Exhibit 10.2

POLO RALPH LAUREN CORPORATION

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made effective as of the 14th day
of October, 2009 (the “Effective Date”), 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 (as amended as of the date hereof
the “2004 Employment Agreement”); and

WHEREAS, the Corporation and Executive wish to amend and restate such 2004
Employment Agreement effective as of the date hereof;

NOW THEREFORE, in consideration of the mutual covenants and premises contained
herein, the parties hereby agree as follows:

ARTICLE I

EMPLOYMENT

1.1 Employment Term. The Corporation hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Corporation, on the terms and
conditions set forth herein, and in the Executive’s term sheet dated October 14,
2009, a copy of which is attached hereto as Exhibit 1 (the “Term Sheet”). The
employment of the Executive by the Corporation shall be effective as of the date
hereof and shall continue until the close of business on March 31, 2013 (the
“Term”), unless terminated earlier in accordance with Article II hereof.

1.2 Position and Duties. During the Term, the Executive shall faithfully, and in
conformity with the directions of the Board of Directors of the Corporation and
any Committee thereof (the “Board”) or the management of the Corporation
(“Management”), perform the duties of her employment, and shall devote to the
performance of such duties her full time and attention. During the Term, the
Executive shall serve in the position of Executive Vice President. During the
Term, the Executive may engage in outside activities provided those activities
do not conflict with the duties and responsibilities enumerated hereunder, and
provided further that the Executive receives written approval in advance from
Management for any outside business activity that may require significant
expenditure of the Executive’s time in which the Executive plans to become
involved, whether or not such activity is pursued for profit. The Executive
shall be excused from performing any services hereunder during periods of
temporary incapacity and during vacations in accordance with the Corporation’s
disability and vacation policies.

1.3 Place of Performance. The Executive shall be employed at the principal
offices of the Corporation located in New York, New York, except for required
travel on the Corporation’s business.

 

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1.4 Compensation and Related Matters.

(a) Base Compensation. In consideration of her services during the Term, the
Corporation shall pay the Executive cash compensation at an annual rate of not
less than nine hundred thousand dollars ($900,000) (“Base Compensation”), less
applicable withholdings. Executive’s Base Compensation shall be subject to such
increases as may be approved by the Board or Management. The Base Compensation
shall be payable as current salary, in installments not less frequently than
monthly, and at the same rate for any fraction of a month unexpired at the end
of the Term.

(b) Bonus. During the Term, the Executive shall have the opportunity to earn an
annual bonus in accordance with any annual bonus program that the Corporation
maintains that would be applicable to the Executive and that is in accordance
with the Executive’s Term Sheet.

(c) Stock Awards. During the Term, the Executive shall be eligible to
participate in the Polo Ralph Lauren Corporation 1997 Long-Term Stock Incentive
Plan (the “Incentive Plan”). All grants to the Executive of stock options,
restricted shares and restricted performance share units (“RPSUs”), if any, are
governed by the terms of the Incentive Plan and are subject, in all cases, to
approval by the Compensation Committee of the Board of Directors (the
“Compensation Committee”) in its sole discretion. In accordance with the
Executive’s Term Sheet and with the terms of the Incentive Plan, and subject to
approval by the Compensation Committee in its sole discretion, the Executive
shall receive, during the Term, annual grants of stock options and RPSUs that
are equivalent to the award amounts specified in the Executive’s Term Sheet,
subject to Executive’s continued employment at the time of each such grant. Such
stock options and RPSUs shall vest in accordance with the terms of the Incentive
Plan. The Committee has the right, in its good faith discretion, to reduce the
value of any annual award provided to the Executive in accordance with the Term
Sheet.

(d) Car and Driver Allowance. During the Term, the Corporation shall reimburse
the Executive for the use of a car and driver.

(e) Expenses. During the Term, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
performing services hereunder, including all reasonable expenses of travel and
living while away from home, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Corporation.

(f) Vacations. During the Term, the Executive shall be entitled to the number of
vacation days in each fiscal year, and to compensation in respect of earned but
unused vacation days, determined in accordance with the Corporation’s vacation
program. The Executive shall also be entitled to all paid holidays given by the
Corporation to its employees.

