Exhibit 10.6
Domestic
Each
of the Stock Plan Subcommittee of the Compensation Committee and
the Compensation Committee of the Board of Directors of The
Estée Lauder Companies Inc. reserves the right to change
provisions of this Agreement to comply with the American Jobs
Creation Act of 2004.
Restricted Stock Unit
Agreement Under
The
Estée Lauder Companies Inc.
Amended and Restated Fiscal
2002 Share Incentive Plan (the “Plan”)
This RESTRICTED STOCK UNIT AGREEMENT
(“ Agreement ”) provides for the granting by The
Estée Lauder Companies Inc., a Delaware corporation (the
“ Company ”), to the participant, an employee of
the Company or one of its subsidiaries (the “
Participant ”), of Stock Units under the Plan
representing a notional account equal to a corresponding number of
shares of the Company’s Class A Common Stock, par value $0.01
(the “ Shares ”), subject to the terms below
(the “ Restricted Stock Units ”). The name
of the “Participant,” the “Grant Date,” the
“Number of Restricted Stock Units,” the “Vesting
Commencement Date,” the “Vesting Schedule,” and
the “Vesting Period” are stated in the attached
“Notice of Grant” and are incorporated by
reference. The other terms of this award are stated in this
Agreement and in the Plan. Terms not defined in this Agreement are
defined in the Plan, as amended.
1.
Award Grant . The Company hereby awards to the
Participant an award of Restricted Stock Units in respect of the
number of Shares set forth in the Notice of Grant.
2.
Vesting . The Restricted Stock Units
granted to the Participant will vest and become payable in
accordance with the Vesting Schedule in the Notice of Grant.
This schedule indicates the vesting date upon which the Participant
will be entitled to receive Shares. Except as otherwise
provided in this Agreement, any Restricted Stock Units that are
unvested when the Participant terminates employment with the
Company will be forfeited.
3.
Payment of Awards . Each Restricted Stock Unit
represents the right to receive one Share when the Restricted Stock
Unit vests.
Upon a Change in
Control, (a) each unvested Restricted Stock Unit will vest and
become payable to the Participant in accordance with the Plan and
this paragraph and (b) each vested Restricted Stock Unit not paid
will become payable to the Participant in accordance with the Plan
and this paragraph. Payments upon a Change in Control will be made
within two weeks following 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 will equal the
consideration paid to each stockholder per Share generally upon the
Change in Control. If the Participant dies before the Change
in Control, vested Restricted Stock Units will become payable in
accordance with this paragraph. If the Participant becomes
disabled or is terminated without Cause before the Change in
Control, the Restricted Stock Units that were to vest pro rata due
to disability or termination without Cause will vest and become
payable in accordance with this paragraph. All other unvested
Restricted Stock Units will be forfeited.
4.
Termination of Employment . If the Participant’s
employment terminates during the Vesting Period, all unvested
Restricted Stock Units will be forfeited except as follows, subject
to Paragraph 3:
(a)
Death . If the Participant dies, unvested Restricted
Stock Units will vest on the date of death pro rata based on the
number of full months the Participant was employed during the
Vesting Period after the last vesting date (i.e., the proration
equals a fraction, the numerator of which is the number of full
calendar months of service completed during the Vesting Period
after the last vesting date through the Participant’s death
and the denominator of which is the number of full calendar months
after the last vesting date that are remaining in the Vesting
Period). For this purpose, “last vesting date” is
the grant date if the first vesting date has not yet
occurred. As an example, assume a grant to Participant X of
Restricted Stock Units for 300 shares with a three-year Vesting
Period and one-third of the units vesting at the end of each
twelve-month period. If Participant X dies 18 months after
the grant date and six months after the last vesting date, then the
estate or beneficiary of Participant X would be entitled to payment
of 50 Shares (before withholding). Participant X would have
already received 100 Shares (before withholding) on the first
anniversary of the grant date. Payment of the vested Restricted
Stock Units will occur as soon as practicable following the
Participant’s death and in accordance with any applicable
laws or Company procedures regarding the payments.
