Document:

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

EXECUTION COPY

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

          AGREEMENT made effective as of the 23rd day of June, 2003, between Polo
Ralph Lauren Corporation, a Delaware corporation (the “Company”), and Ralph
Lauren (the “Executive”).

RECITALS

          The Executive is the founder of the predecessor entities of the Company
and has acted as Chief Executive Officer of such entities and the Company for
more than thirty-five years.

          The Executive has heretofore been employed by the Company pursuant to an
employment agreement made effective as of June 9, 1997, as amended and restated
April 4, 1999 (the “Prior Agreement”).

          The Company recognizes that the Executive’s talents and abilities are
unique and have been integral to the success of the Company. The Company
wishes to retain the services of the Executive and recognizes that the
Executive’s contribution to the growth and success of the Company will be
substantial. The Company desires to provide for the continued employment of
the Executive and to make employment arrangements that will reinforce and
encourage the attention and dedication to the Company of the Executive as a
member of the Company’s senior management, in the best interest of the Company.
The Executive is willing to commit himself to serve the Company, on the terms
and conditions herein provided.

          The Company and the Executive wish to amend and restate the Prior
Agreement as evidenced by this Agreement effective as of the date hereof in
order to provide for the modification of certain provisions of the Prior
Agreement.

          In order to effect the foregoing, the Company and the Executive wish to
enter into an Agreement on the terms and conditions set forth below.
Accordingly, in consideration of the premises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:

AGREEMENT

     Employment. Effective as of June 23, 2003 (the “Effective Date”), the
Executive’s employment with the Company shall be governed by this Agreement,
which restates and supersedes the Prior Agreement.

     Term. The term of the Executive’s employment hereunder shall commence as
of

 

 

 the Effective Date and shall remain in effect through the last day of the
Company’s fiscal year (a “Fiscal Year”) which ends in calendar year 2008,
subject to earlier termination in accordance with the terms of this Agreement
(the “Term”). The Term shall be automatically extended for successive one year
periods thereafter unless either party notifies the other in writing of his or
its intention not to so extend the Term at least ninety (90) days prior to the
commencement of the next scheduled one year extension.

     Position and Duties.

          Title and Duties. The Executive shall serve as Chief Executive Officer of
the Company and Chairman of the Board of Directors of the Company (the
“Board”), and shall have such duties, authority and responsibilities as are
normally associated with and appropriate for such positions. The Executive
shall report directly to the Board. The Executive shall devote substantially
all of his working time and efforts to the business and affairs of the Company.

          Office and Facilities. The Executive shall be provided with appropriate
office and secretarial facilities in each of the Company’s principal executive
offices in New York City and any other location that the Executive reasonably
deems necessary to have an office and support services in order for the
Executive to perform his duties to the Company. In addition, the Executive
shall continue to be entitled to have certain employees of the Company perform
services for the Executive which are non-Company related in a manner consistent
with past practice; provided that the Executive reimburses the Company for the
full amount of salary, benefits and other expenses relating to such employees.

     Compensation.

          Base Salary. During the Term, the Company shall pay to the Executive an
annual base salary of $1,000,000. The Executive’s base salary shall be paid in
substantially equal installments on a basis consistent with the Company’s
payroll practices and shall be subject to such increases, if any, as may be
determined in the sole discretion of the Board. The Executive’s base salary, as
in effect at any time, is hereinafter referred to as the “Base Salary.”

          Annual Bonus. For each Fiscal Year that occurs during the Term, the
Executive shall be eligible to earn an annual cash bonus (the “Bonus”) under
the Company’s Executive Officer Annual Incentive Plan, as amended from time to
time (the “Bonus Plan”), based upon the achievement by the Company and its
subsidiaries of performance goals for each such Fiscal Year established by the
Compensation Committee of the Board of Directors (the “Compensation
Committee”). The Compensation Committee shall establish objective criteria to
be used to determine the extent to which such performance goals have been
satisfied. The range of the Bonus opportunity for each Fiscal Year will be as
determined by the Compensation Committee based upon the extent to which such
performance goals are achieved, provided that the annual target Bonus
opportunity shall be $8 million for the 2004 Fiscal Year, $9 million for the
2005 Fiscal

