Document:

exv10w4

    EXHIBIT 10.4

 

    POLO
    RALPH LAUREN CORPORATION

    

 

    2010
    LONG-TERM STOCK INCENTIVE PLAN

    

 

    As
    adopted on August 5, 2010

 

    Section 1.  PURPOSE
    AND HISTORY.  The purposes of this Polo Ralph
    Lauren Corporation 2010 Long-Term Stock Incentive Plan are to
    promote the interests of Polo Ralph Lauren Corporation and its
    stockholders by (i) attracting and retaining exceptional
    directors, officers and other employees and third party service
    providers of the Company and its Subsidiaries, as defined below;
    (ii) motivating such individuals by means of
    performance-related incentives to achieve longer-range
    performance goals; and (iii) enabling such individuals to
    participate in the long-term growth and financial success of the
    Company. The Plan was originally adopted by the Company’s
    Board of Directors on June 17, 2010, subject to the
    approval of the Company’s stockholders at the
    Company’s 2010 annual meeting of stockholders.

 

    Section 2.  DEFINITIONS.  As
    used in the Plan, the following terms shall have the meanings
    set forth below:

 

    “Affiliate” shall mean (i) any Person
    that, directly or indirectly, is controlled by, or controls or
    is under common control with, the Company and (ii) any
    entity in which the Company has a significant equity interest,
    in either case as determined by the Committee.

 

    “Award” shall mean any Option, Stock
    Appreciation Right, Restricted Stock Award, Restricted Stock
    Unit Award, Performance Award, Other Stock-Based Award or
    Performance Compensation Award.

 

    “Award Agreement” shall mean any agreement,
    contract, or other instrument or document, in any form (written
    or electronic) as determined by the Committee (including,
    without limitation, a Board or Committee resolution, an
    employment agreement, a notice, a certificate or a letter),
    evidencing any Award or the terms and conditions thereof, which
    may, but need not, be executed or acknowledged by a Participant.

 

    “Board” shall mean the Board of Directors of
    the Company.

 

    “Cause” shall mean in the case of a particular
    Award, unless the applicable Award Agreement states otherwise,
    (i) the Company or an Affiliate having “cause” to
    terminate a Participant’s employment or service, as defined
    in any employment or consulting agreement between the
    Participant and the Company or an Affiliate in effect at the
    time of such termination or (ii) in the absence of any such
    employment or consulting agreement (or the absence of any
    definition of “Cause” contained therein):
    (A) failure by the Participant to perform the duties of the
    Participant to the Company or an Affiliate (other than due to
    his or her Disability), provided that such conduct shall not
    constitute Cause unless and until such failure by Participant to
    perform his or her duties has not been cured to the satisfaction
    of the Company, in its sole discretion, within fifteen
    (15) days after notice of such failure has been given by
    the Company to Participant; (B) an act of fraud,
    embezzlement, theft, breach of fiduciary duty, dishonesty, or
    any other misconduct or any violation of law (other than a
    traffic violation) committed by the Participant; (C) any
    action by the Participant causing damage to or misappropriation
    of the Company’s assets; (D) the Participant’s
    wrongful disclosure of confidential information of the Company
    or any of its Affiliates; (E) the Participant’s breach
    of (x) any non-competition, non-solicitation,
    non-disparagement or other restrictive covenants to which he or
    she is subject under any employment or consulting agreement or
    otherwise,
    and/or
    (y) the Participant’s duty of loyalty; (F) the
    Participant’s breach of any employment policy of the
    Company, including, but not limited to, conduct relating to
    falsification of business records, violation of the
    Company’s code of business conduct & ethics,
    harassment, creation of a hostile work environment, excessive
    absenteeism, insubordination, violation of the Company’s
    policy on drug & alcohol use, or violent acts or
    threats of violence; (G) performance by the Participant of
    his or her employment duties in a manner deemed by the
    Committee, in its sole discretion, to be grossly negligent; or
    (H) the commission of any act by the Participant, whether
    or not performed in the workplace, which subjects or, if
    publicly known, would be likely to subject the Company to public
    ridicule or embarrassment, or would likely be detrimental or
    damaging to the Company’s reputation, goodwill, or
    relationships with its customers,

 

    suppliers, vendors, licensees or employees. Any determination of
    whether Cause exists shall be made by the Committee in its sole
    discretion.

 

    “Change of Control” shall mean the occurrence
    of any of the following: (i) the sale, lease, transfer,
    conveyance or other disposition, in one or a series of related
    transactions, of all or substantially all of the assets of the
    Company to any “person” or “group” (as such
    terms are used in Sections 13(d)(3) and 14(d)(2) of the
    Exchange Act other than Permitted Holders; (ii) any person
    or group is or becomes the “beneficial owner” (as
    defined in
    Rules 13d-3
    and 13d-5
    under the Exchange Act, except that a person shall be deemed to
    have “beneficial ownership” of all Shares that any
    such person has the right to acquire, whether such right is
    exercisable immediately or only after the passage of time),
    directly or indirectly, of more than 50 percent of the
    total voting power of the voting stock of the Company, including
    by way of merger, consolidation or otherwise; provided, however,
    that for purposes of this Plan, the following acquisitions shall
    not constitute a Change in Control: (I) any acquisition by
    the Company or any Affiliate, (II) any acquisition by any
    employee benefit plan sponsored or maintained by the Company or
    any Affiliate, (III) any acquisition by one or more of the
    Permitted Holders, or (IV) any acquisition which complies
    with clauses (A), (B) and (C) of subsection (v)
    below; (iii) during any period of twelve
    (12) consecutive months, Present
    and/or New
    Directors cease for any reason to constitute a majority of the
    Board; (iv) the Permitted Holders’ beneficial
    ownership of the total voting power of the voting stock of the
    Company falls below 30 percent and either Ralph Lauren is
    not nominated for a position on the Board, or he stands for
    election to the Board and is not elected; (v) the
    consummation of a reorganization, recapitalization, merger,
    consolidation, statutory share exchange or similar form of
    corporate transaction involving the Company that requires the
    approval of the Company’s stockholders, whether for such
    transaction or the issuance of securities in the transaction (a
    “Business Combination”), if immediately following such
    Business Combination: (A) more than 50% of the total voting
    power of (x) the entity resulting from such Business
    Combination (the “Surviving Company”), or (y) if
    applicable, the ultimate parent entity that directly or
    indirectly has beneficial ownership of sufficient voting
    securities eligible to elect a majority of the members of the
    board of directors (or the analogous governing body) of the
    Surviving Company (the “Parent Company”), is
    represented by the Shares that were outstanding immediately
    prior to such Business Combination (or, if applicable, is
    represented by shares into which the shares of voting stock of
    the Company were converted pursuant to such Business
    Combination), and such voting power among the holders thereof is
    in substantially the same proportion as the voting power was
    among the holders of the Shares that were outstanding
    immediately prior to the Business Combination, (B) no
    person (other than any employee benefit plan sponsored or
    maintained by the Surviving Company or the Parent Company, or
    one or more Permitted Holders), is or becomes the beneficial
    owner, directly or indirectly, of 50% or more of the total
    voting power of the outstanding voting securities eligible to
    elect members of the board of directors of the Parent Company
    (or the analogous governing body) (or, if there is no Parent
    Company, the Surviving Company) and (C) at least a majority
    of the members of the board of directors (or the analogous
    governing body) of the Parent Company (or, if there is no Parent
    Company, the Surviving Company) following the consummation of
    the Business Combination were Board members at the time of the
    Board’s approval of the execution of the initial agreement
    providing for such Business Combination; or (vi) the
    stockholders of the Company approve a plan of complete
    liquidation or dissolution of the Company.

 

    “Code” shall mean the Internal Revenue Code of
    1986, as amended from time to time.

 

    “Committee” shall mean either (i) the
    Board or (ii) a committee of the Board designated by the
    Board to administer the Plan and composed of not less two
    directors, each of whom is required to be a “Non-Employee
    Director” (within the meaning of
    Rule 16b-3)
    and an “outside director” (within the meaning of
    Section 162(m) of the Code) to the extent
    Rule 16b-3
    and Section 162(m) of the Code, respectively, are
    applicable to the Company and the Plan. If at any time such a
    committee has not been so designated, the Board shall constitute
    the Committee.

 

    “Company” shall mean Polo Ralph Lauren
    Corporation, together with any successor thereto.

 

    “Disability” shall mean that as a result of a
    Participant’s incapacity due to physical or mental illness,
    the Participant shall have been (or the Committee reasonably
    determines that the Participant is reasonably likely to

    

    2

 

    be) absent and unable to perform the duties of the
    Participant’s position on a full-time basis for an entire
    period of six consecutive months.

 

    “Effective Date” shall mean the date on which
    this Plan is approved by the Stockholders of the Company at the
    Company’s 2010 annual meeting of Stockholders.

 

    “Exchange Act” shall mean the Securities
    Exchange Act of 1934, as amended.

 

    “Fair Market Value” shall mean, (A) with
    respect to any property other than Shares, the fair market value
    of such property determined by such methods or procedures as
    shall be established from time to time by the Committee and
    (B) with respect to the Shares, as of any date,
    (i) the mean between the high and low sales prices of the
    Shares (provided that the Committee may in its discretion use
    the closing sales price) as reported on the New York Stock
    Exchange for such date (or if not then trading on the New York
    Stock Exchange, the mean between the high and low sales price of
    the Shares (provided that the Committee may in its discretion
    use the closing sales price) on the stock exchange or
    over-the-counter
    market on which the Shares are principally trading on such
    date), or if, there were no sales on such date, on the closest
    preceding date on which there were sales of Shares or
    (ii) in the event there shall be no public market for the
    Shares on such date, the fair market value of the Shares as
    determined in good faith by the Committee.

 

    “Full Value Award” shall mean an Award which is
    other than in the form of an Option or Stock Appreciation Right,
    and that is settled by the issuance of Shares.

 

    “Good Reason” shall mean in the case of a
    particular Award, unless the applicable Award Agreement states
    otherwise, (i) the Participant having “good
    reason” to terminate his or her employment or service, as
    defined in any employment or consulting agreement between the
    Participant and the Company or an Affiliate in effect at the
    time of such termination or (ii) in the absence of any such
    employment or consulting agreement (or the absence of any
    definition of “good reason” contained therein), Good
    Reason shall not apply to such Participant.

