[8-K] The Estee Lauder Companies Inc. Reports Material Event
The company adopted a new form of Stock Option Award Agreement for grants under its Amended and Restated Fiscal 2002 Share Incentive Plan. Under the new form, employees terminated without cause who are not retirement-eligible (including executive officers) will receive pro rata vesting of unvested options only through the last day paid, with remaining unvested options forfeited; retirement-eligible employees retain full vesting on retirement. The agreement expands restrictive covenants—confidentiality, non-competition, non-solicitation, non-disclosure, non-interference, and non-disparagement—and adds a forfeiture and clawback provision for covenant non-compliance. The full form is filed as Exhibit 10.1 and incorporated by reference.
L'azienda ha adottato un nuovo modello di Stock Option Award Agreement per le assegnazioni previste dal suo Amended and Restated Fiscal 2002 Share Incentive Plan. Nel nuovo modello, i dipendenti licenziati senza giusta causa che non sono eleggibili alla pensione (inclusi i dirigenti) riceveranno il vest-ing pro rata delle opzioni non maturate solo fino all'ultimo giorno retribuito, mentre le rimanenti opzioni non maturate saranno revocate; i dipendenti eleggibili alla pensione manterranno la piena maturazione al momento del pensionamento. L'accordo amplia le clausole restrittive — riservatezza, non concorrenza, divieto di sollecitazione, non divulgazione, non interferenza e divieto di diffamazione — e introduce una disposizione di perdita e recupero (forfeiture and clawback) per il mancato rispetto di tali obblighi. Il testo integrale del modello è depositato come Exhibit 10.1 e richiamato per riferimento.
La compañía adoptó un nuevo formulario de Stock Option Award Agreement para concesiones en virtud de su Amended and Restated Fiscal 2002 Share Incentive Plan. En el nuevo formulario, los empleados despedidos sin causa que no son elegibles para jubilación (incluidos los altos directivos) recibirán el vesting prorrateado de las opciones no adquiridas solo hasta el último día pagado, y las opciones no adquiridas restantes se perderán; los empleados con derecho a jubilación conservarán la plena adquisición al retirarse. El acuerdo amplía las cláusulas restrictivas —confidencialidad, no competencia, no captación, no divulgación, no interferencia y no menosprecio— y añade una disposición de pérdida y recuperación (forfeiture and clawback) por incumplimiento de esas obligaciones. El formulario completo está archivado como Exhibit 10.1 e incorporado por referencia.
회사는 수정·재작성된 2002 회계연도 주식 인센티브 플랜(Amended and Restated Fiscal 2002 Share Incentive Plan)에 따른 부여를 위해 새로운 양식의 Stock Option Award Agreement를 채택했습니다. 새 양식에 따르면 퇴직 사유가 아닌 이유로 해고된 직원(임원 포함) 중 퇴직 자격이 없는 경우, 미확정 옵션은 마지막 급여일까지만 비례 베스팅(pro rata vesting)되며 나머지 미확정 옵션은 몰수됩니다. 퇴직 자격이 있는 직원은 퇴직 시 전액 베스팅을 유지합니다. 본 계약은 기밀 유지, 경쟁 금지, 고객 유인 금지, 비공개, 간섭 금지 및 비방 금지 등 제한 조항을 확장하고, 이러한 조항 위반 시 적용되는 몰수 및 환수(forfeiture and clawback) 조항을 추가합니다. 전체 양식은 Exhibit 10.1로 제출되어 참조로 포함되어 있습니다.
La société a adopté un nouveau modèle de Stock Option Award Agreement pour les attributions dans le cadre de son Amended and Restated Fiscal 2002 Share Incentive Plan. Selon ce nouveau modèle, les salariés licenciés sans motif qui ne sont pas éligibles à la retraite (y compris les dirigeants) bénéficieront d'un acquisition au prorata des options non acquises uniquement jusqu'au dernier jour payé, les options non acquises restantes étant perdues ; les salariés éligibles à la retraite conservent l'acquisition complète au moment du départ en retraite. L'accord étend les engagements restrictifs — confidentialité, non-concurrence, non-sollicitation, non-divulgation, non-interférence et non-dénigrement — et ajoute une disposition de perte et récupération (forfeiture and clawback) en cas de non-respect de ces engagements. Le texte complet du modèle est déposé en tant qu'Exhibit 10.1 et intégré par référence.
