EXHIBIT 10.25

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.

(POLO RALPH LAUREN LOGO) [y10404y1040400.gif]
Restricted Performance
Share Unit Award
Overview

June 2005

 

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Highlights of the Award

This Overview is qualified in its entirety by reference to the accompanying
Memorandum to Participants in the Polo Ralph Lauren 1997 Long-Term Stock
Incentive Plan and to the Plan itself. Copies of the Memorandum and the Plan are
available from your Human Resources Department or by logging on to the Intranet
at http://poloweb/HRWeb/Benefits.

OVERVIEW

On June 9, 1997, the Board of Directors adopted the Polo Ralph Lauren
Corporation 1997 Long-Term Stock Incentive Plan (as amended and restated, “the
Plan”), which authorizes the granting of equity awards to officers and other
employees and third party service providers of the Company and its subsidiaries
by the Compensation Committee of the Board of Directors.

A Restricted Performance Share Unit award granted under the Plan provides a
participant the right to receive shares of Polo Ralph Lauren stock (traded on
the New York Stock Exchange: RL) based on the achievement of specified
performance goals over a specified period, generally three financial years. The
performance measure(s) are set by the Compensation Committee of the Board of
Directors at the time of grant, and may include one or more of the following:

     Net Earnings

     Earnings Per Share

     Net Revenue or Net Revenue Growth

     Gross Profit or Gross Profit Growth

     Return on Assets

     Cash Flow

This Overview explains the Restricted Performance Share Unit Award program, its
benefits to you as a participant and outlines the various steps you need to take
in regard to managing your restricted performance share unit award.

OBJECTIVES

The intent of the award is to provide additional performance-based compensation
opportunities:

1.   For selected executives, to link a portion of their long-term incentive to
the achievement of specific corporate performance objectives.

2.   To attract and retain individuals of superior talent.

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PLAN ADMINISTRATION

Polo Ralph Lauren’s Human Resources Department administers the Restricted
Performance Share Unit Award program. Record keeping for restricted performance
share unit awards is performed by Merrill Lynch.

The Company’s Board of Directors reserves the right to amend, modify, or
terminate the plan at any time. No such amendment to the plan would adversely
affect any restricted performance share unit awards then outstanding.

If you have any questions regarding this overview, please consult the Memorandum
to Participants or contact your local Human Resources generalist.

ELIGIBILITY FOR GRANT

Restricted performance share unit awards are granted to individuals in key
executive positions that have a significant impact on the strategic direction
and business results of the Company.

Individuals in designated positions will generally receive each year both a
stock option award and a restricted performance share unit award.

Guidelines have been established for the number of restricted performance share
units that participants may receive. The guidelines reflect a position’s scope,
accountability and impact on the organization.

Please note that the guidelines do not constitute a guarantee that any specific
individual will receive a restricted performance share unit award, or a stock
option award, in any given year or guarantee the number of shares (of either
restricted performance share units or stock options) if a grant is made.

An employee who receives an Improvement Needed (I) or Unsatisfactory (U) rating
on his/her annual performance evaluation is not eligible for either restricted
performance share units or stock options in that fiscal year.

STRUCTURE OF GRANTS AND PAYOUT SCHEDULE

At the time of grant, the award has a target number of share units. Threshold,
Target, and Maximum levels of performance have been established for the
measure(s) applicable to that award. The payout schedule will normally be as
follows:

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                  Performance Level   % of Goal Achieved     % of Target Share
Units Paid  
Threshold
    70 %     75 %
Target
    100 %     100 %
Maximum
    110 %     150 %

Note: Restricted Performance Share Unit awards interpolate between 70%-100% of
target. No payout will be earned for performance below Threshold.

Once an award is given in any fiscal year, the measure(s), performance goals, or
payout schedule will not be modified prior to the end of the award term.
However, for any future awards, the Compensation Committee may change the
performance measure(s), goals and/or payout schedule.

EXAMPLE

An award granted in fiscal 2005 will mature at the end of fiscal 2007 and will
be paid in fiscal 2008 (subject to achievement of the specified performance
goals set for FY 2005-FY 2007) at approximately the same time as the Executive
Incentive Plan (EIP).

Beginning with fiscal 2008, participants would have the opportunity to receive a
LTI payout each year as awards previously granted would mature, as shown below:

          Year Granted   Performance Period   Year Paid 1
FY05
  FY05 — FY07   FY08
FY06
  FY06 — FY08   FY09
FY07
  FY07 — FY09   FY10

     1If at least Threshold performance is achieved.

