tothe Board and shall be subject to the direction and control of the Board, its committees andits non-executive chairman or any non-executive lead director.     (b) Notwithstanding Section 2(a), the Executive acknowledges and agrees upon request ofthe Board that she will participate in and assist and cooperate with the Board to establishand implement a successorship strategy in which she will transition the President and ChiefExecutive Officer duties to a successor chosen by the Board.     (c) The Executive shall be a full-time employee of the Company and shall devote herfull business time and efforts to the duties required of her in the positions described inthis Section 2, and in such other positions or offices of the Company or its subsidiaries oraffiliates as may be required of her hereunder consistent with such positions.Notwithstanding the foregoing provisions of this Section 2, the Executive may from time totime engage in such other pursuits, including, without limitation personal legal andpersonal financial affairs, as shall not materially interfere with the proper performance ofher duties and obligations hereunder.     **3. ****Compensation****.**     (a) Salary. For her services hereunder, effective as of the Commencement Date,the Company shall pay the Executive a base salary of Seven Hundred Seventy Thousand Dollars($770,000) per annum, subject to review annually by the Compensation Committee of the Board(the “Committee”) and adjustment as the Committee based on such review may determine (suchamount, the “Base Salary”) ; provided, however, Executive’s Base Salary may not be decreasedwithout Executive’s express written consent unless the decrease is pursuant to a generalcompensation reduction applicable to all, or substantially all, officers of the Company.     (b) Base Salary shall be paid in accordance with the regular payroll policies of theCompany in effect from time to time.     (c) Incentive Bonus Compensation. The Executive shall be eligible to earn abonus with respect to each fiscal year of the Company (each, a “Fiscal Year”) completedduring the Term based on Company achievement of performance targets established by
2

 
theCommittee (“Annual Bonus”). The performance targets for the Annual Bonus shall beestablished according to the same terms and conditions applicable to other senior managementof the Company. The Executive’s target Annual Bonus for any Fiscal Year shall not be lessthan 100% of Base Salary (“Target Bonus Objective”), and the Executive shall be eligible toearn a maximum bonus of 200% of Base Salary. The actual bonus will be earned in full by theExecutive as of the last day of the related Fiscal Year, based on achievement of the setperformance targets, and paid to Executive no later than April 15 following the end of therelated Fiscal Year, unless it is administratively not practicable to make payment by April15 due to unforeseen circumstances, in which case it shall be paid as soon asadministratively practical to make such payment but no later than December 31 of such year(the “Bonus Payment Date”).     (d) Stock Option Grants.     (1) The 2008 Option. On March 24, 2008, pursuant to the terms of theCompany’s 2007 Incentive Award Plan (the “LTIP”) the Company granted the Executivea stock option with respect to 625,000 shares (the “2008 Option Shares”) of thecommon stock of the Company (“Common Stock”), par value $0.01 per share (the “2008Option”) at an exercise price equal to $14.06. The 2008 Option and the Executive’srights thereunder are subject to the terms and conditions of the LTIP and the formoption agreement approved by the Committee for option grants under the LTIP;provided, that the 2008 Option shall vest in accordance with the following schedule,subject to Section 5 of this Agreement:     (A) the 2008 Option shall become vested as to 250,000 of the 2008Option Shares on the date of the Company’s announcement of its Fiscal Year2008-2009 earnings;     (B) the 2008 Option shall become vested as to 250,000 of the 2008Option Shares on the date of the Company’s announcement of its Fiscal Year2009-2010 earnings; and
3

