Document:

EX-10.29

Ex. 10.29

June 15, 2004

As amended on August 11, 2005

As amended and restated as of December 31, 2008

Ms. Helen McCluskey

2211 Redding Road

Fairfield, CT 06430

Dear Helen,

     This amended and restated letter agreement is made and entered into between The Warnaco Group,
Inc. (together with its subsidiaries, divisions and affiliates, the “Company”) and you to be
effective as of the close of business on December 31, 2008 and reflects our best efforts to comply
with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended from time to
time (the “Code”), and its implementing regulations and guidance (“Section 409A”). As such, as of
the close of business on December 31, 2008, this letter agreement amends and restates the letter
agreement between us dated as of June 15, 2004, as amended on August 11, 2005. Except as otherwise
provided in this agreement, the terms of your employment with the Company shall be governed by the
Warnaco Job Application and current Employee Handbook. Capitalized terms not defined herein shall
have the meaning set forth in Exhibit A.

	 	1.	 	The Company agrees to employ you and you agree to serve as Group President,
Intimate Apparel of the Company, and you shall have such authorities, duties and
responsibilities commensurate with that position. In carrying out your duties, you
shall report to the Chief Executive Officer of the Company. Without limiting the
generality of the foregoing, the following departments and/or functions within the
Intimate Apparel division shall report directly to you: Marketing, Sales,
Merchandising, Design, Operations and Human Resources. In addition, the Intimate
Apparel Finance department shall report to you on a dotted-line basis. You agree to
devote your full time and best efforts to the satisfactory performance of such services
and duties as the position requires, and you shall be entitled to (i) serve on the
boards of directors of trade associations, charitable organizations and for-profit
businesses, subject to the reasonable approval of the Chief Executive Officer and the
Company’s Board of Directors, (ii) engage in charitable activities and community
affairs and (iii) manage your personal investments and affairs, provided that such
activities do not interfere with the proper performance of your duties and
responsibilities for the Company.
	 
	 	2.	 	The term (the “Term”) of your employment under this letter agreement began on
July 15, 2004 or such earlier date as we may have agreed to in writing (the
“Commencement Date”) and shall end at the close of business on the third anniversary of
the Commencement Date; provided, however, that the Term shall thereafter be
automatically extended for additional one-year periods unless either you or the Company
gives the other written notice at least 120 days prior to the then-scheduled expiration
of the Term that such party is electing not to so extend

 

 

Ms. Helen McCluskey

December 31, 2008

Page 2

	 	 	 	the Term, Notwithstanding the foregoing, the Term shall end on the date on which
your employment is terminated by either party in accordance with the provisions
herein. The Company acknowledges that as of the Effective Date, the Executive is
employed by the Company as President, Warnaco Intimate Apparel.
	 
	 	3.	 	Your compensation shall be as follows:

	 	a.	 	During the Term, you shall be paid an annual base salary of
$650,000 (“Base Salary”), payable in semi-monthly payments of $27,083.33. Your
Base Salary may be reviewed annually by the Compensation Committee of the Board
of Directors in consultation with the Chief Executive Officer and may be
increased based on such performance review within the Company’s discretion.
You shall not be entitled to any additional compensation for service as an
officer or member of any board of directors of any affiliate of the Company.
The Company acknowledges that as of the Effective Date, Base Salary is
$800,000, payable in semi-monthly payments of $33,333.33.
	 
	 	b.	 	During the Term, commencing with the Company’s fiscal year
2004, you shall be eligible to receive an annuals cash incentive award under
The Warnaco Group, Inc. Incentive Compensation Plan (“Bonus Plan”) with a
target of 70% of Base Salary (“Target Bonus”). The terms and conditions
applicable to such annual cash incentive award, including, but not limited to
the determination of performance targets (following consultation with you), the
ultimate amount of such award, and the timing of payment of any such award,
shall be determined in accordance with the terms of the Bonus Plan. For fiscal
year 2004 and for fiscal year 2005, you shall receive a guaranteed annual
incentive award of no less than $250,000. Any annual incentive award,
including any annual incentive award for fiscal year 2004, shall be payable to
you when bonuses for the applicable performance period are paid to other senior
executives of the Company, but in all events no later than the 60th
day following the end of the fiscal year for which the annual incentive award
has been earned. The Company acknowledges that as of the Effective Date, Target
Bonus is 85% of Base Salary.
	 
	 	c.	 	Pursuant to the Warnaco 2003 Stock Incentive Plan (the “Plan”),
on the Commencement Date you were granted 35,000 shares of restricted stock
(“restricted stock”) and an option to purchase 210,000 shares of the Company’s
outstanding common stock (the “option”), subject to the terms and conditions of
such awards as set out in the Plan. You may also be eligible to receive future
grants of restricted stock and/or options or other forms of equity compensation
at the sole discretion of the Compensation Committee of the Board of Directors.

 

 

Ms. Helen McCluskey

December 31, 2008

Page 3

	 	i.	 	Except as otherwise provided herein, the
restricted stock as described herein and the option as described herein
shall vest 33% on July 15, 2005 and shall vest 33% on each of July 15,
2006 and July 15, 2007, provided that you are employed by the Company
on such vesting date and have not given notice to the Company that you
are voluntarily resigning, without Good Reason (as defined in
Exhibit A), prior to such vesting date. The form of the
Restricted Stock Award Agreement for the restricted stock was attached
as Exhibit B to the form of this letter agreement dated as of
June 15, 2004. The form of the Non-Qualified Stock Option Agreement
for the option was attached as Exhibit C to the form of this
letter agreement dated as of June 15, 2004.
	 
	 	ii.	 	You shall be subject to the equity ownership,
retention and other requirements applicable to senior executives of the
Company. Except as otherwise expressly provided herein, all equity
grants shall be governed by the applicable plan and award agreement, as
in effect on the date hereof and as may be hereafter changed in
accordance with such plan and agreement.

	 	d.	 	During the Term beginning with fiscal year 2005, provided you
are employed by the Company, you shall be entitled to an annual award with an
aggregate grant date value equal to 10% of the sum of Base Salary plus Annual
Bonus as defined in this paragraph 3(d) if you will be less than age 60 by the
end of the applicable fiscal year and 13% of such amount if you will be age 60
or older by the end of the applicable fiscal year (“Supplemental Award”), with
the first such award being made no later than 60 days after the Effective Date.
For this purpose, Base Salary shall be the Base Salary paid to you for the
fiscal year prior to the award year and Annual Bonus shall be the annual bonus
awarded to you by the Board for such fiscal year. The Supplemental Award shall
not be awarded to you until after the determination by the Board of your annual
bonus for the prior fiscal year (but in no event later than 60 days thereafter
for any award made after fiscal year 2005) and 50% of the value of the
Supplemental Award shall be awarded in the form of restricted shares pursuant
to the applicable Stock Incentive Plan (“Career Shares”) and 50% shall be
awarded in the form of a credit to a bookkeeping account maintained by the
Company for your account (the “Notional Account”). Any Career Shares awarded
hereunder shall be governed by the applicable Stock Incentive Plan and, if
applicable, any award agreement. For purposes of this paragraph 3(d), each
Career Share shall be valued at the closing price of a share of the Company’s
common stock (“Share”) on the date that the Supplemental Award is made. For
the Notional Account, the

 

 

Ms. Helen McCluskey

December 31, 2008

Page 4

	 	 	 	Company shall select the investment alternatives available to you under the
Company’s 401(k) plan. The balance in the Notional Account shall
periodically be credited (or debited) with the deemed positive (or negative)
return based on returns of the permissible investment alternative or
alternatives under the Company’s 401(k) plan as selected in advance by you
(and in accordance with the applicable rules of such plan or investment
alternative) to apply to such Notional Account, with such deemed returns
calculated in the same manner and at the same times as the return on such
investment alternative(s). The Company’s obligation to pay the amount
credited to the Notional Account, including any return thereon provided for
in this paragraph 3(d), shall be an unfunded obligation to be satisfied from
the general funds of the Company. Except as otherwise provided in
paragraphs 6 or 8 below or the applicable Stock Incentive Plan and provided
that you are employed by the Company on such vesting date, any Supplemental
Award granted in the form of Career Shares will vest as follows: 50% of the
Career Shares will vest on the earlier of your 62nd birthday or
upon your obtaining 15 years of “Vesting Service” and 100% of the Career
Shares will vest on the earliest of (i) your 65th birthday, (ii)
upon your obtaining 20 years of “Vesting Service” or (iii) 10th
anniversary of the date of grant. Except as otherwise provided in
paragraphs 6 or 8 below, and provided that you are employed by the Company
on such vesting date, any Supplemental Award granted as a credit to the
Notional Account (as adjusted for any returns thereon) (“Adjusted Notional
Account”)) shall vest as follows: 50% on the earlier of your
62nd birthday or upon your obtaining 5 years of “Vesting Service”
and 100% on the earlier of the your 65th birthday and upon your
obtaining 10 years of “Vesting Service”. For purposes of this paragraph
3(d), “Vesting Service” shall mean the period of time that you are employed
by the Company as an executive officer. Subject to paragraph 27 hereof,
upon vesting the Career Shares will be delivered to you in the form of
Shares. In addition, any unvested Adjusted Notional Account shall vest upon
a Change in Control as defined in clauses (i) or (ii) of the definition of
“Change in Control” on Exhibit A attached hereto if such event qualifies as
a “change in control event” under Section 409A (“409A CIC Event”). The
vested balance in the Adjusted Notional Account, if any, shall not be
distributed to you until there has been a Separation From Service (as
defined in Exhibit A attached hereto) or, if earlier, there has been a 409A
CIC Event and, at such time, shall only be distributed at the earliest time
that satisfies the requirements of this paragraph 3(d). Upon a 409A CIC
Event, the vested Adjusted Notional Account shall be paid to you in a
lump-sum cash payment. In addition, if your employment is terminated for
any reason, after taking into account paragraph 6 or paragraph 8 hereof, any
unvested Supplemental Awards (whether in the

 

 

Ms. Helen McCluskey

December 31, 2008

Page 5

	 	 	 	form of Career Shares or the Adjusted Notional Account) shall be forfeited
and any vested balance in the Adjusted Notional Account, subject to
paragraph 27 hereof, shall be paid to you in a cash lump-sum payment
immediately following your Separation From Service; provided, however, that
if you are a “specified employee” as determined pursuant to Section 409A as
of the date of your Separation From Service, such distribution shall not be
made until the earlier of your death or the first business day of the
seventh calendar month following the month in which your Separation From
Service occurs; provided, further, that if your employment is terminated due
to Disability and such Disability satisfies the requirements of Section
409A(a)(2)(C) of the Code or the Treasury Regulations implementing such
section, then such distribution may be made upon your Separation From
Service without regard to whether you were a “specified employee” at such
time. You can elect to delay the time and/or form of payment of the
Adjusted Notional Account under this paragraph 3(d), provided such election
is delivered to the Company in writing at least 12 months before the
scheduled payment date for such payment and the new payment date for such
payment is not earlier than (i) your death, (ii) your “disability” which
satisfies the requirements of Section 409A(a)(2)(C) and its implementing
regulations, or (iii) five (5) years from the originally scheduled payment
date. Upon the expiration or termination of the Term, the vesting and
payment dates in this paragraph 3(d) (without regard to paragraphs 6 or 8,
except as otherwise expressly provided in paragraph 8 of this Agreement) and
the election right in this paragraph 3(d) shall continue to apply to any
outstanding Supplemental Award.

