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


 

















 


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.  Other Termination of
Employment..


 


(1) Subject
to Section 3, if the Employee terminates 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) or by the Employee for
Good Reason (as defined below) after a Change in Control, 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) Subject
to Section 3, if the Employee terminates for Good Reason (as defined
below) on or following a Change in Control, 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.  “Good
Reason” means the occurrence of any of the following, without the express
written consent of the Participant, within three (3) years after the
occurrence of a Change in Control:


 


(a)           (i) the
assignment to the Participant of any duties inconsistent in any material
adverse respect with the Participant’s position, authority or responsibilities
immediately prior to the Change in Control, or (ii) any other material
adverse change in such position, including title, authority or
responsibilities;


 


(b)           any failure by the
Company to pay any amounts for compensation or benefits owed to the Participant
or a material reduction of the overall amounts of compensation and benefits in
effect prior to the Change in Control, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of notice
thereof given by the Participant;


 


(c)           the Company’s
requiring the Participant to be based at any office or location more than fifty
(50) miles from that location at which he performed his or her services for the
Company immediately prior to the Change in Control, except for travel
reasonably required in the performance of the Participant’s responsibilities;
or


 


(d)           any failure by the
Company to obtain the assumption and agreement to perform this Agreement by a
successor, unless such assumption occurs by operation of law.


 


(4) In
the event of termination for Cause, all outstanding Stock Options held by the
Employee are forfeited.


 


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


 


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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.  Change in
Control.  Upon a Change in
Control during the Exercise Period, each unexercisable Stock Option will vest
and become exercisable by the Participant in accordance with the Plan and this
Agreement, unless the unexercisable Stock Option is assumed by an acquirer in
which case the provisions of Section 2 shall continue to apply.  If an unexercisable Stock Option is not
assumed by the acquirer and the Shares cease to be outstanding immediately
after the Change in Control (e.g., due to a merger with and into another
entity), then the consideration to be received per Share upon exercise of the
stock option will equal the consideration paid to each stockholder per Share
generally upon the Change in Control.  If
the exercise price of the Stock Option is equal to or greater than the
consideration paid to each stockholder per Share generally upon the Change in
Control and the Stock Option is not assumed, then the Stock Options shall
expire upon the Change in Control.


 


5.  Withholding.  Regardless of any action the Company or the
Participant’s employer (the “Employer”) takes with respect to any or all income
tax, social security, payroll tax, or other tax-related withholding (“Tax-Related
Items”), Participant acknowledges that the ultimate liability for all
Tax-Related Items legally due by Participant is and remains his or her
responsibility.  Furthermore, Participant
acknowledges that the Company and/or the Employer (i) make no
representations or undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of the Stock Options, including the grant
of the Stock Options, the exercise of the Stock Options, the subsequent sale of
Shares acquired under the Plan and the receipt of any dividends; and (ii) do
not commit to structure the terms of the grant of the Stock Options or any
aspect of Participant’s participation in the Plan to reduce or eliminate his or
her liability for Tax-Related Items.


 


Prior
to the relevant taxable event, Participant shall pay or make adequate
arrangements satisfactory to the Company and/or the Employer to satisfy all
withholding obligations of the Company and/or the Employer.  In this regard, Participant authorizes the
Company and/or the Employer to withhold all applicable Tax-Related Items
legally payable by Participant from his or her wages or other cash compensation
paid by the Company and/or the Employer or from proceeds of the sale of the
Shares acquired under the Plan. 
Alternatively, or in addition, the Company may (i) sell or arrange
for the sale of Shares that Participant acquires under the Plan to meet the
withholding obligation for the Tax-Related Items, and/or (ii) withhold in
Shares, provided that the Company only withholds the amount of Shares necessary
to satisfy the minimum withholding amount. 
If the Company satisfies the Tax-Related Item withholding obligation by
withholding a number of Shares as described herein, Participant will be deemed
to have been issued the full number of Shares due to Participant at exercise,
notwithstanding that a number of the Shares is held back solely for purposes of
such Tax-Related Items.


 


Finally,
Participant shall pay to the Company or the Employer any amount of Tax-Related
Items that the Company or the Employer may be required to withhold as a result
of his or her participation in the Plan that cannot be satisfied by the means
previously described.  The Company may
refuse to issue Shares under the Plan and refuse to deliver the Shares if
Participant fails to comply with his or her obligations in connection with the
Tax-Related Items as described in this Section.


