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EXHIBIT 10.45  

 
 

EMPLOYMENT AGREEMENT    
    

        EMPLOYMENT AGREEMENT ("Agreement"), dated as of March 4, 2003, between PHILLIPS-VAN HEUSEN CORPORATION, a Delaware corporation ("PVH" and,
together with its subsidiaries, the "Company"), and MICHAEL SHAFFER (the "Executive"). 

W
I T N E S S E T H: 

        WHEREAS,
the Company desires to retain Executive on a full-time basis in accordance with the terms set forth herein; and 

        WHEREAS,
the Executive desires to be so employed by the Company. 

        NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereto hereby agree as follows: 

        1.    Employment.    

        (a)    Employment.    The Company agrees to employ the Executive, and the Executive agrees to be employed by the
Company, in accordance with the terms and conditions hereof. The Executive shall be an employee at will and this Agreement shall not constitute a guarantee of employment. Each of the parties
acknowledges and agrees that either party may terminate the Executive's employment at any time, for any reason, with or without cause, and with or without notice. The period commencing on the date
hereof and ending on the effective date of the termination of the Executive's employment is hereinafter referred to as the "Employment Period." 

        (b)    Position.    The Executive shall serve as Senior Vice President, Retail Operations or in such other position or
positions as the Company's Chief Executive Officer or Board of Directors (which, for purposes of this Agreement, includes any committee thereof, unless the context requires otherwise) may designate
from time to time. The Executive shall (i) perform such duties and services as shall from time to time be assigned to him, (ii) devote all of his business time to the services required
of him hereunder and (iii) use his best efforts, judgment, skill and energy to perform such duties and services. As used in this Section 1, "business time" shall be determined in
accordance with the usual and customary standards of the Company. 

        2.    Compensation.    

        (a)    Base Salary.    The Company shall pay the Executive a salary at the annual rate of $275,000 ("Base Salary"),
payable in accordance with the normal payroll procedures of the Company in effect from time to time. The Company or the Board of Directors may from time to time, in its sole and absolute discretion,
increase or decrease the Base Salary by any amount it determines to be appropriate. 

        (b)    Incentive and Bonus Compensation.    The Executive shall be eligible to participate in the Company's existing
and future bonus and stock option plans and other incentive compensation programs (collectively, "Plans"), to the extent that the Executive is qualified to participate in any such Plan under the
generally applicable provisions thereof in effect from time to time. Such eligibility is not a guarantee of participation in or of the receipt of any award, payment or other compensation under any
Plan. To the extent the Executive does participate in a Plan and the Plan does not expressly provide otherwise, the Chief Executive Officer and/or the Board of Directors, as appropriate, may determine
all terms of participation (including, without limitation, the type and size of any award, payment or other compensation and the timing and conditions of receipt thereof by the Executive) in the Chief
Executive Officer's or Board's sole and absolute discretion. Nothing herein shall be deemed to prohibit the Company or the Board of Directors from amending or terminating any and all Plans in its sole
and absolute discretion. The terms of each Plan shall govern the Executive's rights and obligations thereunder during the Executive's employment and upon the termination thereof. Without limiting the
generality of the foregoing, the definition of "Cause" hereunder shall not supersede the 

 

definition
of "cause" in any Plan and any rights of the Executive hereunder upon and subsequent to the termination of the Executive's employment shall be in addition to, and not in lieu of, any right
of the Executive under any Plan then in effect upon or subsequent to a termination of employment. 

        (c)    Benefits.    The Executive shall be eligible to participate in all employee benefit and insurance plans
sponsored or maintained by the Company for similarly situated executives (including any savings, retirement, life, health and disability plans), to the extent that the Executive is qualified to
participate in any such plan under the generally applicable provisions thereof in effect from time to time. Nothing herein shall be deemed to prohibit the Company or the Board of Directors from
amending or terminating any such plan in its sole and absolute discretion. The terms of each such plan shall govern the Executive's rights and obligations thereunder during the Executive's employment
and upon the termination thereof. 

        (d)    Expenses.    The Company shall pay or reimburse the Executive for reasonable expenses incurred or paid by the
Executive in the performance of the Executive's duties hereunder in accordance with the generally applicable policies and procedures of the Company, as in effect from time to time and subject to the
terms and conditions thereof. 