	 	4.	 	While you are employed by the Company, and subject, of course, to the Company’s
right to amend, modify or terminate any benefit plan or program, you shall be entitled
to participate in all Company employee benefit plans applicable to senior executives,
including the following benefits/perquisites:

	 	a.	 	Reimbursement of reasonable business expenses incurred in
carrying out your duties and responsibilities under this agreement, subject to
documentation in accordance with Company policy.
	 
	 	b.	 	Perquisites provided to other senior executive, including a
monthly car allowance of up to $1,000.
	 
	 	c.	 	Vacation — four weeks paid vacation per calendar year.
	 
	 	d.	 	Reimbursement for COBRA medical and dental insurance premiums
from the date of termination of your employment with Liz Claiborne until such
time as the Company provides you with such coverage.

 

 

Ms. Helen McCluskey

December 31, 2008

Page 6

	 	e.	 	Company-paid term life insurance payable to your designated
beneficiary in the amount of $l million; provided that the Company is able to
obtain such insurance for a commercially reasonable premium.

	 	 	 	Notwithstanding anything elsewhere to the contrary, except to the extent any
reimbursement, payment or entitlement pursuant to this paragraph 4 does not
constitute a “deferral of compensation” within the meaning of Section 409A, (i) the
amount of expenses eligible for reimbursement or the provision of any in-kind
benefit (as defined in Section 409A) to you during any calendar year will not affect
the amount of expenses eligible for reimbursement or provided as in-kind benefits to
you in any other calendar year, (ii) the reimbursements for expenses for which you
are entitled shall be made on or before the last day of the calendar year following
the calendar year in which the applicable expense is incurred and (iii) the right to
payment or reimbursement or in-kind benefits may not be liquidated or exchanged for
any other benefit.
	 
	 	5.	 	In the event your employment is terminated without Cause (as defined in
Exhibit A) by the Company (other than upon death or due to Disability (as
defined in Exhibit A)) or you resign for Good Reason (as defined in Exhibit
A) during the Term, you shall be entitled to:

	 	a.	 	Base Salary through the Date of Termination (as defined in
Exhibit A), payable on the first regularly scheduled payroll date
following the Date of Termination.
	 
	 	b.	 	Payment of an amount equal to the Base Salary that would have
been payable to you from the Date of Termination through the expiration date
for the original Term, but in no event less than one times Base Salary, payable
in a cash lump sum to you as soon as practicable following the Date of
Termination (but in no event later than 60 days following such date).
	 
	 	c.	 	A pro-rata bonus for the fiscal year in which the Date of
Termination occurs, based on the Company’s performance for such year
(determined by multiplying the amount you would have received had your
employment continued through the end of such fiscal year by a fraction, the
numerator of which is the number of days during such fiscal year that you are
employed by the Company and the denominator of which is 365), payable when
bonuses for such fiscal year are paid to other Company executives (which
payment date shall be no earlier than January 1st and no later than
March 15th of the year following the year in which the Date of
Termination occurs).

 

 

Ms. Helen McCluskey

December 31, 2008

Page 7

	 	d.	 	Immediate vesting of that portion of the restricted stock
described in paragraph 3(c) above that would have vested if you had been
employed on the vesting date immediately following the Date of Termination.
	 
	 	e.	 	That portion of the option described in paragraph 3(c) above
that has vested as of the Date of Termination remaining exercisable for two
years following the Date of Termination.
	 
	 	f.	 	Provided you make a timely election under COBRA, continued
participation on the same terms as immediately prior to the Date of Termination
(including costs of premiums) for you and your eligible dependents in the
Company’s medical and dental plans in which you and your eligible dependents
were participating immediately prior to the Date of Termination until the
earlier of (a) the end of the applicable Term (without regard to its earlier
termination hereunder), but in no event less than 12 months, or (b) the date,
or dates, you receive equivalent coverage under the plans and programs of a
subsequent employer.
	 
	 	g.	 	Any amounts earned, accrued or owing to you but not yet paid.
	 
	 	h.	 	As a condition to receiving severance compensation pursuant to
this paragraph 5, you hereby agree to execute and deliver to the Company a
general release of claims in a form acceptable to the Company no later than 45
days following the Date of Termination and not revoke such release within the
applicable revocation period.

	 	6.	 	In the event your employment is terminated upon death or by the Company due to
Disability during the Term, you (or your estate or legal representative, as the case
may be) shall be entitled to:

	 	a.	 	Base Salary through the Date of Termination, payable on the
first regularly scheduled payroll date following the Date of Termination.
	 
	 	b.	 	A pro-rata bonus for the fiscal year in which the Date of
Termination occurs, based on the Company’s performance for such year
(determined by multiplying the amount you would have received had your
employment continued through the end of such fiscal year by a fraction, the
numerator of which is the number of days during such fiscal year that you are
employed by the Company and the denominator of which is 365), payable when
bonuses for such fiscal year are paid to other Company executives (which
payment date shall be no earlier than January 1st and no later than
March 15th of the year following the year in which the Date of
Termination occurs).

 

 

Ms. Helen McCluskey

December 31, 2008

Page 8

	 	c.	 	Immediate vesting of 50% of the restricted stock described in
paragraph 3(c) above that remains unvested as of the Date of Termination and
100% of that portion of the option described in paragraph 3(c) above that
remains unvested as of the Date of Termination, with any vested portion of such
option remaining exercisable for 12 months following the Date of Termination.
	 
	 	d.	 	Any amounts earned, accrued or owing to you but not yet paid.
	 
	 	e.	 	Immediate vesting as of the Date of Termination of 50% of any
previously granted Supplemental Award that remains unvested as of the Date of
Termination, payable in accordance with paragraph 3(d) above.

	 	7.	 	In the event the Company terminates your employment for Cause or you
voluntarily resign, you shall be entitled to Base Salary through the Date of
Termination. In the event of your termination for Cause, the unvested restricted stock
described in paragraph 3(c) above and that portion of the option described in paragraph
3(c) above that remains unvested as of the Date of Termination shall be forfeited. In
the event of your voluntary resignation, the unvested restricted stock described in
paragraph 3(c) above and that portion of the option described in paragraph 3(c) above
that remains unvested as of the date on which you provide written notice to the Company
that you are voluntarily resigning shall be forfeited. A voluntary resignation shall be
effective on 60 days prior written notice; subject to earlier termination by the
Company in accordance with Exhibit A, and, provided that such notice is given,
shall not be deemed to be a breach of this agreement.
	 
	 	8.	 	In the event your employment is terminated without Cause by the Company (other
than upon death or due to Disability or you resign for Good Reason in both cases within
one year following a Change in Control (as defined on Exhibit A) (provided the
Term is still in effect or has expired during the one year period), you shall be
entitled to:

	 	a.	 	Base Salary through the Date of Termination, payable on the
first regularly scheduled payroll date following the Date of Termination.
	 
	 	b.	 	Payment of an amount equal to 2 times the sum of (a) Base
Salary plus (b) Target Bonus, payable in a lump sum as soon as practicable
following the Date of Termination (but in no event later than 60 days following
such date).
	 
	 	c.	 	A pro-rata Target Bonus for the year of termination, determined
by multiplying the Target Bonus by a fraction, the numerator of which is the
number of days that you were employed by the Company during the year

 

 

Ms. Helen McCluskey

December 31, 2008

Page 9

	 	 	 	in which the Date of Termination occurs and the denominator of which is 365,
payable in a lump sum as soon as practicable following the Date of
Termination (but in no event later than 60 days following such date).
	 
	 	d.	 	Immediate vesting of 100% of any of the restricted stock
described in paragraph 3(c) above that remains unvested as of the Date of
Termination and 100% of that portion of the option described in paragraph 3(c)
above that remains unvested as of the Date of Termination, with any vested
portion of such option remaining exercisable for six months following the Date
of Termination and immediate vesting as of the Date of Termination of all other
outstanding equity awards (other than Career Shares), with any stock options
granted on or after August 11, 2005 remaining exercisable for 24 months
following the Date of Termination or the remainder of the option term, if
shorter.
	 
	 	e.	 	Immediate vesting as of the Date of Termination of any
previously granted Supplemental Award, payable in accordance with paragraph
3(d) above.
	 
	 	f.	 	Provided you make a timely election under COBRA, continued
participation on the same terms as immediately prior to the Date of Termination
(including costs of premiums) for you and your eligible dependents in the
Company’s medical and dental plans in which you and your eligible dependents
were participating immediately prior to the Date of Termination until the
earlier of (a) the end of the applicable Term (without regard to its earlier
termination hereunder), but in no event less than 24 months, or (b) the date,
or dates, you receive equivalent coverage under the plans and programs of a
subsequent employer.
	 
	 	g.	 	Any amounts earned, accrued or owing to you but not yet paid.
	 
	 	h.	 	As a condition to receiving severance compensation pursuant to
this paragraph 8, you hereby agree to execute and deliver to the Company a
general release of claims in a form acceptable to the Company no later than 45
days following the Date of Termination and not revoke such release within the
applicable revocation period.

	 	9.	 	In the event the Company provides written notice to you in accordance with
paragraph 2 above that the Term shall not renew and upon or at any time after such
expiration of the Term the Company terminates your employment under circumstances that
during the Term would constitute a termination of employment without Cause, you shall
be entitled to:

	 	a.	 	Base Salary through the Date of Termination, payable on the
first regularly scheduled payroll date following the Date of Termination.

 

 

Ms. Helen McCluskey

December 31, 2008

Page 10

	 	b.	 	Payment of an amount equal to one times Base Salary, payable in
a cash lump sum as soon as practicable following the Date of Termination (but
in no event later than 60 days following such date).
	 
	 	c.	 	That portion of the option described in paragraph 3(c) above
that has vested as of the Date of Termination remaining exercisable for nine
months following the Date of Termination.
	 
	 	d.	 	Provided you make a timely election under COBRA, continued
participation on the same terms as immediately prior to the Date of Termination
(including costs of premiums) for you and your eligible dependents in the
Company’s medical and dental plans in which you and your eligible dependents
were participating immediately prior to the Date of Termination for 12 months
following the Date of Termination.
	 
	 	e.	 	Any amounts earned, accrued or owing to you but not yet paid.
	 
	 	f.	 	Notwithstanding the foregoing, in the event that (i) the
Company provides written notice to you in accordance with paragraph 2 above
that the Term shall not renew, (ii) upon or after such expiration of the Term
the Company terminates your employment under circumstances that during the Term
would constitute a termination of employment without Cause, and (iii) such
notice of non-renewal of the Term and such termination both occur on or within
one year following a Change in Control, then you shall be entitled to the
payments, benefits and entitlements under paragraph 8 hereof instead of this
paragraph 9.
	 
	 	g.	 	As a condition to receiving severance compensation pursuant to
this paragraph 9, you hereby agree to execute and deliver to the Company a
general release of claims in a form acceptable to the Company no later than 45
days following the Date of Termination and not revoke such release within the
applicable revocation period.