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Year, $10 million for the 2006 Fiscal Year, $11 million for the 2007
Fiscal Year and $12 million for the 2008 Fiscal Year (for each such Fiscal
Year, the “Target Bonus”), and provided, further that for each Fiscal Year, the
maximum Bonus payable pursuant to this Section 4(b) shall not exceed the amount
that is 150% of the Target Bonus for such Fiscal Year. Notwithstanding the
foregoing, in no case may the Bonus for any Fiscal Year exceed the maximum
annual bonus payable to any single individual pursuant to the Bonus Plan. The
Bonus, if any, payable to the Executive in respect of any Fiscal Year will be
paid at the same time that bonuses are paid to other executives of the Company,
but in any event within seventy-five days after the conclusion of such Fiscal
Year.

          Incentive Compensation.

		
	 	     Stock Options. As of the Effective Date, and annually thereafter
during the Term at the same time as stock options or other equity awards
are granted to other executives of the Company, the Executive will be
granted an option (each, an “Annual Option”) to purchase 150,000 shares
of Class A Common Stock of the Company (the “Common Shares”) pursuant to
the terms of the Company’s 1997 Long-Term Stock Incentive Plan or any
successor thereto (the “Incentive Plan”). In the event that, prior to
the grant of an Annual Option, there occurs any stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Shares or other similar
corporate transaction or event that affects the Common Shares such that
an adjustment is determined by the Committee (as defined in the Incentive
Plan) in its discretion to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available hereunder, the number of Common Shares subject to such Annual
Option (when granted) will be subject to equitable adjustment. Each
Annual Option will have a term of ten (10) years (subject to earlier
termination as described in Section 6 hereof) and will be nontransferable
during the Executive’s lifetime, except for transfers by the Executive to
family members (or trusts for their benefit) pursuant to the terms of the
Incentive Plan. Each Annual Option will vest and become exercisable
ratably over three (3) years on each of the first three anniversaries of
the date of grant, subject to the Executive’s continued employment
through each vesting date and subject to the provisions of Section 6
hereof, and will have an exercise price per Common Share equal to the
fair market value per Common Share as of the date of grant.

		
	 	     Restricted Stock Units. As of the Effective Date, and annually
thereafter during the Term at the same time as stock options or other
equity awards are granted to other executives of the Company, the
Executive will be granted (each, an “Annual Grant”) 100,000 restricted
stock units (“Units”) pursuant to the terms of the Incentive Plan. Each
Unit will represent a right to receive one Common Share. In the event
that, prior to an Annual Grant, there occurs any stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Shares or other similar
corporate transaction or event that affects the Common Shares such

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	 	that an adjustment is determined by the Committee (as defined in the
Incentive Plan) in its discretion to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to
be made available hereunder, the number of Units subject to such Annual
Grant (when granted) will be subject to equitable adjustment. Each of
the Units will vest on the fifth (5th) anniversary of the date of grant
(subject to acceleration of vesting or forfeiture upon termination of
employment as described in Section 6 hereof). Payment in respect of each
vested Unit shall be made in Common Shares as soon as practicable
following the date of the Executive’s termination of employment with the
Company. In the event of an issuance of a cash dividend on the Common
Shares (a “Dividend”), the Executive shall be entitled to be credited
with an additional number of restricted stock units (each, a “Dividend
Unit”) equal to the quotient obtained by dividing (a) the product of (i)
the number of Units that the Executive holds at the time of the record
date for such Dividend multiplied by (ii) the amount of the Dividend per
Common Share, divided by (b) the fair market value per Common Share on
the payment date for such Dividend. Once credited, each Dividend Unit
shall be treated as a Unit hereunder and shall be subject to the same
terms and conditions as those terms and conditions as the Units from
which such Dividend Unit is derived, including but not limited to vesting
schedule and rights to Dividend Units with respect to future Dividends.
The terms and conditions of each Annual Grant will be reflected in an
Award Agreement which shall be consistent with this paragraph and with
the terms and conditions of the Incentive Plan.

     Employee Benefits.

