Document:

EX-10.1

 

EXHIBIT 10.1

AMENDMENT NO. 1

to the

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     
AMENDMENT (“Amendment No. 1”)
dated the 1st day of July 2004, by and between Polo Ralph
Lauren Corporation, a Delaware corporation (the
“Corporation”), and Roger N. Farah (the
“Executive”).

     
WHEREAS, the Executive currently serves as
President and Chief Operating Officer of the Corporation
pursuant to an Amended and Restated Employment Agreement by and
between the Company and the Executive dated July 23, 2002
(the “Employment Agreement”); and

     
WHEREAS, the Corporation and the Executive wish
to extend the term of the Employment Agreement and to make
certain other amendments to the Employment Agreement, subject to
the conditions contained herein;

     
NOW, THEREFORE, intending to be bound the parties
hereby agree as follows.

     
1. Subject to paragraph 5 hereof, the
second sentence of Section 2 of the Employment Agreement
shall be substituted in its entirety to read as follows:

		
	 	     
    “The term of the Executive’s employment
    under this Agreement shall continue until the close of business
    on April 3, 2010, subject to earlier termination in
    accordance with the terms of this Agreement (the
    “Term”).”
    

     
2. Subject to paragraph 5 hereof, the
Agreement is amended to add a new Section 4(g) to read as
follows:

		
	 	     
    “(g) Restricted Stock Units.
    
	 
	 	     
    (i) Effective as of the effective date of
    Amendment No. 1 to this Agreement, the Executive shall be
    granted (the “Initial Unit Grant”) an aggregate of
    437,500 restricted stock units (“Units”) pursuant to
    the Company’s 1997 Long-Term Stock Incentive Plan, as
    amended (the “1997 Plan”). Each Unit shall represent
    the right to receive one Common Share. The Initial Unit Grant
    shall consist of (A) 250,000 Units that shall vest with
    respect to one-third of such Units on the last day of the
    Company’s 2008, 2009 and 2010 fiscal years (i.e., the
    fiscal years ending in those calendar years), respectively
    (determined without regard to any changes to the Company’s
    fiscal year), so long as the Executive has remained in
    employment through the applicable vesting date, provided,
    however, that notwithstanding the vesting of any such Units, the
    Executive shall not be issued any Common Shares in respect of
    such Units until as soon as practicable following the
    Executive’s termination of employment with the Company (or,
    if earlier, upon the occurrence of a Change of Control during
    the Executive’s employment); and (B) 187,500 Units
    (the “Performance-Based Units”) that shall vest with
    respect to up to one-third of the Units on the last day of the
    Company’s 2005, 2006 and 2007 fiscal years, respectively
    (determined without regard to any future changes to the
    Company’s fiscal year), based on the extent to which the
    Company attains certain performance goals as established by the
    Compensation Committee on the date of grant. The foregoing
    terms, as well as other terms and conditions applicable to the
    Initial Unit Grant, shall be set forth in an Award Agreement
    substantially in the form annexed hereto as Exhibit 1.
    
	 
	 	     
    (ii) During the first quarter of each of
    fiscal years 2006 through 2008, so long as the Executive is then
    employed by the Company, the Executive shall be granted an award
    of 187,500 Units (each, a “Subsequent Unit Grant”).
    Each Subsequent Unit Grant shall cliff vest at the end of the
    three-year performance period (fiscal years 2006-2008, 2007-2009
    and 2008-2010, respectively) based upon the extent to which the
    Company attains certain performance goals as established by the
    Compensation Committee on the respective dates of grant. Each
    Subsequent Unit Grant shall be made pursuant to the 1997 Plan
    (or any successor thereto) and shall be subject to the
    provisions thereof, provided, however,
    

 

		
	 	
    that the foregoing terms, as well as other terms
    and conditions applicable to each Subsequent Unit Grant,
    including the right to receive dividend equivalents, will be
    reflected in an Award Agreement executed by the parties (which
    terms and conditions, insofar as applicable to the
    Executive’s rights upon a termination of employment or a
    Change of Control, to vest in outstanding Units subject to a
    Subsequent Unit Grant, shall be similar in all materials
    respects to the terms and conditions applicable under such
    circumstances to the Performance-Based Units).
    
	 
	 	     
    (iii) In the event that, prior to a
    Subsequent Unit Grant, there occurs any stock split, reverse
    stock split, reorganization, merger, consolidation, split-up,
    spin-off, combination, repurchase, or exchange of Common Shares
    or other similar corporate transaction or event that affects the
    Common Shares such that an adjustment is determined by the
    Compensation Committee in its discretion to be appropriate in
    order to prevent dilution or enlargement of the benefits or
    potential benefits intended to be made available hereunder, the
    number of Units subject to such Subsequent Unit Grant (when
    granted) will be subject to equitable adjustment.
    

     
3. The year “2008” set forth in
the first sentence of Section 4(a)(iii) of the Employment
Agreement shall be deleted, and there shall be substituted
therefor the year “2010.”

     
4. The second sentence of
Section 4(a)(iii) of the Employment Agreement shall be
substituted in its entirety to read as follows:

		
	 	     
    “The Deferred Compensation will be payable
    to Executive, to the extent vested, as soon as practicable
    following the Executive’s termination of employment.”
    