	 	10.	 	Any amounts due to you under paragraphs 5, 6, 8 or 9 are in the nature of
severance payments considered to be reasonable by the Company and are not in the nature
of a penalty. Any payments provided pursuant to paragraph 5, paragraph 8 or paragraph 9
shall be in lieu of any salary continuation arrangements under any other severance
program or plan of the Company.
	 
	 	11.	 	a. Notwithstanding any other provision of this Agreement, upon the termination
of your employment for any reason, unless otherwise requested by the Board, you shall
immediately resign from all boards of directors of any affiliate of the Company, if
any, of which you may be a member, and as a trustee of, or fiduciary to, any employee
benefit plans of the Company or any affiliate of the

 

 

Ms. Helen McCluskey

December 31, 2008

Page 11

Company. You agree to execute any and all documentation of such resignations upon
request by the Company, but you shall be treated for all purposes as having so
resigned upon termination of your employment, regardless of when or whether you
execute any such documentation.

b. Section 409A. Notwithstanding anything to the contrary in this Agreement
or elsewhere (except for paragraph 3(d) of this Agreement), if you are a “specified
employee” as determined pursuant to Section 409A as of the date of your Separation
From Service and if any payment, 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 in a manner otherwise
provided herein or otherwise without subjecting you to additional tax, interest or
penalties under Section 409A, then any such payment, benefit or entitlement that is
payable during the first six months following your Separation From Service shall be
paid or provided to you in a cash lump-sum on the earlier of your death or the first
business day of the seventh calendar month following the month in which your
Separation From Service occurs. In addition, any payment, benefit or entitlement
due upon a termination of your employment that represents a “deferral of
compensation” within the meaning of Section 409A (other than any payments due
pursuant to paragraph 3(d) of this Agreement) shall only be paid or provided to you
upon a Separation From Service, in which case any reference to “Date of Termination”
in connection with such payment, benefit or entitlement shall be deemed to be a
reference to “Separation From Service” and the actual payment date within the time
specified in the applicable provision of paragraphs 5, 6, 7, 8 or 9 shall be within
the Company’s sole discretion. Notwithstanding anything to the contrary in this
Agreement or otherwise, any payment or benefit under this Agreement or otherwise
which is exempt from Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to you only to the extent the
expenses are not incurred or the benefits are not provided beyond the last day of
your second taxable year following your taxable year in which your Separation From
Service occurs; and provided further that the Company reimburses such expenses no
later than the last day of your third taxable year following your taxable year in
which your Separation From Service occurs. Finally, to the extent that the
provision of any benefit pursuant to paragraph 5(f), paragraph 8(f) or paragraph
9(d) hereof is taxable to you, any such reimbursement shall be paid to you on or
before the last day of your taxable year following your taxable year in which the
expense is incurred and such reimbursement shall not be subject to liquidation or
exchange for any other benefit.

	 	12.	 	During the Term and thereafter (provided you are employed by the Company) and
for 12 months following the termination of your employment with the Company and
provided that you are receiving or will receive severance under Sections 5 or

 

 

Ms. Helen McCluskey

December 31, 2008

Page 12

9, you agree that you will not, other than in the ordinary course of performing your
duties hereunder or as agreed by the Company in writing, engage in a “Competitive
Business,” directly or indirectly, as an individual, partner, shareholder, director,
officer, principal, agent, employee, trustee, consultant, or in any relationship or
capacity, in any geographic location in which the Company or any of its affiliates
is engaged in business. You shall not be deemed to be in violation of this
paragraph 12 by reason of the fact that you own or acquire, solely as an investment,
up to two percent (2%) of the outstanding equity securities (measured by value) of
any entity. “Competitive Business” shall mean a business primarily engaged in
apparel design, apparel wholesaling or apparel retailing.

	 	13.	 	Upon any termination of employment (whether during or after the expiration of
the Term), you agree to refrain from directly or indirectly soliciting any employee of
the Company or an affiliate of the Company to terminate his/her employment (excluding,
only, your personal assistant) on your own behalf or on behalf of any other person or
entity or from directly or indirectly hiring any key employee (e.g., any
management-level employee or any designer) of the Company for a period of eighteen (18)
months thereafter. In addition, you agree that for a period of eighteen (18) months
following the termination of your employment (whether during or after the expiration of
the Term), with the Company, you will not, without the prior written consent of the
Company, directly or indirectly, solicit or encourage any customer of the Company or
any affiliate of the Company to reduce or cease its business with the Company or any
such affiliate of the Company or otherwise interfere with the relationship of the
Company or any affiliate of the Company with its customers. You and the Company each
agree to refrain from making any statements or comments of a defamatory or disparaging
nature to third parties regarding each other (including, in the case of the Company, an
affiliate of the Company or the Company’s officers, directors, personnel or products).
You and the Company each understand that either party should be entitled to respond
truthfully and accurately to statements about such party made publicly by you or the
Company, as the case may be, provided that such response is consistent with your or the
Company’s obligations not to make any statements or comments of a defamatory or
disparaging nature as set forth herein above.
	 
	 	14.	 	During the Term and thereafter, other than in the ordinary course of performing
your duties for the Company or as required in connection with providing any cooperation
to the Company pursuant to paragraph 20 below, you agree that you will not disclose to
anyone or make use of any trade secret or proprietary or confidential information of
the Company or any affiliate of the Company, including such trade secret or proprietary
or confidential information of any customer or other entity to which the Company owes
an obligation not to disclose such information, which you acquire during the course of
your employment,

 

 

Ms. Helen McCluskey

December 31, 2008

Page 13

including, but not limited to, records kept in the ordinary course of business,
except when required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative or
legislative body (including a committee thereof) with apparent or actual
jurisdiction to order you to divulge, disclose or make accessible such information.
The foregoing shall not apply to information that (i) was known to the public prior
to its disclosure by you or (ii) becomes known to the public through no wrongful
disclosure by or act of you or any of your representatives. In the event you are
requested by subpoena, court order, investigative demand, search warrant or other
legal process to disclose any information regarding the Company, you agree, unless
prohibited by law or Securities and Exchange Commission regulation, to give the
Company’s General Counsel prompt written notice of any request for disclosure in
advance of your making such disclosure and you shall not disclose such information
regarding the Company unless and until the Company has expressly authorized you to
do so in writing or the Company has had a reasonable opportunity to object to such a
request or to litigate the matter (of which the Company agrees to keep you
reasonably informed) and has failed to do so.

	 	15.	 	You hereby sell, assign and transfer to the Company all of your right, title
and interest in and to all inventions, discoveries, improvements and copyrightable
subject matter (the “Rights”) which during the period of your employment are made or
conceived by you, alone or with others, and which are within or arise out of any
general field of the Company’s business or arise out of any work you perform, or
information you receive regarding the business of the Company, while employed by the
Company. You shall fully disclose to the Company as promptly as available all
information known or possessed by you concerning any Rights, and upon request by the
Company and without any further remuneration in any form to you by the Company, execute
all applications for patents and for copyright registration, assignments thereof and
other instruments and do all things which the Company may deem necessary to vest and
maintain in it the entire right, title and interest in and to all such Rights.
	 
	 	16.	 	You agree that at the time of the termination of employment, whether at your
instance or the Company, and regardless of the reasons therefore, you will promptly
deliver to the Company’s General Counsel, and not keep or deliver to anyone else, any
and all of the following which is in your possession or control: (i) Company property
(including, without limitation, credit cards, computers, communication devices, home
office equipment and other Company tangible property) and (ii) notes, files, memoranda,
papers and, in general, any and all physical matter and computer files containing
confidential or proprietary information of the Company or any of the Company’s
affiliates, including any and all documents relating to the conduct of the business of
the Company or any

 

 

Ms. Helen McCluskey

December 31, 2008

Page 14

of the Company’s affiliates and any and all documents containing confidential or
proprietary information of the customers of the Company or any of the Company’s
affiliates, except for (x) any documents for which the Company’s General Counsel has
given written consent to removal at the time of termination, (y) any documents on
your personal computer if you destroy such documents and give a notarized written
affidavit of such destruction and (z) any information necessary for you to retain
for tax purposes (provided you maintain the confidentiality of such information in
accordance with paragraph 14 above). In addition, you may retain such records as
relate to your compensation, benefits, expenses, job-description and job
performance, as well as personal memorabilia.

	 	17.	 	Any failure by you to comply with the provisions of paragraphs 12, 13, 14, 15
or 16 shall relieve the Company of any of its obligations pursuant to this agreement,
including pursuant to paragraphs 5, 6, 8 and 9; provided, however, that if such failure
is curable, the Company shall give you prompt notice and 30-day period to cure such
failure. If so cured, all of the Company’s obligations hereunder shall remain in full
force and effect.
	 
	 	18.	 	From and after the date hereof, except as otherwise provided in paragraph 19,
should any disagreement, claim or controversy arise between you and the Company with
respect to this agreement or your employment by the Company, the same may be enforced
at the option of either party by confidential, binding and final arbitration in New
York, New York before a single arbitrator in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The award of the arbitrator with respect
to such disagreement, claim or controversy shall be enforceable in any court of
competent jurisdiction and shall be binding upon the parties hereto. You consent to the
personal jurisdiction of the Courts of the State of New York (including the United
States District Court for the Southern District of New York) in any proceedings for
equitable relief. You further agree not to interpose any objection or improper venue in
any such proceeding or interpose any defense that the Company has an adequate remedy at
law or that the injury suffered by the Company is not irreparable. You and the Company
agree that each party shall be responsible for its own costs and expenses, including
attorneys’ fees, provided, however, that if you substantially prevail with respect to
all claims that are the subject matter of the dispute, your costs, including reasonable
attorneys’ fees, shall be borne by the Company; provided that if such costs are not
reimbursed in connection with a dispute exempt from Section 409A pursuant to Treasury
Regulation Section 1.409A-1(b)(11) then such payment shall be made by the Company to
you in the year following the year in which the dispute is resolved.

 

 

Ms. Helen McCluskey

December 31, 2008

Page 15

	 	19.	 	You expressly agree and acknowledge that any breach or threatened breach of any
obligation set forth in paragraphs 12, 13, 14, 15 or 16 above will cause the Company
irreparable harm for which there is no adequate remedy at law, and as a result of this
the Company shall be entitled to seek the issuance by a court of competent jurisdiction
of an injunction, restraining order or other equitable relief in favor of itself,
without the necessity of posting a bond and without proving actual damages, restraining
you from committing or continuing to commit any such violation.
	 
	 	20.	 	Following the Date of Termination, upon reasonable request by the Company, you
shall cooperate with 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 relating to any matter in which you were involved or had
knowledge during your employment with the Company, subject to your reasonable personal
and business schedules. The Company shall reimburse you for all reasonable
out-of-pocket costs, such as travel, hotel and meal expenses and reasonable attorneys’
fees, incurred by you in providing any cooperation pursuant to this paragraph 20;
provided such expenses shall be paid to you as soon as practicable but in no event
later than the end of the calendar year following the calendar year in which the
expenses are incurred, subject in all cases to your providing appropriate documentation
to the Company. The Company shall also pay you a reasonable per diem amount for your
time (other than for time spent preparing for or providing testimony) which shall be
based upon your Base Salary at the Date of Termination, with such per diem paid to you
in the calendar month following the month in which you provide such assistance. Any
reimbursement or payment under this paragraph 20 shall not affect the amount of the
reimbursement or payment to you in any other taxable year. The right to payment or
reimbursement pursuant to this paragraph 20 shall not be liquidated or exchanged for
any other benefit.
	 
