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                                                                    EXHIBIT 10.5

                             TOMMY HILFIGER U.S.A.
                           1992 STOCK INCENTIVE PLAN
                                        
                    (Restated to Incorporate All Amendments
                  through May 8, 1998 and the Effects of the
                  December 27, 1994 Two-for-One Stock Split)
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SECTION 1.  PURPOSE; DEFINITIONS.

          The purpose of the Plan is to give the Company and its Affiliates a
significant advantage in attracting, retaining and motivating officers,
employees and directors and to provide the Company and its subsidiaries with the
ability to provide incentives more directly linked to the profitability of the
Company's businesses and increases in stockholder value.

          For purposes of the Plan, the following terms are defined as set forth
below:

          a.   "Affiliate" means a corporation or other entity controlled by or
                ---------                                                      
in control of the Company and designated by the Committee as such.

          b.   "Award" means a Stock Appreciation Right, Stock Option or
                -----                                                   
Restricted Stock.

          c.   "Board" means the Board of Directors of the Company.
                -----                                              

          d.   "Cause" has the meaning set forth in Section 5(i).
                -----                                            

          e.   "Code" means the Internal Revenue Code of 1986, as amended from
                ----                                                          
time to time, and any successor thereto.

          f.   "Committee" means the Committee referred to in Section 2.
                ---------                                               

          g.   "Company" means Tommy Hilfiger U.S.A., Inc., a Delaware
                -------                                               
corporation.

          h.   "Disability" means permanent and total disability as determined
                ----------                                                    
under procedures established by the Committee for purposes of the Plan.

          i.   "Fair Market Value" means, as of any given date, the mean between
                -----------------                                               
the highest and lowest reported sales prices of the Stock on the New York Stock
Exchange Composite Tape or, if not listed on such exchange, on any other
national securities exchange on which the Stock is listed or on NASDAQ.  If
there is no regular public trading market for such Stock, the Fair Market Value
of the Stock shall be determined by the Committee in good faith.

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          j.   "Incentive Stock Option" means any Stock Option intended to be
                ----------------------                                       
and designated as an "incentive stock option" within the meaning of Section 422
of the Code.

          k.   "Non-Qualified Stock Option" means any Stock Option that is not
                --------------------------                                    
an Incentive Stock Option.

          l.   "Plan" means the Tommy Hilfiger U.S.A. 1992 Stock Incentive Plan,
                ----                                                            
As Amended, as set forth herein and as hereinafter amended from time to time.

          m.   "Restricted Stock" means an award granted under Section 7.
                ----------------                                         

          n.   "Retirement" means retirement from active employment under a
                ----------                                                 
pension plan of the Company, any subsidiary or Affiliate, or under an employment
contract with any of them, or termination of employment at or after age 55 under
circumstances which the Committee, in its sole discretion, deems equivalent to
retirement.

          o.   "Stock" means the Ordinary Shares, par value $0.01 per share, of
                -----                                                          
Tommy Hilfiger Corporation, a British Virgin Islands corporation.

          p.   "Stock Appreciation Right" means a right granted under Section 6.
                ------------------------                                        

          q.   "Stock Option" means an option granted under Section 5.
                ------------                                          

          r.   "Termination of Employment" means the termination of the
                -------------------------                              
participant's employment with the Company and any subsidiary or Affiliate.  A
participant employed by a subsidiary or an Affiliate shall also be deemed to
incur a Termination of Employment if the subsidiary or Affiliate ceases to be
such a subsidiary or Affiliate, as the case may be, and the participant does not
immediately thereafter become an employee of the Company or another subsidiary
or Affiliate.

          In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.

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SECTION 2.  ADMINISTRATION.

          The Plan shall be administered by the Compensation Committee of the
Board.  If at any time no Committee shall be in office, the functions of the
Committee specified in the Plan shall be exercised by the Board.

          The Committee shall have plenary authority to grant Awards pursuant to
the terms of the Plan to officers, employees and directors of the Company and
its subsidiaries and Affiliates.

          Among other things, the Committee shall have the authority, subject to
the terms of the Plan:

          (a)  subject to Section 4, to select the officers, employees and
directors to whom Awards may from time to time be granted;

          (b)  to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and Restricted Stock or
any combination thereof are to be granted hereunder;

          (c)  to determine the number of shares of Stock to be covered by each
Award granted hereunder;

          (d)  to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the option price (subject to Section
5(a)), any vesting restriction or limitation and any vesting acceleration or
forfeiture waiver regarding any Award and the shares of Stock relating thereto,
based on such factors as the Committee shall determine);

          (e)  to modify, amend or adjust the terms and conditions of any Award,
at any time or from time to time, including, but not limited to, with respect to
performance goals and measurements applicable to performance-based Awards
pursuant to the terms of the Plan;

          (f)  to determine to what extent and under what circumstances Stock
and other amounts payable with respect to an Award shall be deferred; and

          (g)  to determine under what circumstances a Stock Option may be
settled in cash or Stock under Section 5(j).

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          The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.

          Any determination made by the Committee or pursuant to delegated
authority pursuant to the provisions of the Plan with respect to any Award shall
be made in the sole discretion of the Committee or such delegate at the time of
the grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter.  All decisions made by the Committee or any
appropriately delegated officer pursuant to the provisions of the Plan shall be
final and binding on all persons, including the Company and Plan participants.


SECTION 3.  STOCK SUBJECT TO PLAN.

          Subject to adjustment as provided herein, the total number of shares
of Stock available for grant under the Plan shall be 7,720,000 shares of Stock,
less the number of shares of Stock which have been made the subject of an Award
under the Tommy Hilfiger (Eastern Hemisphere) Limited 1992 Stock Incentive Plan,
As Amended.  Shares of Stock subject to an Award under the Plan may be
authorized and unissued shares or may be treasury shares.

