Document:

EX-10.31

Ex. 10.31

Execution Copy

EMPLOYMENT AGREEMENT

     AGREEMENT, made and entered into as of August 11, 2008 (the “Effective Date”) by and between
THE WARNACO GROUP, INC., a Delaware corporation (together with its successors and assigns, the
“Company”), and JAY DUBINER (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Executive and to enter into an agreement embodying
the terms of such employment and the Executive desires to enter into this Agreement and to accept
such employment, subject to the terms and provisions of this Agreement;

     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 Company
and the Executive (individually a “Party” and together 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
interests of the Company or any of its Affiliates;

(ii) willful and material breach of duty by the Executive in the course of
the Executive’s employment, which, if curable, is not cured within 10 days
after Executive’s receipt of written notice from the Company specifically
describing such willful and material breach;

(iii) willful failure by the Executive, after having been given written
notice from the Company, to perform the Executive’s duties other than a
failure resulting from the Executive’s incapacity due to physical or mental
illness;

(iv) indictment of the Executive for a felony, a crime involving moral
turpitude or any other crime involving the business of the Company or any of
its Affiliates which, in the case of such crime involving the business of
the Company or any of its Affiliates, is injurious to such business; or

 

 

(v) failure of the Executive to give 90 days prior written notice of a
voluntary resignation (other than for Good Reason or Disability), unless
such failure is waived in writing by an authorized officer of the Company or
the Company shortens the notice period in accordance with Section 5(c)
hereof.

     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 full Board by
no less than majority vote and prior to such determination the Executive and his legal
representatives 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, as amended) 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 Effective 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.

          (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 the Executive’s
employment is so terminated; provided that for a termination for Cause such notice is delivered after the Board determination as set
forth in Section 1(c) hereof;

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(ii) if the Executive voluntarily resigns the Executive’s employment, 90
days after receipt by the Company of written notice that the Executive is
terminating the Executive’s employment or if the Company shortens the
required notice period in accordance with Section 5(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 the Executive’s 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 the Executive’s duties and responsibilities for a period of 120
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 the Executive’s employment gives written notice to the
other Party in accordance with Section 14 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 Senior Vice President, General Counsel and
Corporate Secretary or the assignment to the Executive by the Company of any
duties materially inconsistent with such positions;

(ii) reduction in (A) Base Salary or (B) Target Bonus opportunity as a
percentage of Base Salary;

(iii) 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 Senior Vice President,
General Counsel or as Corporate Secretary of the Company or the failure by
the Board to elect or reelect the Executive as an executive officer of the
Company;

(v) requiring the Executive to be principally based at any office or
location more than 50 miles from his current place of employment; or

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(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
in writing or as a matter of law 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 proper 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. Position; Term.

     During the Term, the Executive shall be employed by the Company as Senior Vice President,
General Counsel and Corporate Secretary, reporting directly to the Company’s Chief Executive
Officer, and shall perform such duties and responsibilities as determined by the Company’s Chief
Executive Officer consistent with such positions. The Executive shall devote the Executive’s full
business time and attention to the satisfactory performance of such duties. Anything herein to the
contrary notwithstanding, nothing shall preclude the Executive from (i) subject to 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
7(a)(i) below), (ii) engaging in charitable activities and community affairs and (iii) managing his
personal investments and affairs, 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 Executive agrees to commence employment with the Company no later
than September 2, 2008 (the “Commencement Date”). The term of the Executive’s employment
hereunder shall begin on the Commencement Date and end at the close of business on the second
anniversary of such date; 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 120 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. Compensation.

          (a) Base Salary. During the Term, the Executive shall be paid an annualized Base
Salary of $450,000 (“Base Salary”), payable in accordance with the regular payroll practices of the
Company, subject to annual review by the Board (or the Compensation Committee of the Board) in its
sole discretion. During the Term, the Base Salary may not be

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decreased without the Executive’s
prior written consent. After any increase in base salary approved by the Board (or the
Compensation Committee of the Board), the term “Base Salary” as used in this Agreement shall
thereafter refer to the increased amount. The Executive shall not be entitled to any compensation
for service as an officer or member of the board of directors of any Affiliate of the Company.

