Document/Exhibit Description Pages Size
1: 10-K Annual Report 82 472K
2: EX-3.1 Articles of Incorporation/Organization or By-Laws 26 97K
3: EX-10.1 Material Contract 19 92K
9: EX-10.10(C) Material Contract 10 41K
10: EX-10.11(B) Material Contract 8 30K
4: EX-10.2 Material Contract 29 132K
5: EX-10.3 Material Contract 12 54K
6: EX-10.5 Material Contract 87 252K
7: EX-10.8(B) Material Contract 9 36K
8: EX-10.9(B) Material Contract 8 36K
11: EX-21.1 Subsidiaries of the Registrant 2 7K
12: EX-23.1 Consent of Experts or Counsel 2 9K
13: EX-23.2 Consent of Experts or Counsel 2 13K
14: EX-24.1 Power of Attorney 2 14K
15: EX-31.1 Certification per Sarbanes-Oxley Act (Section 302) 2 12K
16: EX-31.2 Certification per Sarbanes-Oxley Act (Section 302) 2 12K
17: EX-32.1 Certification per Sarbanes-Oxley Act (Section 906) 2 9K
18: EX-32.2 Certification per Sarbanes-Oxley Act (Section 906) 2 9K
EX-3.1 — Articles of Incorporation/Organization or By-Laws
Exhibit Table of Contents
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
THE ESTEE LAUDER COMPANIES INC.
(Originally Incorporated December 9, 1976 under the name of
The EJL Corporation)
---------
ARTICLE I
NAME
The name of the corporation is "The Estee Lauder Companies
Inc." (the "Corporation").
ARTICLE II
OFFICE AND REGISTERED AGENT
The address of the office of the Corporation in the State of
Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover, County of
Kent. The name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in, carry on and
conduct any lawful act or activity for which corporations may be organized under
the Delaware General Corporation Law ("DGCL").
ARTICLE IV
CAPITAL STOCK
4.1. AUTHORIZED CAPITAL STOCK. The total number of shares of
stock that the Corporation shall have authority to issue is four hundred forty
three million six hundred thousand (443,600,000) shares, consisting of (a)
three hundred million (300,000,000) shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"); (b) one hundred twenty million
(120,000,000) shares of Class B Common Stock, par value $.01 per share (the
"Class B Common Stock"); (c) twenty million (20,000,000) shares of preferred
stock, par value $.01 per share (the "Preferred Stock"), issuable in one or more
series as hereinafter provided; and (d) three million six
hundred thousand (3,600,000) shares of $6.50 Cumulative Redeemable Preferred
Stock, par value $.01 per share (the "$6.50 Cumulative Redeemable Preferred
Stock"). The Class A Common Stock and Class B Common Stock shall hereinafter
collectively be called "Common Stock," and the Preferred Stock and $6.50
Cumulative Redeemable Preferred Stock shall hereinafter collectively be called
"Preference Stock." The number of authorized shares of any class or classes of
capital stock of the Corporation may be increased or decreased (but not below
the number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the voting power of the stock of the Corporation
entitled to vote generally in the election of directors irrespective of the
provisions of Section 242(b)(2) of the DGCL or any corresponding provision
hereinafter enacted.
4.2. TERMS OF COMMON STOCK. All shares of Class A Common Stock
and Class B Common Stock will be identical and will entitle the holders thereof
to the same rights and privileges, except as otherwise provided herein.
(a) VOTING RIGHTS. The holders of shares of Class A Common
Stock and of Class B Common Stock shall have the following voting rights:
(i) Each share of Class A Common Stock shall entitle
the holder thereof to one vote on all matters submitted to a vote of the
stockholders of the Corporation.
(ii) Each share of Class B Common Stock shall
entitle the holder thereof to ten votes on all matters submitted to a vote of
the stockholders of the Corporation.
(iii) Except as otherwise required by applicable
law, the holders of shares of Class A Common Stock and the holders of shares of
Class B Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation (or, if any holders of shares of
Preference Stock are entitled to vote together with the holders of Class A
Common Stock and Class B Common Stock, as a single class with such holders of
shares of Preference Stock).
(b) DIVIDENDS AND DISTRIBUTIONS. Subject to the preferences
applicable to Preference Stock outstanding at any time, the holders of shares of
Class A Common Stock and the holders of shares of Class B Common Stock shall be
entitled to receive such dividends and other distributions in cash, property or
shares of stock of the Corporation as may be declared thereon by the Board of
Directors from time to time out of assets or funds of the Corporation legally
available therefor; provided, that, subject to the provisions of this Section
4.2(b), the Corporation shall pay dividends to the holders of each class of
Common Stock that are equal. In the case of dividends or other distributions
payable in Class A Common Stock or Class B Common Stock, including distributions
pursuant to stock splits or divisions of Class A Common Stock or Class B Common
Stock which occur after the first date upon which the Corporation has issued
shares of both Class A Common Stock and Class B Common Stock, only shares of
Class A Common Stock shall be distributed with respect to Class A Common Stock
and only
2
shares of Class B Common Stock shall be distributed with respect to Class B
Common Stock. Whenever a dividend or distribution, including distributions
pursuant to stock splits or divisions of the Class A Common Stock or Class B
Common Stock, is payable in shares of Class A Common Stock or Class B Common
Stock, the number of shares of each class of Common Stock payable per share of
such class of Common Stock shall be equal in number. In the case of dividends or
other distributions consisting of other voting securities of the Corporation,
the Corporation shall declare and pay such dividends in two separate classes of
such voting securities, identical in all respects, except that the voting rights
of each such security paid to the holders of Class A Common Stock shall be one-
tenth of the voting rights of each such security paid to the holders of Class B
Common Stock, and such security paid to the holders of Class B Common Stock
shall convert into the security paid to the holders of Class A Common Stock upon
the same terms and conditions applicable to the Class B Common Stock. In the
case of dividends or other distributions consisting of securities convertible
into, or exchangeable for, voting securities of the Corporation, the Corporation
shall provide that such convertible or exchangeable securities and the
underlying securities be identical in all respects (including, without
limitation, the conversion or exchange rate), except that the voting rights for
the underlying securities of the convertible or exchangeable security paid to
the holders of Class A Common Stock shall be one-tenth of the voting rights of
each underlying security of the convertible or exchangeable security paid to the
holders of the Class B Common Stock, and such underlying securities paid to the
holders of Class B Common Stock shall convert into the underlying securities
paid to the holders of Class A Common Stock upon the same terms and conditions
applicable to the Class B Common Stock.
(c) TRANSFER OF CLASS B COMMON STOCK.
(i) No Class B Holder (as defined below) may
voluntarily or involuntarily transfer, sell, assign, devise, distribute or
bequeath any of such Class B Holder's interest in his, her or its shares of
Class B Common Stock (including, without limitation, the power to vote or
provide a consent with respect to his, her or its shares of Class B Common Stock
by proxy or otherwise, except for proxies given to any Permitted Transferee (as
defined below) of the Class B Holder or to a person designated by the Board of
Directors of the Corporation who is soliciting proxies on behalf of the
Corporation), and the Corporation and the transfer agent for the Class B Common
Stock, if any (the "Transfer Agent"), shall not register the transfer of such
shares of Class B Common Stock, whether by sale, grant or proxy, assignment,
gift, devise, bequest, distribution, appointment or otherwise, except to the
Corporation or a Permitted Transferee; provided, however, such restrictions on
transfer shall not apply to a merger, consolidation or business combination of
the Corporation with or into another corporation, whether or not the Corporation
is the surviving corporation. For the purposes of this Article IV, a "Permitted
Transferee" shall include only the following persons: (A) Mrs. Estee Lauder and
her estate, guardian, conservator or committee; (B) each descendant of Mrs.
Estee Lauder (a "Lauder Descendant") and their respective estates, guardians,
conservators or committees; (C) each Family Controlled Entity; and (D) the
trustees, in their respective capacities as such, of each Family Controlled
Trust.