	 	21.	 	You represent and warrant that you have the free and unfettered right to enter
into this agreement and to perform your obligations under it and that you know of no
agreement between you and any other person, firm or organization, or any law or
regulation, that would be violated by the performance of your obligations under this
agreement. You agree that you will not use or disclose any confidential or proprietary
information of any current or prior employer in the course of performing your duties
for the Company or any of its affiliates.
	 
	 	22.	 	The invalidity or unenforceability of any particular provision or provisions of
this agreement (as determined by an arbitrator or a court of competent jurisdiction)
shall not affect the other provisions hereof and this agreement shall be construed in
all respects as if such invalid or unenforceable provisions had been omitted.

 

 

Ms. Helen McCluskey

December 31, 2008

Page 16

	 	23.	 	This agreement (including its Exhibits) and the documents referred to herein
constitute the full and complete understanding and agreement of the parties concerning
the subject matter hereof and, as of the close of business on December 31, 2008, shall
supersede all prior representations, understandings and agreements with respect thereto
(other than any agreements governing any equity awards outstanding as of December 31,
2008) and cannot be amended, changed, modified in any respect without the written
consent of the parties, except that the Company reserves the right in its sole
discretion to make changes at any time to the other documents referenced in this letter
agreement. For the avoidance of doubt, for any termination of employment prior to
January 1, 2009, paragraphs 5 through 9, as applicable, of this letter agreement as in
effect prior to this amendment and restatement shall govern and control. No waiver by
either party of any breach by the other party of any condition or provision contained
in this agreement shall be deemed to be a waiver of a similar or dissimilar condition
or provision.
	 
	 	24.	 	This agreement shall be binding upon and shall inure to the benefit of
successors and assigns of the Company.
	 
	 	25.	 	This agreement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to its provisions as to choice of laws. The
respective rights and obligations of the parties hereunder, including without
limitation paragraphs 12 through 16, shall survive any expiration of the Term,
including expiration thereof upon your termination of employment for whatever reason,
to the extent necessary to the intended preservation of such rights and obligations.
	 
	 	26.	 	Any notice given to either you or the Company under this agreement shall be in
writing and shall be deemed to have been given upon actual receipt or refusal to accept
receipt, with any such notice duly addressed to you or the Company, as the case may be,
at the address indicated below or to such other address as such Party may subsequently
designate by written notice in accordance with this paragraph 26: If to the Company:
The Warnaco Group, Inc., 501 Seventh Avenue, New York, New York 10018, Attention:
General Counsel; If to you: at your home address as indicated on the Company’s records.
	 
	 	27.	 	The Company may withhold from any amounts payable under this agreement such
Federal, state, local or other taxes as shall be required to be withheld pursuant to
any applicable law or regulation.
	 
	 	28.	 	The Company hereby agrees during, and after termination of, your employment to
indemnify you and hold you harmless, both during the Term and thereafter, to the
fullest extent permitted by law and under the certificate of incorporation and by-laws
of the Company against and in respect of any and all actions, suits, proceedings,
claims, demands, judgments, costs, expenses (including reasonable

 

 

Ms. Helen McCluskey

December 31, 2008

Page 17

attorneys’ fees), losses, amounts paid in settlement to the extent approved by the
Company, and damages resulting from your good faith performance of your duties as an
officer or director of the Company or any affiliate of the Company. The Company
shall reimburse you for expenses incurred by you in connection with any proceeding
hereunder upon your written request for such reimbursement and your submission of
the appropriate documentation associated with these expenses. Such request shall
include an undertaking by you to repay the amount of such advance or reimbursement
if it shall ultimately be determined that you are not entitled to be indemnified
hereunder against such costs and expenses. The Company shall use commercially
reasonable efforts to obtain and maintain directors’ and officers’ liability
insurance covering you to the same extent as the Company covers its other officers
and directors.

	 	29. 	a.	 	 If any amount, entitlement, or benefit paid or payable to you or provided
for your 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 tax imposed under Section 4999 of the Code or any similar federal
or state law (an “Excise Tax”), then notwithstanding anything contained in this
agreement to the contrary, to the extent that any or all Payments would be subject to
the imposition of an Excise Tax, the Payments shall be reduced (but not below zero) if
and to the extent that such reduction would result in your retaining a larger amount,
on an after-tax basis (taking into account federal, state and local income taxes and
the imposition of the Excise Tax), than if you 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 reducing or eliminating those
payments or benefits which are payable in cash and then by reducing or eliminating
non-cash payments, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time from the Determination (as defined below).

	 	b.	 	All calculations under this paragraph 29 shall be made by a
nationally recognized accounting firm designated by the Company and reasonably
acceptable to you (other than the accounting 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. The
Accounting Firm shall provide its calculations, together with detailed
supporting documentation, both to the Company and you within 45 days after the
Change in Control or the Date of Termination, whichever is later (or such
earlier time as is requested by the Company) and, with respect to the Limited
Payment Amount, shall deliver its opinion to you that you are not required to
report any Excise Tax on your federal income

 

 

Ms. Helen McCluskey

December 31, 2008

Page 18

tax return with respect to the Limited Payment Amount (collectively, the
“Determination”). Within 5 days of your receipt of the Determination, you
shall have the right to dispute the Determination (the “Dispute”). The
existence of the Dispute shall not in any way affect your right to receive
the Payments in accordance with the Determination. If there is no Dispute,
the Determination by the Accounting Firm shall be final binding and
conclusive upon the Company and you (except as provided in clause (c)
below).

	 	c.	 	If, after the Payments have been made to you, it is established
that the Payments made to you, or provided for your benefit, exceed the
limitations provided in clause (a) above (an “Excess Payment”) or are less than
such limitations (an “Underpayment”), as the case may be, then the provisions
of this clause (c) shall apply. If it is established pursuant to a final
determination of a court or an Internal Revenue Service (the “IRS”) proceeding
which has been finally and conclusively resolved, that an Excess Payment has
been made, you shall repay the Excess Payment to the Company within 20 days
following the determination of 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, on its
federal income tax return) or the IRS, (ii) pursuant to a determination by a
court, or (iii) upon the resolution to your satisfaction of the Dispute, that
an Underpayment has occurred, the Company shall pay an amount equal to the
Underpayment to you within 10 days of such determination or resolution together
with interest on such amount at the applicable federal short-term rate, as
defined under Section 1274(d) of the Code and as in effect on the first date
that such amount should have been paid to you under this agreement, from such
date until the date that such Underpayment is made to you.

 

 

Ms. Helen McCluskey

December 31, 2008

Page 19

     IN WITNESS WHEREOF, the Company and you have voluntarily executed this letter agreement to be
effective as of the close of business on December 31, 2008.

	 	 	 	 	 
	 	Very truly yours,

THE WARNACO GROUP, INC.

 	 
	 	/s/ Joseph R. Gromek
 	 
	 	Name:  	Joseph R. Gromek 	 
	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	Agreed to and accepted

 	 
	/s/ Helen McCluskey
 	 
	Helen McCluskey 	 
	 	 
	 

 

 

Exhibit A

Definitions

“Cause” shall mean:

	(i)	 	willful misconduct by you which is materially injurious to the Company’s interests;
	 
	(ii)	 	willful breach of duty by you in the course of your employment that is materially injurious
to the Company’s interests and which, if curable, is not cured within 10 days after your
receipt of written notice from the Company;
	 
	(iii)	 	willful failure by you after having been given written notice from the Company to perform
any and all duties commensurate with your position and a reasonable opportunity to perform
such duties as are specified in the written notice, other than a failure resulting from your
incapacity due to physical or mental illness, provided that such instructions are consistent
with this Agreement and in your reasonable belief do not subject you to liability or sanction;
or
	 
	(iv)	 	indictment of you for the commission of a felony .

“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 the Securities Exchange
Act of 1934) or group of persons acting jointly or in concert, but excluding a person who owns
more than 5% of the outstanding shares of the Company as of the date of the Commencement Date,
becomes a “beneficial owner” (as such term is used in Rule 13d-3 promulgated under that 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 of pursuant to a merger,
consolidation or other transaction (unless the shareholders of the Company immediately prior
to such merger, consolidation or other transaction beneficially own, directly or indirectly,
in substantially the same proportion as they owned the Voting Stock of the Company, all of the
Voting Stock or other ownership interests of the entity or entities, if any, that succeed to
the business of the Company); or
	 
	(iii)	 	approval by the shareholders of the Company of a complete liquidation or 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 stock
of any class or classes having general voting power, in the absence of specified contingencies, to
elect the directors of the Company.

“Date of Termination” shall mean:

	(i)	 	if your employment is terminated by the Company, the date specified in the notice by the
Company to you that your employment is so terminated;

 

 

	(ii)	 	if you voluntarily resign your employment, 60 days after receipt by the Company of written
notice that you are terminating your employment (provided, that if you commence other
employment, the Company may (a) accelerate the Date of Termination to an earlier date so that
there is no overlap with such other employment by providing you with written notice of such
action, or, (b) alternatively, place you on paid leave (covering only Base Salary) during such
period irrespective of whether you commence other employment);
	 
	(iii)	 	if your employment is terminated by reason of death, the date of death; or
	 
	(iv)	 	if you resign your employment for Good Reason, 30 days after receipt by the Company of timely
written notice from you in accordance with paragraph 26 of the letter agreement effective as
of December 31, 2008 between you and the Company (the “Letter Agreement”), unless the Company
cures the event or events giving rise to Good Reason within 30 days after receipt of such
written notice.

“Disability” shall mean your inability, due to physical or mental incapacity, to substantially
perform your duties and responsibilities for a period of 120 consecutive days as determined by
a medical doctor selected by the Company and reasonably acceptable to you.

“Good Reason” shall mean the occurrence of any of the following without your consent:

	(i)	 	a material diminution in your authority, duties or responsibilities as Group President –
Intimate Apparel of the Company;
	 
	(ii)	 	a reduction in your Base Salary or Target Bonus;
	 
	(iii)	 	a change in reporting structure so that you report to someone other than the Chief Executive
Officer of the Company;
	 
	(iv)	 	the removal by the Company of you as Group President – Intimate Apparel of the Company;
	 
	(v)	 	the failure of a successor to all or substantially all of the assets of the Company to assume
the Company’s obligations under the letter agreement either in writing or as a matter of law;
	 
	(vi)	 	requiring you to be principally based at any office or location other than Manhattan, New
York or any location within a 45 mile radius of Manhattan, New York; or
	 
	(vii)	 	requiring you to travel from your primary office location more than 50% of the Company’s
regularly schedule working days or more than 30% of non-working days, as measured over any
consecutive 12-month period.

 

 

     Anything herein to the contrary notwithstanding, you shall not be entitled to resign for Good
Reason unless you give the Company written notice of the event constituting “Good Reason” within 60
days of the occurrence of such event and the Company fails to cure such event within 30 days after
receipt of such notice.