          (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 its shareholders), in effect for the applicable
fiscal year (“Bonus Plan”). The Executive’s annual incentive award for fiscal year 2008 and
thereafter shall have a target of 70% of Base Salary (“Target Bonus”), with a potential maximum
award as set forth in the Bonus Plan; provided that the actual bonus for fiscal year 2008 shall be
pro-rated from the Commencement Date, but in all events, subject to the Executive’s continued
employment with the Company through the payment date, shall be no less than an amount equal to
$315,000 multiplied by a fraction, the numerator of which shall be the number of days the Executive
worked for the Company in fiscal year 2008 and the denominator is 365. Except for the guaranteed
bonus for fiscal year 2008, any Bonus shall in all events be 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
70th day following the end of the fiscal year for which the annual incentive award 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 the Compensation Committee of the Board), the term
“Target Bonus” as used in this Agreement shall thereafter refer to the increased target
opportunity.

          (c) Long-Term Incentive Awards. On the Commencement Date, the Executive will be
granted the following equity awards: (i) an award of restricted stock (“Restricted Stock”), the
number of shares of which shall be equal to 218,025 divided by the closing price of a share of the
Company’s common stock on the Commencement Date and rounded up to the nearest 100 shares, and (ii)
an option to purchase shares of the Company’s common stock (the “Option”) in accordance with the
applicable equity plan, the number of shares of which shall be equal to 218,025 divided by 0.4038
and then divided by the closing price of a share of the Company’s common stock on the Commencement
Date and rounded up to the nearest 100 shares. Except as otherwise provided in this Section 3(c)
or Section 5 hereof, the Restricted Stock will cliff vest on the third anniversary of the
Commencement Date and the Option shall vest (and become exercisable) in three equal annual
installments on the first, second and third anniversaries of the Commencement Date, provided in
both cases that the Executive is
employed by the Company through such applicable vesting date and has not given notice to the
Company that the Executive is voluntarily resigning without Good Reason prior to such applicable
vesting date. Thereafter, commencing in fiscal year 2009 and provided the Term is in effect and
the Executive continues to be employed by the Company, 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

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incentive
plan(s) as may be approved by its shareholders from time to time (“Stock Incentive Plans”). 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 2008, provided the
Executive is employed by the Company on the applicable grant date, the Executive shall be entitled
to an annual award with an aggregate grant date value equal to 6% of the sum of Base Salary plus
Annual Bonus as defined in this paragraph 3(d) if the Executive will be less than age 40 by the end
of the applicable fiscal year, 8% of such amount if the Executive will be age 40 and over and less
than 50 by the end of the applicable fiscal year, 10% of such amount if the Executive will be age
50 and over and less than age 60 at 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 pro-rated to reflect the number of full months of service by the
Executive in fiscal year 2008. 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 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 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 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 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 3(d), shall be an unfunded obligation to be satisfied from the general
funds of the Company. Except as otherwise provided in Section 5 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 obtaining 20 years of
“Vesting Service” or (iii) 10th anniversary of the date of grant. Except as otherwise provided in
Section 5 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 obtaining 5 years of “Vesting Service” and