        3.    Termination of Employment.    The Executive's employment hereunder shall terminate, or shall be subject to
termination at any time, as follows: 

        (a)    Termination for Cause by the Company.    The Company may terminate the Executive's employment under this
Agreement at any time for Cause (as defined below). Upon such termination, the Company shall have no further obligation to the Executive hereunder except for the payment of (i) the portion of
the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), and (ii) all unreimbursed expenses, subject to Section 2(d). For the avoidance of
doubt, the Executive shall have no right to receive any amounts under the Company's severance policy upon his termination for Cause. For purposes of this Agreement, "Cause" shall be defined as
(1) gross negligence in the performance of the material responsibilities of the Executive's office or position; (2) gross misconduct in the performance of the material responsibilities
of the Executive's office or position, including, without limitation, malfeasance relating to the Company and/or vendor and customer accounts and insubordination; (3) material failure or
refusal by the Executive to perform his core job duties, as such may be reasonably assigned to him from time to time, other than by reason of his death or disability or other acts or omissions
constituting material neglect or dereliction of his such duties; (4) the conviction of the Executive by a court of competent jurisdiction (and after all appeal procedures have been exhausted or
have expired) of, or the entry of a plea of guilty or nolo contendere by the Executive to a charge of, the commission of a crime that constitutes a
felony under federal or state law or the equivalent under foreign law; (5) the Executive's embezzlement or intentional misappropriation of any property of the Company; (6) the Executive
having divulged, furnished or made accessible to anyone other than the Company, its directors, officers, employees, auditors and legal advisors, otherwise than in the ordinary course of business, any
Confidential Information (as hereinafter defined); (7) fraud, dishonesty or other acts or omissions by the Executive that constitute a willful breach of his fiduciary duty to the Company; or
(8) the happening of any other event which, under the provisions of applicable law, disqualifies the Executive from acting in any or all capacities in which he is then acting. The Executive
shall be given notice of the termination of his employment for Cause under this Section 3(a). If the Executive shall be terminated pursuant to clause (1), (2) or (3) of this
Section 3(a), the Executive shall be given a reasonable period of time, not to exceed 30 days, to correct the underlying act or omission. In all other cases, termination shall be
effective as of the date notice is given. 

        (b)    Termination without Cause by the Company.    The Company may also terminate the Executive's employment under
this Agreement at any time without Cause. The voluntary resignation of the Executive shall not for any reason be treated as a termination of employment by the Company 

2

 

without
Cause, even if the Executive's stated reason for resignation is a material change in the terms or conditions of his employment as in effect at that time, except as otherwise provided in
Section 3(f)(ii). If the Company terminates the Executive's services without Cause, other than during the two-year period following a Change in Control (as hereinafter defined), the
Executive shall be entitled to receive from the Company (i) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), (ii) all
unreimbursed expenses (if any), subject to Section 2(d), and (iii) an aggregate amount (the "Severance Amount") equal to the greater of (x) two weeks' salary for each consecutive
year of employment with the Company immediately prior to such a termination and (y) the severance payable under the Company's Severance Policy, as then in effect;  provided, however, that in no event shall the Severance Amount be less than the Base Salary then in
effect. In addition, if the Company terminates the Executive's employment hereunder without Cause, then the Company shall also provide to the Executive during the period over which the Severance
Amount is paid, medical and dental insurance coverage for the Executive and the members of his family which is not less favorable to the Executive than the group medical and dental insurance coverage
carried by the Company for the Executive and the members of his family immediately prior to such termination of employment; provided,  however, that the
obligations set forth in this sentence shall terminate to the extent the Executive obtains comparable medical and dental insurance
coverage from any other employer during such period, but the Executive shall not have any obligation to seek or accept employment during such period, whether or not any such employment would provide
comparable medical and dental insurance coverage; and provided further, however, that the Executive
shall be obligated to pay an amount equal to the active employee contribution, if any, for each such coverage. The Severance Amount shall be based upon the Base Salary then in effect. The Severance
Amount shall be payable in substantially equal payments on the same schedule as Base Salary was paid immediately prior to termination. For purposes of this Section 3(b), the Executive shall be
deemed to accrue a year of employment with the Company on each anniversary of his date of hire and, with respect to his last year of employment, if at least six months have passed since the last such
anniversary date. For the avoidance of doubt the payment of the Severance Amount shall be in lieu of any amounts payable under the Company's severance policy (as then in effect) and the Executive
hereby waives any and all rights thereunder. 

        (c)    Termination by Voluntary Resignation by the Executive.    The Executive may terminate his employment with the
Company at any time by voluntary resignation. Upon such termination, except as otherwise provided in Section 3(f)(ii), the Company shall have no further obligation to the Executive hereunder
except for the payment of (i) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), and (ii) all unreimbursed expenses (if
any), subject to Section 2(d). Notwithstanding the foregoing, the Executive shall provide no less than 90 days' prior written notice of the effective date of his resignation. The Company
shall continue to pay the Executive his Base Salary during such 90-day period. The Executive acknowledges and agrees that the Company may elect to place the Executive on paid leave for all
or any part of such 90-day period. Notwithstanding the foregoing, the Company, in its sole and absolute discretion, may waive the requirement for prior notice of the Executive's
resignation or decrease the notice period, in which event the Company shall have no continuing obligation to pay the Executive's Base Salary or shall only have such obligation with respect to the
shortened period, as the case may be. 

