Exhibit 10.4
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EACH OF THE STOCK PLAN SUBCOMMITTEE OF THE COMPENSATION COMMITTEE
AND THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF THE ESTEE
LAUDER COMPANIES
INC. RESERVES THE RIGHT TO CHANGE PROVISIONS OF THIS AGREEMENT TO
COMPLY WITH
THE AMERICAN JOBS CREATION ACT OF 2004.
PERFORMANCE SHARE UNIT AWARD AGREEMENT
UNDER
THE ESTEE LAUDER COMPANIES INC.
AMENDED AND RESTATED FISCAL 2002 SHARE INCENTIVE PLAN (THE
"PLAN")
This PERFORMANCE SHARE UNIT AWARD AGREEMENT ("Agreement") provides
for the
granting of performance share unit awards by The Estee Lauder
Companies Inc., a
Delaware corporation (the "Company"), to the participant, an
employee of the
Company or one of its subsidiaries (the "Participant"), of the
Company's Class A
Common Stock, par value $0.01 (the "Shares"), on the terms and
subject to the
conditions hereinafter provided. The name of the "Participant", the
"Grant
Date", the aggregate number of Shares representing the Target
Award, and the
Plan Achievement (as defined below) goals are stated in the
attached "Notice of
Grant", and incorporated herein by reference. The other terms and
conditions of
this Performance Share Unit Award are stated in this Agreement and
in the Plan.
Terms not defined herein shall have the meaning set forth in the
Plan (including
any amendments thereto).
1. AWARD GRANT. The Company hereby awards to the Participant a
target award of
Performance Share Units in respect of the number of Shares set
forth in the
Notice of Grant (the "Target Award"), representing a Stock Unit
and
Performance-Based Award under the terms of the Plan.
2. RIGHT TO PAYMENT OF PERFORMANCE SHARE UNITS. It is understood
that the
percentage of the Target Award earned and paid will be established
by the
Committee based on the plan achievement (the "Plan Achievement")
during the
period specified in the Notice of Grant (the "Award Period"). The
Plan
Achievement shall be comprised of, and measured separately with
respect to, the
following two components:
(a)
Net Sales Cumulative
Annual Growth Rate (which shall represent 50% of
the Target Award); and
(b)
Earnings Per Share
Cumulative Annual Growth Rate (which shall
represent 50% of the Target Award).
For purposes of this Performance Share Unit Award Agreement, "Net
Sales" shall
have the meaning utilized by the Company in its consolidated
financials in
accordance with generally accepted accounting principles as in
effect on the
first day of the Award Period, excluding the impact of foreign
currency
fluctuations and "Earnings Per Share" shall have the meaning
"diluted earnings
per share" as utilized by the Company in its consolidated
financials. Actual
payment of the Performance Share Units awarded will be determined
for each
component in accordance with the table attached hereto as Schedule
"A".
3. PAYMENT OF AWARDS. Payments made hereunder shall be equal in
amount to the
number of Shares equivalent to the number of Performance Share
Units earned and
payable to the Participant pursuant to paragraph 2 above. Except as
otherwise
provided in paragraph 4 below, payments shall be made as soon as
practicable
following the end of the Award Period, but in no event later than 2
and 1/2
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months following the last day of the calendar year in which the
Award Period
ends. The form of payout shall be in Shares. In addition, each
Performance Share
Unit that becomes earned and payable pursuant to paragraph 2 above
shall carry a
Dividend Equivalent Right, payable in cash at the same time as the
payment of
Shares in accordance with this paragraph 3.
Upon the occurrence of a Change in Control, each Performance
Share
Unit will become payable to the Participant with the total Shares
to be paid
equal to the Target Award. Payments upon the occurrence of a Change
in Control
shall be made as soon as practicable following the Change of
Control, but in no
event later than two weeks after the Change in Control. If the
Shares cease to
be outstanding immediately after the Change in Control (e.g., due
to a merger
with and into another entity), then the consideration to be
received per Share
shall equal the consideration paid to each stockholder per Share
generally upon
such Change in Control.
4. TERMINATION OF EMPLOYMENT. In the event the Participant's
employment
terminates during the Award Period, payouts will be as follows:
(a)
Death. In the event of
the Participant's death, the Performance Share
Units shall be paid as a pro rata Target Award for full months
employed during the Award Period (i.e., the proration of the
Target
Award shall equal a fraction the numerator of which is the number
of
full months of service completed in the Award Period through
the
Participant's death and the denominator of which is the number of
full
months in the Award Period), as soon as practicable following
such
Participant's death.
(b)
Retirement. In the
event of the Employee's formal retirement under the
terms of The Estee Lauder Companies Retirement Growth Account Plan
(or
an affiliate or a successor plan or program of similar purpose),
the
Performance Share Unit Award shall continue through the Award
Period
and the Participant shall be paid based on actual Plan Achievement,
at
the same time as such awards are paid to active employees.
(c)
Disability. In the
event of the occurrence of the Participant's total
and permanent disability (as such status shall be determined under
the
Company's long-term disability program), the Performance Share
Unit
Award shall continue through the Award Period and the
Participant
shall be paid a pro rata amount for full months employed during
the
Award Period (with such proration methodology set forth in
paragraph
4(a)) based on actual Plan Achievement, at the same time as
such
awards are paid to active employees.
(d)
Termination of
Employment Without Cause. In the event the
Participant's employment is terminated at the instance of the
Company
or relevant subsidiary without Cause (as defined below) on or prior
to
the end of the first year of the Award Period, the Performance
Share
Unit Award shall be forfeited. In the event of such termination
after
the end of the first year of the Award Period, the Performance
Share
Unit Award shall continue through the Award Period and the
Participant
shall be paid a pro rata amount for months employed during the
Award
Period (with
such proration methodology set forth in paragraph 4(a))
based on actual Plan Achievement, at the same time as such awards
are
paid to active employees.
(e)
Termination of
Employment By Employee. In the event the Participant
terminates his or her employment (e