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100% on
the earlier of the Executive’s 65th birthday and upon the Executive obtaining 10 years of “Vesting
Service”. In addition, any unvested Adjusted Notional Account shall vest upon a Change in Control
as defined in Section 1(d)(i) or (ii) hereof. For purposes of this Section 3(d), “Vesting Service”
shall mean the period of time that the Executive is employed by the Company as an executive
officer. Subject to Section 15(b) hereof, upon vesting the Career Shares will be delivered to the
Executive in the form of Shares. The vested balance in the Adjusted Notional Account, if any,
shall not be distributed to the Executive until there has been a Separation From Service or, if
earlier, there has been a Change in Control as defined in Section 1(d)(i) or (ii) hereof and, at
such time, shall only be distributed at the earliest time that satisfies the requirements of this
Section 3(d). Upon a Change in Control as defined in Section 1(d)(i) or (ii), the vested Adjusted
Notional Account, subject to Section 15(b) hereof, 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 5 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 15(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 of
the Internal Revenue Code of 1986, as amended from time to time (the “Code”), and the regulations
promulgated thereunder (“Section 409A”) as of the date of the Executive’s Separation From Service,
such distribution shall not be made until the first business day of the seventh calendar month
following the month in which the Executive’s Separation From Service occurs. The Executive can
elect to delay the time and/or form of payment of the Adjusted Notional Account under this Section
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) 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 3(d) (without regard to Section 5, except as otherwise expressly
provided in Section 5(d) of this Agreement) and the election right in this Section 3(d) shall
continue to apply to any outstanding Supplemental Award.

          (e) Review of Arrangements. If during the Term the employment agreements or
compensation arrangements of the Company’s executive officers are reviewed generally for material
improvements, this Agreement and the Executive’s compensation arrangements, as applicable, will be
subject to the same review.

     4. 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 generally made available
to the Company’s senior-level executives as such plans or programs may be in effect from time to
time. 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

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reasonable premium levels. During
the Term, the Executive shall be entitled to four weeks paid vacation per calendar year.

          (b) Business Expenses. During the Term, the Company shall reimburse the Executive for
all reasonable business expenses incurred by him in performance of his duties hereunder in
accordance with Company policy, including, but not limited to, the proper documentation of such
expenses. The Company’s business travel policy shall apply to the Executive.

          (c) Perquisites. During the Term, 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.

          (d) General Limitation. Notwithstanding anything elsewhere to the contrary, except to
the extent any reimbursement, payment or entitlement pursuant to this Section 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
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
payments or 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.

     5. 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 5(d) below does not apply, subject to Section 15(b) hereof, the Executive shall be entitled
to:

(i) payment of an amount equal to the Base Salary that would have been
payable to the Executive for the remainder of the Term (without regard to
its earlier termination hereunder), but in no event less than 12
months, 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 the Restricted Stock
as follows: 50% if the Date of Termination occurs prior to the first
anniversary of the Commencement Date; 66% if the Date of Termination occurs
on or after the first anniversary of the Commencement Date but before the
second anniversary of the

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Commencement Date; and 83% if the Date of
Termination occurs on or after the second anniversary of the Commencement
Date but prior to the third anniversary of the Commencement Date;

(iii) immediate vesting as of the Date of Termination of 50% of any
restricted stock (other than the Career Shares and the Restricted Stock)
that remains unvested as of the Date of Termination and, with respect to any
stock options 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;

(iv) if the Date of Termination occurs after Joseph Gromek is no longer
Chief Executive Officer of the Company, 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);

(v) outplacement counseling for up to 6 months following the Date of
Termination; and

(vi) continued participation on the same terms as immediately prior to the
Date of Termination for the Executive and his eligible dependents in the
Company’s medical and dental plans in which the Executive and his 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
following the Date of Termination, and (b) the date, or dates, the Executive
receives coverage under the plans or programs of a subsequent employer;
provided that in no event shall there be any gross up provided by the
Company for any income tax liabilities or otherwise.

     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 circumstances that during the Term would constitute a
termination of the Executive’s employment without Cause, the Executive shall, subject to Section
15(b) hereof, be entitled to the same payments, benefits and entitlements as a termination without
Cause pursuant to this Section 5(a); provided if such notice of non-renewal of the Term and
termination occurs within one year following a Change in Control, the Executive shall be entitled
to the same payments, benefits and entitlements as a termination without Cause pursuant to Section
5(d) hereof.

