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. If the Participant dies during active
employment after the attainment of age 55 and the completion of 10
or more years of service, or after the attainment of age 65 and the
completion of 5 or more years of service, without formally retiring
under the terms of the Estée Lauder Inc. Retirement Growth
Account Plan (or an affiliate or a successor plan or program of
similar purpose), the Participant will have deemed to be retired as
of the date of death and this Section 4(b) will apply
rather than Section 4(a). If the Participant dies or
becomes disabled after retirement as contemplated by this
Section 4(b), the provisions of this section shall
apply.
(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
2
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.
(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
compensati