 


6.   Transferability. Stock
Options granted under this Agreement may be transferred under laws of descent
and distribution or, during Employee’s lifetime, solely to the Employee’s
spouse, siblings, parents, children and grandchildren or trusts for the
benefits of such persons, or partnerships, corporations, limited liability
companies, or other entities owned solely by such persons, including trusts for
such persons.  Any transfer of Stock
Options will have no effect until written notice (providing sufficient details
relating to the proposed transfer, as required by the Company at that time) is
received and confirmed by the Company. 
The Employee will remain liable for all obligations of Employee and his
or her transferee or


 


3

















 


transferees.  Each transferee will also be subject the
Employee’s obligations under this Agreement relating to the Stock Options
transferred to him or her.


 


7.  Limitations.  The Employee’s right to
continue to serve the Company or any of its subsidiaries as an officer,
employee, or otherwise, is not enlarged or otherwise affected by an award under
this Agreement.  Nothing in this
Agreement or the Plan gives the Employee any right to continue in the employ of
the Company or any of its subsidiaries or to interfere in any way with the
right of the Company or any subsidiary to terminate his or her employment at
any time.  Stock Options are not secured
by a trust, insurance contract or other funding medium, and the Employee does
not have any interest in any fund or specific asset of the Company by reason of
this award or the account established on his or her behalf.  A Stock Option award confers no rights as a
shareholder of the Company until Shares are actually delivered to the Employee.


 


8.  Specific Restrictions Upon
Option Shares.  The Employee
and the Company agree to each of the following:


 


a.  The Employee will acquire Shares hereunder
for investment purposes only and not with a view to reselling or otherwise
distributing  the Shares to the public in
violation of the United States Securities Act of 1933, as amended (the “1933
Act”), and will not dispose of any such Shares in transactions which, in the
opinion of counsel to the Company, violate the 1933 Act or the rules and
regulations thereunder, or any applicable state or national securities or “blue
sky” laws.


 


b.  If any Shares are registered under the 1933
Act, no public offering (other than on a national securities exchange, as
defined in the United States Securities Exchange Act of 1934, as amended) of
any Shares acquired under this Agreement will be made by the Employee (or any
other person) under circumstances where he or she (or such person) may be
deemed an underwriter, as defined in the 1933 Act.


 


c.  The Employee agrees that the Company has the
authority to endorse upon the certificate or certificates representing the
Shares acquired under this Agreement any legends referring to the restrictions
described under this Section 8 and any other application restrictions, as
the Company may deem appropriate.


 


9.  Notices.  Any notice required or permitted under this Agreement
is deemed to have been duly given if delivered, telecopied, mailed (certified
or registered mail, return receipt requested) or sent by
internationally-recognized courier guaranteeing next day delivery (a) to
the Employee at the address on file in the Company’s (or relevant subsidiary’s)
personnel records, or (b) to the Company, attention Stock Plan
Administration at its principal executive offices, which are currently located
at 767 Fifth Avenue, New York, NY 10153.


 


10.  Disclosure and Use of Information.


 


a.     By signing and returning
the attached Notice of Grant, and as a condition of the grant of the Stock
Options, the Employee hereby expressly and unambiguously consents to the
collection, use, and transfer of personal data as described in this Section by
and among, as necessary and applicable, the Employer, the Company and its
subsidiaries and by any agent of the Company or its subsidiaries for the
exclusive purpose of implementing, administering and managing Employee’s
participation in the Plan.


 


b.     The Employee understands
that the Employer, the Company and/or its other 
subsidiaries holds, by means of an automated data file or otherwise,
certain personal information about the Employee, including, but not limited to,
name, home address and telephone number, date of birth, social insurance
number, salary, nationality, job title, any shares or directorships held in the
Company, details of all Stock Options or other entitlement to shares awarded,
canceled, exercised, vested, unvested, or outstanding in the Employee’s favor,
for purposes of managing and administering the Plan (“Data”).


 


c.     The Employee also
understands that part or all of his or her Data may be held by the Company or
its subsidiaries in connection with managing and administering previous award
or incentive 


 


4

















 


plans
or for other purposes, pursuant to a prior transfer made with the Employee’s
consent in respect of any previous grant of stock options or other awards.


 


d.     The Employee further
understands that the Employer may transfer Data to the Company or its
subsidiaries as necessary to implement, administer, and manage his or her
participation in the Plan.  The Company
and its subsidiaries may transfer data among themselves, and each, in turn, may
further transfer Data to any third parties assisting the Company in the
implementation, administration, and management of the Plan (“Data Recipients”).


