EX-10.5






EXHIBIT 10.5




AMENDMENT NO. 1




to the




EMPLOYMENT AGREEMENT




          AMENDMENT (“Amendment No. 1”) effective the 1st day of January 2009, by and between
Polo Ralph Lauren Corporation, a Delaware corporation (the “Corporation”), and Jackwyn Nemerov (the
“Executive”).




          WHEREAS, the Executive has been employed with the Corporation pursuant to an Employment
Agreement dated September 9, 2004 (the “Employment Agreement”); and




          WHEREAS, the Corporation and the Executive wish to amend the Employment Agreement to bring it
into compliance with Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations issued or to be issued by the Department of the Treasury thereunder;




          NOW, THEREFORE, the parties hereby agree to amend the Employment Agreement as follows.




     1. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to
such terms in the Employment Agreement. All other terms and conditions of the Employment Agreement
that are not modified below shall continue to remain in full force and effect.



     2. Section 2.1(e) is hereby amended to read as follows:




     “(e) Voluntary Termination. The Executive may voluntarily terminate the
Executive’s employment with the Corporation at any time, with or without Good Reason. For
purposes of this Agreement, “Good Reason” shall mean a termination of employment by the
Executive within one (1) year following the occurrence of (A) a material diminution in or
adverse alteration to Executive’s title, base salary, benefits, position, status, or
duties, (B) the relocation of the Executive’s principal office outside the area which
comprises a fifty (50) mile radius from New York City, (C) a failure of the Corporation to
comply with any material provision of this Agreement, or (D) the Corporation requires
Executive to report to anyone other than Ralph Lauren or Roger Farah, provided that the
events described in clauses (A), (B), (C) and (D) above shall not constitute Good Reason
(1) until the Executive provides written notice to the Corporation of the existence of such
diminution, change, reduction, relocation or failure within ninety (90) days of its
occurrence and (2) unless such diminution, change, reduction or failure (as applicable) has
not been cured within thirty (30) days after written notice of such noncompliance has been
given by the Executive to the Corporation.”



 









 





     3. Section 2.3(a)(i) is hereby amended to read as follows:




     “(i) Severance. Subject to Section 2.3(a)(v) and Section 4.1(a) hereof, the
Corporation shall: (a) beginning with the first payroll period following the thirtieth
(30th) day following the date of termination of Executive’s employment, continue
to pay the Executive, in accordance with the Corporation’s normal payroll practice,
Executive’s Base Compensation, as in effect immediately prior to such termination of
employment, for the longer of the balance of the Term or the one-year period commencing on
the date of such termination (whichever period is applicable shall be referred to herein as
the “Severance Period”), provided that the initial payment shall include Base Compensation
amounts for all payroll periods from the date of termination through the date of such
initial payment; and (b) pay to the Executive, on the last business day of the Severance
Period, an amount equal to the bonus paid to the Executive for the most recently completed
fiscal year prior to the fiscal year in which Executive’s employment is terminated.
Notwithstanding the foregoing, in order to receive any severance benefits under this
Section 2.3(a)(i), the Executive must sign and not timely revoke a release and waiver of
claims against the Corporation, its successors, affiliates, and assigns, in a form
acceptable to the Corporation on or prior to the thirtieth (30th) day following
the date of termination of Executive’s employment.”



     4. A new Section 2.3(a)(v) is hereby added that reads as follows:




     “(v) Section 409A. Notwithstanding any provision in this Agreement to the
contrary, no amounts shall be payable pursuant to Section 2.3(a) or Section 4.1(a) unless
the Executive’s termination of employment constitutes a “separation from service” within
the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations. If the
Executive is determined to be a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Internal Revenue Code, as amended, and the rules and regulations
issued thereunder (the “Code”), then any amount that becomes payable under Sections
2.3(a)(i) or 4.1(a) hereof (the “Severance Payment”) on account of the Executive’s
“separation from service” shall not be paid to the Executive until the first business day
following the expiration of the six (6) month period immediately following the Executive’s
“separation from service” (or if earlier, the date of the Executive’s death) if and to the
extent that the Severance Payment constitutes deferred compensation (or may be nonqualified
deferred compensation, as mutually agreed by the Corporation and the Executive, such
agreement not to be unreasonably withheld or delayed by the Executive) under Section 409A
of the Code and such deferral is required to comply with the requirements of Section 409A
of the Code. For the avoidance of doubt, no portion of the Severance Payment shall be
delayed for six (6) months after the Executive’s “separation from service” if such portion
(x) constitutes a “short term deferral” within the meaning of Section 1.409A-1(a)(4) of the