          If any shares of Restricted Stock are forfeited for which the
participant did not receive any benefits of ownership (as such phrase is
construed by the Commission or its Staff), or if any Stock Option (and related
Stock Appreciation Right, if any) terminates without being exercised, or if any
Stock Appreciation Right is exercised for cash, shares subject to such Awards
shall again be available for distribution in connection with Awards under the
Plan.

          In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary distribution with
respect to the Stock or other change in corporate structure affecting the Stock,
the Committee or Board may make such substitution or adjustments in the
aggregate number and kind of shares reserved for issuance under the Plan, in the
number, kind and option price of shares subject to outstanding Stock Options and
Stock Appreciation Rights, in the number and 

                                       
                                       4
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kind of shares subject to other outstanding Awards granted under the Plan and/or
such other substitution or adjustments in the consideration receivable upon
exercise as it may determine to be appropriate in its sole discretion; provided,
however, that the number of shares subject to any Award shall always be a whole
number. Such adjusted option price shall also be used to determine the amount
payable by the Company upon the exercise of any Stock Appreciation Right
associated with any Stock Option.


SECTION 4.  ELIGIBILITY.

          Officers, employees and directors of the Company, its subsidiaries and
Affiliates who are responsible for or contribute to the management, growth and
profitability of the business of the Company, its subsidiaries and Affiliates
are eligible to be granted Awards under the Plan.  No grant shall be made to
Thomas J. Hilfiger, Joel J. Horowitz, Silas K.F. Chou, Ronald K.Y. Chao or
Lawrence S. Stroll pursuant to this Plan.


SECTION 5.  STOCK OPTIONS.

          Stock Options may be granted alone or in addition to other Awards
granted under the Plan and may be of two types:  Incentive Stock Options and
Non-Qualified Stock Options.  Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve.

          The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights).  Incentive Stock Options
may be granted only to employees of the Company and its subsidiaries (within the
meaning of Section 424(f) of the Code).  To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.

          Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ.  An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
Non-Qualified Stock Option.  The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in any
grant of a Stock Option, determines the number of shares of Stock to be 

                                       5
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subject to such Stock Option to be granted to such individual and specifies the
terms and provisions of the Stock Option. The Company shall notify a participant
of any grant of a Stock Option, and a written option agreement or agreements
shall be duly executed and delivered by the Company to the participant.

          Anything in the Plan to the contrary notwithstanding, no term of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or, without
the consent of the optionee affected, to disqualify any Incentive Stock Option
under such Section 422.

          Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:

          (a)  Option Price.  The option price per share of Stock purchasable
               ------------                                                  
under a Stock Option shall be determined by the Committee and set forth in the
option agreement, and shall not be less than the Fair Market Value of the Stock
subject to the Stock Option on the date of grant.

          (b)  Option Term.  The term of each Stock Option shall be fixed by the
               -----------                                                      
Committee, but no Stock Option shall be exercisable more than 15 years after the
date the Stock Option is granted.

          (c)  Exercisability.  Except as otherwise provided herein, Stock
               --------------                                             
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee.  If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine.  In addition, the Committee may
at any time, in whole or in part, accelerate the exercisability of any Stock
Option.

          (d)  Method of Exercise.  Subject to the provisions of this Section 5,
               ------------------                                               
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Company specifying the
number of shares of Stock subject to the Stock Option to be purchased.

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          The option price of Stock to be purchased upon exercise of any Option
shall be paid in full in cash (by certified or bank check or such other
instrument as the Company may accept) or, if and to the extent set forth in the
option agreement, may also be paid by one or more of the following:  (i) in the
form of unrestricted Stock already owned by the optionee (and, in the case of
the exercise of a Non-Qualified Stock Option, Restricted Stock subject to an
Award hereunder) based in any such instance on the Fair Market Value of the
Stock on the date the Stock Option is exercised; provided, however, that, in the
case of an Incentive Stock Option, the right to make a payment in the form of
already owned shares of Stock may be authorized only at the time the Stock
Option is granted; (ii) by requesting the Company to withhold from the number of
shares of Stock otherwise issuable upon exercise of the Stock Option that number
of shares having an aggregate fair market value on the date of exercise equal to
the exercise price for all of the shares of Stock subject to such exercise; or
(iii) by a combination thereof, in each case in the manner provided in the
option agreement.

          In the discretion of the Committee, payment for any shares subject to
a Stock Option may also be made by delivering a properly executed exercise
notice to the Company, together with a copy of irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds to
pay the purchase price.  To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.

          If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock, the number
of shares of Stock to be received upon such exercise equal to the number of
shares of Restricted Stock used for payment of the option exercise price shall
be subject to the same forfeiture restrictions to which such Restricted Stock
was subject, unless otherwise determined by the Committee.

          No shares of Stock shall be issued until full payment therefor has
been made.  Subject to any forfeiture restrictions that may apply if a Stock
Option is exercised using Restricted Stock, an optionee shall have all of the
rights of a stockholder of the Company holding the Stock that is subject to such
Stock Option (including, if applicable, the right to vote the shares and the
right to receive dividends), when the optionee has given written notice of
exercise, has paid in full for such shares and, if 

                                       7
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requested, has given the representation described in Section 10(a).

