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(iv) indictment of the Executive for a felony, a crime involving moralturpitude or any other crime involving the business of the Company which, inthe case of such crime involving the business of the Company, is injuriousto the business of the Company.     For purposes of this Cause definition, no act or failure to act, on the part of the Executive,shall be considered willful unless it is done, or omitted to be done, by her in bad faith andwithout reasonable belief that her action was in the best interests of the Company. Thedetermination to terminate the Executive’s employment for Cause shall be made by the Board andprior to such determination the Executive shall have the right to appear before the Board or aCommittee designated by the Board.          (d) “Change in Control” shall mean any of the following:(i) any “person” (as such term is used in Sections 3(a)(9) and 13(d) of theSecurities Exchange Act of 1934) or group of persons acting jointly or inconcert, but excluding a person who owns more than 5% of the outstandingshares of the Company as of the date of this Agreement, becomes a“beneficial owner” (as such term is used in Rule 13d-3 promulgated underthat Act), of 50% or more of the Voting Stock of the Company;(ii) all or substantially all of the assets of the Company are disposed ofpursuant to a merger, consolidation or other transaction (unless theshareholders of the Company immediately prior to such merger, consolidationor other transaction beneficially own, directly or indirectly, insubstantially the same proportion as they owned the Voting Stock of theCompany, all of the Voting Stock or other ownership interests of the entityor entities, if any, that succeed to the business of the Company); or(iii) approval by the shareholders of the Company of a complete liquidationor dissolution of all or substantially all of the assets of the Company.     For purposes of this Change in Control definition, “Voting Stock” shall mean the capital stockof any class or classes having general voting power, in the absence of specified contingencies, toelect the directors of the Company.          (e) “Commencement Date” shall mean September 12, 2005.          (f) “Date of Termination” shall mean:(i) if the Executive’s employment is terminated by the Company, the datespecified in the notice by the Company to the Executive that heremployment is so terminated; provided that for a termination forCause
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suchnotice is delivered after the Board determination as set forth in Section1(c) hereof;(ii) if the Executive voluntarily resigns her employment, 90 days afterreceipt by the Company of written notice that the Executive is terminatingher employment or if the Company shortens the required notice period inaccordance with Section 6(c), the date of termination specified in suchnotice;(iii) if the Executive’s employment is terminated by reason of death, thedate of death;(iv) if the Executive’s employment is terminated for Disability, 30 daysafter written notice is given as specified in Section 1(g) below; or(v) if the Executive resigns her employment for Good Reason, 30 days afterreceipt by the Company of timely written notice from the Executive inaccordance with Section 1(h) below unless the Company cures the event orevents giving rise to Good Reason within 30 days after receipt of suchwritten notice.          (g) “Disability” shall mean the Executive’s inability, due to physical or mental incapacity,to substantially perform her duties and responsibilities for a period of 180 consecutive days asdetermined by a medical doctor selected by the Company and reasonably acceptable to the Executive.In no event shall any termination of the Executive’s employment for Disability occur until theParty terminating her employment gives written notice to the other Party in accordance with Section15 below.          (h) “Good Reason” shall mean the occurrence of any of the following without the Executive’sprior written consent:(i) a material diminution by the Company in the Executive’s authority,duties or responsibilities as Senior Vice President Human Resources or theassignment to the Executive by the Company of any duties materiallyinconsistent with such position;(ii) a reduction in (A) Base Salary or (B) Target Bonus opportunity as apercentage of Base Salary;(iii) in connection with or following a Change in Control, a change inreporting structure so that the Executive reports to someone other than theChief Executive Officer of the Company;(iv) the removal by the Company of the Executive as Senior Vice PresidentHuman Resources of the Company or the failure by the Board to
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elect orreelect the Executive as an executive officer of the Company;(v) requiring the Executive to be principally based at any office orlocation more than 50 miles from midtown Manhattan; or(vi) the failure of a successor to all or substantially all of the assets ofthe Company to assume the Company’s obligations under this Agreement eitheras a matter of law or in writing within 15 days after a merger,consolidation, sale or similar transaction.     Anything herein to the contrary notwithstanding, the Executive shall not be entitled to resignfor Good Reason (i) if the occurrence of the event otherwise constituting Good Reason is the resultof Disability, a termination by the Company for which notification has been given or a voluntaryresignation by the Executive other than for Good Reason and (ii) unless the Executive gives theCompany written notice of the event constituting “Good Reason” within 90 days of the occurrence ofsuch event and the Company fails to cure such event within 30 days after receipt of such notice.     (i) “Separation From Service” shall mean a termination of the Executive’s employment in amanner consistent with Treasury Regulation Section 1.409A-1(h).     2. Term of Employment.     The term of the Executive’s employment under this Agreement commenced on the Commencement Dateand shall end at the close of business on the second anniversary of such date (the “Term”);provided, however, that the Term shall thereafter be automatically extended for additionalone-year periods, unless either the Company or the Executive gives the other written notice atleast 120 days prior to the then-scheduled expiration of the Term that such Party is electing notto so extend the Term (the initial term plus any extension thereof in accordance herewith beingreferred to herein as the “Term”). Notwithstanding the foregoing, the Term shall end on the dateon which the Executive’s employment is terminated by either Party in accordance with the provisionsherein.     3. Position; Duties and Responsibilities.     During the Term, the Executive shall be employed as Senior Vice President, Human Resources ofthe Company and shall perform such duties and responsibilities as determined by the Chief ExecutiveOfficer. The Executive shall devote substantially all of her business time and attention to thesatisfactory performance of her duties. Anything herein to the contrary notwithstanding, nothingshall preclude the Executive from (i) subject to the reasonable approval of the Board, serving onthe boards of directors of trade associations and/or charitable organizations or other businesscorporations (provided such service is not prohibited underSection 8(a)(i) below), (ii) engaging in charitable activities and community affairs and(iii) managing her personal investments and affairs, provided that the activities described in the
