International pension plans with accumulated benefit obligations in excess of the plans’ assets had aggregate projected benefit obligations of $137.8 million and $113.3 million, aggregate accumulated benefit obligations of $119.1 million and $97.2 million and aggregate fair value of plan assets of $68.9 million and $66.3 million at June 30, 2003 and 2002, respectively. The Company’s 401(k) Savings Plan (“Savings Plan”) is a contributory defined contribution plan covering substan- tially all regular U.S. employees who have completed the hours and service requirements, as defined by the plan document.Effective January 1, 2002, regular full-time employees are eligible to participate in the Plan on the first day of the second month following their date of hire. The Savings Plan is subject to the applicable provisions  of ERISA. The Company matches a portion of the par- ticipant’s contributions after one year of service under  a predetermined formula based on the participant’s con- tribution level and years of service. The Company’s contributions were approximately $9.1 million in fiscal 2003 and $6.7 million for the fiscal years ended June 30, 2002 and 2001. Shares of the Company’s Class A Com- mon Stock are not an investment option in the Savings Plan and the Company does not use such shares to match participants’ contributions. The Company accrues for deferred compensation and interest thereon and for the increase in the value of share units pursuant to agreements with certain key executives and outside directors. The amounts included in the accompanying consolidated balance sheets under these plans were $109.2 million and $95.7 million as of June 30, 2003 and 2002, respectively. The expense for fiscal 2003 was $17.4 million and for fiscal 2002 and 2001 was $11.6 million in each year. The Company recorded the $6.50 Cumulative Redeemable Preferred Stock at its redemption value of $360.0 million and charged this amount, net of the par value of the shares of nonvoting common stock exchanged, to stockholders’ equity in fiscal 1995. Holders of the $6.50 Cumulative Redeemable Pre- ferred Stock are entitled to receive cumulative cash divi- dends at a rate of $6.50 per annum per share payable in quarterly installments. Such dividends have preference over all other dividends of stock issued by the Company. Shares are subject to mandatory redemption on June 30, 2005 at a redemption price of $100 per share. Following such date and so long as such mandatory redemption obligations have not been discharged in full, no dividends may be paid or declared upon the Class A or Class B Common Stock, or on any other capital stock ranking junior to or in parity with such $6.50 Cumulative Redeemable Preferred Stock and no shares of Class A or Class B Common Stock or such junior or parity stock may be redeemed or acquired for any consideration by the Company. Under certain circumstances, the Company may redeem the stock, in whole or in part, prior to the mandatory redemption date. Holders of such stock may put such shares to the Company at a price of $100 per share upon the occurrence of certain events. As of June 30, 2003, the Company’s authorized capital stock included 23.6 million shares of preferred stock, par value $.01 per share, of which 3.6 million shares are outstanding and designated as $6.50 Cumulative Redeemable Preferred Stock. The outstanding preferred stock was issued in June 1995 in exchange for nonvoting common stock of the Company owned by The Estée Lauder 1994 Trust. The Company provides certain postemployment benefits to eligible former or inactive employees and their dependents during the period subsequent to employ- ment but prior to retirement. These benefits include health care coverage and severance benefits. Generally, the cost of providing these benefits is accrued and any incremental benefits were not material to the Company’s consolidated financial results. NOTE 11– POSTEMPLOYMENT BENEFITS  OTHER THAN TO RETIREES NOTE 12 – $6.50 CUMULATIVE REDEEMABLE PREFERRED STOCK, AT REDEMPTION VALUE 401(k) Savings Plan (U.S.) Deferred Compensation THEEST{E LAUDER COMPANIES INC. 75