          (e)  Non-transferability of Stock Options.  No Stock Option shall be
               ------------------------------------                           
transferable by the optionee other than (i) by will or by the laws of descent
and distribution or (ii) in the case of a Non-Qualified Stock Option, pursuant
to a qualified domestic relations order (as defined in the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder).  All Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or by the guardian or legal representative of the
optionee or, in the case of a Non-Qualified Stock Option, its alternate payee
pursuant to such qualified domestic relations order, it being understood that
the terms "holder" and "optionee" include the guardian and legal representative
of the optionee named in the option agreement and any person to whom an option
is transferred by will or the laws of descent and distribution or, in the case
of a Non-Qualified Stock Option, pursuant to a qualified domestic relations
order.

          (f)  Termination by Death.  If an optionee's employment terminates by
               --------------------                                            
reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable, or on such accelerated basis as the
Committee may determine, for a period of one year (or such other period as the
Committee may specify in the option agreement) from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter.  In the event of termination of employment due to death, if an
Incentive Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.

          (g)  Termination by Reason of Disability.  If an optionee's employment
               -----------------------------------                              
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination, or on such accelerated basis as the Committee may
determine, for a period of one year (or such shorter period as the Committee may
specify in the option agreement) from the date of such termination of employment
or until the expiration of the stated term of such Stock Option, whichever
period is the shorter; provided, however, that if the optionee dies within such
one-year period (or such shorter period), any unexercised Stock Option held by
such optionee shall, notwithstanding 

                                       8
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the expiration of such three-year (or such shorter) period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of termination of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.

          (h)  Termination by Reason of Retirement.  If an optionee's employment
               -----------------------------------                              
terminates by reason of Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of such Retirement or on such accelerated basis as the Committee may
determine, for a period of three years (or such shorter period as the Committee
may specify in the option agreement) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such three-year (or such shorter) period, any unexercised Stock Option
held by such optionee shall, notwithstanding the expiration of such three-year
(or such shorter) period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of 12 months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.  In the event of termination of employment by
reason of Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a Non-Qualified Stock
Option.

          (i)  Other Termination.  Unless otherwise determined by the Committee,
               -----------------                                                
if an optionee incurs a Termination of Employment for any reason other than
death, Disability or Retirement, any Stock Option held by such Optionee shall
thereupon terminate, except that such Stock Option, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, may be
exercised for the lesser of three months from the date of such Termination of
Employment or the balance of such Stock Option's term if such Termination of
Employment of the optionee is without Cause; provided, however, that if the
optionee dies within such three-month period, any unexercised Stock Option held
by such optionee shall 

                                       9
<PAGE>
 
notwithstanding the expiration of such three-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of Termination of Employment for any reason other than death, Disability or
Retirement, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option. Unless
otherwise determined by the Committee, for the purposes of the Plan "Cause"
shall mean (i) the conviction of the optionee for committing a felony under
Federal law or the law of the state in which such action occurred, (ii)
dishonesty in the course of fulfilling the optionee's employment duties or (iii)
willful and deliberate failure on the part of the optionee to perform his
employment duties in any material respect.

          (j)  Cashing Out of Stock Option.  On receipt of written notice of
               ---------------------------                                  
exercise, the Committee may elect to cash out all or part of the portion of the
shares of Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Stock, equal to the excess of the Fair Market
Value of the Stock over the option price times the number of shares of Stock for
which to the Option is being exercised on the effective date of such cash out.


SECTION 6.  STOCK APPRECIATION RIGHTS.

          (a)  Grant and Exercise.  Stock Appreciation Rights may be granted in
               ------------------                                              
conjunction with all or part of any Stock Option granted under the Plan.  In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option.  In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option.  A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.

          A Stock Appreciation Right may be exercised by an optionee in
accordance with Section 6(b) by surrendering the applicable portion of the
related Stock Option in accordance with procedures established by the Committee.
Upon such exercise and surrender, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b).  Stock Options which
have been so surrendered 

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<PAGE>
 
shall no longer be exercisable to the extent the related Stock Appreciation 
Rights have been exercised.

          (b) Terms and Conditions.  Stock Appreciation Rights shall be subject
              --------------------                                             
to such terms and conditions as shall be determined by the Committee, including
the following:

            (i) Stock Appreciation Rights shall be exercisable only at such time
    or times and to the extent that the Stock Options to which they relate are
    exercisable in accordance with the provisions of Section 5 and this Section
    6.

            (ii) Upon the exercise of a Stock Appreciation Right, an optionee
    shall be entitled to receive an amount in cash, shares of Stock or both
    equal in value to the excess of the Fair Market Value of one share of Stock
    over the option price per share specified in the related Stock Option
    multiplied by the number of shares in respect of which the Stock
    Appreciation Right shall have been exercised, with the Committee having the
    right to determine the form of payment.

            (iii) Stock Appreciation Rights shall be transferable only to
    permitted transferees of the underlying Stock Option in accordance with
    Section 5(e).


SECTION 7.  RESTRICTED STOCK.

          (a) Administration.  Shares of Restricted Stock may be awarded either
              --------------                                                   
alone or in addition to other Awards granted under the Plan.  The Committee
shall determine the officers and employees to whom and the time or times at
which grants of Restricted Stock will be awarded, the number of shares to be
awarded to any participant, the time or times within which such Awards may be
subject to forfeiture and any other terms and conditions of the Awards, in
addition to those contained in Section 7(c).

          The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals of the participant or of the Company
or subsidiary, division or department of the Company for or within which the
participant is primarily employed or upon such other factors or criteria as the
Committee shall determine.  The provisions of Restricted Stock Awards need not
be the same with respect to each recipient.