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preceding clauses (i) through (iii) do not materially interfere with the proper performance of herduties and responsibilities hereunder.     4. Compensation.          (a) Base Salary. During the Term, the Executive shall be paid an annualized BaseSalary of $300,000 (“Base Salary”), payable in accordance with the regular payroll practices of theCompany, subject to annual review by the Board (or its designee, including the CompensationCommittee of the Board) in its sole discretion. During the Term the Base Salary may not bedecreased without the Executive’s prior written consent. The Executive shall not be entitled toany compensation for service as an officer or member of any board of directors of any Affiliate.After any increase in base salary approved by the Board or its designee, the term “Base Salary” asused in this Agreement shall thereafter refer to the increased amount. The Company acknowledgesthat as of the Effective Date, Base Salary is $325,000.          (b) Annual Incentive Awards. During the Term, the Executive shall be eligible toreceive an annual incentive award (provided the Executive was employed continuously during theapplicable fiscal year) pursuant to the Company’s Incentive Compensation Plan, as amended (or suchother annual incentive plan as may be approved by the Company’s shareholders), in effect for theapplicable fiscal year (“Bonus Plan”). The Executive’s annual incentive award shall have a targetof 50% of Base Salary (“Target Bonus”), with a potential maximum award as set forth in the BonusPlan, in all events based on the Executive’s achievement of annual performance and other targetsapproved by the committee administering the Bonus Plan. The amount and payment of any annualincentive award shall be determined in accordance with the Bonus Plan and shall be payable to theExecutive when bonuses for the applicable performance period are paid to other senior executives ofthe Company, but in all events no later than the 60th day following the end of theapplicable fiscal year for which the Annual Bonus has been earned. After any increase in theExecutive’s target annual bonus opportunity as a percentage of Base Salary as approved by the Board(or its designee), the term “Target Bonus” as used in this Agreement shall thereafter refer to theincreased target opportunity. The Company acknowledges that as of the Effective Date, Target Bonusis 60% of Base Salary.          (c) Long Term Incentive Awards. On the Commencement Date, the Executive was grantedshares of restricted stock and an option to purchase shares of the Company’s common stock with anaggregate value of 2 times Base Salary ($600,000). Except as otherwise provided herein, therestricted stock as described herein and the option as described herein shall vest 33% on each ofSeptember 12, 2006 and September 12, 2007 and 34% on September 12, 2008, provided that theExecutive is employed by the Company on such vesting date and has not given notice to the Companythat she is voluntarily resigning, without Good Reason, prior to such vesting date. Thereafter,commencing in fiscal year 2007, the Executive shall be eligible to participate in the Company’sequity incentive plans, including, without limitation, the 2003 and 2005 Stock Incentive Plans, asamended from time to time, and suchother long-term incentive plan(s) as may be approved by the Company’s shareholders from timeto time (“Stock Incentive Plan”). Except as otherwise provided herein, all equity grants shall begoverned by the applicable equity plan and/or award agreement. The Executive shall be subject
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tothe equity ownership, retention and other requirements applicable to senior executives of theCompany.          (d) Supplemental Award. During the Term beginning with fiscal year 2006, provided theExecutive is employed by the Company, the Executive shall be entitled to an annual award with anaggregate grant date value equal to 8% of the sum of Base Salary plus Annual Bonus as defined inthis Section 4(d) if the Executive will be less than age 50 by the end of the applicable fiscalyear, 10% of such amount if the Executive will be age 50 and over and less than age 60 at the endof the applicable fiscal year and 13% of such amount if the Executive will be age 60 or older bythe end of the applicable fiscal year (“Supplemental Award”), with the first such award pro-ratedto reflect four months of service in fiscal 2005. For this purpose, Base Salary shall be the BaseSalary paid to the Executive for the fiscal year prior to the award year and Annual Bonus shall bethe annual bonus awarded to the Executive by the Board for such fiscal year. The SupplementalAward shall not be awarded to the Executive until after the determination by the Board of theExecutive’s annual bonus for the prior fiscal year (but in no event later than 60 days thereafterfor any award made after fiscal year 2005) and 50% of the value of the Supplemental Award shall beawarded in the form of restricted shares pursuant to the applicable Stock Incentive Plan (“CareerShares”) and 50% shall be awarded in the form of a credit to a bookkeeping account maintained bythe Company for the Executive’s account (the “Notional Account”). Any Career Shares awardedhereunder shall be governed by the applicable Stock Incentive Plan and, if applicable, any awardagreement. For purposes of this Section 4(d), each Career Share shall be valued at the closingprice of a share of the Company’s common stock (“Share”) on the date that the Supplemental Award ismade. For the Notional Account, the Company shall select the investment alternatives available tothe Executive under the Company’s 401(k) plan. The balance in the Notional Account shallperiodically be credited (or debited) with the deemed positive (or negative) return based onreturns of the permissible investment alternative or alternatives under the Company’s 401(k) planas selected in advance by the Executive (and in accordance with the applicable rules of such planor investment alternative) to apply to such Notional Account, with such deemed returns calculatedin the same manner and at the same times as the return on such investment alternative(s). TheCompany’s obligation to pay