 

    “Incentive Stock Option” shall mean a right to
    purchase Shares from the Company that is granted under
    Section 6 of the Plan and that is intended to meet the
    requirements of Section 422 of the Code or any successor
    provision thereto.

 

    “Negative Discretion” shall mean the discretion
    authorized by the Plan to be applied by the Committee to
    eliminate or reduce the size of a Performance Compensation
    Award; PROVIDED that the exercise of such discretion would not
    cause the Performance Compensation Award to fail to qualify as
    “performance-based compensation” under
    Section 162(m) of the Code. By way of example and not by
    way of limitation, in no event shall any discretionary authority
    granted to the Committee by the Plan including, but not limited
    to, Negative Discretion, be used to (a) grant or provide
    payment in respect of Performance Compensation Awards for a
    Performance Period if the Performance Goals for such Performance
    Period have not been attained; or (b) increase a
    Performance Compensation Award above the maximum amount payable
    under Sections 4(a) or 11(d)(vi) of the Plan.
    Notwithstanding anything herein to the contrary, in no event
    shall Negative Discretion be exercised by the Committee with
    respect to any Option or Stock Appreciation Right (other than an
    Option or Stock Appreciation Right that is intended to be a
    Performance Compensation Award under Section 11 of the
    Plan).

 

    “New Directors” shall mean any directors whose
    election by the Board or whose nomination for election by the
    shareholders of the Company was approved by a vote of a majority
    of the directors of the Company who, at the time of such vote,
    were either Present Directors or New Directors but excluding any
    such individual whose initial assumption of office occurs solely
    as a result of an actual or threatened proxy contest with
    respect to the election or removal of directors or other actual
    or threatened solicitation of proxies or consents by or on
    behalf of a person other than the Board.

 

    “Non-Qualified Stock Option” shall mean a right
    to purchase Shares from the Company that is granted under
    Section 6 of the Plan and that is not intended to be an
    Incentive Stock Option.

 

    “Option” shall mean an Incentive Stock Option
    or a Non-Qualified Stock Option.

    

    3

 

    “Other Stock-Based Award” shall mean any right
    granted under Section 10 of the Plan.

 

    “Participant” shall mean any Person eligible to
    receive an Award under Section 5 of the Plan and selected
    by the Committee to receive an Award under the Plan.

 

    “Performance Award” shall mean any right
    granted under Section 9 of the Plan.

 

    “Performance Compensation Award” shall mean any
    Award designated by the Committee as a Performance Compensation
    Award pursuant to Section 11 of the Plan.

 

    “Performance Criteria” shall mean the criterion
    or criteria that the Committee shall select for purposes of
    establishing the Performance Goal(s) for a Performance Period
    with respect to any Performance Compensation Award under the
    Plan. The Performance Criteria that will be used to establish
    the Performance Goal(s) shall be based on the attainment of
    specific levels of performance of the Company (and/or one or
    more Subsidiaries, Affiliates, divisions or operational
    and/or
    business units, product lines, brands, business segments,
    administrative departments or any combination of the foregoing)
    and shall be limited to the following: (a) net earnings or
    net income (before or after taxes); (b) basic or diluted
    earnings per share (before or after taxes); (c) net revenue
    or net revenue growth; (d) gross revenue or gross revenue
    growth, or gross profit or gross profit growth; (e) net
    operating profit (before or after taxes); (f) return
    measures (including, but not limited to, return on investment,
    assets, capital, employed capital, invested capital, equity, or
    sales); (g) cash flow measures (including, but not limited
    to, operating cash flow, free cash flow, and cash flow return on
    capital), which may but are not required to be measured on a per
    share basis; (h) earnings before or after taxes, interest,
    depreciation
    and/or
    amortization; (i) gross or net operating margins;
    (j) productivity ratios; (k) share price (including,
    but not limited to, growth measures and total stockholder
    return); (l) expense targets or cost reduction goals;
    (m) general and administrative expense savings;
    (n) operating efficiency; (o) objective measures of
    customer satisfaction; (p) working capital targets;
    (q) measures of economic value added or other “value
    creation” metrics; (r) inventory control;
    (s) enterprise value; (t) customer retention;
    (u) competitive market metrics; (v) employee
    retention; (w) timely completion of new product rollouts;
    (x) timely launch of new facilities; (y) objective
    measures of personal targets, goals or completion of projects
    (including but not limited to succession and hiring projects,
    completion of specific acquisitions, reorganizations or other
    corporate transactions or capital-raising transactions,
    expansions of specific business operations and meeting
    divisional or project budgets); (z) royalty income; (aa)
    same store sales (comparable sales), comparisons of continuing
    operations to other operations; (bb) market share; (cc) new
    store openings (gross or net), store remodelings; (dd) cost
    of capital, debt leverage year-end cash position or book value;
    (ee) strategic objectives, development of new product lines and
    related revenue, sales and margin targets, franchisee growth and
    retention, menu design and growth, co-branding or international
    operations; or (ii) any combination of the foregoing. Any
    one or more of the Performance Criteria may be stated as a
    percentage of another Performance Criterion, or used on an
    absolute or relative basis to measure the performance of the
    Company, Subsidiary
    and/or
    Affiliate as a whole or any divisions or operational
    and/or
    business units, product lines, brands, business segments, or
    administrative departments of the Company, Subsidiary
    and/or
    Affiliate or any combination thereof, as the Committee may deem
    appropriate, or any of the above Performance Criteria may be
    compared to the performance of a group of comparator companies,
    or published or special index that the Committee, in its sole
    discretion, deems appropriate, or compared to various stock
    market indices. The Committee also has the authority to provide
    for accelerated vesting of any Award based on the achievement of
    Performance Goals pursuant to the Performance Criteria specified
    in this paragraph. To the extent required under
    Section 162(m) of the Code, the Committee shall, within the
    first 90 days of a Performance Period (or, if longer,
    within the maximum period allowed under Section 162(m) of
    the Code), define in an objective fashion the manner of
    calculating the Performance Criteria it selects to use for such
    Performance Period. In the event that applicable tax
    and/or
    securities laws change to permit Committee discretion to alter
    the governing Performance Criteria without obtaining stockholder
    approval of such changes, the Committee shall have sole
    discretion to make such changes without obtaining stockholder
    approval.

 

    “Performance Formula” shall mean, for a
    Performance Period, the one or more objective formulas applied
    against the relevant Performance Goal to determine, with regard
    to the Performance Compensation

    

    4

 

    Award of a particular Participant, whether all, some portion but
    less than all, or none of the Performance Compensation Award has
    been earned for the Performance Period.

 

    “Performance Goals” shall mean, for a
    Performance Period, the one or more goals established by the
    Committee for the Performance Period based upon the Performance
    Criteria. The Committee is authorized at any time during the
    first 90 days of a Performance Period, or at any time
    thereafter (but only to the extent the exercise of such
    authority after the first 90 days of a Performance Period
    would not cause the Performance Compensation Awards granted to
    any Participant for the Performance Period to fail to qualify as
    “performance-based compensation” under
    Section 162(m) of the Code), in its sole and absolute
    discretion, to adjust or modify the calculation of a Performance
    Goal for such Performance Period to the extent permitted under
    Section 162(m) of the Code in order to prevent the dilution
    or enlargement of the rights of Participants based on the
    following events: (a) asset write-downs,
    (b) litigation or claim judgments or settlements,
    (c) the effect of changes in tax laws, accounting
    principles, or other laws or provisions affecting reported
    results, (d) any reorganization and restructuring programs,
    (e) extraordinary nonrecurring items as described in the
    Financial Accounting Standards Board Accounting Standards
    Codification Topic
    225-20 (or
    any successor pronouncement thereto)
    and/or in
    management’s discussion and analysis of financial condition
    and results of operations appearing in the Company’s annual
    report to stockholders for the applicable year,
    (f) acquisitions or divestitures, (g) any other
    specific, unusual or nonrecurring events, or objectively
    determinable category thereof, (h) foreign exchange gains
    and losses, and (i) a change in the Company’s fiscal
    year. To the extent such inclusions or exclusions affect Awards
    to Participants, they shall be prescribed in a form that meets
    the requirements of Section 162(m) of the Code for
    deductibility.

 

    “Performance Period” shall mean the one or more
    periods of time of at least one year in duration, as the
    Committee may select, over which the attainment of one or more
    Performance Goals will be measured for the purpose of
    determining a Participant’s right to and the payment of a
    Performance Compensation Award.

 

    “Permitted Holders” shall mean, as of the date
    of determination, (i) any and all of Ralph Lauren, his
    spouse, his siblings and their spouses, and descendants of any
    of them (whether natural or adopted) (collectively, the
    “Lauren Group”) and (ii) any trust established
    and maintained primarily for the benefit of any member of the
    Lauren Group and any entity controlled by any member of the
    Lauren Group.

 

    “Person” shall mean any individual,
    corporation, partnership, association, joint-stock company,
    trust, unincorporated organization, government or political
    subdivision thereof or other entity.

 

    “Plan” shall mean this Polo Ralph Lauren
    Corporation 2010 Long-Term Stock Incentive Plan.

 

    “Present Directors” shall mean individuals who
    at the beginning of any one year period were members of the
    Board.

 

    “Prior Plan” shall mean the Polo Ralph Lauren
    Corporation 1997 Long-Term Stock Incentive Plan, as amended.

 

    “Restricted Stock” shall mean any Share granted
    under Section 8 of the Plan.

 

    “Restricted Stock Unit” shall mean any unit
    granted under Section 8 of the Plan.

 

    “Rule 16b-3”
    shall mean
    Rule 16b-3
    as promulgated and interpreted by the SEC under the Exchange
    Act, or any successor rule or regulation thereto as in effect
    from time to time.

 

    “SEC” shall mean the Securities and Exchange
    Commission or any successor thereto and shall include the Staff
    thereof.

 

    “Shares” shall mean the shares of Class A
    Common Stock of the Company, $.01 par value, or such other
    securities of the Company (i) into which such common shares
    shall be changed by reason of a recapitalization, merger,
    consolidation,
    split-up,
    combination, exchange of shares or other similar transaction or
    (ii) as may be determined by the Committee pursuant to
    Section 4(b).

