EXHIBIT 10.5
AMENDMENT NO. 1
to the
EMPLOYMENT AGREEMENT
          AMENDMENT (“Amendment No. 1”) effective the 1st day of January 2009,
by and between Polo Ralph Lauren Corporation, a Delaware corporation (the
“Corporation”), and Jackwyn Nemerov (the “Executive”).
          WHEREAS, the Executive has been employed with the Corporation pursuant
to an Employment Agreement dated September 9, 2004 (the “Employment Agreement”);
and
          WHEREAS, the Corporation and the Executive wish to amend the
Employment Agreement to bring it into compliance with Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations issued or to be
issued by the Department of the Treasury thereunder;
          NOW, THEREFORE, the parties hereby agree to amend the Employment
Agreement as follows.
     1. Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed to such terms in the Employment Agreement. All other terms and
conditions of the Employment Agreement that are not modified below shall
continue to remain in full force and effect.
     2. Section 2.1(e) is hereby amended to read as follows:
     “(e) Voluntary Termination. The Executive may voluntarily terminate the
Executive’s employment with the Corporation at any time, with or without Good
Reason. For purposes of this Agreement, “Good Reason” shall mean a termination
of employment by the Executive within one (1) year following the occurrence of
(A) a material diminution in or adverse alteration to Executive’s title, base
salary, benefits, position, status, or duties, (B) the relocation of the
Executive’s principal office outside the area which comprises a fifty (50) mile
radius from New York City, (C) a failure of the Corporation to comply with any
material provision of this Agreement, or (D) the Corporation requires Executive
to report to anyone other than Ralph Lauren or Roger Farah, provided that the
events described in clauses (A), (B), (C) and (D) above shall not constitute
Good Reason (1) until the Executive provides written notice to the Corporation
of the existence of such diminution, change, reduction, relocation or failure
within ninety (90) days of its occurrence and (2) unless such diminution,
change, reduction or failure (as applicable) has not been cured within thirty
(30) days after written notice of such noncompliance has been given by the
Executive to the Corporation.”

 

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     3. Section 2.3(a)(i) is hereby amended to read as follows:
     “(i) Severance. Subject to Section 2.3(a)(v) and Section 4.1(a) hereof, the
Corporation shall: (a) beginning with the first payroll period following the
thirtieth (30th) day following the date of termination of Executive’s
employment, continue to pay the Executive, in accordance with the Corporation’s
normal payroll practice, Executive’s Base Compensation, as in effect immediately
prior to such termination of employment, for the longer of the balance of the
Term or the one-year period commencing on the date of such termination
(whichever period is applicable shall be referred to herein as the “Severance
Period”), provided that the initial payment shall include Base Compensation
amounts for all payroll periods from the date of termination through the date of
such initial payment; and (b) pay to the Executive, on the last business day of
the Severance Period, an amount equal to the bonus paid to the Executive for the
most recently completed fiscal year prior to the fiscal year in which
Executive’s employment is terminated. Notwithstanding the foregoing, in order to
receive any severance benefits under this Section 2.3(a)(i), the Executive must
sign and not timely revoke a release and waiver of claims against the
Corporation, its successors, affiliates, and assigns, in a form acceptable to
the Corporation on or prior to the thirtieth (30th) day following the date of
termination of Executive’s employment.”
     4. A new Section 2.3(a)(v) is hereby added that reads as follows:
     “(v) Section 409A. Notwithstanding any provision in this Agreement to the
contrary, no amounts shall be payable pursuant to Section 2.3(a) or
Section 4.1(a) unless the Executive’s termination of employment constitutes a
“separation from service” within the meaning of Section 1.409A-1(h) of the
Department of Treasury Regulations. If the Executive is determined to be a
“specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Internal
Revenue Code, as amended, and the rules and regulations issued thereunder (the
“Code”), then any amount that becomes payable under Sections 2.3(a)(i) or 4.1(a)
hereof (the “Severance Payment”) on account of the Executive’s “separation from
service” shall not be paid to the Executive until the first business day
following the expiration of the six (6) month period immediately following the
Executive’s “separation from service” (or if earlier, the date of the
Executive’s death) if and to the extent that the Severance Payment constitutes
deferred compensation (or may be nonqualified deferred compensation, as mutually
agreed by the Corporation and the Executive, such agreement not to be
unreasonably withheld or delayed by the Executive) under Section 409A of the
Code and such deferral is required to comply with the requirements of
Section 409A of the Code. For the avoidance of doubt, no portion of the
Severance Payment shall be delayed for six (6) months after the Executive’s
“separation from service” if such portion (x) constitutes a “short term
deferral” within the meaning of Section 1.409A-1(a)(4) of the