(g) Other Benefits. The Executive shall be entitled to participate in all of the
Corporation’s employee benefit plans and programs in effect during the Term as
would by their terms be applicable to the Executive, including, without
limitation, any pension and retirement plan, supplemental pension and retirement
plan, deferred compensation plan,

 

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incentive plan, stock option plan, life insurance plan, medical insurance plan,
dental care plan, accidental death and disability plan, and vacation, sick leave
or personal leave program. The Corporation shall not make any changes in such
plans or programs that would adversely affect the Executive’s benefits
thereunder, unless such change occurs pursuant to a program applicable to other
similarly situated employees of the Corporation and does not result in a
proportionately greater reduction in the rights or benefits of the Executive as
compared with other similarly situated employees of the Corporation. Except as
otherwise specifically provided herein, nothing paid to the Executive under any
plan or program presently in effect or made available in the future shall be in
lieu of the Base Compensation or any bonus payable under Sections 1.4(a) and
1.4(b) hereof.

ARTICLE II

TERMINATION OF EMPLOYMENT

2.1 Termination of Employment. The Executive’s employment may terminate prior to
the expiration of the Term under the following circumstances:

(a) Without Cause. The Executive’s employment may terminate upon the Corporation
notifying the Executive that her services will no longer be required, including
at the end of the Term.

(b) Death. The Executive’s employment shall terminate upon the Executive’s
death.

(c) Disability. If, as a result of the Executive’s incapacity due to physical or
mental illness, the Executive shall have been absent and unable to perform the
duties hereunder on a full-time basis for an entire period of six consecutive
months, the Executive’s employment may be terminated by the Corporation
following such six-month period.

(d) Cause. The Corporation may terminate the Executive’s employment for Cause.
For purposes hereof, “Cause” shall mean: (1) the willful and continued failure
by the Executive to substantially perform her duties hereunder after demand for
substantial performance is delivered to her by the Corporation that specifically
identifies the manner in which the Corporation believes the Executive has not
substantially performed her duties, (2) Executive’s conviction of, or plea of
nolo contendere to, a crime (whether or not involving the Corporation)
constituting any felony or (3) the willful engaging by the Executive in gross
misconduct relating to the Executive’s employment that is materially injurious
to the Corporation, monetarily or otherwise (including, but not limited to,
conduct that constitutes competitive activity, in violation of Article III) or
which subjects, or if generally known would subject, the Corporation to public
ridicule. For purposes of this paragraph, no act, or failure to act, on the
Executive’s part shall be considered “willful” unless done, or omitted to be
done, by her not in good faith and without reasonable belief that her action or
omission was in the best interest of the Corporation. Notwithstanding the
foregoing, the Executive’s employment may be terminated for Cause only by act of
the Board of Directors of the Corporation and, in any event, the Executive’s
employment shall not be deemed to have been terminated for Cause without
(x) reasonable written notice to the Executive setting forth the reasons for the
Corporation’s intention to terminate for Cause, (y) the opportunity to cure (if
curable) within 30 days of such written notice of the event(s) giving rise to
such notice and (z) an opportunity for the Executive, together with her counsel,
to be heard by the Board of Directors of the Corporation.

 

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(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 and/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.

2.2 Date of Termination. The date of termination shall be:

(a) if the Executive’s employment is terminated by the Executive’s death, the
date of the Executive’s death;

(b) if the Executive’s employment is terminated by reason of Executive’s
disability pursuant to Section 2.1(c) or by the Corporation pursuant to
Sections 2.1(a) or 2.1(d), the date specified by the Corporation; and

(c) if the Executive’s employment is terminated by the Executive, the date on
which the Executive notifies the Corporation of her termination.

2.3 Effect of Termination of Employment.

(a) If the Executive’s employment is terminated by the Corporation Without Cause
pursuant to Section 2.1(a), or if the Executive resigns for Good Reason pursuant
to Section 2.1(e), the Executive shall only be entitled to the following:

(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

 

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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.

(ii) Stock Awards. The Executive shall immediately vest in any unvested stock
options as of the date of termination of the Executive’s employment. With
respect to vested stock options, if any, the Executive shall have one year
(except as provided for in Section 4.1(a)) from the date of termination of
Executive’s employment to exercise any vested options, but in no event later
than the expiration date of such vested options. With respect to any unvested
pro-rata RPSUs and unvested cliff RPSUs awarded through the date on which the
Executive’s employment terminates, except as provided for in Section 4.1(a):
(1) any unvested pro-rata RPSUs will fully vest upon the Corporation’s
attainment of the applicable performance goals and will be paid in their
entirety as per the terms of the Incentive Plan as soon as practicable (but in
no event later than 30 days) after each applicable vesting date without regard
to Executive’s continued employment; and (2) any unvested cliff RPSUs will
remain outstanding and the Executive will vest in such cliff RPSUs at the end of
the applicable performance period based on the Corporation’s actual degree of
achievement of the applicable performance goals, as described in the Term Sheet,
and any such cliff RPSUs will be paid in their entirety as per the terms of the
Incentive Plan as soon as practicable (but in no event later than 30 days) after
each applicable vesting date, without regard to Executive’s continued
employment.