        (d)    Disability.    The Executive's employment shall be terminable by the Company, subject to applicable law and the
Company's short-term and long-term disability policies then in effect, if the Executive becomes physically or mentally disabled, whether totally or partially, such that he is
prevented from performing his usual duties and services hereunder for a period of 120 consecutive days or for shorter periods aggregating 120 days in any 12-month period. If the
Executive's employment is so terminated by the Company, the Company shall have no further obligation to the Executive hereunder, except for the payment to the Executive or his legal guardian or
representative, as appropriate, of 

3

 

(i) the
portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), and (ii) all unreimbursed expenses (if any), subject to
Section 2(d). 

        (e)    Death.    If the Executive shall die during the Employment Period, this Agreement shall terminate on the date
of the Executive's death and the Company shall have no further obligation to the Executive hereunder except for the payment to the Executive's estate of (i) the portion of the Base Salary for
periods prior to the effective date of termination accrued but unpaid (if any), and (ii) all unreimbursed expenses (if any), subject to Section 2(d). 

        (f)    Termination Subsequent to a Change in Control.    

        (i)    For
purposes of this Agreement: 

        (A)  A
"Change in Control" shall be deemed to occur upon: 

        (1)   the
election of one or more individuals to the Board of Directors, which election results in one-third or more of the directors of PVH consisting of
individuals who have not been directors of PVH for at least two years, unless such individuals have been elected as directors or nominated for election as directors by at least three-fourths of the
directors of PVH who have been directors of PVH for at least two years; 

        (2)   the
sale by PVH of all or substantially all of its assets (or the assets of the PVH subsidiary employing the Executive) to any individual or unaffiliated partnership,
limited liability company or other entity (each, a "Person"), the consolidation of PVH (or the PVH subsidiary employing the Executive) with any Person, the merger of PVH (or the PVH subsidiary
employing the Executive) with any Person as a result of which merger PVH (or the PVH subsidiary employing the Executive) is not the surviving entity (in the case of PVH, as a publicly held
corporation), unless such sale has been approved in advance by at least three-fourths of the directors of PVH on the date hereof or by a
Successor Board, provided that at least three-fourths of the Continuing Directors on such Successor Board approve such transaction; 

        (3)   the
sale or transfer of shares of PVH by PVH and/or any one or more of its stockholders, in one or more transactions, related or unrelated, to one or more Persons under
circumstances whereby any Person and its affiliates (as defined in the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended) shall own, after such sales and
transfers, at least one-fourth, but less than one-half, of the shares of PVH having voting power for the election of directors, unless such sale or transfer has been approved
in advance by at least three-fourths of the directors of PVH on the date hereof or by a Successor Board, provided that at least three-fourths of the Continuing Directors on such Successor Board
approve such transaction; or 

        (4)   the
sale or transfer of shares of PVH by PVH and/or any one or more of its stockholders, in one or more transactions, related or unrelated, to one or more Persons under
circumstances whereby any Person and its affiliates (as defined in the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended) shall own, after such sales and
transfers, at least one-half, of the shares of PVH having voting power for the election of directors. 

        (B)  "Continuing
Director" means any director of PVH on the date hereof and any director of PVH whose election to the Board of Directors of PVH was recommended or approved by
at least three-fourths of the directors of PVH serving at the time of such recommendation or approval and in all events shall exclude any director who was elected as a result of the solicitation of
proxies by any Person other than the Board of Directors of PVH. 

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        (C)  "Successor
Board" means a Board of Directors of PVH at least three-quarters of which is composed of Continuing Directors. 

        (D)  "Good
Reason" means 

        (1)   a
material reduction in the Executive's duties without his consent; 

        (2)   a
reduction of the Executive's Base Salary as in effect immediately before the Change in Control by more than 10% or the elimination of all Plans (without a commensurate
increase in Base Salary or replacement by new Plans) or the reduction of the compensation under the Plans (including any new or replacement Plans) such that the Executive's potential total
compensation (i.e., Base Salary, cash
bonuses, stock awards, stock options and other compensation) is reduced by more than 10% of his potential total compensation (assuming all performance criteria are satisfied and awards are paid at
their maximum level) before the Change in Control; 

        (3)   a
material reduction relative to all other senior executives in the medical, life, disability and other benefits made available to the Executive pursuant to
Section 2(c); and 

        (4)   a
material diminution relative to all other senior executives in the Executive's status or working conditions or any other action that impairs substantially the
Executive's status relative to all other senior executives. 