     
5. The provisions of this Amendment
No. 1 shall take effect as of the date hereof, subject to
approval of the stockholders of the Company, at the 2004 annual
meeting, of the Amendment and Restatement of the Company’s
1997 Long-Term Stock Incentive Plan. In the event that such
Amendment and Restatement is not so approved, this Amendment
No. 1 shall be null and void and of no force and effect.

     
IN WITNESS WHEREOF, the Company has caused this
Amendment to be duly executed and the Executive has hereunto set
his hand, effective as of the date hereof, subject to the
conditions set forth herein.

		
	 	
    POLO RALPH LAUREN CORPORATION
    

			
	 	By: 	
    /s/ RALPH LAUREN
    

		
	 	
    

	 	
    Name: Ralph Lauren
    

			
	 	Title:	
    Chairman and Chief Executive Officer

		
	 	
    /s/ ROGER N. FARAH
    

			
	 		
    

		
	 	
    Executive:     Roger N.
    Farah
    

2EXHIBIT 10.3

 

EXHIBIT 10.3

POLO RALPH LAUREN CORPORATION

EMPLOYMENT AGREEMENT

     
THIS EMPLOYMENT AGREEMENT (the
“Agreement”), is made effective as of the 9th day of
September, 2004 (the “Effective Date”), by and between
POLO RALPH LAUREN CORPORATION, a Delaware corporation (the
“Corporation”), and Jackwyn Nemerov (the
“Executive”).

     
In consideration of the mutual covenants and
premises contained herein, the parties hereby agree as follows:

ARTICLE I

EMPLOYMENT

     
1.1     Employment
Term. The Corporation hereby agrees to employ the Executive,
and the Executive hereby agrees to serve the Corporation, on the
terms and conditions set forth herein. The employment of the
Executive by the Corporation shall be effective as of the
Effective Date hereof and continue until the close of business
of the fifth anniversary of the Effective Date of this Agreement
(the “Term”), unless earlier terminated in accordance
with Article II hereof.

     
1.2     Position and
Duties. During the Term the Executive shall faithfully, and
in conformity with the directions of the Board of Directors of
the Corporation (the “Board”) or the management of the
Corporation (“Management”), perform the duties of her
employment, and shall devote to the performance of such duties
her full time and attention. During the Term the Executive shall
serve in the position of Executive Vice President. During the
Term, the Executive may engage in outside activities provided
those activities do not conflict with the duties and
responsibilities enumerated hereunder, and provided further that
the Executive gives written notice to the Board of any outside
business activity that may require significant expenditure of
the Executive’s time in which the Executive plans to become
involved, whether or not such activity is pursued for profit.
The Executive shall be excused from performing any services
hereunder during periods of temporary incapacity and during
vacations in accordance with the Corporation’s disability
and vacation policies.

     
1.3     Place of
Performance. The Executive shall be employed at the
principal offices of the Corporation located in New York, New
York, except for required travel on the Corporation’s
business.

     
1.4     Compensation
and Related Matters.

     
(a) Base Compensation. In
consideration of her services during the Term, the Corporation
shall pay the Executive cash compensation at an annual rate not
less than the base salary as set forth on Exhibit A hereto
(“Base Compensation”). Executive’s Base
Compensation shall be subject to such increases as may be
approved by the Board or Management. The Base Compensation shall
be payable as current salary, in installments not less
frequently than monthly, and at the same rate for any fraction
of a month unexpired at the end of the Term.

     
(b) Bonus. During the Term, the
Executive shall have the opportunity to earn an annual bonus in
accordance with any annual bonus program the Corporation
maintains that would be applicable to the Executive as reflected
in Executive’s Terms of Employment Sheet.

     
(c) Stock. During the Term, the
Executive shall be eligible to participate in the Polo Ralph
Lauren Long-Term Stock Incentive Plan (the “Incentive
Plan”) Stock grants are granted annually in June of each
year and are subject to ratification by the Compensation
Committee of the Board of Directors. In accordance with the
terms of the Incentive Plan and subject to approval by the
Compensation Committee of the Board of Directors, Executive will
be granted such options and restricted shares of stock as are
specified in Executive’s Terms of Employment Sheet, to be
awarded at the end of the fiscal quarter in which
Executive’s hire date occurs. Stock options will vest one
third each year from the date of the grant and will be fully
vested after

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three years, subject to Executive’s
continued employment through each vesting date. Restricted
shares of stock will vest one-fifth each year from the date of
the grant and will be fully vested after five years, subject to
Executive’s continued employment through each vesting date.

     
(d) Car Allowance. During the Term,
the Corporation shall reimburse Executive for the cost of a car
and driver.

     
(e) Expenses. During the Term, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in performing
services hereunder, including all reasonable expenses of travel
and living while away from home, provided that such
expenses are incurred and accounted for in accordance with the
policies and procedures established by the Corporation.

     
(f) Vacations. During the Term, the
Executive shall be entitled to the number of vacation days in
each calendar year, and to compensation in respect of earned but
unused vacation days, determined in accordance with the
Corporation’s vacation program. The Executive shall also be
entitled to all paid holidays given by the Corporation to its
employees.