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<PAGE>
 
          (b) Awards and Certificates.  Shares of Restricted Stock shall be
              -----------------------                                      
evidenced in such manner as the Committee may deem appropriate, including book-
entry registration or issuance of one or more stock certificates.  Any
certificate issued in respect of shares of Restricted Stock shall be registered
in the name of such participant and shall bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:

         "The transferability of this certificate and the shares of
         stock represented hereby are subject to the terms and
         conditions (including forfeiture) of the Tommy Hilfiger
         U.S.A. 1992 Stock Incentive Plan, As Amended, and a
         Restricted Stock Agreement. Copies of such Plan and
         Agreement are on file at the offices of Tommy Hilfiger
         U.S.A., Inc.,18 Thatcher Road, Dayton, New Jersey 08810."

The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Stock covered
by such Award.

         (c)  Terms and Conditions.  Shares of Restricted Stock shall be subject
              --------------------                                              
to the following terms and conditions:

            (i) Subject to the provisions of the Plan and the Restricted Stock
    Agreement referred to in Section 7(c)(vi), during a period set by the
    Committee, commencing with the date of such Award (the "Restriction
    Period"), the participant shall not be permitted to sell, assign, transfer,
    pledge or otherwise encumber shares of Restricted Stock.  The Committee may
    provide for the lapse of such restrictions in installments or otherwise and
    may accelerate or waive such restrictions, in whole or in part, in each case
    based on period of service, performance of the participant or of the Company
    or the subsidiary, division or department for which the participant is
    employed or such other factors or criteria as the Committee may determine.

            (ii)Except as provided in this paragraph (ii) and Section 7(c)(i)
    and the Restricted Stock Agreement,

                                      12
<PAGE>
 
    the participant shall have, with respect to the shares of Restricted Stock,
    all of the rights of a stockholder of the Company holding the class or
    series of Stock that is the subject of the Restricted Stock, including, if
    applicable, the right to vote the shares and the right to receive any cash
    dividends. If so determined by the Committee in the applicable Restricted
    Stock Agreement and subject to Section 10(f) of the Plan, (1) cash dividends
    on the shares of Stock that are the subject of the Restricted Stock Award
    shall be automatically deferred and reinvested in additional Restricted
    Stock, and (2) dividends payable in Stock shall be paid in the form of
    Restricted Stock.

            (iii) Except to the extent otherwise provided in the applicable
    Restricted Stock Agreement and Sections 7(c)(i) and 7(c)(iv), upon a
    participant's Termination of Employment for any reason during the
    Restriction Period, all shares still subject to restriction shall be
    forfeited by the participant.

            (iv)  In the event of Termination of Employment of a participant for
    any reason (other than for Cause), the Committee shall have the discretion
    to waive in whole or in part any or all remaining restrictions with respect
    to any or all of such participant's shares of Restricted Stock.

            (v)   If and when the Restriction Period expires without a prior
    forfeiture of the Restricted Stock subject to such Restriction Period,
    unlegended certificates for such shares shall be delivered to the
    participant.

            (vi)  Each Award shall be confirmed by, and be subject to the terms
    of, a Restricted Stock Agreement.


SECTION 8.  TERM, AMENDMENT AND TERMINATION.

          The Plan will terminate on December 31, 2002.  Under the Plan, Awards
outstanding as of December 31, 2002 shall not be affected or impaired by the
termination of the Plan.

          The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee under a Stock Option or a recipient of a Stock Appreciation Right or

                                      13
<PAGE>
 
Restricted Stock Award theretofore granted without the optionee's or recipient's
consent.

          The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder without the holder's consent.


SECTION 9.  UNFUNDED STATUS OF PLAN.

          It is presently intended that the Plan constitute an "unfunded" plan
for incentive and deferred compensation.  The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or make payments; provided, however, that, unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.


SECTION 10.  GENERAL PROVISIONS.

          (a)  The Committee may require each person purchasing or receiving
shares pursuant to an Award to represent to and agree with the Company in
writing that such person is acquiring the shares without a view to the
distribution thereof.  The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.

          All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Commission, any stock exchange upon which the
Stock is then listed and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

          (b)  Nothing contained in the Plan shall prevent the Company or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.

          (c)  The adoption of the Plan shall not confer upon any employee any
right to continued employment nor shall it interfere in any way with the right
of the Company

                                      14
<PAGE>
 
or any subsidiary or Affiliate to terminate the employment of any
employee at any time.

          (d)  No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any Award under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any Federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount.  Unless otherwise determined by
the Committee, withholding obligations may be settled with Stock, including
Stock that is part of the Award that gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditional on such
payment or arrangements, and the Company, its Subsidiaries and its Affiliates
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the participant.  The Committee may establish
such procedures as it deems appropriate, including the making of irrevocable
elections, for the settlement of withholding obligations with Stock.

          (e)  At the time of grant, the Committee may provide in connection
with any grant made under the Plan that the shares of Stock received as a result
of such grant shall be subject to a right of first refusal pursuant to which the
participant shall be required to offer to the Company any shares that the
participant wishes to sell at the then Fair Market Value of the Stock, subject
to such other terms and conditions as the Committee may specify at the time of
grant.

          (f)  The reinvestment of dividends in additional Restricted Stock at
the time of any dividend payment shall only be permissible if sufficient shares
of Stock are available under Section 3 for such reinvestment (taking into
account then outstanding Stock Options and other Awards).

          (g)  The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid.

          (h)  The Plan and all Awards made and actions taken thereunder shall
be governed by and construed in accordance with the laws of Delaware.

                                      15
<PAGE>
 
SECTION 11.  EFFECTIVE DATE OF PLAN.

          The Plan shall be effective on the date it is approved by the
shareholders of the Company.

                                      16
<PAGE>
 
                  TOMMY HILFIGER (EASTERN HEMISPHERE) LIMITED
                           1992 STOCK INCENTIVE PLAN
                                        
                    (Restated to Incorporate All Amendments
                  through May 8, 1998 and the Effects of the
                  December 27, 1994 Two-for-One Stock Split)


<PAGE>
 
SECTION 1.  PURPOSE; DEFINITIONS.