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          (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, subject to Section 15(b)
hereof, the Executive (or the Executive’s 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 the Restricted Stock
as follows: 50% if the Date of Termination occurs prior to the first
anniversary of the Commencement Date; 66% if the Date of Termination occurs
on or after the first anniversary of the Commencement Date but before the
second anniversary of the Commencement Date; and 83% if the Date of
Termination occurs on or after the second anniversary of the Commencement
Date but prior to the third anniversary of the Commencement Date;

(iii) immediate vesting as of the Date of Termination of 50% of any
restricted stock (other than Career Shares and the Restricted Stock) that
remains unvested as of the Date of Termination; and

(iv) 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 3(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 the Executive’s Base Salary
and employee benefits through the Date of Termination. A voluntary
resignation by the Executive of the Executive’s 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. During the Notice Period, the Executive shall
continue to be an employee of the Company and the Executive’s fiduciary duties and other
obligations as an employee of the Company shall continue. The Executive shall cooperate in the
transition of the Executive’s 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 and to the extent the Company so directs in writing, in addition to the
Executive’s fiduciary duties and other obligations as an employee and the Executive’s commitments
pursuant to Sections 6 and 7 hereof, the Executive agrees to refrain during the Notice Period from
contacting any customers, clients, advertisers, suppliers, agents, professional

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advisors or
employees of the Company or any of its Affiliates regarding the Company or any of its Affiliates or
the Executive’s employment status in regard to the Company or any of its Affiliates. The Company
shall also have the 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 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), subject to Section 15(b)
hereof, 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 cash 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 cash 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 vested and outstanding
stock options 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 3(d) above;

(v) outplacement counseling for up to 6 months following the Date of
Termination; and

(vi) continued participation on the same terms as immediately prior to the
Date of Termination for the Executive and his eligible dependents in the
Company’s welfare benefit plans in which the Executive 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, and
(b) the date, or dates, the Executive receives substantially equivalent
coverage under the plans or programs of a subsequent employer; provided that
in no event shall there be any gross up provided by the Company for any
income tax liabilities or otherwise.

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          (e) 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 5(c) above,
payment of any unpaid Annual Bonus for any fiscal year preceding the Date of
Termination, payable when bonuses for such fiscal year are paid to other
Company executives;

(iii) any amounts earned or owing to the Executive but not yet paid under
Section 5 above, payable in accordance with such section; and

(iv) except as otherwise provided in Section 5(f) below, additional
entitlements, 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).

          (f) Exclusivity of Benefits; Releases of Claims. Any payments provided pursuant to
Section 5(a) or Section 5(d) above shall be in lieu of any salary continuation arrangements under
any other severance program of the Company or any Affiliate and, in all events, the Executive shall
not be entitled to duplication of any benefit or entitlement (whether pursuant to this Agreement,
any other plan, policy, arrangement of, or other agreement with, the Company or any Affiliate or
pursuant to law). 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 6, 7, 8 and 9 of this Agreement. As a condition of
receiving the severance and benefits pursuant to Section 5(a) or Section 5(d) (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 a general release of claims in the form 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. In the event the Executive revokes
the Release, the Executive shall not be entitled to the payments, rights or other entitlements
hereunder other than as required by applicable law.

          (g) Nature of Payments; No Mitigation. Any amounts due under this Section 5 are in
the nature of severance payments considered to be reasonable by the Company and are not in the
nature of a penalty. In the event of termination of the Executive’s 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 5 (including, without limitation, Section
5(f) hereof), there shall be no offset against amounts due to the Executive on account of any
remuneration or benefits provided by any subsequent employment the Executive may obtain.

          (h) Resignation. Notwithstanding any other provision of this Agreement, upon the
termination of the Executive’s employment for any reason or, if earlier, upon

12

 

commencement of the
Notice Period, unless otherwise requested by the Company, the Executive shall immediately resign,
if applicable, from all boards of directors of the Company or any Affiliate 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
the Executive shall be treated for all purposes as having so resigned upon termination of the
Executive’s employment or commencement of the Notice Period, as the case may be, regardless of when
or whether the Executive executes any such documentation.

