Document:

EX-10.18

Exhibit 10.18

THE WARNACO GROUP, INC.

DEFERRED COMPENSATION PLAN

ARTICLE 1

ESTABLISHMENT AND PURPOSE

	1.1	 	Establishment. The Warnaco Group, Inc. (the “Company”) adopted this deferred
compensation plan, known as “The Warnaco Group, Inc. Deferred Compensation Plan” (the “Plan”),
effective as of May 1, 2005. The Plan is amended and restated effective as of January 1,
2009.
	 
	1.2	 	Purpose. The Plan is intended to provide certain key Company employees the
opportunity to build wealth by deferring compensation on a pre-tax basis and to help the
Company reward and retain these employees. The Plan is intended to be a “top-hat” plan (i.e.,
an unfunded deferred compensation plan maintained for a select group of management or
highly-compensated employees) under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974 (“ERISA”).

ARTICLE 2

DEFINITIONS

As used in the Plan, the following words and phrases have the meanings given them in this Article
2, unless a different meaning is plainly required by the context. Some of the words and phrases
used in the Plan are not defined in this Article 2, but, for convenience, are defined as they are
introduced into the text.

	2.1	 	“Administrative Committee” means the committee designated to oversee the operation and
administration of the Plan pursuant to Article 9 hereof.
	 
	2.2	 	“Base Pay” means a Participant’s annual base salary in effect at any given time.
	 
	2.3	 	“Beneficiary” means a person or entity designated by a Participant in accordance with Section
12.6 hereof, who upon the Participant’s death, shall be entitled to any balance remaining in
the Participant’s Participant Contribution Account.
	 
	2.4	 	“Change in Control” means any transaction or series of transactions (whether related or not)
involving the transfer of the beneficial ownership (as defined below) of shares of any class
of the Company’s capital stock by any stockholders that results in any Person (as defined
below) together with its Affiliates (as defined below) as a group, or any other group (as the
term “group” is used in Section 12(d) of the Securities Exchange Act of 1934, as amended, and
the rules thereunder (the 1934 Act)) beneficially owning (as defined below) capital stock of
the Company possessing the voting power to elect one-half or more of the Company’s Board of
Directors, or upon the occurrence of a “change in control event” within the meaning of Final
Treasury Regulation § 1.409A-3(i)(5). For

 

 

	 	 	purposes of this Section 2.4, (a) “Affiliate” means (1) in the case of a natural Person, such person’s
spouse, descendants (whether natural or adopted), parents, brothers, sisters and other relatives, and
(2) in other cases, any Person controlling, controlled by or under common control with another Person;
(b) “Beneficial ownership” and beneficially owning” shall have the meaning determined under Rule 13D-3
under the 1934 Act; and (c) “Person” means an individual, a partnership, a corporation, an association
a joint stock company, a trust, an entity or any department, agency or political subdivision thereof.

	2.5	 	“Code” means the Internal Revenue Code of 1986, as amended from time to time.
	 
	2.6	 	“Compensation Committee” means the Compensation Committee of the Company’s Board of
Directors.
	 
	2.7	 	“Disability” means any medically determinable physical or mental impairment that can be
expected to result in death or last for a continuous period of not less than twelve months and
that (1) renders the Participant unable to engage in any substantial gainful activity or (2)
is the reason the Participant is receiving income and replacement benefits for a period of not
less than three months under an accident and health plan covering employees of the Company.
“Disability” also means any determination by the Social Security Administration that a
Participant is totally disabled.
	 
	2.8	 	“Incentive Pay” means any cash payment to a Participant pursuant to an annual bonus or
long-term incentive plan designated by the Administrative Committee. Incentive Pay shall not
include any payment that relates to commissions or a grant of equity compensation, including
(but not limited to) stock options, stock appreciation rights, and restricted stock.
	 
	2.9	 	“Participant Contribution Account” means the account established for each Participant to
which contributions described in Section 4.1 hereof are credited.
	 
	2.10	 	“Participant” means any employee who contributes to the Plan pursuant to Article 4 hereof and
any former employee who is eligible to receive a benefit under the Plan.
	 
	2.11	 	“Plan Year” means the twelve-month period (or such shorter period, if applicable) ending on
December 31 of each year during which the Plan is in effect.
	 
	2.12	 	“Rabbi Trust” means the Grantor Trust between First American Trust FSB and The Warnaco Group,
Inc. dated July 2, 2007, as amended from time to time, and any successor trust thereto.
	 
	2.13	 	“Retirement Date” means the date a Participant attains age fifty (50) and completes ten (10)
years of service with the Company.