 


e.     The Employee understands
that the Company, its subsidiaries, and the Data Recipients are or may be
located in his or her country of residence or elsewhere. The Employee
authorizes the Employer, the Company, its subsidiaries, and Data Recipients to
receive, possess, use, retain, and transfer Data in electronic or other form,
to implement, administer, and manage his or her participation in the Plan,
including any transfer of Data that the Administrator deems appropriate for the
administration of the Plan and any transfer of Shares on his or her behalf to a
broker or third party with whom the Shares may be deposited.


 


f.      The Employee understands
that he or she may request a list with the names and addresses of any potential
recipients of the Data by contacting his or her local human resources
representative.


 


g.     The Employee understands
that Data will be held as long as is reasonably necessary to implement,
administer and manage his or her participation in the Plan and he or she may
oppose the processing and transfer of his or her Data and may, at any time,
review the Data, request that any necessary amendments be made to it, or
withdraw his or her consent by notifying the Company in writing. The Employee
further understands that withdrawing consent may affect his or her ability to
participate in the Plan.


 


11.  Discretionary
Nature and Acceptance of Award.  By accepting this Award, the Employee agrees
to be bound by the terms of this Agreement and acknowledges that:


 


a.     The Plan is established
voluntarily by the Company, it is discretionary in nature, and it may be
modified, amended, suspended, or terminated by the Company at any time, unless
otherwise provided in the Plan and this Agreement.


 


b.     The award of the Stock
Options is voluntary and occasional, and does not create any contractual or
other right to receive future grants of Stock Options, or benefits in lieu of
Stock Options, even if Stock Options have been granted repeatedly in the past;


 


c.     All decisions with respect
to future Stock Option grants, if any, will be at the sole discretion of the
Company;


 


d.     Employee’s participation in
the Plan is voluntary;


 


e.     Employee’s participation in
the Plan shall not create a right to further employment with the Employer and
shall not interfere with the ability of the Company or the Employer to
terminate Employee’s employment at any time;


 


f.    The Stock Option is an
extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to the Company or any subsidiary, and which is
outside the scope of Participant’s employment or service contract, if any;


 


g.   The Stock Option is not part
of normal or expected compensation or salary for any purposes, including, but
not limited to, calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement or welfare benefits or similar 


 


5

















 


payments and in no event should be considered as compensation for, or
relating in any way to, past services for the Company or any subsidiary;


 


h.     In the event the
Participant is not an Employee of the Company, the Stock Option and Participant’s
participation in the Plan will not be interpreted to form an employment or
service contract or relationship with the Company; and furthermore, the Stock
Option and Participant’s participation in the Plan will not be interpreted to
form an employment or service contract with any subsidiary of the Company;


 


i.      The future value of the
Shares is unknown and cannot be predicted with certainty;


 


j.      If the Shares decrease in
value, the Stock Option will have no value;


 


k.     If Participant exercises
the Stock Option and obtains Shares, the value of the Shares obtained upon
exercise may increase or decrease in value, even below the Exercise Price;


 


l.      In consideration of the
award of the Stock Option, no claim or entitlement to compensation or damages
shall arise from termination of the Stock Option or diminution in value of the
Stock Option, or Shares purchased through exercise of the Stock Option,
resulting from termination of Participant’s employment by the Company or any
subsidiary (for any reason whatsoever and whether or not in breach of local
labor laws) and in consideration of the grant of the Stock Option, Participant
irrevocably releases the Company and any subsidiary from any such claim that may
arise; if, notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen, then, by signing the Notice of Grant,
Participant shall be deemed irrevocably to have waived his or her right to
pursue or seek remedy for any such claim or entitlement;


 


m.    In the event of termination
of Participant’s employment (whether or not in breach of local labor laws),
Participant’s right to receive Stock Options under the Plan and to vest in such
Stock Options, if any, will terminate effective as of the date that Participant
is no longer actively employed and will not be extended by any notice period
mandated under local law (e.g., active
employment would not include a period of “garden leave” or similar period
pursuant to local law); furthermore, in the event of termination of  Participant’s employment (whether or not in
breach of local labor laws), Participant’s right to exercise the Stock Options
after termination of employment, if any, will be measured by the date of
termination of active employment and will not be extended by any notice period
mandated under local law; the Administrator shall have the exclusive discretion
to determine when Participant is no longer actively employed for purposes of
this Agreement;


 


n.     The Company is not
providing any tax, legal or financial advice, nor is the Company making any
recommendations regarding Participant’s participation in the Plan or
Participant’s acquisition or sale of the underlying Shares; and


 


o.     Participant is hereby
advised to consult with Participant’s own personal tax, legal and financial
advisors regarding Participant’s participation in the Plan before taking any
action related to the Plan.