 
     (C) the 2008 Option shall become vested as to 125,000 of the 2008Option Shares on the date of the Company’s announcement of its Fiscal Year2010-2011 earnings.     In addition, if Executive’s employment is terminated without Cause under Section5(c) prior to December 31, 2010 then, subject to Section 5(h) and Executive’scontinued compliance with the Policy (as defined in Section 10 below), the 2008Option shall remain exercisable through March 24, 2011.     (2) The 2009 Option. The Company shall grant to the Executive, on thefirst date that the Company allows executives of the Company to trade in the CommonStock pursuant to the Company’s trading policy (the “First Trading Date”), followingthe announcement of its Fiscal Year 2008-2009 earnings (the “2009 Grant Date”), astock option with respect to 200,000 shares (the “2009 Option Shares”) of CommonStock (the “2009 Option”) at an exercise price equal to Fair Market Value (asdetermined under the LTIP or any successor plan thereto) on the 2009 Grant Date.The 2009 Option and the Executive’s rights thereunder shall be subject to the termsof the LTIP (or any successor plan thereto) and the standard form option agreementapproved by the Committee for option grants from time to time thereunder; provided,however, that the 2009 Option shall vest in accordance with the following schedule,subject to Section 5 of this Agreement:     (A) the 2009 Option shall become vested as to 100,000 of the 2009Option Shares on the date of the Company’s announcement of its Fiscal Year2009-2010 earnings; and     (B) the 2009 Option shall become vested as to 100,000 of the 2009Option Shares on the date of the Company’s announcement of its Fiscal Year2010-2011 earnings.     (3) The 2010 Option. The Company shall grant to the Executive, on theFirst Trading Date following the announcement of its Fiscal Year 2009-2010
4

 
earnings(the “2010 Grant Date”), a stock option with respect to 200,000 shares (the “2010Option Shares,” and together with the 2008 and 2009 Options Shares, the “OptionShares”) of Common Stock (the “2010 Option”) at an exercise price equal to FairMarket Value (as determined under the LTIP or any successor plan thereto) on the2010 Grant Date. The 2010 Option and the Executive’s rights thereunder shall besubject to the terms of the LTIP (or any successor plan thereto) and the standardform option agreement approved by the Committee for grants of options thereunder;provided, however, that the 2010 Option shall become vested on the date of theCompany’s announcement of its Fiscal Year 2010-2011 earnings, subject to Section 5of this Agreement.     (4) In the event that Executive’s employment is terminated without Cause underSection 5(c) prior to the date on which the 2009 and 2010 Options are otherwisescheduled to be granted under Sections 3(d)(2) and (3) above, then the 2009 and 2010Options shall, subject to Section 5(h) be granted on the date immediately prior tothe date Executive’s employment is so terminated, and shall be fully vested upongrant.     (5) Subject to continued compliance with the Policy, the 2009 and 2010 Optionsshall have a term of three years from the 2009 and 2010 Grant Dates (including ifthe grant date is under Section 3(d)(4)), respectively, during which Executive mayexercise the 2009 and 2010 Options regardless of Executive’s continued employment;provided, however, that if Executive’s employment is terminated for Cause underSection 5(b) the 2009 and 2010 Options shall automatically expire and no longer beexercisable.     (6) Notwithstanding anything to the contrary contained in this Section 3(d),each of the 2008, 2009 and 2010 Options (collectively, the “Contract Options”) shallprovide that they shall be fully-exercisable at all times during their respectiveterms; provided, however, after the termination of Executive’s employment for anyreason, the Contract Options may be exercised only with respect to vested OptionShares (including any Contract Options which
5

 
vest upon termination) and all unvestedContract Options shall expire. In all events the Contract Options and the OptionShares shall be subject to the vesting provisions set forth in this Section 3(d),and to the extent the Contract Option is exercised before it has become vested, theOption Shares so acquired shall be, until the Executive’s rights with respect tosuch Option Shares are vested in accordance with this Section 3(d), Restricted Stock(as defined in the LTIP) subject to forfeiture and cancellation upon the same termsand conditions as applicable to the Contract Options prior to their exercise. Forthis purpose, a Contract Option shall first be deemed to be exercised with respectto the vested portion thereof, and thereafter with respect to that portion which isdue to become vested hereunder in the shortest time frame. As a condition toexercising the Contract Options, the Executive shall be required to (i) execute suchagreements as ordinarily executed by recipients of Restricted Stock under the LTIP,and (ii) deliver in accordance with any method made available under the Plan by theCommittee, cash, vested Option Shares acquired upon exercise of the Contract Optionsor other unrestricted shares of Common Stock held by Executive for at least sixmonths, with a Fair Market Value (as determined under the LTIP or any successor planthereto) equal to the minimum amount required to satisfy all income and employmenttax withholding obligations of the Executive that may be due upon exercise of theContract Options, vesting of the Restricted Stock or the filing of an election underSection 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) withrespect thereto.     (7) Tolling. In the event that upon the Executive’s termination ofemployment, (i) the Option Shares may not be issued by reason of any state orfederal law or under rulings or regulations of the Securities and ExchangeCommission or of any other governmental regulatory body or (ii) Executive shallbe prohibited from selling the Option Shares by reason of her possession of materialnonpublic information regarding the Company, then notwithstanding anything containedin the Contract Option agreements to the contrary, the Contract Options shall beexercisable through the earlier of (A) the term set forth in the option agreementnotwithstanding any termination of employment; or (B)
6