     
(g) Other Benefits. The Executive
shall be entitled to participate in all of the
Corporation’s employee benefit plans and programs in effect
during the Term as would by their terms be applicable to the
Executive, including, without limitation, any pension and
retirement plan, supplemental pension and retirement plan,
deferred compensation plan, incentive plan, stock option plan,
life insurance plan, medical insurance plan, dental care plan,
accidental death and disability plan, and vacation, sick leave
or personal leave program. After the Executive becomes employed,
the Corporation shall not make any changes in such plans or
programs that would adversely affect the Executive’s
benefits thereunder, unless such change occurs pursuant to a
program applicable to other similarly situated employees of the
Corporation and does not result in a proportionately greater
reduction in the rights or benefits of the Executive as compared
with other similarly situated employees of the Corporation.
Except as otherwise specifically provided herein, nothing paid
to the Executive under any plan or program presently in effect
or made available in the future shall be in lieu of the Base
Compensation or any bonus payable under Sections 1.4(a) and
1.4(b) hereof.

ARTICLE II

TERMINATION OF EMPLOYMENT

     
2.1     Termination
of Employment. The Executive’s employment may terminate
prior to the expiration of the Term under the following
circumstances:

		
	 	     
    (a) Without Cause. The
    Executive’s employment shall terminate upon the Corporation
    notifying the Executive that her services will no longer be
    required.
    
	 
	 	     
    (b) Death. The Executive’s
    employment shall terminate upon the Executive’s death.
    
	 
	 	     
    (c) Disability. If, as a result of
    the Executive’s incapacity due to physical or mental
    illness, the Executive shall have been absent and unable to
    perform the duties hereunder on a full-time basis for an entire
    period of six consecutive months, the Executive’s
    employment may be terminated by the Corporation following such
    six-month period.
    
	 
	 	     
    (d) Cause. The Corporation may
    terminate the Executive’s employment for Cause. For
    purposes hereof, “Cause” shall mean: (1) the
    willful and continued failure by the Executive to substantially
    perform her duties hereunder after demand for substantial
    performance is delivered to her by the Corporation that
    specifically identifies the manner in which the Corporation
    believes the Executive has not substantially performed her
    duties, (2) Executive’s conviction of, or plea of nolo
    contendere to, a crime (whether or not involving the
    Corporation) constituting any felony or (3) the willful
    engaging by the Executive in gross misconduct relating to the
    Executive’s employment that is materially injurious to the
    Corporation, monetarily or otherwise (including, but not limited
    to, conduct that constitutes competitive activity, in violation
    of Article III) or which subjects, or if generally known
    would subject, the Corporation to public ridicule. For purposes
    of this paragraph, no act, or failure to act, on the
    

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    Executive’s part shall be considered
    “willful” unless done, or omitted to be done, by her
    not in good faith and without reasonable belief that her action
    or omission was in the best interest of the Corporation.
    Notwithstanding the foregoing, the Executive’s employment
    may be terminated for Cause only by act of the Board of
    Directors of the Corporation and, in any event, the
    Executive’s employment shall not be deemed to have been
    terminated for Cause without (x) reasonable written notice
    to the Executive setting forth the reasons for the
    Corporation’s intention to terminate for Cause,
    (y) the opportunity to cure (if curable) within
    30 days of such written notice of the event(s) giving rise
    to such notice and (z) an opportunity for the Executive,
    together with her counsel, to be heard by the Board of Directors
    of the Corporation.
    
	 
	 	     
    (e) Voluntary Termination. The
    Executive may voluntarily terminate the Executive’s
    employment with the Corporation at any time, with or without
    Good Reason. For purposes of this Agreement, “Good
    Reason” shall mean (A) a material diminution in or
    adverse alteration to Executive’s title, base salary,
    benefits, position, status, or duties, (B) the relocation
    of the Executive’s principal office outside the area which
    comprises a fifty (50) mile radius from New York City,
    (C) a failure of the Corporation to comply with any
    material provision of this Agreement or (D) the Corporation
    requires Executive to report to anyone other than Ralph Lauren
    or Roger Farah, provided that the events described in clauses,
    (A), (B), and (C) above shall not constitute Good Reason
    unless and until such diminution, change, reduction or failure
    (as applicable) has not been cured within thirty (30) days
    after notice of such noncompliance has been given by the
    Executive to the Corporation.
    

     
2.2     Date of
Termination. The date of termination shall be:

		
	 	     
    (a) if the Executive’s employment is
    terminated by the Executive’s death, the date of the
    Executive’s death;
    
	 
	 	     
    (b) if the Executive’s employment is
    terminated by reason of Executive’s Disability or by the
    Corporation pursuant to Sections 2.1(a) or 2.1(d), the date
    specified by the Corporation; and
    
	 
	 	     
    (c) if the Executive’s employment is
    terminated by the Executive, the date on which the Executive
    notifies the Corporation of her termination.
    