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ARTICLE 3

ELIGIBILITY

	3.1	 	Eligibility to Participate. Each U.S. employee of the Company and each of its wholly
owned subsidiaries whose Base Pay equals or exceeds $180,000 and who is eligible to
participate in The Warnaco Group, Inc. Incentive Compensation Plan, as in effect from time to
time, or any successor plan, as a member of a select group of management or highly compensated
employees, shall be eligible to participate in the Plan on the first day of the month
following the date in which they would otherwise meet this eligibility criteria. The
Compensation Committee may change eligibility requirements from time to time.
	 
	3.2	 	Participation. A Participant shall remain a Participant so long as he or she is
entitled to receive benefits under the Plan.
	 
	3.3	 	Select Group of Employees. The Plan is intended to qualify as a plan maintained by
the Company primarily to provide deferred compensation for a select group of management and
highly compensated employees. If the Company determines, based on subsequent authority, or if
an agency or court of competent jurisdiction determines that the Plan benefits any person
other than a member of the select group of management and highly compensated employees, the
participation of each employee who is determined not to be included in the group shall be
terminated immediately and the employee shall cease to participate in the Plan. In the case
of a determination by an agency or court, the employee’s participation shall terminate only
after the period for appeal of the determination has elapsed.
	 
	3.4	 	Change of Employment Category. During any period in which a Participant remains in
the employ of the Company, but ceases to meet the eligibility criteria set forth in Section
3.1 hereof, the Participant will not be permitted to change or cease any current election
under Section 4.1 hereof, however, the Participant shall not be eligible to make contributions
hereunder with respect to any future Plan Year during such period of ineligibility. Any
existing Participant Contribution Account will continue to be administered in accordance with
the Participant’s existing elections and the terms of the Plan.

ARTICLE 4

CONTRIBUTIONS 

	4.1	 	Deferral of Base Pay.

     (a) Annual Elections. Prior to January 1st of each calendar year, each
eligible employee may make a written election to reduce his or her Base Pay for that
calendar year by up to fifty percent (50%) and to have the amounts contributed to his or her
Participant Contribution Account.

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     (b) Initial Eligibility Elections. If an employee first becomes eligible to
participate in the Plan during the middle of a calendar year, the Administrative Committee
may in its sole discretion permit the Participant, within thirty (30) days after he or she
first becomes eligible to participate in the Plan, to make an election to reduce his or her
Base Pay for the months remaining in the calendar year by up to fifty percent (50%) and to
have the amounts contributed to his or her Participant Contribution Account.

	4.2	 	Deferral of Incentive Pay.

     (a) Performance Period Elections. Prior to January 1st of the first year in
which an Incentive Pay performance period begins (whether based on an annual or multi-year
performance period), each eligible employee may make a written election to reduce his or her
Incentive Pay for such performance period by up to one hundred percent (100%) (but no less
than one percent (1%) or such other minimum as established by the Administrative Committee)
and to have the amounts contributed to his or her Participant Contribution Account.
Notwithstanding the foregoing, in the event the Incentive Pay is considered to be
“performance-based compensation” within the meaning of Final Treasury Regulation
Section 1.409A-1(e), including (without limitation) the requirement that performance
criteria be pre-established in writing no later than ninety (90) days after the commencement
of the performance period, the Administrative Committee may in its sole discretion permit
Participants to make an election on or before the date that is six (6) months before the end
of the Incentive Pay performance period; provided that, in accordance with Final
Treasury Regulation Section 1.409A-2(a)(8), the Participant performs services continuously
to the Company from the later of the beginning of the performance period or the date the
performance criteria are established through the election date and that the election to
defer be made before such compensation has become readily ascertainable.

     (b) Initial Eligibility Elections. If an employee first becomes eligible to
participate in the Plan during the middle of a performance period, the Administrative
Committee may in its sole discretion permit the Participant, within thirty (30) days after
he or she first becomes eligible to participate in the Plan, to make an election to reduce
his or her Incentive Pay provided that any such election applies to no more than an amount
equal to the total amount of Incentive Pay for the performance period, multiplied by a
ratio: (i) the numerator of which is the number of days remaining in the performance
period, and (ii) the denominator of which is the total number of days in the performance
period. Any such amounts will be contributed to the Participant’s Participant Contribution
Account.

	4.3	 	Deferral Elections. The elections shall be made on paper forms or otherwise as
provided by the Administrative Committee on or before the specified deadline. The election
forms shall state the percentage in whole numbers by which the Participant desires to reduce
his or her Base Pay and/or Incentive Pay. Amounts shall be withheld form the Participant’s
Incentive Pay and/or ratably from the Participant’s Base Pay throughout the calendar year and
credited to his or her Participant Contribution Account as of the last day of the

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	 	 	payroll period in which withheld. A Participant’s election shall remain in force for
subsequent calendar years and/or measurement periods unless and until the Participant makes
a new election in accordance with this Article 4.