“Separation From Service” shall mean a termination of your employment in a manner consistent with
Treasury Regulation Section 1.409A-1(h).EX-10.30

Ex. 10.30

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into by
and between THE WARNACO GROUP, INC., a Delaware corporation (together with its successors and
assigns, the “Company”), and STANLEY P. SILVERSTEIN (the “Executive”) to be effective as of the
close of business on December 31, 2008 (the “Effective Date”).

W I T N E S S E T H :

     WHEREAS, the Company and the Executive (individually, a “Party” and together the “Parties”)
previously entered into this Agreement as of August 11, 2005 on the terms and conditions set forth
herein; and

     WHEREAS, the Parties wish to amend and restate this Agreement as of the close of business on
December 31, 2008 in a manner which reflects the Parties best efforts to comply with the provisions
of Section 409A of the Internal Revenue Code of 1986, as amended from time to time (the “Code”),
and its implementing regulations and guidance (“Section 409A”), and to make certain other changes;

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is mutually acknowledged, the Parties
agree as follows:

	 	1.	 	Certain Definitions.

	 	(a)	 	“Affiliate” of a specified person or entity shall mean a person or entity that directly or
indirectly controls, is controlled by, or is under common control with, the person or entity
specified.
	 
	 	(b)	 	“Board” shall mean the Board of Directors of the Company.
	 
	 	(c)	 	“Cause” shall mean:
	 
	 	 	 	(i) willful misconduct by the Executive which causes material harm to the
Company’s interests;
	 
	 	 	 	(ii) willful and material breach of duty by the Executive in the course of
his employment, which, if curable, is not cured within 10 days after
Executive’s receipt of written notice from the Company;
	 
	 	 	 	(iii) willful failure by the Executive, after having been given written
notice from the Company, to perform his duties other than a failure
resulting from Executive’s incapacity due to physical or mental illness; or

1

 

	 	 	 	(iv) indictment of the Executive for a felony, a crime involving moral
turpitude or any other crime involving the business of the Company which, in
the case of such crime involving the business of the Company, is injurious
to 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 him in bad faith and
without reasonable belief that his action was in the best interests of the Company. The
determination to terminate the Executive’s employment for Cause shall be made by the Board and
prior to such determination the Executive shall have the right to appear before the Board or a
committee 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 the
Securities Exchange Act of 1934) or group of persons acting jointly or in
concert, but excluding a person who owns more than 5% of the outstanding
shares of the Company as of the date of this Agreement, becomes a
“beneficial owner” (as such term is used in Rule 13d-3 promulgated under
that 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 of
pursuant to a merger, consolidation or other transaction (unless the
shareholders of the Company immediately prior to such merger, consolidation
or other transaction beneficially own, directly or indirectly, in
substantially the same proportion as they owned the Voting Stock of the
Company, all of the Voting Stock or other ownership interests of the entity
or entities, if any, that succeed to the business of the Company); or
	 
	 	 	 	(iii) approval by the shareholders of the Company of a complete liquidation
or 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 stock
of any class or classes having general voting power, in the absence of specified contingencies, to
elect the directors of the Company.

	 	(e)	 	“Date of Termination” shall mean:
	 
	 	 	 	(i) if the Executive’s employment is terminated by the Company, the date
specified in the notice by the Company to the Executive that his employment
is so terminated; provided that for a termination for Cause such notice is
delivered after the Board determination as set forth in

2

 

	 	 	 	Section 1(c) hereof;

	 	 	 	(ii) if the Executive voluntarily resigns his employment, 90 days after
receipt by the Company of written notice that the Executive is terminating
his employment or if the Company shortens the required notice period in
accordance with Section 6(c), the date of termination specified in such
notice;
	 
	 	 	 	(iii) if the Executive’s employment is terminated by reason of death, the
date of death;
	 
	 	 	 	(iv) if the Executive’s employment is terminated for Disability, 30 days
after written notice is given as specified in Section 1(f) below; or
	 
	 	 	 	(v) if the Executive resigns his employment for Good Reason, 30 days after
receipt by the Company of timely written notice from the Executive in
accordance with Section 1(g) below unless the Company cures the event or
events giving rise to Good Reason within 30 days after receipt of such
written notice.

          (f) “Disability” shall mean the Executive’s inability, due to physical or mental incapacity,
to substantially perform his duties and responsibilities for a period of 180 consecutive days as
determined 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 the
Party terminating his employment gives written notice to the other Party in accordance with Section
15 below.

          (g) “Good Reason” shall mean the occurrence of any of the following without the Executive’s
prior written consent:

	 	 	 	(i) a material diminution by the Company in the Executive’s authority,
duties or responsibilities as Executive Vice President, Corporate
Development and Chief Administrative Officer or the assignment to the
Executive by the Company of any duties materially inconsistent with such
positions;
	 
	 	 	 	(ii) a reduction in (A) Base Salary or (B) Target Bonus opportunity as a
percentage of Base Salary;
	 
	 	 	 	(iii) in connection with or following a Change in Control, a change in
reporting structure so that the Executive reports to someone other than the
Chief Executive Officer of the Company;
	 
	 	 	 	(iv) the removal by the Company of the Executive as Executive Vice
President, Corporate Development and Chief Administrative Officer or the
failure by the Board to elect or reelect the Executive as an executive
officer of the Company;

3

 

	 	 	 	(v) requiring the Executive to be principally based at any office or
location more than 50 miles from mid-town Manhattan; or

	 	 	 	(vi) the failure of a successor to all or substantially all of the assets of
the Company to assume the Company’s obligations under this Agreement either
as 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 resign
for Good Reason (i) if the occurrence of the event otherwise constituting Good Reason is the result
of Disability, a termination by the Company for which notification has been given or a voluntary
resignation by the Executive other than for Good Reason and (ii) unless the Executive gives the
Company written notice of the event constituting “Good Reason” within 90 days of the occurrence of
such event and the Company fails to cure such event within 30 days after receipt of such notice.

     (h) “Separation From Service” shall mean a termination of the Executive’s employment in a
manner 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 August 11, 2005 and
shall end at the close of business on the third anniversary of such date (the “Term”);
provided, however, that the Term shall thereafter be automatically extended for additional
one-year periods, unless either the Company or the Executive gives the other written notice at
least 180 days prior to the then-scheduled expiration of the Term that such Party is electing not
to so extend the Term (the initial term plus any extension thereof in accordance herewith being
referred to herein as the “Term”). Notwithstanding the foregoing, the Term shall end on the date
on which the Executive’s employment is terminated by either Party in accordance with the provisions
herein.

	 	3.	 	Position; Duties and Responsibilities.

     During the Term, the Executive shall be employed as Executive Vice President, Corporate
Development and Chief Administrative Officer of the Company and shall perform such duties and
responsibilities as determined by the Chief Executive Officer. The Executive shall devote
substantially all of his business time and attention to the satisfactory performance of his duties.
Anything herein to the contrary notwithstanding, nothing shall preclude the Executive from (i)
subject to the reasonable approval of the Board, serving on the boards of directors of trade
associations and/or charitable organizations or other business corporations (provided such service
is not prohibited under Section 8(a)(i) below), (ii) engaging in charitable activities and
community affairs and (iii) managing his personal investments and affairs,

4

 

provided that the
activities described in the preceding clauses (i) through (iii) do not materially interfere with
the proper performance of his duties and responsibilities hereunder. The Company acknowledges that
as of the Effective Date, the Executive is employed by the Company as Executive Vice President,
International Strategy and Business Development.

	 	4.	 	Compensation.

          (a) Base Salary. During the Term, the Executive shall be paid an annualized Base
Salary of $525,000 (“Base Salary”), payable in accordance with the regular payroll practices of the
Company, subject to annual review by the Board (or its designee, including the Compensation
Committee of the Board) in its sole discretion. During the Term the Base Salary may not be
decreased without the Executive’s prior written consent. The Executive shall not be entitled to
any 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” as
used in this Agreement shall thereafter refer to the increased amount. The Company acknowledges
that as of the Effective Date, Base Salary is $620,000.

          (b) Annual Incentive Awards. During the Term, the Executive shall be eligible to
receive an annual incentive award (provided the Executive was employed continuously during the
applicable fiscal year) pursuant to the Company’s Incentive Compensation Plan, as amended (or such
other annual incentive plan as may be approved by the Company’s shareholders), in effect for the
applicable fiscal year (“Bonus Plan”). The Executive’s annual incentive award for fiscal year 2005
and thereafter shall have a target of 85% of Base Salary (“Target Bonus”), with a potential maximum
award as set forth in the Bonus Plan, in all events based on the Executive’s achievement of annual
performance and other targets approved by the committee administering the Bonus Plan. The amount
and payment of any annual incentive award shall be determined in accordance with the Bonus Plan and
shall be payable to the Executive when bonuses for the applicable performance period are paid to
other senior executives of the Company, but in all events no later than the 60th day
following the end of the applicable fiscal year for which the Annual Bonus has been earned. After
any increase in the Executive’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 the increased target opportunity. The Company acknowledges that as of the
Effective Date, Target Bonus is 85% of Base Salary.

          (c) Long-Term Incentive Awards. During the Term, the Executive shall be eligible to
participate in the Company’s equity incentive plans, including, without limitation, the 2003 and
2005 Stock Incentive Plans, as amended from time to time, and such other long-term incentive
plan(s) as may be approved by the Company’s shareholders from time to time (“Stock Incentive
Plan”). Except as otherwise provided herein, all equity grants shall be governed by the applicable
equity plan and/or award agreement. The Executive shall be subject to the equity ownership,
retention and other requirements applicable to senior executives of the Company.

          (d) Supplemental Award. During the Term beginning with fiscal year 2005, provided the
Executive is employed by the Company, the Executive shall be entitled to an annual
award with an aggregate grant date value equal to 10% of the sum of Base Salary plus Annual

5

 