the amount credited to the Notional Account, including any returnthereon provided for in this Section 4(d), shall be an unfunded obligation to be satisfied from thegeneral funds of the Company. Except as otherwise provided in Section 6 below or the applicableStock Incentive Plan and provided that the Executive is employed by the Company on such vestingdate, any Supplemental Award granted in the form of Career Shares will vest as follows: 50% of theCareer Shares will vest on the earlier of the Executive’s 62nd birthday or upon the Executive’sobtaining 15 years of “Vesting Service” and 100% of the Career Shares will vest on the earliest of(i) the Executive’s 65th birthday, (ii) upon the Executive obtaining 20 years of “Vesting Service”or (iii) 10th anniversary of the date of grant. Except as otherwise provided in Section 6 below,and provided that the Executive is employed by the Company on such vesting date, any SupplementalAward granted as a credit to the Notional Account (as adjusted for any returns thereon) (“AdjustedNotional Account”)) shall vest as follows: 50% on the earlier of theExecutive’s 62nd birthday or upon the Executive obtaining 5 years of “Vesting Service” and100% on the earlier of the Executive’s 65th birthday and upon the Executive obtaining 10 years of“Vesting Service”. For purposes of this Section 4(d), “Vesting Service” shall mean the period oftime that the Executive is employed by the Company as an executive officer. Subject to
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Section17(b) hereof, upon vesting the Career Shares will be delivered to the Executive in the form ofShares. In addition, any unvested Adjusted Notional Account shall vest upon a Change in Control asdefined in Section 1(d)(i) or (ii) hereof which also qualifies as a “change in control event” underSection 409A (“409A Change in Control Event”). The vested balance in the Adjusted NotionalAccount, if any, shall not be distributed to the Executive until there has been a Separation FromService or, if earlier, there has been a 409A Change in Control Event and, at such time, shall onlybe distributed at the earliest time that satisfies the requirements of this Section 4(d). Upon a409A Change in Control Event, the vested Adjusted Notional Account shall be paid to the Executivein a lump-sum cash payment. In addition, if the Executive’s employment is terminated for anyreason, after taking into account Section 6 hereof, any unvested Supplemental Awards (whether inthe form of Career Shares or the Adjusted Notional Account) shall be forfeited and any vestedbalance in the Adjusted Notional Account, subject to Section 17(b) hereof, shall be paid to theExecutive in a cash lump-sum payment immediately following the Executive’s Separation From Service;provided, however, that if the Executive is a “specified employee” as determined pursuant toSection 409A as of the date of the Executive’s Separation From Service, such distribution shall notbe made until the earlier of the Executive’s death or the first business day of the seventhcalendar month following the month in which the Executive’s Separation From Service occurs;provided, further, that if the Executive’s employment is terminated due to Disability and suchDisability satisfies the requirements of Section 409A(a)(2)(C) of the Code or the TreasuryRegulations implementing such section, then such distribution may be made upon Separation FromService without regard to whether the Executive was a “specified employee” at such time. TheExecutive can elect to delay the time and/or form of payment of the Adjusted Notional Account underthis Section 4(d), provided such election is delivered to the Company in writing at least 12 monthsbefore the scheduled payment date for such payment and the new payment date for such payment is notearlier than (i) the Executive’s death, (ii) the Executive’s “disability” which satisfies therequirements of Section 409A(a)(2)(C) of the Code and its implementing regulations, or (iii) five(5) years from the originally scheduled payment date. Upon the expiration or termination of theTerm, the vesting and payment dates in this Section 4(d) (without regard to Section 6, except asotherwise expressly provided in Section 6(d) of this Agreement) and the election right in thisSection 4(d) shall continue to apply to any outstanding Supplemental Award.     5. Employee Benefits.          (a) Employee Benefit Programs. During the Term, subject to the Company’s right toamend, modify or terminate any benefit plan or program, the Executive shall be entitled toparticipate in all employee savings and welfare benefit plans and programs made available to theCompany’s senior-level executives on a basis no less favorable than provided to othersimilarly-situated executives, as such plans or programs may be in effect from time to time,including, without limitation, savings and other retirement plans or programs, medical, dental,hospitalization, short-term and long-term disability and life insurance plans, accidental death anddismemberment protection and travel accident insurance. During the Term, the Executive shallalso be entitled to a paid annual physical medical exam as approved by the Company and Company-paidterm life insurance with a benefit equal to $1 million, provided the Company can obtain suchinsurance at commercially reasonable premium levels. The Executive shall be entitled to four weekspaid vacation per calendar year.
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          (b) Business Expenses. During the Term, the Executive is authorized to incurreasonable expenses in carrying out her duties and responsibilities under this Agreement and theCompany shall promptly reimburse her for all business and entertainment expenses incurred inconnection with carrying out the business of the Company, subject to documentation in accordancewith the Company’s policy. The Executive shall be entitled to first class air travel whentraveling on Company business.          (c) Perquisites. The Executive shall be entitled to perquisites provided to othersenior-level executives, including a monthly car allowance of up to a maximum of $1,000.     Notwithstanding anything elsewhere to the contrary, except to the extent any reimbursement,payment or entitlement pursuant to this Section 5 does not constitute a “deferral of compensation”within the meaning of Section 409A, (i) the amount of expenses eligible for reimbursement or theprovision of any in-kind benefit (as defined in Section 409A) to the Executive during any calendaryear will not affect the amount of expenses eligible for reimbursement or provided as in-kindbenefits to the Executive in any other calendar year, (ii) the reimbursements for expenses forwhich the Executive is entitled shall be made on or before the last day of the calendar yearfollowing the calendar year in which the applicable expense is incurred and (iii) the right topayment or reimbursement or in-kind benefits may not be liquidated or exchanged for any otherbenefit.     