(iii) Welfare Plan Coverages. The Executive shall continue to participate during
the Severance Period in any group medical, dental or life insurance plan she
participated in prior to the date of her termination, under substantially
similar terms and conditions as an active employee (i.e., the Corporation will
continue to pay the Corporation’s portion of the costs of such participation);
provided that participation in such group medical, dental or life insurance plan
shall correspondingly cease at such time as the Executive becomes eligible for a
future employer’s medical, dental and/or life insurance coverage (or would
become eligible if the Executive did not waive coverage).

(iv) Retirement Plans. Without limiting the generality of the foregoing, it is
specifically provided that the Executive shall not accrue additional benefits
under any pension plan of the Corporation (whether or not qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended) during the
Severance Period.

(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

 

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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 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 Corporation 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).

(b) If the Executive’s employment is terminated by reason of the Executive’s
death or disability, pursuant to Sections 2.1(b) or 2.1(c), the Executive (or
the Executive’s designee or estate) shall only be entitled to whatever welfare
plans benefits are available to the Executive pursuant to the welfare plans the
Executive participated in prior to such termination, and whatever stock awards
may have been provided to the Executive by the Corporation the terms of which
shall be governed by the provisions of the Corporation’s Incentive Plan and the
respective award agreements, if any, under which such stock awards were
provided.

(c) If the Executive’s employment is terminated by the Corporation for Cause or
by the Executive without Good Reason (as defined in Section 2.1(e)), the
Executive shall receive only that portion of the Executive’s then current Base
Compensation payable through the Executive’s termination date. The Executive’s
rights with respect to any stock awards provided to the Executive by the
Corporation shall be governed by the provisions of the Corporation’s Incentive
Plan and the respective award agreements, if any, under which such stock awards
were provided.

 

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(d) If the Corporation elects not to renew Executive’s employment at the end of
the Term, the Corporation shall provide Executive with written notice if its
decision at least six (6) months prior to the end of the Term, and such a
termination will be considered a termination Without Cause as defined in
Section 2.1(a).

ARTICLE III

COVENANTS OF THE EXECUTIVE

3.1 Non-Compete.

(a) The Corporation and the Executive acknowledge that: (i) the Corporation has
a special interest in and derives significant benefit from the unique skills and
experience of the Executive; (ii) the Executive will use and have access to
proprietary and valuable Confidential Information (as defined in Section 3.2
hereof) during the course of the Executive’s employment; and (iii) the
agreements and covenants contained herein are essential to protect the business
and goodwill of the Corporation or any of its subsidiaries, affiliates or
licensees. Accordingly, except as hereinafter noted, the Executive covenants and
agrees that during the Term and for the period of one (1) year following the
termination of Executive’s employment for any reason, the Executive shall not
provide any labor, work, services or assistance (whether as an officer,
director, employee, partner, agent, owner, independent contractor, consultant,
stockholder or otherwise) to a “Competing Business.” For purposes hereof,
“Competing Business” shall mean any business engaged in the designing, marketing
or distribution of premium lifestyle products, including but not limited to
apparel, home, accessories and fragrance products, which competes in any
material respects with the Corporation or any of its subsidiaries, affiliates or
licensees, and shall include, without limitation, those brands and companies
that the Corporation and the Executive have jointly designated in writing on the
date hereof, which is incorporated herein by reference and which is attached as
Schedule A, as being in competition with the Corporation or any of its
subsidiaries, affiliates or licensees as of the date hereof. Thus, Executive
specifically acknowledges that Executive understands that she may not become
employed by any Competing Business in any capacity during the Term, provided
that the Executive may own, solely as an investment, securities of any entity
which are traded on a national securities exchange if the Executive is not a
controlling person of, or a member of a group that controls such entity and does
not, directly or indirectly, own 2% or more of any class of securities of such
entity.

(b) The non-compete provisions of this Section shall no longer be applicable to
Executive if she has been notified pursuant to Section 2.1(a) hereof that her
services will no longer be required or if the Executive has terminated her
employment for Good Reason pursuant to Section 2.1(e).