     
2.3     Effect of
Termination of Employment.

     
(a) If the Executive’s employment is
terminated by the Corporation, pursuant to Section 2.1(a),
or if the Executive resigns for Good Reason pursuant to
Section 2.1(e), the Executive shall only be entitled to the
following:

		
	 	     
    (i) Severance. Subject to
    Section 4.1(a) hereof, the Corporation shall:
    (a) continue to pay the Executive, in accordance with the
    Corporation’s normal payroll practice, her Base
    Compensation, as in effect immediately prior to such termination
    of employment, for the longer of the balance of the Term or the
    one-year period commencing on the date of such termination
    (whichever period is applicable shall be referred to herein as
    the “Severance Period”); and (b) pay to the
    Executive, on the last business day of the Severance Period, an
    amount equal to the bonus paid to the Executive for the calendar
    year prior to the year in which her employment is terminated.
    Notwithstanding the foregoing, in order to receive any severance
    benefits under this Section 2.3(a)(i), the Executive must
    sign and not timely revoke a release and waiver of claims in
    favor of the Corporation, its successors, affiliates, and
    assigns.
    
	 
	 	     
    (ii) Stock Options. The
    Executive’s rights with respect to any stock options
    granted to the Executive by the Corporation shall be governed by
    the provisions of the Corporation’s stock option plan and
    respective award agreements, if any, except as provided in
    Section 4.1(a).
    
	 
	 	     
    (iii) Welfare Plan Coverages. The
    Executive shall continue to participate during the Severance
    Period in any group medical, dental or life insurance plan she
    participated in prior to the date of her termination, under
    substantially similar terms and conditions as an active employee
    (i.e., the Corporation will continue to pay the
    Corporation’s portion of the costs of such participation);
    provided that participation in such group medical, dental
    and life insurance plan shall correspondingly cease at such
    

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    time as the Executive becomes eligible for a
    future employer’s medical, dental and/or life insurance
    coverage (or would become eligible if the Executive did not
    waive coverage).
    
	 
	 	     
    (iv) Retirement Plans. Without
    limiting the generality of the foregoing, it is specifically
    provided that the Executive shall not accrue additional benefits
    under any pension plan of the Corporation (whether or not
    qualified under Section 401(a) of the Internal Revenue Code
    of 1986, as amended) during the Severance Period.
    

     
(b) If the Executive’s employment is
terminated by reason of the Executive’s death or
Disability, pursuant to Sections 2.1(b) and 2.1(c), the
Executive (or the Executive’s designee or estate) shall
only be entitled to whatever welfare plans benefits are
available to the Executive pursuant to the welfare plans the
Executive participated in prior to such termination, and
whatever stock options may have been granted to the Executive by
the Corporation the terms of which shall be governed by the
provisions of the respective award agreements under which such
stock options were granted.

     
(c) If the Executive’s employment is
terminated by the Corporation for Cause or by the Executive not
for Good Reason pursuant to Section 2.1(e) hereof, the
Executive shall receive only that portion of the
Executive’s then current Base Compensation payable through
the Executive’s termination date. The Executive’s
rights with respect to any stock options granted to the
Executive by the Corporation shall be governed by the provisions
of the respective award agreements under which such stock
options were granted. The Corporation shall have no further
obligations to the Executive as a result of the termination of
the Executive’s employment.

ARTICLE III

COVENANTS OF THE EXECUTIVE

     
3.1     Non-Compete.

     
(a) The Corporation and the Executive
acknowledge that: (i) the Corporation has a special
interest in and derives significant benefit from the unique
skills and experience of the Executive; (ii) the Executive
will use and have access to proprietary and valuable
Confidential Information (as defined in Section 3.2 hereof)
during the course of the Executive’s employment; and
(iii) the agreements and covenants contained herein are
essential to protect the business and goodwill of the
Corporation or any of its subsidiaries, affiliates or licensees.
Accordingly, except as hereinafter noted, the Executive
covenants and agrees that for a period of one year following the
termination of Executive’s employment (except as provided
in 3.1(b)), the Executive shall not provide any labor, work,
services or assistance (whether as an officer, director,
employee, partner, agent, owner, independent contractor,
stockholder or otherwise) to a “Competing Business.”
For purposes hereof, “Competing Business” shall mean
any business engaged in the designing, marketing or distribution
of premium lifestyle products, including but not limited to
apparel, home, accessories and fragrance products, which
competes in any material respects with the Corporation or any of
its subsidiaries, affiliates or licensees, and shall include,
without limitation, those brands and companies that the
Corporation and the Executive have jointly designated in writing
on the date hereof, which is incorporated herein by reference
and which is attached as Exhibit B, as being in competition
with the Corporation as of the date hereof. Thus, Executive
specifically acknowledges that Executive understands that,
except as provided in Section 3.1(b) she may not become
employed by any Competing Business in any capacity during the
Term, provided that the Executive may own, solely as an
investment, securities of any entity which are traded on a
national securities exchange if the Executive is not a
controlling person of, or a member of a group that controls such
entity and does not, directly or indirectly, own 2% or more of
any class of securities of such entity.

     
(b) The non-compete provisions of this
Section shall no longer be applicable to Executive if she has
been notified pursuant to Section 2.1(a) hereof that her
services will no longer be required during the Term or if the
Executive has terminated her employment for Good Reason pursuant
to Section 2.1(e).