          Benefit Plans. The Executive shall continue to participate in all
existing employee benefit plans, perquisite and fringe benefit arrangements of
the Company or its affiliates in which he is currently participating and shall
be entitled to participate in any future employee benefit plans, perquisite and
fringe benefit arrangements of the Company or its affiliates that are provided
to other officers of the Company on terms no less favorable than are provided
to any other senior executive of the Company.

          Life Insurance. The Executive shall be solely responsible for maintaining
and making premium contributions to, and the Company shall cease to have any
further obligation to maintain and make premium contributions with respect to,
those certain split dollar and other life insurance arrangements between the
Company and the Executive, his family members and/or life insurance trusts for
the benefit of any of them, that have been maintained or contributed to by the
Company or its affiliates or predecessor entities (the “Insurance Policies”);
provided, however, that nothing contained in this Section 5(b) shall adversely
affect the Company’s right to receive reimbursement in respect of any premium
payments previously made by the Company under the Insurance Policies.

          Expenses. The Executive shall be entitled to receive prompt reimbursement
for all reasonable and customary expenses incurred by the Executive in
performing services hereunder, including all expenses of travel and living
expenses while

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away from home on business or at the request of and in the service of the
Company (including hotel, travel and meal expenses for the Executive’s spouse
should the Executive’s spouse elect to travel with Executive) (collectively,
“Business Expenses”), provided that such Business Expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Company.

          Air Travel. For security purposes, the Executive and his family members
shall be required to use the Executive’s or other acceptable private aircraft
for any travel. For any Business Expense incurred as a result of the
Executive’s use of his private aircraft, the Executive shall be reimbursed in
accordance with past practice. For any Business Expense incurred as a result
of travel on any private aircraft (other than Executive’s personal aircraft),
the Executive shall be entitled to reimbursement at market rates.

          Perquisites. The Company shall provide the Executive with a car and
driver for his use during the term of his employment with the Company.

          Vacations. The Executive shall be entitled to vacations and holidays on a
basis consistent with that offered to other senior executive officers of the
Company.

          Indemnification. The Company shall indemnify the Executive to the fullest
extent permitted by applicable law against damages and expenses (including fees
and disbursements of counsel) in connection with his status or performance of
duties as an officer or director of the Company and its affiliates (including
any predecessor entities) and shall use reasonable commercial efforts to
maintain customary and appropriate directors and officers liability insurance
for the benefit of the Executive’s protection. The Company’s obligations under
this Section 5(g) shall survive any termination of the Executive’s employment
hereunder.

     Termination of Employment. The Company and the Executive may each
terminate the Executive’s employment hereunder and the Term for any reason.

          Termination by the Company without Cause, Non-Extension of Term by the
Company or Termination by the Executive for Good Reason. If the Company shall
terminate the Executive’s employment without “Cause” (as defined in Section
6(e)), if the Company elects not to extend the Term, or if the Executive
resigns for Good Reason (as defined in Section 6(e)):

		
	 	     the Executive shall be entitled to receive a lump sum cash payment
equal to the sum of:

		
	 	     the Executive’s Base Salary that would be
payable for the period from the date of the
Executive’s termination of employment through the
third (3rd) anniversary thereof (the “Severance
Period”);

		
	 	     any accrued but unpaid compensation as of the
date

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	 	of termination of employment; and

		
	 	     a Bonus equal to three (3) times the average
annual bonus paid to the Executive in respect of each
of the immediately preceding two Fiscal Years prior
to the Fiscal Year in which the Executive’s
termination of employment occurs;

		
	 	     during the Severance Period, the Company shall (A) continue to
provide the Executive with office facilities and secretarial assistance
in New York City and any other location that the Executive maintained an
office during the term of his employment that the Executive reasonably
deems necessary, (B) permit the Executive to continue to participate in
all welfare and medical plans on the same terms as active officers of the
Company, and (C) continue to provide the Executive with the use of a car
and driver;

		
	 	     any unvested stock options then held by the Executive will continue
to vest on their scheduled vesting dates, subject to and conditioned upon
the Executive’s compliance with Section 8 hereof. In addition, subject
to, and conditioned upon, the Executive’s compliance with Section 8
hereof, any vested options (and any options that continue to vest as
described above) will remain exercisable until the later to occur of (A)
one (1) year from the date of the Executive’s termination of employment
or (B) thirty (30) days from the date the option becomes vested and
exercisable, but in no event later than the expiration date of the
option;

		
	 	     any unvested Units then held by the Executive shall vest in their
entirety on the Executive’s date of termination of employment; and

		
	 	     except as expressly provided above and except for the Company’s
obligations under Section 5(g) hereof, the Company shall have no further
obligations to the Executive hereunder following the Executive’s
termination of employment under the circumstances described in this
Section 6(a).