6. Termination of Employment. The Term of this Agreement and the Executive’semployment hereunder shall terminate as of the Date of Termination in the following circumstances:          (a) Termination Without Cause by the Company or Resignation for Good Reason by theExecutive. In the event that during the Term the Executive’s employment is terminated withoutCause by the Company (other than due to Disability) or the Executive resigns for Good Reason andSection 6(d) below does not apply, the Executive shall be entitled to:(i) an amount equal to the Base Salary which would have been paid theExecutive from the Date of Termination through the expiration of the Term(without regard to its earlier termination hereunder) if she had remainedemployed, but in no event less than one times Base Salary, payable in a cashlump sum to the Executive as soon as practicable following the Date ofTermination (but in no event later than 60 days following such date);(ii) immediate vesting as of the Date of Termination of 50% of anyrestricted stock (other than Career Shares) that remains unvested as of theDate of Termination;(iii) with respect to any stock options granted on or after September 12,2005 which are vested and outstanding as of the Date of Termination,continued exercisability for 12 months following the Date of Termination orthe remainder of the option term, if shorter; and
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(iv) continued participation for the Executive and her eligible dependentsin the Company’s welfare benefit plans in which she and her eligibledependents were participating immediately prior to the Date of Terminationuntil the earlier of (a) the end of the applicable Term (without regard toits earlier termination hereunder), but in no event less than 12 monthsfollowing the Date of Termination, or (b) the date, or dates, the Executivereceives equivalent coverage under the plans and programs of a subsequentemployer.          (b) Termination upon Death or due to Disability. In the event that during the Termthe Executive’s employment is terminated upon death or due to Disability, the Executive (or herestate or legal representative, as the case may be) shall be entitled to:(i) a pro-rata annual bonus determined by multiplying the amount of theannual bonus the Executive would have received had her employment continuedthrough the end of the fiscal year in which the Date of Termination occursby a fraction, the numerator of which is the number of days during suchfiscal year that the Executive was employed by the Company and thedenominator of which is 365, payable when bonuses for such fiscal year arepaid to other Company executives (which payment date shall be no earlierthan January 1st and no later than March 15th of theyear following the year in which the Date of Termination occurs);(ii) immediate vesting as of the Date of Termination of 50% of anyrestricted stock (other than Career Shares) that remains unvested as of theDate of Termination; and(iii) immediate vesting as of the Date of Termination of 50% of anypreviously granted Supplemental Award that remains unvested as of the Dateof Termination, payable in accordance with Section 4(d) above.          (c) Termination by the Company for Cause or a Voluntary Resignation by the Executive.In the event that during the Term the Company terminates the Executive’s employment for Cause orthe Executive voluntarily resigns, the Executive shall be entitled to her Base Salary and benefitsthrough the Date of Termination. A voluntary resignation by the Executive of her employment shallbe effective upon 90 days prior written notice by theExecutive to the Company (“Notice Period”), subject to earlier termination by the Company inaccordance herewith. Failure by the Executive to provide the required notice shall be deemed to bea breach of this Agreement. During the Notice Period, the Executive shall continue to be anemployee of the Company and herfiduciary duties and other obligations as an employee of theCompany shall continue. The Executive shall cooperate in the transition of her responsibilities;provided that the Company shall have the right to direct the Executive to no longer come to work ornot to perform any work for the Company during the Notice Period. If the Company so directs, inaddition to her fiduciary duties and other obligations as an employee and her
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commitments pursuantto Section 7 and 8 hereof, the Executive agrees to refrain during the Notice Period from contactingany customers, clients, advertisers, suppliers, agents, professional advisors or employees of theCompany or any of its Affiliates. The Company shall also have the right to shorten the NoticePeriod by providing written notice to the Executive, in which event the Executive’s employmentshall terminate on the date stated in such notice.          (d) Termination without Cause by the Company or Resignation for Good Reason by theExecutive Upon or Following a Change in Control. In the event that the Executive’s employmentis terminated without Cause by the Company (other than due to Disability) or the Executive resignsfor Good Reason, in both cases upon or within one year following a Change in Control (provided theTerm is still in effect or has expired during this one-year period), the Executive shall beentitled to:(i) an amount equal to 2 times the sum of (a) Base Salary plus (b) TargetBonus, payable in a lump sum as soon as practicable following the Date ofTermination (but in no event later than 60 days following such date);(ii) a pro-rata Target Bonus for the year of termination, determined bymultiplying the Target Bonus by a fraction, the numerator of which is thenumber of days the Executive was employed by the Company during the year inwhich the Date of Termination occurs and the denominator of which is 365,payable in a lump sum as soon as practicable following the Date ofTermination (but in no event later than 60 days following such date);(iii) immediate vesting as of the Date of Termination of all outstandingequity awards (other than Career Shares), with any vested and outstandingstock options granted on or after September 12, 2005 remaining exercisablefor 24 months following the Date of Termination or the remainder of theoption term, if shorter;(iv) immediate vesting as of the Date of Termination of any previouslygranted Supplemental Award, payable in accordance with Section 4(d) above;and(v) continued participation for the Executive and her eligible dependents inthe Company’s welfare benefit plans in which she and her eligible dependentswere participating immediately prior to the Date of Termination until theearlier of (a) 24 months following the Date of Termination, or (b) the date,or dates, the Executive receives substantially equivalent coverage under theplans and programs of a subsequent employer.
