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.


 


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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-


 


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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 Participant fails to comply with his or her obligations
in connection with the Tax-Related Items as described in this paragraph.


 


7.     Nonassignability. This award may not be assigned, pledged, or
transferred, except, if the Participant dies, to a designated beneficiary or by
will or by the laws of descent and distribution. The foregoing restrictions do
not apply to transfers under a court order, including, but not limited to, any
domestic relations order.


 


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


 


9.     Notices. Any notice required or permitted under this
Agreement is deemed to have been duly given if delivered, telecopied, or mailed
(certified or registered mail, return receipt requested), or sent by
internationally-recognized courier guaranteeing next day delivery (a) to
the Participant at the address on file in the Company’s (or relevant subsidiary’s)
personnel records, or (b) to the Company, attention 


 


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Stock
Plan Administration at its principal executive offices, which are currently
located at 767 Fifth Avenue, New York, NY 10153.


 


10.  Disclosure and Use of Information.


 


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


 


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


 


c.     The Participant also understands
that part or all of his or her Data may be held by the Company or its
subsidiaries in connection with managing and administering previous award or
incentive plans or for other purposes, pursuant to a prior transfer made with
the Participant’s consent in respect of any previous grant of restricted stock
units or other awards.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


g.     The Restricted Stock Units
are not part of normal or expected compensation or salary for any purposes,
including, but not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement or welfare benefits or similar payments and in no event
should be considered as compensation for, or relating in any way to, past
services for the Company or any subsidiary;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


15.  Section 409A Compliance. This Agreement is intended
to comply with section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and any regulations, rulings, or guidance provided thereunder.
The Company reserves the unilateral right to amend this Agreement upon written
notice to the Participant to prevent taxation under Code section 409A.


 


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


 


	
   

  	
  The Estée Lauder Companies Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Amy DiGeso

  
	
   

  	
   

  	
  Amy
  DiGeso

  
	
   

  	
   

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
  Global
  Human Resources

  



 


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