Exhibit 10.7

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of May 23, 2013 (this
“Agreement”), by and among MICHAEL KORS (USA), INC., a Delaware corporation
having its principal executive offices in New York County, New York (the
“Corporation”), MICHAEL KORS HOLDINGS LIMITED, a British Virgin Islands
corporation having its registered office in Road Town, Tortola, British Virgin
Islands (“MKHL”) and MICHAEL D. KORS, a resident of New York, New York (“Kors”).

IT IS AGREED AS FOLLOWS:

1. Term. The Corporation agrees to employ Kors, and Kors agrees to serve the
Corporation, for a term (the “Term”) that began on January 29, 2003 and ending
as provided herein, upon the terms and conditions set forth herein.

2. Offices and Positions; CEO Consultation. Throughout the Term, Kors shall have
the title of Honorary Chairman of the Board and Chief Creative Officer of the
Corporation and MKHL shall use its best efforts to cause Kors to be appointed or
elected, as the case may be, to the Boards of Directors of the Corporation (the
“Board”) and MKHL. During the Term, MKHL shall consult with Kors regarding the
hiring of any Chief Executive Officer (or equivalent executive officer) of MKHL
or the Corporation.

3. Duties.

(a) Throughout the Term, Kors shall devote substantially all of his business
time exclusively to the business of the Corporation and its affiliates to design
collections of apparel, accessories and related products as needed by the
Corporation and its affiliates and to promote the business and affairs of the
Corporation and its affiliates. It is agreed and understood that, during the
Term, Kors will have creative and aesthetic control of the products produced and
sold under or bearing the “MICHAEL KORS” trademark and any variation of such
name and the initials of such name in whatever form or style and all related
trade names, copyrights, logos and similar rights (the “Marks”), including
exclusive control of the design of such products; provided, that this sentence
shall not apply to any attempted exercise by Kors of the foregoing rights that
is not commercially reasonable.

(b) Throughout the Term, Kors shall not, without the prior written consent of
the Corporation, directly or indirectly, render services to or for any other
person or firm whether or not for compensation or engage in any activity that,
in either case, is in competition with the business of MKHL, the Corporation or
any other subsidiary of MKHL (MKHL and its subsidiaries collectively, the “MK
Group”); provided, however, that Kors may participate in charitable activities
not inconsistent with the intent of this Agreement. The making of passive
personal investments shall not be prohibited hereunder. For the avoidance of
doubt, the parties agree that, subject to Section 3(a), Kors may render services
with respect to the television show “Project Runway” and that such services are
not in competition with the business of MKHL, the Corporation or any other
subsidiary of MKHL for the purposes of this paragraph. In

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addition, subject to Section 3(a), Kors may participate in literary, theatrical
or artistic activities, but only if and to the extent that the Corporation shall
have determined in advance (in its reasonable discretion) that such activities
would not be detrimental to the Marks.

4. Compensation.

(a) Throughout the Term, the Corporation shall pay to Kors a salary (the “Base
Salary”) at the rate of $2,500,000 per annum, payable in periodic installments
in accordance with the Corporation’s customary payroll practices. Effective with
the Corporation’s fiscal year which ends on April 2, 2011, and for each complete
fiscal year during the Term (or, on a prorated basis for any period representing
less than a full fiscal year), Kors, as additional compensation hereunder, shall
be entitled to receive a bonus equal to 2.5% of MKHL’s consolidated earnings
before interest, taxes, depreciation and amortization (“EBITDA”) for such fiscal
year of the Term, up to a maximum bonus of $5,000,000 for any fiscal year (the
“Bonus Payment”). Such Bonus Payment shall be payable in a single lump sum cash
payment within thirty (30) days of the determination of EBITDA, and shall be
paid at such time that the Corporation generally makes bonus payments to its
executives; provided, however, that in any event such Bonus Payment shall be
paid during the calendar year in which the applicable fiscal year has ended.
EBITDA for any fiscal year shall be determined, and certified, by the accounting
firm that regularly performs the audit functions for MKHL, whose determination
shall be final and binding on the parties. Such determination shall be made in
accordance with applicable generally accepted accounting principles.

(b) In addition to what is required pursuant to Section 5, the Corporation may
pay, but shall have no obligation to pay, to Kors such additional compensation
in the form of bonuses, fringe benefits or otherwise in such amounts and at such
times as the Compensation Committee of the Board of MKHL (the “Compensation
Committee”) shall from time to time determine in its sole and absolute
discretion.