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          (e) Termination of the Executive’s Employment by the Company Upon or After the Expirationof the Term. If the Company provides written notice to the Executive in accordance withSection 2 above that the Term shall not renew and upon, or at any time after, such expiration ofthe Term the Company terminates the Executive’s employment under circumstances that during the Termwould constitute a termination of employment without Cause, the Executive shall be entitled to thesame payments, benefits and entitlements as a Termination without Cause under Section 6(a) hereof;provided that if such notice of non-renewal of the Term and such termination both occur on orwithin one year following a Change in Control, then the Executive shall be entitled to thepayments, benefits, and entitlements under Section 6(d) hereof.          (f) Other Entitlements Upon Termination of Employment. In the event of anytermination of the Executive’s employment, the Executive (or her estate or legal representative, asthe case may be) shall be entitled to:(i) Base Salary through the Date of Termination, payable on the firstregularly scheduled payroll date following the Date of Termination;(ii) except for a termination of employment pursuant to Section 6(c) above,payment of any annual bonus awarded to the Executive that remains unpaid forthe fiscal year preceding the fiscal year in which the Date of Terminationoccurs, payable when bonuses for such performance period are paid to otherCompany executives;(iii) any Supplemental Award that is vested as of the Date of Termination,payable in accordance with Section 4(d) above;(iv) any amounts owing to the Executive but not yet paid under Section 5(b)and 5(c) above, payable in accordance with such section; and(v) except as otherwise provided in Section 6(g) below, additionalentitlements or treatment, if any, in accordance with applicable plans andprograms of the Company (provided that in no event shall the Executive beentitled to duplication of any payments or benefits).          (g) Exclusivity of Benefits; Releases of Claims. Any payments provided pursuant toSection 6(a), Section 6(d) or Section 6(e) above shall be in lieu of any salarycontinuation arrangements under any other severance program of the Company and in all events,the Executive shall not be entitled to duplication of any benefit or entitlement. In order to beentitled to any payments, rights and other entitlements pursuant to this Agreement or otherwise,the Executive must comply with the covenants and/or acknowledgements contained in Sections 7, 8, 9and 10 of this Agreement. In addition, in order to be entitled to any payments, rights or otherentitlements in connection with a termination covered by Section 6(a), Section 6(d) or Section 6(e)above (except for those payments or benefits required to be paid or provided by applicable law),the Executive shall be required to execute and deliver to the Company the
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Agreement and Release ofClaims attached hereto as Exhibit A no later than 45 days following the Date of Termination and notrevoke such release within the applicable revocation period.          (h) Nature of Payments; No Mitigation. Any amounts due under this Section 6 are inthe nature of severance payments considered to be reasonable by the Company and are not in thenature of a penalty. In the event of termination of her employment for any reason in compliancewith this Agreement, the Executive shall be under no obligation to seek other employment and,except as specifically provided for in this Section 6 with respect to continuation of welfarebenefits, there shall be no offset against amounts or entitlements due to her on account of anyremuneration or benefits provided by any subsequent employment she may obtain.          (i) Resignation. Notwithstanding any other provision of this Agreement, upon thetermination of the Executive’s employment for any reason or the Executive being directed not tocome to work or not to perform services for the Company in accordance with Section 6(c) hereof,unless otherwise requested by the Board, she shall immediately resign from the Board, ifapplicable, and all boards of directors of any Affiliate of the Company of which she may be amember, and as a trustee of, or fiduciary to, any employee benefit plans of the Company or anyAffiliate. The Executive hereby agrees to execute any and all documentation of such resignationsupon request by the Company, but she shall be treated for all purposes as having so resigned upontermination of her employment or upon the date the Company directs her not to come to work orperform services for the Company, regardless of when or whether she executes any suchdocumentation.          (j) Section 409A. Notwithstanding anything to the contrary in this Agreement orelsewhere (except for Section 4(d) of this Agreement), if the Executive is a “specified employee”as determined pursuant to Section 409A as of the date of the Separation From Service and if anypayment, benefit or entitlement provided for in this Agreement or otherwise both (x) constitutes a“deferral of compensation” within the meaning of Section 409A and (y) cannot be paid or provided ina manner otherwise provided herein or otherwise without subjecting the Executive to additional tax,interest or penalties under Section 409A, then any such payment, benefit or entitlement that ispayable during the first six months following the Executive’s Separation From Service shall be paidor provided to the Executive in a cash lump-sum on the earlier of the Executive’s death or thefirst business day of the seventh calendar month following the month in which the Executive’sSeparation From Service occurs. In addition, any payment, benefit or entitlement due upon atermination of the Executive’s employment that represents a “deferral of compensation” within themeaning of Section 409A (other than any payments due pursuant to Section 4(d) of this Agreement)shall only be paid orprovided to Executive upon a Separation From Service, in which case any reference to “Date ofTermination” in connection with such payment, benefit or entitlement shall be deemed to be areference to “Separation From Service” and the actual payment date within the time specified in theapplicable provision of Section 6 shall be within the Company’s sole discretion. Notwithstandinganything to the contrary in this Section 6 or otherwise, any payment or benefit under this Section6 or otherwise which is exempt from Section 409A pursuant to Treasury Regulation Section1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to the Executive only
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to the extent theexpenses are not incurred or the benefits are not provided beyond the last day of the secondtaxable year of the Executive following the taxable year of the Executive in which the SeparationFrom Service occurs; and provided further that the Company reimburses such expenses no later thanthe last day of the third taxable year following the taxable year of the Executive in which theSeparation From Service occurs. Finally, to the extent that the provision of any benefit pursuantto Section 6(a)(iv) or Section 6(d)(v) hereof is taxable to the Executive, any such reimbursementshall be paid to the Executive on or before the last day of the Executive’s taxable year followingthe taxable year in which the expense is incurred and such reimbursement shall not be subject toliquidation or exchange for any other benefit.     7. Protection of Confidential Information and Company Property.          (a) During the Term and thereafter, other than in the ordinary course of performing her dutiesfor the Company or as required in connection with providing any cooperation to the Company pursuantto Section 10 below, the Executive agrees that she shall not disclose to anyone or make use of anytrade secret or proprietary or confidential information of the Company or any Affiliate of theCompany, including such trade secret or proprietary or confidential information of any customer orother entity to which the Company owes an obligation not to disclose such information, which sheacquires during the course of her employment (“Confidential Information”), including, but notlimited to, records kept in the ordinary course of business, except when required to do so by acourt of law, by any governmental agency having supervisory authority over the business of theCompany or by any administrative or legislative body (including a committee thereof) with apparentor actual jurisdiction to order her to divulge, disclose or make accessible such information.