3
For purposes of this Article IV, the term "Family Controlled Entity" shall mean
(A) any not-for-profit corporation if at least 80% of its board of directors is
composed of Mrs. Estee Lauder and/or Lauder Descendants; (B) any other
corporation if at least 80% of the value of its outstanding equity is owned by
Permitted Transferees; (C) any partnership if at least 80% of the value of its
partnership interests are owned by Permitted Transferees; and (D) any limited
liability or similar company if at least 80% of the value of the company is
owned by Permitted Transferees. For purposes of this Article IV, the term
"Family Controlled Trust" shall mean (A) the trusts set forth on Schedule A
hereto and (B) any trust the primary beneficiaries of which are Mrs. Estee
Lauder, Lauder Descendants, Spouses of Lauder Descendants and/or charitable
organizations (collectively, "Lauder Beneficiaries"); provided, that, if the
trust is a wholly charitable trust, at least 80% of the trustees of such trust
consist of Mrs. Estee Lauder and/or Lauder Descendants. For purposes of this
provision, the primary beneficiaries of a trust will be deemed to be Lauder
Beneficiaries if, under the maximum exercise of discretion by the trustee in
favor of persons who are not Lauder Beneficiaries, the value of the interests of
such persons in such trust, computed actuarially, is 20% or less. The factors
and methods prescribed in section 7520 of the Internal Revenue Code of 1986, as
amended, for use in ascertaining the value of certain interests shall be used in
determining a beneficiary's actuarial interest in a trust for purposes of
applying this provision. For purposes of this provision, the actuarial value of
the interest in a trust of any person in whose favor a testamentary power of
appointment may be exercised shall be deemed to be zero. For purposes of this
provision, in the case of a trust created by a Lauder Descendant, the actuarial
value of the interest in such trust of any person who may receive trust property
only at the termination of the trust and then only in the event that, at the
termination of the trust, there are no living issue of such Lauder Descendant
shall be deemed to be zero. For purposes of this Article IV, the term "Spouses
of Lauder Descendants" shall mean those individuals who at any time were married
to any Lauder Descendant whether or not such marriage is subsequently dissolved
by death, divorce, or by any other means.
(ii) Notwithstanding anything to the contrary set
forth herein, any Class B Holder may pledge such Class B Holder's shares of
Class B Common Stock to a financial institution pursuant to a bona fide pledge
of such shares as collateral security for indebtedness due to the pledgee;
provided, that, such shares shall remain subject to the provisions of this
Section 4.2(c) and may not be transferred to, or voted by, the pledgee, except
as otherwise permitted by the provisions of Section 4.2(c). In the event of
foreclosure or other similar action by the pledgee, such pledged shares of Class
B Common Stock may only be transferred to a Permitted Transferee or converted
into shares of Class A Common Stock, as the pledgee may elect.
(iii) For purposes of this Section 4.2(c):
1. the relationship of any person that is
derived by or through legal adoption shall be considered a
natural relationship;
2. a minor who is a descendant of Mrs.
Estee Lauder and for whom shares of Class B Common Stock are held
pursuant to a Uniform Gifts to Minors Act or similar law shall be
considered a Class B Holder
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of such shares and the custodian who is the record holder of such
shares shall not be considered a Class B Holder;
3. an incompetent stockholder who is a
Permitted transferee but whose shares are owned or held by a
guardian or conservator shall be considered a Class B Holder of
such shares and such guardian or conservator who is the holder of
such shares shall not be considered a Class B Holder;
4. unless otherwise specified, the term
"person" means and includes natural persons, corporations,
partnerships, unincorporated associations, firms, joint ventures,
trusts and all other entities; and
5. except as provided in clauses 2 and 3
above, the term "Class B Holder" shall mean in respect of any
share of Class B Common Stock, the record holder of such share;
provided, however, that if such record holder is a nominee, the
Class B Holder shall be the first person in the chain of
ownership of such share of Class B Common Stock who is not
holding such share solely as a nominee.
(iv) The Corporation may, in connection with preparing a
list of stockholders entitled to vote at any meeting of stockholders, or as a
condition to the transfer or the registration of shares of Class B Common Stock
on the Corporation's books, or at any other time, require the furnishing of such
affidavits or other proof as it deems necessary to establish that a Class B
Holder is a Permitted Transferee. Upon the determination by the Board of
Directors of the Corporation or a committee thereof that a Class B Holder is not
a Permitted Transferee, each share of Class B Common Stock held by such Class B
Holder shall thereupon be converted automatically into one (1) fully paid and
nonassessable share of Class A Common Stock pursuant to the procedures set forth
in Section 4.2(d)(iii).
(v) Each certificate representing shares of Class B
Common Stock shall be endorsed with a legend that states that shares of Class B
Common Stock are not transferable other than to certain transferees and are
subject to certain restrictions as set forth in this Restated Certificate of
Incorporation filed by the Corporation with the Secretary of State of the State
of Delaware.
(d) CONVERSION OF CLASS B COMMON STOCK.
(i) If, on the record date for any meeting of
stockholders of the Corporation, the number of shares of Class B Common Stock
then outstanding constitutes less than 10% of the aggregate number of shares of
Common Stock then outstanding, as determined by the Board of Directors of the
Corporation, each share of Class B Common Stock then issued or outstanding shall
thereupon be converted automatically as of such record date into one (1) fully
paid and nonassessable share of Class A Common Stock and will have one vote per
share at such meeting. Upon making such determination, notice of such automatic
conversion shall be given by the Corporation by means of a press release and
written notice to all Class B Holders and
5
shall be given as soon as practicable, but no later than the next meeting of
stockholders of the Corporation, and the Secretary of the Corporation shall be
instructed to, and shall promptly request from each Class B Holder that each
holder promptly deliver, and each holder shall promptly deliver, the certificate
representing each such share of Class B Common Stock to the Corporation for
exchange hereunder, together with instruments of transfer, in form satisfactory
to the Corporation and Transfer Agent, duly executed by such holder or such
holder's duly authorized attorney, and together with transfer tax stamps or
funds therefore, if required pursuant to Section 4.2(d)(vii).
(ii) Each Class B Holder shall be entitled to convert, at
any time and from time to time, any or all of the shares of such holder's Class
B Common Stock, on a one-for-one basis, into the same number of fully paid and
nonassessable shares of Class A Common Stock. Such right shall be exercised by
the surrender of the certificate or certificates representing the shares of
Class B Common Stock to be converted to the Corporation at any time during
normal business hours at the principal executive offices of the Corporation or
at the office of the Transfer Agent, accompanied by a written notice of the
holder of such shares stating that such holder desires to convert such shares,
or a stated number of the shares represented by such certificate or
certificates, into an equal number of shares of the Class A Common Stock, and
(if so required by the Corporation or the Transfer Agent) by instruments of
transfer, in form satisfactory to the corporation and to the Transfer Agent,
duly executed by such holder or such holder's duly authorized attorney, and
transfer tax stamps or funds therefor, if required pursuant to Section
4.2(d)(vii).
(iii) As set forth in Section 4.2(c)(iv), upon the
determination by the Board of Directors of the Corporation or a committee
thereof that a Class B Holder is not a Permitted Transferee, each share of Class
B Common Stock, or any beneficial interest therein, held by such Class B Holder
shall thereupon be converted automatically into one (1) fully paid and
nonassessable share of Class A Common Stock. A determination by the Board of
Directors of the Corporation that a Class B Holder is not a Permitted Transferee
and therefore a conversion is required shall be conclusive. Upon making such a
determination, the Secretary of the Corporation shall be instructed to, and
shall promptly request from the holder of record of each such share of Class B
Common Stock that each such holder promptly deliver, and each such holder shall
promptly deliver, the certificate representing each such share of Class B Common
Stock to the Corporation for exchange hereunder, together with instruments of
transfer, in form satisfactory to the Corporation and Transfer Agent, duly
executed by such holder or such holder's duly authorized attorney, and together
with transfer tax stamps or funds therefore, if required pursuant to Section
4.2(d)(vii).