          (i) Section 409A. Notwithstanding anything to the contrary in this Agreement or
elsewhere (except for Section 3(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 payment due pursuant to Section 3(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 5 shall be within the Company’s sole discretion.
Notwithstanding anything to the contrary in this Section 5 or otherwise, any payment or benefit
under this Section 5 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 of any benefit
pursuant to Section 5(a)(vi) or Section 5(d)(vi) 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.

     6. Protection of Confidential Information and Company Property.

          (a) During the Term and thereafter, other than in the ordinary course of performing the
Executive’s duties for the Company or as required in connection with providing any cooperation to
the Company pursuant to Section 9 below, the Executive agrees that the Executive 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

13

 

confidential
information of any customer or other entity to which the Company owes an obligation not to disclose
such information, which the Executive acquires during the course of the Executive’s 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 the Executive 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 Chief Executive Officer and, if applicable, the Chairman of the
Board 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 the Executive’s
right, title and interest in and to all inventions, discoveries, improvements and copyrightable
subject matter (the “Rights”) which during the period of the Executive’s employment are made or
conceived by the Executive, 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 the Executive performs, or information the
Executive 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 the Executive concerning any Rights, and upon request by the Company and without any
further remuneration in any form to the Executive 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.

          (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, the
Executive will promptly deliver to the Company’s Chief Executive Officer, and not keep or deliver
to anyone else, any and all of the following which is in the Executive’s 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

14

 

proprietary information of the customers of the Company or any
of its Affiliates, except for (x) any documents for which the Company’s Chief Executive Officer 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 the Executive’s tax purposes (provided
the Executive maintains the confidentiality of such information in accordance with Section 6
above).

     7. Additional Covenants.

          (a) The Executive acknowledges that in the Executive’s capacity in management the Executive
will have a great deal of exposure and access to the trade secrets of the Company or its Affiliates
and other Confidential Information. Therefore, to protect such trade secrets and other
Confidential Information, the Executive agrees as follows:

(i) during the Executive’s 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 the Executive’s 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; provided, however, that following
termination of the Executive’s employment this prohibition shall not be
deemed to prohibit the Executive from the practice of law for any client or
in respect of any industry or business so long as the Executive does not
breach any of the terms of Section 6 hereof. The Executive shall not be
deemed to be in violation of this Section 7(a) by reason of the fact that
the Executive 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 any of its Affiliates is conducting at
the time of the alleged violation; and

(ii) during the Executive’s 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 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 the Executive’s 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

15

 

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) Upon commencement of the Notice Period and following the termination of the Executive’s
employment for any reason (whether during the Term or thereafter), the Executive agrees to refrain
from making any statements or comments, whether oral or written, of a defamatory or disparaging
nature to third parties regarding the Company or any of its Affiliates and any of their officers,
directors, personnel and products. Nothing herein shall prevent the Executive from responding
truthfully and accurately to statements about him made publicly by the Company, provided that such
response is consistent with the Executive’s obligations not to make any statements or comments of a
defamatory or disparaging nature as set forth herein.

     8. Injunctive and Other Relief.

          (a) The Executive acknowledges that the restrictions and commitments set forth in Sections 6,
7 and 9 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 6,
7 and 9 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 6, 7 or 9
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 6, 7 or 9 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 geographic area as
to which it may be enforceable. If any provision of Section 6, 7 or 9 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.

     9. 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 the Executive was involved or had knowledge during the

16

 

Executive’s
employment with the Company, subject to the Executive’s 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 9; 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 9 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 9 shall not be liquidated or exchanged for any other
benefit.

     10. Tax Matters.

          (a) If any amount, entitlement, or benefit paid or payable to the Executive or provided for
the Executive’s benefit under this Agreement and under any other agreement, plan or program of the
Company or any Affiliate (such payments, entitlements and benefits referred to as a “Payment”) is
subject to the excise tax imposed under Code Section 4999, 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 shall reduce or eliminate the Payments by first reducing or eliminating the payments or
benefits payable in cash and then by reducing or eliminating the 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 10 shall be made by a nationally 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 the
Executive is not required to report any Excise Tax on the Executive’s 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

17

 

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 Section 10(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
Section 10(a) above (an “Excess Payment”) or are less than such limitations (an “Underpayment”), as
the case may be, then the provisions of this Section 10(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 Code Section
1274(d) 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.

