UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE ESTEE LAUDER COMPANIES INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
11-2408943
(I.R.S. Employer Identification No.)
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 572-4200
(Address and Zip Code of Principal Executive Offices)
THE ESTEE LAUDER COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN
(Full Title of the Plan)
SARA E. MOSS, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
THE ESTEE LAUDER COMPANIES INC.
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 572-4200
(Name, Address and Telephone Number, including area code,
of Agent For Service)
Copy to:
JEFFREY J. WEINBERG, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to be to be Price Per Offering Registration
Registered Registered(1) Share(2) Price(2) Fee
--------------------------------------------------------------------------------
Class A Common Stock, 300,000 shares $41.88 $12,564,000 $385.72
par value $0.01 per share
================================================================================
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended (the
"Securities Act"), there shall also be deemed registered hereby such
additional number of shares of Class A Common Stock of the Registrant as
may be offered or issued to prevent dilution resulting from stock
dividends, stock splits or similar transactions.
(2) Estimated pursuant to Rule 457(h) and Rule 457(c) under the Securities
Act, based upon the average of the high and low sales prices of the
Registrant's Class A Common Stock reported in the consolidated reporting
system on November 5, 2007.
EXPLANATORY NOTE
In accordance with General Instruction E to Form S-8, this Registration Statement registers an additional 300,000 shares of Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"), of The Estee Lauder Companies Inc. (the "Registrant"), to be offered and sold pursuant to The Estee Lauder Companies Inc. Non-Employee Director Share Incentive Plan, as amended and restated (the "Plan"). The contents of the following registration statement filed by the Registrant are incorporated herein by reference to the extent not modified hereby: Form S-8 filed November 9, 2000 (SEC File No. 333-49606).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission (the "Commission") by the Registrant (File Nos. 001-14064) are incorporated herein by reference:
(i) the Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 2007;
(ii) the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007;
(iii) the Registrant's Current Reports filed on Form 8-K with the Commission on July 3, August 29, September 6, September 11, September 17, and September 25, 2007; and
(iv) The description of the Registrant's Class A Common Stock contained in the Registrant's Registration Statement on Form 8-A filed with the Commission pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"), on November 8, 1995, including any amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Registrant with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Unless expressly incorporated into this Registration Statement, a report (or portion thereof) "furnished" on Form 8-K shall not be incorporated by reference into this Registration Statement. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Copies of these documents are not required to be filed with this Registration Statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated in the State of Delaware. Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify directors and officers, as well as other employees and individuals, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee or agent of such corporation. The Delaware General Corporation Law provides that Section 145 is not exclusive of other rights to which those
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seeking indemnification may be entitled under any certificate of incorporation, bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for payments of unlawful dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any transactions from which the director derived an improper personal benefit.
The Registrant's Restated Certificate of Incorporation, as amended, provides that no director or officer will be liable to the corporation or its stockholder for any breach of fiduciary duty, except as limited under Delaware General Corporation Law. The Registrant's Amended and Restated By-Laws provide for indemnification of our directors and officers to the fullest extent permitted by Delaware General Corporation Law.
The Registrant's directors and officers are covered by insurance policies indemnifying against certain liabilities, including certain liabilities arising under the Securities Act that might be incurred by them in such capacities and against which the Registrant may not indemnify them.
ITEM 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------
4.1 - Form of Restated Certificate of Incorporation, dated
November 16, 1995 (incorporated by reference to
Exhibit 3.1 to the Registrant's Annual Report on Form
10-K for the year ended June 30, 2003) (SEC File No.
1-14064).
4.2 - Certificate of Amendment to Restated Certificate of
Incorporation (incorporated by reference to Exhibit
3.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1999) (SEC File
No. 1-14064).
4.3 - Amended and Restated By-laws (incorporated by
reference to Exhibit 3.1 to the Registrant's Current
Report on Form 8-K dated May 18, 2005) (SEC File No.
1-14064).
5* - Opinion of Weil, Gotshal & Manges LLP.
23.1* - Consent of KPMG LLP.
23.2* - Consent of Weil, Gotshal & Manges LLP (included in
Exhibit 5).
24* - Power of Attorney (included as part of the signature
page to this Registration Statement and incorporated
herein by reference).
99.1* - The Estee Lauder Companies Inc. Non-Employee Director
Share Incentive Plan (as amended and restated
November 9, 2007).
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EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------
99.2* - Form of Stock Option Agreement for Annual Stock
Option Grants under The Estee Lauder Companies Inc.
Non-Employee Director Share Incentive Plan (as
amended and restated November 9, 2007).
99.3* - Form of Stock Option Agreement for Elective Stock
Option Grants under The Estee Lauder Companies Inc.
Non-Employee Director Share Incentive Plan (as
amended and restated November 9, 2007).
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* Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities
offered (if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high and the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York, State of New York, on this 9th day of November, 2007.
THE ESTEE LAUDER COMPANIES INC.