(c) In the event that following the IPO, the compensation payable to you
hereunder becomes (or is reasonably likely to become) subject to the deduction
limitations of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), taking into account the application of any applicable transition
period under Section 162(m) of the Code and the regulations promulgated
thereunder, the parties agree to negotiate in good faith to implement as
promptly as possible such revisions to the structure (including the timing, form
and type) of such compensation so as to achieve to the greatest extent possible
full tax deductibility of such compensation under Section 162(m) of the Code;
provided, however, that in no event shall any such revisions result in a
reduction in the aggregate amount of compensation otherwise contemplated to be
payable to Kors hereunder or otherwise cause Kors to incur any tax, penalty or
interest charge under Section 409A of the Code.

 

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5. Benefits.

(a) In addition to the compensation described in Section 4, during the Term,
Kors shall be entitled to the following:

(i) Kors shall be entitled to participate in all Corporation employee benefit
plans (to the extent Kors is eligible therefor), including, without limitation,
any health and retirement plans (but, except as otherwise provided in this
Agreement or as determined by the Compensation Committee of the Board, excluding
bonus and equity-based plans), in each case subject to any applicable laws which
shall be in effect from time to time and on the same basis as is available to
the other senior officers of the Corporation. If any such benefit plan shall be
unavailable to Kors by reason of his nationality or residence, the Corporation
shall use it best efforts to provide a substantially equivalent benefit, through
another source, at its expense.

(ii) The Corporation shall provide the health and medical insurance coverage
referred to in Section 5(a)(i) above at its own cost without contribution from
Kors. The Corporation also shall pay during the Term the premiums on (A) the
whole life insurance policy (the “Whole Life Policy”) currently in place on the
life of Kors and (B) the $500,000 term life insurance policy (the “Term Life
Policy”) currently in place on the life of Kors, both of which policies are
owned by Kors. Upon termination of this Agreement, the Corporation shall cease
to pay premiums on the Whole Life Policy and the Term Life Policy and Kors shall
thereafter be solely responsible for the payment of any premiums on both such
policies.

(iii) Reimbursement of reasonable out-of-pocket professional costs incurred for
the preparation of any of his tax returns to be filed in the United States.

(iv) Membership in a health club, at the request of Kors.

(v) The Corporation shall provide Kors with an automobile and driver for
transportation to and from the Corporation’s offices and for other business
purposes. Such automobile shall be a Mercedes-Benz S-Class or an automobile at
least substantially equivalent in price thereto.

(b) In addition to the foregoing, Kors acknowledges and agrees that the
Corporation may apply for, and purchase, key-man life insurance covering Kors
(the “Key-Man Insurance”). The Corporation shall own all rights in any such
Key-Man Insurance policies and the proceeds thereof, and Kors shall not have any
right, title or interest therein. Kors agrees to assist the Corporation, at the
Corporation’s expense, in obtaining such Key-Man Insurance by, among other
things, submitting to the customary examinations and correctly preparing,
signing and delivering such applications and other documents as may be required
by potential insurers.

 

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(c) Anything to the contrary herein notwithstanding, in the event of the
occurrence of a condition that may with the passage of time constitute a
Permanent Disability (as defined below) of Kors, then the Corporation shall
continue to pay to Kors his Base Salary and all other compensation and benefits
owed to Kors hereunder until the termination of this Agreement as provided in
Section 10 below, less any payments received by Kors from any disability
insurance policy whose premiums are paid by the Corporation. For purposes of
this Agreement, the term “Permanent Disability” shall mean any mental or
physical condition that: (i) prevents Kors from reasonably discharging his
services and employment duties hereunder; (ii) is attested to in writing by a
physician who is licensed to practice in the State of New York and is mutually
acceptable to Kors and the Corporation (or, if Kors and the Corporation are
unable to mutually agree on a physician, the Board may select a physician who is
a chairman of a department of medicine at a university-affiliated hospital in
the City of New York); and (iii) continues, for any one or related condition,
during any period of six (6) consecutive months or for a period aggregating six
(6) months in any twelve-month period; and such Permanent Disability shall be
deemed to have occurred on the last day of such applicable six-month period.

6. Vacation; Meetings.

Kors shall be entitled to five weeks of vacation annually, and such additional
vacation time as may be agreed to by any Chairman of the Board of the
Corporation. Kors shall be entitled to additional time off for attendance at
meetings, conventions and educational courses, as any Chairman or of the Board
of the Corporation may from time to time allow.

7. Expenses; Indemnification.

(a) The Corporation shall reimburse Kors for the reasonable business expenses
(including travel at the highest class of service available) incurred by Kors in
the course of performing his duties for the Corporation, subject to Kors’
compliance with the policies and procedures for reimbursement generally in
effect from time to time for senior officers of the Corporation.