          Termination Due to Death or Disability. If the Executive’s employment is
terminated due to his death or “Disability” (as defined in Section 6(e)):

		
	 	     the Executive (or his estate) shall be entitled to a lump sum cash
payment equal to the sum of:

		
	 	     the Executive’s Base Salary through the date on
which his termination due to death or Disability
occurred;

		
	 	     any accrued and unpaid compensation as of the
date of termination of employment; and

		
	 	     a pro-rata portion of the Bonus he would
otherwise

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	 	have received for the Fiscal Year in which his
termination due to death or Disability occurred;

		
	 	     any unvested stock options then held by the Executive will vest
immediately and options held by the Executive, or his estate, will remain
exercisable for three (3) years from the date of the Executive’s death or
termination due to Disability, but in no event later than the expiration
date of the option.

		
	 	     any unvested Units then held by the Executive shall vest in their
entirety on the Executive’s date of termination of employment; and

		
	 	     except as expressly provided above and except for the Company’s
obligations under Section 5(g) hereof, the Company will have no further
obligations to the Executive hereunder following the Executive’s
termination of employment under the circumstances described in this
Section 6(b).

          Termination by the Company for Cause, by the Executive other than for Good
Reason or Due to the Executive’s Election Not to Extend the Term. If the
Executive’s employment is terminated by the Company for Cause, by the Executive
other than for Good Reason, or due to the Executive’s election not to extend
the Term:

		
	 	     the Executive shall be entitled to receive an immediate lump sum
cash payment equal to the sum of:

		
	 	     his Base Salary through the date of termination;
and any accrued but unpaid compensation for any prior
Fiscal Year;

		
	 	     any accrued and unpaid compensation as of the
date of termination of employment; and

		
	 	     a pro-rata portion of his Bonus for the Fiscal
Year in which the termination occurred, to be paid
when bonuses are paid to other executives of the
Company;

		
	 	     any stock options then held by the Executive that have not
previously been exercised shall be forfeited.

		
	 	     any unvested Units shall be forfeited and the Executive shall be
entitled to payment in respect of those Units that have vested as of the
date of the Executive’s termination of employment with the Company,
provided, however, that for the purposes of this clause (iii), if the
Executive terminates his employment without Good Reason after the last
day of Fiscal Year which ends in calendar year 2008, any unvested Units
will vest and the Executive shall be entitled to payment in respect of
such Units; and

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	 	     except as expressly provided above and except for the Company’s
obligations under Section 5(g) hereof, the Company will have no further
obligations to the Executive hereunder following the Executive’s
termination of employment under the circumstances described in this
Section 6(c).

          Notice of Termination. Any termination of the Executive’s employment by
the Company or by the Executive (other than termination pursuant to the
Executive’s death) shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 10 hereof. If the Company
terminates the Executive’s employment for Cause or due to Disability or if the
Executive resigns for Good Reason, the “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.

          Definitions. For purpose of this Agreement:

		
	 	     “Cause” shall mean (A) the willful and continued failure by the
Executive to substantially perform his duties hereunder after demand for
substantial performance is delivered by the Company that specifically
identifies the manner in which the Company believes the Executive has not
substantially performed his duties; or (B) the Executive’s conviction of,
or plea of nolo contendere to, a crime (whether or not involving the
Company) constituting a felony; or (C) willful engaging by the Executive
in gross misconduct relating to the Executive’s employment that is
materially injurious to the Company or subjects the Company, monetarily
or otherwise (including, but not limited to, conduct that constitutes
competitive activity, in violation of Section 9) or which subjects, or if
generally known, would subject the Company to public ridicule or
embarrassment. For purposes of this paragraph, no act, or failure to
act, on the Executive’s part shall be considered “willful” unless done,
or omitted to be done, by him not in good faith and without reasonable
belief that his action or omission was in the best interest of the
Company. Notwithstanding the forgoing, the Executive shall not be deemed
to have been terminated for Cause without (x) reasonable written notice
to the Executive setting forth the reasons for the Company’s intention to
terminate for Cause, (y) an opportunity for the Executive, together with
his counsel, to be heard before the Board, and (z) delivery to the
Executive of a Notice of Termination, as defined in Section 6(d) hereof,
from the Board finding that in the good faith opinion of the Board the
Executive was guilty of conduct set forth above in clauses (A) through
(C) hereof, and specifying the particulars thereof in detail. In the
event that the Board has so determined in good faith that Cause exists,
the Board shall have no obligation to terminate the Executive’s
employment if the Board determines in its sole discretion that such a
decision not to terminate the Executive’s employment is in the best
interest of the Company.

		
	 	     “Good Reason” shall mean (A) a material diminution in the

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	 	Executive’s duties or the assignment to the Executive of a title or
duties inconsistent with his position as Chairman of the Board and Chief
Executive Officer of the Company, (B) a reduction in the Executive’s
salary or annual incentive bonus opportunity, or (C) a failure of the
Company to comply with any material provision of this Agreement; provided
that the events described in clauses (A), (B) and (C) above shall not
constitute Good Reason unless and until such diminution, reduction or
failure (as applicable) has not been cured within thirty (30) days after
notice of such noncompliance has been given by the Executive to the
Company.

		
	 	     For purposes of this Agreement, “Disability” shall mean that as a
result of the Executive’s incapacity due to physical or mental illness,
the Executive shall have been absent from his duties hereunder on a
full-time basis for the entire period of six (6) consecutive months, and
within thirty (30) days after written Notice of Termination is given by
the Company (which may occur before or after the end of such six month
period) the Executive shall not have returned to the performance of his
duties hereunder on a full-time basis.

     No Mitigation. The Executive shall have no duty to mitigate the payments
provided for hereunder by seeking other employment or otherwise and such
payment shall not be subject to reduction for any compensation received by the
Executive from employment in any capacity following the termination of the
Executive’s employment with the Company.

     Non-Solicitation/Non-Competition.

          The Executive agrees that for the duration of his employment and for a
period of three (3) years from the date of termination thereof, he will not, on
his own behalf or on behalf of any other person or entity, hire, solicit, or
encourage to leave the employ of the Company or its subsidiaries or affiliates
any person who is an employee of any of such companies.

          The Executive agrees that for the duration of his employment and for a
period of three (3) years from the date of termination thereof, the Executive
will take no action which is intended, or would reasonably be expected, to harm
(e.g., making public derogatory statements or misusing confidential Company
information, it being acknowledged that the Executive’s employment with a
competitor in and of itself shall not be deemed to be harmful to the Company
for purposes of this Section 8(b)) the Company or any of its subsidiaries or
affiliates of their reputation.

          The Executive agrees that during the duration of his employment and for a
period of two (2) years following the date of the Executive’s termination of
employment for any reason other than death, the Executive shall not, directly
or indirectly, (A) engage in any “Competitive Business” (as defined below) for
his own account, (B) enter into the employ of, or render any services to, any
person engaged in a Competitive Business, or (C) become interested in any
entity engaged in a Competitive Business, directly or

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indirectly as an individual, partner, shareholder, officer, director,
principal, agent, employee, trustee, consultant, or in any other relationship
or capacity; provided that the Executive may own, solely as an investment,
securities of any entity which are traded on a national securities exchange if
the Executive is not a controlling person of, or a member of a group that
controls such entity and does not, directly or indirectly, own 2% or more of
any class of securities of such entity.

		
	 	     For purposes of this Agreement, the term “Competitive Business”
shall include the design, manufacture, sale, marketing or distribution of
branded or designer apparel and other products in the categories of
products sold by, or under license from, the Company or its affiliates
within the United States.