By: /s/ Richard W. Kunes
---------------------------
Name: Richard W. Kunes
Title: Executive Vice President and
Chief Financial Officer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of William P. Lauder, Richard W. Kunes, Sara E. Moss and Spencer G. Smul or any of them, each acting alone, his true and lawful attorney-in-fact and agent, with full powers of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, in connection with the Registrant's Registration Statement on Form S-8 under the Securities Act of 1933, including to sign the Registration Statement and any and all amendments to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and any applicable securities exchange or securities self-regulatory body, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully, to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title/Capacity Date
--------- -------------- ----
/s/ William P. Lauder President, Chief November 9, 2007
------------------------------ Executive Officer
William P. Lauder and Director
(Principal Executive
Officer)
/s/ Richard W. Kunes Executive Vice November 9, 2007
------------------------------ President and Chief
Richard W. Kunes Financial Officer
(Principal Financial
and Accounting
Officer)
/s/ Leonard A. Lauder Chairman of the Board November 9, 2007
------------------------------ of Directors
Leonard A. Lauder
/s/ Charlene Barshefsky Director November 9, 2007
------------------------------
Charlene Barshefsky
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Signature Title/Capacity Date
--------- -------------- ----
/s/ Rose Marie Bravo Director November 9, 2007
------------------------------
Rose Marie Bravo
/s/ Paul J. Fribourg Director November 9, 2007
------------------------------
Paul J. Fribourg
/s/ Mellody Hobson Director November 9, 2007
------------------------------
Mellody Hobson
/s/ Irvine O. Hockaday, Jr. Director November 9, 2007
------------------------------
Irvine O. Hockaday, Jr.
/s/ Aerin Lauder Director November 9, 2007
------------------------------
Aerin Lauder
/s/ Ronald S. Lauder Director November 9, 2007
------------------------------
Ronald S. Lauder
/s/ Richard D. Parsons Director November 9, 2007
------------------------------
Richard D. Parsons
/s/Lynn Forester de Rothschild Director November 9, 2007
------------------------------
Lynn Forester de Rothschild
/s/ Barry S. Sternlicht Director November 9, 2007
------------------------------
Barry S. Sternlicht
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------
4.1 - Form of Restated Certificate of Incorporation, dated
November 16, 1995 (incorporated by reference to
Exhibit 3.1 to the Registrant's Annual Report on Form
10-K for the year ended June 30, 2003) (SEC File No.
1-14064).
4.2 - Certificate of Amendment to Restated Certificate of
Incorporation (incorporated by reference to Exhibit
3.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1999) (SEC File
No. 1-14064).
4.3 - Amended and Restated By-laws (incorporated by
reference to Exhibit 3.1 to the Registrant's Current
Report on Form 8-K dated May 18, 2005) (SEC File No.
1-14064).
5* - Opinion of Weil, Gotshal & Manges LLP.
23.1* - Consent of KPMG LLP.
23.2* - Consent of Weil, Gotshal & Manges LLP (included in
Exhibit 5).
24* - Power of Attorney (included as part of the signature
page to this Registration Statement and incorporated
herein by reference).
99.1* - The Estee Lauder Companies Inc. Non-Employee Director
Share Incentive Plan (as amended and restated
November 9, 2007).
99.2* - Form of Stock Option Agreement for Annual Stock
Option Grants under The Estee Lauder Companies Inc.
Non-Employee Director Share Incentive Plan (as
amended and restated November 9, 2007).
99.3* - Form of Stock Option Agreement for Elective Stock
Option Grants under The Estee Lauder Companies Inc.
Non-Employee Director Share Incentive Plan (as
amended and restated November 9, 2007).
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* Filed herewith.
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EXHIBIT 5.1
WEIL, GOTSHAL & MANGES LLP Austin
767 Fifth Avenue Boston
New York, NY 10153 Budapest
(212) 310-8000 Dallas
Fax: (212) 310-8007 Frankfurt
Houston
London
Miami
Munich
Paris
Prague
Shanghai
November 9, 2007 Silicon Valley
Singapore
Warsaw
Washington, D.C.
Wilmington
The Estee Lauder Companies Inc.
767 Fifth Avenue
New York, NY 10153
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Ladies and Gentlemen:
We have acted as counsel to The Estee Lauder Companies Inc., a Delaware corporation (the "Company"), in connection with the preparation and filing of the Company's Registration Statement on Form S-8 under the Securities Act of 1933, as amended (the "Registration Statement"), relating to the issuance of not more than 300,000 additional shares of the Company's Class A common stock, par value $0.01 per share (the "Class A Common Stock"), being registered in connection with The Estee Lauder Companies Inc. Non-Employee Director Share Incentive Plan, as amended and restated (the "Plan").
In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of the Registration Statement and the Plan pursuant to which shares of the Class A Common Stock will be issued and such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of documents submitted to us as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to this opinion that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that the 300,000 shares of Class A Common Stock being registered for sale pursuant to the Registration Statement have been duly authorized and, if and when issued and delivered upon receipt by the Company of consideration constituting lawful consideration under Delaware law in accordance with the Plan, will be validly issued, fully paid and non-assessable.
The Estee Lauder Companies Inc.
November 9, 2007
We hereby consent to the filing of a copy of this opinion letter as an exhibit to the Registration Statement.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP |
EXHIBIT 23.1
The Board of Directors
The Estee Lauder Companies Inc.:
We consent to the use of our reports with respect to the consolidated financial statements, management's assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting incorporated by reference herein.
Our report refers to the Company's adoption of Statement of Financial Accounting Standard No. 123(R), "Share-Based Payment," effective July 1, 2005, the Company's methodology change for quantifying errors based on SEC Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," effective July 1, 2006, and the Company's adoption of Statement of Financial Accounting Standard No. 158, "Employers' Accounting for Defined Benefit Pension and Other Post Retirement Plans-An Amendment of FASB Statements No. 87, 88, 106, and 132(R)," effective June 30, 2007.