(b) The Corporation and/or MKHL (as applicable) will indemnify Kors and hold him
harmless to the maximum extent permitted by applicable law, against all costs,
charges, liabilities and expenses incurred or sustained by him in connection
with any action, suit, claim or proceeding to which he may be made a party by
reason of his being an officer, director or employee of the Corporation or of
any affiliate of the Corporation; provided, however, that in no event shall Kors
be indemnified for acts taken by him in bad faith or in breach of his duty of
loyalty to the Corporation or MKHL under applicable law. Notwithstanding the
foregoing, Kors’ indemnification and hold harmless rights under this Section 7
shall in no event be less favorable in any respect than the terms of any
indemnification and hold harmless rights provided by the Corporation and/or MKHL
to any senior officer of the Corporation under an employment agreement,
indemnification agreement or otherwise. The provisions of this subsection (b)
shall survive the termination of this Agreement.

 

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8. Confidentiality; Intellectual Property Rights.

(a) Kors acknowledges that his work for and with the Corporation and its
affiliates will bring him into close contact with the confidential affairs of
the Corporation and its affiliates, including, without limitation, confidential
information and trade secrets concerning the Corporation’s and its affiliates’
working methods, processes, business and other plans, programs, designs,
products, profit formulas, customer names, customer requirements and supplier
names (collectively, “Confidential Information”). “Confidential Information”
shall not include (i) information generally known to the public,
(ii) information properly received by Kors outside his engagement with the
Corporation (or any predecessor or affiliate of the Corporation) from any third
party not affiliated with the Corporation (or any affiliate of the Corporation)
and not under any duty to the Corporation not to disclose such information, and
(iii) any materials, including designs and products created by Kors and which
are otherwise “Confidential Information”, to the extent approved in writing by
the Corporation, which approval shall not be unreasonably withheld. Kors
acknowledges that such Confidential Information is reposed in him in trust and
he shall, both during and for a period of three years after the Term (or such
longer period as the Corporation may be bound to keep any such Confidential
Information confidential pursuant to any agreement or otherwise), maintain such
Confidential Information in confidence and, except as may be required under
applicable law, neither disclose to others nor use such Confidential Information
personally without written permission of the Corporation. Kors agrees, upon
termination of this Agreement, to return to the Corporation all documents or
recorded material of any type (including all copies thereof) which may be in his
possession or under his control dealing with the Confidential Information.

(b) All trademarks, designs, copyrights and other intellectual property created
by or at the direction of Kors in the course of his employment by the
Corporation shall remain the property of, and be exclusively owned by, the
Corporation without further act of either party. Kors shall, at the reasonable
request of the Corporation, execute such documents as may be reasonably
necessary to confirm or evidence the Corporation’s ownership of such property.

(c) The obligations of this Section 8 shall survive the termination of this
Agreement. Notwithstanding anything to the contrary set forth herein or in any
other agreement to which Kors, on the one hand, and the Corporation or any of
its affiliates, on the other hand, are parties or by which they are bound, the
obligations of confidentiality contained herein and therein, as they relate to
the transactions contemplated by this Agreement, shall not apply to the
“structure or the tax aspects” (as that phrase is used in
Section 1.6011-4T(a)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Code) of such transactions.

9. Notices.

Any notice or request permitted or required hereunder shall be in writing deemed
sufficient when delivered in person or mailed by certified mail, postage
prepaid, or transmitted by facsimile, and addressed if to the Corporation or
MKHL, c/o the Corporation at the

 

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Corporation’s principal executive offices in New York, New York, Facsimile No.:
(646) 354-4826, Attn: Chief Executive Officer, and if to Kors, to his home
address on file with the Company, with copy to:

Patterson Belknap, Webb & Tyler LLP

1133 Avenue of the Americas

New York, New York 10036-6710

Attention: Peter J. Schaeffer, Esq.

Facsimile No.: (212) 336-2222

or to such other address as may be provided by such notice.