          The Executive will not at any time (whether during or after his employment
with the Company) disclose or use for his own benefit or purposes or the
benefit or purposes of any other person, entity or enterprise, other than the
Company or any of its affiliates, any trade secrets, information, data, or
other confidential information relating to customers, development programs,
costs, marketing, trading, investment, sales activities, promotion, credit and
financial data, manufacturing processes, financing methods, plans or the
business and affairs of the Company generally, or any affiliate of the Company;
provided that the foregoing shall not apply to information which is not unique
to the Company or which is generally known to the industry or the public other
than as a result of the Executive’s breach of this covenant. The Executive
agrees that upon termination of his employment with the Company for any reason,
he will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom, in
any way relating to the business of the Company and its affiliates.

          If the Executive breaches, or threatens to commit a breach of, any of the
provisions of this Section 8 (the “Restrictive Covenants”), the Company shall
have the following rights and remedies, each of which rights and remedies shall
be independent of the other and severally enforceable, and all of which rights
and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or equity:

		
	 	     The right and remedy to have the Restrictive Covenants specifically
enforced by any court having equity jurisdiction, it being acknowledged
and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company;

		
	 	     The right and remedy to require the Executive to account for and pay
over to the Company all compensation, profits, monies, accruals,
increments or other benefits (collectively, “Benefits”) derived or
received by the Executive as the result of any transactions constituting
a breach of any of the Restrictive Covenants, and the Executive shall
account for and pay over such Benefits to the Company; and

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	 	     The right to discontinue the payment of any amounts owing to the
Executive under the Agreement.

          If any court determines that any of the Restrictive Covenants, or any part
thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full effect, without
regard to the invalid portion. In addition, if any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration or area of such provision and, in its reduced
form, such provision shall then be enforceable and shall be enforced.

     Successors; Binding Agreement.

          The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean the Company as herein defined
and any successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 9 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.

          This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts are
payable to him hereunder all such amounts unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive’s
devisee, legatee, or other designee or, if there be no such designee, to the
Executive’s estate.

     Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered with receipt
acknowledged or five business days after having been mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed as follows:

          If to the Executive:

		
	 	Mr. Ralph Lauren

c/o Polo Ralph Lauren Corporation

650 Madison Avenue

New York, New York 10022

          If to the Company:

		
	 	Polo Ralph Lauren Corporation

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	 	650 Madison Avenue

New York, New York 10022

Attention: Corporate Counsel

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

     Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York without regard to its conflicts of law principles.

     Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

     Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

     Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in the City of
New York in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator’s award in any court
having jurisdiction; provided, however, that the Company shall be entitled to
seek a restraining order or injunction in any court of competent jurisdiction
to prevent any continuation of any violation of the provisions of Section 8 of
this Agreement and the Executive hereby consents that such restraining order or
injunction may be granted without the necessity of the Company’s posting any
bond, and provided further that the Executive shall be entitled to seek
specific performance of his right to be paid until the date of termination
during the pendency of any dispute or controversy arising under or in
connection with this Agreement.

     Withholding. The Company may withhold from any amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to applicable law or regulation.

     Prior Agreements; Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications,

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 representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto; and any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and canceled.

13

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set his hand, effective as of the
Effective Date.

	 	 	 	 	 
	 	 	POLO RALPH LAUREN CORPORATION
	 	 	 	 	 
	 	 	
By:
	 	/s/ JOEL L. FLEISHMAN
	 	 	 	 	

	 	 	 	 	Joel L. Fleishman, Chairperson
of the Compensation Committee
	 	 	 	 	 
	 	 	 	 	/s/ RALPH LAUREN
	 	 	 	 	

	 	 	 	 	Executive: Ralph Lauren

14<PAGE>
                                                                   EXHIBIT 10(y)

                    AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

         THIS AMENDMENT NO. 1 dated as of May 13, 2003 amends the Employment
Agreement by and between MALAN REALTY INVESTORS, INC., a Michigan corporation
(the "Company"), and JEFFREY D. LEWIS ("Executive") dated as of September 26,
2000 (the "Agreement").

                                    RECITALS

         In August 2002, the Company's shareholders adopted a plan of
liquidation (the "Plan of Liquidation"). The Company wishes to retain
Executive's services as the Company's chief executive officer through the
completion of the liquidation and to make certain amendments to the Agreement in
addition to extending the term beyond the initial September 26, 2003 termination
date.