	4.4	 	Additional Rules for Amounts Deferred. Anything to the contrary notwithstanding, if
the amounts deferred would reduce a Participant’s Base Pay and/or Incentive Pay below amounts
necessary to pay applicable employment, state, local or foreign taxes on his or her deferrals
and/or to make any elective contributions under the Company’s tax-qualified 401(k) plan, the
Administrative Committee may reduce the amounts deferred accordingly in order to satisfy such
obligations. In addition, deferrals may only be cancelled in the Administrative Committee’s
discretion and in compliance with Final Treasury Regulation Section 1.409A-3(j)(4), including
(without limitation) following an “unforeseeable emergency” defined in Section 7.5 hereof, a
hardship distribution under the Company’s tax-qualified 401(k) plan pursuant to Final Treasury
Regulation Section 1.401(k)-1(d)(3) if required under such 401(k) plan, certain types of
disability and/or to comply with ethics rules and applicable law.

ARTICLE 5

ACCOUNTS

	5.1	 	Establishment of Accounts. The Administrative Committee shall establish a
Participant Contribution Account for each Participant to which the contributions described in
Sections 4.1 and 4.2 hereof will be credited. The Administrative Committee may establish
sub-accounts for Participants, as it deems appropriate. The accounts and/or sub-accounts
shall be adjusted to reflect distributions and any notional income, gains, and losses.
	 
	5.2	 	Investment Credits. The Administrative Committee shall offer Participants a choice
of two or more hypothetical or notional investment options, in which their contributions will
be deemed to be invested, and the Administrative Committee may add, eliminate, or modify the
options from time to time. The Administrative Committee shall select such options from among
those then available under the Company’s tax-qualified 401(k) plan. Participants’ accounts
will be valued, and Participants may reallocate such accounts among hypothetical investment
options in increments of one percent, on a daily basis. The investment return on hypothetical
investment options shall be the same as the return on the underlying actual investment, net of
fees and expenses.

ARTICLE 6

VESTING

	6.1	 	Vesting. The amount credited to a Participant’s Participant Contribution Account
shall be at all times and in all events one hundred percent (100%) vested.

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ARTICLE 7

PAYMENT OF BENEFITS

	7.1	 	Elections.

     (a) Participant Elections. Coincident with each election to defer under Article 4
hereof, a Participant shall elect a deferral period in whole years, which may not be shorter
than five (5) years from the end of the Plan Year in which the compensation is deferred, and
also shall elect the form of distribution for the deferrals. The Participant may choose to
receive distributions in either a single lump sum (in the month following the month the
payment becomes due) or approximately equal annual installments over a period of up to five
(5) years (to commence in the month following the month the payment becomes due, and then
annually thereafter as determined by the Administrative Committee), except as may be
required by Section 7.6 hereof. Payment shall be made in accordance with the Participant’s
elections, subject to this Article 7 (which shall govern in the event they conflict with a
Participant’s elections). In the event a Participant fails to make a timely election with
respect to the time or form of distribution, the default time and form of distribution shall
be a single lump sum payable on the date that is five (5) years from the end of the Plan
Year in which the compensation is deferred.

     (b) Re-deferral Elections. The Administrative Committee may permit a Participant to
elect to delay a distribution or increase the number of annual installments (not to exceed
five (5)) by notifying the Administrative Committee in writing at least twelve (12) months
prior to the first scheduled distribution date. In such event, such election shall not take
effect until at least twelve (12) months after the date on which the election is made and
the Participant’s distribution shall be deferred for a period of at least five (5) years
from the scheduled distribution date.

	7.2	 	Retirement and Disability. A Participant who separates from service on or after his
or her Retirement Date or who incurs a Disability shall receive the amount credited to his or
her Participant Contribution Account on the first to occur of the distribution date set forth
in the Participant’s existing election(s) or the fifth anniversary of the Participant’s
separation from service or Disability.
	 
	7.3	 	Death. If a Participant separates from service on account of death, the
Participant’s Beneficiary shall receive the amount credited to the Participant Contribution
Account in a single lump sum in the month following the month which includes the date of
death.
	 
	7.4	 	Other Separations. A Participant who separates from service under circumstances
other than those described in Sections 7.2 or Section 7.3 hereof shall receive the amount
credited to his or her Participant Contribution Account in a single lump sum in the month
following the month which includes his or her separation date, except as may be required under
Section 7.6 hereof.

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	7.5	 	Unforeseeable Emergencies. A Participant may request, in writing, to withdraw a lump
sum amount from his or her Participant Contribution Account in the event of an unforeseeable
emergency. The determination that an unforeseeable emergency exists shall be made by the
Administrative Committee. For this purpose, “unforeseeable emergency” shall mean a severe
financial hardship of the Participant resulting from:

	 	(i)	 	an illness or accident of the Participant or
the spouse or a dependent (within the meaning of Section 152(a) of the
Code) of the Participant;
	 
	 	(ii)	 	the loss of the Participant’s property due to
casualty; or
	 
	 	(iii)	 	other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant.