10. No Termination.

(a) The Corporation may not terminate the Agreement and Kors’ employment
hereunder for any reason other than Cause (as defined below). It is expressly
understood that Kors is to be employed hereunder until he dies or becomes
Permanently Disabled (in which case this Agreement shall immediately terminate
and the Corporation shall only be liable to promptly pay to Kors or his estate
(as applicable) the Accrued Obligations and Pro Rata Bonus Payment (each as
defined below)); provided, however, that Kors has not been terminated for Cause
as aforesaid. In the event that the Corporation materially breaches its
obligations hereunder, including, without limitation, the Corporation’s
obligations to make payments pursuant to Section 4 hereof then upon thirty
(30) days notice to the Corporation (which notice shall describe the
Corporation’s breach in reasonable detail), unless the Corporation (i) cures
such breach within such thirty (30)-day period (or, if the breach cannot
reasonably be cured within such thirty (30)-day period, initiates all possible
action that substantially cures the breach within such thirty (30)-day period)
to Kors’ reasonable satisfaction (which curative action, at a minimum, places
Kors in a no less favorable economic and financial position than he would have
been in had the breach not occurred) and (ii) provides evidence satisfactory to
Kors that the Corporation has done so, Kors may terminate his employment under
this Agreement and in such event shall be relieved of all his further
obligations hereunder and entitled to exercise any rights and remedies he may
have at law or in equity with respect to such material breach. In the event of
such termination due to breach by the Corporation, the Corporation shall, in
addition and not in limitation to any other rights and remedies Kors may have
hereunder, at law or in equity, (A) promptly pay Kors any Base Salary earned but
not yet paid prior to the date of termination, and reimburse Kors for any
expenses pursuant to Section 7(a) (collectively, the “Accrued Obligations”) and
(B) at the time the Bonus Payment would otherwise be payable under Section 4(a)
with respect to the fiscal year of the Corporation in which such termination
occurs, pay Kors the pro rated Bonus Payment specified in Section 4(a) that
would otherwise have been payable to Kors in respect of such fiscal year (the
“Pro Rata Bonus Payment”).

“Cause” shall mean: (i) the material breach by Kors of any material provision
contained in this Agreement (including, without limitation, the provisions set
forth in Section 3 hereof), which breach continues without the cure thereof by
Kors for a period of thirty (30) days following written notice thereof from the
Corporation to Kors (which

 

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notice shall describe Kors’ breach in reasonable detail); (ii) the conviction of
Kors for fraudulent or criminal conduct adversely affecting the Corporation;
(iii) the commission by Kors of any willful, reckless, or grossly negligent act
which has a material adverse effect on the Corporation or its products,
trademarks or goodwill (including, without limitation, the reputation thereof).

(b) If Kors shall terminate his employment under this Agreement without the
consent of the Corporation other than by reason of Kors’ death, Permanent
Disability or pursuant to the third sentence of Section 10(a) of this Agreement,
the obligations of the Corporation, other than for the Accrued Obligations,
shall cease and, subject to Section 11, the parties hereto shall be relieved of
all further obligations hereunder.

(c) If Kors’ employment is terminated by the Corporation for Cause, (i) MKHL
shall have the option to purchase all of the ordinary shares and/or other equity
interests of MKHL held directly or indirectly by Kors for their book value as of
the last day of the calendar month immediately preceding such termination, as
determined by MKHL’s independent auditors in accordance with U.S. generally
accepted accounting principles, consistently applied, and (ii) other than for
the Accrued Obligations, the Corporation shall be relieved of all further
obligations hereunder. If the Corporation makes the election to purchase all the
ordinary shares and/or other equity interests pursuant to this Section 10(c), it
shall provide a written notice to Kors of such election within thirty (30) days
of such termination, the closing for such purchase shall occur as promptly as
practicable but in no event more than thirty (30) days following such notice and
the purchase price shall be paid in cash in a single lump sum at such closing.

11. Kors Non-Competition. If Kors shall have terminated this Agreement pursuant
to Section 10(b), for the remainder of Kors’ lifetime, (i) Kors agrees to serve
as an independent and exclusive design consultant to the Corporation for a fee
of $1,000,000 per year, payable monthly in arrears in equal installments with
such duties as shall be mutually agreed in good faith at such time, and (ii) in
consideration thereof, Kors shall not, without the written consent of the Board,
engage anywhere in the world where the Corporation or any other member of the MK
Group is doing business, directly or indirectly, as a designer, consultant,
officer, director, employee, agent, proprietor, partner or shareholder in any
business (other than on behalf of the Corporation or any other member of the MK
Group) which engages in activities in competition with the Corporation or any
other member of the MK Group to the extent those activities were carried on by
the Corporation or any other member of the MK Group during the Term; provided,
however, that the Corporation may terminate such consulting arrangement and
cease making such payments at any time, in which event Kors’ obligations to
serve as a consultant to the Corporation and to comply with such non-competition
restrictions shall immediately terminate. Notwithstanding the foregoing, at any
time, Kors may own up to 5% of the common stock or other securities of any
public corporation and may have an interest as a limited partner in any
partnership provided he provides no services or advice of any kind to any such
corporation or partnership.