     11. Representations.

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

     12. 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

18

 

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.

     13. Resolution of Disputes.

     Except as otherwise provided in Section 8 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 hereunder, including, without limitation, any proceeding 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 attorneys’ fees, shall be borne by the Company and if such costs are not
reimbursed by the Company in a dispute exempt pursuant to Treasury Regulation 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 dispute is resolved.

     14. Notices.

     Any notice given to a Party shall be in writing and shall be deemed to have been given (i)
when delivered personally, (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
14:

	 	 	 
	If to the Company:

	 	The Warnaco Group, Inc.

501 Seventh Avenue

New York, New York 10018

Attention: Chief Executive Officer
	 
	If to the Executive:

	 	The most recent address in the Company’s records.

     15. Miscellaneous Provisions.

19

 

          (a) 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 13 hereof. 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. 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. The
respective rights and obligations of the Parties hereunder, including, without limitation, Section
6 (protection of confidential information and company property), Section 7 (additional covenants),
Section 8 (injunctive and other relief), Section 9 (cooperation) and Section 13 (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, payments or benefits 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. No rights or obligations
of the Executive under this Agreement may be assigned or transferred by the Executive other than
the Executive’s rights to compensation and benefits, which may be transferred only by will,
operation of law or in accordance with any applicable Company plan, program or agreement.

          (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) The effectiveness of this Agreement is conditioned upon (i) there being no agreement as of
the Commencement Date between the Executive and any prior employer that interferes, or could
interfere with, the Executive’s employment with the Company unless such agreement is to the
satisfaction of the Company waived by such prior employer; (ii) the Executive’s successful
completion, prior to the Commencement Date, of the Company’s standard pre-employment checks; and
(iii) the Executive commencing employment with the Company no later than September 2, 2008.

20

 

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

[Signatures on next page.]

21

 

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

	 	 	 	 	 
	 	THE WARNACO GROUP, INC.

 	 
	 	By:  	/s/ Joseph R. Gromek
 	 
	 	 	Name:  	Joseph R. Gromek 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	THE EXECUTIVE

 	 
	 	/s/ Jay Dubiner
 	 
	 	 	 
	 	Jay Dubiner 	 

22

 

	 	 	 	 	 

Exhibit A

AGREEMENT AND RELEASE OF CLAIMS

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

     WHEREAS, the Executive and The Warnaco Group, Inc. (the “Company”) entered into an employment
agreement dated August 11, 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 5 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 Executive may have to enforce Sections 5, 10 and 12 of the Employment Agreement,
(iii) any right or claim the Executive may have to benefits or equity awards that have accrued or
vested as

23

 

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 6, 7, 9 and 13 of the Employment Agreement and the provisions of such
sections, along with Section 8 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 14 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.

	 	 	 
		 	____________________________________________ 
	 
	 

	 	Date:________________________________________

24EX-10.32

Ex. 10.32

April 6, 2005

As amended on August 11, 2005

As amended and restated as of December 31, 2008

Mr. Dwight Meyer

Dear Dwight:

     This amended and restated letter agreement is made and entered into between The Warnaco Group,
Inc. (“Warnaco” and 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 April 6, 2005, 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 President, Global
Sourcing of Warnaco 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 Warnaco. 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
and charitable organizations, subject to the reasonable approval of the Chief Executive
Officer, (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. The
Company acknowledges that as of the Effective Date, the Executive is employed by the
Company as President, Global Sourcing, Distribution and Logistics.
	 
	 	2.	 	The term of your employment under this letter agreement began on April 20, 2005
(the “Commencement Date”) and shall end at the close of business on the third
anniversary of the Commencement Date (the “Term”); 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
the term. The initial three year term and any extension thereof are referred to herein
as 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.
	 