     
(c) It is acknowledged by the Executive that
the Corporation has determined to relieve the Executive from any
obligation of non-competition for periods after the Term, and/or
if the Corporation terminates the

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Executive’s employment under
Section 2.1(a) or if the Executive has terminated her
employment for Good Reason pursuant to Section 2.1(e). In
consideration of that, and in consideration of all of the
compensation provisions in this Agreement (including the
potential for the award of stock options that may be made to the
Executive), Executive agrees to the provisions of
Section 3.1 and also agrees that the non-competition
obligations imposed herein, are fair and reasonable under all
the circumstances.

     
3.2     Confidential
Information.

     
(a) The Corporation owns and has developed
and compiled, and will own, develop and compile, certain
proprietary techniques and confidential information as described
below which have great value to its business (referred to in
this Agreement, collectively, as “Confidential
Information”). Confidential Information includes not only
information disclosed by the Corporation and/or its affiliates
and licensees to Executive, but also information developed or
learned by Executive during the course of, or as a result of,
employment hereunder, which information Executive acknowledges
is and shall be the sole and exclusive property of the
Corporation. Confidential Information includes all proprietary
information that has or could have commercial value or other
utility in the business in which the Corporation is engaged or
contemplates engaging, and all proprietary information the
unauthorized disclosure of which could be detrimental to the
interests of the Corporation. Whether or not such information is
specifically labeled as Confidential Information by the
Corporation is not determinative. By way of example and without
limitation, Confidential Information includes any and all
information developed, obtained or owned by the Corporation
and/or its affiliates and licensees concerning trade secrets,
techniques, know-how (including designs, plans, procedures,
processes and research records), software, computer programs,
innovations, discoveries, improvements, research, development,
test results, reports, specifications, data, formats, marketing
data and plans, business plans, strategies, forecasts,
unpublished financial information, orders, agreements and other
forms of documents, price and cost information, merchandising
opportunities, expansion plans, designs, store plans, budgets,
projections, customer, supplier and subcontractor identities,
characteristics and agreements, and salary, staffing and
employment information. Notwithstanding the foregoing,
Confidential Information shall not in any event include
(A) Executive’s personal knowledge and know-how
relating to merchandising and business techniques which
Executive has developed over her career in the apparel business
and of which Executive was aware prior to her employment, or
(B) information which (i) was generally known or
generally available to the public prior to its disclosure to
Executive; (ii) becomes generally known or generally
available to the public subsequent to disclosure to Executive
through no wrongful act of any person or (iii) which
Executive is required to disclose by applicable law or
regulation (provided that Executive provides the Corporation
with prior notice of the contemplated disclosure and reasonably
cooperates with the Corporation at the Corporation’s
expense in seeking a protective order or other appropriate
protection of such information).

     
(b) Executive acknowledges and agrees that
in the performance of her duties hereunder the Corporation will
from time to time disclose to Executive and entrust Executive
with Confidential Information. Executive also acknowledges and
agrees that the unauthorized disclosure of Confidential
Information, among other things, may be prejudicial to the
Corporation’s interests, and an improper disclosure of
trade secrets. Executive agrees that she shall not, directly or
indirectly, use, make available, sell, disclose or otherwise
communicate to any corporation, partnership, individual or other
third party, other than in the course of her assigned duties and
for the benefit of the Corporation, any Confidential
Information, either during her term of employment or thereafter.

     
(c) The Executive agrees that upon leaving
the Corporation’s employ, the Executive shall not take with
the Executive any software, computer programs, disks, tapes,
research, development, strategies, designs, reports, study,
memoranda, books, papers, plans, information, letters, e-mails,
or other documents or data reflecting any Confidential
Information of the Corporation, its subsidiaries, affiliates or
licensees.

     
(d) During Executive’s term of
employment, Executive will disclose to the Corporation all
designs, inventions and business strategies or plans developed
for the Corporation, including without limitation any process,
operation, product or improvement. Executive agrees that all of
the foregoing are and will be the sole and exclusive property of
the Corporation and that Executive will at the
Corporation’s request and cost do whatever is necessary to
secure the rights thereto, by patent, copyright or otherwise, to
the Corporation.

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3.3     Non-Solicitation
of Employees. The Executive covenants and agrees that for a
period of two years following the termination of
Executive’s employment for any reason whatsoever hereunder,
the Executive shall not directly or indirectly solicit or
influence any other employee of the Corporation, or any of its
subsidiaries, affiliates or licensees, to terminate such
employee’s employment with the Corporation, or any of its
subsidiaries, affiliates or licensees, as the case may be, or to
become employed by a Competing Business.

     
3.4     Nondisparagement.
The parties agree that during the Term and thereafter whether or
not the Executive is receiving any amounts pursuant to
Sections 2.3 and 4.1, the parties shall not make any
statements or comments that reasonably could be considered to
shed an adverse light on the Executive or the business or
reputation of the Corporation or any of its subsidiaries,
affiliates or licensees, the Board or any officer of the
Corporation or any of its subsidiaries, affiliates or licensees;
provided, however, the foregoing limitation shall not apply to
(i) compliance with legal process or subpoena, or
(ii) statements in response to inquiry from a court or
regulatory body.