2









 







Department of Treasury Regulations, or (y) (A) it is being paid due to the
Corporation’s termination of the Executive’s employment without Cause or the Executive’s
termination of employment for Good Reason; (B) it does not exceed two times the lesser of
(1) the Executive’s annualized compensation from the Corporation for the calendar year
prior to the calendar year in which the termination of the Executive’s employment occurs,
or (2) the maximum amount that may be taken into account under a qualified plan pursuant to
Section 401(a)(17) of the Code for the year in which the Executive’s employment terminates;
and (C) the payment is required under this Agreement to be paid no later than the last day
of the second calendar year following the calendar year in which the Executive incurs a
“separation from service”. For purposes of Section 409A of the Code, the Executive’s right
to receive installment payments pursuant to Section 2.3(a) shall be treated as a right to
receive a series of separate and distinct payments. To the extent that any reimbursement
of any expense under Section 1.4(e) or in-kind benefits provided under this Agreement are
deemed to constitute taxable compensation to the Executive, such amounts will be reimbursed
or provided no later than December 31 of the year following the year in which the expense
was incurred. The amount of any such expenses reimbursed or in-kind benefits provided in
one year shall not affect the expenses or in-kind benefits eligible for reimbursement or
payment in any subsequent year, and the Executive’s right to such reimbursement or payment
of any such expenses will not be subject to liquidation or exchange for any other benefit.
The determination of whether the Executive is a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code as of the time of the Executive’s separation from
service shall made by the Company in accordance with the terms of Section 409A of the Code
and applicable guidance thereunder (including without limitation Treasury Regulation
Section 1.409A-1(i) and any successor provision thereto).”



     5. The second paragraph of Section 4.1(c) is hereby amended by adding the following provision
after the first sentence of that paragraph:




     “Notwithstanding the forgoing, all Gross-up Payments shall be made to the Executive no
later than the end of the calendar year following the calendar year in which the Executive
remits the Excise Tax.”



     6. A new Section 5.11 is hereby added that reads as follows:




     “5.11 Compliance with Section 409A. The parties acknowledge and agree that,
to the extent applicable, this Agreement shall be interpreted in accordance with, and the
parties agree to use their best efforts to achieve timely compliance with, Section 409A of
the Code and the Department of Treasury Regulations and other interpretive guidance issued
thereunder (“Section 409A”), including without limitation any such regulations or other
guidance that may be issued after the Effective Date. Notwithstanding any provision of
this Agreement to the contrary, in the event that the Corporation determines that any
compensation or benefits payable or provided hereunder may be subject to Section 409A, the
Corporation reserves the right (without any obligation to do so



3









 







or to indemnify the Executive for failure to do so), after consulting with and securing the
approval of the Executive (such approval not to be unreasonably withheld or delayed), to
adopt such limited amendments to this Agreement and appropriate policies and procedures,
including amendments and policies with retroactive effect, that the Corporation reasonably
determines are necessary or appropriate to (a) exempt the compensation and benefits payable
under this Agreement from Section 409A and/or preserve the intended tax treatment of the
compensation and benefits provided with respect to this Agreement or (b) comply with the
requirements of Section 409A.




IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 effective as of the date
first above written.



POLO RALPH LAUREN CORPORATION




	 	 	 
	/s/ Mitchell Kosh

	 	/s/ Jackwyn Nemerov
	 

	 	 
	By:    Mitchell Kosh

	 	JACKWYN NEMEROV
	Title: Senior Vice President – Human
Resources & Legal
	 	 







4