	 	3.	 	Your compensation shall be as follows:

 

 

Mr. Dwight Meyer

December 31, 2008

Page 2

	 	a.	 	During the Term, you shall be paid an annual base salary of
$600,000 (“Base Salary”), payable in semi-monthly payments of $25,000. 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;
however, your base salary shall not be decreased without your prior written
consent. 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
$670,000, payable in semi-monthly payments of $27,916.67.
	 
	 	b.	 	During the Term, commencing with the Company’s 2005 fiscal
year, you shall be eligible to receive an annual 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.
Notwithstanding the foregoing, for fiscal year 2005 in no event will your
annual incentive award be less than $250,000. Any annual incentive award,
including any annual incentive award for fiscal year 2005, 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.	 	Subject to shareholder approval of the Warnaco 2005 Stock
Incentive Plan (the “Plan”) at Warnaco’s annual shareholder meeting on May 23,
2005, on the Commencement Date you were granted 25,000 shares of restricted
stock (“restricted stock”) and an option to purchase 75,000 shares of Warnaco’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
in fiscal year 2007 and thereafter at the sole discretion of the Compensation
Committee of the Board of Directors.

	 	i.	 	Except as otherwise provided herein, the
restricted stock as described herein and the option as described herein
shall vest 33% on April 20, 2006 and shall vest 33% on each of April
20, 2007

 

 

Mr. Dwight Meyer

December 31, 2008

Page 3

	 	 	 	and April 20, 2008, 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.
	 
	 	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 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

 

 

Mr. Dwight Meyer

December 31, 2008

Page 4

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 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

 

 

Mr. Dwight Meyer

December 31, 2008

Page 5

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 executives, including a
monthly car allowance of up to $1,000.
	 
	 	c.	 	Vacation — four weeks paid vacation per calendar year.

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.

 

 

Mr. Dwight Meyer

December 31, 2008

Page 6

	 	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).
	 
	 	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 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.

 

 

Mr. Dwight Meyer

December 31, 2008

Page 7

	 	g.	 	Any amounts earned, accrued or owing to you but not yet paid.

	 	 	 	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).
	 
	 	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 without Good Reason, 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

 

 

Mr. Dwight Meyer

December 31, 2008

Page 8

	 	 	 	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
without Good Reason shall be forfeited. A voluntary resignation without Good Reason
shall be effective on 60 days prior written notice, subject to earlier termination
by the Company, 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 the greater of (x) the sum of
Base Salary plus Target Bonus divided by 12, with such amount then multiplied
by the number of months (including any partial months) remaining in the Term
(without regard to the earlier termination thereof) or (y) 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 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.

 

 

Mr. Dwight Meyer

December 31, 2008

Page 9

	 	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.	 	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 Internal Revenue 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 your 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). The following rules
shall apply:

	 	1.	 	All calculations under this paragraph 8(g)
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

 

 

Mr. Dwight Meyer

December 31, 2008

Page 10

	 	 	 	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 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 subsection (2) below).
	 
	 	2.	 	If, after the Payments have been made to you,
it is established that the Payments made to, or provided for the
benefit of, you exceed the limitations provided above (an “Excess
Payment”) or are less than such limitations (an “Underpayment”), as the
case may be, then the provisions of this subsection (ii) 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 (A) 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, (B) pursuant to a
determination by a court, or (C) upon the resolution to the
satisfaction of you 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 Internal Revenue 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.

	 	 	 	For the avoidance of doubt, this clause (h) shall apply without regard to
whether your employment has been terminated or not.

	 	 	 	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

 

 

Mr. Dwight Meyer

December 31, 2008

Page 11

	 	 	 	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.
	 
	 	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 six months
following the Date of Termination.
	 
	 	e.	 	Any amounts earned, accrued or owing to you but not yet paid.

	 	 	 	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.
	 
	 	 	 	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.