 

    “Stock Appreciation Right” shall mean any right
    granted under Section 7 of the Plan.

    

    5

 

    “Subsidiary” shall mean (i) any entity
    that, directly or indirectly, is controlled by the Company and
    (ii) any entity in which the Company has a significant
    equity interest, in either case as determined by the Committee.

 

    “Substitute Awards” shall have the meaning
    specified in Section 4(c).

 

    “Third Party Service Provider” means any
    consultant, agent, advisor, or independent contractor who is a
    natural person and who renders services to the Company, a
    Subsidiary, or an Affiliate, that (a) are not in connection
    with the offer and sale of the Company’s securities in a
    capital raising transaction, and (b) do not directly or
    indirectly promote or maintain a market for the Company’s
    securities.

 

    Section 3.  EFFECTIVE
    DATE AND ADMINISTRATION.

 

    (a) The Plan shall be effective as of the Effective Date.
    The expiration date of the Plan, on and after which date no
    Awards may be granted hereunder, shall be the tenth anniversary
    of the Effective Date; provided, however, that
    such expiration shall not affect Awards then outstanding, and
    the terms and conditions of the Plan shall continue to apply to
    such Awards.

 

    (b) The Plan shall be administered by the Committee.
    Subject to the terms of the Plan and applicable law, and in
    addition to other express powers and authorizations conferred on
    the Committee by the Plan, the Committee shall have full power
    and authority to: (i) designate Participants;
    (ii) determine the type or types of Awards to be granted to
    a Participant and designate those Awards which shall constitute
    Performance Compensation Awards; (iii) determine the number
    of Shares to be covered by, or with respect to which payments,
    rights, or other matters are to be calculated in connection
    with, Awards; (iv) determine the terms and conditions of
    any Award; (v) determine whether, to what extent, and under
    what circumstances Awards may be settled or exercised in cash,
    Shares, other securities, other Awards or other property, or
    canceled, forfeited, or suspended and the method or methods by
    which Awards may be settled, exercised, canceled, forfeited, or
    suspended; (vi) determine whether, to what extent, and
    under what circumstances cash, Shares, other securities, other
    Awards, other property, and other amounts payable with respect
    to an Award (subject to Section 162(m) of the Code with
    respect to Performance Compensation Awards) shall be deferred
    either automatically or at the election of the holder thereof or
    of the Committee; (vii) interpret, administer reconcile any
    inconsistency, correct any default
    and/or
    supply any omission in the Plan and any instrument or agreement
    relating to, or Award made under, the Plan;
    (viii) establish, amend, suspend, or waive such rules and
    regulations and appoint such agents as it shall deem appropriate
    for the proper administration of the Plan; (ix) establish
    and administer Performance Goals and certify whether, and to
    what extent, they have been attained; and (x) make any
    other determination and take any other action that the Committee
    deems necessary or desirable for the administration of the Plan.

 

    (c) Unless otherwise expressly provided in the Plan, all
    designations, determinations, interpretations, and other
    decisions under or with respect to the Plan or any Award shall
    be within the sole discretion of the Committee, may be made at
    any time and shall be final, conclusive, and binding upon all
    Persons, including the Company, any Affiliate, any Participant,
    any holder or beneficiary of any Award, and any stockholder.

 

    (d) The mere fact that a Committee member shall fail to
    qualify as a “Non-Employee Director” or “outside
    director” within the meaning of
    Rule 16b-3
    and Code Section 162(m), respectively, shall not invalidate
    any award made by the Committee which award is otherwise validly
    made under the Plan.

 

    (e) No member of the Board, the Committee or any employee
    or agent of the Company (each such person, an
    “Indemnifiable Person”) shall be liable for any action
    taken or omitted to be taken or any determination made with
    respect to the Plan or any Award hereunder (unless constituting
    fraud or a willful criminal act or omission). Each Indemnifiable
    Person shall be indemnified and held harmless by the Company
    against and from any loss, cost, liability, or expense
    (including attorneys’ fees) that may be imposed upon or
    incurred by such Indemnifiable Person in connection with or
    resulting from any action, suit or proceeding to which such
    Indemnifiable Person may be a party or in which such
    Indemnifiable Person may be involved by reason of any action
    taken or omitted to be taken or determination made under the
    Plan or any Award Agreement and against and from any and all
    amounts paid by such Indemnifiable Person with the
    Company’s approval, in settlement thereof, or paid by such
    Indemnifiable Person in satisfaction of any judgment in any such
    action, suit or proceeding against such Indemnifiable Person,
    and the Company shall advance to such Indemnifiable Person any
    such expenses promptly upon written request (which

    

    6

 

    request shall include an undertaking by the Indemnifiable Person
    to repay the amount of such advance if it shall ultimately be
    determined as provided below that the Indemnifiable Person is
    not entitled to be indemnified); provided that the Company shall
    have the right, at its own expense, to assume and defend any
    such action, suit or proceeding and once the Company gives
    notice of its intent to assume the defense, the Company shall
    have sole control over such defense with counsel of the
    Company’s choice. The foregoing right of indemnification
    shall not be available to an Indemnifiable Person to the extent
    that a final judgment or other final adjudication (in either
    case not subject to further appeal) binding upon such
    Indemnifiable Person determines that the acts or omissions or
    determinations of such Indemnifiable Person giving rise to the
    indemnification claim resulted from such Indemnifiable
    Person’s fraud or willful criminal act or omission or that
    such right of indemnification is otherwise prohibited by law or
    by the Company’s Certificate of Incorporation or By Laws.
    The foregoing right of indemnification shall not be exclusive of
    or otherwise supersede any other rights of indemnification to
    which such Indemnifiable Persons may be entitled under the
    Company’s Amended and Restated Certificate of Incorporation
    or By Laws, as a matter of law, individual indemnification
    agreement or contract or otherwise, or any other power that the
    Company may have to indemnify such Indemnifiable Persons or hold
    them harmless.

 

    (f) With respect to any Performance Compensation Award
    granted under the Plan, the Plan shall be interpreted and
    construed in accordance with Section 162(m) of the Code.

 

    (g) Notwithstanding the foregoing, the Committee may
    delegate, in a manner consistent with Section 157(c) of the
    Delaware General Corporation Law (or other applicable law), to
    one or more officers of the Company (i) the authority to
    grant awards to Participants who are not officers or directors
    of the Company subject to Section 16 of the Exchange Act or
    “covered employees” within the meaning of
    Section 162(m) of the Code or (ii) the authority to
    make certain determinations permitted or required to be made by
    the Committee under the Plan (including, without limitation,
    determinations relating to the existence of Cause or Disability).

 

    (h) Notwithstanding anything to the contrary contained in
    the Plan, the Board may, in its sole discretion, at any time and
    from time to time, grant Awards and administer the Plan with
    respect to such Awards. Any such actions by the Board shall be
    subject to the applicable rules of the New York Stock Exchange
    or any other securities exchange or inter-dealer quotation
    system on which the Common Stock is listed or quoted. In any
    such case, the Board shall have all the authority granted to the
    Committee under the Plan.

 

    Section 4.  SHARES AVAILABLE
    FOR AWARDS.

 

    (a) SHARES AVAILABLE.  Subject to
    adjustment as provided in Section 4(b), the aggregate
    number of Shares with respect to which Awards may be granted
    under the Plan shall be the sum (such sum, the “Absolute
    Share Limit”) of (i) the number of Shares remaining
    available for issuance as of the Effective Date under the Prior
    Plan that are not subject to outstanding awards under the Prior
    Plan plus (ii) 3,000,000; the maximum number of Shares with
    respect to which Awards may be granted to any Participant who is
    a director of the Company but not an employee of the Company in
    any fiscal year may not exceed 25,000; the maximum number of
    Shares with respect to which Options and Stock Appreciation
    Rights may be granted to any Participant in any fiscal year
    shall be 1,000,000 and the maximum number of Shares which may be
    paid to a Participant in the Plan in connection with the
    settlement of any Award(s) designated as “Performance
    Compensation Awards” in respect of a single Performance
    Period shall be 1,000,000 or, in the event such Performance
    Compensation Award is paid in cash, the equivalent cash value
    thereof. In addition, of the Shares reserved for issuance under
    the Plan pursuant to this Section 4(a), no more than the
    Absolute Share Limit may be issued pursuant to Incentive Stock
    Options. If, after the Effective Date of the Plan, any Shares
    covered by an Award granted under the Plan or an award granted
    under the Prior Plan, or to which such an Award relates, are
    forfeited, or if an Award granted under the Plan (or an award
    granted under the Prior Plan) has expired, terminated or been
    canceled for any reason whatsoever (other than by reason of
    exercise or vesting), then the Shares covered by such Award (or
    award granted under the Prior Plan) shall again be, or shall
    become, Shares with respect to which Awards may be granted
    hereunder. In addition, Shares delivered (either directly or by
    means of attestation or withholding) in full or partial payment
    of the exercise price of any Award (or an award granted under
    the Prior Plan) or of any tax withholding obligation, shall be
    deducted from the number of Shares delivered to the Participant
    pursuant to such Award (or award granted under the Prior Plan)
    for purposes of determining the number of Shares acquired
    pursuant to the Plan.

