EXHIBIT
10.2
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
applicable laws or regulations.
Market Share Unit Award Agreement Under
The Estée Lauder Companies Inc.
Amended and Restated Fiscal 2002 Share Incentive Plan (the
“ Plan” )
This MARKET SHARE UNIT AWARD AGREEMENT
(“ Agreement” ) provides for the granting of
market share unit awards 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” ), representing the right to
receive shares of the Company’s Class A Common Stock, par
value $0.01 (the “ Shares” ), subject to the
terms below (the “ Market Share Units”
). The name of the “ Participant,”
the “ Grant Date,” the aggregate number of
Shares that may be paid out and the Plan Achievement (as defined
below) goals are stated in the attached “ Notice of
Grant ,” and are incorporated by
reference. The other terms of this Market Share Unit
Award are stated in this Agreement and in the Plan, which is
incorporated by reference and made a part hereof. 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 Market Share Units to be paid out as set forth in the
Notice of Grant, representing a Performance Award and
Performance-Based Award under the terms of the Plan.
2.
Right to Payment of Market Share Units . The number of
shares to be paid out to the Participant shall be determined by the
Committee based on the Participant’s continued employment
with the Company and plan achievement through the end of the
Performance Period (as set forth in the Notice of
Grant). Except as otherwise provided in paragraph 3, 4
or 5 below, at the end of the Performance Period, the number of
Shares earned in respect of the Market Share Units will be
determined in accordance with the Notice of Grant.
3.
Payment of Awards . Payments under this Agreement will be
made in the number of Shares that is equivalent to the number of
Market Share Units earned and payable to the Participant pursuant
to paragraph 2 above. Except as otherwise provided in paragraph 3,
4 or 5 below, earned Market Share Units shall be paid in Shares as
soon as practicable following the date on which the Committee
certifies the attainment of the Plan Achievement goals with respect
to the Performance Period, but in no event later than 2 and
½ months following the last day of the calendar year in
which the Performance Period ends. In addition, during
the Performance Period, each Market Share Unit that becomes earned
and payable pursuant to paragraph 2 above carries a Dividend
Equivalent Right, payable in cash at the same time as the Market
Share Units are paid in accordance with paragraph 3, 4 or 5.
4.
Change in Control . Upon a Change in Control that
occurs during employment, each Market Share Unit with a Performance
Period ending after the Change in Control will become payable to
the Participant with the total number of Shares to be paid equal to
the number of Shares earned in accordance with the Notice of Grant
as if the Performance Period ended on the date of the Change in
Control. Payment of Shares so earned will be made within
two weeks following the date of 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 in respect of each Share earned under
a Market Share Unit will equal the consideration paid to each
stockholder per Share generally upon the Change in
Control. If the Performance Period ends on or prior to
the Change in Control, the Market Share Unit shall be paid out in
accordance with paragraph 3 or 5 of this Agreement, as
applicable.
5.
Termination of Employment . If the Participant’s
employment terminates during the Performance Period, payouts will
be as follows:
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Death. For termination as a result
of death, the Market Share Units will be paid pro rata for the
number of full months employed during the Service Period (as set
forth in the Notice of Grant) (i.e., the proration to be applied
will equal a fraction, the numerator of which is the number of full
calendar months of service completed during the Service Period
through the date of termination (in the case of this paragraph
5(a), the Participant’s death) and the denominator of which
is the number of full calendar months in the Service
Period). Payment of Shares earned in respect of such
Market Share Units will be made to the Participant’s estate
as soon as practicable after the date of the Participant’s
death, but in no event later than 2 and ½ months following
the calendar year of death, and in accordance with any applicable
laws or Company procedures regarding the payments.
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Disability. For termination as a
result of total and permanent disability (as determined by the
Company pursuant to the Company’s long-term disability
program), the Performance Period will terminate and the Participant
will vest in a pro rata amount of Market Share Units for the number
of full months employed during the Service Period (determined under
the proration methodology in paragraph 5(a)) based on actual Plan
Achievement through the date the Participant becomes totally and
permanently disabled. Payment of Shares earned in
respect of such Market Share Units will be made within two weeks
following the date on which the Participant terminates employment
as a result of total and permanent disability.
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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) or at the instance of the
Participant for Material Breach as provided for in the employment
agreement in effect between the Participant and the Company or any
subsidiary, including any employment agreement entered into after
the Grant Date, on or prior to the end of the first year of the
Performance Period, the Market Share Unit Award will be
forfeited. If such termination occurs after the end of
the first year of the Performance Period, the Performance Period
will terminate and the Participant will vest in a pro rata amount
of Market Share Units for the number of full months employed during
the Service Period (determined under the proration methodology in
paragraph 5(a)) based on actual Plan Achievement through the date
of termination. Payment of Shares earned in respect of
such Market Share Units will be made within two weeks following the
date of termination of employment.
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Termination of Employment By
Employee. If the Participant terminates his or her
employment ( e.g. , by voluntary resignation) the Market
Share Unit Award will be forfeited.
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Termination of Employment With
Cause. If the Participant is terminated for Cause, the
Market Share Unit Award 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 any 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 Conduct.
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Post Employment Conduct. Payout of
any Market Share Unit Award after termination of employment is
subject to satisfaction of the condition precedent that the
Participant complies with the covenants provided for in the
employment agreement in effect between the Participant and the
Company or any subsidiary, including any employment agreement
entered into after the Grant Date.
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If the Participant’s employment
terminates after the expiration of the Performance Period but prior
to the payout, payout will be subject to this paragraph 5.
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6.
No Rights of Stock Ownership . This grant of Market Share
Units does not entitle the Participant to any interest in or to any
voting or other rights normally attributable to Share ownership
other than the Dividend Equivalent Rights granted under paragraph 3
above.
7.
Clawback . Shares earned and delivered under any
Market Share Unit Award shall be subject to any recoupment policy
for awards under the Plan adopted by the Company as such policy
exists from time to time.
8.
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” ), the Participant acknowledges
that the ultimate liability for all Tax-Related Items legally due
by the Participant is and remains his or her
responsibility. Furthermore, the 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 Market Share
Units, including the grant of the Market Share Units, the vesting
of the Market Share 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 Market Share Units or any aspect of the
Participant’s participation in the Plan to reduce or
eliminate his or her liability for Tax-Related Items.
Prior to the
relevant taxable event, the 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, the Participant authorizes the
Company and/or the Employer to withhold all applicable Tax-Related
Items legally payable by the 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 the 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 of Shares necessary to satisfy the
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