(iv) As promptly as practicable following the surrender
for conversion of a certificate representing shares of Class B Common Stock in
the manner provided in Section 4.2(d)(i), (ii) or (iii), as applicable, and the
payment in cash of any amount required by the provisions of Section 4.2(d)(vii),
the Corporation will deliver or cause to be delivered at the office of the
Transfer Agent, a certificate or certificates representing the number of full
shares of Class A Common Stock issuable upon such conversion, issued in such
name or names as such holder may direct. In the case of a conversion
6
under Section 4.2(d)(i), such conversion shall be deemed to have been made on
the record date for such meeting of stockholders on which the condition set
forth in Section 4.2(d)(i) is determined by the Board of Directors of the
Corporation to have occurred. In the case of a conversion under Section
4.2(d)(ii), such conversion shall be deemed to have been effected immediately
prior to the close of business on the date of the surrender of the certificate
or certificates representing shares of Class B Common Stock. In the case of a
conversion under Section 4.2(d)(iii), such conversion shall be deemed to have
been made on the date of transfer. Upon the date any conversion under Section
4.2(d)(i) is made or effected, all rights of the holder of such shares as such
holder shall cease, and the person or persons in whose name or names the
certificate or certificates representing the shares of Class A Common Stock are
to be issued shall be treated for all purposes as having become the record
holder or holders of such shares of Class A Common Stock. Upon the date any
conversion under Section 4.2(d)(ii) is made or effected, all rights of the
holder of such shares as such holder shall cease, and the person or persons in
whose name or names the certificate or certificates representing the shares of
Class A Common Stock are to be issued shall be treated for all purposes as
having become the record holder or holders of such shares of Class A Common
Stock; provided, however, that if any such surrender and payment occurs on any
date when the stock transfer books of the Corporation shall be closed, the
person or persons in whose name or names the certificate or certificates
representing shares of Class A Common Stock are to be issued shall be deemed the
record holder or holders thereof for all purposes immediately prior to the close
of business on the next succeeding day on which the stock transfer books are
open. Upon the date any conversion under Section 4.2(d)(iii) is made, all rights
of the holder of such shares as such holder shall cease, and the new owner or
owners of such shares shall be treated for all purposes as having become the
record holder or holders of such shares of Class A Common Stock.
(v) In the event of a reclassification or other similar
transaction as a result of which the shares of Class A Common Stock are
converted into another security, then a Class B Holder shall be entitled to
receive upon conversion the amount of such security that such holder would have
received if such conversion had occurred immediately prior to the record date of
such reclassification or other similar transaction. No adjustments in respect of
dividends shall be made upon the conversion of any share of Class B Common
Stock; provided, however, that if a share shall be converted subsequent to the
record date for the payment of a dividend or other distribution on shares of
Class B Common Stock but prior to such payment, then the registered holder of
such share at the close of business on such record date shall be entitled to
receive the dividend or other distribution payable on such share on such date
notwithstanding the conversion thereof or the Corporation's default in payment
of the dividend due on such date.
(vi) The Corporation covenants that it will at all times
reserve and keep available out of its authorized but unissued shares of Class A
Common Stock, solely for the purpose of issuance upon conversion of the
outstanding shares of Class B Common Stock, such number of shares of Class A
Common Stock that shall be issuable upon the conversion of all such outstanding
shares of Class B Common Stock; provided, that, nothing contained herein shall
be construed to preclude the Corporation from satisfying its obligations in
respect of the conversion of the outstanding shares of Class B Common
7
Stock by delivery of purchased shares of Class A Common Stock which are held in
the treasury of the Corporation. The Corporation covenants that if any shares of
Class A Common Stock required registration with or approval of any governmental
authority under any federal or state law before such shares of Class A Common
Stock may be issued upon conversion, the Corporation will cause such shares to
be duly registered or approved, as the case may be. The Corporation will
endeavor to use its best efforts to list the shares of Class A Common Stock
required to be delivered upon conversion prior to such delivery upon each
national securities exchange upon which the outstanding Class A Common Stock is
listed at the time of such delivery. The Corporation covenants that all shares
of Class A Common Stock that shall be issued upon conversion of the shares of
fully paid and nonassessable Class B Common Stock will, upon issue, be fully
paid and nonassessable.
(vii) The issuance of certificates for shares of Class A
Common Stock upon conversion of shares of Class B Common Stock shall be made
without charge to the holders of such shares for any stamp or other similar tax
in respect of such issuance; provided, however, that, if any such certificate is
to be issued in a name other than that of the holder of the share or shares of
Class B Common Stock converted, then the person or persons requesting the
issuance thereof shall pay to the Corporation the amount of any tax that may be
payable in respect of any transfer involved in such issuance or shall establish
to the satisfaction of the Corporation that such tax has been paid.
(viii) Shares of Class B Common Stock that are converted into
shares of Class A Common Stock as provided herein shall continue to be
authorized shares of Class B Common Stock and available for reissue by the
Corporation; provided, however, that no shares of Class B Common Stock shall be
reissued except as expressly permitted by Sections 4.2(b), 4.2(e) and 4.2(f) of
this Restated Certificate of Incorporation.
(e) STOCK SPLITS. The Corporation shall not in any manner
subdivide (by any stock split, stock dividend, reclassification,
recapitalization or otherwise) or combine (by reverse stock split,
reclassification, recapitalization or otherwise) the outstanding shares of one
class of Common Stock unless the outstanding shares of all classes of Common
Stock shall be proportionately subdivided or combined.
(f) OPTIONS, RIGHTS OR WARRANTS. (i) The Corporation shall not
make any offering of options, rights or warrants to subscribe for shares of
Class B Common Stock. The Corporation may make offerings of options, rights or
warrants to subscribe for shares of any other class or classes of capital stock
(other than Class B Common Stock) to all holders of Class A Common Stock or
Class B Common Stock if an identical offering is made simultaneously to the
holders of the other class. All such options, rights or warrants offerings shall
offer the respective holders of Class A Common Stock and Class B Common Stock
the right to subscribe at the same rate per share.
(ii) Subject to Sections 4.2(d)(v) and 4.2(f)(i), the
Corporation shall have the power to create and issue, whether or not in
connection with the issue and sale of any shares of stock or other securities of
the Corporation, rights or options entitling the holders thereof to purchase
from the Corporation any shares of its capital
8
stock of any class or classes at the time authorized (other than Class B Common
Stock), such rights or options to have such terms and conditions, and to be
evidenced by or in such instrument or instruments, as shall be approved by the
Board of Directors.
(g) MERGERS, CONSOLIDATION, ETC. In the event that the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then, and in such
event, the shares of each class of Common Stock shall be exchanged for or
changed into an amount per share equal to the amount of stock, securities, cash
and/or any other property, as the case may be, into which or for which each
share of any other class of Common Stock is exchanged or changed; provided,
however, that if shares of Class A Common Stock and Class B Common Stock are
exchanged for or changed into shares of capital stock, such shares so exchanged
for or changed into may differ to the extent and only to the extent that the
Class A Common Stock and Class B Common Stock differ as provided herein.
(h) LIQUIDATION RIGHTS. In the event of any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation and after making provision for the holders of
each series of Preference Stock, if any, the remaining assets and funds of the
Corporation, if any, shall be divided among and paid ratably to the holders of
the Class A Common Stock and the Class B Common Stock treated as a single class.
(i) NO PRE-EMPTIVE RIGHTS. The holders of shares of Common
Stock are not entitled to any preemptive right to subscribe for, purchase or
receive any part of any new or additional issue of stock of any class, whether
now or hereafter authorized, or of bonds, debentures or other securities
convertible into or exchangeable for stock.
