPMorgan Chase. 

Change in Outstanding Shares:  In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, issuance of a new class of common stock, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to stockholders of Common Stock other than regular cash dividends, the Committee will make an equitable substitution or proportionate adjustment, in the number or kind of shares of Common Stock or other securities issued or reserved for issuance pursuant to the Plan and to any Stock Appreciation Rights (including but not to limited to their Exercise Price) outstanding under this award for such corporate events.

Interpretation/Administration: The Committee has sole and complete authority to interpret and administer this Award Agreement, including, without limitation, the power to (i) interpret the Plan and the terms of this Award Agreement, (ii) determine the reason for termination of employment, (iii) determine the application of the post-employment obligations and cancellation and recovery provisions, (iv) decide all claims arising with respect to this award, and (v) delegate such authority as it deems appropriate.  Any determination by the Committee or its delegate shall be binding on all parties.

Notwithstanding anything herein to the contrary, the Firm’s determinations under the Plan and the Award Agreements are not required to be uniform.  By way of clarification, the Firm shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.

	
		
	 
	This Award is intended to be exempt from the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and shall be interpreted accordingly.  Notwithstanding anything else herein or in the Plan, no action described herein or in the Plan shall be permitted if the Firm determines such action would result in the imposition of additional tax under Section 409A of the Code.”

Amendment:  The Committee or its delegate reserves the right to amend this Award Agreement in any manner, at any time and for any reason; provided, however, that no such amendment shall materially adversely affect your rights under this Award Agreement without your consent except to the extent that the Committee or its delegate considers advisable to (x) comply with applicable laws or changes in or interpretation of applicable laws, regulatory requirements and accounting rules or standards and (y)  impose the restrictions under the section captioned “Restriction on Disposition of Shares Derived from an Exercise” and, to the  extent permitted by Section 409A of the Code, make a change in a scheduled Exercisable Date.  This Award Agreement may not be amended except in writing signed by the Director Human Resources of JPMorgan Chase.

Severability:  If any portion of the Award Agreement is determined by the Firm to be unenforceable in any jurisdiction, any court of competent jurisdiction (or arbitrator) or the Director Human Resources of JPMorgan Chase may reform the relevant provisions (e.g. as to length of service, geographical area or scope) to the extent the Firm (or court/arbitrator) considered necessary to make the provision enforceable under applicable law.

Use of Personal Data:  By accepting this award, you have acknowledged that the Firm may use your personal data for purposes of (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, (iii) registration of shares, (iv) at its discretion,  establishing brokerage account on your behalf, and (v) all other lawful purposes related to your employment and this award and that the Firm may provide such data to third party vendors with whom it has contracted to provide such services.  You may terminate this authorization at any time except with respect to tax and regulatory reporting.  In such case, your award will be cancelled.

Governing Law: This award shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.

Choice of Forum:  By accepting this award, you agree that to the extent not otherwise subject to arbitration under an arbitration agreement between you and the Firm, any dispute arising directly or indirectly in connection with this award or the Plan shall be submitted to arbitration in accordance with the rules of the American Arbitration Association if so elected by the Firm in its sole discretion.  In the event such a dispute is not subject to arbitration for any reason, you agree to accept the exclusive jurisdiction and venue of the United States District Court for the Southern District of New York with respect to any judicial proceeding in connection with this award or the Plan.  You waive, to the fullest extent permitted by law, any objection to personal jurisdiction or to the laying of venue of such dispute and further agree not to commence any action arising out of or relating to this award or the Plan in any other forum.
 
Waiver of Jury Trial/Class Claims: By accepting this award, you agree with respect to any claim brought in connection with your employment with the Firm in any forum (i) to waive the right to a jury trial and (ii) that any judicial proceeding or arbitration claim will be brought on an individual basis, and you hereby waive any right to submit, initiate, or participate in a representative capacity or as a plaintiff, claimant or member in a class action, collective action, or other representative or joint action.

Litigation:  By accepting any award, you agree that in any action or proceeding by the Firm (other than a derivative suit in the right of the Firm) to enforce the terms and conditions of this Award Agreement where the Firm is the prevailing party, the Firm shall be entitled to recover from you its reasonable attorney fees and expenses incurred in such action or proceeding. In addition, you agree that you are not entitled to, and agree not to seek, advancement of attorney fees and indemnification under the Firm’s By-Laws in the event of such a suit by the Firm.

Outstanding Awards:  The Administrative provisions set forth above shall apply to any award of stock appreciation rights outstanding as of the date hereof, and such awards are hereby amended.

	
		
	Definitions
	"Cause" means a determination by the Firm that your employment terminated as a result of your (i) violation of any law, rule or regulation (including rules of self-regulatory bodies) related to the Firm's business, (ii) indictment or conviction of a felony, (iii) commission of a fraudulent act, (iv) violation of the Firm’s Code of Conduct or other Firm policies or misconduct related to your duties to the Firm (other than an immaterial and inadvertent violation or misconduct), (v) inadequate performance of the duties associated with your position or job function or failure to follow reasonable directives of your manager, or (vi) any act or failure to act that is or might reasonably be expected to be injurious to the interests of the Firm or its relationship with a customer, client or an employee.

“Financial Services Company” means a business enterprise that employs you in any capacity (as an employee, contractor, consultant, advisor or self-employed individual whether paid or unpaid) and engages in:
•    commercial or retail banking, including, but not limited to, commercial, institutional and personal trust, custody and/or lending and processing services, originating and servicing mortgages, issuing and servicing credit cards,
•    insurance, including but not limited to, guaranteeing against loss, harm, damage, illness, disability or death, providing and issuing annuities, acting as principal, agent or broker for purpose of the forgoing,
•    financial, investment or economic advisory services, including but not limited to, investment banking services (such as advising on mergers or dispositions, underwriting, dealing in, or making a market in securities or other similar activities), brokerage services, investment management services, asset management services, and hedge funds,
•    issuing, trading or selling instruments representing interests in pools of assets or in derivatives instruments, 
•    advising on, or investing in, private equity or real estate, or 
•    any similar activities that JPMorgan Chase determines in its sole discretion constitute financial services.  

“Not-for-Profit Organization” means an entity exempt from tax under state law and under Section 501(c) (3) of the Code.  Section 501(c) (3) only includes entities organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, or to foster national or international amateur sports competition or for the prevention of cruelty to children or animals.

“Recognized Service” means the period of service as an employee set forth in the Firm’s applicable service-related policies.

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