Bonus as defined in this Section 4(d) if the Executive will be less than age 60 by the end of the
applicable fiscal year and 13% of such amount if the Executive will be age 60 or older by the end
of the applicable fiscal year (“Supplemental Award”), with the first such award being made no later
than 60 days after August 11, 2005. For this purpose, Base Salary shall be the Base Salary paid to
the Executive for the fiscal year prior to the award year and Annual Bonus shall be the annual
bonus awarded to the Executive by the Board for such prior fiscal year. The Supplemental Award
shall not be awarded to the Executive until after the determination by the Board of the Executive’s
annual bonus for the prior fiscal year (but in no event later than 60 days thereafter for any award
made after fiscal year 2005) and 50% of the value of the Supplemental Award shall be awarded in the
form of restricted shares pursuant to the applicable Stock Incentive Plan (“Career Shares”) and 50%
shall be awarded in the form of a credit to a bookkeeping account maintained by the Company for the
Executive’s account (the “Notional Account”). Any Career Shares awarded hereunder shall be
governed by the applicable Stock Incentive Plan and, if applicable, any award agreement. For
purposes of this Section 4(d), each Career Share shall be valued at the closing price of a share of
the Company’s common stock (“Share”) on the date that the Supplemental Award is made. For the
Notional Account, the Company shall select the investment alternatives available to the Executive
under the Company’s 401(k) plan. The balance in the Notional Account shall periodically be
credited (or debited) with the deemed positive (or negative) return based on returns of the
permissible investment alternative or alternatives under the Company’s 401(k) plan as selected in
advance by the Executive (and in accordance with the applicable rules of such plan or investment
alternative) to apply to such Notional Account, with such deemed returns calculated in the same
manner and at the same times as the return on such investment alternative(s). The Company’s
obligation to pay the amount credited to the Notional Account, including any return thereon
provided for in this Section 4(d), shall be an unfunded obligation to be satisfied from the general
funds of the Company. Except as otherwise provided in Section 6 below or the applicable Stock
Incentive Plan and provided that the Executive is employed by the Company on such vesting date, any
Supplemental Award granted in the form of Career Shares will vest as follows: 50% of the Career
Shares will vest on the earlier of the Executive’s 62nd birthday or upon the Executive’s
obtaining 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’s obtaining 20 years of
“Vesting Service” or (iii) the 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 Supplemental Award granted as a credit to the Notional Account (as
adjusted for any returns thereon) (“Adjusted Notional Account”)) shall vest as follows: 50% on the
earlier of the Executive’s 62nd birthday or upon the Executive’s obtaining 5 years of
“Vesting Service” and 100% on the earlier of the Executive’s 65th birthday and upon the
Executive’s obtaining 10 years of “Vesting Service”. For purposes of this Section 4(d), “Vesting
Service” shall mean the period of time that the Executive is employed by the Company as an
executive officer, provided that for these purposes only the Executive’s service from February 4,
2003 on will be counted. Subject to Section 17(b) hereof, upon vesting the Career Shares will be
delivered in the form of Shares to the Executive. In addition, any unvested Adjusted Notional
Account shall vest upon a Change in Control as defined in Section 1(d)(i) or (ii) hereof which also
qualifies as a “change in control event” under Section 409A (“409A Change in Control Event”). The
vested balance in the
Adjusted Notional Account, if any, shall not be distributed to

6

 

the Executive until there has
been a Separation From Service or, if earlier, there has been a 409A Change in Control Event and,
at such time, shall only be distributed at the earliest time that satisfies the requirements of
this Section 4(d). Upon a 409A Change in Control Event, the vested Adjusted Notional Account shall
be paid to the Executive in a lump-sum cash payment. In addition, if the Executive’s employment is
terminated for any reason, after taking into account Section 6 hereof, any unvested Supplemental
Awards (whether in the form of Career Shares or the Adjusted Notional Account) shall be forfeited
and any vested balance in the Adjusted Notional Account, subject to Section 17(b) hereof, shall be
paid to the Executive 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 to Section 409A as of the date of the Executive’s Separation From Service, such
distribution shall not be made until the earlier of the Executive’s death or the first business day
of the seventh calendar 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
such Disability satisfies the requirements of Section 409A(a)(2)(C) of the Code or the Treasury
Regulations implementing such section, then such distribution may be made upon Separation From
Service without regard to whether the Executive was a “specified employee” at such time. The
Executive can elect to delay the time and/or form of payment of the Adjusted Notional Account under
this Section 4(d), provided such election is delivered to the Company in writing at least 12 months
before the scheduled payment date for such payment and the new payment date for such payment is not
earlier than (i) the Executive’s death, (ii) the Executive’s “disability” which satisfies the
requirements 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 the
Term, the vesting and payment dates in this Section 4(d) (without regard to Section 6, except as
otherwise expressly provided in Section 6(d) of this Agreement) and the election right in this
Section 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 to
amend, modify or terminate any benefit plan or program, the Executive shall be entitled to
participate in all employee savings and welfare benefit plans and programs made available to the
Company’s senior-level executives on a basis no less favorable than provided to other
similarly-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 and
dismemberment protection and travel accident insurance. During the Term, the Executive shall also
be entitled to a paid annual physical medical exam as approved by the Company and Company-paid term
life insurance with a benefit equal to $1 million, provided the Company can obtain such insurance
at commercially reasonable premium levels. The Executive shall be entitled to four weeks paid
vacation per calendar year.

          (b) Business Expenses. During the Term, the Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities under this Agreement and the
Company shall promptly reimburse him for all business and entertainment expenses incurred in

7

 

connection with carrying out the business of the Company, subject to documentation in accordance
with the Company’s policy. The Executive shall be entitled to first class air travel when
traveling on Company business.

          (c) Perquisites. The Executive shall be entitled to perquisites provided to other
senior-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 the
provision of any in-kind benefit (as defined in Section 409A) to the Executive during any calendar
year will not affect the amount of expenses eligible for reimbursement or provided as in-kind
benefits to the Executive in any other calendar year, (ii) the reimbursements for expenses for
which the Executive is entitled shall be made on or before the last day of the calendar year
following the calendar year in which the applicable expense is incurred and (iii) the right to
payment or reimbursement or in-kind benefits may not be liquidated or exchanged for any other
benefit.

     6. Termination of Employment. The Term of this Agreement and the Executive’s
employment 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 the
Executive. In the event that during the Term the Executive’s employment is terminated without
Cause by the Company (other than due to Disability) or the Executive resigns for Good Reason and
Section 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 the
Executive from the Date of Termination through the expiration of the Term
(without regard to its earlier termination hereunder) if he had remained
employed, but in no event more than 2 times or less than 1 times Base
Salary, payable in a cash lump sum to the Executive as soon as practicable
following the Date of Termination (but in no event later than 60 days
following such date);
	 
	 	 	 	(ii) immediate vesting as of the Date of Termination of 50% of any
restricted stock (other than Career Shares) that remains unvested as of the
Date of Termination;
	 
	 	 	 	(iii) with respect to any stock options granted on or after August 11, 2005
which are vested and outstanding as of the Date of Termination, continued
exercisability for 12 months following the Date of Termination or the
remainder of the option term, if shorter; and
	 
	 	 	 	(iv) continued participation for the Executive and his eligible dependents
in the Company’s welfare benefit plans in which he and his 

8

 

	 	 	 	eligible
dependents were participating immediately prior to the Date of Termination
until the earlier of (a) the end of the applicable Term (without regard to
its earlier termination hereunder), but in no event more than 24 months or
less than 12 months following the Date of Termination, or (b) the date, or
dates, the Executive receives equivalent coverage under the plans and
programs of a subsequent employer.

          (b) Termination upon Death or due to Disability. In the event that during the Term
the Executive’s employment is terminated upon death or due to Disability, the Executive (or his
estate or legal representative, as the case may be) shall be entitled to:

	 	 	 	(i) a pro-rata annual bonus determined by multiplying the amount of the
annual bonus the Executive would have received had his employment continued
through the end of the fiscal year in which the Date of Termination occurs
by a fraction, the numerator of which is the number of days during such
fiscal year that the Executive was employed by the Company and the
denominator of which is 365, payable when bonuses for such fiscal year are
paid to other Company executives (which payment date shall be no earlier
than January 1st and no later than March 15th of the
year following the year in which the Date of Termination occurs);
	 
	 	 	 	(ii) immediate vesting as of the Date of Termination of 50% of any
restricted stock (other than Career Shares) that remains unvested as of the
Date of Termination; and
	 
	 	 	 	(iii) immediate vesting as of the Date of Termination of 50% of any
previously granted Supplemental Award that remains unvested as of the Date
of 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 or
the Executive voluntarily resigns, the Executive shall be entitled to his Base Salary and benefits
through the Date of Termination. A voluntary resignation by the Executive of his employment shall
be effective upon 90 days prior written notice by the Executive to the Company (“Notice Period”),
subject to earlier termination by the Company in accordance herewith. Failure by the Executive to
provide the required notice shall be deemed to be a breach of this Agreement. During the Notice
Period, the Executive shall continue to be an employee of the Company and his fiduciary duties and
other obligations as an employee of the Company shall continue. The Executive shall cooperate in
the transition of his responsibilities; provided that the Company shall have the right to direct
the Executive to no longer come to work or not to perform any work for the Company during the
Notice Period. If the Company so directs, in addition to his fiduciary duties and other
obligations as an employee and his commitments pursuant to Section 7 and 8 hereof, the Executive
agrees to refrain during the
Notice Period from contacting any customers, clients, advertisers, suppliers, agents,
professional advisors or employees of the Company or any of its Affiliates. The Company shall also
have the

9

 

right to shorten the Notice Period by providing written notice to the Executive, in which
event the Executive’s employment shall terminate on the date stated in such notice.

          (d) Termination without Cause by the Company or Resignation for Good Reason by the
Executive Upon or Following a Change in Control. In the event that (i) the Executive’s
employment is terminated without Cause by the Company (other than due to Disability) or the
Executive resigns for Good Reason, in both cases upon or within one year following a Change in
Control (provided the Term is still in effect or has expired during this one-year period), the
Executive shall be entitled to:

	 	 	 	(i) an amount equal to 2 times the sum of (a) Base Salary plus (b) Target
Bonus, payable in a lump sum as soon as practicable following the Date of
Termination (but in no event later than 60 days following such date);
	 
	 	 	 	(ii) a pro-rata Target Bonus for the year of termination, determined by
multiplying the Target Bonus by a fraction, the numerator of which is the
number of days the Executive was employed by the Company during the year in
which the Date of Termination occurs and the denominator of which is 365,
payable in a lump sum as soon as practicable following the Date of
Termination (but in no event later than 60 days following such date);
	 
	 	 	 	(iii) immediate vesting as of the Date of Termination of all outstanding
equity awards (other than Career Shares), with any stock options granted on
or after the August 11, 2005 remaining exercisable for 24 months following
the Date of Termination or the remainder of the option term, if shorter;
	 
	 	 	 	(iv) immediate vesting as of the Date of Termination of any previously
granted Supplemental Award, payable in accordance with Section 4(d) above;
and
	 
	 	 	 	(v) continued participation for the Executive and his eligible dependents in
the Company’s welfare benefit plans in which he and his eligible dependents
were participating immediately prior to the Date of Termination until the
earlier of (a) 24 months following the Date of Termination, or (b) the date,
or dates, the Executive receives substantially equivalent coverage under the
plans and programs of a subsequent employer.

          (e) Termination of the Executive’s Employment by the Company Upon or After the Expiration
of the Term. If the Company provides written notice to the Executive in
accordance with Section 2 above that the Term shall not renew and upon, or at any time after,
such expiration of the Term the Company terminates the Executive’s employment under

10

 

circumstances
that during the Term would constitute a termination of employment without Cause, the Executive
shall be entitled to the same 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 or within one year following a Change in Control, then the Executive
shall be entitled to the payments, benefits, and entitlements under Section 6(d) hereof.

          (f) Other Entitlements Upon Termination of Employment. In the event of any
termination of the Executive’s employment, the Executive (or his estate or legal representative, as
the case may be) shall be entitled to:

	 	 	 	(i) Base Salary through the Date of Termination, payable on the first
regularly 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 for
the fiscal year preceding the fiscal year in which the Date of Termination
occurs, payable when bonuses for such performance period are paid to other
Company 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, additional
entitlements or treatment, if any, in accordance with applicable plans and
programs of the Company (provided that in no event shall the Executive be
entitled to duplication of any payments or benefits).