          The purpose of the Plan is to give the Company and its Affiliates a
significant advantage in attracting, retaining and motivating officers,
employees and directors and to provide the Company and its subsidiaries with the
ability to provide incentives more directly linked to the profitability of the
Company's businesses and increases in stockholder value.

          For purposes of the Plan, the following terms are defined as set forth
below:

          a.   "Affiliate" means a corporation or other entity controlled by or
                ---------                                                      
in control of the Company and designated by the Committee as such.

          b.   "Award" means a Stock Appreciation Right, Stock Option or
                -----                                                   
Restricted Stock.

          c.   "Board" means the Board of Directors of the Company.
                -----                                              

          d.   "Cause" has the meaning set forth in Section 5(i).
                -----                                            

          e.   "Code" means the Internal Revenue Code of 1986, as amended from
                ----                                                          
time to time, and any successor thereto.

          f.   "Committee" means the Committee referred to in Section 2.
                ---------                                               

          g.   "Company" means Tommy Hilfiger (Eastern Hemisphere) Limited, a
                -------                                                      
British Virgin Islands corporation.

          h.   "Disability" means permanent and total disability as determined
                ----------                                                    
under procedures established by the Committee for purposes of the Plan.

          i.   "Fair Market Value" means, as of any given date, the mean between
                -----------------                                               
the highest and lowest reported sales prices of the Stock on the New York Stock
Exchange Composite Tape or, if not listed on such exchange, on any other
national securities exchange on which the Stock is listed or on NASDAQ.  If
there is no regular public trading market for such Stock, the Fair Market Value
of the Stock shall be determined by the Committee in good faith.

                                       1
<PAGE>
 
          j.   "Incentive Stock Option" means any Stock Option intended to be
                ----------------------                                       
and designated as an "incentive stock option" within the meaning of Section 422
of the Code.

          k.   "Non-Qualified Stock Option" means any Stock Option that is not
                --------------------------                                    
an Incentive Stock Option.

          l.   "Plan" means the Tommy Hilfiger (Eastern Hemisphere) Limited 1992
                ----                                                            
Stock Incentive Plan, as set forth herein and as hereinafter amended from time
to time.

          m.   "Restricted Stock" means an award granted under Section 7.
                ----------------                                         

          n.   "Retirement" means retirement from active employment under a
                ----------                                                 
pension plan of the Company, any subsidiary or Affiliate, or under an employment
contract with any of them, or termination of employment at or after age 55 under
circumstances which the Committee, in its sole discretion, deems equivalent to
retirement.

          o.   "Stock" means the ordinary shares, par value $0.01 per share, of
                -----                                                          
Tommy Hilfiger Corporation, a British Virgin Islands corporation.

          p.   "Stock Appreciation Right" means a right granted under Section 6.
                ------------------------                                        

          q.   "Stock Option" means an option granted under Section 5.
                ------------                                          

          r.   "Termination of Employment" means the termination of the
                -------------------------                              
participant's employment with the Company and any subsidiary or Affiliate.  A
participant employed by a subsidiary or an Affiliate shall also be deemed to
incur a Termination of Employment if the subsidiary or Affiliate ceases to be
such a subsidiary or Affiliate, as the case may be, and the participant does not
immediately thereafter become an employee of the Company or another subsidiary
or Affiliate.

          In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.

                                       2
<PAGE>
 
SECTION 2.  ADMINISTRATION.

          The Plan shall be administered by the Compensation Committee of the
Board.  If at any time no Committee shall be in office, the functions of the
Committee specified in the Plan shall be exercised by the Board.

          The Committee shall have plenary authority to grant Awards pursuant to
the terms of the Plan to officers, employees and directors of the Company and
its subsidiaries and Affiliates.

          Among other things, the Committee shall have the authority, subject to
the terms of the Plan:

          (a) subject to Section 4, to select the officers, employees and
directors to whom Awards may from time to time be granted;

          (b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and Restricted Stock or
any combination thereof are to be granted hereunder;

          (c) to determine the number of shares of Stock to be covered by each
Award granted hereunder;

          (d) to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the option price (subject to Section
5(a)), any vesting restriction or limitation and any vesting acceleration or
forfeiture waiver regarding any Award and the shares of Stock relating thereto,
based on such factors as the Committee shall determine);

          (e) to modify, amend or adjust the terms and conditions of any Award,
at any time or from time to time, including, but not limited to, with respect to
performance goals and measurements applicable to performance-based Awards
pursuant to the terms of the Plan;

          (f) to determine to what extent and under what circumstances Stock and
other amounts payable with respect to an Award shall be deferred; and

          (g) to determine under what circumstances a Stock Option may be
settled in cash or Stock under Section 5(j).

                                       3
<PAGE>
 
          The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.

          Any determination made by the Committee or pursuant to delegated
authority pursuant to the provisions of the Plan with respect to any Award shall
be made in the sole discretion of the Committee or such delegate at the time of
the grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter.  All decisions made by the Committee or any
appropriately delegated officer pursuant to the provisions of the Plan shall be
final and binding on all persons, including the Company and Plan participants.


SECTION 3.  STOCK SUBJECT TO PLAN.

          Subject to adjustment as provided herein, the total number of shares
of Stock available for grant under the Plan shall be 7,720,000 shares of Stock,
less the number of shares of Stock which have been made subject to an Award
under the Tommy Hilfiger U.S.A. 1992 Stock Incentive Plan.  Shares of Stock
subject to an Award under the Plan may be authorized and unissued shares or may
be treasury shares.