 

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12. Other Lines of Business; Transfer or Encumbrance of Marks. The Corporation
and its subsidiaries shall not enter into any new line of business without the
consent of Kors if Kors shall reasonably determine that such line of business is
detrimental to the Marks.

13. Miscellaneous. This Agreement (i) constitutes the entire agreement between
the parties concerning the subjects hereof and supersedes all prior agreements,
(ii) may not be assigned by Kors without the prior written consent of the
Corporation, but shall be binding upon and inure to the benefit of Kors’ heirs,
legal representatives and permitted assigns (without limiting the generality of
the foregoing, the provisions of Sections 4 and 7 hereof specifically shall
inure to the benefit of such heirs, legal representatives, successors and
permitted assigns), (iii) may be assigned by the Corporation in connection with
any transfer of all or a substantial portion of the Corporation’s assets and
shall be binding upon, and inure to the benefit of, the Corporation’s successors
and assigns, and (iv) may not be amended, modified or supplemented except by a
writing signed by each party.

14. Arbitration. All disputes arising under this Agreement including but not
limited to any claim for specific performance under Section 15 of this Agreement
shall be submitted to binding arbitration in accordance with the rules of
commercial arbitration of the American Arbitration Association of the City of
New York. Any arbitration proceeding shall be conducted in New York, New York
before a single arbitrator or, if requested by either party, by a panel of three
arbitrators.

15. Specific Enforcement. In addition to any remedies available to the parties
at law, the parties each acknowledge that they would be irreparably damaged and
there would be no adequate remedy at law for breach of either’s obligations
hereunder and, accordingly, this Agreement is to be specifically enforced if not
performed according to its terms.

16. Severability. The provisions of this Agreement are severable. The invalidity
of any provision shall not affect the validity of any other provision.

17. Governing Law. This Agreement shall be construed and governed in all
respects under the laws of the State of New York (without reference to such
State’s conflict of law rules).

18. Headings. Headings in this Agreement are for convenience of reference only
and shall not define, limit or interpret the contents hereof.

19. Code Section 409A.

(a) It is the intention of the parties hereto that, to the extent any amounts or
benefits payable under or otherwise with respect to this Agreement constitute
nonqualified deferred compensation that is or may be subject to Section 409A of
the Code and the treasury regulations or other official pronouncements
thereunder (herein, collectively, “Section 409A”), the provisions of this
Agreement shall be interpreted and administered in a manner (which may, as
appropriate, include amendments to this Agreement) that will enable such amounts
or benefits to satisfy the requirements of Section 409A (either pursuant to
qualifying for an exemption from coverage under Section 409A or satisfying the
substantive provisions for compliance with such section).

 

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(b) For purposes of any reimbursement of expenses due to Kors or the provision
of in-kind benefits with respect to Kors (including, without limitation,
pursuant to Section 7 above), such reimbursements shall be made in a manner
consistent with Code Section 409A, including Treasury Regulation
Section 1.409A-3(i)(1)(iv). In that regard (i) the amount of expenses eligible
for reimbursement, or in-kind benefits provided, during a calendar year shall
not affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, (ii) the reimbursement of eligible expenses
shall be made on or before the end of the calendar year following the calendar
year in which the expense was incurred, and (iii) the right to reimbursement or
in-kind benefits shall not be subject to liquidation or exchange for another
benefit.

(c) In the event that any amount or benefit payable under or otherwise with
respect to this Agreement is conditioned on Kors’ termination of employment and
such amount or benefit is not otherwise exempt from Section 409A, such
termination of employment shall mean a “separation from service” within the
meaning of Section 409A. In addition, if any such payment is conditioned on a
separation from service by Kors and Kors shall then be a “specified employee”
(as defined in Treasury Regulation section 1.409A-1(i)), then, to the extent
necessary to avoid a violation of Section 409A, the portion of any such payment
that would otherwise be paid within the six-month period immediately following
Kors’ separation from service shall instead be deferred and paid in a single sum
on the first day following the end of such six-month period.

 

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IN WITNESS WHEREOF, this Agreement is entered into as of the day and year first
above written.

 

MICHAEL KORS (USA), INC. By:   /s/ John D. Idol  

Name: John D. Idol

Title:   Chairman and Chief Executive Officer

MICHAEL KORS HOLDINGS LIMITED By:   /s/ John D. Idol  

Name: John D. Idol

Title:   Chairman and Chief Executive Officer

  /s/ Michael D. Kors   Michael D. Kors

 

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