	 	 	A distribution
shall not be
granted to a
Participant to the
extent that such
emergency is or may
be relieved through
reimbursement or
compensation by
insurance or
otherwise, or by
liquidating the
Participant’s
assets, to the
extent such
liquidation of
assets would not
itself cause severe
financial hardship.
The amount of any
distribution shall
be limited to an
amount reasonably
necessary to
satisfy the
Participant’s
financial need and
pay the
Participant’s tax
liabilities
resulting from the
distribution.
	 
	7.6	 	Specified Employee.
If, at the time of
the Participant’s “separation from
service” other than
by reason of death,
the Employee is
deemed to be a
“specified
employee” (each as
defined under
Section 409A of the
Code) of a public
company,
any payments of
deferred
compensation to
which the Employee
otherwise would
have been entitled
to under any
provision of
this Plan payable
on account of a
separation from
service shall not
be paid until six
(6) months
following
the Employee’s separation from service,
if and to the
extent such delay
in payment is
required under
Section 409A of the
Code.
In such event, any such payments scheduled
to be paid during such six-month period will
accumulate and be paid in a lump sum payment
within ten (10) business days following the
end of the required six-month period.
	 
	7.7	 	Cash Payment and Tax Matters. Plan benefits shall be paid in cash and, to the extent
required by law, shall be subject to all applicable Federal, state, local and foreign income
and employment taxes, withholdings and deductions. This Plan is intended to comply with
Section 409A of the Code and any guidance issued thereunder, and the Plan shall be
interpreted, administered and operated accordingly.

ARTICLE 8

SOURCES OF PAYMENTS

	8.1	 	Unfunded Plan. Except as set forth in Section 8.2 hereof, the Plan shall be
unfunded. Neither the Participant not any other persons shall have any interest in any
specific asset or assets of the Plan by reason of any Participant Contribution Account, nor
any rights to receive distribution of the Participant Contribution Account except and as to
the extent

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	 	 	expressly provided hereunder. The Company shall not be required to purchase, hold or
dispose of any investments pursuant to the Plan; provided, however, if in
order to cover its obligations hereunder the Company elects to purchase any investments the
same shall continue for all purposes to be a part of the general assets and property of the
Company, subject to the claims of its general creditors and no person other than the Company
shall by virtue of the provision of this Plan have any interest in such assets other than as
interest as a general creditor.
	 
	8.2	 	Rabbi Trust. Upon a Change in Control, and thereafter on such other periodic basis
as may be required under the terms of the Rabbi Trust, the Company shall make contributions to
the Rabbi Trust equal to the excess, if any, of the Plan’s aggregate benefit obligations over
the value of the Rabbit Trust’s assets. The trustee of the Rabbi Trust, which shall be a bank
or other independent financial institution, shall be authorized to invest the trust’s assets,
subject to investment guidelines set by the Administrative Committee and to applicable law.
Plan benefits may be paid directly from the Rabbi Trust. The Company may pay any expenses of
the trustees in maintaining the Rabbi Trust, which, if not paid, the trustee may deduct from
the assets of the Rabbi Trust. To the extent that benefits or Plan expenses are not paid from
the Rabbi Trust, they shall be paid from the general assets of the Company. The Rabbi Trust
shall be a grantor trust, the assets of which are subject to the claims of the Company’s
creditors in the event of the Company’s insolvency. Except as to any amounts paid or payable
to the Rabbi Trust, the Company shall not be obligated to set aside, earmark or escrow any
funds or other assets to satisfy the obligations under this Plan. The Participant and/or his
or her Beneficiaries shall not have any property interest in any specific assets of the
Company or the Rabbi Trust other than the unsecured right to receive benefits under the Plan.
No assets of the trust will be located, or subsequently transferred, outside the United
States. Notwithstanding anything in the Plan to the contrary, in no event will the Company be
required to make contributions to the Rabbi Trust in connection with “a change in the
employer’s financial health” within the meaning of Section 409A(b)(2) of the Code.

ARTICLE 9

PLAN ADMINISTRATOR

	9.1	 	Administrative Committee. An Administrative Committee comprised of employees chosen
by the Compensation Committee shall serve as plan administrator. The Administrative Committee
shall act by a majority of its members and such action may be taken either by vote at a
meeting or in writing without a meeting. The Administrative Committee may appoint one or more
delegate(s) to discharge any or all of its responsibilities under the Plan. The
Administrative Committee and its delegate(s) shall have all of the discretionary authority,
rights and duties which are necessary or appropriate for proper administration of the Plan.
The decisions of the Administrative Committee, or its delegate(s), including but not limited
to interpretations and determinations of amounts due under the Plan, shall be final and
binding on all parties.