 
the date that is 90 daysfollowing the date that the Company determines that the provisions of clause (i) or(ii) of this Section 3(d)(7) no longer apply. The determination of whether theextension of the option exercise period under this Section 3(d)(7) applies, and whenit ends under clause (B) hereof shall be made in the discretion of the Company, withthe approval of the Audit Committee of the Board of Directors upon the advice ofoutside legal counsel to the Company.     (8) Grants under LTIP. The Executive acknowledges that the ContractOptions are being granted to her in lieu of her eligibility to participate in grantsunder the Company’s Long Term Incentive Plan, any successor thereto, or any otherplan or arrangement that the Company may adopt in the future with respect to equitycompensation for senior executives. In addition, Executive agrees not to request tothe Board or any Committee thereof any further equity compensation grants forherself. However, the parties acknowledge that nothing herein shall preclude theCommittee from deciding, in its sole discretion, to grant the Executive additionalequity awards at any time after the Commencement Date.     **4. ****Benefits****.**     (a) Standard Benefits. During the Term, the Executive shall be eligible toparticipate in such medical, health, pension, welfare, and insurance plans offered by theCompany to other management employees as she elects from time to time (subject to the termsof such plans). The Executive shall participate in any other benefit plans or arrangementson a basis that is at least as favorable to the Executive as that which is applicable to anyother senior officer of the Company.     (b) Expenses. The Company agrees to reimburse the Executive for all reasonabletravel and business expenses incurred by her in the performance of her duties hereunder inaccordance with the Company’s business expense reimbursement policies as in effect from timeto time. All such reimbursements shall be made no later than December 31 of the yearfollowing the year in which the expense was incurred. The amount of reimbursements providedinone year shall not affect the amounts provided in
7

 
any subsequent year. Suchreimbursements shall not be subject to liquidation or exchange for another benefit.     (c) Vacation. The Executive shall be entitled to four weeks of annual vacationto be accrued and taken in accordance with the Company’s vacation policy for seniorexecutives.     (d) Indemnification. The Executive shall be entitled to the sameindemnification under the terms of the Company’s By-Laws and Articles of Incorporation as isprovided, and such liability insurance as the Company may from time to time purchase, forits Board members and senior officers, including such post-termination indemnification andliability insurance as applicable to other Board members and senior executives.     (e) New York State Tax. Each year during the Term, the Company shall reimburseExecutive for the difference, if any, between the income taxes actually paid by Executive asa result of her performance of services for the Company in New York state, and the rateExecutive would otherwise have paid on such income as a resident of Illinois. The Companyshall also reimburse Executive for any penalties and interest payable by Executive withrespect to income from service for the Company taxable in New York for years prior to 2007.     **5. ****Termination****.**     (a) Death or Disability. The Executive’s employment shall automaticallyterminate upon the death of the Executive, or Disability (defined below). In the eventthat the Executive’s employment terminates by reason of Disability or death, theExecutive shall be entitled to the following:     (1) Base Salary accrued through the last day of the Executive’s employment withthe Company (the “Termination Date”), all earned but unpaid Annual Bonus for theyear prior to the year in which the Termination Date occurs, all accrued but unusedvacation, and accrued benefits under the Company’s
8