4.3. PREFERRED STOCK. Shares of Preferred Stock may be issued
from time to time in one or more series. The Board of Directors is authorized,
by resolution adopted and filed in accordance with law, to provide for the issue
of such series of shares of Preferred Stock. Each series of shares of Preferred
Stock (a) may have such voting powers, full or limited, or may be without voting
powers; provided, however, that, unless holders of at least seventy-five percent
(75%) of the outstanding shares of Class B Common Stock have approved the
issuance of such shares of Preferred Stock, the Board of Directors may not issue
any shares of Preferred Stock that have the right (i) to vote for the election
of directors under ordinary circumstances or (ii) under any circumstances to
elect fifty percent (50%) or more of the directors of the Corporation; (b) may
be subject to redemption at such time or times and at such prices; (c) may be
entitled to receive dividends (which may be cumulative or non-cumulative) at
such rate or rates, on such conditions and at such times, and payable in
preference to, or in such relation to, the dividends payable on any other class
or classes or series of stock; (d) may have such rights upon the dissolution of,
or upon any distribution of the assets of, the Corporation; (e) may be made
convertible into, or exchangeable for, shares of any other class or classes or
of any other series of the same or any other class or classes of stock of the
Corporation or such other corporation or other entity at such price or prices or
at such
9
rates of exchange and with such adjustments; (f) may be entitled to the benefit
of a sinking fund to be applied to the purchase or redemption of shares of such
series in such amount or amounts; (g) may be entitled to the benefit of
conditions and restrictions upon the creation of indebtedness of the Corporation
or any subsidiary, upon the issue of any additional shares (including additional
shares of such series or of any other series) and upon the payment of dividends
or the making of other distributions on, and the purchase, redemption or other
acquisition by the Corporation or any subsidiary of, any outstanding shares of
the Corporation; and (h) may have such other relative, participating, optional
or other special rights, qualifications, limitations or restrictions thereof,
all as shall be stated in said resolution or resolutions providing for the issue
of such shares of Preferred Stock. Shares of Preferred Stock of any series that
have been redeemed or repurchased by the Corporation (whether through the
operation of a sinking fund or otherwise) or that, if convertible or
exchangeable, have been converted or exchanged in accordance with their terms
shall be retired and have the status of authorized and unissued shares of
Preferred Stock of the same series and may be reissued as a part of the series
of which they were originally a part or may, upon the filing of an appropriate
certificate with the Delaware Secretary of State, be reissued as part of a new
series of shares of Preferred Stock to be created by resolution or resolutions
of the Board of Directors or as part of any other series of shares of Preferred
Stock, all subject to the conditions or restrictions on issuance set forth in
the resolution or resolutions adopted by the Board of Directors providing for
the issue of any series of shares of Preferred Stock.
4.4. $6.50 Cumulative Redeemable Preferred Stock.
(a) (i) The holders of shares of $6.50 Cumulative Redeemable
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds of the Corporation legally available therefor,
cumulative cash dividends on the shares of $6.50 Cumulative Redeemable Preferred
Stock at the rate of $6.50 per annum per share, and no more, payable in equal
quarterly installments on March 31, June 30, September 30, and December 31, in
each year, commencing September 30, 1995. Such dividends shall accrue and be
cumulative from the date of original issue of each share of $6.50 Cumulative
Redeemable Preferred Stock, whether or not declared and whether or not there
shall be funds legally available for the payment thereof. Each such dividend
shall be paid to the holders of record of the shares of $6.50 Cumulative
Redeemable Preferred Stock as they appear on the share register of the
Corporation on such record date, not more than 30 calendar days nor less than 10
calendar days preceding the dividend payment date thereof, as shall be fixed by
the Board of Directors or a duly authorized committee thereof. Dividends in
arrears may be declared and paid at any time without reference to any regular
dividend payment date.
(ii) If dividends are not paid in full, or declared
in full and sums set apart for the full payment thereof, upon the shares of
$6.50 Cumulative Redeemable Preferred Stock and shares of any other preferred
stock ranking on a parity as to dividends and upon liquidation with the $6.50
Cumulative Redeemable Preferred Stock, all dividends declared and paid upon
shares of $6.50 Cumulative Redeemable Preferred Stock and of any other preferred
stock ranking on a parity as to dividends with the $6.50 Cumulative Redeemable
Preferred Stock shall be declared and paid PRO RATA so that in all
10
cases the amount of dividends declared and paid per share on the $6.50
Cumulative Redeemable Preferred Stock and on such other shares of preferred
stock shall bear to each other the same ratio that accumulated dividends per
share, including dividends accrued or dividends in arrears, if any, on the
shares of the $6.50 Cumulative Redeemable Preferred Stock and such other shares
of preferred stock bear to each other. Except as provided in the preceding
sentence, unless full cumulative dividends on the shares of the $6.50 Cumulative
Redeemable Preferred Stock have been paid or declared in full and sums set aside
exclusively for the payment thereof (A) no dividends (other than dividends in
shares of the Common Stock (as hereinafter defined) or in shares of any other
capital stock of the Corporation ranking junior to the $6.50 Cumulative
Redeemable Preferred Stock as to dividends or upon liquidation) shall be paid or
declared or set aside for payment or other distribution made upon the Common
Stock, or any other capital stock of the Corporation ranking junior to or on a
parity with the $6.50 Cumulative Redeemable Preferred Stock as to dividends or
upon liquidation; (B) nor shall any shares of the Common Stock or shares of any
other capital stock of the Corporation ranking junior to or on a parity with
$6.50 Cumulative Redeemable Preferred Stock as to dividends or upon liquidation,
or any warrants, rights, calls or options exercisable for or convertible into
Common Stock or any such capital stock, be redeemed, purchased or otherwise
acquired for any consideration (or any payment made to or available for a
sinking fund or any similar fund for the redemption of any such shares) by the
Corporation or any, direct or indirect, subsidiary of the Corporation (except in
the case of clause (B) by conversion into or exchange for shares of capital
stock of the Corporation ranking junior to the $6.50 Cumulative Redeemable
Preferred Stock as to dividends and upon liquidation, or any warrants, rights,
calls or options exercisable for or convertible into Common Stock or any such
capital stock). Holders of shares of $6.50 Cumulative Redeemable Preferred Stock
shall not be entitled to any dividends, whether payable in cash, property or
shares of capital stock, in excess of full accrued and cumulative dividends as
herein provided. No interest or sum of money in lieu of interest shall be
payable in respect of any dividend payment or payments on the shares of $6.50
Cumulative Redeemable Preferred Stock that may be in arrears.
The terms "accrued dividends," "dividends accrued"
and "dividends in arrears," whenever used herein with reference to shares of
Preference Stock shall be deemed to mean an amount that shall be equal to
dividends thereon at the annual dividend rates per share for the respective
series from the date or dates on which such dividends commence to accrue to the
end of the then current quarterly dividend period for such preferred stock (or,
in the case of redemption, to the date of redemption), less the amount of all
dividends paid, or declared in full and sums set aside for the payment thereof,
upon such shares of preferred stock.
(iii) Dividends payable on shares of $6.50 Cumulative
Redeemable Preferred Stock for any period less than a full quarterly dividend
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in the period for which payable.
(b) (i) On June 30, 2005, to the extent a) the Corporation
shall have funds legally available therefor and b) the Corporation shall not
have been rendered
11
insolvent pursuant to the U.S. Bankruptcy Code or any successor statute, the
Corporation shall redeem all remaining outstanding shares of $6.50 Cumulative
Redeemable Preferred Stock, at a redemption price of $100.00 per share, together
with accrued and unpaid dividends thereon to the redemption date, in cash
without interest. If, for any reason, the Corporation shall fail to discharge
its mandatory redemption obligations pursuant to this Section 4.4(b)(1), such
mandatory redemption obligations shall be discharged as soon as the Corporation
is able to discharge such obligations. If after June 30, 2005 and so long as any
mandatory redemption obligations with respect to the shares of $6.50 Cumulative
Redeemable Preferred Stock shall not be fully discharged, (A) no dividends
(other than dividends in shares of Common Stock or in shares of any other
capital stock of the Corporation ranking junior to the $6.50 Cumulative
Redeemable Preferred Stock as to dividends and upon liquidation) shall be paid
or declared or set aside for payment or other distribution made upon the Common
Stock or any other capital stock of the Corporation ranking junior to or on a
parity with the $6.50 Cumulative Redeemable Preferred Stock as to dividends or
upon liquidation, and (B) no shares of the Common Stock or shares of any other
capital stock of the Corporation ranking junior to or on a parity with the $6.50
Cumulative Redeemable Preferred Stock as to dividends or upon liquidation, or
any warrants, rights, calls or options exercisable for or convertible into
Common Stock or any such capital stock, shall be redeemed, purchased or
otherwise acquired for any consideration (or any payment made to or available
for a sinking or other similar fund for the redemption of any such shares) by
the Corporation or any direct or indirect subsidiary of the Corporation (except
by conversion into or exchange for shares of capital stock of the Corporation
ranking junior to the $6.50 Cumulative Redeemable Preferred Stock as to
dividends and upon liquidation).