          If any shares of Restricted Stock are forfeited for which the
participant did not receive any benefits of ownership (as such phrase is
construed by the Commission or its Staff), or if any Stock Option (and related
Stock Appreciation Right, if any) terminates without being exercised, or if any
Stock Appreciation Right is exercised for cash, shares subject to such Awards
shall again be available for distribution in connection with Awards under the
Plan.

          In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary distribution with
respect to the Stock or other change in corporate structure affecting the Stock,
the Committee or Board may make such substitution or adjustments in the
aggregate number and kind of shares reserved for issuance under the Plan, in the
number, kind and option price of shares subject to outstanding Stock Options and
Stock Appreciation Rights, in the number and kind of shares subject to other
outstanding Awards granted

                                       4
<PAGE>
 
under the Plan and/or such other substitution or adjustments in the
consideration receivable upon exercise as it may determine to be appropriate in
its sole discretion; provided, however, that the number of shares subject to any
Award shall always be a whole number.  Such adjusted option price shall also be
used to determine the amount payable by the Company upon the exercise of any
Stock Appreciation Right associated with any Stock Option.


SECTION 4.  ELIGIBILITY.

          Officers, employees and directors of the Company, its subsidiaries and
Affiliates who are responsible for or contribute to the management, growth and
profitability of the business of the Company, its subsidiaries and Affiliates
are eligible to be granted Awards under the Plan.  No grant shall be made to
Thomas J. Hilfiger, Joel J. Horowitz, Silas K.F. Chou, Ronald K.Y. Chao or
Lawrence S. Stroll pursuant to this Plan.


SECTION 5.  STOCK OPTIONS.

          Stock Options may be granted alone or in addition to other Awards
granted under the Plan and may be of two types:  Incentive Stock Options and
Non-Qualified Stock Options.  Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve.

          The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights).  Incentive Stock Options
may be granted only to employees of the Company and its subsidiaries (within the
meaning of Section 424(f) of the Code).  To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.

          Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ.  An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
Non-Qualified Stock Option.  The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in any
grant of a Stock Option, determines the number of shares of Stock to be subject
to such Stock Option to be granted to such

                                       5
<PAGE>
 
individual and specifies the terms and provisions of the Stock Option.  The
Company shall notify a participant of any grant of a Stock Option, and a written
option agreement or agreements shall be duly executed and delivered by the
Company to the participant.

          Anything in the Plan to the contrary notwithstanding, no term of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or, without
the consent of the optionee affected, to disqualify any Incentive Stock Option
under such Section 422.

          Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:

          (a) Option Price.  The option price per share of Stock purchasable
              ------------                                                  
under a Stock Option shall be determined by the Committee and set forth in the
option agreement, and shall not be less than the Fair Market Value of the Stock
subject to the Stock Option on the date of grant.

          (b) Option Term.  The term of each Stock Option shall be fixed by the
              -----------                                                      
Committee, but no Stock Option shall be exercisable more than 15 years after the
date the Stock Option is granted.

          (c) Exercisability.  Except as otherwise provided herein, Stock
              --------------                                             
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee.  If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine.  In addition, the Committee may
at any time, in whole or in part, accelerate the exercisability of any Stock
Option.

          (d) Method of Exercise.  Subject to the provisions of this Section 5,
              ------------------                                               
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Company specifying the
number of shares of Stock subject to the Stock Option to be purchased.

          The option price of Stock to be purchased upon exercise of any Option
shall be paid in full in cash (by

                                       6
<PAGE>
 
certified or bank check or such other instrument as the Company may accept) or,
if and to the extent set forth in the option agreement, may also be paid by one
or more of the following:  (i) in the form of unrestricted Stock already owned
by the optionee (and, in the case of the exercise of a Non-Qualified Stock
Option, Restricted Stock subject to an Award hereunder) based in any such
instance on the Fair Market Value of the Stock on the date the Stock Option is
exercised; provided, however, that, in the case of an Incentive Stock Option,
the right to make a payment in the form of already owned shares of Stock may be
authorized only at the time the Stock Option is granted; (ii) by requesting the
Company to withhold from the number of shares of Stock otherwise issuable upon
exercise of the Stock Option that number of shares having an aggregate fair
market value on the date of exercise equal to the exercise price for all of the
shares of Stock subject to such exercise; or (iii) by a combination thereof, in
each case in the manner provided in the option agreement.

          In the discretion of the Committee, payment for any shares subject to
a Stock Option may also be made by delivering a properly executed exercise
notice to the Company, together with a copy of irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds to
pay the purchase price.  To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.

          If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock, the number
of shares of Stock to be received upon such exercise equal to the number of
shares of Restricted Stock used for payment of the option exercise price shall
be subject to the same forfeiture restrictions to which such Restricted Stock
was subject, unless otherwise determined by the Committee.

          No shares of Stock shall be issued until full payment therefor has
been made.  Subject to any forfeiture restrictions that may apply if a Stock
Option is exercised using Restricted Stock, an optionee shall have all of the
rights of a stockholder of the Company holding the Stock that is subject to such
Stock Option (including, if applicable, the right to vote the shares and the
right to receive dividends), when the optionee has given written notice of
exercise, has paid in full for such shares and, if requested, has given the
representation described in Section 10(a).

                                       7
<PAGE>
 
          (e) Non-transferability of Stock Options.  No Stock Option shall be
              ------------------------------------                           
transferable by the optionee other than (i) by will or by the laws of descent
and distribution or (ii) in the case of a Non-Qualified Stock Option, pursuant
to a qualified domestic relations order (as defined in the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder).  All Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or by the guardian or legal representative of the
optionee or, in the case of a Non-Qualified Stock Option, its alternate payee
pursuant to such qualified domestic relations order, it being understood that
the terms "holder" and "optionee" include the guardian and legal representative
of the optionee named in the option agreement and any person to whom an option
is transferred by will or the laws of descent and distribution or, in the case
of a Non-Qualified Stock Option, pursuant to a qualified domestic relations
order.