/s/ KPMG LLP New York, New York November 8, 2007 |
THE ESTEE LAUDER COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN
1. PURPOSE. The Estee Lauder Companies Inc. Non-Employee Director Share Incentive Plan (the "Plan") is intended (i) to provide incentives which will attract, retain and motivate highly competent persons as non-employee directors of The Estee Lauder Companies Inc. (the "Company"), and (ii) to assist in further aligning the interests of the Company's non-employee directors with those of its other stockholders, by providing non-employee directors with opportunities to acquire shares of the Class A Common Stock, par value $0.01 per share, of the Company ("Class A Common Stock") or to receive monetary payments based on the value of such shares pursuant to the Benefits (as defined below) described herein.
2. ADMINISTRATION.
The Plan will be administered by the Board of Directors of the Company (the "Board") or a committee appointed by the Board from among its members (and references herein to the Board shall be deemed to include references to any such committee, except as the context otherwise requires). The Board is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and interpretations and to take such action in connection with the Plan and any Benefits (as defined below) granted hereunder as it deems necessary or advisable. All determinations and interpretations made by the Board shall be binding and conclusive on all participants and their legal representatives.
The Board may employ such legal or other counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion or computation received from any such counsel, consultant or agent. Expenses incurred by the Board in the engagement of such counsel, consultant or agent shall be paid by the Company.
3. PARTICIPANTS. Each member of the Board who is not an employee of the Company or any subsidiary of the Company (a "Non-Employee Director") shall be eligible to participate in the Plan.
4. TYPE OF BENEFITS. Benefits under the Plan shall be granted in a combination of (a) Stock Options, (b) Stock Awards and/or (c) Stock Units (each as described below, and collectively, the "Benefits"). Benefits may be evidenced by agreements (which need not be identical) in such forms as the Board may from time to time approve; provided, however, that in the event of any conflict between the provisions of the Plan and any such agreements, the provisions of the Plan shall prevail.
5. COMMON STOCK AVAILABLE UNDER THE PLAN.
(a) Subject to the provisions of this Section 5 and any adjustments made in accordance with Section 9 hereof, the maximum number of shares of Class A Common Stock that may be delivered to Non-Employee Directors and their beneficiaries under the Plan shall be 600,000 shares of Class A Common Stock, which may be authorized and unissued or treasury shares. Any shares of Class A Common Stock covered by a Stock Option or Stock Unit granted under the Plan, which is forfeited, is canceled, or expires, shall be deemed not to have been delivered for purposes of determining the maximum number of shares of Class A Common Stock available for delivery under the Plan.
(b) If any Stock Option is exercised by tendering shares of Class A Common Stock, either actually or by attestation, to the Company as full or partial payment in connection with the exercise of a Stock Option under the Plan, only the number of shares of Class A Common Stock issued net of the shares of Class A Common Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares of Class A Common Stock available for delivery under the Plan.
6. ANNUAL STOCK OPTIONS.
(a) GRANT. On the date of each Annual Meeting of Stockholders of the Company during the term of the Plan (commencing with the Annual Meeting of Stockholders to be held on November 9, 2000), each Non-Employee Director in office immediately following such Annual Meeting shall be granted automatically a Stock Option to purchase 5,000 shares of Class A Common Stock (subject to adjustments made in accordance with Section 9 hereof). Stock Options are not intended to constitute "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
(b) EXERCISE PRICE. Each Stock Option granted hereunder shall have a per-share exercise price equal to the Fair Market Value (as defined herein) of a share of Class A Common Stock on the date of grant (subject to adjustments made in accordance with Section 9 hereof).
(c) PAYMENT OF EXERCISE PRICE. The option exercise price may be paid in cash or, in the discretion of the Board, by the delivery of shares of Class A Common Stock then owned by the Non-Employee Director (to be valued at their Fair Market Value on the date of exercise), by the withholding of shares of Class A Common Stock for which a Stock Option is exercisable, or by a combination of these methods. In the discretion of the Board, payment may also be made by delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the exercise price. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. The Board may prescribe any other method of paying the exercise price that it determines to be consistent with applicable law and the purpose of the Plan, including, without limitation, in lieu of the exercise of a Stock Option by delivery of shares of Class A Common Stock then owned by a Non-Employee Director, providing the Company with a notarized statement attesting to the number of shares owned, in which case upon verification by the Company, the Company would issue to the Non-Employee Director only the number of incremental shares to which the Non-Employee Director is entitled upon exercise of the Stock Option. In determining which methods a Non-Employee Director may utilize to pay the exercise price, the Board may consider such factors as it determines are appropriate.
(d) EXERCISE PERIOD.
(i) GENERAL. Each Stock Option granted to a Non-Employee Director hereunder shall become exercisable beginning on the first anniversary of the date of grant provided that the Non-Employee Director continues to serve as a director of the Company on such anniversary date; provided, however, any such Stock Option granted to a Non-Employee Director shall become immediately exercisable in the event of (A) a Change in Control of the Company (as defined in Section 9(b) hereof), subject to Section 9(b) hereof or (B) the death of the Non-Employee Director. Each Stock Option shall terminate on the tenth anniversary of the date of grant unless terminated earlier pursuant to the Plan or, for Stock Options granted before April 10, 2007, later pursuant to Section 6(d)(iii) hereof. If a Non-Employee Director ceases to serve as a director of the Company for any reason other than as a result of a Change in Control or his or her death, each Stock Option granted to such person less than one year prior to cessation of service shall immediately terminate and become null and void upon such cessation of service.