(ii) The shares of $6.50 Cumulative Redeemable
Preferred Stock shall be redeemable at the option of the Corporation, in whole
or from time to time in part, at a redemption price of $100.00 per share,
together with all dividends accrued and unpaid on the shares of $6.50 Cumulative
Redeemable Preferred Stock up to the date fixed for redemption, upon giving
notice as provided in Section 4.4(b)(iv) below; provided, however, that (A) the
Corporation shall be prohibited from redeeming pursuant to this Section
4.4(b)(ii) any shares of $6.50 Cumulative Redeemable Preferred Stock
beneficially owned by (1) Estee Lauder, (2) Leonard A. Lauder, Ronald S. Lauder
and Ira T. Wender, as trustees (the "Trustees"), u/a/d as of June 2, 1994, as
amended, between Estee Lauder, as settlor, and the Trustees and known as "The
Estee Lauder 1994 Trust Agreement" (the "Trust"), or (3) the trustees, as
trustees of a trust whose primary beneficiary is Leonard A. Lauder (the "LAL
Trust"), in each case prior to the death of Estee Lauder, and (B) the
Corporation shall be prohibited from redeeming pursuant to this Section
4.4(b)(ii) any shares of $6.50 Cumulative Redeemable Preferred Stock not
beneficially owned by Estee Lauder, the Trust or the LAL Trust prior to the
fifth anniversary of the date such shares were sold, transferred or otherwise
disposed of by Estee Lauder, the Trust or the LAL Trust, as the case may be
(provided further that the limitation in this clause (B) shall not affect the
redemption provided for in Section 4.4(b)(i)).
(iii) If less than all the outstanding shares of the
$6.50 Cumulative Redeemable Preferred Stock permitted to be redeemed in
12
accordance with Section 4.4(b)(ii) above are to be redeemed, the shares to be
redeemed shall be determined PRO RATA.
(iv) At least 30 calendar days but not more than 60
calendar days prior to any date fixed for any redemption of shares of $6.50
Cumulative Redeemable Preferred Stock, a written notice shall be given to each
holder of record of shares of $6.50 Cumulative Redeemable Preferred Stock to be
redeemed by certified or registered mail in a postage prepaid envelope or by a
nationally recognized overnight courier (appropriately marked for overnight
delivery) addressed to such holder at its address as shown on the records of the
Corporation (and shall be deemed given only upon the later of (A) the date when
received by the holder or (B) three days after the Corporation has sent such
notice), notifying such holder of the election of the Corporation to redeem such
shares, stating the date fixed for redemption thereof (the "Redemption Date"),
that the shares shall be deemed to be redeemed at 5:00 p.m., New York time, on
such date and the redemption price (including a calculation of all accrued
dividends up to and including the Redemption Date), and calling upon such holder
to surrender to the Corporation on the Redemption Date at the place designated
in such notice its certificate or certificates representing the number of shares
specified in such notice of redemption. Each notice of redemption shall be
irrevocable. On or after the Redemption Date, upon surrender by each holder of
its certificate or certificates for shares of $6.50 Cumulative Redeemable
Preferred Stock to be redeemed at the place designated in such notice, the
redemption price of such shares (together with all accrued and unpaid dividends
thereon up to and including the Redemption Date) shall be paid in immediately
available funds to or on the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be cancelled. In case less than all the shares represented by
any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares, without cost to the holder thereof. From and
after the Redemption Date (unless notice of redemption is not received by each
holder of shares as aforesaid, or there shall be a default by the Corporation in
payment of the redemption price or the accrued and unpaid dividends up to and
including the Redemption Date), all dividends on the shares of $6.50 Cumulative
Redeemable Preferred Stock designated for redemption in such notice shall cease
to accrue, and all rights of the holders thereof as shareholders of the
Corporation, except the right to receive the redemption price of such shares
(including all accrued and unpaid dividends up to the Redemption Date) upon the
surrender of certificates representing the same, shall cease and terminate, and
such shares shall not be deemed to be outstanding for any purpose whatsoever. At
its election, if notice of redemption is received by each holder of shares as
aforesaid, the Corporation prior to the Redemption Date may deposit the
redemption price (including all accrued and unpaid dividends up to the
Redemption Date) of the shares of $6.50 Cumulative Redeemable Preferred Stock so
called for redemption in trust for the account of holders thereof with a bank or
trust company (having a capital surplus and undivided profits aggregating not
less than $100,000,000) in the Borough of Manhattan, City and State of New York,
in which case the aforesaid notice to holders of shares of $6.50 Cumulative
Redeemable Preferred Stock to be redeemed shall state the date of such deposit,
shall specify the office of such bank or trust company as the place of payment
of the redemption price, and shall call upon such holders to surrender the
certificates representing such shares at such place on or after the date fixed
in such
13
redemption notice (which shall not be later than the Redemption Date) against
payment of the redemption price (including all accrued and unpaid dividends up
to the Redemption Date). Any interest accrued on such funds shall be paid to the
Corporation from time to time. Any moneys so deposited that shall remain
unclaimed by the holders of such shares of $6.50 Cumulative Redeemable Preferred
Stock at the end of two years after the Redemption Date shall be returned by
such bank or trust company to the Corporation, and thereafter the holder of any
such shares shall look to the Corporation for the payment of the redemption
price (and any accrued and unpaid dividends).
(v) Shares of $6.50 Cumulative Redeemable Preferred
Stock redeemed, repurchased or retired by the Corporation pursuant to the
provisions of this Section 4.4(b) or otherwise, shall thereupon be retired and
cancelled and may not be reissued as shares of $6.50 Cumulative Redeemable
Preferred Stock. All such shares shall upon their cancellation become authorized
but unissued shares of Preferred Stock without designation as to series, and may
be reissued as part of any other series of Preferred Stock created by resolution
of the Board of Directors, subject to the conditions and restrictions upon
issuance set forth herein.
(c) (i) Except as otherwise provided in Section 4.4(c)(ii), in
Section 4.4(e) or as required by law, the holders of shares of $6.50 Cumulative
Redeemable Preferred Stock shall not be entitled to vote on any matter on which
the holders of any voting securities of the Corporation shall be entitled to
vote.
(ii) If at the time of any annual meeting of
stockholders for the election of directors, the equivalent of six quarterly
dividends (whether or not consecutive) payable on any share or shares of $6.50
Cumulative Redeemable Preferred Stock are in default, the number of directors
constituting the Board of Directors of the Corporation shall be increased by
two. The holders of record of the $6.50 Cumulative Redeemable Preferred Stock,
voting separately as a class, shall be entitled at said meeting of stockholders
(and at each subsequent annual meeting of stockholders), unless all dividends in
arrears have been paid or declared and set apart for payment prior thereto, to
vote for the election of two directors of the Corporation, with the holders of
$6.50 Cumulative Redeemable Preferred Stock being entitled to cast one vote per
share of $6.50 Cumulative Redeemable Preferred Stock held. Until the default in
payments of all dividends which permitted the election of said directors shall
cease to exist, any director who shall have been so elected pursuant to the next
preceding sentence may be removed at any time, either with or without cause,
only by the affirmative vote of the holders of the shares at the time entitled
to cast a majority of the votes entitled to be cast for the election of any such
director at a special meeting of such holders called for that purpose, and any
vacancy thereby created may be filled by the vote of such holders. If and when
such default shall cease to exist, the holders of $6.50 Cumulative Redeemable
Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of the office of all persons who may have been elected
directors pursuant to said special voting rights shall forthwith terminate, and
the number of directors constituting the Board of Directors shall be reduced by
two.