        (E)  "Parachute
Indemnity Amount" shall mean the amount determined with respect to the Executive as follows: 

        (1)   There
shall first be determined, after giving effect to the payment of the Executive's Primary Benefit (as hereinafter defined) and all other compensation and benefits
paid to the Executive under any plans of or agreements with the Company, but not to the Executive's Secondary Benefit, the aggregate of the Executive's "excess parachute" payments within the
contemplation of section 280G(b)(1) of the Internal Revenue Code of 1986, as amended. 

        (2)   There
shall then be determined the amount of the aggregate taxes imposed upon such "excess parachute payments" by the provisions of section 4999(a) of the
Internal Revenue Code of 1986, as amended. 

        (3)   The
amount determined in accordance with the provisions of clause (2) shall then be multiplied by the fraction the numerator of which shall be one and the
denominator of which shall be one minus the Executive's Effective Marginal Tax Rate with respect to the calendar year in which his employment by the Company shall terminate. 

        (ii)   Upon
the voluntary termination of employment with the Company by the Executive for Good Reason within two years after the occurrence of a Change in Control, or upon the
involuntary termination of employment with the Company of the Executive for any reason other than death, disability or Cause within two years after the occurrence of a Change in Control, PVH (or the
then-former PVH subsidiary employing the Executive), or the consolidated, surviving or transferee Person in the event of a consolidation, merger or sale of assets, shall pay to the
Executive, in a lump sum immediately subsequent to the date of such termination, (A) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if
any), (B) all unreimbursed expenses (if any), subject to Section 2(d) and (C) an aggregate amount equal to the sum of (x) (the "Primary Benefit") equal to the product of
(1) two and (2) the average annual cash compensation, including salary and bonuses, paid to and/or accrued with respect to the Executive during the two-year period preceding
the date of such termination, or such portion of said period as the Executive shall have been employed by the Company, and (y) an 

5

 

amount
(the "Secondary Benefit") equal to the Executive's Parachute Indemnity Amount. Upon the voluntary termination of employment with the Company for Good Reason by the Executive within two years
after the occurrence of a Change in Control, or upon the involuntary termination of employment with the Company of the Executive for any reason other than death, disability or Cause within two years
after the occurrence of a Change in Control, PVH (or the then-former PVH subsidiary employing the Executive), or the consolidated, surviving or transferee Person in the event of a
consolidation, merger or sale of assets, shall also provide to the Executive, for a period of two consecutive years commencing on the date of such termination of employment, medical, dental, life and
disability insurance coverage for the Executive and the members of his family which is not less favorable to the Executive than the group medical, dental, life and disability insurance coverage
carried by the Company for the Executive and the members of his family either immediately prior to such termination of employment or on the occurrence of such Change in Control, whichever is greater;  provided, however, that the obligations set forth in this sentence shall terminate to the extent the
Executive obtains comparable medical, dental, life and disability insurance coverage from any other employer during such two-year period, but the Executive shall not have any obligation to
seek or accept employment during such three-year period, whether or not any such employment would provide comparable medical, dental, life and disability insurance coverage. The Executive
shall not be required to mitigate the amount of any payment provided for in this Section 3(f)(ii) by seeking employment or otherwise, nor shall the amount of any payment provided for
herein be reduced by any compensation or retirement benefits heretofore or hereafter earned by the Executive as the result of employment by any other Person, except as provided in the  proviso to the
immediately preceding sentence. For the avoidance of doubt, the amounts payable under clause (C) of this Section 3(f)(ii)
as severance shall be in lieu of any amounts payable under the Company's severance policy and the Executive hereby waives any and all rights thereunder. 

        4.    Effect of Termination.    The amounts paid to the Executive pursuant to Section 3(b) or 3(f)(ii), as
applicable, following termination of his employment shall be in full and complete satisfaction of the Executive's rights under this Agreement and any other claims he may have with respect to his
employment by the Company and the termination thereof, other than as expressly provided in Section 2(b). Such amounts shall constitute liquidated damages with respect to any and all such rights
and claims. In consideration of the Executive's receipt thereof, the Executive shall, in advance of, and as a condition to, the payment thereof, execute a release in favor of the Company,
substantially in the form of Exhibit A hereto. Pursuant to said release, the Company shall be released and discharged from any and all liability
to the Executive in connection with this Agreement and otherwise in connection
with the Executive's employment with the Company and the termination thereof, including, without limitation, any claims arising under federal, state or local labor, employment and employment
discrimination laws, but excluding claims with respect to any Plan. Notwithstanding the foregoing, nothing herein shall be construed to release the Company from its obligations to indemnify the
Executive (as set forth in Section 7(h)). 