     
3.5     Remedies.

     
If the Executive breaches, or threatens to commit
a breach of, any of the provisions of this Article III, the
Corporation shall have the following rights and remedies, each
of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies
shall be in addition to, and not in lieu of, any other rights
and remedies available to the Corporation under law or equity:

		
	 	     
    (i) The right and remedy to have the
    obligations specifically enforced by any court having equity
    jurisdiction, it being acknowledged and agreed that any such
    breach or threatened breach of such obligations in this
    Article III will cause irreparable injury to the
    Corporation and that money damages will not provide an adequate
    remedy to the Corporation; and
    
	 
	 	     
    (ii) The right to discontinue the payment of
    any amounts owing to the Executive under the Agreement; provided
    that the Corporation shall have secured a reasoned opinion of
    counsel that the Executive’s activities constitute a
    material breach of the obligations in this Article III and
    which shall have been provided to the Executive, the delivery of
    which shall not be deemed to be a waiver of any applicable
    privilege. To the extent Executive, by notice hereunder,
    disputes the discontinuance of any payments hereunder, such
    payments shall be segregated and deposited in an interest
    bearing account at a major financial center bank in New York
    City pending resolution of the dispute.
    
	 
	 	     
    (b) If any court or arbitrator determines
    that any of the obligations in this Article III, or any
    part thereof, is invalid or unenforceable, the remainder of the
    obligations in this Article III shall not thereby be
    affected and shall be given full effect, without regard to the
    invalid portion. In addition, if any court or arbitrator
    construes any of the obligations in this Article III, or
    any part thereof, to be unenforceable because of the duration of
    such provision or the area covered thereby, such court shall
    have the power to reduce the duration or area of such provision
    and, in its reduced form, such provision shall then be
    enforceable and shall be enforced.
    

     
3.6     The provisions
of this Article III shall survive the termination of this
Agreement and Executive’s Term of employment.

ARTICLE IV

CHANGE IN CONTROL

     
4.1     Change in
Control.

     
(a) Effect of a Change in Control.
Notwithstanding anything contained herein to the contrary, if
the Executive’s employment is terminated within
12 months following a Change in Control (as defined in
Section 4.1(b) hereof) during the Term by the Corporation
for any reason other than Cause, then:

		
	 	     
    (i) Severance. The Corporation shall
    pay to the Executive, in lieu of any amounts otherwise due her
    under Section 2.3(a) hereof, within 15 days of the
    Executive’s termination of employment, a lump sum amount
    equal to two times the sum of: (A) the Executive’s
    Base Compensation, as in effect
    

6

 

		
	 	
    immediately prior to such termination of
    employment; and (B) the bonus actually paid to the
    Executive during the year prior to the Executive’s
    termination.
    
	 
	 	     
    (ii) Stock Options. The Executive
    shall immediately become vested in any unvested stock options
    granted to the Executive by the Corporation prior to the Change
    in Control and Executive will have six (6) months from the
    date of termination under this circumstance to exercise all
    vested options.
    

     
(b) Definition. For purposes hereof,
a “Change in Control” shall mean the occurrence of any
of the following: (i) the sale, lease, transfer, conveyance
or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the
Corporation to any “person” or “group” (as
such terms are used in Sections 13(d)(3) and 14(d)(2) of
the Securities Exchange Act of 1934 (“Act”)) other
than Permitted Holders; (ii) any person or group, other
than Permitted Holders, is or becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the
Act, except that a person shall be deemed to have
“beneficial ownership” of all shares that any such
person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50 percent of the
total voting power of the voting stock of the Corporation,
including by way of merger, consolidation or otherwise;
(iii) during any period of two consecutive years, Present
and/or New Directors cease for any reason to constitute a
majority of the Board; or (iv) the Permitted Holders’
beneficial ownership of the total voting power of the voting
stock of the Corporation falls below 30 percent and either
Ralph Lauren is not nominated for a position on the Board of
Directors, or he stands for election to the Board of Directors
and is not elected. For purposes of this Section 4.1(b),
the following terms have the meanings indicated: “Permitted
Holders” shall mean, as of the date of determination:
(A) any and all of Ralph Lauren, his spouse, his siblings
and their spouses, and descendants of them (whether natural or
adopted) (collectively, the “Lauren Group”); and
(B) any trust established and maintained primarily for the
benefit of any member of the Lauren Group and any entity
controlled by any member of the Lauren Group. “Present
Directors” shall mean individuals who at the beginning of
any such two consecutive year period were members of the Board.
“New Directors” shall mean any directors whose
election by the Board or whose nomination for election by the
shareholders of the Corporation was approved by a vote of a
majority of the directors of the Corporation who, at the time of
such vote, were either Present Directors or New Directors.