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Example of awards and payouts to a Division SVP:

                  Year Granted   Performance Period           Year Paid and #
Share Units   and Achievement   Payout %   and # Share Units
FY05 2,500
  FY05 — FY07 Target     100 %   FY08 2,500
FY06 2,500
  Fy06 — FY08 70%     75 %   FY09 1,875
FY07 2,500
  FY07 — FY09 110%     150 %   FY10 3,750

          Total Share Units Granted   Total Share Units Paid  
7,500
    8,125  

AWARD VESTING/EXPIRATION

As shown below, all restricted performance share units granted for a particular
award will vest at the end of the three-year performance period, subject to
achieving at least a Threshold level of performance. This is sometimes referred
to as “cliff” vesting since all share units vest at the same time.

If Threshold or better performance is achieved and shares are paid out, you will
own those shares, so you will have voting rights and you will receive dividends.

If performance is below Threshold at the end of the three-year period, all share
units for that award will be forfeited. As noted above, as participants receive
awards over a period of years, they will have potential vesting on their other
awards even if the award maturing in that fiscal year does not pay out.

(VESTING EXPIRATION SCHEDULE) [y10404y1040401.gif]

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If a participant leaves Polo Ralph Lauren (except as a result of retirement,
disability, or death) before the three-year period is over, all rights to
unvested share units are forfeited. (For details, please see chart on Page 8.)

VALUE OF RESTRICTED PERFORMANCE SHARE UNITS

A restricted performance share unit offers two opportunities to recognize value.

First, if Threshold or better performance is achieved you will receive a payout
of actual shares. Unlike options, this type of award is not dependent on the
share price going up to provide value.

The second opportunity would result from an increase in the share price. The
benefit to you is that you receive the same number of shares regardless of how
much the stock price may have increased.

The potential gain from restricted performance share units can be significant,
as shown in the following example. In this example, we are not forecasting
actual growth in the company’s stock price, but merely illustrating both the
original award value and the potential for gains based on potential rates of
stock price appreciation.

In the example, the participant received a grant for 2,500 restricted
performance share units. At a stock price of $30 when the grant was made, the
award has a value at target of $75,000. Any increase in the stock price above
the stock price at the grant date increases the value of the award as shown
below.

SALE OF SHARES

When shares acquired through payout of a restricted performance share unit award
are sold at a later date, participants can benefit from any price appreciation
that has occurred since the purchase date, similar to any other stock you own.
Shares received from a performance share unit award payout may be sold at any
time, except during those “Blackout” periods specified by the Company’s
Securities Trading Policy (see Page10). Executive Officers, however, may sell
shares only pursuant to SEC Rule 144 or another applicable exception under the
Securities Act of 1933, as Amended.

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Impact of Employment Termination

The following chart explains what happens if you leave Polo Ralph Lauren.

IMPACT ON RESTRICTED PERFORMANCE SHARE UNIT AWARDS

          Event   Unvested Awards
Retirement Beginning at age 55,
Disability or Death
  ·   In the case of retirement, disability or death, a pro-rated target number
of share units will be determined.
 
  ·   These pro-rated share units will vest at the end of the three-year period,
and payout will be based on the actual degree of achievement. If performance
does not reach the Threshold level, then the pro-rated share units will be
forfeited.
Involuntary Termination (without cause)
  ·   All unvested share units are forfeited.
Dismissal for Cause
  ·   All vested share units not yet paid are forfeited. All unvested share
units are forfeited.
Voluntary Resignation
  ·   All unvested share units are forfeited.

If a participant has received any shares of Polo Ralph Lauren stock, as a result
of payout of any Restricted Performance Share Unit award, the participant
retains all rights to those shares.

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Tax Liability

The following statements regarding United States federal income tax consequences
of the grant and vesting of Restricted Performance Share Unit awards under the
Plan should be read in conjunction with the “Federal Income Tax Consequences” of
the Memorandum to Participants in the Polo Ralph Lauren Corporation 1997
Long-Term Stock Incentive Plan and are not intended to be a complete summary of
applicable law, nor do they address state, local or non-U.S. tax considerations.
Moreover, the federal income tax consequences to any particular participant may
differ from those described herein by reason of, among other things, the
specific circumstances of such participant. For these reasons, participants are
urged to consult their tax advisors with respect to the consequences of their
participation in the Plan.

AT GRANT

No United States federal income tax is owed at grant.