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ARTICLE 10

NONALIENATION OF BENEFITS

	10.1	 	Restrictions on Participants’ Interests. The interests of Participants and
Beneficiaries under the Plan are not subject to the claims of their creditors and may not be
voluntarily or involuntarily sold, transferred, alienated, assigned, pledged, anticipated, or
encumbered. Any attempt by a Participant, a Beneficiary, or any other person to sell,
transfer, alienate, assign, pledge, anticipate, encumber, charge or otherwise dispose of any
right to benefits payable under the Plan shall be void. The Company may cancel and refuse to
any portion of a benefit which is sold, transferred, alienated, assigned, pledged, anticipated
or encumbered. Additionally, Plan benefits are not subject to the terms of any Qualified
Domestic Relations Order (as that term is defined in Section 414(p) of the Code) with respect
to any Participant, nor shall the Administrative Committee or the Company be required to
comply with the terms of such order in connection with this Plan.

ARTICLE 11

AMENDMENT AND TERMINATION

	11.1	 	Reservation of Rights. The Company, by action of its Compensation Committee or its
authorized delegate, reserves the right to amend, alter or discontinue this Plan at any time,
including (without limitation) the right to make retroactive amendments and to terminate the
Plan. These actions may be taken by any officer of the Company who has been duly authorized
by the Compensation Committee to perform acts of this kind. The deferral of Base Pay and
Incentive Pay and the payment of cash pursuant to the Plan shall be subject to all applicable
laws, rules and regulations. If the Compensation Committee determines that, as the result of
the application of Section 409A of the Code, any Participant or the Company is likely to
suffer tax consequences that are adverse to the tax consequences that the Compensation
Committee intended at the time of adoption of the Plan, all affected deferral of Base Pay and
Incentive Pay and the payment of cash shall be subject to such modification without the
consent of the Participant as the Compensation Committee shall deem appropriate under the
circumstances.

ARTICLE 12

GENERAL PROVISION

	12.1	 	Facility of Payment. When a person entitled to a distribution under the Plan is
under a legal disability, or, in the opinion of the Administrative Committee, is in any way
incapacitated so as to be unable to manage his or her financial affairs, the Administrative
Committee may direct that the distribution to which such person otherwise would be entitled
shall be made to such person’s legal representative(s) or to a relative or friend of such
person for such person’s benefit, or the Administrative Committee may direct the application
of the distribution for the benefit of the person in a manner that the Administrative
Committee considers advisable. Any payment made in good faith in

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	 	 	accordance with provisions of this Section 12.1 shall be a complete discharge of any
liability for making the payment under the provisions of the Plan.

	12.2	 	Plan Not a Contract of Employment. The Plan does not constitute a contract of
employment, and participation in the Plan will not give any Participant the right to be
retained in the employment of the Company.
	 
	12.3	 	Successors. The provisions of the Plan shall be binding upon the Company and its
successors and assigns and upon every Participant and his or her heirs, Beneficiaries, estates
and legal representatives.
	 
	12.4	 	Required Notification to Administrative Committee. Each Participant and Beneficiary
entitled to benefits shall file with the Administrative Committee, in writing, his or her post
office address and each change of post office address. Any benefit payment and any
communication addressed to a Participant or Beneficiary at his or her last address filed with
the Administrative Committee, or if no address has been filed, then at his or her last address
in the Company’s records, shall be binding on such person for all purposes of the Plan, and
neither the Administrative Committee nor the Company or other payer shall be obliged to search
for or ascertain the location of any such person. If the Administrative Committee for any
reason is in doubt as to the address of any Participant or Beneficiary or as to whether
benefit payments are being received, it shall, by registered mail addressed to the person
concerned at his or her address last known to the Administrative Committee, notify the person
that:

	 	(i)	 	all future payments from the Plan shall be
withheld until he or she provides the Administrative Committee with
evidence of his or her continued life and proper mailing address; and
	 
	 	(ii)	 	his or her right to payments from the Plan
shall, at the option of the Administrative Committee, be canceled if,
at the expiration of five years from the date of mailing, he or she has
not provided the Administrative Committee with evidence of his or her
continued life and proper mailing address.

	12.5	 	Required Information to Plan Administrator. Each Participant shall furnish to the
Administrative Committee information it considers necessary or desirable for purposes of
administering the Plan, and the provisions of the Plan respecting any benefit payments are
conditional upon the Participant’s furnishing promptly such true, full and complete
information as the Administrative Committee may request.
	 
	12.6	 	Designation of a Beneficiary. Each Participant shall specifically designate, by
name, on forms provided by the Administrative Committee, the Beneficiary (ies) who shall
receive any benefits which might be payable after his or her death. The designation may be
made at any time satisfactory to the Administrative Committee. A designation of a Beneficiary
may be changed or revoked without the consent of the Beneficiary in the manner provided by the
Administrative Committee, and the Administrative Committee shall have not duty to notify any
Beneficiary of any change in the designation which might affect

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	 	 	such person’s present or future rights under the Plan. If the designated Beneficiary does
not survive the Participant, all amounts which would have been paid to the deceased
Beneficiary shall be paid to the Participant’s estate. Any payment under the Plan which may
be made to a Beneficiary after the death of a Participant shall be made only to the
person(s) or trust(s) designated pursuant to this Section 12.6 by the Participant.
	 