         Accordingly, the parties agree as follows (all capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement):

         1.       EXTENSION OF TERM. Section 2 of the Agreement is hereby
amended to read in full as follows:

                           "2. TERM OF EMPLOYMENT. Executive's term of
                  employment under this Agreement shall, subject to the terms
                  hereof, terminate on the earlier of (i) September 30, 2004
                  (the "Termination Date") or (ii) the termination of
                  Executive's employment pursuant to this Agreement. The period
                  from the date of Amendment No. 1 to this Agreement until the
                  termination of this Agreement shall be the "Term." The Company
                  may extend the Term of this Agreement through December 31,
                  2004, by giving written notice of extension to Executive no
                  later than July 1, 2004."

         2.       INCREASE IN BASE SALARY.  Effective October 1, 2003,
Executive's Base Salary shall be increased to $275,000 per year during the
remainder of the Term.

         3.         PRORATION OF ANNUAL BONUS. The last Bonus payable pursuant
to Section 3.2 of the Term shall be prorated if it covers a period less than a
year, based on the relative amount of time that has elapsed since the end of the
Company's prior fiscal year.

         4.         NON-RENEWAL PAYMENT. The Company shall pay Executive $50,000
in the event that this Agreement expires pursuant to its terms, without any
further extension or renewal or early termination by either party, including
expiration following one or more extensions.

         5.       CASH BONUSES IN LIEU OF OPTIONS.

                  (a) Executive hereby agrees to the cancellation by, and hereby
         surrenders to, the Company effective as of the date of this Amendment
         all stock options held by

<PAGE>

         Executive under the Malan Realty Investors, Inc. 1994 Stock Option
         Plan, all of which are more particularly described on Exhibit A.

                  (b) In consideration of such cancellation and
         surrender, the Company agrees than when aggregate liquidating
         distributions per share made to Company shareholders pursuant to the
         Plan of Liquidation after the date of this Amendment reach the levels
         set forth below, Executive shall be entitled, subject to the terms and
         conditions set forth herein, to receive a cash bonus (each, a
         "Liquidation Bonus") such that aggregate Liquidation Bonuses paid to
         Executive pursuant to this Section 5 total the amount set opposite the
         applicable level of per share liquidating distributions (which amounts
         represent liquidating distributions in excess of the average price of
         all of Executive's options, regardless of when first exercisable):

<TABLE>
<CAPTION>

            AGGREGATE PER SHARE                  CUMULATIVE AMOUNT OF
         LIQUIDATING DISTRIBUTIONS                 LIQUIDATION BONUS
<S>                                            <C>
         $         4.00                          $        8,000
                   4.25                                  25,500
                   4.50                                  43,000
                   4.75                                  60,500
                   5.00                                  78,000
                   5.25                                  95,500
                   5.50                                 113,000
                   5.75                                 130,500
                   6.00                                 148,000
                   6.25                                 173,000
                   6.50                                 198,000
                   6.75                                 223,000
                   7.00                                 248,000
                   7.25                                 294,000
                   7.50                                 344,000
                   7.75                                 394,000
                   8.00                                 444,000
                   8.25                                 494,000
                   8.50                                 544,000
                   8.75                                 594,000
                   9.00                                 644,000
</TABLE>

         For example, when aggregate per share liquidating distributions of
         $4.00 have been paid, Executive will be entitled to a Liquidation Bonus
         of $8,000. When aggregate liquidating distributions reach $4.25 per
         share, Executive will be entitled to receive another Liquidation Bonus
         of $17,500, resulting in cumulative Liquidating Bonuses of $25,500.

                  (c) Each Liquidation Bonus will be paid as soon as practicable
         after the applicable liquidating distribution is paid to shareholders,
         less any federal, state and local taxes required to be withheld
         thereon. If the Company makes a liquidating distribution in a form
         other than cash, the Company's board of directors shall in good faith
         determine

                                       2
<PAGE>
         the fair market value per share of the liquidating distribution for
         purposes of determining the amount of any Liquidation Bonus to be paid
         to Executive hereunder, which in the Company's discretion may be paid
         in cash or in kind.