 
employee benefit plans (the“Accrued Benefits”), payable within the time required under state wage payment law;     (2) (i) The Executive’s Base Salary at the rate in effect on the TerminationDate payable in twelve (12) equal monthly installments; and (ii) an amount equal tothe Annual Bonus which Executive would have earned based on the Company’sperformance in the Fiscal Year of such termination, multiplied by a fraction thenumerator of which is the number of days in the Fiscal Year elapsed through theTermination Date and the denominator is 365 (the “Pro-Rated Bonus”) payable in alump sum as provided in Section 5(a)(3); provided, however, that in the event of hertermination for Disability, all amounts payable under Section 5(a)(2) shall besubject to Sections 5(h), Section 7 and continued compliance with the Policy; and     (3) Amounts payable under Section 5(a)(2)(i) shall commence on the Company’sfirst regularly scheduled payroll date following (A) the Release Effective Date (asdefined in Section 5(h)) if payable upon the Disability, or (B) Executive’s death,if payable by reason of death. The Pro-Rated Bonus shall be payable on the BonusPayment Date for such Fiscal Year or, if later, the Release Effective Date, ifpayable due to termination by reason of Disability.     The Executive’s rights and benefits under any other applicable Company plans orprograms including, but not limited to, the LTIP (the “Company Plans”), shall be asdetermined under such plans or programs.     The term “Disability” shall mean a medical condition entitling the Executive tolong-term disability compensation under the terms of any long-term disability planapplicable to the Executive and other management employees, and in the absence thereof shallmean that, due to physical or mental illness, the Executive shall have failed to perform herduties on a full-time basis hereunder for one hundred eighty (180) consecutive days(“Disability Period”). Any termination of the Executive’s employment by the Company forDisability shall be communicated by written notice of termination specifying the reason fortermination (“Disability Termination Notice”) and the
9

 
Termination Date shall be the later of(i) the date of Disability or (ii) thirty (30) days following the Executive’s receipt of theDisability Termination Notice. Any dispute as to the Executive’s Disability shall beresolved by an independent physician selected by the Board and reasonably acceptable to theExecutive or her legal representative.     (b) Cause. The Company may terminate the Executive’s employment for Cause(defined below) by written notice to the Executive at any time when Cause exists. In suchcase the Company shall pay the Executive the Accrued Benefits within the time periodprescribed by state wage payment law and the Executive’s rights under any of the CompanyPlans shall be as determined under the terms thereof. For purposes of this Agreement,“Cause” shall mean the Executive’s:     (1) continued willful failure substantially to perform her duties, followingwritten notice (other than by reason of disability);     (2) willful engagement in gross misconduct that is materially injurious to theCompany;     (3) willful fraudulent or dishonest action that is materially detrimental tothe business or reputation of the Company;     (4) willful and material breach of the Policy or any policy of the Companyrelating to discrimination, harassment or trading in the Company’s securities, afterthe Executive has been given written notice detailing the specificevent constituting such breach and a period of thirty (30) days followingreceipt of such notice to cure such event (if susceptible to cure); or     (5) conviction of, or plea of guilty or nolo contendere to a felony.     For purposes of this Section 5(b), an act or failure to act shall be considered“willful” only if done or omitted to be done without a good faith reasonable belief thatsuch act or failure to act was in the best interests of the Company.     The Company shall provide Executive with at least ten (10) days written notice of itsintent to terminate her employment for Cause and during any such notice period may
10

 
suspendExecutive from her duties and position without pay. Any determination of Cause by theCompany will be made by a resolution approved by a majority of the members of the Boardafter the Executive has been provided with the opportunity (with counsel of her choice) tocontest the determination at a meeting of the Board. The determination of Cause by theCompany may be made anytime before or after the Executive’s Termination Date; provided thatany retroactive determination that Executive’s termination was for Cause shall be based onfacts and circumstances not reasonably known to the Board on the Termination Date.     (c) Termination Without Cause. The Company may terminate the Executive’semployment at any time without “Cause” (as defined below) by written notice to theExecutive. In such case the Executive shall be entitled to:     (1) the Accrued Benefits, payable within the time period prescribed by statewage payment law;     (2) subject to Sections 5(h), Section 7 and continued compliance with thePolicy, an amount equal to: (i) two (2) times the Executive’s Base Salary at therate in effect on the Termination Date payable in twelve (12) equal monthlyinstallments commencing on the first regularly scheduled payroll date following theRelease Effective Date, and (ii) the Pro-Rated Bonus payable in a lump sum on thelater of (A) the Release Effective Date, or (B) the Bonus Payment Date for suchFiscal Year;     (3) subject to Sections 5(h) and continued compliance with the Policy; providedthat the Executive elects continuation Coverage under Section 4980B of the Code(“COBRA”), then for the duration of the COBRA period, but not to exceed eighteen(18) months after the Termination Date, continued health benefits (including anymedical, vision or dental benefits), under the Company’s health plans and programsunder COBRA, but at the same cost to the Executive as would have applied in theabsence of such termination; and
11