(ii) TERMINATION OF DIRECTORSHIP. If a Non-Employee Director ceases
to serve as a director of the Company, any exercisable outstanding Stock Option
previously granted to such Non-Employee Director shall, to the extent not
theretofore exercised, remain exercisable at any time up to and including a date
that is five years after the date of such cessation of service, except, for
Stock Options granted before April 10, 2007, as set forth in Section 6(d)(iii)
hereof, at which time such Stock Option shall terminate and become null and
void; provided, however, that no Stock Option shall be exercisable later than
ten years after the date of grant (except, for Stock Options granted before
April 10, 2007, as set forth in Section 6(d)(iii) hereof); provided, further,
however, if the service of a Non-Employee Director ceases by reason other than
(A) death, (B) disability (as described in Section 22(e)(3) of the Code), (C)
voluntary retirement from service as a director of the Company, or (D) the
failure of the Company to nominate for re-election such Non-Employee Director
who is otherwise eligible, unless such failure to nominate for re-election is
due to any act of (1) fraud or intentional misrepresentation or (2)
embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any subsidiary, in which case such Stock Option shall immediately
terminate and become null and void.
(iii) EXTENSION OF TERM. The term of exercise of any outstanding Stock Options granted prior to April 10, 2007 that have a remaining term of less than one year on the date of a Non-Employee Director's death shall automatically be extended to the first anniversary of the date of death.
(e) POST-DIRECTORSHIP EXERCISES. The exercise of any Stock Option after a Non-Employee Director ceases to serve as a director shall be subject to satisfaction of the conditions precedent that the former Non-Employee Director neither (i) competes with, or takes employment with or renders services to a competitor of, the Company, its subsidiaries or affiliates without the written consent of the Company, nor (ii) conducts himself or herself in a manner adversely affecting the Company. If a Stock Option shall be exercised by the legal or personal representative of a deceased Non-Employee Director or former Non-Employee Director, or by a person who acquired a Stock Option granted hereunder by bequest or inheritance or by reason of the death of any Non-Employee Director or former Non-Employee Director, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative or other person to exercise such Stock Option.
7. STOCK AWARDS FOR NEW NON-EMPLOYEE DIRECTORS. On the date of the first Annual Meeting of Stockholders of the Company which is at least six months after the date a Non-Employee Director is first elected to the Board, such Non-Employee Director (provided that he or she is in office immediately following the Annual Meeting) shall be granted automatically 2,000 shares of Class A Common Stock (subject to adjustments made in accordance with Section 9 hereof), without restrictions, accompanied by an amount in cash for reimbursement of income taxes related to such grant and cash reimbursement payment.
8. ANNUAL STOCK UNITS OR ELECTIVE STOCK OPTIONS.
(a) Subject to clause (e) below, on the date of each Annual Meeting of Stockholders of the Company during the term of the Plan, each Non-Employee Director in office immediately following such Annual Meeting shall be granted automatically that number of Stock Units obtained by dividing (i) a dollar amount determined from time to time by the Board (such amount, which constitutes the portion of the annual retainer payable by the grant of Stock Units, being $25,000 for the calendar year ending December 31, 2000) by (ii) the average closing price of the Class A Common Stock for the twenty days on which trading occurred next preceding the date of grant of the Stock Units. Each grant of a Stock Unit shall be accompanied by a Dividend Equivalent Right (as defined below) with respect to such Stock Unit.
(b) On the first business day of the calendar year following the year in which a Non-Employee Director ceases to serve as a director, the shares of Class A Common Stock representing the Stock Units granted to the Non-Employee Director shall be distributed to him or her or, in the case of his or her death, to his or her legal or personal representative.
(c) The Board may, in its discretion, allow a Non-Employee Director to
defer receipt of shares of Class A Common Stock in a manner which complies with
Section 409A of the Internal Revenue Code of 1986, as amended.
(d) A "Stock Unit" means a notional account representing one share of Class A Common Stock. A "Dividend Equivalent Right" means the right to receive the amount of any dividend paid on the share of Class A Common Stock represented by a Stock Unit, which shall be payable in the form of additional Stock Units. Additional Stock Units paid in respect of Dividend Equivalent Rights shall be subject to the same terms and conditions as the Stock Units with which the Dividend Equivalent Rights are associated.
(e) Notwithstanding the foregoing, in lieu of being granted Stock Units pursuant to Section 8(a) hereof, a Non-Employee Director may elect to be granted Stock Options pursuant to this Section 8(e) at the time such Non-Employee Director would have otherwise been granted Stock Units, by delivering written notice of the director's election to the Secretary of the Company no later than the date of the Annual Meeting of Stockholders. The number of shares of Class A Common Stock subject to such Stock Options shall be determined by dividing (i) a dollar amount determined from time to time by the Board (such amount, which constitutes that portion of the annual retainer payable by the grant of Stock Options, being $75,000 for the calendar year ending December 31, 2000) by (ii)
the Fair Market Value of a share of Class A Common Stock on the date of grant of the Stock Options. Such Stock Options shall be exercisable beginning on the first anniversary of the date of grant, without any requirement that the Non-Employee Director continues to serves as a director of the Company on such anniversary date, but otherwise subject to the same terms and conditions as set forth in Sections 6(b), (c), (d)(i), (d)(iii) and (e) hereof.