(c) It is acknowledged by the Executive that the Corporation has determined to
relieve the Executive from any obligation of non-competition upon the expiration
of one (1) year following the termination of Executive’s employment for any
reason, and/or if the Corporation terminates the Executive’s employment under
Section 2.1(a) or if the Executive has terminated her employment for Good Reason
pursuant to Section 2.1(e). In consideration of that, and in consideration of
all of the compensation provisions in this Agreement (including the potential
for the award of stock options, restricted shares and/or RPSUs and severance
payments

 

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that may be provided to the Executive), Executive agrees to the provisions of
Section 3.1(a) and also agrees that the non-competition obligations imposed
herein are fair and reasonable under all the circumstances.

3.2 Confidential Information.

(a) The Corporation owns and has developed and compiled, and will own, develop
and compile, certain proprietary techniques and confidential information as
described below which have great value to its business (referred to in this
Agreement, collectively, as “Confidential Information”). Confidential
Information includes not only information disclosed by the Corporation and/or
its affiliates, subsidiaries and licensees to Executive, but also information
developed or learned by Executive during the course of, or as a result of,
employment hereunder, which information Executive acknowledges is and shall be
the sole and exclusive property of the Corporation. Confidential Information
includes all proprietary information that has or could have commercial value or
other utility in the business in which the Corporation is engaged or
contemplates engaging, and all proprietary information the unauthorized
disclosure of which could be detrimental to the interests of the Corporation.
Whether or not such information is specifically labeled as Confidential
Information by the Corporation is not determinative. By way of example and
without limitation, Confidential Information includes any and all information
developed, obtained or owned by the Corporation and/or its subsidiaries,
affiliates or licensees concerning trade secrets, techniques, know-how
(including designs, plans, procedures, processes and research records),
software, computer programs, innovations, discoveries, improvements, research,
development, test results, reports, specifications, data, formats, marketing
data and plans, business plans, strategies, forecasts, unpublished financial
information, orders, agreements and other forms of documents, price and cost
information, merchandising opportunities, expansion plans, designs, store plans,
budgets, projections, customer, supplier and subcontractor identities,
characteristics and agreements, and salary, staffing and employment information.
Notwithstanding the foregoing, Confidential Information shall not in any event
include (A) Executive’s personal knowledge and know-how relating to
merchandising and business techniques which Executive has developed over her
career in the apparel business and of which Executive was aware prior to her
employment, or (B) information which (i) was generally known or generally
available to the public prior to its disclosure to Executive; (ii) becomes
generally known or generally available to the public subsequent to disclosure to
Executive through no wrongful act of any person or (iii) which Executive is
required to disclose by applicable law or regulation (provided that Executive
provides the Corporation with prior notice of the contemplated disclosure and
reasonably cooperates with the Corporation at the Corporation’s expense in
seeking a protective order or other appropriate protection of such information).

(b) Executive acknowledges and agrees that in the performance of her duties
hereunder the Corporation will from time to time disclose to Executive and
entrust Executive with Confidential Information. Executive also acknowledges and
agrees that the unauthorized disclosure of Confidential Information, among other
things, may be prejudicial to the Corporation’s interests, and an improper
disclosure of trade secrets. Executive agrees that she shall not, directly or
indirectly, use, make available, sell, disclose or otherwise communicate to any
corporation, partnership, individual or other third party, other than in the
course of her assigned duties and for the benefit of the Corporation, any
Confidential Information, either during her Term of employment or thereafter.

 

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(c) The Executive agrees that upon leaving the Corporation’s employ, the
Executive shall not take with the Executive any software, computer programs,
disks, tapes, research, development, strategies, designs, reports, study,
memoranda, books, papers, plans, information, letters, e-mails, or other
documents or data reflecting any Confidential Information of the Corporation,
its subsidiaries, affiliates or licensees.

(d) During the Term, Executive shall disclose to the Corporation all designs,
inventions and business strategies or plans developed for the Corporation,
including without limitation any process, operation, product or improvement.
Executive agrees that all of the foregoing are and shall be the sole and
exclusive property of the Corporation and that Executive shall at the
Corporation’s request and cost do whatever is necessary to secure the rights
thereto, by patent, copyright or otherwise, to the Corporation.

3.3 Non-Solicitation of Employees. The Executive covenants and agrees that
during the Term, and for a period of two (2) years following the termination of
Executive’s employment for any reason whatsoever hereunder, the Executive shall
not directly or indirectly solicit or influence any other employee of the
Corporation, or any of its subsidiaries, affiliates or licensees, to terminate
such employee’s employment with the Corporation, or any of its subsidiaries,
affiliates or licensees, as the case may be, or to become employed by a
Competing Business. As used herein, “solicit” shall include, without limitation,
requesting, encouraging, enticing, assisting, or causing, directly or
indirectly.