“Confidential Information” shall not include information that (i) was known to the public prior toits disclosure by the Executive; or (ii) becomes known to the public through no wrongful disclosureby or act of the Executive or any representative of the Executive. In the event the Executive isrequested by subpoena, court order, investigative demand, search warrant or other legal process todisclose any Confidential Information, the Executive agrees, unless prohibited by law or Securitiesand Exchange Commission regulation, to give the Company’s General Counsel prompt written notice ofany request for disclosure in advance of the Executive’s making such disclosure and the Executiveagrees not to disclose such information unless and until the Company has expressly authorized theExecutive to do so in writing or the Company has had a reasonable opportunity to object to suchrequest or to litigate the matter (of which the Company agrees to keep the Executive reasonablyinformed) and has failed to do so.          (b) The Executive hereby sells, assigns and transfers to the Company all of her right, titleand interest in and to all inventions, discoveries, improvements and copyrightablesubject matter (the “Rights”) which during the period of her employment are made or conceivedby her, alone or with others, and which are within or arise out of any general field of theCompany’s business or arise out of any work she performs, or information she receives regarding thebusiness of the Company, while employed by the Company. The Executive shall fully disclose to theCompany as promptly as available all information known or possessed by her concerning any Rights,and upon request by the Company and without any further remuneration in any form to her by theCompany, but at the expense of the Company, execute all
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applications for patents and for copyrightregistration, assignments thereof and other instruments and do all things which the Company maydeem necessary to vest and maintain in it the entire right, title and interest in and to all suchRights.          (c) The Executive agrees upon termination of employment (whether during or after theexpiration of the Term and whether such termination is at the instance of the Executive or theCompany), and regardless of the reasons therefor, or at any time as the Company may request, shewill promptly deliver to the Company’s General Counsel, and not keep or deliver to anyone else, anyand all of the following which is in her possession or control: (i) Company property (including,without limitation, credit cards, computers, communication devices, home office equipment and otherCompany tangible property) and (ii) notes, files, memoranda, papers and, in general, any and allphysical matter and computer files containing confidential or proprietary information of theCompany or any of its Affiliates, including any and all documents relating to the conduct of thebusiness of the Company or any of its Affiliates and any and all documents containing confidentialor proprietary information of the customers of the Company or any of its Affiliates, except for (x)any documents for which the Company’s General Counsel has given written consent to removal at thetime of termination of the Executive’s employment and (y) any information necessary for theExecutive to retain for her tax purposes (provided the Executive maintains the confidentiality ofsuch information in accordance with Section 7(a) above).     8. Additional Covenants.          (a) The Executive acknowledges that in her capacity in management the Executive will have agreat deal of exposure and access to the Company’s trade secrets and Confidential Information.Therefore, to protect the Company’s trade secrets and other Confidential Information, the Executiveagrees as follows:(i) during her employment with the Company or any Affiliate and for 12months following termination of such employment (whether during the Term orthereafter), the Executive shall not, other than in the ordinary course ofperforming her duties hereunder or as agreed by the Company in writing,engage in a “Competitive Business,” directly or indirectly, as anindividual, partner, shareholder, director, officer, principal, agent,employee, trustee, consultant, or in any relationship or capacity, in anygeographic location in which the Company or any of its Affiliates is engagedin business. The Executive shall not be deemed to be in violation of thisSection 8(a) by reason of the fact that she owns or acquires, solelyas an investment, up to two percent (2%) of the outstanding equitysecurities (measured by value) of any entity. “Competitive Business” shallmean a business engaged in (x) apparel design and/or apparel wholesaling or(y) retailing in competition with any business that the Company or itsAffiliates is conducting at the time of the alleged violation; and
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(ii) during her employment with the Company or any Affiliate and for 18months following termination of such employment for any reason (whetherduring the Term or thereafter), the Executive shall not, other than in theordinary course of the Company’s business or with the Company’s priorwritten consent, directly or indirectly, solicit or encourage any customerof the Company or any of its Affiliates to reduce or cease its business withthe Company or any such Affiliate or otherwise interfere with therelationship of the Company or any Affiliate with its customers.          (b) The Executive agrees that during her employment with the Company or any Affiliate and for18 months following termination of such employment for any reason (whether during the Term orthereafter), she shall not, other than in the ordinary course of the Company’s business or with theCompany’s prior written consent, directly or indirectly, hire any employee of the Company or any ofits Affiliates, or solicit or encourage any such employee to leave the employ of the Company or itsAffiliates, as the case may be.          (c) During any Notice Period and following the termination of the Executive’s employment forany reason (whether during the Term or thereafter), the Executive and the Company each agree torefrain from making any statements or comments, whether oral or written, of a defamatory ordisparaging nature to third parties regarding each other (and, in the case of the Executive’scommitment hereunder, the “Company” shall include an Affiliate of the Company and the Company’sofficers, directors, personnel and products). The Executive and the Company each understand thateither party should be entitled to respond truthfully and accurately to statements about such partymade publicly by the Executive or the Company, as the case may be, provided that such response isconsistent with the responding party’s obligations not to make any statements or comments of adefamatory or disparaging nature as set forth herein.     9. Injunctive and Other Relief.          (a) The Executive acknowledges that the restrictions and commitments set forth in Sections 7,8 and 10 of this Agreement are necessary to prevent the improper use and disclosure of ConfidentialInformation and to otherwise protect the legitimate business interests of the Company and any ofits Affiliates. The Executive further acknowledges that the restrictions set forth in Sections 7,8 and 10 of this Agreement are reasonable in all respects, including, without limitation, duration,territory and scope of activity. The Executive expressly agrees and acknowledges that any breachor threatened breach by the Executive or any third party of any obligation by the Executive underthis Agreement, including, without limitation, any breach or threatened breach of Section 7, 8 or10 of this Agreement will cause the Company immediate, immeasurable and irreparable harm for whichthere is no adequate remedy at law, andas a result of this, in addition to its other remedies, the Company shall be entitled to theissuance by a court of competent jurisdiction of an injunction, restraining order, specificperformance or other equitable relief in favor of itself, without the necessity of posting a bond,restraining the Executive or any third party from committing or continuing to commit any suchviolation.