AT VESTING

United States federal income tax is owed on the value of the share units, if
any, received at payout. As previously indicated, the value at vesting is based
on the number of share units earned times the share price on the payout date.

A percentage of the share units earned will be withheld to satisfy applicable
federal, state, and local payroll and income tax withholding requirements.
However, the amount withheld by Polo may be less than a participant’s actual
federal, state or local income tax liabilities because the rate at which the
participant’s income is taxed may exceed required withholding rates.
Participants may wish to arrange for additional withholding or estimated tax
payments.

The value of the share units paid out is treated as ordinary income for U.S.
federal tax liability. In the example above, the value of 2,500 share units at
$30 per share is $75,000, so that amount will be subject to federal income
taxes. In addition, the value will be subject to state and local taxes, as well
as Federal Insurance Contributions Act (FICA) to the extent applicable.

Any value generated from the payout of a restricted performance share unit award
must be reported as income to the Internal Revenue Service (IRS) and will
therefore be included on the W-2 form received in January.

SUBSEQUENT SALES

Please consult the Prospectus and your own tax advisor.

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Other Administrative Issues

INSIDER TRADING

As provided in the Polo Ralph Lauren Employee Handbook, employees are prohibited
by law from buying or selling stock if an employee has or is aware of any
material, non-public information about Polo Ralph Lauren. This is commonly
referred to as “insider information.” Material, non-public information is any
information that has not been disclosed to the public that could affect the
price of RL stock — either positively or negatively — or affect a person’s
decision to buy, hold or sell stock.

Examples of what might be considered “insider information” include but are not
limited to the following:

•   Earnings or other financial information;   •   Changes in dividend policy;  
•   Stock splits;   •   Mergers and acquisitions;   •   Major new contracts or
product-line introductions;   •   Litigation involving substantial amounts of
money; or   •   Changes in management

These insider-trading rules are applicable to employees of Polo Ralph Lauren and
its related companies worldwide.

COMPANY BLACKOUT PERIODS

To avoid even the appearance of “insider trading,” our Company’s policy
prohibits members of the Board of Directors and all employees from making trades
involving stock of the Company during certain “blackout periods.” This
prohibition covers buying or selling shares. These blackout periods generally
begin two weeks before the end of each of our fiscal quarters and continue
through one trading day after the Company issues its earnings release for the
fiscal quarter or year just ended. If the earnings release is issued before the
opening of the market on a trading day, trading may begin the next day. The
“blackout periods” are announced at the start of each year. In addition, the
Board of Directors, officers, and employees in the Finance and Legal departments
must clear all trades with the Corporate Counsel, whether they occur within a
blackout period or not.

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ADDITIONAL PROHIBITED TRANSACTIONS

Because we believe it is inappropriate for any Company personnel to engage in
short-term or speculative transactions involving the Company’s common stock, it
is Company policy that employees do not engage in any of the following
activities with respect to the securities of the Company:

•   “In and out” trading in securities of the Company. Any Company stock
purchased in the market must be held for a minimum of six months, and ideally
longer. (Note that the Securities and Exchange Commission (SEC) has a
“short-swing profit recapture” rule that effectively prohibits Executive
Officers and members of the Board of Directors from selling any Company stock
within six months of a purchase. The Company has extended this prohibition to
all employees. (The receipt of shares pursuant to the vesting of Restricted
Performance Share Unit awards is not considered a purchase under the SEC’s
rule.)   •   Short sales (i.e., selling stock one does not own and then
borrowing the shares to make delivery.)   •   Buying or selling “puts” or
“calls” (i.e., making commitments to buy or sell securities at a specified price
for a fixed period of time.)

CLEARANCE OF ALL TRADES BY DIRECTORS, OFFICERS AND OTHER KEY PERSONNEL

All transactions in Company stock (purchases, sales, transfers, etc.) by members
of the Board of Directors, officers, and personnel in the Finance and Legal
departments must be cleared by the Corporate Counsel. If you contemplate a
transaction, you must contact the Corporate Counsel at (212) 705-8280 before
contacting Merrill Lynch or taking any other step to initiate a transaction.

In the event of any discrepancy between the terms of the Plan and this
Restricted Performance Share Unit Award Overview, the terms of the Plan will
govern. A copy of the official Polo Ralph Lauren Corporation 1997 Long-Term
Stock Incentive Plan is available from your Human Resources department or you
may log on to the Intranet at http://poloweb/HRWeb/Benefits.

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