 


12.  Failure to Enforce Not a
Waiver.  The Company’s failure
to enforce at any time any provision of this Agreement does not constitute a
waiver of that provision or of any other provision of this Agreement.


 


13.  Governing Law.  This Agreement is governed by and is to be
construed according to the laws of the State of New York that apply to
agreements made and performed in that state, without regard to its choice of
law provisions.  For purposes of
litigating any dispute that arises under this Stock Option or this Agreement,
the parties hereby submit to and consent to the jurisdiction of the State of
New York, and agree that such litigation will be conducted in the courts of New
York County, New York, or the federal courts for the United States for the
Southern District of New York, and no other courts, where this Stock Option is
made and/or to be performed.


 


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14.  Partial Invalidity.  The invalidity or illegality of any provision
of this Agreement will be deemed not to affect the validity of any other
provision.


 


15.  Section 409A.  The Stock Options are intended to be exempt
from Code Section 409A.  The Company
reserves the unilateral right to amend this Agreement upon written notice to
the Participant to prevent taxation under Code Section 409A.


 


16.  Electronic Delivery.  The Company may, in its sole
discretion, decide to deliver any documents related to Stock Options awarded
under the Plan or future Stock Options that may be awarded under the Plan by
electronic means or request Employee’s consent to participate in the Plan by
electronic means.  Employee hereby
consents to receive such documents by electronic delivery and agrees to
participate in the Plan through any on-line or electronic system established
and maintained by the Company or another third party designated by the Company.


 


	
   

  	
  The
  Estée Lauder Companies Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Amy
  DiGeso

  
	
   

  	
   

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
  Global
  Human Resources

  



 


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NOTICE OF GRANT


UNDER


THE ESTÉE LAUDER COMPANIES INC.


AMENDED AND RESTATED FISCAL 2002 SHARE INCENTIVE PLAN
(The “Plan”)


 


This is to confirm that,
upon the recommendation of your management, you were awarded options to
purchase shares of Class A Common Stock of The Estee Lauder Companies Inc.
(the “Shares”) at the most recent meeting of the Stock Plan Subcommittee of the
Compensation Committee of the Board of Directors.  This award was made in recognition of the
significant contributions you have made as a key employee of the Company, and
to motivate you to achieve future successes by aligning your interests more
closely with those of our stockholders. 
These options are granted under and governed by the terms and conditions
of the Plan and the Stock Option Agreement (the “Agreement”) made part
hereof.  The Agreement and Summary Plan
Description are being sent to you in a separate email.  Please read these documents and keep them for
future reference.  The specific terms of
your award are as follows:


 


Participant:


 


Employee Number:


 


	
  Grant Date:

  	
   

  	
  September 1,
  2010

  
	
   

  	
   

  	
   

  
	
  Type of Award:

  	
   

  	
  Non-Qualified
  Stock Options

  
	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
  $58.08

  	
  (Closing
  trading price on NYSE of the Class A Common Stock on the date of grant)

  



 


Aggregate number of Shares subject to your options:


 


Exercise Period:         Your options shall become exercisable on the following dates (or upon
death, disability, retirement, or involuntary termination of employment if
these occurrences are earlier), but are subject to termination or forfeiture as
per Paragraphs 2 and 3 of the Agreement:


 


	
  Number of Shares

  	
   

  	
  Date Exercisable

  	
   

  	
  Expiration Date

  
	
   

  	
   

  	
  January 1, 2012

  	
   

  	
  September 1, 2020

  
	
   

  	
   

  	
  January 1, 2013

  	
   

  	
  September 1, 2020

  
	
   

  	
   

  	
  January 1, 2014

  	
   

  	
  September 1, 2020

  



 


Questions regarding the
stock option program can be directed to Thomas Fellenbaum at (212) 572-3705 or
Patricia Zakrzewski at (973) 492-3609.


 


If you wish to accept this
grant, please sign this Notice of Grant
and return immediately to:


 


Compensation
Department


767 Fifth Avenue, 43rd Floor


New York, New York 10153


Attention:
Thomas Fellenbaum


 


The undersigned hereby
accepts, and agrees to, all terms and provisions of the Agreement, including
those contained in this Notice of Grant.


 


	
  By

  	
   

  	
   

  	
  Date

  	
   

  



 


Enclosure:  Share Incentive Plan Overview


 


Sign and Return this Notice of
Grant Immediately!