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          (b) If any restriction set forth in Section 7, 8 or 10 of this Agreement is found by anyarbitrator or court of competent jurisdiction to be unenforceable because it extends for too long aperiod of time or over too great a range of activities or in too broad a geographic area, it willbe interpreted to extend over the maximum period of time, range of activities or geographic area asto which it may be enforceable. If any provision of Section 7, 8 or 10 of this Agreement isdeclared to be invalid or unenforceable, in whole or in part, for any reason, such invalidity willnot affect the remaining provisions of such Section which will remain in full force and effect.     10. Cooperation.     Following the Executive’s termination of employment for any reason (whether during or afterthe expiration of the Term), upon reasonable request by the Company, the Executive shall cooperatewith the Company or any of its Affiliates with respect to any legal or investigatory proceeding,including any government or regulatory investigation, or any litigation or other dispute relatingto any matter in which she was involved or had knowledge during her employment with the Company,subject to her reasonable personal and business schedules. The Company shall reimburse theExecutive for all reasonable out-of-pocket costs, such as travel, hotel and meal expenses andreasonable attorneys’ fees, incurred by the Executive in providing any cooperation pursuant to thisSection 10; provided such expenses shall be paid to the Executive as soon as practicable but in noevent later than the end of the calendar year following the calendar year in which the expenses areincurred, subject in all cases to the Executive providing appropriate documentation to the Company.The Company shall also pay the Executive a reasonable per diem amount for the Executive’s time(other than for time spent preparing for or providing testimony) which shall be based upon theExecutive’s Base Salary at the Date of Termination, with such per diem paid to the Executive in thecalendar month following the month in which she provides such assistance. Any reimbursement orpayment under this Section 10 shall not affect the amount of the reimbursement or payment to theExecutive in any other taxable year. The right to payment or reimbursement pursuant to thisSection 10 shall not be liquidated or exchanged for any other benefit.     11. Tax Matters.          (a) If any amount, entitlement, or benefit paid or payable to the Executive or provided forher benefit under this Agreement and under any other agreement, plan or program of the Company(such payments, entitlements and benefits referred to as a “Payment”) is subject to the excise taximposed under Section 4999 of the Code, or any similar federal or state law (an “Excise Tax”), thennotwithstanding anything contained in this Agreement to the contrary, to the extent that any or allPayments would be subject to the imposition of an Excise Tax, the Payments shall be reduced (butnot below zero) if and to the extent that such reduction would result in the Executive retaining alarger amount, on an after-tax basis (taking into accountfederal, state and local income taxes and the imposition of the Excise Tax), than if theExecutive received all of the Payments (such reduced amount is hereinafter referred to as the“Limited Payment Amount”). The Company shall reduce or eliminate the Payments, by first reducingor eliminating those payments orbenefits which are payable in cash and then by reducing oreliminating non-cash payments, in each case in reverse order beginning with payments or
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benefitswhich are to be paid the farthest in time from the Determination (as defined below).          (b) All calculations under this Section 11 shall be made by a nationally recognized accountingfirm designated by the Company and reasonably acceptable to the Executive (other than theaccounting firm that is regularly engaged by any party who has effectuated a Change in Control)(the “Accounting Firm”). The Company shall pay all fees and expenses of such Accounting Firm. TheAccounting Firm shall provide its calculations, together with detailed supporting documentation,both to the Company and the Executive within 45 days after the Change in Control or the Date ofTermination, whichever is later (or such earlier time as is requested by the Company) and, withrespect to the Limited Payment Amount, shall deliver its opinion to the Executive that she is notrequired to report any Excise Tax on her federal income tax return with respect to the LimitedPayment Amount (collectively, the “Determination”). Within 5 days of the Executive’s receipt ofthe Determination, the Executive shall have the right to dispute the Determination (the “Dispute”).The existence of the Dispute shall not in any way affect the right of the Executive to receive thePayments in accordance with the Determination. If there is no Dispute, the Determination by theAccounting Firm shall be final binding and conclusive upon the Company and the Executive (except asprovided in subsection (c) below).          (c) If, after the Payments have been made to the Executive, it is established that thePayments made to, or provided for the benefit of, the Executive exceed the limitations provided insubsection (a) above (an “Excess Payment”) or are less than such limitations (an “Underpayment”),as the case may be, then the provisions of this subsection (c) shall apply. If it is establishedpursuant to a final determination of a court or an Internal Revenue Service (the “IRS”) proceedingwhich has been finally and conclusively resolved, that an Excess Payment has been made, theExecutive shall repay the Excess Payment to the Company within 20 days following the determinationof such Excess Payment. In the event that it is determined by (i) the Accounting Firm, the Company(which shall include the position taken by the Company, or together with its consolidated group, onits federal income tax return) or the IRS, (ii) pursuant to a determination by a court, or (iii)upon the resolution to the satisfaction of the Executive of the Dispute, that an Underpayment hasoccurred, the Company shall pay an amount equal to the Underpayment to the Executive within 10 daysof such determination or resolution together with interest on such amount at the applicable federalshort-term rate, as defined under Section 1274(d) of the Code and as in effect on the first datethat such amount should have been paid to the Executive under this Agreement, from such date untilthe date that such Underpayment is made to the Executive.     12. Representations.          (a) The Executive represents and warrants that she has the free and unfettered right to enterinto this Agreement and to perform her obligations under it and that she knows ofno agreement between her and any other person, firm or organization, or any law or regulation,that would be violated by the performance of her obligations under this Agreement. The Executiveagrees that she will not use or disclose any confidential or proprietary information of any prioremployer in the course of performing her duties for the Company or any of itsAffiliates.