 
     (4) subject to Section 5(h) and continued compliance with the Policy all of theContract Options (and any Restricted Stock into which Contract Stock was exercisedunder Section 3(c)(4)) shall vest, become fully exercisable and nonforfeitable onthe Release Effective Date.     The Executive’s rights and benefits under the Company Plans and any other option shallbe as determined under such plans, programs and option agreements.     (d) Termination by Executive for Good Reason. The Executive may terminate heremployment under this Agreement for Good Reason (defined below) by written notice to theCompany. Any termination for Good Reason pursuant to this Section 5(d) shall be deemed tobe a termination by the Company without Cause and Executive shall be eligible for thepayments and benefits under Section 5(c) of this Agreement, subject to the terms andconditions thereof. For purposes of this Agreement, the term “Good Reason” means:     (1) A material reduction by the Company, without the Executive’s writtenconsent, in the Executive’s material duties and responsibilities, including but notlimited to loss of board position, or the assignment of duties materiallyinconsistent with the Executive’s position with the Company as previously assignedby the Board; provided, however, that any reduction in Executive’s duties andresponsibilities and the assignment to Executive of new duties in connection withthe implementation of the successorship plan described in Section 2(b) shall notconstituted Good Reason under this Section 5(d)(1);     (2) An adverse or material change in reporting responsibilities, including anyrequirement that the Executive report to anyone other than the Board;     (3) The Company’s appointment of a successor chief executive officer orexecutive chairman prior to January 1, 2011;
12

 
     (4) Except as permitted by Section 3(a), any material reduction by the Company,without the Executive’s written consent, of the Executive’s Base Salary or TargetBonus Objective; or     (5) Any material breach by the Company of its obligations under this Agreement;     provided, that Executive must give written notice to the Company within thirty (30)days of any event giving rise to Good Reason and the Company must fail to cure withinthirty (30) days of such notice in order for such event to qualify as a Good Reasontermination.     (e) Termination by Executive other than for Good Reason. The Executive mayterminate her employment other than for “Good Reason” at any time upon thirty (30) daysprior written notice to the Company. In such case the Company shall pay to the Executiveany Accrued Benefits within the time period prescribed by state wage payment law. TheExecutive’s rights and benefits under any of the Company Plans shall be as determined underthe terms thereof.     (f) Change in Control. In the event of a Change in Control (as defined in theLTIP) and the Executive’s employment is terminated by the Company other than for Cause, orby the Executive for Good Reason within the twelve month period following the Change inControl, then, subject to Section 5(h), in addition to the Executive’s rights under Section5(c) or 5(d) above, all of the Executive’s Options (whether or not granted prior to orfollowing the Commencement Date), or any Restricted Stock into which theContract Stock was exercised under Section 3(d)(4), shall immediately vest, becomefully exercisable and nonforfeitable on the Release Effective Date.     (g) Effect of Termination. Upon the termination of the Executive’s employmentwith the Company for any reason and upon such termination, the Executive shall be deemed tohave resigned immediately from all offices held by her in the Company or any of itssubsidiaries.
13

 
     (h) Release and Timing of Payment. Executive’s rights to receive the paymentsand benefits under Section 5(a)(2), 5(c)(2), (3) and (4), 5(f) and the grant of the 2009 and2010 Options under Section 3(c)(4), (the “Severance Benefits”) shall be subject toExecutive’s execution, delivery and not revoking a release of claims and covenant not tosue, in the form attached hereto as Exhibit A (the “Release”), following theTermination Date. The Release shall be effective on the 8th day followingExecutive’s execution and delivery of the Release, if Executive does not revoke the Releaseduring such period (the “Release Effective Date”). However, in no event shall the ReleaseEffective Date be later than seventy-five days following the Termination Date.Notwithstanding any provision herein to the contrary, the Severance Benefits shall be paidor provided only upon Employee’s “separation from service” as defined in Treasury RegulationSection 1.409A-1(h).     **6. ****Notices****.**Any notice or other communication required or permitted to be given underthis Agreement shall be in writing and shall be deemed given (i) when delivered or refused if sentby hand during regular business hours, (ii) three (3) business days after being sent by UnitedStates Postal Service, registered or certified mail, postage prepaid, return receipt requested, or(iii) when recorded as delivered by reputable overnight express mail service that provides tracingand proof of receipt or refusal at the address or addresses set forth below or such other addressesas the parties may designate in a notice given in accordance with this Section.     If to the Company:c/o Global Retail Partners