          (g) Exclusivity of Benefits; Releases of Claims. Any payments provided pursuant to
Section 6(a), Section 6(d) or Section 6(e) above shall be in lieu of any salary continuation
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 be entitled 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, 9 and 10 of this
Agreement. In addition, in order to be entitled to any payments, rights or other entitlements 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 Agreement and Release of Claims
attached hereto as Exhibit A no later than 45 days following
the Date of Termination and not revoke such release within the applicable revocation period.

          (h) Nature of Payments; No Mitigation. Any amounts due under this Section 6 are in
the nature of severance payments considered to be reasonable by the Company and are

11

 

not in the
nature of a penalty. In the event of termination of his employment for any reason in compliance
with 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 welfare
benefits, there shall be no offset against amounts or entitlements due to him on account of any
remuneration or benefits provided by any subsequent employment he may obtain.

          (i) Resignation. Notwithstanding any other provision of this Agreement, upon the
termination of the Executive’s employment for any reason or the Executive being directed not to
come to work or not to perform services for the Company in accordance with Section 6(c) hereof,
unless otherwise requested by the Board, he shall immediately resign from the Board, if applicable,
and all boards of directors of any Affiliate of the Company of which he may be a member, and as a
trustee of, or fiduciary to, any employee benefit plans of the Company or any Affiliate. The
Executive hereby agrees to execute any and all documentation of such resignations upon request by
the Company, but he shall be treated for all purposes as having so resigned upon termination of his
employment or upon the date the Company directs him not to come to work or perform services for the
Company, regardless of when or whether he executes any such documentation.

          (j) Section 409A. Notwithstanding anything to the contrary in this Agreement or
elsewhere (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 any
payment, 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 in
a 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 is
payable during the first six months following the Executive’s Separation From Service shall be paid
or provided to the Executive in a cash lump-sum on the earlier of the Executive’s death or the
first business day of the seventh calendar month following the month in which the Executive’s
Separation From Service occurs. In addition, any payment, benefit or entitlement due upon a
termination of the Executive’s employment that represents a “deferral of compensation” within the
meaning of Section 409A (other than any payments due pursuant to Section 4(d) of this Agreement)
shall only be paid or provided to Executive upon a Separation From Service, in which case any
reference to “Date of Termination” in connection with such payment, benefit or entitlement shall be
deemed to be a reference to “Separation From Service” and the actual payment date within the time
specified in the applicable provision of Section 6 shall be within the Company’s sole discretion.
Notwithstanding anything to the contrary in this Section 6 or otherwise, any payment or benefit
under this Section 6 or otherwise which is exempt from Section 409A pursuant to Treasury Regulation
Section 1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to the Executive only to the extent
the expenses are not incurred or the benefits are not provided beyond the last day of the second
taxable year of the Executive following the taxable year of the Executive in which the
Separation From Service occurs; and provided further that the Company reimburses such expenses
no later than the last day of the third taxable year following the taxable year of the Executive in
which the Separation From Service occurs. Finally, to the extent that the provision

12

 

of any benefit
pursuant to Section 6(a)(iv) or Section 6(d)(v) hereof is taxable to the Executive, any such
reimbursement shall be paid to the Executive on or before the last day of the Executive’s taxable
year following the taxable year in which the expense is incurred and such reimbursement shall not
be subject to liquidation 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 his duties
for the Company or as required in connection with providing any cooperation to the Company pursuant
to Section 10 below, the Executive agrees that he shall not disclose to anyone or make use of any
trade secret or proprietary or confidential information of the Company or any Affiliate of the
Company, including such trade secret or proprietary or confidential information of any customer or
other entity to which the Company owes an obligation not to disclose such information, which he
acquires during the course of his employment (“Confidential Information”), including, but not
limited to, records kept in the ordinary course of business, except when required to do so by a
court of law, by any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee thereof) with apparent
or actual jurisdiction to order him to divulge, disclose or make accessible such information.
“Confidential Information” shall not include information that (i) was known to the public prior to
its disclosure by the Executive; or (ii) becomes known to the public through no wrongful disclosure
by or act of the Executive or any representative of the Executive. In the event the Executive is
requested by subpoena, court order, investigative demand, search warrant or other legal process to
disclose any Confidential Information, the Executive agrees, unless prohibited by law or Securities
and Exchange Commission regulation, to give the Company’s General Counsel prompt written notice of
any request for disclosure in advance of the Executive’s making such disclosure and the Executive
agrees not to disclose such information unless and until the Company has expressly authorized the
Executive to do so in writing or the Company has had a reasonable opportunity to object to such
request or to litigate the matter (of which the Company agrees to keep the Executive reasonably
informed) and has failed to do so.

          (b) The Executive hereby sells, assigns and transfers to the Company all of his right, title
and interest in and to all inventions, discoveries, improvements and copyrightable subject matter
(the “Rights”) which during the period of his employment are made or conceived by him, alone or
with others, and which are within or arise out of any general field of the Company’s business or
arise out of any work he performs, or information he receives regarding the business of the
Company, while employed by the Company. The Executive shall fully disclose to the Company as
promptly as available all information known or possessed by him concerning any Rights, and upon
request by the Company and without any further remuneration in any form to him by the Company, but
at the expense of the Company, execute all applications for patents and for copyright registration,
assignments thereof and other instruments and do all things which the Company may deem necessary to
vest and maintain in it the entire right, title
and interest in and to all such Rights.

13

 

          (c) The Executive agrees upon termination of employment (whether during or after the
expiration of the Term and whether such termination is at the instance of the Executive or the
Company), and regardless of the reasons therefor, or at any time as the Company may request, he
will promptly deliver to the Company’s General Counsel, and not keep or deliver to anyone else, any
and all of the following which is in his possession or control: (i) Company property (including,
without limitation, credit cards, computers, communication devices, home office equipment and other
Company tangible property) and (ii) notes, files, memoranda, papers and, in general, any and all
physical matter and computer files containing confidential or proprietary information of the
Company or any of its Affiliates, including any and all documents relating to the conduct of the
business of the Company or any of its Affiliates and any and all documents containing confidential
or 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 the
time of termination of the Executive’s employment and (y) any information necessary for the
Executive to retain for his tax purposes (provided the Executive maintains the confidentiality of
such information in accordance with Section 7(a) above).

	 	8.	 	Additional Covenants.

          (a) The Executive acknowledges that in his capacity in management the Executive has had or
will have a great 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 Executive agrees as follows:

	 	 	 	(i) during his employment with the Company or any Affiliate and for 12
months following termination of such employment (whether during the Term or
thereafter), the Executive shall not, other than in the ordinary course of
performing his duties hereunder or as agreed by the Company in writing,
engage in a “Competitive Business,” directly or indirectly, as an
individual, partner, shareholder, director, officer, principal, agent,
employee, trustee, consultant, or in any relationship or capacity, in any
geographic location in which the Company or any of its Affiliates is engaged
in business. The Executive shall not be deemed to be in violation of this
Section 8(a) by reason of the fact that he owns or acquires, solely as an
investment, up to two percent (2%) of the outstanding equity securities
(measured by value) of any entity. “Competitive Business” shall mean a
business engaged in (x) apparel design and/or apparel wholesaling or (y)
retailing in competition with any business that the Company or its
Affiliates is conducting at the time of the alleged violation; and
	 
	 	 	 	(ii) during his employment with the Company or any Affiliate and for 18
months following termination of such employment for any reason (whether
during the Term or thereafter), the Executive shall not, other than
in the ordinary course of the Company’s business or with the Company’s prior
written consent, directly or indirectly, solicit or 

14

 

	 	 	 	encourage any customer
of the Company or any of its Affiliates to reduce or cease its business with
the Company or any such Affiliate or otherwise interfere with the
relationship of the Company or any Affiliate with its customers.

          (b) The Executive agrees that during his employment with the Company or any Affiliate and for
18 months following termination of such employment for any reason (whether during the Term or
thereafter), he shall not, other than in the ordinary course of the Company’s business or with the
Company’s prior written consent, directly or indirectly, hire any employee of the Company or any of
its Affiliates, or solicit or encourage any such employee to leave the employ of the Company or its
Affiliates, as the case may be.

          (c) During any Notice Period and following the termination of the Executive’s employment for
any reason (whether during the Term or thereafter), the Executive and the Company each agree to
refrain from making any statements or comments, whether oral or written, of a defamatory or
disparaging nature to third parties regarding each other (and, in the case of the Executive’s
commitment hereunder, the “Company” shall include an Affiliate of the Company and the Company’s
officers, directors, personnel and products). The Executive and the Company each understand that
either party should be entitled to respond truthfully and accurately to statements about such party
made publicly by the Executive or the Company, as the case may be, provided that such response is
consistent with the responding party’s obligations not to make any statements or comments of a
defamatory 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 Confidential
Information and to otherwise protect the legitimate business interests of the Company and any of
its 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 breach
or threatened breach by the Executive or any third party of any obligation by the Executive under
this Agreement, including, without limitation, any breach or threatened breach of Section 7, 8 or
10 of this Agreement will cause the Company immediate, immeasurable and irreparable harm for which
there is no adequate remedy at law, and as a result of this, in addition to its other remedies, the
Company shall be entitled to the issuance by a court of competent jurisdiction of an injunction,
restraining order, specific performance 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 such violation.

          (b) If any restriction set forth in Section 7, 8 or 10 of this Agreement is found by any
arbitrator or court of competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a geographic area, it will
be interpreted to extend over the maximum period of time, range of activities or

15

 

geographic
area as to which it may be enforceable. If any provision of Section 7, 8 or 10 of this
Agreement is declared to be invalid or unenforceable, in whole or in part, for any reason, such
invalidity will not 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 after
the expiration of the Term), upon reasonable request by the Company, the Executive shall cooperate
with 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 relating
to any matter in which he was involved or had knowledge during his employment with the Company,
subject to his reasonable personal and business schedules. The Company shall reimburse the
Executive for all reasonable out-of-pocket costs, such as travel, hotel and meal expenses and
reasonable attorneys’ fees, incurred by the Executive in providing any cooperation pursuant to this
Section 10; provided such expenses shall be paid to the Executive as soon as practicable but in no
event later than the end of the calendar year following the calendar year in which the expenses are
incurred, 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 the
Executive’s Base Salary at the Date of Termination, with such per diem paid to the Executive in the
calendar month following the month in which he provides such assistance. Any reimbursement or
payment under this Section 10 shall not affect the amount of the reimbursement or payment to the
Executive in any other taxable year. The right to payment or reimbursement pursuant to this
Section 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 for
his 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 tax
imposed under Section 4999 of the Code, or any similar federal or state law (an “Excise Tax”), then
notwithstanding anything contained in this Agreement to the contrary, to the extent that any or all
Payments would be subject to the imposition of an Excise Tax, the Payments shall be reduced (but
not below zero) if and to the extent that such reduction would result in the Executive retaining a
larger amount, on an after-tax basis (taking into account federal, state and local income taxes and
the imposition of the Excise Tax), than if the Executive received all of the Payments (such reduced
amount is hereinafter referred to as the “Limited Payment Amount”). The Company to effectuate the
limitations described in the preceding sentence, the Company shall reduce or eliminate the
Payments, by first reducing or eliminating those payments or benefits which are payable in cash and
then by reducing or eliminating non-cash payments, in each case in reverse order beginning with
payments or benefits which 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

16

 

recognized accounting firm designated by the Company and reasonably acceptable to the Executive
(other than the accounting 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. The Accounting 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 of Termination, whichever is later (or such earlier time as is requested by the
Company) and, with respect to the Limited Payment Amount, shall deliver its opinion to the
Executive that he is not required to report any Excise Tax on his federal income tax return with
respect to the Limited Payment Amount (collectively, the “Determination”). Within 5 days of the
Executive’s receipt of the 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 the Payments in accordance with the Determination. If there is no
Dispute, the Determination by the Accounting Firm shall be final binding and conclusive upon the
Company and the Executive (except as provided in subsection (c) below).