14
(d) (i) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or otherwise,
the holders of shares of $6.50 Cumulative Redeemable Preferred Stock shall be
entitled to receive, in cash, out of the assets of the Corporation available for
distribution to stockholders, the amount of One Hundred Dollars ($100.00) for
each share of $6.50 Cumulative Redeemable Preferred Stock, plus an amount equal
to all dividends accrued and unpaid on each such share up to and including the
date fixed for distribution, before any distribution shall be made to the
holders of shares of the Common Stock or any other capital stock of the
Corporation ranking (as to any such distribution) junior to the $6.50 Cumulative
Redeemable Preferred Stock. If upon any liquidation, dissolution or winding up
of the Corporation, the assets distributable among the holders of shares of the
$6.50 Cumulative Redeemable Preferred Stock and all other classes and series of
preferred stock ranking (as to any such distribution) on a parity with the $6.50
Cumulative Redeemable Preferred Stock are insufficient to permit the payment in
full to the holders of all such shares of all preferential amounts payable to
all such holders, then the entire assets of the Corporation thus distributable
shall be distributed ratably among the holders of the shares of $6.50 Cumulative
Redeemable Preferred Stock and such other classes and series of preferred stock
ranking (as to any such distribution) on a parity with the $6.50 Cumulative
Redeemable Preferred Stock in proportion to the respective amounts that would be
payable per share if such assets were sufficient to permit payment in full.
(ii) For purposes of this Section 4.4(d), a
distribution of assets in any dissolution, winding up or liquidation shall
include (A) any consolidation or merger of the Corporation with or into any
other corporation, (B) any dissolution, liquidation, winding up or
reorganization of the Corporation immediately followed by reincorporation of
another corporation or (C) a sale or other disposition of all or substantially
all of the Corporation's assets to another corporation; unless in each case,
such transaction has been approved as provided in Section 4.4(e).
(iii) After the payment of the full preferential
amounts provided for herein to the holders of shares of $6.50 Cumulative
Redeemable Preferred Stock or funds necessary for such payment have been set
aside in trust for the holders thereof in the manner provided in Section
4.4(b)(iv), such holders shall be entitled to no other or further participation
in the distribution of the assets of the Corporation.
(e) In addition to any other rights provided by applicable
law, so long as any shares of $6.50 Cumulative Redeemable Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote, or the
written consent as provided by law, of the holders of at least two-thirds (2/3)
of the outstanding shares of $6.50 Cumulative Redeemable Stock, voting
as a separate class (i) modify, amend or rescind the preferences, rights or
powers with respect to the $6.50 Cumulative Redeemable Preferred Stock so as to
affect the $6.50 Cumulative Redeemable Preferred Stock adversely; provided,
that, nothing herein contained shall require such a vote or consent in
connection with any increase in the total number of authorized shares of the
Common Stock; (ii) engage in any transaction of the type specified in Section
4.4(d)(ii), provided, that, such right to vote on such transactions shall only
apply so long as all the outstanding shares of $6.50 Cumulative Redeemable
Preferred Stock are owned of record
15
and beneficially by The Estee Lauder 1994 Trust; or (iii) authorize or increase
the authorization of any class or series of stock of the Corporation ranking
prior to or on a parity with the $6.50 Cumulative Redeemable Preferred Stock as
to dividends or upon liquidation; provided, however, the Corporation may without
such vote or consent authorize or increase the authorization of shares of stock
of the Corporation on a parity as to dividends or liquidation with the $6.50
Cumulative Redeemable Preferred Stock if the aggregate liquidation preference of
all such newly authorized shares (including any such shares authorized pursuant
to this proviso and excluding any such shares as to which a vote or consent was
obtained) does not exceed $100,000,000. The provisions of this Section 4.4(e)
shall not in any way limit the right and power of the Corporation to issue its
currently authorized but unissued shares or bonds, notes, mortgages, debentures,
and other obligations, and to incur indebtedness to banks and to other lenders.
(f) (i) Subject to the terms and conditions of this Section
4.4(f), each holder of shares of $6.50 Cumulative Redeemable Preferred Stock
shall have the right and option, which may be exercised only once by such
holder, from and after the later of (A) the date Estee Lauder dies and (B) June
30, 2000, to require the Corporation to purchase from such holder, all or a
whole-share portion of the $6.50 Cumulative Redeemable Preferred Stock then
owned by such holder (the "Put Right"), at a price per share equal to $100 plus
cumulative and unpaid dividends thereon. The closing of the purchase of the
shares of $6.50 Cumulative Redeemable Preferred Stock from a holder thereof
pursuant to this Section 4.4(f) shall occur on a date not later than one hundred
twenty (120) days after the date on which the Put Right is deemed to be
exercised by such holder, and at a time and place provided for by the
Corporation.
(ii) Any holder of a share or shares of $6.50
Cumulative Redeemable Preferred Stock electing to exercise the Put Right shall
deliver the certificate or certificates to be purchased by the Corporation to
the principal office of any transfer agent for the Common Stock (or, if none, to
the attention of the Secretary of the Corporation at the principal office of the
Corporation), with a written notice of exercise of such Put Right duly executed
and (if so required by the Corporation or any transfer agent) accompanied by
instruments of transfer in form satisfactory to the Corporation and to any
transfer agent, duly executed by the registered holder or his, her or its duly
authorized attorney. The Put Right with respect to any such shares shall be
deemed to have been exercised at the date upon which the certificates therefor
shall have been so delivered, and at such time, subject to Section 4.4(f)(i)
above, the Corporation's obligation to purchase the shares of $6.50 Cumulative
Redeemable Preferred Stock from the holder who delivered the notice of exercise
of the Put Right shall be irrevocable.
ARTICLE V
BOARD OF DIRECTORS
5.1. NUMBER OF DIRECTORS. Except as otherwise fixed by or
pursuant to the provisions of Article IV of this Restated Certificate of
Incorporation relating to the rights of the holders of Preference Stock, the
number of Directors shall be determined from time to time by the Board of
16
Directors of the Corporation by the affirmative vote of directors constituting
at least a majority of the entire board. The use of the phrase "entire board"
refers to the total number of directors which the Corporation would have if
there were no vacancies.
5.2. POWERS OF THE BOARD OF DIRECTORS. The business and
affairs of the Corporation shall be managed by or under the direction of the
Board of Directors selected as provided by law and this Restated Certificate of
Incorporation and the Bylaws of the Corporation. In furtherance, and not in
limitation, of the powers conferred by the laws of the State of Delaware, the
Board of Directors is expressly authorized to:
(a) adopt, amend, alter, change or repeal Bylaws of
the Corporation; provided, however, that no Bylaw hereafter
adopted shall invalidate any prior act of the Corporation that
would have been valid if such new Bylaws had not been adopted;
(b) subject to the Bylaws as from time to time in
effect, determine the rules and procedures for the conduct of
the business of the Board of Directors and the management and
direction by the Board of Directors of the business and
affairs of the Corporation, including the power to designate
and empower committees of the Board of Directors, to elect, or
authorize the appointment of, and empower officers and other
agents of the Corporation, and to determine the time and place
of, the notice requirements for, and the manner of conducting,
Board meetings, as well as other notice requirements for, and
the manner of taking, Board action; and
(c) exercise all such powers and do all such acts as
may be exercised or done by the Corporation, subject to the
provisions of the DGCL and this Restated Certificate of
Incorporation and Bylaws of the Corporation.
5.3. CLASSIFIED BOARD OF DIRECTORS. At the first annual
meeting of stockholders held after the consummation of an initial offering and
sale by the Corporation of any shares of Common Stock pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), the directors, other than those who may be elected by the
holders of Preference Stock pursuant to the terms of Article IV of this Restated
Certificate of Incorporation or any resolution or resolutions providing for the
issuance of such Preference Stock adopted by the Board of Directors, shall be
divided into three classes, designated Class I, Class II and Class III.
