SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 26, 2005
The Estee Lauder Companies Inc.
(Exact name of registrant as specified in its charter)
Delaware 11-2408943
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
767 Fifth Avenue, New York, New York 10153
(Address of principal executive offices) (Zip Code)
Commission File Number: 1-14064
212-572-4200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On September 26, 2005, the Stock Plan Subcommittee of the
Compensation Committee of the Board of Directors of The Estee Lauder Companies
Inc. (the "Company") granted options, performance share unit awards and
restricted stock units to certain executive officers of the Company pursuant to
The Estee Lauder Companies Inc. Fiscal 2002 Share Incentive Plan (the "Fiscal
2002 Plan").
Options
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Option grants were made to the following executive officers listed
in the Summary Compensation Table in the Company's 2005 proxy statement:
Shares of Class A Common
Named Executive Officer Stock Underlying Options
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William P. Lauder 150,000
Daniel J. Brestle 100,000
Patrick Bousquet-Chavanne 50,000
Philip Shearer 50,000
Each option has an exercise price equal to $35.00 per share. The options are
generally exercisable in three substantially equal annual tranches beginning on
January 1, 2007. Options become exercisable earlier upon death, disability or
retirement of the optionee or a change in control of the Company. All options
expire on September 26, 2015, subject to earlier termination or forfeiture and
the expiration of the one year period after death in the case of death after
September 26, 2014. Earlier termination or forfeiture can occur if the employee
resigns other than by reason of retirement or is terminated. Post-termination
exercises are subject to non-competition and good conduct requirements. A copy
of the Form of Stock Option Agreement providing additional information regarding
the terms of each option is incorporated by reference to Exhibit No. 10.2 to
this Form 8-K.
Performance Share Unit Awards
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Performance Share Unit Awards were granted to the following
executive officers listed in the Summary Compensation Table in the Company's
2005 proxy statement:
Shares of Class A Common
Stock Underlying Target
Named Executive Officer Performance Share Awards
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William P. Lauder 28,993
Daniel J. Brestle 19,329
Patrick Bousquet-Chavanne 9,664
Philip Shearer 9,664
Payout of the target amounts, which will be made in shares of Class
A Common Stock, is generally subject to the achievement by the Company of its
net sales and net earnings per share goals for the three years ending June 30,
2008. No payouts will be made pursuant to an opportunity unless the threshold
for such opportunity is achieved and additional shares shall be paid out if
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performance exceeds the targeted performance goals. Except as provided below,
full payout to any executive is subject to his continued employment through June
30, 2008 (the "Award Period") or formal retirement under the Company's pension
plan during the Award Period. Pro rata payouts will be made to the executive or
his estate if he dies or becomes permanently disabled during the Award Period or
if he is terminated without cause in the second or third year of the Award
Period. Performance Share Units are forfeited upon voluntary resignation (which
does not qualify as retirement), termination for cause and termination by the
Company without cause in the first year of the Award Period. Full payouts based
on target award amounts will be made in the case of a Change in Control. Upon
payout shares will be withheld to cover minimum statutory tax obligations.
Performance Share Units are accompanied by dividend equivalent rights that will
be payable in cash at the time of payout of the related shares.
Performance Share Unit Awards are Stock Units and Performance-Based
Awards under the Fiscal 2002 Plan. Measurement of performance is subject to
certain automatic adjustments, such as changes in accounting principles, the
impact of discontinued operations and non-recurring income/expenses.
The form of Performance Share Unit Award Agreement is attached
hereto as Exhibit 10.3 and incorporated herein by reference.
Restricted Stock Units
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Restricted Stock Units were granted to the following executive
officers listed in the Summary Compensation Table in the Company's 2005 proxy
statement:
Shares of Class A Common
Stock Underlying Target
Named Executive Officer Restricted Stock Units
----------------------- ----------------------
William P. Lauder 28,993
Daniel J. Brestle 19,329
Patrick Bousquet-Chavanne 9,664
Philip Shearer 9,664
Restricted Stock Units vest ratably in thirds on October 31, 2006,
2007 and 2008 (or the first day thereafter that shares may be traded under the
Company's policy). Upon death, disability or involuntary termination without
cause, shares will vest pro rata for full months employed during the vesting
period. Payout upon death will be as soon as practicable thereafter. Payout upon
termination without cause shall be on the first day after termination that
shares may be sold under the Company's policy. Payout upon disability will be in
accordance with the annual vesting schedule. Upon retirement, unvested shares
will vest and be paid out on the first day after retirement that shares of Class
A Common Stock may be sold under the Company's policy. Restricted Stock Units
will vest upon, and be paid out as soon as practicable after, a Change in
Control. Unvested Restricted Stock Units will be forfeited upon termination for
cause and upon voluntary resignation that does not qualify as retirement. Upon
payout shares will be withheld to cover minimum statutory tax obligations.
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Restricted Stock Units are accompanied by dividend equivalent rights that will
be payable in cash at the time of payout of the related shares.
The form of Restricted Stock Unit Agreement is attached hereto as
Exhibit 10.4 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
10.1 The Estee Lauder Companies Inc. Fiscal 2002 Share Incentive Plan
(filed as Exhibit 4(d) to our Registration Statement on Form S-8 (No.
333-72684) on November 1, 2001).*
10.2 Form of Stock Option Agreement under Fiscal 2002 Share Incentive Plan
(filed as Exhibit 10.2 to our Current Report on Form 8-K dated August
24, 2004) (SEC File No. 1-14064).*
10.3 Form of Performance Share Unit Award Agreement Under The Estee Lauder
Companies Inc. Fiscal 2002 Share Incentive Plan (including Form of
Notice of Grant).
10.4 Form of Restricted Stock Unit Agreement Under The Estee Lauder
Companies Inc. Fiscal 2002 Share Incentive Plan (including Form of
Notice of Grant).*
* Incorporated by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
THE ESTEE LAUDER COMPANIES INC.
Date: September 28, 2005 By: /s/ Amy DiGeso
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Amy DiGeso
Senior Vice President - Global
Human Resources
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