     
(c) Excise Tax Gross-Up. If the
Executive becomes entitled to one or more payments (with a
“payment” including the vesting of restricted stock, a
stock option, or other non-cash benefit or property), whether
pursuant to the terms of this Agreement or any other plan or
agreement with the Corporation or any affiliated company
(collectively, “Change of Control Payments”), which
are or become subject to the tax (“Excise Tax”)
imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), the Corporation shall
pay to the Executive at the time specified below such amount
(the “Gross-up Payment”) as may be necessary to place
the Executive in the same after-tax position as if no portion of
the Change of Control Payments and any amounts paid to the
Executive pursuant to this paragraph 4(c) had been subject
to the Excise Tax. The Gross-up Payment shall include, without
limitation, reimbursement for any penalties and interest that
may accrue in respect of such Excise Tax. For purposes of
determining the amount of the Gross-up Payment, the Executive
shall be deemed: (A) to pay federal income taxes at the
highest marginal rate of federal income taxation for the year in
which the Gross-up Payment is to be made; and (B) to pay
any applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the
Gross-up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of
such state and local taxes if paid in such year. If the Excise
Tax is subsequently determined to be less than the amount taken
into account hereunder at the time the Gross-up Payment is made,
the Executive shall repay to the Corporation at the time that
the amount of such reduction in Excise Tax is finally determined
(but, if previously paid to the taxing authorities, not prior to
the time the amount of such reduction is refunded to the
Executive or otherwise realized as a benefit by the Executive)
the portion of the Gross-up Payment that would not have been
paid if such Excise Tax had been used in initially calculating
the Gross-up Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time the
Gross-up Payment is made, the Corporation shall make an

7

 

additional Gross-up Payment in respect of such
excess (plus any interest and penalties payable with respect to
such excess) at the time that the amount of such excess is
finally determined.

     
The Gross-up Payment provided for above shall be
paid on the 30th day (or such earlier date as the Excise Tax
becomes due and payable to the taxing authorities) after it has
been determined that the Change of Control Payments (or any
portion thereof) are subject to the Excise Tax; provided,
however, that if the amount of such Gross-up Payment or
portion thereof cannot be finally determined on or before such
day, the Corporation shall pay to the Executive on such day an
estimate, as determined by counsel or auditors selected by the
Corporation and reasonably acceptable to the Executive, of the
minimum amount of such payments. The Corporation shall pay to
the Executive the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of
the Code) as soon as the amount thereof can be determined. In
the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess
shall constitute a loan by the Corporation to the Executive,
payable on the fifth day after demand by the Corporation
(together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code). The Corporation shall
have the right to control all proceedings with the Internal
Revenue Service that may arise in connection with the
determination and assessment of any Excise Tax and, at its sole
option, the Corporation may pursue or forego any and all
administrative appeals, proceedings, hearings, and conferences
with any taxing authority in respect of such Excise Tax
(including any interest or penalties thereon); provided,
however, that the Corporation’s control over any such
proceedings shall be limited to issues with respect to which a
Gross-up Payment would be payable hereunder, and the Executive
shall be entitled to settle or contest any other issue raised by
the Internal Revenue Service or any other taxing authority. The
Executive shall cooperate with the Corporation in any
proceedings relating to the determination and assessment of any
Excise Tax and shall not take any position or action that would
materially increase the amount of any Gross-up Payment
hereunder).

ARTICLE V

MISCELLANEOUS

     
5.1     Notice.
For the purposes of this Agreement, notices, demands and all
other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when
delivered by hand or by facsimile or mailed by United States
registered mail, return receipt requested, postage prepaid,
addressed as follows:

	 	 	 
	
    
    If to the Executive:
    

    	 	
    Jackwyn Nemerov

    28 Mooreland Road

    Greenwich, Connecticut 06831
    
	 
	
    
    with a copy to:
    

    	 	
    Miriam Wugmeister, Esq.

    Morrison & Foerster LLP

    1290 Avenue of the Americas

    New York, New York 10104

    Fax: (212) 468-7900
    
	 
	
    
    If to the Corporation:
    

    	 	
    Polo Ralph Lauren Corporation

    650 Madison Avenue

    New York, New York 10022

    Attn: Mitchell A. Kosh

    Senior Vice President — Human Resources

    Fax: (212) 318-7277
    

or to such other address as any party may have
furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon
receipt.

     
5.2     Modification
or Waiver; Entire Agreement. No provision of this Agreement
may be modified or waived except in a document signed by the
Executive and the Corporation. This Agreement, along with any
documents incorporated herein by reference, including
Executive’s Terms of Employment sheet, constitute

8

 

the entire agreement between the parties
regarding their employment relationship and supersede all prior
agreements, promises, covenants, representations or warranties.
To the extent that this Agreement is in any way inconsistent
with any prior or contemporaneous stock option agreements
between the parties, this Agreement shall control. No agreements
or representations, oral or otherwise, with respect to the
subject matter hereof have been made by either party that are
not set forth expressly in this Agreement.

     
5.3     Governing
Law. The validity, interpretation, construction,
performance, and enforcement of this Agreement shall be governed
by the laws of the State of New York without reference to New
York’s choice of law rules.