        5.    Restrictive Covenants.    

        (a)    Confidentiality.    The Executive recognizes that any knowledge and information of any type whatsoever of a
confidential nature relating to the business of the Company, including, without limitation, all types of trade secrets, vendor and customer lists and information, employee lists and information,
information regarding product development, marketing plans, management organization information, operating policies and manuals, sourcing data, performance results, business plans, financial records,
and other financial, commercial, business and technical information (collectively, "Confidential Information"), must be protected as confidential, not copied, disclosed or used, other than for the
benefit of the Company, at any time. The Executive further agrees that at any time during the Employment Period or thereafter he will not divulge to anyone (other than the Company or any 

6

 

Person
employed or designated by the Company), publish or make use of any Confidential Information without the prior written consent of the Company, except as (and only to the extent) required by an
order of a court having competent jurisdiction or under subpoena from an appropriate government agency and then only after providing the Company with the opportunity to prevent such disclosure or to
receive confidential treatment for the Confidential Information required to be disclosed. The Executive further agrees that following the termination of the Employment Period for whatever reason,
(i) the Company shall keep all tangible property assigned to the Executive or prepared by the Executive and (ii) the Executive shall not misappropriate or infringe upon the Confidential
Information of the Company (including the recreation or reconstruction of Confidential Information from memory). 

        (b)    Non-Interference.    The Executive acknowledges that information regarding the Company's business
and financial relations with its vendors and customers is Confidential Information and proprietary to the Company and that any interference with such relations based directly or indirectly on the use
of such information would cause irreparable damage to the Company. The Executive acknowledges that by virtue of his employment with the Company, he has gained or may gain knowledge of such information
concerning the Company's vendors and customers (respectively "Vendor Information" or "Customer Information"), and that he would inevitably have to draw on this Vendor Information and Customer
Information and on other Confidential Information if he were to solicit or service the Company's vendors or customers on behalf of a competing business enterprise. Accordingly, and subject to the
immediately following sentence, the Executive agrees that during the Employment Period and for a period of 18 months following the termination thereof, other than by reason of a termination by
the Company without Cause, the Executive will not, on behalf of himself or any other Person, other than the Company, directly or indirectly do business with, solicit the business of, or perform any
services for any actual vendor or customer of the Company, any Person that has been a vendor or customer of the Company within the 12-month period preceding such termination or any
actively solicited prospective vendor or customer as to whom or which the Executive
provided any services or as to whom or which the Executive has knowledge of Vendor Information, Customer Information or Confidential Information. The foregoing restrictive covenant shall only apply to
business activities engaged in by the Executive on behalf of himself or any other Person that are directly competitive with those of the operating divisions of the Company in which the Executive has
worked in terms of channel(s) of distribution, types of products, gender for which the products have been designed and similarity of price range. In addition, the Executive agrees that, during the
Employment Period and such 18-month period thereafter, he will not, directly or indirectly, seek to encourage or induce any such vendor or customer to cease doing business with, or lessen
its business with, the Company, or otherwise interfere with or damage (or attempt to interfere with or damage) any of the Company's relationships with its vendors and customers, except in the ordinary
course of the Company's business. 

        (c)    Non-Solicitation.    The Executive agrees that during the Employment Period and for a period of
18 months following the termination thereof for any reason, he will not hire or solicit to hire, whether on his own behalf or on behalf of any other Person (other than the Company), any
employee of the Company or any individual who had left the employ of the Company within 12 months of the termination of the Executive's employment with the Company. In addition, during the
Employment Period and such 18-month period thereafter, the Executive will not, directly or indirectly, encourage or induce any employee of the Company to leave the Company's employ, except
in the ordinary course of the Company's business. 

        (d)    Public Comment.    The Executive, during the Employment Period and at all times thereafter, shall not make any
derogatory comment concerning the Company or any of its current or former directors, officers, stockholders or employees. Similarly, the senior management of the Company shall not make any derogatory
comment concerning the Executive. 