(f) Notwithstanding the foregoing, in no event shall a Non-Employee Director be granted Stock Options or Stock Units (including Dividend Equivalent Rights), as the case may be, pursuant to this Section 8 for greater than 5,000 shares of Class A Common Stock (subject to amendment from time to time by the Board, and to adjustments made in accordance with Section 9 hereof) in any calendar year.
9. ADJUSTMENT PROVISIONS; CHANGE IN CONTROL.
(a) If there shall be any change in the Class A Common Stock, 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 Board shall adjust, in a fair and equitable manner, the Plan and each outstanding Benefit thereunder, to prevent dilution or enlargement of participants' rights under the Plan and such an adjustment shall be made successively each time any such change shall occur. Such adjustment shall be effected by one or more of the following, as applicable, as determined by the Board of Directors: (i) adjustment of the number of Class A Common Stock and/or kind of shares of common stock of the Company or other securities that may be issued under the Plan, adjustment of 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 Benefits, and/or where applicable, the exercise price or purchase price applicable to such Benefits; (ii) grant of a right to receive one or more payments of securities, cash and/or property (which right may be evidenced as an additional Benefit under this Plan) in respect of any outstanding Benefit, (iii) provision for the settlement of any outstanding Benefit(other than a Stock Option) in such securities, cash and/or other property as would have been received had the Benefit been settled in full immediately prior to the change; provided, however, that any adjustment pursuant to this Section 9 shall comply with or otherwise ensure exemption from Section 409A of the Code, as applicable.
(b) Notwithstanding any other provision of this Plan, if there is a Change in Control of the Company, all then outstanding Stock Options shall immediately become exercisable and all outstanding Stock Units shall immediately become payable. For purposes of this Section 9(b), 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 holders of the shares of Common Stock immediately prior to the consolidation or merger have, directly or indirectly, at least a majority of the shares of Common Stock of the continuing or surviving corporation immediately after such consolidation or merger or in which the Board immediately prior to the merger or consolidation would, immediately after the merger or consolidation, constitute a majority of the board of directors of the continuing or surviving corporation.
Notwithstanding the foregoing, none of the following shall constitute a Change in Control of the Company: (A) changes in the relative beneficial ownership among members of the Lauder Family, without other changes that would constitute a Change in Control; or (B) any spin-off of a division or subsidiary of the Company to its stockholders.
For purposes of this Section 9(b), "Continuing Directors" shall mean
(x) the directors of the Company in office on the Effective Date (as defined
below) and (y) any successor to any such director and any additional director
who after the Effective Date whose appointment or election is endorsed by a
majority of the Continuing Directors at the time of his or her nomination or
election.
The Board, 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 Class A Common Stock subject to such Stock Option, an amount equal to the excess of the Fair Market Value of such shares of Class A 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 constituting the Change in Control) or in a combination thereof, as the Board, in its discretion, shall determine. The provisions contained in the preceding sentence shall be inapplicable to a Stock Option granted within six (6) months before the occurrence of a Change in Control if the holder of such Stock Option is subject to the reporting requirements of Section 16(a) of the Exchange Act and no exception from liability under Section 16(b) of the Exchange Act is otherwise available to such holder.
10. NONTRANSFERABILITY. Stock Options and Stock Units granted under the Plan to a Non-Employee Director shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the Non-Employee Director's lifetime, only by the Non-Employee Director. In the event of the death of a Non-Employee Director, each Stock Option theretofore granted to him or her shall be exercisable during such period after his or her death and by such persons as set forth in Section 6 above. Notwithstanding the foregoing, at the discretion of the Board, an award of a Stock Option or Stock Unit may permit the transferability of any such Stock Option or Stock Unit by a Non-Employee Director solely to the Non-Employee Director's spouse, siblings, parents, children and/or grandchildren, or to trusts for the benefit of such persons, or to partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons, subject to any restriction included in the award of the Stock Option or Stock Unit.
11. OTHER AWARDS AND PROVISIONS. The award of any Benefit under the Plan may also be subject to such other provisions (whether or not applicable to the Benefit awarded to any other Non-Employee Director) as the Board determines appropriate. The Board also may make any other awards to Non-Employee Directors as are consistent with the purposes of this Plan with such terms and conditions as the Board may determine in its sole discretion.
12. ISSUANCE OF STOCK CERTIFICATES AND RELATED MATTERS. The Company may endorse such legend or legends upon the certificates for shares of Class A Common Stock issued under this Plan and may issue such "stop transfer" instructions to its transfer agent in respect of such shares as the Board, in its sole discretion, determines to be necessary or appropriate to (i) prevent a violation of, or to perfect an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act") or (ii) implement
the provisions of the Plan and any agreement between the Company and the Non-Employee Director. Notwithstanding any other provision of the Plan, the Company shall have no obligation to deliver any shares of Class A Common Stock under the Plan or make any other distribution of Benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation the Securities Act), and the applicable requirements of any securities exchange or similar entity.