     
5.4     Arbitration.
The Corporation and the Executive mutually agree that any
controversy or claim arising out of or relating to this
Agreement or the breach thereof, or any other dispute between
the parties arising from or related to Executive’s
employment with the Corporation, shall be submitted to mediation
before a mutually agreeable mediator. In the event mediation is
unsuccessful in resolving the claim or controversy, such claim
or controversy shall be resolved by arbitration. The Corporation
and Executive agree that arbitration shall be held in New York,
New York, before a mutually agreed upon single arbitrator
licensed to practice law. The arbitrator shall have authority to
award or grant legal, equitable, and declaratory relief. Such
arbitration shall be final and binding on the parties and fees
for any arbitration shall be paid by the losing party. If the
parties are unable to agree on an arbitrator, the matter may be
submitted to JAMS Dispute Resolution solely for appointment of
an arbitrator. Any fees for mediation shall be split between the
parties.

     
5.5     No Mitigation
or Offset. In the event the Executive’s employment with
the Corporation terminates for any reason, the Executive shall
not be obligated to seek other employment following such
termination and there shall be no offset of the payments or
benefits set forth herein.

     
5.6     Withholding.
All payments required to be made by the Corporation hereunder to
the Executive or the Executive’s estate or beneficiaries
shall be subject to the withholding of such amounts as the
Corporation may reasonably determine it should withhold pursuant
to any applicable law.

     
5.7     Attorney’s
Fees. Each party shall bear its own attorney’s fees and
costs incurred in any action or dispute arising out of this
Agreement and/or the employment relationship.

     
5.8     No
Conflict. Executive represents and warrants that she is not
party to any agreement, contract, understanding, covenant,
judgment or decree or under any obligation, contractual or
otherwise, in any way restricting or adversely affecting her
ability to act for the Corporation in all of the respects
contemplated hereby.

     
5.9     Enforceability.
Each of the covenants and agreements set forth in this Agreement
are separate and independent covenants, each of which has been
separately bargained for and the parties hereto intend that the
provisions of each such covenant shall be enforced to the
fullest extent permissible. Should the whole or any part or
provision of any such separate covenant be held or declared
invalid, such invalidity shall not in any way affect the
validity of any other such covenant or of any part or provision
of the same covenant not also held or declared invalid. If any
covenant shall be found to be invalid but would be valid if some
part thereof were deleted or the period or area of application
reduced, then such covenant shall apply with such minimum
modification as may be necessary to make it valid and effective.
The failure of either party at any time to require performance
by the other party of any provision hereunder will in no way
affect the right of that party thereafter to enforce the same,
nor will it affect any other party’s right to enforce the
same, or to enforce any of the other provisions in this
Agreement; nor will the waiver by either party of the breach of
any provision hereof be taken or held to be a waiver of any
prior or subsequent breach of such provision or as a waiver of
the provision itself.

     
5.10     Miscellaneous.
No right or interest to, or in, any payments shall be assignable
by the Executive; provided, however, that this provision
shall not preclude the Executive from designating in writing one
or more beneficiaries to receive any amount that may be payable
after the Executive’s death and shall not preclude the
legal representative of the Executive’s estate from
assigning any right hereunder to the person or persons entitled
thereto. If the Executive should die while any amounts would
still be payable to the Executive hereunder, all such amounts
shall be paid in accordance with the terms of this Agreement to
the Executive’s

9

 

written designee or, if there be no such
designee, to the Executive’s estate. This Agreement shall
be binding upon and shall inure to the benefit of, and shall be
enforceable by, the Executive, the Executive’s heirs and
legal representatives and the Corporation and its successors.
The section headings shall not be taken into account for
purposes of the construction of any provision of this Agreement.

     
IN WITNESS WHEREOF, the parties have executed
this Agreement effective as of the date and year first above
written.

POLO RALPH LAUREN CORPORATION

	 	 	 
	
    
    /s/ MITCHELL KOSH
    

    	 	
    /s/ JACKWYN NEMEROV
    
	
	 	

	 
	
    
    By:    Mitchell Kosh
    

    	 	
    Jackwyn Nemerov
    
	 
	
    
    Title:  Senior Vice
    President — Human Resources
    

    	 	 

10

 

EXHIBIT A

Jackwyn Nemerov

Upon Effective Date, annual base compensation is
$900,000.

11

 

JACKWYN NEMEROV

TERMS OF EMPLOYMENT

 

			
	
    Title:		
    Executive Vice President
    
	 
	
    Salary:		
    $900,000 per year
    
	 
	
    Term:		
    Formal contract to be provided under separate
    cover
    
	 
	
    Annual Bonus:		
    57.5% Threshold — 100%
    Target — 150% Stretch — 200% Maximum
    
	 
	
		
    Target:    $900,000
    
	 
	
		
    Maximum: $1,800,000
    
	 
	
    Equity Award:		
    200,000 options 

     75,000 restricted shares 

     Future grants, if any, consistent with EVP level
    
	 
	
    Car reimbursement:		
    Company will reimburse cost of car and driver
    
	 
	
    Severance:		
    To be outlined in contract
    
	 
	
    Other:		
    SERP plan Execucare benefit
    

ACCEPTED & AGREED:

	 	 	 	 	 	 	 
	
    
    Signature:
    

    	 	 	 	
    Polo Ralph Lauren
    	 	
    Date:
    
	 	 	
	 	 	 	 
	
    
    Signature
    

    	 	 	 	
    Jackwyn Nemerov
    	 	
    Date:
    
	 	 	
	 	 	 	 

12

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