    

    7

 

    (b) ADJUSTMENTS.  Notwithstanding any
    provisions of the Plan to the contrary, in the event that the
    Committee determines that any dividend or other distribution
    (whether in the form of cash, Shares, other securities, or other
    property), recapitalization, stock split, reverse stock split,
    reorganization, merger, consolidation,
    split-up,
    spin-off, combination, repurchase, or exchange of Shares or
    other securities of the Company, issuance of warrants or other
    rights to purchase Shares or other securities of the Company, or
    other similar corporate transaction or event affects the Shares
    such that an adjustment is determined by the Committee in its
    discretion to be appropriate in order to prevent dilution or
    enlargement of the benefits or potential benefits intended to be
    made available under the Plan, then the Committee shall, in such
    manner as it may deem equitable, adjust any or all of
    (i) the number of Shares or other securities of the Company
    (or number and kind of other securities or property) with
    respect to which Awards may be granted, (ii) the number of
    Shares or other securities of the Company (or number and kind of
    other securities or property) which may be delivered in respect
    of Awards or with respect to which Awards may be granted under
    the Plan (including without limitation adjusting any or all of
    the limitations in Section 4(a) of the Plan),
    (iii) the terms of any outstanding Award, including,
    without limitation, (1) the number of Shares or other
    securities of the Company (or number and kind of other
    securities or other property) subject to outstanding Awards or
    to which outstanding Awards relate (2) the grant or
    exercise price with respect to any Award or (3) any
    applicable performance measures (including, without limitation,
    Performance Criteria and Performance Goals), (iv) if deemed
    appropriate, make provision for a payment in cash, Shares, other
    securities or other property, or any combination thereof, to the
    holder of an outstanding Award in consideration for the
    cancellation of such Award which, in the case of Options and
    Stock Appreciation Rights shall equal the excess if any, of the
    Fair Market Value of the Shares (which if applicable may be
    based upon the price per Share received or to be received by
    other stockholders of the Company in such event) subject to such
    Options or Stock Appreciation Rights over the aggregate exercise
    price or strike price of such Options or Stock Appreciation
    Rights (it being understood that, in such event, any Option or
    SAR having a per Share exercise price or strike price equal to,
    or in excess of, the Fair Market Value of a Share subject
    thereto may be canceled and terminated without any payment or
    consideration therefor), and (v) accelerating the
    exercisability of, lapse of restrictions on, or termination of,
    Awards or providing for a period of time (which shall not be
    required to be more than ten (10) days) for Participants to
    exercise outstanding Awards prior to the occurrence of such
    event (and any such Award not so exercised shall terminate upon
    the occurrence of such event);

 

    PROVIDED, however, that in the case of any “equity
    restructuring” (within the meaning of the Financial
    Accounting Standards Board Accounting Standards Codification
    Topic 718 (or any successor pronouncement thereto)), the
    Committee shall make an equitable or proportionate adjustment to
    outstanding Awards to reflect such equity restructuring. Any
    adjustment in Incentive Stock Options under this
    Section 4(b) (other than any cancellation of Incentive
    Stock Options) shall be made only to the extent not constituting
    a “modification” within the meaning of
    Section 424(h)(3) of the Code, and any adjustments under
    this Section 4(b) shall be made in a manner which does not
    adversely affect the exemption provided pursuant to
    Rule 16b-3
    under the Exchange Act. Any such adjustment shall be conclusive
    and binding for all purposes.

 

    (c) SUBSTITUTE AWARDS.  Subject to
    Section 12(b), Awards may, in the discretion of the
    Committee, be made under the Plan in assumption of, or in
    substitution for, outstanding awards previously granted by the
    Company or its Affiliates or a company acquired by the Company
    or with which the Company combines (“Substitute
    Awards”). The number of Shares underlying any Substitute
    Awards shall be counted against the aggregate number of Shares
    available for Awards under the Plan.

 

    (d) SOURCES OF SHARES DELIVERABLE UNDER
    AWARDS.  Any Shares delivered pursuant to an Award
    may consist, in whole or in part, of authorized and unissued
    Shares, treasury Shares, Shares purchased on the open market, or
    by private purchase, or a combination of the foregoing.
    Following the Effective Date, no further awards shall be granted
    under any Prior Plan.

 

    (e) FULL VALUE AWARDS.  Except with
    respect to a maximum of five percent (5%) of the Shares
    authorized under the Plan, any Full Value Awards that vest
    solely on the basis of the Participant’s continued
    employment with or provision of service to the Company shall not
    provide for vesting that is any more rapid than annual pro rata
    vesting over a three (3) year period, and any Full Value
    Awards that vest upon the attainment of performance goals shall
    provide for a performance period of at least twelve
    (12) months. The vesting of Full Value Awards may only be
    accelerated upon (i) death, Disability, retirement or other
    termination of employment or service of the Participant or
    (ii) a Change of Control.

    

    8

 

    Section 5.  ELIGIBILITY.  Any
    director, officer or employee of, or Third Party Service
    Provider to, the Company or any of its Subsidiaries (including
    any prospective director, officer, employee or Third Party
    Service Provider) shall be eligible to be designated a
    Participant.

 

    Section 6.  STOCK
    OPTIONS.

 

    (a) GRANT.  Subject to the provisions of
    the Plan, the Committee shall have sole and complete authority
    to determine the Participants to whom Options shall be granted,
    the number of Shares to be covered by each Option, the exercise
    price therefor and the conditions and limitations applicable to
    the exercise of the Option. The Committee shall have the
    authority to grant Incentive Stock Options, or to grant
    Non-Qualified Stock Options, or to grant both types of Options.
    In the case of Incentive Stock Options, the terms and conditions
    of such grants shall be subject to and comply with such rules as
    may be prescribed by Section 422 of the Code, as from time
    to time amended, and any regulations implementing such statute.
    All Options when granted under the Plan are intended to be
    Non-Qualified Stock Options, unless the applicable Award
    Agreement expressly states that the Option is intended to be an
    Incentive Stock Option. If an Option is intended to be an
    Incentive Stock Option, and if for any reason such Option (or
    any portion thereof) shall not qualify as an Incentive Stock
    Option, then, to the extent of such nonqualification, such
    Option (or portion thereof) shall be regarded as a Non-Qualified
    Stock Option appropriately granted under the Plan; provided that
    such Option (or portion thereof) otherwise complies with the
    Plan’s requirements relating to Non-Qualified Stock Options.

 

    (b) EXERCISE PRICE.  The Committee shall
    establish the exercise price at the time each Option is granted,
    which exercise price shall be set forth in the applicable Award
    Agreement, but shall be no less than the Fair Market Value of a
    Share at the date of grant.

 

    (c) EXERCISE.  Each Option shall be
    exercisable at such times and subject to such terms and
    conditions as the Committee may, in its sole discretion, specify
    in the applicable Award Agreement or thereafter. Each Option
    shall expire at such time as the Committee shall determine at
    the time of grant; provided, however, no Option shall be
    exercisable after the tenth anniversary of the grant date. The
    Committee may impose such conditions with respect to the
    exercise of Options, including without limitation, any relating
    to the application of federal or state securities laws, as it
    may deem necessary or advisable. Options with an exercise price
    equal to or greater than the Fair Market Value per Share as of
    the date of grant are intended to qualify as
    “performance-based compensation” under
    Section 162(m) of the Code.

 

    (d) PAYMENT.

 

    (i) No Shares shall be delivered pursuant to any exercise
    of an Option until payment in full of the aggregate exercise
    price therefor is received by the Company. Such payment may be
    made (x) in cash, or its equivalent or (y) by
    tendering to the Company Shares valued at Fair Market Value at
    the time the Option is exercised, which are not the subject of
    any pledge or other security interest or which have such other
    characteristics, if any, as may be determined by the Committee,
    or (z) subject to such rules as may be established by the
    Committee, through delivery of irrevocable instructions to a
    broker to sell the Shares otherwise deliverable upon the
    exercise of the Option and to deliver promptly to the Company an
    amount equal to the aggregate exercise price, or by a
    combination of the foregoing, provided that the combined value
    of all cash and cash equivalents and the Fair Market Value of
    any such Shares so tendered to the Company as of the date of
    such tender is at least equal to such aggregate exercise price.

 

    (ii) Wherever in this Plan or any Award Agreement a
    Participant is permitted to pay the exercise price of an Option
    or taxes relating to the exercise of an Option by delivering
    Shares, the Participant may, subject to procedures satisfactory
    to the Committee, satisfy such delivery requirement by
    presenting proof of beneficial ownership of such Shares, in
    which case the Company shall treat the Option as exercised
    without further payment and shall withhold such number of Shares
    from the Shares acquired by the exercise of the Option.

 

    (e) NOTIFICATION UPON DISQUALIFYING DISPOSITION OF AN
    INCENTIVE STOCK OPTION.  Each Participant awarded
    an Incentive Stock Option under the Plan shall notify the
    Company in writing immediately after the date he or she makes a
    disqualifying disposition of any Shares acquired pursuant to the
    exercise of such Incentive Stock Option. A disqualifying
    disposition is any disposition (including, without limitation,
    any sale) of any Shares acquired pursuant to any Incentive Stock
    Option before the later of (A) two years after the Date of
    Grant of the Incentive Stock Option or (B) one year after
    the date of exercise of the Incentive Stock Option. The Company

    

    9

 

    may, if determined by the Committee and in accordance with
    procedures established by the Committee, retain possession, as
    agent for the applicable Participant, of any Shares acquired
    pursuant to the exercise of an Incentive Stock Option until the
    end of the period described in the preceding sentence, subject
    to complying with any instructions from such Participant as to
    the sale of such Shares.

 

    Section 7.  STOCK
    APPRECIATION RIGHTS.

 

    (a) GRANT.  Subject to the provisions of
    the Plan, the Committee shall have sole and complete authority
    to determine the Participants to whom Stock Appreciation Rights
    shall be granted, the number of Shares to be covered by each
    Stock Appreciation Right Award, the strike price thereof (which
    shall be no less than the Fair Market Value of a Share at the
    date of grant) and the conditions and limitations applicable to
    the exercise thereof. Stock Appreciation Rights with a strike
    price equal to or greater than the Fair Market Value per Share
    as of the date of grant are intended to qualify as
    “performance-based compensation” under
    Section 162(m) of the Code. Stock Appreciation Rights may
    be granted in tandem with another Award, in addition to another
    Award, or freestanding and unrelated to another Award. Stock
    Appreciation Rights granted in tandem with or in addition to an
    Award may be granted either at the same time as the Award or at
    a later time.

 

    (b) EXERCISE AND PAYMENT.  A Stock
    Appreciation Right shall entitle the Participant to receive an
    amount equal to the excess of the Fair Market Value of a Share
    on the date of exercise of the Stock Appreciation Right over the
    strike price thereof. The Committee shall determine whether a
    Stock Appreciation Right shall be settled in cash, Shares or a
    combination of cash and Shares.

