Exhibit 10.5
Each
of the Stock Plan Subcommittee of the Compensation Committee and
the Compensation Committee of the Board of Directors of The
Estée Lauder Companies Inc. reserves the right to change
provisions of this Agreement to comply with the American Jobs
Creation Act of 2004.
Restricted Stock Unit
Agreement Under
The
Estée Lauder Companies Inc.
Amended and Restated Fiscal
2002 Share Incentive Plan (the “Plan”)
This RESTRICTED
STOCK UNIT AGREEMENT (“ Agreement ”)
provides for the granting 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 “ Participant ”), of Stock Units under the
Plan representing a notional account equal to a corresponding
number of shares of the Company’s Class A Common Stock, par
value $0.01 (the “ Shares ”), subject to the
terms below (the “ Restricted Stock Units
”). The name of the “Participant,” the
“Grant Date,” the “Number of Restricted Stock
Units,” the “Vesting Commencement Date,” the
“Vesting Schedule,” and the “Vesting
Period” are stated in the attached “Notice of
Grant” and are incorporated by reference. The other
terms of this award are stated in this Agreement and in the Plan.
Terms not defined in this Agreement are defined in the Plan, as
amended.
1.
Award Grant . The Company hereby awards to the
Participant an award of Restricted Stock Units in respect of the
number of Shares set forth in the Notice of Grant.
2.
Vesting . The Restricted Stock Units
granted to the Participant will vest and become payable in
accordance with the Vesting Schedule in the Notice of Grant.
This schedule indicates the vesting date upon which the Participant
will be entitled to receive Shares. Except as otherwise
provided in this Agreement, any Restricted Stock Units that are
unvested when the Participant terminates employment with the
Company will be forfeited.
3.
Payment of Awards . Each Restricted Stock Unit
represents the right to receive one Share when the Restricted Stock
Unit vests.
In addition, each
Restricted Stock Unit carries a Dividend Equivalent Right, payable
in cash at the same time as payment of Restricted Stock Units in
Shares in accordance with this paragraph 3 and paragraph 4.
Dividend Equivalent Rights are deemed part of the related
Restricted Stock Units under this Agreement.
Upon a Change in
Control, each Restricted Stock Unit will vest and become payable to
the Participant. Payments upon a Change in Control will be
made within two weeks following the Change in Control. If 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 will equal the
consideration paid to each stockholder per Share generally upon the
Change in Control.
4.
Termination of Employment . If the Participant’s
employment terminates during the Vesting Period, all Restricted
Stock Units will be forfeited except as follows:
(a)
Death . If the Participant dies, the Restricted Stock
Units will vest pro rata for the number of full months the
Participant was employed during the Vesting Period (i.e., the
proration equals a fraction, the numerator of which is the number
of full calendar months of service completed during the Vesting
Period through the Participant’s death and the denominator of
which is the number of full calendar months in the Vesting
Period). Payment of the Restricted Stock Units will occur as
soon as practicable following the Participant’s death and in
accordance with any applicable laws or Company procedures regarding
the payments.
(b)
Retirement . If the Participant formally retires under
the terms of The Estée Lauder Companies Retirement Growth
Account Plan (or an affiliate or a successor plan or program of
similar purpose), the unvested Restricted Stock Units will continue
to vest and be paid in accordance with the Vesting Schedule.
(c)
Disability . If the Participant becomes totally and
permanently disabled (as determined under the Company’s
long-term disability program), the Restricted Stock Units will vest
pro rata for full months employed during the Vesting Period
(determined under the proration methodology in paragraph
4(a)). The Restricted Stock Units will be paid in accordance
with the Vesting Schedule.
(d)
Termination of Employment Without Cause . If the
Participant’s employment is terminated at the instance of the
Company or relevant subsidiary without Cause (as defined below),
any unvested Restricted Stock Units will vest pro rata for full
months employed during the Vesting Period (determined under the
proration methodology in paragraph 4(a)) on the next vesting date
during the Vesting Period. Restricted Stock Units will be paid in
accordance with the Vesting Schedule.
(e)
Termination of Employment By Employee . If the
Participant voluntarily terminates his or her employment (e.g
. , by voluntary resigning) other than by retirement, which
is subject to paragraph 4(b) above, all Restricted Stock Units that
are not vested as of the effective date of resignation will be
forfeited.
(f)
Termination of Employment With Cause . If the
Participant is terminated for Cause, all Restricted Stock Units
that are not vested as of the effective date of termination will be
forfeited. For this purpose, “Cause” is defined
in the employment agreement in effect between the Participant 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 Participant
of any of his or her material obligations under any Company policy
or procedure, including, without limitation, the Code of Corporate
Conduct.
(g)
Post Employment Conduct . Payment in respect of any
Restricted Stock Unit after termination of employment is subject to
satisfaction of the conditions precedent that the Participant
neither (i) competes with, takes employment with, or renders
services to a competitor of the Company, its subsidiaries, or
affiliates without the Company’s written consent, nor (ii)
conducts himself or herself in a manner adversely affecting the
Company.
2
5.
No Rights of Stock Ownership . This grant of Restricted
Stock Units does not entitle the Participant to any interest in or
to any voting or other rights normally attributable to Share
ownership other than the Dividend Equivalent Rights granted under
paragraph 3 above.
6.
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 Restricted
Stock Units, including the grant of the Restricted Stock Units, the
vesting of the Restricted Stock Units, the delivery of Shares, 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 Restricted Stock Units 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 vesting,
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 Particip