          (f) Termination by Death.  If an optionee's employment terminates by
              --------------------                                            
reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable, or on such accelerated basis as the
Committee may determine, for a period of one year (or such other period as the
Committee may specify in the option agreement) from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter.  In the event of termination of employment due to death, if an
Incentive Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.

          (g) Termination by Reason of Disability.  If an optionee's employment
              -----------------------------------                              
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination, or on such accelerated basis as the Committee may
determine, for a period of one year (or such shorter period as the Committee may
specify in the option agreement) from the date of such termination of employment
or until the expiration of the stated term of such Stock Option, whichever
period is the shorter; provided, however, that if the optionee dies within such
one-year period (or such shorter period), any unexercised Stock Option held by
such optionee shall, notwithstanding the expiration of such three-year (or such
shorter) period, continue to be exercisable to the extent to which it was

                                       8
<PAGE>
 
exercisable at the time of death for a period of 12 months from the date of such
death or until the expiration of the stated term of such Stock Option, whichever
period is the shorter.  In the event of termination of employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option.

          (h) Termination by Reason of Retirement.  If an optionee's employment
              -----------------------------------                              
terminates by reason of Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of such Retirement or on such accelerated basis as the Committee may
determine, for a period of three years (or such shorter period as the Committee
may specify in the option agreement) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such three-year (or such shorter) period, any unexercised Stock Option
held by such optionee shall, notwithstanding the expiration of such three-year
(or such shorter) period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of 12 months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.  In the event of termination of employment by
reason of Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a Non-Qualified Stock
Option.

          (i) Other Termination.  Unless otherwise determined by the Committee,
              -----------------                                                
if an optionee incurs a Termination of Employment for any reason other than
death, Disability or Retirement, any Stock Option held by such Optionee shall
thereupon terminate, except that such Stock Option, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, may be
exercised for the lesser of three months from the date of such Termination of
Employment or the balance of such Stock Option's term if such Termination of
Employment of the optionee is without Cause; provided, however, that if the
optionee dies within such three-month period, any unexercised Stock Option held
by such optionee shall notwithstanding the expiration of such three-month
period, continue to be exercisable to the extent to which it was exercisable at
the time of death for a

                                       9
<PAGE>
 
period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.  In the event
of Termination of Employment for any reason other than death, Disability or
Retirement, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option.  Unless
otherwise determined by the Committee, for the purposes of the Plan "Cause"
shall mean (i) the conviction of the optionee for committing a felony under
Federal law or the law of the state in which such action occurred, (ii)
dishonesty in the course of fulfilling the optionee's employment duties or (iii)
willful and deliberate failure on the part of the optionee to perform his
employment duties in any material respect.

          (j) Cashing Out of Stock Option.  On receipt of written notice of
              ---------------------------                                  
exercise, the Committee may elect to cash out all or part of the portion of the
shares of Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Stock, equal to the excess of the Fair Market
Value of the Stock over the option price times the number of shares of Stock for
which to the Option is being exercised on the effective date of such cash out.


SECTION 6.  STOCK APPRECIATION RIGHTS.

          (a) Grant and Exercise.  Stock Appreciation Rights may be granted in
              ------------------                                              
conjunction with all or part of any Stock Option granted under the Plan.  In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option.  In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option.  A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.

          A Stock Appreciation Right may be exercised by an optionee in
accordance with Section 6(b) by surrendering the applicable portion of the
related Stock Option in accordance with procedures established by the Committee.
Upon such exercise and surrender, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b).  Stock Options which
have been so surrendered shall no longer be exercisable to the extent the
related Stock Appreciation Rights have been exercised.

                                      10
<PAGE>
 
          (b) Terms and Conditions.  Stock Appreciation Rights shall be subject
              --------------------                                             
to such terms and conditions as shall be determined by the Committee, including
the following:

            (i)   Stock Appreciation Rights shall be exercisable only at such
    time or times and to the extent that the Stock Options to which they relate
    are exercisable in accordance with the provisions of Section 5 and this
    Section 6.

            (ii)  Upon the exercise of a Stock Appreciation Right, an optionee
    shall be entitled to receive an amount in cash, shares of Stock or both
    equal in value to the excess of the Fair Market Value of one share of Stock
    over the option price per share specified in the related Stock Option
    multiplied by the number of shares in respect of which the Stock
    Appreciation Right shall have been exercised, with the Committee having the
    right to determine the form of payment.

            (iii) Stock Appreciation Rights shall be transferable only to
    permitted transferees of the underlying Stock Option in accordance with
    Section 5(e).


SECTION 7.  RESTRICTED STOCK.

          (a) Administration.  Shares of Restricted Stock may be awarded either
              --------------                                                   
alone or in addition to other Awards granted under the Plan.  The Committee
shall determine the officers and employees to whom and the time or times at
which grants of Restricted Stock will be awarded, the number of shares to be
awarded to any participant, the time or times within which such Awards may be
subject to forfeiture and any other terms and conditions of the Awards, in
addition to those contained in Section 7(c).

          The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals of the participant or of the Company
or subsidiary, division or department of the Company for or within which the
participant is primarily employed or upon such other factors or criteria as the
Committee shall determine.  The provisions of Restricted Stock Awards need not
be the same with respect to each recipient.