7

 

        (e)    Blue Pencilling.    If any of the restrictions on competitive or other activities contained in this
Section 5 shall for any reason be held by a court of competent jurisdiction to be excessively broad as to duration, geographical scope, activity or subject, such restrictions shall be construed
so as thereafter to be limited or reduced to be enforceable to the extent compatible with the applicable law; it being understood that by the execution of this Agreement, (i) the parties hereto
regard such restrictions as reasonable and compatible with their respective rights and (ii) the Executive acknowledges and agrees that the restrictions will not prevent him from obtaining
gainful employment subsequent to the termination of his employment. The existence of any claim or cause of action by the Executive against the Company shall not constitute a defense to the enforcement
by the Company of the foregoing restrictive covenants, but such claim or cause of action shall be determined separately. 

        (f)    Injunctive Relief.    The Executive acknowledges and agrees that the covenants and obligations of the Executive
set forth in this Section 5 relate to special, unique and extraordinary services rendered by the Executive to the Company and that a violation of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which adequate remedies are not available at law.
Therefore, the Executive agrees that the Company shall be entitled to seek an injunction, restraining order or other temporary or permanent equitable relief (without the requirement to post bond)
restraining the Executive from committing any violation of the covenants and obligations contained herein. These injunctive remedies are cumulative and are in addition to any other rights and remedies
the Company may have at law or in equity. 

        6.    Work for Hire.    The Executive agrees that all marketing, operating and training ideas, sourcing data,
processes and materials, including all inventions, discoveries, improvements, enhancements, written materials and development related to the business of the Company ("Proprietary Materials") to which
the Executive may have access or that the Executive may develop or conceive while employed by the Company shall be considered works made for hire for the Company and prepared within the scope of
employment and shall belong exclusively to the Company. Any Proprietary Materials developed by the Executive that, under applicable law, may not be considered works made for hire, are hereby assigned
to the Company without the need for any further consideration, and the Executive agrees to take such further action, including executing such instruments and documents as the Company may reasonably
request, to evidence such assignment. 

        7.    Miscellaneous.    

        (a)    Assignment.    This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, legatees, executors, administrators, legal representatives, successors and assigns. Notwithstanding anything in the foregoing to the contrary, the Executive may not assign any of his
rights or obligations under this Agreement without first obtaining the written consent of the Company. The Company may assign this Agreement in connection with a sale of all or substantially all of
its assets. The merger or consolidation of the Company into or with any other Person or any other transaction involving a change of control of the Company shall not constitute an assignment of this
Agreement by the Company. 

        (b)    Survival.    The provisions of Sections 3, 4, 5, 6 and 7 shall survive the termination of this Agreement
pursuant to Section 3. 

8

 

        (c)    Notices.    Any notices to be given hereunder shall be in writing and delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid as follows: 

If
to the Executive, addressed to the Executive at the address then shown in the Executive's employment records 

If
to the Company at: 

Phillips-Van
Heusen Corporation

200 Madison Avenue

New York, New York 10016

Attention: Chairman 

With
a copy to: 

Phillips-Van
Heusen Corporation

200 Madison Avenue

New York, New York 10016

Attention: Vice President—Human Resources 

Any
party may change the address to which notices are to be sent by giving notice of such change of address to the other party in the manner provided above for giving notice. 

        (d)    Governing Law.    This Agreement shall be governed by, and construed and enforced in accordance with, the laws
of the State of New York, without regard to the principles thereof relating to the conflict of laws. 

        (e)    Consent to Jurisdiction.    Any judicial proceeding brought against the Executive with respect to this
Agreement may be brought in any court of competent jurisdiction in the Borough of Manhattan in the City and State of New York and, by execution and delivery of this Agreement, the Executive 

        (i)    accepts,
generally and unconditionally, the nonexclusive jurisdiction of such courts and any related appellate courts, and irrevocably agrees to be bound by any final
judgment (after exhausting all appeals therefrom or after all time periods for such appeals have expired) rendered thereby in connection with this Agreement and 

        (ii)   irrevocably
waives any objection the Executive may now or hereafter have as to the venue of any such suit, action or proceeding brought in such a court or that such
court is an inconvenient forum. 

        (f)    Severability.    The invalidity of any one or more provisions of this Agreement or any part thereof shall not
affect the validity of any other provision of this Agreement or part thereof; and in the event that
one or more provisions contained herein shall be held to be invalid, the Agreement shall be reformed to make such provisions enforceable. 

        (g)    Waiver.    The Company, in its sole discretion, may waive any of the requirements imposed on the Executive by
this Agreement. The Company, however, reserves the right to deny any similar waiver in the future. Each such waiver must be express and in writing and there will be no waiver by conduct. Pursuit by
the Company of any available remedy, either in law or equity, or any action of any kind, does not constitute waiver of any other remedy or action. Such remedies and actions are cumulative and not
exclusive. 