3.4 Nondisparagement. The parties agree that during the Term and thereafter
whether or not the Executive is receiving any amounts pursuant to Sections 2.3
and 4.1, the parties shall not make any statements or comments that reasonably
could be considered to shed an adverse light on the Executive or the business or
reputation of the Corporation or any of its subsidiaries, affiliates or
licensees, the Board or any officer of the Corporation or any of its
subsidiaries, affiliates or licensees; provided, however, the foregoing
limitation shall not apply to (i) compliance with legal process or subpoena, or
(ii) statements in response to an inquiry from a court or regulatory body.

3.5 Remedies.

(a) If the Executive breaches, or threatens to commit a breach of, any of the
provisions of this Article III, the Corporation shall have the following rights
and remedies, each of which rights and remedies shall be independent of the
other and severally enforceable, and all of which rights and remedies shall be
in addition to, and not in lieu of, any other rights and remedies available to
the Corporation under law or equity:

(i) The right and remedy to have the obligations specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach of such obligations in this Article III will cause
irreparable injury to the Corporation and that money damages will not provide an
adequate remedy to the Corporation; and

 

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(ii) The right to discontinue the payment of any amounts owing to the Executive
under the Agreement; provided that the Corporation shall have secured a reasoned
opinion of counsel that the Executive’s activities constitute a material breach
of the obligations in this Article III and which shall have been provided to the
Executive, the delivery of which shall not be deemed to be a waiver of any
applicable privilege. To the extent Executive, by notice hereunder, disputes the
discontinuance of any payments hereunder, such payments shall be segregated and
deposited in an interest bearing account at a major financial center bank in New
York City pending resolution of the dispute.

(b) If any court or arbitrator determines that any of the obligations in this
Article III, or any part thereof, is invalid or unenforceable, the remainder of
the obligations in this Article III shall not thereby be affected and shall be
given full effect, without regard to the invalid portion. In addition, if any
court or arbitrator construes any of the obligations in this Article III, or any
part thereof, to be unenforceable because of the duration of such provision or
the area covered thereby, such court shall have the power to reduce the duration
or area of such provision and, in its reduced form, such provision shall then be
enforceable and shall be enforced.

3.6 The provisions of this Article III shall survive the termination of this
Agreement and Executive’s Term of employment.

ARTICLE IV

CHANGE IN CONTROL

4.1 Change in Control.

(a) Effect of a Change in Control. Notwithstanding anything contained herein to
the contrary, if the Executive’s employment is terminated within twelve
(12) months following a Change in Control (as defined in Section 4.1(b) hereof)
during the Term by the Corporation for any reason other than Cause, then:

(i) Severance. The Corporation shall pay to the Executive, in lieu of any
amounts otherwise due to her under Section 2.3(a) hereof, within fifteen
(15) days of the Executive’s termination of employment, or within the timeframe
required by Section 2.3(a)(v) hereof if applicable, a lump sum amount equal to
two (2) times the sum of: (A) the Executive’s Base Compensation, as in effect
immediately prior to such termination of employment; and (B) the bonus paid to
the Executive for the most recently completed fiscal year prior to the fiscal
year in which her employment is terminated. Notwithstanding the foregoing, to
the extent that any portion of the severance pay that would have otherwise been
due to the Executive under Section 2.3(a)(i) (had a Change in Control not
occurred during the twelve-month period prior to such termination of employment)
would have been subject to Code Section 409A by reason of its failure to qualify
as a short-term deferral for purposes of Treas. Reg. Section 1.409A-1(b)(4) or
as non-deferred separation pay under Treas. Reg. Section 1.409A-1(b)(9) (the
“409A Severance Pay”) and that the exception set forth in Treas. Reg.
Section 1.409A-3(c) is not available, the 409A Severance Pay shall be deducted
from the amount otherwise payable in a lump sum in accordance with the first
sentence of this Section 4.1(a)(i) and shall instead be payable to Executive in
the form and on the schedule specified in Section

 

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2.3(a)(i) as if the Executive’s employment had been terminated pursuant to
Section 2.3(a) hereof rather than within a twelve-month period following a
Change in Control but subject to Section 2.3(a)(v).