                  (d) When the Company makes its final liquidating distribution,
         if aggregate liquidating distributions exceed $4.00 per share, the
         Liquidation Bonus relating to the final liquidating distribution shall
         be prorated based on the amount of the final liquidating distribution
         to the extent that the final distribution does not reach the next
         threshold for the payment of the next Liquidation Bonus. For example,
         if aggregate liquidating distributions of $7.00 per share have been
         made, Liquidating Bonuses totaling $248,000 have been paid, and the
         final liquidating distribution is $0.125 per share, Executive would be
         entitled to a final Liquidation Bonus of $23,000.

                  (e) Anything herein to the contrary notwithstanding, Executive
         shall not be entitled to a Liquidation Bonus to the extent that such
         bonus represents cash in excess of the exercise price of an option
         that, absent this Amendment, would have expired or terminated pursuant
         to its terms before the record date for the liquidating distribution to
         which the Liquidation Bonus relates (for example, if Executive ceases
         to be an employee of the Company within one year after the date of
         grant of the option for any reason other than death, disability or
         retirement).

         6.        ASSIGNMENT TO LIQUIDATING TRUST. The Company may form a
liquidating trust in connection with winding down the Company's business (the
"Liquidating Trust"). The Company may assign this Agreement to a Liquidating
Trust provided that the Liquidating Trust assumes each and every obligation of
the Company hereunder, including the obligation to pay Liquidation Bonuses.

         7.       NO OTHER CHANGES.  Except as expressly amended hereby, the
provisions of the Agreement shall continue to remain in full force and effect
throughout the Term of the Agreement.

                                     MALAN REALTY INVESTORS, INC.

                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------

                                     -------------------------------------------
                                     JEFFREY D. LEWIS

                                      3
<PAGE>
                                    EXHIBIT A

                                CANCELLED OPTIONS

<TABLE>
<CAPTION>

   DATE OF AGREEMENT             NUMBER OF SHARES                 EXERCISE PRICE
   -----------------             ----------------                 --------------
<S>                             <C>                              <C>
     05/18/2000                        1,000                         $13.875

     09/25/2000                        5,000                         $13.438

     11/02/2001                      100,000                           $7.04

     06/14/2002                       20,000                           $3.60

</TABLE>

                                     MALAN REALTY INVESTORS, INC.

                                     By:
                                        ----------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                     -------------------------------------------
                                     JEFFREY D. LEWIS

<PAGE>
                  MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION
                               (LIQUIDATION BASIS)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                          JUNE 30,        DECEMBER 31,
                                                            2003              2002
                                                            ----              ----
                                                         (unaudited)
ASSETS
<S>                                                       <C>               <C>
      Real estate held for sale                           $179,297          $191,802
      Cash and cash equivalents                             14,760            10,008
      Restricted cash - mortgage escrow deposits             2,591             1,753
      Accounts receivable                                    1,635             3,761
      Other assets                                             629               622
                                                          --------          --------
           Total Assets                                    198,912           207,946
                                                          --------          --------

LIABILITIES
      Mortgages                                             82,890            91,330
      Convertible debentures                                42,593            42,593
      Convertible notes                                     27,000            27,000
      Accounts payable and other liabilities                12,196            13,011
      Reserve for estimated liquidation costs                5,593             7,582
                                                          --------          --------
           Total Liabilities                               170,272           181,516
                                                          --------          --------

           NET ASSETS IN LIQUIDATION                      $ 28,640          $ 26,430
                                                          ========          ========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       3

<PAGE>
                  MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES

         CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       THREE MONTHS       SIX MONTHS
                                                                      ENDED JUNE 30,    ENDED JUNE 30,
                                                                           2003              2003
                                                                       ------------     -------------

<S>                                                                    <C>              <C>
Net Assets in Liquidation beginning of period                          $     27,902     $      26,430
Operating Income                                                                 10               573
Changes in net assets in liquidation:
    Realized gain on sale of assets                                             313               313
    Decrease in fair value of real estate                                      (665)             (665)
    Decrease in reserve for estimated liquidation costs                       1,080             1,989
                                                                       ------------     -------------
Net Assets in Liquidation as of June 30, 2003                          $     28,640     $      28,640
                                                                       ============     =============
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        4

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