 

 

Mr. Dwight Meyer

December 31, 2008

Page 12

	 	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 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

 

 

Mr. Dwight Meyer

December 31, 2008

Page 13

	 	 	 	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.	 	You acknowledge that in your capacity as senior management you have had or will
have a great deal of exposure and access of the Company’s trade secrets and
confidential and proprietary information. Therefore, 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, to protect the Company’s trade secrets and other
confidential and proprietary information, 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 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 to reduce or cease its business with
the Company or otherwise interfere with the relationship 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 or the Company’s officers, directors, personnel
or products). You and the Company each understand that either party should be

 

 

Mr. Dwight Meyer

December 31, 2008

Page 14

	 	 	 	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. 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, 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 (but at
the expense of the Company), execute all applications for patents and for copyright
registration, assignments thereof and

 

 

Mr. Dwight Meyer

December 31, 2008

Page 15

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, including any and all documents
relating to the conduct of the business of the Company any and all documents containing
confidential or proprietary information of the customers of the Company, 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).
	 
	 	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.
	 
	 	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 relating to this agreement, your
costs, including reasonable attorneys’ fees, shall be borne

 

 

Mr. Dwight Meyer

December 31, 2008

Page 16

	 	 	 	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.
	 
	 	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 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 provides 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 prior employer in the course of performing your duties for the
Company.

 

 

Mr. Dwight Meyer

December 31, 2008

Page 17

	 	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.
	 
	 	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.

 

 

Mr. Dwight Meyer

December 31, 2008

Page 18

	 	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 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.	 	The parties hereto recognize that certain provisions of this Agreement may be
affected by Section 409A of the Internal Revenue Code and they, therefore, agree to
negotiate in good faith to amend the Agreement with respect to any changes necessary or
advisable to comply with Section 409A. To the extent you incur any penalty for
violation of Section 409A, the Company shall indemnify you.

 

 

Mr. Dwight Meyer

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/ Jay Dubiner
 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	Agreed to and Accepted

 	 
	/s/ Dwight Meyer
 	 
	Dwight Meyer 	 
	 	 	 
	 

 

 

Exhibit A

Definitions

“Cause” shall mean:

	(i)	 	willful misconduct by you which causes material harm to the Company’s interests;
	 
	(ii)	 	willful and material breach of duty by you in the course of your employment, 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
your duties other than a failure resulting from your incapacity due to physical or mental
illness; or
	 
	(iv)	 	indictment of you 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 your part, shall be
considered willful unless it is done, or omitted to be done, by you in bad faith and without
reasonable belief that your action was in the best interests of the Company. The determination to
terminate your employment for Cause shall be made by the Board and prior to such determination you
shall have the right to appear before the Board or a committee designated by the Board.

“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), but excluding a person who owns more than 5% of the outstanding shares of
Warnaco 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 Warnaco, provided
that any sale or transfer of Voting Stock by shareholders as of the Commencement Date shall
not constitute a Change in Control;
	 
	(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 Warnaco 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 Warnaco, 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 Warnaco 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 Warnaco.

“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 without Good Reason, 60 days after receipt by the
Company of written notice that you are terminating your employment (provided, that the
Company may accelerate the Date of Termination to an earlier date by providing you with
written notice of such action, or, alternatively, the Company may place you on paid leave
(covering only Base Salary) during such period);
	 
	(iii)	 	if your employment is terminated by reason of death, the date of death;
	 
	(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 this letter agreement, unless the Company cures the
event or events giving rise to Good Reason within 30 days after receipt of such written
notice; or
	 
	(v)	 	if your employment is terminated for Disability, 30 days after written notice is given.

“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. In no event shall
any termination of your employment for Disability occur until the party terminating your
employment gives written notice to the other party.

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

	(i)	 	a material diminution in your authority, duties or responsibilities as President, Global
Sourcing of the Company or the assignment to you of any duties materially inconsistent with
such position;
	 
	(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 Warnaco;
	 
	(iv)	 	the removal by the Company of you as President, Global Sourcing 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 within 15 days after a
merger, consolidation, sale or similar transaction or as a matter of law; or

 

 

	(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.

     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).

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