(ii) Stock Awards. Subject to Section 2.3(a)(v), the Executive shall immediately
become vested in any unvested stock options granted to the Executive by the
Corporation prior to the Change in Control and Executive will have six
(6) months from the date of termination under this circumstance to exercise all
vested options (but in no event later than the expiration date of such
options). In addition, subject to Section 2.3(a)(v), any awards of RPSUs and
restricted shares which are unvested shall be deemed vested immediately prior to
such Change in Control. Subject to Section 2.3(a)(v), payments to the Executive
with respect to any RPSUs whose vesting accelerates as described in this
Section 4.1(a)(ii) will be calculated as if any applicable performance goals had
been achieved at the specified target level and made as per the terms of the
Incentive Plan but in no event later than thirty (30) days after the applicable
vesting date.

(b) Definition. For purposes hereof, a “Change in Control” shall mean the
occurrence of any of the following:

(i) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Corporation to any “person” or “group” (as such terms are used in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934 (“Act”)) other than
Permitted Holders;

(ii) any person or group is or becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Act, except that a person shall be deemed to
have “beneficial ownership” of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50 percent of the total voting
power of the voting stock of the Corporation, including by way of merger,
consolidation or otherwise; provided, however, that for purposes of this
Agreement, the following acquisitions shall not constitute a Change in Control:
(I) any acquisition by the Corporation or any Affiliate, (II) any acquisition by
any employee benefit plan sponsored or maintained by the Corporation or any
Affiliate, (III) any acquisition by one or more of the Permitted Holders, or
(IV) any acquisition which complies with clauses (A), (B) and (C) of subsection
(v) below;

(iii) during any period of twelve (12) consecutive months, Present and/or New
Directors cease for any reason to constitute a majority of the Board;

(iv) the Permitted Holders’ beneficial ownership of the total voting power of
the voting stock of the Corporation falls below 30 percent and either Ralph
Lauren is not nominated for a position on the Board of Directors, or he stands
for election to the Board of Directors and is not elected;

(v) the consummation of a reorganization, recapitalization, merger,
consolidation, statutory share exchange or similar form of corporate transaction
involving the Corporation that requires the approval of the Corporation’s
stockholders, whether

 

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for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:
(A) more than 50% of the total voting power of (x) the entity resulting from
such Business Combination (the “Surviving Company”), or (y) if applicable, the
ultimate parent entity that directly or indirectly has beneficial ownership of
sufficient voting securities eligible to elect a majority of the members of the
board of directors (or the analogous governing body) of the Surviving Company
(the “Parent Company”), is represented by the shares of voting stock of the
Corporation that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which the shares of voting
stock of the Corporation were converted pursuant to such Business Combination),
and such voting power among the holders thereof is in substantially the same
proportion as the voting power was among the holders of the shares of voting
stock of the Corporation that were outstanding immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan sponsored or
maintained by the Surviving Company or the Parent Company, or one or more
Permitted Holders), is or becomes the beneficial owner, directly or indirectly,
of 50% or more of the total voting power of the outstanding voting securities
eligible to elect members of the board of directors of the Parent Company (or
the analogous governing body) (or, if there is no Parent Company, the Surviving
Company) and (C) at least a majority of the members of the board of directors
(or the analogous governing body) of the Parent Company (or, if there is no
Parent Company, the Surviving Company) following the consummation of the
Business Combination were Board members at the time of the Board’s approval of
the execution of the initial agreement providing for such Business Combination;
or

(vi) the stockholders of the Corporation approve a plan of complete liquidation
or dissolution of the Corporation.

For purposes of this Section 4.1(b), the following terms have the meanings
indicated: “Permitted Holders” shall mean, as of the date of determination:
(A) any and all of Ralph Lauren, his spouse, his siblings and their spouses, and
descendants of them (whether natural or adopted) (collectively, the “Lauren
Group”); and (B) any trust established and maintained primarily for the benefit
of any member of the Lauren Group and any entity controlled by any member of the
Lauren Group. “Present Directors” shall mean individuals who at the beginning of
any one year period were members of the Board. “New Directors” shall mean any
directors whose election by the Board or whose nomination for election by the
shareholders of the Corporation was approved by a vote of a majority of the
directors of the Corporation who, at the time of such vote, were either Present
Directors or New Directors but excluding any such individual whose initial
assumption of office occurs solely as a result of an actual or threatened proxy
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board.