Initially, Class I directors shall be elected for a one-year term, Class II
directors for a two-year term, and Class III directors for a three-year term. At
each succeeding annual meeting of stockholders beginning at the annual meeting
after such first meeting, successors to the class of directors whose term
expires at that annual meeting shall be elected for a three-year term. Any
additional director of any class elected to fill a vacancy resulting from an
increase in such class shall hold office for a term that shall coincide with the
remaining term of that class, but in no case will a decrease in the number of
directors shorten the term of any incumbent director. A
17
director shall hold office until the annual meeting for the year in which his or
her term expires and until his or her successor shall be elected, subject,
however, to his or her prior death, resignation, retirement or removal from
office.
5.4. VACANCIES. Except as otherwise required by law and
subject to the rights of the holders of Preference Stock, any vacancy in the
Board of Directors for any reason and any newly created directorship resulting
by reason of any increase in the number of directors may be filled only by the
Board of Directors (and not by the stockholders), by resolution adopted by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum (or by a sole remaining director); provided, however,
that if not so filled, any such vacancy shall be filled by the stockholders at
the next annual meeting or at a special meeting called for that purpose. Any
director so appointed shall hold office until the next meeting of stockholders
at which directors of the class for which such director has been chosen are to
be elected and until his or her successor is elected and qualified.
5.5. REMOVAL OF DIRECTORS. Any director (including all members
of the Board of Directors) may be removed from office at any time by the
affirmative vote of the holders of at least 75% of the voting power of all of
the shares of capital stock of the Corporation then entitled to vote generally
in the election of directors, voting together as a single class; provided,
however, that after the election of directors pursuant to Section 5.3, such
removal shall be only for cause. For the purposes of this Section 5.5. of
Article V, "cause" shall mean the failure of a director to substantially perform
such director's duties to the Corporation (other than any such failure resulting
from incapacity due to physical or mental illness) or the wilful engaging by a
director in gross misconduct injurious to the Corporation.
5.6. RIGHTS OF PREFERRED STOCK. Notwithstanding the foregoing,
whenever the holders of any one or more classes or series of Preference Stock
issued by the Corporation shall have the right, voting separately by class or
series, to elect directors at an annual or special meeting of stockholders, the
election, term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of this Restated Certificate of
Incorporation or the resolution or resolutions adopted by the Board of
Directors, and such directors so elected shall not be divided into classes
pursuant to this Article V unless expressly provided by such terms.
ARTICLE VI
VOTE REQUIRED FOR EXTRAORDINARY TRANSACTIONS
AND TRANSACTIONS WITH RELATED PERSONS
6.1. EXTRAORDINARY TRANSACTIONS. Notwithstanding that approval
by a lesser percentage vote is permitted by law, the affirmative vote of the
holders of not less than seventy-five percent (75%) of the outstanding shares of
Voting Stock (as hereinafter defined) of the Corporation shall be required for
the approval or authorization of (a) any merger or consolidation requiring the
18
approval of the Corporation's stockholders under Subchapter IX of the DGCL,
Section 251 ET. SEQ. or any successor provisions or (b) any sale, lease or
exchange of all or substantially all of the Corporation's property and assets
requiring the approval of the Company's stockholders under Section 271 of the
DGCL or any successor provisions.
6.2. TRANSACTIONS WITH RELATED PERSONS.
(a) VOTE REQUIRED FOR CERTAIN TRANSACTIONS WITH RELATED
PERSONS. Except as otherwise expressly provided in Section 6.2(b) hereof, in
addition to any affirmative vote required by law or by any other provision
hereof or by the Bylaws of the Corporation, the affirmative vote of the holders
of not less than seventy-five percent (75%) of the outstanding shares of Voting
Stock, other than those shares held by a Related Person (as hereinafter
defined), shall be required for the approval or authorization of any of the
transactions (a "Business Combination") listed below:
(i) any merger, consolidation or share exchange of
the Corporation into or with a Related Person, pursuant to which the holders of
Common Stock of the Corporation will receive cash, property, securities or other
consideration; or
(ii) any sale, lease, exchange or other disposition
to or with such Related Person of all or any Substantial Part (as hereinafter
defined) of the assets of the Corporation or any of its Subsidiaries.
(b) WHEN HIGHER VOTE IS NOT REQUIRED. Notwithstanding Section
6.2(a) hereof, the seventy-five percent (75%) voting requirement shall not be
applicable if (i) any transaction specified above shall have been approved by a
vote of not less than a majority of the Continuing Directors (as hereinafter
defined) or (ii) in the case of any transaction pursuant to which the holders of
the Common Stock of the Corporation are entitled to receive cash, property,
securities or other consideration, the cash or fair market value of the
property, securities or other consideration (as determined by the Continuing
Directors) to be received per share by holders of the Common Stock of the
Corporation in such transaction is not less than the higher of (A) the highest
price per share paid by the Related Person for any of its holdings of Common
Stock of the Corporation within the two-year period immediately prior to the
announcement of the proposed transaction (the "Announcement Date"), excluding
transactions by and among the individuals or entities included in the definition
of Permitted Transferees under Section 4.2(c) of Article IV hereof, or (B) the
highest closing sale price per share of Common Stock during the 30-day period
immediately preceding the Announcement Date or during the 30-day period
immediately preceding the date on which the Related Person became a Related
person, whichever is higher. The highest closing sale price shall be determined
by the reports of closing sale prices on the Composite Tape for New York Stock
Exchange Listed Stocks or, if such stock is not quoted on the Composite Tape, on
the New York Stock Exchange or other principal United States securities exchange
on which such stock is listed or, for any period when such stock is not listed
on any such exchange, the highest closing bid quotation with respect to a share
of such stock on the National Association of Securities Dealer, Inc. Automated
Quotation System; provided, however, that such price under clause (A) or (B)
19
shall be proportionately adjusted for any subsequent increase or decrease in the
number of issued shares of the Corporation's capital stock resulting from a
subdivision or consolidation of shares or any other capital adjustments, the
payment of a stock dividend, or other increase or decrease in such shares of
capital stock effected without receipt of consideration by the Corporation.
(c) The Board of Directors, with the approval of a majority of
the total number of Continuing Directors, shall have the power and duty to
determine, on the basis of information known to it after reasonable inquiry, all
facts necessary to determine compliance with this Article, including, without
limitation, (i) whether a person is a Related Person; (ii) the number of shares
of Voting Stock Beneficially Owned by any person; (iii) whether a person is an
Affiliate or Associate of another person; (iv) whether the applicable conditions
set forth in paragraph (b) of Section 6.2 have been met with respect to any
Business Combination; and (v) whether the proposed transaction is a Business
Combination. Any such determinations shall be final and conclusive.
6.3. DEFINITIONS.
For the purposes of Section 6.2:
(a) The term "Related Person" shall mean and include
any individual, corporation, partnership, or other person, entity or group, as
such term is defined in Rule 13d-5 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which Beneficially Owns (as hereinafter defined),
in the aggregate, ten percent (10%) or more of the outstanding Voting Stock of
the Corporation. For purposes of calculating the 75% vote under Section 6.2(a),
a Related Person shall also include the seller or sellers from whom the Related
Person, during the six months preceding the Announcement Date, acquired at least
five percent (5%) of the outstanding shares of Class A Common Stock pursuant to
one or more agreements or other arrangements (excluding brokers' transactions)
but only if such seller or sellers Beneficially Own shares of Common Stock
having an aggregate fair market value in excess of $10 million at the
Announcement Date. Notwithstanding the foregoing, neither the Corporation nor
any of its Subsidiaries shall be a Related Person.
(b) The terms "Affiliate" and "Associate" shall have
the meanings set forth in Rule 12b-2 under the Exchange Act, as in effect on the
date this Restated Certificate of Incorporation is filed in the office of the
Secretary of State of the State of Delaware.