	12.7	 	Claims Procedure. Any claim for benefits must initially be submitted in writing to
the Administrative Committee, 470 Wheelers Farms Road, Milford, CT 06460. The Administrative
Committee shall have complete discretion as to whether a claim shall be allowed or denied.
The Administrative Committee’s decision in this regard shall be final. The Administrative
Committee and/or other decision-makers shall not be liable to any person for any action taken
under this Section 12.7, except those actions undertaken with lack of good faith.

     (a) Initial Claim. In the event of a denial or limitation of any benefit or payment
due to a claimant, the claimant shall be given a written notification containing specific
reasons for the denial or limitation of his benefit. The written notification shall contain
specific reference to the pertinent Plan provisions on which the denial or limitation of his
benefit is based. In addition, it shall contain a description of any other material or
information necessary for the claimant to perfect a claim and an explanation of why such
material or information is necessary. The notification shall further provide appropriate
information as to the step to be taken if the claimant wishes to submit his claim for
review. This written notification shall be given to a claimant within ninety (90) days
after receipt of his claim by the Administrative Committee (forty-five (45) days in the
event of a claim based upon Disability) unless special circumstances required an extension
of time for processing the claim. If such an extension of time is required, written notice
of the extension shall be furnished to the claimant prior to the termination of said ninety
(90) day period (forty-five (45) day period in the event of a claim based upon Disability),
and such notice shall indicate the special circumstances which make the postponement
appropriate. In the event of a denial or limitation of his or her benefit, the claimant or
his duly authorized representative shall be permitted to review pertinent documents and to
submit to the Administrative Committee issues and comments in writing.

     (b) Appeal. In addition, the claimant or his or her duly authorized representatives
may make a written request for a full and fair review of his claim and its denial by the
Administrative Committee; provided that such written request is received by the
Administrative Committee (or its delegate to receive such request) within sixty (60) days
after receipt by the claimant of written notification of the denial or limitation of the
claim (one hundred eighty (180) days in the event of a claim based upon Disability). The
sixty (60) day requirement may be waived by the Administrative Committee in appropriate
cases. A decision shall be rendered by the Administrative Committee within sixty (60) days
(forty-five (45) days in the event of a claim based upon Disability) after the receipt of
the request for review, provided that where special circumstances require an extension of
time or processing the decision, it may be postponed with written notice to the claimant
prior to the expiration of the initial sixty (60) day period (forty-five (45) day

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period in the event of a claim based upon Disability) for an additional sixty (60) days
(forty-five (45) days in the event of a claim based upon Disability), but in no event shall
the decision be rendered more than one hundred twenty (120) days (ninety (90) days in the
event of a claim based upon Disability) after the receipt of such request for review. Any
decision by the Administrative Committee shall be furnished to the claimant in writing and
shall set forth: (i) the specific reason for the decision and the specific Plan provision
on which the decision is based; (ii) the specific plan provisions or documents that the
denial is based on; (iii) a statement that claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and other
relevant plan information; and (iv) a statement that claimant has the right to bring a civil
action under Section 502(a) of ERISA.

	12.8	 	Controlling State Law. To the extent not superseded by the laws of the United
States, the laws of the State of New York shall be controlling in all matters relating to this
Plan.
	 
	12.9	 	Severability. In case any provisions of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if the illegal and invalid provisions
had never been set forth.

THE WARNACO GROUP, INC.

Executed
this 3rd day of December, 2008.

	 	 	 	 	 
	By:

	 	/s/ Jay Dubiner
 

	 	 
	Name: Jay Dubiner	 	 
	Title: Senior Vice President, General Counsel
and Secretary	 	 

12EX-10.20

Exhibit 10.20

THE WARNACO GROUP, INC.

NON-EMPLOYEE DIRECTORS

DEFERRED COMPENSATION PLAN

As Amended and Restated

Effective November 5, 2008

FOREWORD

     The Plan as set forth herein is amended and restated effective November 5, 2008 to provide for
additional investment options for deferred compensation payable in cash and to incorporate certain
additional terms to the Plan the as set forth herein.

	1)	 	Purpose. The purpose of The Warnaco Group, Inc. Non-Employee Directors Deferred
Compensation Plan (the “Plan”) is to enable directors of The Warnaco Group, Inc. (the
“Company”) who are not also employees of the Company to defer the receipt of certain
compensation earned in their capacity as directors of the Company. This Plan is intended to
comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
shall be interpreted, operated and administered accordingly.
	 