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          (b) The Company represents that (i) the execution of this Agreement and the granting of thebenefits and awards hereunder have been authorized by the Company, including, where necessary, bythe Board, (ii) the execution, delivery and performance of this Agreement does not violate any law,regulation, order, decree, agreement, plan or corporate governance document of the Company and(iii) upon the execution and delivery of this Agreement by the Parties, it shall be the valid andbinding obligation of the Company enforceable against it in accordance with its terms, except tothe extent that enforceability may be limited by applicable bankruptcy, insolvency or similar lawsaffecting the enforcement of creditors’ rights generally.     13. Indemnification and Liability Insurance.     The Company hereby agrees during, and after termination of, her employment to indemnify theExecutive and hold her harmless, both during the Term and thereafter, to the fullest extentpermitted by law and under the certificate of incorporation and by-laws of the Company against andin respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses(including reasonable attorneys’ fees), losses, amounts paid in settlement to the extent approvedby the Company, and damages resulting from the Executive’s good faith performance of her duties asan officer or director of the Company or any Affiliate of the Company. The Company shall reimbursethe Executive for expenses incurred by her in connection with any proceeding hereunder upon writtenrequest from the Executive for such reimbursement and the submission by the Executive of theappropriate documentation associated with these expenses. Such request shall include anundertaking by the Executive to repay the amount of such advance or reimbursement if it shallultimately be determined that she is not entitled to be indemnified hereunder against such costsand expenses. The Company shall use commercially reasonable efforts to obtain and maintaindirectors’ and officers’ liability insurance covering the Executive to the same extent as theCompany covers its other officers and directors.     14. Resolution of Disputes.     Except as otherwise provided in Section 9 above, any controversy, dispute or claim arisingunder or relating to this Agreement, the Executive’s employment with the Company or any Affiliateor the termination thereof shall, at the election of the Executive or the Company (unless otherwiseprovided in an applicable Company plan, program or agreement), be resolved by confidential, bindingand final arbitration, to be held in the borough of Manhattan in New York City in accordance withthe rules and procedures of the Commercial Arbitration Rules of the American ArbitrationAssociation. Judgment upon the award rendered by the arbitrator may be entered in any court havingjurisdiction thereof and shall be binding upon the Parties. The Executive consents to the personaland exclusive jurisdiction of the Courts of the State of New York (including the United StatesDistrict Court for the Southern District of New York) in anyproceedings for equitable relief. The Executive further agrees not to interpose any objectionfor improper venue in any such proceeding. Each Party shall be responsible for its own costs andexpenses, including attorneys’ fees, and neither Party shall be liable for punitive or exemplary
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damages, provided that if the Executive substantially prevails with respect to all claims that arethe subject matter of the dispute, her costs, including reasonable attorneys’ fees, shall be borneby the Company; provided that if such costs are not reimbursed in connection with a dispute exemptfrom Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(11) then such payment shallbe made by the Company to the Executive in the year following the year in which the dispute isresolved.     15. Notices.     Any notice given to a Party shall be in writing and shall be deemed to have been given(i) when delivered personally (provided that a written acknowledgement of receipt is obtained),(ii) three days after being sent by certified or registered mail, postage prepaid, return receiptrequested or (iii) two days after being sent by overnight courier (provided that a writtenacknowledgement of receipt is obtained by the overnight courier), with any such notice dulyaddressed to the Party concerned at the address indicated below or to such other address as suchParty may subsequently designate by written notice in accordance with this Section 15:       If to the Company: The Warnaco Group, Inc.    501 Seventh Avenue    New York, New York 10018    Attention: General Counsel       If to the Executive: The most recent address in the Company’s records.     16. Governing Law.     This Agreement shall be governed by and construed and interpreted in accordance with the lawsof New York without reference to principles of conflicts of law, provided, however, that Federallaw shall apply to the interpretation or enforcement of the arbitration provisions of Section 14hereof.     17. Miscellaneous Provisions.          (a) This Agreement contains the entire understanding and agreement between the Partiesconcerning the subject matter hereof and, as of the Effective Date, shall supersede all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral,between the Parties with respect thereto (other than any agreements governing any equity awardsoutstanding as of the Effective Date). For the avoidance of doubt, for any termination ofemployment prior to January 1, 2009, Section 6 of this Agreement as in effect prior to thisamendment and restatement shall govern and control. No provision of this Agreement may be amendedunless such amendment is agreed to in writing and signed by the Executive and an authorized officerof the Company. No waiver by either Party of any breach by the other Party ofany condition or provision contained in this Agreement to be performed by such other Partyshall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prioror subsequent time. Any waiver must be in writing and signed by the Party against whom
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it is beingenforced (either the Executive or an authorized officer of the Company, as the case may be). Therespective rights and obligations of the Parties hereunder, including, without limitation, Section4(d) (Supplemental Award), Section 7 (protection of confidential information and company property),Section 8 (additional covenants), Section 9 (injunctive and other relief), Section 10(cooperation), Section 13 (indemnification and liability insurance) and Section 14 (resolution ofdisputes), shall survive any expiration of the Term, including expiration thereof upon theExecutive’s termination of employment for whatever reason, to the extent necessary to the intendedpreservation of such rights and obligations.          (b) The Company may withhold from any amounts or payments under this Agreement such Federal,state, local or other taxes as shall be required to be withheld pursuant to any applicable law orregulation.          (c) This Agreement shall be binding upon and inure to the benefit of the Parties and theirrespective successors, heirs (in the case of the Executive) and assigns. For purposes of thisSection 17(c), a successor to the Company shall be limited to an entity which shall have acquiredall or substantially all of the business and/or assets of the Company and shall have assumed(whether by agreement or operation of law) the Company’s rights and obligations under thisAgreement. No rights or obligations of the Executive under this Agreement may be assigned ortransferred by the Executive other than her rights to compensation and benefits, which may betransferred only by will, operation of law or in accordance with this clause (c). The Executiveshall be entitled, to the extent permitted under applicable plans, agreements or law, to select andchange a beneficiary or beneficiaries to receive any compensation or benefit payable hereunderfollowing the Executive’s death by giving the Company written notice thereof. In the event of theExecutive’s death or a judicial determination of her incompetence, reference in this Agreement tothe Executive shall be deemed, where appropriate, to refer to her beneficiary, estate or otherlegal representative.          (d) In the event that any provision or portion of this Agreement shall be determined to beinvalid or unenforceable by an arbitrator or court of competent jurisdiction for any reason, inwhole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shallremain in full force and effect to the fullest extent permitted by law.          (e) The headings and subheadings of the sections contained in this Agreement are forconvenience only and shall not be deemed to control or affect the meaning or construction of anyprovision of this Agreement.          (f) This Agreement may be executed in two or more counterparts.[Signatures on next page.]
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     IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of thedate first written above.      THE WARNACO GROUP, INC.