Exhibit 10.1
DOMESTIC
Stock Option Agreement
Under
The Estée Lauder Companies
Inc.
Amended and Restated Fiscal 2002
Share Incentive Plan (the “Plan”)
This STOCK OPTION AGREEMENT (the
“Agreement”) provides for the granting of options 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 “Employee” or
the “Participant”), to purchase shares of the
Company’s Class A Common Stock, par value $0.01 (the
“Shares”), subject to the terms below (the “Stock
Options” or “Options”). The name of the
“Participant,” the “Grant Date,” the
aggregate number of Shares that may be purchased pursuant to this
Agreement, and the “Exercise Price” per Shares are
stated in the attached “Notice of Grant,” and are
incorporated by reference. The other terms of the Options are
stated in this Agreement and in the Plan. Terms not defined
in this Agreement are defined in the Plan, as amended.
The Stock Options described in this
Agreement are granted pursuant to the Company’s Amended and
Restated Fiscal 2002 Share Incentive Plan, as may be amended from
time to time (the “Plan”), and are subject in all
respects to the provisions of the Plan. The Stock Options
granted under this Agreement are not Incentive Stock Options (as
defined in Section 422(b) of the Internal Revenue Code of
1986, as amended (the “Code”)).
1. Payment of Exercise
Price. The Company will provide and communicate to the
Employee various methods of exercise. In all cases, upon
exercise, the Employee must deliver or cause to be delivered to the
Company (or its agent designated for the purpose) upon settlement
of the exercise sufficient cash or sufficient number of Shares with
value equal to or exceeding the Exercise Price per Share. The
Employee also is required to deliver or cause to be delivered
sufficient cash to cover the applicable tax withholding in
accordance with Section 5 of this Agreement and fees in
connection with the exercise. To facilitate exercise, the
Company may enter into agreements for coordinated procedures with
one or more brokerage firms or financial institutions.
2. Exercise
Period.
a. General .
Subject to other provisions contained in this Agreement and in the
Plan, Stock Options granted under this Agreement will be
exercisable in installments as specified under “Exercise
Period” in the attached “Notice of
Grant”.
Stock Options awarded under this
Agreement are exercisable until the close of business on the tenth
anniversary of the Grant Date; after this date, the Stock Options
expire.
b. Death or Disability
. If the Employee dies or becomes totally and permanently
disabled (as determined under the Company’s long term
disability program), each Stock Option awarded but not yet
exercisable as of the Employee’s date of death or disability
determination will become immediately exercisable. The period
during which the Stock Option may be exercised will commence on the
day after the Employee’s date of death or disability
determination and end on the earlier of the close of business on
the date of (i) the first anniversary of the Employee’s
death or disability determination or (ii) the tenth
anniversary of the Grant Date.
c. Retirement .
Subject to Section 3, if the Employee formally retires under
the terms of the Estée Lauder Inc. Retirement Growth Account
Plan (or an affiliate or a successor plan or program of similar
purpose), each Stock Option awarded but not yet exercisable as of
the date of retirement will become immediately exercisable. Each
Stock Option awarded may thereafter be exercised until the close of
business on the date of the tenth anniversary of the Grant
Date. If the Employee 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
Employee will have deemed to be retired as of the date of death and
this
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Section 2(c) will apply rather than
Section 2(b). If the Employee dies or becomes disabled
after retirement as contemplated by this Section 2(c), the
provisions of this section shall apply.
d. Termination of
Employment Without Cause .
(1) Subject to Section 3,
if the Employee is terminated at the instance of the Employee
(e.g., resigns voluntarily), each Stock Option exercisable but
unexercised as of the effective date of such termination may be
exercised until the close of business on the date first to occur of
(i) ninety (90) days after the effective date of such
termination and (ii) the tenth anniversary of the Grant
Date. Each Stock Option awarded but unexercisable as of the
date of such termination will be forfeited.
(2) Subject to Section 3,
if the Employee is terminated at the instance of the Company or
relevant subsidiary without Cause (as defined below), each Stock
Option awarded but unexercisable as of the date of termination will
become immediately exercisable. Each Stock Option awarded may
be exercised until the close of business on the date first to occur
of (i) ninety (90) days after the effective date of such
termination and (ii) the tenth anniversary of the Grant
Date. For this purpose, “Cause” is defined in the
employment agreement in effect between the Employee 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 Employee of
any of his or her material obligations under any Company policy or
procedure, including, without limitation, the Code of Corporate
Conduct and the Policy on Avoidance of Insider Trading.
3. Post-Employment
Exercises. No Stock Option represented by this Agreement
may be exercised after termination of the Employee’s
employment with the Company (or any of its subsidiaries) unless as
provided for in Section 2b, 2c or 2d hereof. The
exercise of any Stock Option after termination of the
Employee’s employment by reason of retirement in accordance
with Section 2c, or due to termination by the Employee or
termination by the Company or relevant subsidiary without Cause in
accordance with Section 2d, is subject to satisfaction of the
conditions precedent that the Employee neither (i) competes
with, takes other employment with, or renders services to a
competitor of the Company, its subsidiaries, or affiliates without
the Company’s written consent, nor (ii) conducts herself
or himself in a manner adversely affecting the Company. All
Stock Options that cannot be exercised after termination of the
Employee’s employment will be forfeited.