        (h)    Indemnification.    The Company shall indemnify the Executive and hold the Executive harmless from and against
any claim, loss or cause of action arising from or out of the Executive's performance as an officer, director or employee of the Company or in any other capacity, including any fiduciary capacity, in
which the Executive serves at the request of the Company to the maximum extent permitted by applicable law; provided,  however, that the Executive shall not
be entitled to 

9

 

indemnification
hereunder with respect to any expense, loss, liability or damage which was caused by the Executive's own gross negligence, willful misconduct or reckless disregard of his duties
hereunder. The Company shall pay any and all reasonable legal fees incurred by the Executive in the defense of any such claim on a current basis, provided that the Executive agrees in writing to
reimburse the Company for any fees that it is determined the Executive is not entitled to have paid by the Company. The Company shall have the right to select counsel reasonably acceptable to the
Executive to defend such claim and to have the same counsel represent the Company and its officers and directors unless there is a material conflict of interest between the Company and the Executive,
in which case the Executive may select and retain his own counsel at the Company's expense. The Executive shall not settle any action or claim against the Executive without the prior written consent
of the Company, except at the Executive's sole cost and expense. 

        (i)    Section Headings.    The section headings contained in this Agreement are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement. 

        (j)    Withholding.    Any payments provided for herein shall be reduced by any amounts required to be withheld by the
Company from time to time under applicable Federal, State or local employment or income tax laws or similar statutes or other provisions of law then in effect. 

        (k)    Waiver of Jury Trial.    The Company and the Executive hereby waive, as against the other, trial by jury in any
judicial proceeding to which they are both parties involving, directly or indirectly, any matter in any way arising out of, related to or connected with this Agreement. 

        (l)    Entire Agreement.    This Agreement contains the entire understanding, and cancels and supersedes all prior
agreements, including any agreement in principle or oral statement, letter of intent, statement of understanding or guidelines of the parties hereto with respect to the subject matter hereof.
Notwithstanding the foregoing, this Agreement does not cancel or supersede the Plans or the plans referred to in Section l(c). This Agreement may be amended, supplemented or otherwise modified
only by a written document executed by each of the parties hereto or their respective successors or assigns. The Executive acknowledges that he is entering into this Agreement of his own free will and
accord with no duress, and that he has read this Agreement and understands it and its legal consequences. 

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

        IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the day and year first above written. 

	 	 	PHILLIPS-VAN HEUSEN CORPORATION
	 	 	 	 	 	 	 
	 	 	By:	 	/s/  BRUCE J. KLATSKY      

	 	 	 	 	Name:	 	Bruce J. Klatsky
	 	 	 	 	Title:	 	Chairman and Chief Executive Officer
	 	 	 	 	 	 	 
	 	 	/s/  MICHAEL SHAFFER      
 Michael Shaffer

10

  

EXHIBIT A  

 
  RELEASE    
    

        TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT MICHAEL SHAFFER (the "Releasor"), on behalf of
himself and his heirs, executors, administrators and legal representatives, in consideration of the payments set forth in Section [3(b)] [3(f)(ii)] of
the Employment Agreement between the Releasor and PHILLIPS-VAN HEUSEN CORPORATION, dated as of March 4, 2003 (as the same may have been heretofore amended, the "Agreement"), hereby
irrevocably, unconditionally, generally and forever releases and discharges Phillips-Van Heusen Corporation (together with its current and former subsidiaries, the "Company"), each of its
current and former officers, directors, employees, agents, representatives and advisors and their respective heirs, executors, administrators, legal representatives, receivers, affiliates, beneficial
owners, successors and assigns (collectively, the "Releasees"), from, and hereby waives and settles, any and all, actions, causes of action, suits, debts, promises, damages, or any liability, claims
or demands, known or unknown and of any nature whatsoever and which the Releasor ever had, now has or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever
from the beginning of the world to the date of this Release arising directly or indirectly pursuant to or out of his employment with the Company or the termination of such employment (collectively,
"Claims"), including, without limitation, any Claims (i) arising under any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the
employment relationship and/or specifically that prohibit discrimination based upon age, race, religion, gender, national origin, disability, sexual orientation or any other unlawful bases, including,
without limitation, the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts
of 1866 and 1871, as amended, the Americans with Disabilities Act of 1990, as amended, the New Jersey Law Against Discrimination, as amended, the New York State and New York City Human Rights Laws, as
amended, the laws of the States of New York and New Jersey, the City of New York and Somerset County, New Jersey relating to discrimination, as amended, and any and all applicable rules and
regulations promulgated pursuant to or concerning any of the foregoing statutes; (ii) arising under or pursuant to any contract, express or implied, written or oral, including, without
limitation, the Agreement; (iii) for wrongful dismissal or termination of employment; (iv) for tort, tortuous or harassing conduct, infliction of mental or emotional distress, fraud,
libel or slander; and (v) for damages, including, without limitation, punitive or compensatory damages or for attorneys' fees, expenses, costs, wages, injunctive or equitable relief. This
Release shall not apply to any claim that the Releasor may have for a breach of Section [3(b)] [3(f)(ii)], 5(d) or 7(h) of the Agreement. 