 

    (c) OTHER TERMS AND CONDITIONS.  Subject
    to the terms of the Plan and any applicable Award Agreement, the
    Committee shall determine, at or after the grant of a Stock
    Appreciation Right, the term, methods of exercise, methods and
    form of settlement, and any other terms and conditions of any
    Stock Appreciation Right; PROVIDED, HOWEVER, that no Stock
    Appreciation rights shall be exercisable after the tenth
    anniversary of the date of its grant. Any such determination by
    the Committee may be changed by the Committee from time to time
    and may govern the exercise of Stock Appreciation Rights granted
    or exercised prior to such determination as well as Stock
    Appreciation Rights granted or exercised thereafter. The
    Committee may impose such conditions or restrictions on the
    exercise of any Stock Appreciation Right as it shall deem
    appropriate.

 

    Section 8.  RESTRICTED
    STOCK AND RESTRICTED STOCK UNITS.

 

    (a) GRANT.  Subject to the provisions of
    the Plan, the Committee shall have sole and complete authority
    to determine the Participants to whom Shares of Restricted Stock
    and Restricted Stock Units shall be granted, the number of
    Shares of Restricted Stock
    and/or the
    number of Restricted Stock Units to be granted to each
    Participant, the duration of the period during which, and the
    conditions, if any, under which, the Restricted Stock and
    Restricted Stock Units may be forfeited to the Company, and the
    other terms and conditions of such Awards.

 

    (b) TRANSFER RESTRICTIONS.  Shares of
    Restricted Stock and Restricted Stock Units may not be sold,
    assigned, transferred, pledged or otherwise encumbered, except,
    in the case of Restricted Stock, as provided in the Plan or the
    applicable Award Agreements. Upon the grant of Restricted Stock,
    the Committee shall cause a stock certificate registered in the
    name of the Participant to be issued or shall cause Shares to be
    registered in the name of the Participant and held in book-entry
    form subject to the Company’s directions. The Committee may
    also require that certificates issued in respect of Shares of
    Restricted Stock be registered in the name of the Participant
    and deposited by such Participant, together with a stock power
    endorsed in blank, with the Company. Upon the lapse of the
    restrictions applicable to such Shares of Restricted Stock, the
    Company shall deliver such certificates to the Participant or
    the Participant’s legal representative. Subject to the
    restrictions set forth in this Section 8 and the applicable
    Award Agreement, the Participant generally shall have the rights
    and privileges of a stockholder as to such Restricted Stock,
    including without limitation the right to vote such Restricted
    Stock. To the extent Shares of Restricted Stock are forfeited,
    any stock certificates issued to the Participant evidencing such
    shares shall be returned to the Company, and all rights of the
    Participant to such Shares and as a stockholder with respect
    thereto shall terminate without further obligation on the part
    of the Company.

 

    (c) PAYMENT.  Each Restricted Stock Unit
    shall have a value equal to the Fair Market Value of a Share.
    Restricted Stock Units shall be paid in cash, Shares, other
    securities or other property, as determined in the sole
    discretion of the Committee, upon the lapse of the restrictions
    applicable thereto, or otherwise in accordance with

    

    10

 

    the applicable Award Agreement. Dividends paid on any Shares of
    Restricted Stock may be paid directly to the Participant,
    withheld by the Company subject to vesting of the Restricted
    Shares pursuant to the terms of the applicable Award Agreement,
    or may be reinvested in additional Shares of Restricted Stock or
    in additional Restricted Stock Units, as determined by the
    Committee in its sole discretion.

 

    (d) MINIMUM VESTING
    REQUIREMENTS.  Notwithstanding the foregoing,
    (i) except as provided in Section 4(e), any Awards of
    Shares of Restricted Stock
    and/or
    Restricted Stock Units that are Full Value Awards and vest
    solely on the basis of the Participant’s continued
    employment with or provision of service to the Company shall not
    provide for vesting that is any more rapid than annual pro rata
    vesting over a three (3) year period, and any Awards of
    Shares of Restricted Stock
    and/or
    Restricted Stock Units that are Full Value Awards and vest upon
    the attainment of performance goals (whether or not combined
    with other conditions) shall provide for a performance period of
    at least twelve (12) months; and (ii) the vesting of
    Awards of Shares of Restricted Stock
    and/or
    Restricted Stock Units that are Full Value Awards may only be
    accelerated upon (A) death, Disability, retirement or other
    termination of employment or service of the Participant or
    (B) a Change of Control.

 

    Section 9.  PERFORMANCE
    AWARDS.

 

    (a) GRANT.  The Committee shall have sole
    and complete authority to determine the Participants who shall
    receive a “Performance Award”, which shall consist of
    a right which is (i) denominated in cash or Shares,
    (ii) valued, as determined by the Committee, in accordance
    with the achievement of such performance goals during such
    performance periods as the Committee shall establish, and
    (iii) payable at such time and in such form as the
    Committee shall determine.

 

    (b) TERMS AND CONDITIONS.  Subject to the
    terms of the Plan and any applicable Award Agreement, the
    Committee shall determine the performance goals to be achieved
    during any performance period, the length of any performance
    period, the amount of any Performance Award and the amount and
    kind of any payment or transfer to be made pursuant to any
    Performance Award.

 

    (c) PAYMENT OF PERFORMANCE
    AWARDS.  Performance Awards may be paid in a lump
    sum or in installments following the close of the performance
    period or, in accordance with procedures established by the
    Committee, on a deferred basis.

 

    (d) MINIMUM VESTING
    REQUIREMENTS.  Notwithstanding the foregoing,
    (i) except as provided in Section 4(e), any
    Performance Awards that are Full Value Awards and vest upon the
    attainment of performance goals shall provide for a performance
    period of at least twelve (12) months; and (ii) the
    vesting of Performance Awards that are Full Value Awards may
    only be accelerated upon (A) death, Disability, retirement
    or other termination of employment or service of the Participant
    or (B) a Change of Control.

 

    Section 10.  OTHER
    STOCK-BASED AWARDS.

 

    (a) GENERAL.  The Committee shall have
    authority to grant to Participants an “Other Stock-Based
    Award”, which shall consist of any right which is
    (i) not an Award described in Sections 6 through 9
    above and (ii) an Award of Shares or an Award denominated
    or payable in, valued in whole or in part by reference to, or
    otherwise based on or related to, Shares (including, without
    limitation, securities convertible into Shares), as deemed by
    the Committee to be consistent with the purposes of the Plan;
    provided that any such rights must comply, to the extent deemed
    desirable by the Committee, with
    Rule 16b-3
    and applicable law. Subject to the terms of the Plan and any
    applicable Award Agreement, the Committee shall determine the
    terms and conditions of any such Other Stock-Based Award,
    including the price, if any, at which securities may be
    purchased pursuant to any Other Stock-Based Award granted under
    this Plan.

 

    (b) DIVIDEND EQUIVALENTS.  In the sole and
    complete discretion of the Committee, an Award, whether made as
    an Other Stock-Based Award under this Section 10 or as an
    Award granted pursuant to Sections 6 through 9 hereof, may
    provide the Participant with dividends or dividend equivalents,
    payable in cash, Shares, other securities or other property on a
    current or deferred basis; provided, that no dividend
    equivalents shall be payable in respect of outstanding
    (i) Options or Stock Appreciation Rights or
    (ii) unearned Performance Compensation Awards or other
    unearned Awards subject to performance conditions (other than or
    in addition to the passage of time) (although

    

    11

 

    dividend equivalents may be accumulated in respect of unearned
    Awards and paid after such Awards are earned and become payable
    or distributable).

 

    (c) MINIMUM VESTING
    REQUIREMENTS.  Notwithstanding the foregoing,
    (i) except as provided in Section 4(e), any
    “Other Stock-Based Awards” that are Full Value Awards
    and vest solely on the basis of the Participant’s continued
    employment with or provision of service to the Company shall not
    provide for vesting that is any more rapid than annual pro rata
    vesting over a three (3) year period, and any “Other
    Stock-Based Awards” that are Full Value Awards and vest
    upon the attainment of performance goals shall provide for a
    performance period of at least twelve (12) months; and
    (ii) the vesting of “Other Stock-Based Awards”
    that are Full Value Awards may only be accelerated for
    (A) death, Disability, retirement or other termination of
    employment or service of the Participant or (B) a Change of
    Control.

 

    Section 11.  PERFORMANCE
    COMPENSATION AWARDS.

 

    (a) GENERAL.  The Committee shall have the
    authority, at the time of grant of any Award described in
    Sections 6 through 10 (other than Options and Stock
    Appreciation Rights granted with an exercise price or strike
    price, as the case may be, equal to or greater than the Fair
    Market Value per Share on the date of grant), to designate such
    Award as a Performance Compensation Award in order to qualify
    such Award as “performance-based compensation” under
    Section 162(m) of the Code.

 

    (b) ELIGIBILITY.  The Committee will, in
    its sole discretion, designate within the first 90 days of
    a Performance Period (or, if longer, within the maximum period
    allowed under Section 162(m) of the Code) which
    Participants will be eligible to receive Performance
    Compensation Awards in respect of such Performance Period.
    However, designation of a Participant eligible to receive an
    Award hereunder for a Performance Period shall not in any manner
    entitle the Participant to receive payment in respect of any
    Performance Compensation Award for such Performance Period. The
    determination as to whether or not such Participant becomes
    entitled to payment in respect of any Performance Compensation
    Award shall be decided solely in accordance with the provisions
    of this Section 11. Moreover, designation of a Participant
    eligible to receive an Award hereunder for a particular
    Performance Period shall not require designation of such
    Participant eligible to receive an Award hereunder in any
    subsequent Performance Period and designation of one Person as a
    Participant eligible to receive an Award hereunder shall not
    require designation of any other Person as a Participant
    eligible to receive an Award hereunder in such period or in any
    other period.

 

    (c) DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE
    COMPENSATION AWARDS.  With regard to a particular
    Performance Period, the Committee shall have full discretion to
    select the length of such Performance Period, the type(s) of
    Performance Compensation Awards to be issued, the Performance
    Criteria that will be used to establish the Performance Goal(s),
    the kind(s)
    and/or
    level(s) of the Performance Goals(s) is(are) to apply to the
    Company and the Performance Formula. Within the first
    90 days of a Performance Period (or, if longer, within the
    maximum period allowed under Section 162(m) of the Code),
    the Committee shall, with regard to the Performance Compensation
    Awards to be issued for such Performance Period, exercise its
    discretion with respect to each of the matters enumerated in the
    immediately preceding sentence of this Section 11(c) and
    record the same in writing.