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Department of Treasury Regulations, or (y) (A) it is being paid due to the
Corporation’s termination of the Executive’s employment without Cause or the
Executive’s termination of employment for Good Reason; (B) it does not exceed
two times the lesser of (1) the Executive’s annualized compensation from the
Corporation for the calendar year prior to the calendar year in which the
termination of the Executive’s employment occurs, or (2) the maximum amount that
may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which the Executive’s employment terminates; and
(C) the payment is required under this Agreement to be paid no later than the
last day of the second calendar year following the calendar year in which the
Executive incurs a “separation from service”. For purposes of Section 409A of
the Code, the Executive’s right to receive installment payments pursuant to
Section 2.3(a) shall be treated as a right to receive a series of separate and
distinct payments. To the extent that any reimbursement of any expense under
Section 1.4(e) or in-kind benefits provided under this Agreement are deemed to
constitute taxable compensation to the Executive, such amounts will be
reimbursed or provided no later than December 31 of the year following the year
in which the expense was incurred. The amount of any such expenses reimbursed or
in-kind benefits provided in one year shall not affect the expenses or in-kind
benefits eligible for reimbursement or payment in any subsequent year, and the
Executive’s right to such reimbursement or payment of any such expenses will not
be subject to liquidation or exchange for any other benefit. The determination
of whether the Executive is a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code as of the time of the Executive’s
separation from service shall made by the Company in accordance with the terms
of Section 409A of the Code and applicable guidance thereunder (including
without limitation Treasury Regulation Section 1.409A-1(i) and any successor
provision thereto).”
     5. The second paragraph of Section 4.1(c) is hereby amended by adding the
following provision after the first sentence of that paragraph:
     “Notwithstanding the forgoing, all Gross-up Payments shall be made to the
Executive no later than the end of the calendar year following the calendar year
in which the Executive remits the Excise Tax.”
     6. A new Section 5.11 is hereby added that reads as follows:
     “5.11 Compliance with Section 409A. The parties acknowledge and agree that,
to the extent applicable, this Agreement shall be interpreted in accordance
with, and the parties agree to use their best efforts to achieve timely
compliance with, Section 409A of the Code and the Department of Treasury
Regulations and other interpretive guidance issued thereunder (“Section 409A”),
including without limitation any such regulations or other guidance that may be
issued after the Effective Date. Notwithstanding any provision of this Agreement
to the contrary, in the event that the Corporation determines that any
compensation or benefits payable or provided hereunder may be subject to
Section 409A, the Corporation reserves the right (without any obligation to do
so

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or to indemnify the Executive for failure to do so), after consulting with and
securing the approval of the Executive (such approval not to be unreasonably
withheld or delayed), to adopt such limited amendments to this Agreement and
appropriate policies and procedures, including amendments and policies with
retroactive effect, that the Corporation reasonably determines are necessary or
appropriate to (a) exempt the compensation and benefits payable under this
Agreement from Section 409A and/or preserve the intended tax treatment of the
compensation and benefits provided with respect to this Agreement or (b) comply
with the requirements of Section 409A.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 effective as
of the date first above written.
POLO RALPH LAUREN CORPORATION

     
/s/ Mitchell Kosh
  /s/ Jackwyn Nemerov
 
   
By:    Mitchell Kosh
  JACKWYN NEMEROV
Title: Senior Vice President – Human Resources & Legal
   

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