(c) The term "Beneficially Owns" shall have the
meaning set forth in Rule 13d-3 under the Exchange Act, as in effect on the date
this Restated Certificate of Incorporation is filed in the office of the
Secretary of State of the State of Delaware.
(d) The term "Continuing Director", with respect to
any Business Combination, shall mean any member of the Board of Directors of the
Corporation who is not a Related Person with whom such Business Combination is
proposed and is neither Affiliated nor Associated with or designated by such
Related Person. Notwithstanding the foregoing, any director of the Company
elected pursuant to a voting agreement to
20
which such Related Person is a party but who is not designated by such Related
Person and any director of the Company who has a family relation with such
Related Person (unless designated by such Related Person) shall not be
considered to be an Affiliate or Associate of such Related Person.
(e) The term "Substantial Part" shall mean more than
30% of the fair market value, as determined by two-thirds of the Continuing
Directors, of the total consolidated assets of the Corporation and its
subsidiaries taken as a whole as of the end of its most recent fiscal year
ending prior to the time the determination is being made, subject to adjustments
made by the Continuing Directors to take into account transactions made
subsequent to year end.
(f) The term "Subsidiary" shall mean any corporation
of which a majority of the Voting Stock thereof entitled to vote generally in
the election of directors is owned, directly or indirectly, by the Corporation.
(g) The term "Voting Stock" shall mean all
outstanding shares of capital stock of the Corporation or another corporation
entitled to vote generally in the election of directors, and each reference to a
percentage of shares of Voting Stock shall refer to such percentage of the votes
entitled to be cast by such shares.
ARTICLE VII
LIABILITY OF DIRECTORS
7.1. LIMITATION ON LIABILITY. No Director of the Corporation
shall be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a Director, except for liability (a) for
any breach of the Director's duty of loyalty to the Corporation or its
stockholders; (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (c) under Section 174 of
the DGCL; or (d) for any transaction from which the Director derived an improper
personal benefit. If the DGCL is amended after approval by the stockholders of
this article to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended.
7.2. AMENDMENTS. Any repeal or modification of Section 7.1
hereof by the stockholders of the Corporation shall not adversely affect any
right or protection of a Director of the Corporation existing at the time of
such repeal or modification.
ARTICLE VIII
STOCKHOLDERS
8.1. ACTION BY STOCKHOLDERS. Any action required or permitted
to be taken by the holders of the issued and outstanding stock of the
Corporation may be effected at an annual or special meeting of stockholders duly
called and held in accordance with law and this Restated Certificate of
Incorporation and the Bylaws, or, as
21
long as any shares of Class B Common Stock are outstanding, without a meeting,
by written consent, setting forth the action so taken, signed by the holders of
outstanding shares entitled to vote thereon having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
stockholders' meeting at which all shares entitled to vote thereon were present.
If no shares of Class B Common Stock are outstanding, such written consent shall
require the signature by holders of all outstanding shares entitled to vote
thereon.
8.2. SPECIAL MEETINGS OF STOCKHOLDERS. Except as otherwise
required by law, special meetings of stockholders may be called only by the
Chairman of the Board of Directors or the Chief Executive Officer or by the
Board of Directors pursuant to a resolution adopted by the affirmative vote of a
majority of the entire Board. Except as otherwise required by law, stockholders
of the Corporation shall not have the right to request or call a special meeting
of the stockholders.
ARTICLE IX
BYLAWS
The Board of Directors shall have the power to adopt, amend or
repeal the Bylaws by the affirmative vote of at least a majority of the members
then in office. The affirmative vote of the holders of not less than
seventy-five percent (75%) of the voting power of all shares of capital stock of
the Corporation then entitled to vote generally in the election of directors,
voting as a single class shall be required to adopt, amend or repeal the Bylaws
(notwithstanding the fact that approval by a lesser percentage may be permitted
by the DGCL).
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ARTICLE X
AMENDMENT OF RESTATED
CERTIFICATE OF INCORPORATION
The Corporation hereby reserves the right from time to time to
amend, alter, change or repeal any provision contained in this Restated
Certificate of Incorporation in any manner permitted by law and all rights and
powers conferred upon stockholders, directors and officers herein are granted
subject to this reservation. In addition to any vote otherwise required by law,
any such amendment, alteration, change or repeal shall require approval of both
(a) the Board of Directors by the affirmative vote of a majority of the members
then in office and (b) the holders of a majority of the voting power of all the
shares of capital stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class; provided, however,
that any proposal to amend, alter, change or repeal the provisions of Article V,
Article VI and this Article X shall require the affirmative vote of the holders
of seventy-five percent (75%) of the voting power of all the shares of capital
stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class.
23
IN WITNESS WHEREOF, this Restated Certificate of Incorporation
of the Corporation, which restates, integrates and amends the provisions of the
certificate of incorporation of the Corporation, and which was duly approved
pursuant to resolutions set forth in unanimous written consents adopted by the
Board of Directors of the Corporation and the holders of all of the outstanding
shares of stock of the Corporation in accordance with the requirements of
Sections 228, 242 and 245 of the DGCL, has been executed by Saul H. Magram,
acting in his capacity as Senior Vice President and General Counsel of the
Corporation, this 16th day of November, 1995, and shall become effective on
November 16, 1995 at 6:00 p.m.
THE ESTEE LAUDER COMPANIES INC.
/s/ SAUL H. MAGRAM
------------------
Saul H. Magram
Senior Vice President and General Counsel
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SCHEDULE A
Trusts
1. Descendants of Leonard Lauder 1966 Trust u/a/d June 14, 1966,
between Estee Lauder, as Settlor, and Leonard A. Lauder, as Trustee,
for the benefit of the descendants of Leonard A. Lauder.
2. Descendants of Ronald Lauder 1966 Trust u/a/d June 14, 1966,
between Estee Lauder, as Settlor and Ronald S. Lauder, as Trustee, for
the benefit of the descendants of Ronald S. Lauder.
3. Trust u/a/d December 15, 1976, between Estee Lauder and Joseph
H. Lauder, as Grantors, and Leonard A. Lauder, as Trustee, for the
benefit of Gary Lauder and William Lauder.
4. Trust u/a/d December 15, 1976, between Estee Lauder and Joseph
H. Lauder, as Grantors, and Ronald S. Lauder, as Trustee, for the
benefit of Aerin Lauder and Jane Lauder.
5. Trust u/a/d December 15, 1976, between Leonard A. Lauder, as
Grantor, and Leonard A. Lauder and Ronald S. Lauder, as Trustees, for
the benefit of Gary Lauder and William Lauder.
6. Trust u/a/d December 15, 1976, between Ronald S. Lauder, as
Grantor, and Ronald S. Lauder and Leonard A. Lauder, as Trustees, for
the benefit of Aerin Lauder and Jane Lauder.
7. Trust u/a/d August 13, 1982, between Estee Lauder and Joseph
H. Lauder, as Grantors, and Leonard A. Lauder, as Trustee, for the
benefit of Gary Lauder and William Lauder.
8. Leonard A. Lauder Generation-Skipping Securities Trust u/a/d
December 23, 1992, between Leonard A. Lauder, as Grantor, and Joel S.
Ehrenkranz, as Trustee.
9. Leonard A. Lauder Grantor Retained Annuity Trust u/a/d
November 30, 1992, between Leonard A. Lauder, as Grantor, and Joel S.
Ehrenkranz, as Trustee.
10. Gary Lauder 1994 Family Trust u/a/d as of December 16, 1994,
between Gary Lauder, as Settlor, and Leonard A. Lauder and Laura
Lauder, as Trustees.
11. William Lauder 1994 Family Trust u/a/d as of December 14,
1994, between William Lauder, as Settlor, and Leonard A. Lauder and
Karen Lauder, as Trustees.
25
12. Trust u/a/d June 2, 1994, as amended, between Estee Lauder,
as Grantor, and Leonard A. Lauder, Ronald S. Lauder and Ira T. Wender,
as Trustees.
26
Dates Referenced Herein and Documents Incorporated by Reference
4 Subsequent Filings that Reference this Filing
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