          (b) Awards and Certificates.  Shares of Restricted Stock shall be
              -----------------------                                      
evidenced in such manner as the Committee may deem appropriate, including book-
entry

                                      11
<PAGE>
 
registration or issuance of one or more stock certificates.  Any certificate
issued in respect of shares of Restricted Stock shall be registered in the name
of such participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:

         "The transferability of this certificate and the shares
         of stock represented hereby are subject to the terms and
         conditions (including forfeiture) of the Tommy Hilfiger
         (Eastern Hemisphere) Limited 1992 Stock Incentive Plan
         and a Restricted Stock Agreement. Copies of such Plan
         and Agreement are on file at the offices of Tommy
         Hilfiger (Eastern Hemisphere) Limited, 6/F, Precious
         Industrial Centre, 18 Cheung Yue Street, Cheung Sha Wan,
         Kowloon, Hong Kong."

The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Stock covered
by such Award.

         (c) Terms and Conditions.  Shares of Restricted Stock shall be subject
             --------------------                                              
to the following terms and conditions:

            (i)  Subject to the provisions of the Plan and the Restricted Stock
    Agreement referred to in Section 7(c)(vi), during a period set by the
    Committee, commencing with the date of such Award (the "Restriction
    Period"), the participant shall not be permitted to sell, assign, transfer,
    pledge or otherwise encumber shares of Restricted Stock.  The Committee may
    provide for the lapse of such restrictions in installments or otherwise and
    may accelerate or waive such restrictions, in whole or in part, in each case
    based on period of service, performance of the participant or of the Company
    or the subsidiary, division or department for which the participant is
    employed or such other factors or criteria as the Committee may determine.

            (ii) Except as provided in this paragraph (ii) and Section 7(c)(i)
    and the Restricted Stock Agreement, the participant shall have, with respect
    to the shares of Restricted Stock, all of the rights of a

                                      12
<PAGE>
 
    stockholder of the Company holding the class or series of Stock that is the
    subject of the Restricted Stock, including, if applicable, the right to vote
    the shares and the right to receive any cash dividends.  If so determined by
    the Committee in the applicable Restricted Stock Agreement and subject to
    Section 10(f) of the Plan, (1) cash dividends on the shares of Stock that
    are the subject of the Restricted Stock Award shall be automatically
    deferred and reinvested in additional Restricted Stock, and (2) dividends
    payable in Stock shall be paid in the form of Restricted Stock.

            (iii) Except to the extent otherwise provided in the applicable
    Restricted Stock Agreement and Sections 7(c)(i) and 7(c)(iv), upon a
    participant's Termination of Employment for any reason during the
    Restriction Period, all shares still subject to restriction shall be
    forfeited by the participant.

            (iv)  In the event of Termination of Employment of a participant for
    any reason (other than for Cause), the Committee shall have the discretion
    to waive in whole or in part any or all remaining restrictions with respect
    to any or all of such participant's shares of Restricted Stock.

            (v)   If and when the Restriction Period expires without a prior
    forfeiture of the Restricted Stock subject to such Restriction Period,
    unlegended certificates for such shares shall be delivered to the
    participant.

            (vi)  Each Award shall be confirmed by, and be subject to the terms
    of, a Restricted Stock Agreement.


SECTION 8.  TERM, AMENDMENT AND TERMINATION.

          The Plan will terminate on December 31, 2002.  Under the Plan, Awards
outstanding as of December 31, 2002 shall not be affected or impaired by the
termination of the Plan.

          The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee under a Stock Option or a recipient of a Stock Appreciation Right or
Restricted Stock Award theretofore granted without the optionee's or recipient's
consent.

                                      13
<PAGE>
 
          The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder without the holder's consent.


SECTION 9.  UNFUNDED STATUS OF PLAN.

          It is presently intended that the Plan constitute an "unfunded" plan
for incentive and deferred compensation.  The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or make payments; provided, however, that, unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.


SECTION 10.  GENERAL PROVISIONS.

          (a)  The Committee may require each person purchasing or receiving
shares pursuant to an Award to represent to and agree with the Company in
writing that such person is acquiring the shares without a view to the
distribution thereof.  The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.

          All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Commission, any stock exchange upon which the
Stock is then listed and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

          (b)  Nothing contained in the Plan shall prevent the Company or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.

          (c)  The adoption of the Plan shall not confer upon any employee any
right to continued employment nor shall it interfere in any way with the right
of the Company or any subsidiary or Affiliate to terminate the employment of any
employee at any time.

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          (d)  No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any Award under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any Federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount.  Unless otherwise determined by
the Committee, withholding obligations may be settled with Stock, including
Stock that is part of the Award that gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditional on such
payment or arrangements, and the Company, its Subsidiaries and its Affiliates
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the participant.  The Committee may establish
such procedures as it deems appropriate, including the making of irrevocable
elections, for the settlement of withholding obligations with Stock.

          (e)  At the time of grant, the Committee may provide in connection
with any grant made under the Plan that the shares of Stock received as a result
of such grant shall be subject to a right of first refusal pursuant to which the
participant shall be required to offer to the Company any shares that the
participant wishes to sell at the then Fair Market Value of the Stock, subject
to such other terms and conditions as the Committee may specify at the time of
grant.

          (f)  The reinvestment of dividends in additional Restricted Stock at
the time of any dividend payment shall only be permissible if sufficient shares
of Stock are available under Section 3 for such reinvestment (taking into
account then outstanding Stock Options and other Awards).

          (g)  The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid.

          (h)  The Plan and all Awards made and actions taken thereunder shall
be governed by and construed in accordance with the laws of the British Virgin
Islands.


SECTION 11.  EFFECTIVE DATE OF PLAN.

          The Plan shall be effective on the date it is approved by the
shareholders of the Company.

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