13. FAIR MARKET VALUE. For purposes of this Plan and any Benefits awarded hereunder, Fair Market Value shall be the closing price of the Class A Common Stock on the date of calculation (or on the last preceding trading date if Class A Common Stock was not traded on such date) if the Class A Common Stock is readily tradable on a national securities exchange or other market system, and if the Class A Common Stock is not readily tradable, Fair Market Value shall mean the amount determined in good faith by the Board as the fair market value of the Class A Common Stock.
14. TENURE. A Non-Employee Director's right, if any, to continue to serve as a director of the Company or any of its subsidiaries or affiliates shall not be enlarged or otherwise affected by his or her designation as a participant under this Plan.
15. UNFUNDED PLAN. Non-Employee Directors shall have no right, title, or interest whatsoever in or to any investments that the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Non-Employee Director, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
16. NO FRACTIONAL SHARES. No fractional shares of Class A Common Stock shall be issued or delivered pursuant to the Plan. The Board shall determine whether cash or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
17. AMENDMENT AND TERMINATION. The Board may amend the Plan from time to time or suspend or terminate the Plan at any time. However, no amendment shall have a material adverse effect on an outstanding Stock Option or Stock Unit without the consent of the holder. No amendment of the Plan may be made without approval of the stockholders of the Company if required by applicable law or by any listing agreement to which the Company is a party with a national securities exchange or other market system.
18. GOVERNING LAW. This Plan, Benefits granted hereunder and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of New York (regardless of the law that might otherwise govern under applicable New York principles of conflict of laws).
19. EFFECTIVE DATE. The Plan shall be effective as of November 9, 2000 (the "Effective Date") and was amended and restated effective November 9, 2007.
FORM OF
STOCK OPTION AGREEMENT FOR ANNUAL STOCK OPTIONS
UNDER
THE ESTEE LAUDER COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN (THE "PLAN")
This STOCK OPTION AGREEMENT provides for the granting of Stock Options ("Options") by The Estee Lauder Companies Inc., a Delaware corporation (the "Company"), to the participant, a Non-Employee Director of the Company (a "Non-Employee Director"), to purchase shares of the Company's Class A Common Stock, par value $0.01 (the "Shares"), on the terms and subject to the conditions hereinafter provided. The Stock Options described herein are being granted pursuant to Section 6(a) of the Company's Non-Employee Director Share Incentive Plan, as may be amended or restated from time to time (the "Plan"), and are subject in all respects to the provisions of the Plan. The Stock Options granted hereunder are not Incentive Stock Options (as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code")). This Stock Option Agreement incorporates and is subject to all terms, conditions, limitations and restrictions contained in the Plan, which shall be controlling in the event of any conflicting or inconsistent provisions. Capitalized terms not defined herein shall have the meanings ascribed thereto in the Plan.
The name of the "Non-Employee Director", the "Grant Date", the aggregate number of Shares that may be purchased pursuant to this agreement, and the "Exercise Price" per Share are stated in the attached "Notice of Grant", and incorporated herein by reference. The other terms and conditions of the Options are stated in this agreement and in the Plan.
1. PAYMENT OF EXERCISE PRICE. The Company will provide and communicate to the Non-Employee Director various methods of exercise. These methods may include the ability to receive Shares of Class A Common Stock of the Company or cash at 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.
(i). General. Each Stock Option granted to a Non-Employee Director hereunder shall become exercisable beginning on the first anniversary of the date of grant provided that the Non-Employee Director continues to serve as a director of the Company on such anniversary date; provided, however, any such Stock Option granted to a Non-Employee Director shall become immediately exercisable in the event of (A) a Change in Control of the Company or (B) the death of the Non-Employee Director. Each Stock Option shall terminate on the tenth anniversary of the date of grant unless terminated earlier pursuant to the Plan. If a Non-Employee Director ceases to serve as a director of the Company for any reason other than as a result of a Change in Control or his or her death, each Stock Option granted to such person less than one year prior to cessation of service shall immediately terminate and become null and void upon such cessation of service.
(ii). Termination of Directorship. If a Non-Employee Director ceases to serve as a director of the Company, any exercisable outstanding Stock Option previously granted to such Non-Employee Director shall, to the extent not theretofore exercised, remain exercisable at any time up to and including a date that is five years after the date of such cessation of service, at which time such Stock Option shall terminate and become null and void; provided, however, that no Stock Option shall be exercisable later than ten years after the date of grant; and provided, further, however, if the service of a Non-Employee Director ceases by reason other than (A) death, (B) disability (as described in Section 22(e)(3) of the Code), (C) voluntary retirement from service as a director of the Company, or (D) the failure of the Company to nominate for re-election such Non-Employee Director who is otherwise eligible, unless such failure to nominate for re-election is due to any act of (1) fraud or intentional misrepresentation or (2) embezzlement, misappropriation or conversion of assets or opportunities of the Company or any subsidiary, in which case such Stock Option shall immediately terminate and become null and void.
3. POST-DIRECTORSHIP EXERCISES. The exercise of any Stock Option after a Non-Employee Director ceases to serve as a director shall be subject to satisfaction of the conditions precedent that the former Non-Employee Director neither (i) competes with, or takes employment with or renders services as a director or in any other capacity to a competitor of, the Company, its subsidiaries or affiliates without the written consent of the Company, nor (ii) conducts himself or herself in a manner adversely affecting the Company. If a Stock Option shall be exercised by the legal or personal representative of a deceased Non-Employee Director or former Non-Employee Director, or by a person who acquired a Stock Option granted hereunder by bequest or inheritance or by reason of the death of any Non-Employee Director or former Non-Employee Director, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative or other person to exercise such Stock Option.