          (c) If, after the Payments have been made to the Executive, it is established that the
Payments made to, or provided for the benefit of, the Executive exceed the limitations provided in
subsection (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 established
pursuant to a final determination of a court or an Internal Revenue Service (the “IRS”) proceeding
which has been finally and conclusively resolved, that an Excess Payment has been made, the
Executive shall repay the Excess Payment to the Company within 20 days following the determination
of 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, on
its 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 has
occurred, the Company shall pay an amount equal to the Underpayment to the Executive within 10 days
of such determination or resolution together with interest on such amount at the applicable federal
short-term rate, as defined under Section 1274(d) of the Code and as in effect on the first date
that such amount should have been paid to the Executive under this Agreement, from such date until
the date that such Underpayment is made to the Executive.

	 	12.	 	Representations.

          (a) The Executive represents and warrants that he has the free and unfettered right to enter
into this Agreement and to perform his obligations under it and that he knows of no agreement
between him and any other person, firm or organization, or any law or regulation, that would be
violated by the performance of his obligations under this Agreement. The Executive agrees that he
will not use or disclose any confidential or proprietary information of any prior employer in the
course of performing his duties for the Company or any of its Affiliates.

          (b) The Company represents that (i) the execution of this Agreement and the granting of the
benefits and awards hereunder have been authorized by the Company, including, where necessary, by
the Board, (ii) the execution, delivery and performance of this Agreement

17

 

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 and binding obligation of the Company enforceable against it in accordance
with its terms, except to the extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally.

	 	13.	 	Indemnification and Liability Insurance.

     The Company hereby agrees during, and after termination of, his employment to indemnify the
Executive and hold him harmless, both during the Term and thereafter, to the fullest extent
permitted by law and under the certificate of incorporation and by-laws of the Company against and
in 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 approved
by the Company, and damages resulting from the Executive’s good faith performance of his duties as
an officer or director of the Company or any Affiliate of the Company. The Company shall reimburse
the Executive for expenses incurred by him in connection with any proceeding hereunder upon written
request from the Executive for such reimbursement and the submission by the Executive of the
appropriate documentation associated with these expenses. Such request shall include an
undertaking by the Executive to repay the amount of such advance or reimbursement if it shall
ultimately be determined that he is not entitled to be indemnified hereunder against such costs and
expenses. The Company shall use commercially reasonable efforts to obtain and maintain directors’
and officers’ liability insurance covering the Executive to the same extent as the Company covers
its other officers and directors.

	 	14.	 	Resolution of Disputes.

     Except as otherwise provided in Section 9 above, any controversy, dispute or claim arising
under or relating to this Agreement, the Executive’s employment with the Company or any Affiliate
or the termination thereof shall, at the election of the Executive or the Company (unless otherwise
provided in an applicable Company plan, program or agreement), be resolved by confidential, binding
and final arbitration, to be held in the borough of Manhattan in New York City in accordance with
the rules and procedures of the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof and shall be binding upon the Parties. The Executive consents to the personal
and exclusive jurisdiction of the Courts of the State of New York (including the United States
District Court for the Southern District of New York) in any proceedings for equitable relief. The
Executive further agrees not to interpose any objection for improper venue in any such proceeding.
Each Party shall be responsible for its own costs and expenses, including attorneys’ fees, and
neither Party shall be liable for punitive or exemplary damages, provided that if the Executive
substantially prevails with respect to all claims that are the subject matter of the dispute, his
costs, including reasonable attorneys’ fees, shall be borne by the Company; provided that if such
costs are not reimbursed in connection with a dispute exempt from Section 409A pursuant to Treasury
Regulation Section 1.409A-1(b)(11) then such payment shall be made by the Company to the Executive
in the year following the year in which the

18

 

dispute is resolved.

	 	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 receipt
requested or (iii) two days after being sent by overnight courier (provided that a written
acknowledgement of receipt is obtained by the overnight courier), with any such notice duly
addressed to the Party concerned at the address indicated below or to such other address as such
Party 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 laws
of New York without reference to principles of conflicts of law, provided, however, that Federal
law shall apply to the interpretation or enforcement of the arbitration provisions of Section 14
hereof.

	 	17.	 	Miscellaneous Provisions.

          (a) This Agreement contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and, as of the Effective Date, shall supersede all prior
agreements, understandings, discussions, negotiations and undertakings, whether written or oral,
between the Parties with respect thereto (but not including any indemnification agreements and/or
equity agreements which remain outstanding as of the Effective Date). For the avoidance of doubt,
for any termination of employment prior to January 1, 2009, Section 6 of this Agreement prior to
this amendment and restatement shall govern and control. No provision of this Agreement may be
amended unless such amendment is agreed to in writing and signed by the Executive and an authorized
officer of the Company. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other Party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Party against whom it is being
enforced (either the Executive or an authorized officer of the Company, as the case may be). The
respective rights and obligations of the Parties hereunder, including, without limitation, Section
4(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

19

 

liability insurance) and Section 14 (resolution of disputes), shall survive any expiration of
the Term, including expiration thereof upon the Executive’s termination of employment for whatever
reason, to the extent necessary to the intended preservation 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 or
regulation.

          (c) This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors, heirs (in the case of the Executive) and assigns. For purposes of this
Section 17(c), a successor to the Company shall be limited to an entity which shall have acquired
all 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 this
Agreement. No rights or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive other than his rights to compensation and benefits, which may be
transferred only by will, operation of law or in accordance with this clause (c). The Executive
shall be entitled, to the extent permitted under applicable plans, agreements or law, to select and
change a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder
following the Executive’s death by giving the Company written notice thereof. In the event of the
Executive’s death or a judicial determination of his incompetence, reference in this Agreement to
the Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.

          (d) In the event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable by an arbitrator or court of competent jurisdiction for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall
remain 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 for
convenience only and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.

          (f) This Agreement may be executed in two or more counterparts.

[Signatures on next page.]

20

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of the
date first written above.

	 	 	 	 	 
	 	THE WARNACO GROUP, INC.

 	 
	 	By:  	/s/ Joseph R. Gromek
 	 
	 	 	Name:  	Joseph R. Gromek 	 
	 	 	Title:  	President and Chief Executive Officer 	 

	 	 	 	 	 
	 	THE EXECUTIVE

 	 
	 	/s/ Stanley P. Silverstein
 	 
	 	Stanley P. Silverstein 	 
	 	 	 

21

 

	 	 	 	 	 

Exhibit A

AGREEMENT AND RELEASE OF CLAIMS

          THIS AGREEMENT AND RELEASE is executed by STANLEY P. SILVERSTEIN (the “Executive”) as of the
date hereof.

          WHEREAS, the Executive and The Warnaco Group, Inc. (the “Company”) entered into an amended and
restated employment agreement to be effective as of December 31, 2008 (the “Employment Agreement”);

          WHEREAS, the Executive has certain entitlements pursuant to the Employment Agreement subject
to the Executive’s executing this Agreement and Release and complying with its terms.

          NOW, THEREFORE, in consideration of the payments set forth in Section 6 of the Employment
Agreement and other good and valuable consideration, the Executive agrees as follows:

          The Executive, on behalf of himself and his dependents, heirs, administrators, agents,
executors, successors and assigns (the “Executive Releasors”), hereby releases and forever
discharges the Company and its affiliated companies and their past and present parents,
subsidiaries, successors and assigns and all of the aforesaid companies’ past and present officers,
directors, employees, trustees, shareholders, representatives and agents (the “Company Releasees”),
from any and all claims, demands, obligations, liabilities and causes of action of any kind or
description whatsoever, in law, equity or otherwise, whether known or unknown, that any Executive
Releasor had, may have had or now has against the Company or any other Company Releasee as of the
date of execution of this Agreement and Release arising out of or relating to the Executive’s
employment relationship, or the termination of that relationship, with the Company (or any
affiliate), including, but not limited to, any claim, demand, obligation, liability or cause of
action arising under any Federal, state, or local employment law or ordinance (including, but not
limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay
Act, the Americans With Disabilities Act of 1991, the Workers Adjustment and Retraining
Notification Act, the Employee Retirement Income Security Act (other than any claim for vested
benefits), the Family and Medical Leave Act, and the Age Discrimination in Employment Act, as
amended by the Older Workers’ Benefit Protection Act (“ADEA”)), tort, contract, or alleged
violation of any other legal obligation (collectively “Released Executive Claims”). In addition,
in consideration of the promises and covenants of the Company, the Executive, on behalf of himself
and the other Executive Releasors, further agrees to waive any and all rights under the laws of any
jurisdiction in the United States, or any other country, that limit a general release to any of the
foregoing actions, causes of action, claims or charges that are known or suspected to exist in the
Executive’s favor as of the date of this Agreement and Release. Anything to the contrary
notwithstanding in this Agreement and Release or the Employment Agreement, nothing herein shall
release any Company Releasee from any claims or damages based on (i) any right or claim that arises
after the date of this Agreement and Release
pertaining to a matter that arises after such date, (ii) any right the

22

 

          Executive may have to
enforce Sections 6, 11 and 13 of the Employment Agreement, (iii) any right or claim the Executive
may have to benefits or equity awards that have accrued or vested as of the Date of Termination or
any right pursuant to any qualified retirement plan or (iv) any right the Executive may have to be
indemnified by the Company to the extent such indemnification by the Company or any Affiliate is
permitted by applicable law or the Company’s by-laws.

          The Executive agrees that he shall continue to be bound by, and will comply with, the
provisions of Sections 7, 8, 10 and 14 of the Employment Agreement and the provisions of such
sections, along with Section 9 of the Employment Agreement, shall be incorporated fully into this
Agreement and Release.

          The Executive acknowledges that he has been provided a period of at least 21 calendar days (45
calendar days in the case of any termination covered by Section 7(f)(1)(F)(ii) of ADEA) in which to
consider and execute this Agreement and Release. The Executive further acknowledges and
understands that he has seven calendar days from the date on which he executes this Agreement and
Release to revoke his acceptance by delivering to the Company written notification of his intention
to revoke this Agreement and Release in accordance with Section 15 of the Employment Agreement.
This Agreement and Release becomes effective when signed unless revoked in writing and in
accordance with this seven-day provision. To the extent that the Executive has not otherwise done
so, the Executive is advised to consult with an attorney prior to executing this Agreement and
Release.

          This Agreement and Release shall be governed by and construed and interpreted in accordance
with the laws of New York without reference to principles of conflicts of law. Capitalized terms,
unless defined herein, shall have the meaning ascribed to such terms in the Employment Agreement.

          IN WITNESS WHEREOF, the Executive has executed this Agreement and Release as of the date
hereof.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	Stanley P. Silverstein	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

23

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