Das Unternehmen hat für Zuteilungen im Rahmen seines Amended and Restated Fiscal 2002 Share Incentive Plan ein neues Muster des Stock Option Award Agreement eingeführt. Nach dem neuen Muster erhalten ohne verschulden gekündigte Mitarbeiter, die nicht pensionierungsberechtigt sind (einschließlich leitender Angestellter), eine anteilige Vesting der unverfallbaren Optionen nur bis zum letzten bezahlten Tag; die verbleibenden unverfallbaren Optionen verfallen. Ruhestandsberechtigte Mitarbeiter behalten bei Pensionierung die volle Vesting. Die Vereinbarung weitet die Schutzklauseln aus — Vertraulichkeit, Wettbewerbsverbot, Abwerbeverbot, Geheimhaltung, Nichtbeeinträchtigung und Nichtdiffamierung — und fügt eine Verfall- und Rückforderungsregelung (forfeiture and clawback) für die Nichteinhaltung dieser Klauseln hinzu. Das vollständige Muster ist als Exhibit 10.1 eingereicht und durch Verweis einbezogen.
- Strengthened governance: addition of forfeiture and clawback provisions improves contractual remedies for covenant breaches
- Reduced contingent dilution: pro rata vesting on termination without cause limits potential full vesting of unvested options and may modestly lower long-term dilution
- Tighter post-employment restrictions: expanded non-compete and non-solicit clauses may increase legal and compliance risk in some jurisdictions
- Potential retention impact: reduced vesting protections on termination could affect employee and executive retention or severance negotiations
Insights
TL;DR: The change reduces post-termination option vesting for non-retirement eligible employees and strengthens employer protections via expanded covenants and clawbacks.
The amendment shifts the balance of post-employment equity treatment toward the company by replacing prior full vesting on termination without cause with pro rata vesting through the last paid day for non-retirement-eligible employees, which lowers potential dilution and long-term compensation cost tied to involuntary terminations. Enhanced restrictive covenants and a clawback/forfeiture mechanism increase contractual protections against competitive activity and disclosure risk, strengthening governance and enforceability. For investors, this is a governance/compensation-policy update rather than an immediate financial event; it may modestly reduce future long-term dilution and executive retention risk but does not provide near-term financial metrics.
TL;DR: Stronger covenants and clawbacks raise compliance and litigation risk while tightening the company’s post-employment protections.
Expanding non-competition, non-solicitation, and non-disparagement clauses and introducing clawbacks increases the company’s ability to enforce post-employment restrictions but may elevate the risk of disputes or challenges depending on jurisdictional enforceability. The pro rata vesting change reduces contingent compensation obligations for terminated, non-retirement-eligible employees, which could affect retention dynamics and severance negotiations. The filing does not disclose any quantification of affected headcount, historical grant sizes, or expected financial impact, so materiality to earnings or cash flows cannot be determined from the text provided.
L'azienda ha adottato un nuovo modello di Stock Option Award Agreement per le assegnazioni previste dal suo Amended and Restated Fiscal 2002 Share Incentive Plan. Nel nuovo modello, i dipendenti licenziati senza giusta causa che non sono eleggibili alla pensione (inclusi i dirigenti) riceveranno il vest-ing pro rata delle opzioni non maturate solo fino all'ultimo giorno retribuito, mentre le rimanenti opzioni non maturate saranno revocate; i dipendenti eleggibili alla pensione manterranno la piena maturazione al momento del pensionamento. L'accordo amplia le clausole restrittive — riservatezza, non concorrenza, divieto di sollecitazione, non divulgazione, non interferenza e divieto di diffamazione — e introduce una disposizione di perdita e recupero (forfeiture and clawback) per il mancato rispetto di tali obblighi. Il testo integrale del modello è depositato come Exhibit 10.1 e richiamato per riferimento.
