LEVEL EQUAL TO NO
LESS THAN ONE HUNDRED FIFTY PERCENT (150%) AND A MAXIMUM AWARD LEVEL OF THREE
HUNDRED PERCENT (300%) OF EXECUTIVE'S BASE SALARY IN EFFECT DURING THE CALENDAR
YEAR FOR WHICH THE AWARD IS MADE.
(C)
INTEGRATION BONUSES.
IF CERTAIN
PREDETERMINED PERFORMANCE GOALS ESTABLISHED IN WRITING BY THE COMPANY'S BOARD OR
COMMITTEE AND SET FORTH IN ATTACHMENT A ARE SATISFIED AS CERTIFIED BY THE
COMPANY'S BOARD OR COMMITTEE, EXECUTIVE SHALL BE ENTITLED TO RECEIVE AN
INTEGRATION BONUS OF (I) $500,000 FOR THE REMAINDER OF THE COMPANY'S FISCAL YEAR
2005, (II) $1 MILLION FOR THE COMPANY'S FISCAL YEAR 2006 AND (III) $1 MILLION
FOR THE COMPANY'S FISCAL YEAR 2007.
ANY SUCH INTEGRATION BONUS SHALL BE PAYABLE
IN CASH WITHIN TWO AND ONE-HALF (2-1⁄2) MONTHS OF THE CLOSE OF THE APPLICABLE
FISCAL YEAR.
(D)
STOCK OPTION AWARD.
EXECUTIVE HAS BEEN
GRANTED AN OPTION TO PURCHASE 200,000 SHARES OF COMMON STOCK OF CARTER'S SUBJECT
TO THE COMPANY'S AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN AND TO THE
TERMS OF A STOCK OPTION CERTIFICATE EXECUTED BY CARTER'S.
(E)
VACATION.
EXECUTIVE SHALL BE ENTITLED TO
FOUR (4) WEEKS PAID VACATION ANNUALLY.
(F)
FRINGE BENEFITS.
EXECUTIVE SHALL RECEIVE
THE FRINGE BENEFITS DESCRIBED ON ATTACHMENT B TO THIS AGREEMENT AS WELL AS SUCH
OTHER BENEFITS AS ARE MADE AVAILABLE TO EXECUTIVE LEVEL EMPLOYEES OF THE COMPANY
AND SUCH ADDITIONAL BENEFITS, PAYMENTS OR ALLOWANCES AS THE COMPANY'S BOARD OR
THE COMMITTEE MAY FROM TIME TO TIME MAKE AVAILABLE TO EXECUTIVE. WITHOUT
PREJUDICE TO EXECUTIVE'S RIGHTS UNDER THIS AGREEMENT, THE COMPANY RESERVES THE
RIGHT (I) TO MODIFY THE TERMS OF ANY BENEFIT PLAN THAT IS GENERALLY MADE
AVAILABLE TO EXECUTIVE LEVEL EMPLOYEES OF THE COMPANY AND IN WHICH EXECUTIVE
PARTICIPATES SO LONG AS SUCH CHANGES AFFECT ALL PLAN PARTICIPANTS SUBSTANTIALLY
EQUALLY (OR SUBSTANTIALLY IN PROPORTION TO THEIR RESPECTIVE INTERESTS), AND
(II) TO MAKE REASONABLE CHANGES IN BENEFITS ESTABLISHED FOR EXECUTIVE AT THE
DIRECTION OF THE COMPANY'S BOARD OR THE COMMITTEE, SO LONG AS THE BENEFITS
AVAILABLE TO EXECUTIVE AFTER GIVING EFFECT TO SUCH CHANGE ARE NOT MATERIALLY
DIFFERENT FROM THOSE BEING PROVIDED PRIOR TO SUCH CHANGE.
(G)
BUSINESS EXPENSES.
THE COMPANY SHALL
REIMBURSE EXECUTIVE FOR ALL REASONABLE AND NECESSARY EXPENSES INCURRED BY HIM IN
CONNECTION WITH THE PERFORMANCE OF HIS DUTIES AND RESPONSIBILITIES PURSUANT TO
THIS AGREEMENT WHICH ARE CONSISTENT WITH THE COMPANY'S POLICIES IN EFFECT FROM
TIME TO TIME WITH RESPECT TO TRAVEL, ENTERTAINMENT AND OTHER BUSINESS EXPENSES,
SUBJECT TO THE COMPANY'S REASONABLE REQUIREMENTS WITH RESPECT TO REPORTING AND
DOCUMENTATION OF SUCH EXPENSES.
2
4.
TERM AND TERMINATION.
(A)
THE EMPLOYMENT PERIOD SHALL EXTEND UNTIL
THE CLOSE OF THE COMPANY'S 2009 FISCAL YEAR; PROVIDED THAT (I) THE EMPLOYMENT
PERIOD SHALL TERMINATE PRIOR TO SUCH DATE UPON EXECUTIVE'S RESIGNATION,
RETIREMENT OR DEATH AND (II) THE EMPLOYMENT PERIOD MAY BE TERMINATED BY THE
COMPANY AT ANY TIME PRIOR TO SUCH DATE FOR CAUSE, EXECUTIVE'S DISABILITY OR
WITHOUT CAUSE.
(B)
ANY TERMINATION OF EXECUTIVE'S EMPLOYMENT BY
THE COMPANY PURSUANT TO CLAUSE 4(A)(II) ABOVE, AND ANY TERMINATION OF
EXECUTIVE'S