4. Adjustment Provisions;
Change in Control.
a. If there shall be any
change in the Class A Common Stock of the Company, through
merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, split up, spin-off,
combination of Shares, exchange of Shares, dividend in kind or
other like change in capital structure or distribution (other than
normal cash dividends) to stockholders of the Company, the Company
shall adjust, in a fair and equitable manner, the Plan and each
outstanding Stock Option to prevent dilution or enlargement of
Participant’s rights under the Plan. The Company will
make this adjustment each time one of the changes identified above
occurs by either adjusting the number of shares of Class A
Common Stock and/or kind of shares of common stock of the Company
or other securities that may be issued with respect to any Stock
Option under the Plan, adjusting the number of Class A Common
Stock and/or kind of shares of common stock of the Company or other
securities that are subject to outstanding Stock Options, and/or
where applicable, adjusting the exercise price or purchase price
applicable to outstanding Stock Options. Appropriate
adjustments may also be made by the Company to the terms of any
Stock Options to reflect such changes or distributions (and any
extraordinary dividend or distribution of cash or other assets) and
to modify any other terms of outstanding Stock Options on an
equitable basis. In addition, the Company is authorized to
make adjustments to the terms and conditions of Stock Options, in
recognition of unusual or nonrecurring events affecting the Company
or the financial statements of the Company, or in response to
changes in applicable laws, regulations, or accounting
principles. However, no adjustment or change can be made to
the terms of a Stock Option that will cause that Stock Option to
fail to be exempt from Code Section 409A. For purposes
of this Section 4, the Market Value of the Shares shall be
equal to 100% of the closing price of the Class A Common Stock
on the New York Stock Exchange (or, if not traded thereon, then on
any other national securities exchange or other market system on
which the Class A
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Common Stock is then traded) as reported by the
Wall Street Journal for the date on which such Market Value is
being fixed, or, if there shall be no trading on such date, the
date next preceding on which trading occurred.
b. Notwithstanding any other
provision hereunder, in the event of a Change in Control (as
defined below), the Committee, in its discretion, may take such
actions as it deems appropriate with respect to outstanding
Benefits, including, without limitation, accelerating the
exercisability or vesting of such Benefits, or such other actions
provided in an agreement approved by the Board in connection with a
Change in Control and such Benefits shall be subject to the terms
of such agreement as the Committee, in its discretion, shall
determine. The Committee, in its discretion, may determine
that, upon the occurrence of a Change in Control of the Company
each Stock Option outstanding hereunder shall terminate within a
specified number of days after notice to the holder, and such
holder shall receive, with respect to each share of Common Stock
subject to such Stock Option an amount equal to the excess of the
Market Value of such shares of Common Stock immediately prior to
the occurrence of such Change in Control over the exercise price
per share of such Stock Option such amount to be payable in cash,
in one or more kinds of property (including the property, if any,
payable in the transaction) or in a combination thereof, as the
Committee, in its discretion, shall determine. For purposes
of this Section 4b, a “Change in Control” of the
Company shall be deemed to have occurred upon any of the following
events:
(i)
On or after the date there are no shares of Class B Common
Stock, par value $.01 per share, of the Company outstanding, any
person as such term is used in Section 13(d) of the
Exchange Act or person(s) acting together which would
constitute a “group” for purposes of
Section 13(d) of the Exchange Act (other than the
Company, any subsidiary, any employee benefit plan sponsored by the
Company or any member of the Lauder family or any family-controlled
entities (collectively, the “Lauder Family”)) shall
acquire (or shall have acquired during the 12-month period ending
on the date of the most recent acquisition by such person(s)) and
shall “beneficially own” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, at least 30% of
the total voting power of all classes of capital stock of the
Company entitled to vote generally in the election of the Board;
or
(ii)
During any period of twelve consecutive months, either (A) the
individuals who at the beginning of such period constitute the
Board of Directors or any individuals who would be
“Continuing Directors” (as hereinafter defined) cease
for any reason to constitute at least a majority thereof
(B) at any meeting of the shareholders of the Company called
for the purpose of electing directors, a majority of the persons
nominated by the Board for election as directors shall fail to be
elected; or
(iii)
Consummation of a sale or other disposition (in one transaction or
a series of transactions) of all or substantially all of the assets
of the Company; or
(iv)
Consummation of a merger or consolidation of the Company
(A) in which the Company is not the continuing or surviving
corporation (other than a consolidation or merger with a
wholly-owned subsidiary of the Company in which all shares of the
Company’s common stock outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for common
stock of the subsidiary) or (B) pursuant to which all shares
of the Company’s common stock are converted into cash,
securities or other property, except in either case, a
consolidation or merger of the Company in which the hol