La compañía adoptó un nuevo formulario de Stock Option Award Agreement para concesiones en virtud de su Amended and Restated Fiscal 2002 Share Incentive Plan. En el nuevo formulario, los empleados despedidos sin causa que no son elegibles para jubilación (incluidos los altos directivos) recibirán el vesting prorrateado de las opciones no adquiridas solo hasta el último día pagado, y las opciones no adquiridas restantes se perderán; los empleados con derecho a jubilación conservarán la plena adquisición al retirarse. El acuerdo amplía las cláusulas restrictivas —confidencialidad, no competencia, no captación, no divulgación, no interferencia y no menosprecio— y añade una disposición de pérdida y recuperación (forfeiture and clawback) por incumplimiento de esas obligaciones. El formulario completo está archivado como Exhibit 10.1 e incorporado por referencia.
회사는 수정·재작성된 2002 회계연도 주식 인센티브 플랜(Amended and Restated Fiscal 2002 Share Incentive Plan)에 따른 부여를 위해 새로운 양식의 Stock Option Award Agreement를 채택했습니다. 새 양식에 따르면 퇴직 사유가 아닌 이유로 해고된 직원(임원 포함) 중 퇴직 자격이 없는 경우, 미확정 옵션은 마지막 급여일까지만 비례 베스팅(pro rata vesting)되며 나머지 미확정 옵션은 몰수됩니다. 퇴직 자격이 있는 직원은 퇴직 시 전액 베스팅을 유지합니다. 본 계약은 기밀 유지, 경쟁 금지, 고객 유인 금지, 비공개, 간섭 금지 및 비방 금지 등 제한 조항을 확장하고, 이러한 조항 위반 시 적용되는 몰수 및 환수(forfeiture and clawback) 조항을 추가합니다. 전체 양식은 Exhibit 10.1로 제출되어 참조로 포함되어 있습니다.
La société a adopté un nouveau modèle de Stock Option Award Agreement pour les attributions dans le cadre de son Amended and Restated Fiscal 2002 Share Incentive Plan. Selon ce nouveau modèle, les salariés licenciés sans motif qui ne sont pas éligibles à la retraite (y compris les dirigeants) bénéficieront d'un acquisition au prorata des options non acquises uniquement jusqu'au dernier jour payé, les options non acquises restantes étant perdues ; les salariés éligibles à la retraite conservent l'acquisition complète au moment du départ en retraite. L'accord étend les engagements restrictifs — confidentialité, non-concurrence, non-sollicitation, non-divulgation, non-interférence et non-dénigrement — et ajoute une disposition de perte et récupération (forfeiture and clawback) en cas de non-respect de ces engagements. Le texte complet du modèle est déposé en tant qu'Exhibit 10.1 et intégré par référence.
Das Unternehmen hat für Zuteilungen im Rahmen seines Amended and Restated Fiscal 2002 Share Incentive Plan ein neues Muster des Stock Option Award Agreement eingeführt. Nach dem neuen Muster erhalten ohne verschulden gekündigte Mitarbeiter, die nicht pensionierungsberechtigt sind (einschließlich leitender Angestellter), eine anteilige Vesting der unverfallbaren Optionen nur bis zum letzten bezahlten Tag; die verbleibenden unverfallbaren Optionen verfallen. Ruhestandsberechtigte Mitarbeiter behalten bei Pensionierung die volle Vesting. Die Vereinbarung weitet die Schutzklauseln aus — Vertraulichkeit, Wettbewerbsverbot, Abwerbeverbot, Geheimhaltung, Nichtbeeinträchtigung und Nichtdiffamierung — und fügt eine Verfall- und Rückforderungsregelung (forfeiture and clawback) für die Nichteinhaltung dieser Klauseln hinzu. Das vollständige Muster ist als Exhibit 10.1 eingereicht und durch Verweis einbezogen.
FAQ
What change did EL make to stock option vesting on termination without cause?
Do retirement-eligible employees lose vesting under the new agreement?
What new restrictive covenants were added in EL's form of Stock Option Award Agreement?
Is there a clawback provision in the new agreement?
Where can I find the full text of the new Stock Option Award Agreement?