	2)	 	Effective Date. The Plan was originally effective as of December 20, 2006, the date
on which it was adopted by the Nominating and Corporate Governance Committee (the “Committee”)
of the Board of Directors of the Company (the “Board”). The Plan was subsequently amended and
restated effective January 31, 2007, and further amended and restated as set forth herein
effective as of November 5, 2008.
	 
	3)	 	Eligibility. Directors of the Company who are not also employees of the Company or
any of its subsidiaries (“Directors”) are eligible to participate in the Plan. Each
individual whose service as a Director commences during a calendar year may, prior to or
within 30 days after the first commencement of such Director’s service on the Board, make a
deferral election with respect to Director Fees (as defined in Section 5) to be earned
following the date on which such election is made. Directors also will be eligible to elect
to defer during any annual enrollment period the Committee may establish in its discretion.
Any Director who ceases to be eligible to participate in the Plan (including by reason of the
Director becoming employed by the Company or any of its subsidiaries) shall no longer be
eligible to defer Director Fees as of the January 1st next following the year in
which the Director’s eligibility ceased.
	 
	4)	 	Administration. The Plan shall be administered by the Committee. The Committee
shall have the discretionary authority to adopt rules and regulations for carrying out the
Plan’s intent and to interpret, construe and implement the provisions thereof, as well as the
discretionary authority for making any

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	 	 	determinations under the Plan (including any factual determinations). Determinations made
by the Committee with respect to the Plan, any deferral made hereunder and any Director’s
account shall be final and binding on all persons, including but not limited to the
Company, each Director participating in the Plan and such Director’s beneficiaries.
	 
	5)	 	Deferral of Fees. Subject to such rules and procedures that the Committee may
establish from time to time, Directors may elect to defer under the Plan all amounts to be
paid to a Director, including annual retainer and committee meeting fees, whether payable in
the form of cash or unrestricted shares of Common Stock, par value $0.01 of the Company
(“Common Stock”) (such cash or unrestricted Common Stock compensation, collectively, “Director
Fees”), but excluding any payment or reimbursement with respect to a Director’s expenses
arising from his or her service as a member of the Board, in any case, that would otherwise be
payable in accordance with the Company’s policies as in effect from time to time. On and
after November 5, 2008, Directors will be permitted to defer the portion of any Director Fees
that are payable in cash in the form of Stock Units (as defined in Section 7(b)).
	 
	6)	 	Election Forms. In order to defer Director Fees that may be payable with respect to
a calendar year (and to elect to defer all or a portion of any such Director Fees payable in
cash into Stock Units), the Director must complete and submit to the Committee a deferral
election in such form, and at such time, as determined by the Committee in its sole
discretion. The deferral election must be submitted to the Committee prior to January
1st of the calendar year in which the service commences with respect to which the
Director Fees are payable. Once a Director has elected to defer his or her Director Fees, the
election is irrevocable and shall continue in force for the remainder of the Director’s
service as a member of the Board; provided, however, that: (i) a Director may make a new
deferral election (and revoke the prior election), provided that the new deferral election is
made prior to January 1st of any calendar year and applies only to the Director
Fees that will be incurred and payable during the upcoming calendar year and thereafter; and
(ii) a Director who ceases to meet the eligibility criteria described above will have his or
her election automatically revoked as of the January 1st next following the year in
which the Director’s eligibility ceased.
	 
	7)	 	Form of Deferral. The Company shall establish a separate deferred compensation
account on its books in the name of each Director who has elected to participate in the Plan.

	 	a)	 	Cash Deferral. With respect to Director Fees payable in the form of cash,
the Committee shall offer Directors a choice of two or more hypothetical investment
options, in which their contributions will be deemed to be invested, and the Committee may
add, eliminate, or modify the options from time to time. The Committee shall select such
options from among those then available under the Company’s tax-qualified 401(k) plan.
The investment return on hypothetical investment options shall be the same as the return
on the underlying actual

2

 

	 	 	 	investment, net of fees and expenses. Participants’ accounts will be valued, and
Participants may reallocate such accounts among hypothetical investment options, on a daily
basis. Participants will be fully vested with respect to such accounts.
	 