 

    (d) PAYMENT OF PERFORMANCE COMPENSATION AWARDS

 

    (i) CONDITION TO RECEIPT OF
    PAYMENT.  Unless otherwise provided in the
    applicable Award Agreement, a Participant must be employed by
    the Company on the last day of a Performance Period to be
    eligible for payment in respect of a Performance Compensation
    Award for such Performance Period.

 

    (ii) LIMITATION.  A Participant shall be
    eligible to receive payment in respect of a Performance
    Compensation Award only to the extent that: (1) the
    Performance Goals for such period are achieved; and (2) the
    Performance Formula as applied against such Performance Goals
    determines that all or some portion of such Participant’s
    Performance Award has been earned for the Performance Period.

 

    (iii) CERTIFICATION.  Following the
    completion of a Performance Period, the Committee shall meet to
    review and certify in writing whether, and to what extent, the
    Performance Goals for the Performance Period have been achieved
    and, if so, to calculate and certify in writing that amount of
    the Performance Compensation Awards

    

    12

 

    earned for the period based upon the Performance Formula. The
    Committee shall then determine the actual size of each
    Participant’s Performance Compensation Award for the
    Performance Period and, in so doing, may apply Negative
    Discretion, if and when it deems appropriate.

 

    (iv) NEGATIVE DISCRETION.  In determining
    the actual size of an individual Performance Award for a
    Performance Period, the Committee may reduce or eliminate the
    amount of the Performance Compensation Award earned under the
    Performance Formula in the Performance Period through the use of
    Negative Discretion if, in its sole judgment, such reduction or
    elimination is appropriate.

 

    (v) TIMING OF AWARD PAYMENTS.  The Awards
    granted for a Performance Period shall be paid to Participants
    as soon as administratively possible following completion of the
    certifications required by this Section 11.

 

    (vi) MAXIMUM AWARD
    PAYABLE.  Notwithstanding any provision contained
    in this Plan to the contrary, the maximum Performance
    Compensation Award payable to any one Participant under the Plan
    for a Performance Period is 1,000,000 Shares or, in the
    event the Performance Compensation Award is paid in cash, the
    equivalent cash value thereof on the last day of the Performance
    Period to which such Award relates. Furthermore, any Performance
    Compensation Award that has been deferred shall not (between the
    date as of which the Award is deferred and the payment date)
    increase (A) with respect to Performance Compensation Award
    that is payable in cash, by a measuring factor for each fiscal
    year greater than a reasonable rate of interest set by the
    Committee or (B) with respect to a Performance Compensation
    Award that is payable in Shares, by an amount greater than the
    appreciation of a Share from the date such Award is deferred to
    the payment date.

 

    (e) MINIMUM VESTING
    REQUIREMENTS.  Notwithstanding the foregoing,
    (i) except as provided in Section 4(e), any
    Performance Compensation Awards that are Full Value Awards and
    vest upon the attainment of performance goals shall provide for
    a performance period of at least twelve (12) months; and
    (ii) the vesting of Performance Compensation Awards that
    are Full Value Awards may only be accelerated upon
    (A) death, Disability, retirement or other termination of
    employment or service of the Participant or (B) a Change of
    Control.

 

    Section 12.  AMENDMENT
    AND TERMINATION.

 

    (a) AMENDMENTS TO THE PLAN.  The Board may
    amend, alter, suspend, discontinue, or terminate the Plan or any
    portion thereof at any time; provided that (a) no such
    amendment, alteration, suspension, discontinuation or
    termination shall be made without stockholder approval if such
    approval is necessary to comply with any tax or regulatory
    requirement applicable to the Plan; and provided, further, that
    any such amendment, alteration, suspension, discontinuance or
    termination that would impair the rights of any Participant or
    any holder or beneficiary of any Award theretofore granted shall
    not to that extent be effective without the consent of the
    affected Participant, holder or beneficiary, and (b) no
    material revision to the Plan shall be made without stockholder
    approval. A “material revision” shall include, without
    limitation: (i) a material increase in the number of Shares
    available under the Plan (other than an increase solely to
    reflect a reorganization, stock split, merger, spin-off or
    similar transaction); (ii) an expansion of the types of
    Awards available under the Plan; (iii) a material expansion
    of the class of employees, directors or other service providers
    eligible to participate in the Plan; (iv) a material
    extension of the term of the Plan; (v) a material change to
    the method of determining the exercise price of Options or
    strike price of Stock Appreciation Rights granted under the
    Plan; and (vi) the deletion or limitation of any provision
    prohibiting repricing of Options or Stock Appreciation Rights.

 

    (b) AMENDMENTS TO AWARDS.  The Committee
    may, to the extent consistent with the terms of any applicable
    Award Agreement, waive any conditions or rights under, amend any
    terms of, or alter, suspend, discontinue, cancel or terminate,
    any Award theretofore granted or the associated Award Agreement,
    prospectively or retroactively; provided that any such waiver,
    amendment, alteration, suspension, discontinuance, cancellation
    or termination that would impair the rights of any Participant
    or any holder or beneficiary of any Award theretofore granted
    shall not to that extent be effective without the consent of the
    affected Participant, holder or beneficiary; and provided,
    further, that, without stockholder approval, except as otherwise
    permitted under Section 4(b), (i) no amendment or
    modification may reduce the exercise price of any Option or the
    strike price of any Stock Appreciation Right, (ii) the
    Committee may not cancel any outstanding Option or Stock
    Appreciation Right and replace it with a new Option or Stock
    Appreciation Right (with a lower exercise price or strike price,
    as the case

    

    13

 

    may be) or other Award or cash in a manner which would either
    (A) be reportable on the Company’s proxy statement as
    Options or Stock Appreciation Rights which have been
    “repriced” (as such term is used in Item 402 of
    Regulation S-K
    promulgated under the Exchange Act), or (B) cause any
    Option or Stock Appreciation Right to fail to qualify for equity
    accounting treatment and (iii) the Committee may not take
    any other action which is considered a “repricing” for
    purposes of the stockholder approval rules of any applicable
    stock exchange on which the securities of the Company are listed.

 

    (c) ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN
    UNUSUAL OR NONRECURRING EVENTS.  The Committee is
    hereby authorized to make adjustments in the terms and
    conditions of, and the criteria included in, Awards (including,
    without limitation, the actions described in Section 4(b)
    hereof) in recognition of unusual or nonrecurring events
    (including, without limitation, the events described in
    Section 4(b) hereof) affecting the Company, any Affiliate,
    or the financial statements of the Company or any Affiliate, or
    of changes in applicable laws, rules, rulings, regulations, or
    other requirements of any governmental body or securities
    exchange or inter-deal quotation system, or accounting
    principles, whenever the Committee determines that such
    adjustments are appropriate in order to prevent dilution or
    enlargement of the benefits or potential benefits intended to be
    made available under the Plan.

 

    (d) FORFEITURE EVENTS.  For purposes of
    this Section 12(d), a “named executive officer”
    means a Participant who is a named executive officer of the
    Company (as defined for purposes of the executive compensation
    disclosure rules of the Exchange Act). The Committee may specify
    in an Award that a named executive officer’s rights,
    payments, and benefits with respect to an Award shall be subject
    to reduction, cancellation, forfeiture, or recoupment, in the
    reasonable discretion of the Committee, upon the occurrence of
    certain specified events, in addition to any otherwise
    applicable vesting or performance conditions of an Award. Such
    events may include, but shall not be limited to, termination of
    the named executive officer’s employment for cause,
    material violation of material written policies of the Company,
    or breach of noncompetition, confidentiality, or other
    restrictive covenants that may apply to the named executive
    officer, as determined by the Committee in its reasonable
    discretion. In addition, with respect to an Award, if, as a
    result of a named executive officer’s intentional
    misconduct or gross negligence, as determined by the Committee
    in its reasonable discretion, the Company is required to prepare
    an accounting restatement due to the material noncompliance of
    the Company with any financial reporting requirement under the
    securities laws, the Committee may, in its reasonable
    discretion, require the named executive officer to promptly
    reimburse the Company for the amount of any payment (whether in
    cash, Shares, other securities or other property) previously
    received by the named executive officer pursuant to any Award
    (or otherwise forfeit to the Company any outstanding Award) that
    was earned or accrued (or exercised or settled) during the
    twelve (12) month period following the earlier of the first
    public issuance or filing with the United States Securities and
    Exchange Commission of any financial document embodying such
    financial reporting requirement that required such accounting
    restatement.

 

    Section 13.  CHANGE
    OF CONTROL.  In the event that a
    Participant’s employment with the Company is terminated by
    the Company without Cause or by the Participant for Good Reason,
    in each case on or within 12 months following the date of a
    Change of Control, any outstanding Awards then held by such
    affected Participant which are unexercisable or otherwise
    unvested shall automatically be deemed exercisable or otherwise
    vested, as the case may be, as of immediately prior to such
    termination of employment; provided, that in the event the
    vesting or exercisability of any Award would otherwise be
    subject to the achievement of performance conditions, a portion
    of any such Award that shall become fully vested and immediately
    exercisable shall be based on (a) actual performance
    through the date of termination as determined by the Committee
    or (b) if the Committee determines that measurements of
    actual performance cannot be reasonably assessed, the assumed
    achievement of target performance as determined by the Committee.

 

    Section 14.  GENERAL
    PROVISIONS.

 

    (a) NONTRANSFERABILITY.

 

    (i) Each Award, and each right under any Award, shall be
    exercisable only by the Participant during the
    Participant’s lifetime, or, if permissible under applicable
    law, by the Participant’s legal guardian or representative.

    

    14

 

    (ii) No Award may be assigned, alienated, pledged,
    attached, sold or otherwise transferred or encumbered by a
    Participant otherwise than by will or by the laws of descent and
    distribution, and any such purported assignment, alienation,
    pledge, attachment, sale, transfer or encumbrance shall be void
    and unenforceable against the Company or any Affiliate; provided
    that the designation of a beneficiary shall not constitute an
    assignment, alienation, pledge, attachment, sale, transfer or
    encumbrance.