4. WITHHOLDING. All payments or distributions made hereunder of Shares covered by Stock Options shall be net of any amounts required to be withheld pursuant to applicable federal, national, state and local tax withholding requirements imposed by each taxing authority having jurisdiction. The Company may require the Non-Employee Director to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Shares. The Company may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Non-Employee Director pay the minimum amount of the federal, national, state and local withholding taxes arising in connection with any Stock Option by electing to have the Company withhold Shares of Class A Common Stock having a Market Value equal to the amount to be withheld.
5. NONTRANSFERABILITY. The Stock Options granted hereby are not transferable except by will or the laws of descent and distribution. Notwithstanding the preceding sentence, the Stock Options granted hereby may be transferred by the Non-Employee Director for no consideration, upon ten business days prior written notice to the Company, solely to the Non-Employee Director's spouse, siblings, parents, children and/or grandchildren, or to trusts for the benefit of such persons, or to partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons, subject to all restrictions included in this Stock Option Agreement and subject to the Non-Employee Director and permitted transferee executing an agreement of transfer satisfactory to the Board in its sole discretion.
6. TENURE. A Non-Employee Director's right, if any, to continue to serve as a director of the Company or any of its subsidiaries or affiliates shall not be enlarged or otherwise affected by his or her designation as a participant under this Plan.
7. NOTICES. Any notice required or permitted under this Stock Option Agreement shall be deemed to have been duly given if delivered, telecopied or mailed, certified or registered mail, return receipt requested (a) to the Non-Employee Director at such address as the Company shall maintain for the Non-Employee Director and (b) to the Company's General Counsel or Secretary at the Company's principal executive office.
8. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to enforce at any time any provision of this Stock Option Agreement shall in no manner be construed to be a waiver of such provision or of any other provision hereof.
9. GOVERNING LAW. The Stock Option Agreement shall be governed by and construed according to the laws of the State of New York, applicable to agreements made and performed in that state.
10. PARTIAL INVALIDITY. The invalidity or illegality of any provision herein shall not be deemed to affect the validity of any other provision.
The Estee Lauder Companies Inc.
By:________________________
NOTICE OF GRANT FOR ANNUAL STOCK OPTIONS
UNDER
THE ESTEE LAUDER COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN (THE "PLAN")
This is to confirm that you were awarded options to purchase shares of Class A Common Stock of The Estee Lauder Companies Inc. (the "Shares") in accordance with the Plan. These options are granted under and governed by the terms and conditions of the Plan and the Stock Option Agreement (the "Agreement") attached hereto and made part hereof. A Summary Plan Description is also attached. Please read these documents and keep them for future reference. The specific terms of your award are as follows:
Non-Employee Director:
SSN or Tax ID: XXX-XX-
Grant Date:
Type of Award: NON-QUALIFIED STOCK OPTIONS
Exercise Price per Share: $
Aggregate number of Shares subject to your options:
Exercise Period: YOUR OPTIONS SHALL BECOME EXERCISABLE ON THE FOLLOWING DATES (OR IN THE EVENT OF A "CHANGE IN CONTROL" OF THE COMPANY OR UPON DEATH, DISABILITY, IF THESE OCCURRENCES ARE EARLIER), BUT ARE SUBJECT TO TERMINATION OR FORFEITURE AS PER THE AGREEMENT:
Questions regarding the stock option program can be directed to ______________ (____) _________ or _____________ at (___) ____-______. If you wish to accept this grant, PLEASE SIGN THIS NOTICE AND RETURN WITHIN THE NEXT TWO WEEKS TO:
Compensation Department
767 Fifth Avenue, 43rd Floor
New York, New York 10153
Attention:
The undersigned hereby accepts, and agrees to, all terms and provisions of the Agreement, including those contained in this Notice of Grant.
By_________________________ Date__________
Enclosures:
Stock Option Agreement
Summary Plan Description
FORM OF
STOCK OPTION AGREEMENT FOR ELECTIVE STOCK OPTIONS
UNDER
THE ESTEE LAUDER COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN (THE "PLAN")
This STOCK OPTION AGREEMENT provides for the granting of Stock Options ("Options") by The Estee Lauder Companies Inc., a Delaware corporation (the "Company"), to the participant, a Non-Employee Director of the Company (a "Non-Employee Director"), to purchase shares of the Company's Class A Common Stock, par value $0.01 (the "Shares"), on the terms and subject to the conditions hereinafter provided. The Stock Options described herein are being granted pursuant to Section 8(e) of the Company's Non-Employee Director Share Incentive Plan, as may be amended or restated from time to time (the "Plan"), and are subject in all respects to the provisions of the Plan. The Stock Options granted hereunder are not Incentive Stock Options (as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code")). This Stock Option Agreement incorporates and is subject to all terms, conditions, limitations and restrictions contained in the Plan, which shall be controlling in the event of any conflicting or inconsistent provisions. Capitalized terms not defined herein shall have the meanings ascribed thereto in the Plan.
The name of the "Non-Employee Director", the "Grant Date", the aggregate number of Shares that may be purchased pursuant to this agreement, and the "Exercise Price" per Share are stated in the attached "Notice of Grant", and incorporated herein by reference. The other terms and conditions of the Options are stated in this agreement and in the Plan.