ARTICLE V

MISCELLANEOUS

5.1 Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or by facsimile or mailed
by United States registered mail, return receipt requested, postage prepaid,
addressed as follows:

 

If to the Executive:

   Jackwyn Nemerov    [Address Redacted]

 

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with a copy to:

   Miriam Wugmeister, Esq.    Morrison & Foerster LLP    1290 Avenue of the
Americas    New York, New York 10104    Fax: (212) 468-7900

If to the Corporation:

   Polo Ralph Lauren Corporation    650 Madison Avenue    New York, New York
10022    Attn: Mitchell A. Kosh    Senior Vice President - Human Resources   
Fax: (212) 318-7277

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

5.2 Modification or Waiver; Entire Agreement; End of Term. No provision of this
Agreement may be modified or waived except in a document signed by the Executive
and the Corporation. This Agreement, along with the Term Sheet and any other
documents incorporated herein by reference, constitutes the entire agreement
between the parties regarding their employment relationship and supersedes all
prior agreements, promises, covenants, representations or warranties, including,
without limitation, the Executive’s 2004 Employment Agreement with the
Corporation. To the extent that this Agreement is in any way inconsistent with
any prior or contemporaneous stock award agreements between the parties, this
Agreement shall control. No agreements or representations, oral or otherwise,
with respect to the subject matter hereof have been made by either party that
are not set forth expressly in this Agreement. Any extensions or renewals of
this Agreement must be in writing and must be agreed to by both the Corporation
and the Executive. Absent such extensions or renewals, this Agreement and all of
its terms and conditions, except for those provisions in Article III as
specified therein, shall expire upon the end of the Term.

5.3 Governing Law. The validity, interpretation, construction, performance, and
enforcement of this Agreement shall be governed by the laws of the State of New
York without reference to New York’s choice of law rules.

5.4 Arbitration. The Corporation and the Executive mutually agree that any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, or any other dispute between the parties arising from or related to
Executive’s employment with the Corporation, shall be submitted to mediation
before a mutually agreeable mediator. In the event mediation is unsuccessful in
resolving the claim or controversy, such claim or controversy shall be resolved
by arbitration. The Corporation and Executive agree that arbitration shall be
held in New York, New York, before a mutually agreed upon single arbitrator
licensed to practice law. The arbitrator shall have authority to award or grant
legal, equitable, and declaratory relief. Such arbitration shall be final and
binding on the parties and fees for any arbitration shall be paid by

 

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the losing party. If the parties are unable to agree on an arbitrator, the
matter may be submitted to JAMS Dispute Resolution solely for appointment of an
arbitrator. Any fees for mediation shall be split between the parties.

5.5 No Mitigation or Offset. In the event the Executive’s employment with the
Corporation terminates for any reason, the Executive shall not be obligated to
seek other employment following such termination and there shall be no offset of
the payments or benefits set forth herein.

5.6 Withholding. All payments required to be made by the Corporation hereunder
to the Executive or the Executive’s estate or beneficiaries shall be subject to
the withholding of such amounts as the Corporation may reasonably determine it
should withhold pursuant to any applicable law.

5.7 Attorney’s Fees. Each party shall bear its own attorney’s fees and costs
incurred in any action or dispute arising out of this Agreement and/or the
employment relationship.

5.8 No Conflict. Executive represents and warrants that she is not party to any
agreement, contract, understanding, covenant, judgment or decree or under any
obligation, contractual or otherwise, with any other party that in any way
restricts or adversely affects her ability to act for the Corporation in all of
the respects contemplated hereby, including but not limited to any obligations
to comply with any non-compete or non-solicitation provisions.

5.9 Enforceability. Each of the covenants and agreements set forth in this
Agreement are separate and independent covenants, each of which has been
separately bargained for and the parties hereto intend that the provisions of
each such covenant shall be enforced to the fullest extent permissible. Should
the whole or any part or provision of any such separate covenant be held or
declared invalid, such invalidity shall not in any way affect the validity of
any other such covenant or of any part or provision of the same covenant not
also held or declared invalid. If any covenant shall be found to be invalid but
would be valid if some part thereof were deleted or the period or area of
application reduced, then such covenant shall apply with such minimum
modification as may be necessary to make it valid and effective. The failure of
either party at any time to require performance by the other party of any
provision hereunder will in no way affect the right of that party thereafter to
enforce the same, nor will it affect any other party’s right to enforce the
same, or to enforce any of the other provisions in this Agreement; nor will the
waiver by either party of the breach of any provision hereof be taken or held to
be a waiver of any prior or subsequent breach of such provision or as a waiver
of the provision itself.