 

    (iii) Notwithstanding the foregoing, the Committee may in
    the applicable Award Agreement evidencing an Option granted
    under the Plan or at any time thereafter in an amendment to an
    Award Agreement provide that Options granted hereunder which are
    not intended to qualify as Incentive Stock Options may be
    transferred by the Participant to whom such Option was granted
    (the “Grantee”) without consideration, subject to such
    rules as the Committee may adopt to preserve the purposes of the
    Plan, to:

 

    (A) the Grantee’s spouse, children or grandchildren
    (including adopted and stepchildren and grandchildren)
    (collectively, the “Immediate Family”);

 

    (B) a trust solely for the benefit of the Grantee and his
    or her Immediate Family; or

 

    (C) a partnership or limited liability company whose only
    partners or stockholders are the Grantee and his or her
    Immediate Family members;

 

    (each transferee described in clauses (A), (B) and
    (C) above is hereinafter referred to as a “Permitted
    Transferee”); PROVIDED that the Grantee gives the Committee
    advance written notice describing the terms and conditions of
    the proposed transfer and the Committee notifies the Grantee in
    writing that such a transfer would comply with the requirements
    of the Plan and any applicable Award Agreement evidencing the
    option.

 

    The terms of any option transferred in accordance with the
    immediately preceding sentence shall apply to the Permitted
    Transferee and any reference in the Plan or in an Award
    Agreement to an optionee, Grantee or Participant shall be deemed
    to refer to the Permitted Transferee, except that
    (a) Permitted Transferees shall not be entitled to transfer
    any Options, other than by will or the laws of descent and
    distribution; (b) Permitted Transferees shall not be
    entitled to exercise any transferred Options unless there shall
    be in effect a registration statement on an appropriate form
    covering the shares to be acquired pursuant to the exercise of
    such Option if the Committee determines that such a registration
    statement is necessary or appropriate, (c) the Committee or
    the Company shall not be required to provide any notice to a
    Permitted Transferee, whether or not such notice is or would
    otherwise have been required to be given to the Grantee under
    the Plan or otherwise and (d) the consequences of
    termination of the Grantee’s employment by, or services to,
    the Company under the terms of the Plan and applicable Award
    Agreement shall continue to be applied with respect to the
    Grantee, following which the Options shall be exercisable by the
    Permitted Transferee only to the extent, and for the periods,
    specified in the Plan and the applicable Award Agreement.

 

    (b) NO RIGHTS TO AWARDS.  No Participant
    or other Person shall have any claim to be granted any Award,
    and there is no obligation for uniformity of treatment of
    Participants, or holders or beneficiaries of Awards. The terms
    and conditions of Awards and the Committee’s determinations
    and interpretations with respect thereto need not be the same
    with respect to each Participant (whether or not such
    Participants are similarly situated).

 

    (c) SHARE CERTIFICATES.  All certificates
    for Shares or other securities of the Company or any Affiliate
    delivered under the Plan (or, if applicable, a notice evidencing
    a book entry notation) pursuant to any Award or the exercise
    thereof shall be subject to such stop transfer orders and other
    restrictions as the Committee may deem advisable under the Plan
    or the rules, regulations, and other requirements of the
    Securities and Exchange Commission, any stock exchange upon
    which such Shares or other securities are then listed, and any
    applicable Federal or state laws, and the Committee may cause a
    legend or legends to be put on any such certificates, as
    applicable, make appropriate reference to such restrictions.

 

    (d) WITHHOLDING.

 

    (i) A Participant may be required to pay to the Company or
    any Affiliate, and the Company or any Affiliate shall have the
    right and is hereby authorized to withhold from any Award, from
    any payment due or transfer made under any Award or under the
    Plan or from any compensation or other amount owing to a
    Participant, the amount (in cash, Shares, other securities,
    other Awards or other property) of any applicable withholding
    taxes in respect of an

    

    15

 

    Award, its exercise, or any payment or transfer under an Award
    or under the Plan and to take such other action as may be
    necessary in the opinion of the Company to satisfy all
    obligations for the payment of such taxes. The Committee may
    provide for additional cash payments to holders of Awards to
    defray or offset any tax arising from the grant, vesting,
    exercise or payments of any Award.

 

    (ii) Without limiting the generality of clause (i)
    above, a Participant may satisfy, in whole or in part, the
    foregoing withholding liability by delivery of Shares owned by
    the Participant (which are not subject to any pledge or other
    security interest) with a Fair Market Value equal to such
    withholding liability or by having the Company withhold from the
    number of Shares otherwise issuable pursuant to the exercise of
    the option a number of Shares with a Fair Market Value equal to
    such withholding liability.

 

    (iii) Notwithstanding any provision of this Plan to the
    contrary, in connection with the transfer of an Option to a
    Permitted Transferee pursuant to Section 14(a) of the Plan,
    the Grantee shall remain liable for any withholding taxes
    required to be withheld upon the exercise of such Option by the
    Permitted Transferee.

 

    (e) 409A OF THE CODE.  Notwithstanding any
    provision of the Plan to the contrary, it is intended that the
    provisions of this Plan comply with Section 409A of the
    Code, and all provisions of this Plan shall be construed and
    interpreted in a manner consistent with the requirements for
    avoiding taxes or penalties under Section 409A of the Code.
    Each Participant is solely responsible and liable for the
    satisfaction of all taxes and penalties that may be imposed on
    or in respect of such Participant in connection with this Plan
    or any other plan maintained by the Company (including any taxes
    and penalties under Section 409A of the Code), and neither
    the Company nor any Affiliate shall have any obligation to
    indemnify or otherwise hold such Participant (or any
    beneficiary) harmless from any or all of such taxes or
    penalties. Notwithstanding any provision of the Plan to the
    contrary and only to the extent required to avoid the imputation
    of any tax, penalty or interest pursuant to Section 409A of
    the Code, if any Participant is a “specified employee”
    within the meaning of Section 409A(a)(2)(B)(i) of the Code,
    no payments in respect of any Award that are “deferred
    compensation” subject to Section 409A of the Code
    shall be made to such Participant prior to the date that is six
    months after the date of Participant’s “separation
    from service” (as defined in Section 409A of the Code)
    or, if earlier, Participant’s date of death. Following any
    applicable six (6) month delay, all such delayed payments
    will be paid in a single lump sum on the earliest permissible
    payment date. With respect to any Award that is considered
    “deferred compensation” subject to Section 409A
    of the Code, references in the Plan to “termination of
    employment” (and substantially similar phrases) shall mean
    “separation from service” within the meaning of
    Section 409A of the Code. Unless otherwise provided by the
    Committee, in the event that the timing of payments in respect
    of any Award (that would otherwise be considered “deferred
    compensation” subject to Section 409A of the Code)
    would be accelerated upon the occurrence of (i) a Change in
    Control, no such acceleration shall be permitted unless the
    event giving rise to the Change in Control satisfies the
    definition of a change in the ownership or effective control of
    a corporation, or a change in the ownership of a substantial
    portion of the assets of a corporation pursuant to
    Section 409A of the Code or (ii) a Disability, no such
    acceleration shall be permitted unless the Disability also
    satisfies the definition of “Disability” pursuant to
    Section 409A of the Code. For purposes of Section 409A
    of the Code, each of the payments that may be made in respect of
    any Award granted under the Plan is designated as separate
    payments.

 

    (f) AWARD AGREEMENTS.  Each Award
    hereunder shall be evidenced by an Award Agreement which shall
    be delivered to the Participant and shall specify the terms and
    conditions of the Award and any rules applicable thereto,
    including but not limited to the effect on such Award of the
    death, Disability or termination of employment or service of a
    Participant and the effect, if any, of such other events as may
    be determined by the Committee.

 

    (g) NO LIMIT ON OTHER COMPENSATION
    ARRANGEMENTS.  Nothing contained in the Plan shall
    prevent the Company or any Affiliate from adopting or continuing
    in effect other compensation arrangements, which may, but need
    not, provide for the grant of Options, Restricted Stock, Shares
    and other types of Awards provided for hereunder (subject to
    stockholder approval if such approval is required), and such
    arrangements may be either generally applicable or applicable
    only in specific cases.

 

    (h) NO RIGHT TO EMPLOYMENT.  The grant of
    an Award shall not be construed as giving a Participant the
    right to be retained in the employ of, or in any consulting
    relationship to, the Company or any Affiliate. Further, the
    Company or an Affiliate may at any time dismiss a Participant
    from employment or discontinue any consulting

    

    16

 

    relationship, free from any liability or any claim under the
    Plan, unless otherwise expressly provided in the Plan or in any
    Award Agreement.

 

    (i) NO RIGHTS AS STOCKHOLDER.  Subject to
    the provisions of the applicable Award, no Participant or holder
    or beneficiary of any Award shall have any rights as a
    stockholder with respect to any Shares to be distributed under
    the Plan until he or she has become the holder of such Shares.
    Notwithstanding the foregoing, in connection with each grant of
    Restricted Stock hereunder, the applicable Award shall specify
    if and to what extent the Participant shall not be entitled to
    the rights of a stockholder in respect of such Restricted Stock.

 

    (j) GOVERNING LAW.  The validity,
    construction, and effect of the Plan and any rules and
    regulations relating to the Plan and any Award Agreement shall
    be determined in accordance with the laws of the State of
    New York.

 

    (k) SEVERABILITY.  If any provision of the
    Plan or any Award is or becomes or is deemed to be invalid,
    illegal, or unenforceable in any jurisdiction or as to any
    Person or Award, or would disqualify the Plan or any Award under
    any law deemed applicable by the Committee, such provision shall
    be construed or deemed amended to conform the applicable laws,
    or if it cannot be construed or deemed amended without, in the
    determination of the Committee, materially altering the intent
    of the Plan or the Award, such provision shall be stricken as to
    such jurisdiction, Person or Award and the remainder of the Plan
    and any such Award shall remain in full force and effect.