	 	b)	 	Stock Units Deferral. With respect to Director Fees payable in Common Stock
or Director Fees payable in cash that a Director elected to defer into Stock Units, a
number of stock units (“Stock Units”), to be issued under the Company’s 2003 and 2005
Stock Incentive Plans as amended from time to time or a successor plan thereto (the “Stock
Plan”), shall be credited to each such Director’s account as of each date (a “Deferral
Date”) on which amounts deferred under the Plan would otherwise have been paid to such
Director. The number of Stock Units credited to a Director’s account as of each Deferral
Date, as applicable, shall be calculated by dividing by the amount so deferred by the Fair
Market Value (as defined below) of a share of Common Stock as of such applicable Deferral
Date. For purposes of the Plan, the Fair Market Value of a share of Common Stock as of
any date shall be (i) the closing sales price per share of Common Stock on the national
securities exchange on which the Common Stock is principally traded or if the market is
closed as of such date, for the last preceding date on which there was a sale of such
Common Stock on such exchange or, (ii) if the Common Stock is not publicly traded as of
such date, such value per share as the Committee shall determine in its sole discretion.
The Stock Units so credited shall be immediately vested and non-forfeitable and shall
become payable as set forth herein. Except as set forth herein, the terms and conditions
of the Stock Units credited to Director’s accounts under the Plan shall be governed by the
Stock Plan, including, but not limited to, the equitable adjustment provisions set forth
in Section 4(b) thereof. Once a Director’s deferral election is irrevocable, a Director
may not elect to convert any Stock Units to cash or vice versa.

	8)	 	Dividend Equivalents. Additional Stock Units shall be credited to a Director’s
account as of each date (a “Dividend Date”) on which cash dividends and/or special dividends
and distributions are paid with respect to Common Stock, provided that at least one Stock Unit
is credited to such Director’s account as of the record date for such dividend or
distribution. The number of Stock Units to be credited to a Director’s account under the Plan
as of any Dividend Date shall equal the quotient obtained by dividing: (a) the product of (i)
the number of the Stock Units credited to such account on the record date for such dividend or
distribution and (ii) the per share dividend (or distribution value) payable on such Dividend
Date; by (b) the Fair Market Value of a share of Common Stock as of such Dividend Date. The
additional Stock Units so credited shall be immediately vested and non-forfeitable and shall
become payable as set forth herein.
	 
	9)	 	Restrictions on Transfer. The right of a Director or that of any other person to the
payment of deferred compensation or other benefits under the Plan may not be assigned,
transferred, pledged or encumbered except by will or by the laws of descent and distribution.

3

 

	10)	 	Payments. Each Director (or his or her beneficiary) shall receive a one-time
distribution of the balance then credited to the Director’s account under the Plan within 60
days immediately following the date upon which such Director’s service as a member of the
Board terminates for any reason. If a Director is no longer eligible to defer under this
Plan, but continues to serve as a member of the Board (including due to the Director becoming
an employee or related person of the Company or its affiliates), the date the Director’s
eligibility ceases shall be treated as the date of termination for purposes of this Section
10, provided any distribution resulting therefrom complies with Section 409A of the Code and
any guidance issued thereunder. Any distribution of Stock Units pursuant to the terms of
this provision shall be in the form of Common Stock. The number of shares of the Common Stock
payable upon such distribution shall equal the number of Stock Units credited to such
Director’s account as of the date of such distribution to be paid in Common Stock, less
applicable withholding. Fractional shares shall be payable in cash. The remainder of the
account balance (not in Stock Units) shall be paid in cash and, to the extent required by law,
shall be subject to withholding of Federal, state and local taxes.
	 
	11)	 	Unfunded Plan; Creditor’s Rights. The Plan is intended to be an “unfunded” plan.
The obligation of the Company under the Plan is purely contractual and shall not be funded or
secured in any way; provided, however, that the Company may establish a grantor trust of the
type commonly known as a “rabbi trust” for the purpose of satisfying its obligations under the
Plan and may, but shall not be required to, contribute cash or shares of Common Stock to such
trust from time to time. A Director or any beneficiary shall have only the interest of an
unsecured general creditor of the Company in respect of the Stock Units credited to such
Director’s account under the Plan.
	 
	12)	 	Successors in Interest. The obligations of the Company under the Plan shall be
binding upon any successor or successors of the Company, whether by merger, consolidation,
sale of assets or otherwise, and for this purpose reference herein to the Company shall be
deemed to include any such successor or successors.
	 
	13)	 	Governing Law; Interpretation. The Plan shall be construed and enforced in accordance
with, and governed by, the laws of the State of Delaware. The Company intends that
transactions under the Plan shall be exempt under Rule 16b-3 promulgated under Section 16 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), unless otherwise
determined by the Company. Notwithstanding the foregoing, a Director shall file such forms as
may be required with respect to any Director Fees as may be required under Section 16 of the
Exchange Act.
	 
	14)	 	Termination and Amendment of the Plan. The Committee may terminate the Plan at any
time; provided, that termination of the Plan shall not adversely affect the rights of a
Director or beneficiary thereof with respect to amounts previously deferred under the Plan
without the consent of such Director and that of such Director’s beneficiary and provided
further that any such termination comply with

4

 

	 	 	Section 409A of the Code and any requirements thereunder. The Committee may amend the Plan
at any time and from time to time; provided, however, that no such amendment shall
adversely affect the rights of any Director or beneficiary thereof with respect to amounts
previously deferred under the Plan.

5

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