5.10 Miscellaneous. No right or interest to, or in, any payments shall be
assignable by the Executive; provided, however, that this provision shall not
preclude the Executive from designating in writing one or more beneficiaries to
receive any amount that may be payable after the Executive’s death and shall not
preclude the legal representative of the Executive’s estate from assigning any
right hereunder to the person or persons entitled thereto. If the Executive
should die while any amounts would still be payable to the Executive hereunder,
all such amounts shall be paid in accordance with the terms of this Agreement to
the Executive’s

 

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written designee or, if there be no such designee, to the Executive’s estate.
This Agreement shall be binding upon and shall inure to the benefit of, and
shall be enforceable by, the Executive, the Executive’s heirs and legal
representatives and the Corporation and its successors. The section headings
shall not be taken into account for purposes of the construction of any
provision of this Agreement.

5.11 Meaning of Signing This Agreement. By signing this Agreement, Executive
expressly acknowledges and agrees that (a) she has carefully read it and fully
understands what it means; (b) she has been advised in writing to discuss this
Agreement with an independent attorney of her own choosing before signing it and
has had a reasonable opportunity to confer with her attorney and has discussed
and reviewed this Agreement with her attorney prior to executing it and
delivering it to the Corporation; (c) she has had answered to her satisfaction
any questions she has with regard to the meaning and significance of any of the
provisions of this Agreement; and (d) she has agreed to this Agreement knowingly
and voluntarily of her own free will and was not subjected to any undue
influence or duress, and assents to all the terms and conditions contained
herein with the intent to be bound hereby.

5.12 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 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.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date and year first above written.

 

POLO RALPH LAUREN CORPORATION     /s/ Roger Farah     /s/ Jackwyn Nemerov By:
Roger Farah     JACKWYN NEMEROV Title: President & Chief Operating Officer    
Date: 9/29/09     Date: 10/14/09

 

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SCHEDULE A

[List Redacted]

 

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Exhibit 1

Term Sheet

Jackwyn Nemerov

October 14, 2009

 

Title:    Executive Vice President Additional Responsibility:    Asia and Home
will report directly to Ms. Nemerov Base Salary:    $900,000 annually Annual
Bonus:    Continue to participate in Executive Officer Annual Incentive Plan
(EOAIP)   

Target

   200% of salary        

Threshold

   100%          

Stretch

   250%          

Maximum

   300%           EOAIP goal based 100% on Corporate performance and EOAIP
Strategic Goal achievement. Executive’s bonus percentages as described above
shall be effective as of the beginning of Fiscal 2010. Annual Equity Award   
$3,000,000 value to be granted annually at the same time as annual awards to
other executives and under terms of the equity program as approved each year by
the Compensation Committee of the Board of Directors, including grant structure,
types of awards, conversion of value to actual number of shares, and other
applicable factors as determined by the Committee in its discretion. The
Committee will have the right to reduce the value of any such annual award in
its good faith discretion. Executive’s Annual Equity Award as described above
shall be effective as of the beginning of Fiscal 2010. One-half of the annual
equity award shall be in the form of Cliff Restricted Performance Share Units,
which shall follow the vesting formula below:       % of Goals

Achieved

  

  

  Annual Equity

RPSUs Vested

  

  

        Threshold    70 %    75 %       Target    100 %    100 %       Maximum
   110 %    150 %       Note: For performance between 70% and 110%, performance
will be interpolated

 

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Special Equity Award    35,000 Restricted Performance Share Units (“RPSUs”) to
be granted in fiscal years 2010 , 2011, 2012 and 2013 (for a total grant of
140,000 RPSUs) at the same time as annual awards to other executives (except as
noted below for fiscal year 2010) which is normally made in July of the prior
calendar year. Performance goals to be based on the same cumulative three-year
performance goals established and approved by the Compensation Committee for the
Cliff RPSU program each year. Provisions for this award are subject to the
equity program approved each year by the Compensation Committee. The Committee
will have the right, in its good faith discretion, to reduce the value of any
such annual award.       % of Goals
Achieved   
     Special Equity
RPSUs Vested   
           Threshold    70 %    75 %       Target or better    100 %    100 %
(cap)       Note: For performance between 70% and 100%, performance will be
interpolated    FY2010 annual and special equity awards to be granted within ten
(10) days of the Effective Date of Employment Agreement, subject to completion
of a signed Employment Agreement and approval by the Compensation Committee.
Conversion of annual grant value to be based on the Company’s standard procedure
of applying the applicable Fair Market Value 10 days before the grant date. Such
award to be made in Fiscal 2010 shall not be pro-rated. Term:    New Employment
Agreement ending on March 31, 2013 will be provided Car and Driver:    The
Corporation shall reimburse the Executive for the use of a car and driver.
Non-Compete/ Non Solicit    A non-compete/non-solicit clause will be included in
the new Employment Agreement consistent in terms of time periods with current
contract.

 

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