 

    (l) OTHER LAWS.  The Committee may refuse
    to issue or transfer any Shares or other consideration under an
    Award if, acting in its sole discretion, it determines that the
    issuance or transfer of such Shares or such other consideration
    might violate any applicable law or regulation or entitle the
    Company to recover the same under Section 16(b) of the
    Exchange Act, and any payment tendered to the Company by a
    Participant, other holder or beneficiary in connection with the
    exercise of such Award shall be promptly refunded to the
    relevant Participant, holder or beneficiary. Without limiting
    the generality of the foregoing, no Award granted hereunder
    shall be construed as an offer to sell securities of the
    Company, and no such offer shall be outstanding, unless and
    until the Committee in its sole discretion has determined that
    any such offer, if made, would be in compliance with all
    applicable requirements of the U.S. federal securities laws.

 

    (m) NO TRUST OR
    FUND CREATED.  Neither the Plan nor any Award
    shall create or be construed to create a trust or separate fund
    of any kind or a fiduciary relationship between the Company or
    any Affiliate and a Participant or any other Person. To the
    extent that any Person acquires a right to receive payments from
    the Company or any Affiliate pursuant to an Award, such right
    shall be no greater than the right of any unsecured general
    creditor of the Company or any Affiliate.

 

    (n) NO FRACTIONAL SHARES.  No fractional
    Shares shall be issued or delivered pursuant to the Plan or any
    Award, and the Committee shall determine whether cash, other
    securities, or other property shall be paid or transferred in
    lieu of any fractional Shares or whether such fractional Shares
    or any rights thereto shall be canceled, terminated, or
    otherwise eliminated.

 

    (o) PAYMENTS TO PERSONS OTHER THAN
    PARTICIPANTS.  If the Committee or the senior
    human resource officer of the Company shall find that any Person
    to whom any amount is payable under the Plan is unable to care
    for his affairs because of illness or accident, or is a minor,
    or has died, then any payment due to such Person or his estate
    (unless a prior claim therefor has been made by a duly appointed
    legal representative) may, if the Committee or the senior human
    resource officer of the Company so directs the Company, be paid
    to his spouse, child, relative, an institution maintaining or
    having custody of such Person, or any other Person deemed by the
    Committee to be a proper recipient on behalf of such Person
    otherwise entitled to payment. Any such payment shall be a
    complete discharge of the liability of the Committee and the
    Company therefor.

 

    (p) RELATIONSHIP TO OTHER BENEFITS.  No
    payment or benefit under the Plan shall be taken into account in
    determining any benefits under any pension, retirement, profit
    sharing, group insurance or other benefit plan of the Company or
    any Subsidiary except as otherwise specifically provided in such
    other plan.

 

    (q) HEADINGS.  Headings are given to the
    Sections and subsections of the Plan solely as a convenience to
    facilitate reference. Such headings shall not be deemed in any
    way material or relevant to the construction or interpretation
    of the Plan or any provision thereof.

    

    17

 

    Section 15.  TERM
    OF THE PLAN.

 

    (a) EXPIRATION DATE.  No Award shall be
    granted under the Plan on or after the tenth anniversary of the
    Effective Date. Unless otherwise expressly provided in the Plan
    or in an applicable Award Agreement, any Award granted hereunder
    may, and the authority of the Board or the Committee to amend,
    alter, adjust, suspend, discontinue, or terminate any such Award
    or to waive any conditions or rights under any such Award shall,
    continue after the tenth anniversary of the Effective Date.

 

    (b) SECTION 162(M) REAPPROVAL.  The
    provisions of the Plan regarding Performance Compensation Awards
    shall be disclosed and reapproved by stockholders of the Company
    no later than the first stockholder meeting that occurs in the
    fifth year following the year that stockholders previously
    approved such provisions, in order for Performance Compensation
    Awards granted after such time to be exempt from the deduction
    limitations of Section 162(m) of the Code. Nothing in this
    Section 15(b), however, shall affect the validity of
    Performance Compensation Awards granted after such time if such
    stockholder approval has not been obtained.

    

    18exv10w5

    EXHIBIT 10.5

 

    Execution
    Copy

 

    SECOND AMENDMENT, dated as of June 17, 2010 (this
    “Amendment”), to the Credit Agreement, dated as
    of November 28, 2006 (as amended and restated as of
    May 22, 2007, the ‘‘Credit
    Agreement”), among POLO RALPH LAUREN CORPORATION, a
    Delaware corporation (the ‘‘Borrower”),
    POLO JP ACQUI B.V., a private company with limited liability
    (besloten vennootschap met beperkte aansprakelijkheid)
    incorporated under the laws of the Netherlands with its
    corporate seat in Amsterdam, the Netherlands (the “Term
    Borrower”), the several lenders from time to time
    parties thereto (collectively, the “Lenders”)
    and JPMORGAN CHASE BANK, N.A., as administrative agent for the
    Lenders (in such capacity, the “Administrative
    Agent”).

 

    W I T N E S
    S E T H :
    

 

    WHEREAS, the Borrower, the Term Borrower, the Lenders and the
    Administrative Agent are parties to the Credit Agreement;

 

    WHEREAS, the Borrower and the Term Borrower have requested that
    the Credit Agreement be amended as set forth herein; and

 

    WHEREAS, the Lenders are willing to agree to such amendment on
    the terms set forth herein;

 

    NOW, THEREFORE, in consideration of the premises contained
    herein, the parties hereto agree as follows:

 

    1. Defined Terms.  Unless otherwise
    defined herein, terms which are defined in the Credit Agreement
    and used herein (and in the recitals hereto) as defined terms
    are so used as so defined

 

    2. Amendments to
    Section 1.01.  (a) Section 1.01
    of the Credit Agreement is hereby amended by adding the
    following definition in proper alphabetical order:

 

    ‘‘Fitch” means Fitch Ratings Inc.

 

    (b) Section 1.01 of the Credit Agreement is hereby
    amended by deleting therefrom the definition of
    “Permitted Investments” and substituting
    therefor the following:

 

    ‘‘Permitted
    Investments”  means:

 

    (a) direct obligations of, or obligations the principal of
    and interest on which are directly and fully guaranteed or
    insured by, the United States of America (or by any agency
    thereof to the extent such obligations are backed by the full
    faith and credit of the United States of America);

 

    (b) investments in commercial paper having, at such date of
    acquisition, a credit rating of at least
    A-2 from
    S&P or
    P-2 from
    Moody’s;

 

    (c) investments in certificates of deposit, Eurocurrency
    time deposits, banker’s acceptances and time deposits
    maturing within three years from the date of acquisition thereof
    issued or guaranteed by or placed with, and money market deposit
    accounts issued or offered by, any Lender or any commercial bank
    which has a combined capital and surplus and undivided profits
    of not less than $100,000,000;

 

    (d) repurchase agreements with a term of not more than
    180 days for securities described in clause (a) above
    and entered into with a financial institution satisfying the
    criteria described in clause (c) above;

 

    (e) securities with maturities of three years or less from
    the date of acquisition issued or fully guaranteed by any state,
    commonwealth or territory of the United States or by any
    political subdivision or taxing authority of any such state,
    commonwealth or territory or by any foreign government, the
    securities of which state, commonwealth or territory, political
    subdivision, taxing authority or foreign government (as the case
    may be) are rated, at such date of acquisition, at least A by
    S&P or A2 by Moody’s;

 

    (f) securities with maturities of three years or less from
    the date of acquisition backed by standby letters of credit
    issued by any Lender or any commercial bank satisfying the
    requirements of clause (c) of this definition;

 

    (g) shares of money market funds that (i) comply with
    the criteria set forth in (a) Securities and Exchange
    Commission
    Rule 2a-7
    under the Investment Company Act of 1940 or (b) Securities
    and Exchange Commission
    Rule 3c-7
    under the Investment Company Act of 1940 and (ii) have
    portfolio assets of at least (x) in the case of funds that
    invest exclusively in assets satisfying the requirements of
    clause (a) of this definition, $250,000,000 and (y) in
    all other cases, $500,000,000;

 

    (h) in the case of investments by any Foreign Subsidiary,
    obligations of a credit quality and maturity comparable to that
    of the items referred to in clauses (a) through
    (g) above that are available in local markets; and

 

    (i) corporate debt obligations with a Moody’s,
    S&P, or Fitch rating of Aa3/AA-/AA- or better, or their
    equivalent, as follows:

 

    (i) corporate notes and bonds; and

 

    (ii) medium term notes.

 

    3. Effectiveness of
    Amendment.  This Amendment shall become
    effective as of the date the Administrative Agent shall have
    received counterparts of this Amendment duly executed by the
    Borrower, the Term Borrower and Lenders having Revolving Credit
    Exposures, unused Commitments and outstanding Term Loans
    representing more than 50% of the sum of the total Revolving
    Credit Exposures, unused Commitments and outstanding Term Loans.

 

    4. Representations and
    Warranties.  On and as of the date hereof, the
    Borrower and the Term Borrower hereby confirm, reaffirm and
    restate the representations and warranties set forth in
    Article III of the Credit Agreement mutatis
    mutandis, except to the extent that such representations
    and warranties expressly relate to a specific earlier date in
    which case the Borrower and the Term Borrower hereby confirm,
    reaffirm and restate such representations and warranties as of
    such earlier date.

 

    5. Continuing Effect; No Other
    Amendments.  Except as expressly provided
    herein, all of the terms and provisions of the Credit Agreement
    are and shall remain in full force and effect.

 

    6. Counterparts.  This Amendment
    may be executed in any number of counterparts by the parties
    hereto (including by facsimile or electronic transmission), each
    of which counterparts when so executed shall be an original, but
    all the counterparts shall together constitute one and the same
    instrument.

 

    7. GOVERNING LAW.  THIS AMENDMENT
    SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
    ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

    

    2

 

    IN WITNESS WHEREOF, the parties hereto have caused this
    Amendment to be duly executed and delivered in New York, New
    York by their proper and duly authorized officers as of the day
    and year first above written.

 

    POLO RALPH LAUREN CORPORATION

 

			
	 	    By: 
	
        

    Name:     

    Title:

 

    POLO JP ACQUI B.V.

 

			
	 	    By: 
	
        

    Name:     

    Title:

 

    JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a
    Lender

 

			
	 	    By: 
	
        

    Name:     

    Title:

 

    [LENDER]

 

			
	 	    By: 
	
        

    Name:     

    Title:

 

    SECOND
    AMENDMENT TO POLO RALPH LAUREN CORPORATION CREDIT AGREEMENT
    DATED AS OF NOVEMBER 28, 2006
    

    

    3

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