(b)
Retirement . If the Participant formally retires under
the terms of The Estée Lauder Companies Retirement Growth
Account Plan (or an affiliate or a successor plan or program of
similar purpose), the unvested Restricted Stock Units will continue
to vest and be paid in accordance with the Vesting
Schedule. Vesting and payment in respect of any
unvested Restricted Stock Unit after retirement will be subject to
satisfaction of the conditions precedent that the Participant
neither (i) competes with, takes employment with, or renders
services to a competitor of the Company, its subsidiaries, or
affiliates without the Company’s written consent, nor (ii)
conducts himself or herself in a manner adversely affecting the
Company.
(c)
Disability . If the Participant becomes totally and
permanently disabled (as determined under the Company’s
long-term disability program), the unvested Restricted Stock Units
will vest pro rata for full months employed during the Vesting
Period (determined under the proration methodology in paragraph
4(a)) on the next vesting date during the Vesting Period. The
vested Restricted Stock Units will be paid in accordance with the
Vesting Schedule (i.e., on the next vesting date during the Vesting
Period).
(d)
Termination of Employment Without Cause . If the
Participant’s employment is terminated at the instance of the
Company or relevant subsidiary without Cause (as defined below),
any unvested Restricted Stock Units will vest pro rata for full
months employed during the Vesting Period (determined under the
proration methodology in paragraph 4(a)) on the next vesting date
during the Vesting Period. Restricted Stock Units will be paid in
accordance with the Vesting Schedule and payment in respect of any
unvested Restricted Stock Unit after last day of active employment
will be subject to satisfaction of the conditions precedent that
the Participant neither (i) competes with, takes employment with,
or renders services to a competitor of the Company, its
subsidiaries, or affiliates without the Company’s written
consent, nor (ii) conducts himself or herself in a manner adversely
affecting the Company.
2
(e)
Termination of Employment By Employee . If the
Participant voluntarily terminates his or her employment (e.g., by
voluntarily resigning) other than due to retirement or disability,
which are subject to paragraphs 4(b) and 4(c) above, respectively,
all Restricted Stock Units that are not vested as of the effective
date of resignation will be forfeited.
(f)
Termination of Employment With Cause . If the
Participant is terminated for Cause, all Restricted Stock Units
that are not vested as of the effective date of resignation will be
forfeited. For this purpose, “Cause” is defined
in the employment agreement in effect between the Participant and
the Company or any subsidiary, including an employment agreement
entered into after the Grant Date. In the absence of an
employment agreement, “Cause” means any breach by the
Participant of any of his or her material obligations under any
Company policy or procedure, including, without limitation, the
Code of Corporate Conduct.
5.
No Rights of Stock Ownership . This grant of Restricted
Stock Units does not entitle the Participant to any interest in or
to any voting or other rights normally attributable to Share
ownership.
6.
Withholding . Regardless of any action the Company or
the Participant’s employer (the “Employer”) takes
with respect to any or all income tax, social security, payroll
tax, or other tax-related withholding (“Tax-Related
Items”), Participant acknowledges that the ultimate liability
for all Tax-Related Items legally due by Participant is and remains
his or her responsibility. Furthermore, Participant
acknowledges that the Company and/or the Employer (i) make no
representations or undertakings regarding the treatment of any
Tax-Related Items in connection with any aspect of the Restricted
Stock Units, including the grant of the Restricted Stock Units, the
vesting of the Restricted Stock Units, the delivery of Shares, the
subsequent sale of Shares acquired under the Plan and the receipt
of any dividends; and (ii) do not commit to structure the terms of
the grant of the Restricted Stock Units or any aspect of
Participant’s participation in the Plan to reduce or
eliminate his or her liability for Tax-Related Items.
Prior to the
relevant taxable event, Participant shall pay or make adequate
arrangements satisfactory to the Company and/or the Employer to
satisfy all withholding obligations of the Company and/or the
Employer. In this regard, Participant authorizes the Company
and/or the Employer to withhold all applicable Tax-Related Items
legally payable by Participant from his or her wages or other cash
compensation paid by the Company and/or the Employer or from
proceeds of the sale of the Shares acquired under the Plan.
Alternatively, or in addition, the Company may (i) sell or arrange
for the sale of Shares that Participant acquires under the Plan to
meet the withholding obligation for the Tax-Related Items, and/or
(ii) withhold in Shares, provided that the Company only withholds
the amount o