1. PAYMENT OF EXERCISE PRICE. The Company will provide and communicate to the Non-Employee Director various methods of exercise. These methods may include the ability to receive Shares of Class A Common Stock of the Company or cash at 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. Each Stock Option granted to a Non-Employee Director hereunder shall become exercisable beginning on the first anniversary of the date of grant; provided, however, any such Stock Option granted to a Non-Employee Director shall become immediately exercisable in the event of (A) a Change in Control of the Company or (B) the death of the Non-Employee Director. Each Stock Option shall terminate on the tenth anniversary of the date of grant unless terminated earlier pursuant to the Plan.
3. POST-DIRECTORSHIP EXERCISES. The exercise of any Stock Option after a Non-Employee Director ceases to serve as a director shall be subject to satisfaction of the conditions precedent that the former Non-Employee Director neither (i) competes with, or takes employment with or renders services as a director or in any other capacity to a competitor of, the Company, its subsidiaries or affiliates without the written consent of the Company, nor (ii) conducts himself or herself in a manner adversely affecting the Company. If a Stock Option shall be exercised by the legal or personal representative of a deceased Non-Employee Director or former Non-Employee Director, or by a person who acquired a Stock Option granted hereunder by bequest or inheritance or by reason of the death of any Non-Employee Director or former Non-Employee Director, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative or other person to exercise such Stock Option.
4. WITHHOLDING. All payments or distributions made hereunder of Shares covered by Stock Options shall be net of any amounts required to be withheld pursuant to applicable federal, national, state and local tax withholding requirements imposed by each taxing authority having jurisdiction. The Company may require the Non-Employee Director to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Shares. The Company may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Non-Employee Director pay the minimum amount of the federal, national, state and local withholding taxes arising in connection with any Stock Option by electing to
have the Company withhold Shares of Class A Common Stock having a Market Value equal to the amount to be withheld.
5. NONTRANSFERABILITY. The Stock Options granted hereby are not transferable except by will or the laws of descent and distribution. Notwithstanding the preceding sentence, the Stock Options granted hereby may be transferred by the Non-Employee Director for no consideration, upon ten business days prior written notice to the Company, solely to the Non-Employee Director's spouse, siblings, parents, children and/or grandchildren, or to trusts for the benefit of such persons, or to partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons, subject to all restrictions included in this Stock Option Agreement and subject to the Non-Employee Director and permitted transferee executing an agreement of transfer satisfactory to the Board in its sole discretion.
6. TENURE. A Non-Employee Director's right, if any, to continue to serve as a director of the Company or any of its subsidiaries or affiliates shall not be enlarged or otherwise affected by his or her designation as a participant under this Plan.
7. NOTICES. Any notice required or permitted under this Stock Option Agreement shall be deemed to have been duly given if delivered, telecopied or mailed, certified or registered mail, return receipt requested (a) to the Non-Employee Director at such address as the Company shall maintain for the Non-Employee Director or (b) to the Company's General Counsel or Secretary at the Company's principal executive office.
8. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to enforce at any time any provision of this Stock Option Agreement shall in no manner be construed to be a waiver of such provision or of any other provision hereof.
9. GOVERNING LAW. The Stock Option Agreement shall be governed by and construed according to the laws of the State of New York, applicable to agreements made and performed in that state.
10. PARTIAL INVALIDITY. The invalidity or illegality of any provision herein shall not be deemed to affect the validity of any other provision.
The Estee Lauder Companies Inc.
By: ________________________
NOTICE OF GRANT FOR ELECTIVE STOCK OPTIONS
UNDER
THE ESTEE LAUDER COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN (THE "PLAN")
This is to confirm that you were awarded options to purchase shares of Class A Common Stock of The Estee Lauder Companies Inc. (the "Shares") in accordance with the Plan. These options are granted under and governed by the terms and conditions of the Plan and the Stock Option Agreement (the "Agreement") attached hereto and made part hereof. A Summary Plan Description is also attached. Please read these documents and keep them for future reference. The specific terms of your award are as follows:
Non-Employee Director:
SSN or Tax ID: : XXX-XX-
Grant Date:
Type of Award: NON-QUALIFIED STOCK OPTIONS
Exercise Price per Share:
Aggregate number of Shares subject to your options:
Exercise Period: YOUR OPTIONS SHALL BECOME EXERCISABLE ON THE FOLLOWING DATES (OR IN THE EVENT OF A "CHANGE IN CONTROL" OF THE COMPANY OR UPON DEATH, DISABILITY, IF THESE OCCURRENCES ARE EARLIER), BUT ARE SUBJECT TO TERMINATION OR FORFEITURE AS PER THE AGREEMENT:
Questions regarding the stock option program can be directed to _______________ (___) ___-____ or ____________ at (___) ___-____. If you wish to accept this grant, PLEASE SIGN THIS NOTICE AND RETURN WITHIN THE NEXT TWO WEEKS TO:
Compensation Department
767 Fifth Avenue, 43rd Floor
New York, New York 10153
Attention:
The undersigned hereby accepts, and agrees to, all terms and provisions of the Agreement, including those contained in this Notice of Grant.
By_________________________ Date__________
Enclosures:
Stock Option Agreement
Summary Plan Description