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.
EO
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 unvested
Restricted Stock Units will continue to vest and be paid in
accordance with the Vesting Schedule. Payment of the
Restricted Stock Units will occur 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 unvested
Restricted Stock Units will continue to vest and 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 continue to vest and 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.
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-
2
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 num