        The
Releasor agrees not to file, assert or commence any Claims against any Releasee with any federal, state or local court or any administrative or regulatory agency or body. 

        The
Releasor represents and warrants that there has been no assignment or other transfer of any interest in any Claim which the Releasor may have against the Releasees, or any of them,
and the Releasor agrees to indemnify and hold the Releasees, and each of them, harmless from any Claims, or other liability, demands, damages, costs, expenses and attorneys' fees incurred by the
Releasees, or any of them, as a result of any person asserting any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent
to recovery by the Releasees against the Releasor under this indemnity. 

        The
Releasor agrees that if he hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any Claim released hereunder, or
in any manner asserts against the Releasees, or any of them, any Claim released hereunder, then the Releasor shall pay to the Releasees, and each of them, in addition to any other damages caused to
the Releasees 

A-1

 

thereby,
all attorneys' fees incurred by the Releasees in defending or otherwise responding to said suit or Claim. 

        The
Releasor hereby waives any right to, and agrees not to, seek reinstatement of his employment with the Company or any Releasee. The Releasor acknowledges that the amounts to be paid
to him under Section [3(b)] [3(f)(ii)] of the Agreement include benefits, monetary or otherwise, which the Releasor has not earned or accrued, or to
which he is not already entitled. 

        Releasor
acknowledges that he was advised by the Company to consult with his attorney concerning the waivers contained in this Release, that he has consulted with counsel, and that the
waivers Releasor has made herein are knowing, conscious and with full appreciation that he is forever foreclosed from pursuing any of the rights so waived. 

        The
Releasor has a period of 21 days from the date on which a copy of this Release has been delivered to him to consider whether to sign it. In addition, in the event that
Releasor elects to sign and return to Phillips-Van Heusen Corporation a copy of this Release, Releasor has a period of seven days (the "Revocation Period") following the date of such
return to revoke this Release, which revocation must be in writing and delivered to Phillips-Van Heusen Corporation, 200 Madison Avenue, New York, New York 10016, Attention: General
Counsel, within the Revocation Period. This Release, and the Releasor's right to receive the amounts paid to him under Section [3(b)] [3(f)(ii)], shall
not be effective or
enforceable until the expiration of the Revocation Period without the Releasor's exercise of his right of revocation. 

        This
Release shall not be amended, supplemented or otherwise modified in any way except in a writing signed by the Releasor and Phillips-Van Heusen Corporation. 

        This
Release shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without reference to its principles of conflicts of law. 

        IN WITNESS WHEREOF, the Releasor has caused this Release to be executed as
of                        , 20    . 

   

    

	 	 	
 Michael Shaffer
	

SWORN TO AND SUBSCRIBED

BEFORE ME THIS    DAY OF

                        , 20    .	
 	

 
	

 Notary Public	
 	

 

A-2

QuickLinks

EMPLOYMENT AGREEMENT

RELEASE<Page>

                                                                     EXHIBIT 4.5

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR A
PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) FERRIS, BAKER WATTS, INCORPORATED ("FBW") OR AN UNDERWRITER OR A
SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR
PARTNER OF FBW OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION
BY HARBOR ACQUISITION CORPORATION ("COMPANY") OF A MERGER, CAPITAL STOCK
EXCHANGE, ASSET ACQUISITION OR OTHER SIMILAR BUSINESS COMBINATION ("BUSINESS
COMBINATION") (AS DESCRIBED MORE FULLY IN THE COMPANY'S REGISTRATION STATEMENT
(DEFINED HEREIN)) OR , 2007. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME,
;______________, 2011.

                          FORM OF UNIT PURCHASE OPTION

                               FOR THE PURCHASE OF

                                  500,000 UNITS

                                       OF

                         HARBOR ACQUISITION CORPORATION

1.   PURCHASE OPTION.

     THIS CERTIFIES THAT, in consideration of $100.00 duly paid by or on behalf
of Ferris, Baker Watts, Incorporated ("HOLDER"), as registered owner of this
Purchase Option, to Harbor Acquisition Corporation ("COMPANY"), Holder is
entitled, at any time or from time to time upon the later of the consummation of
a Business Combination or , 2007 ("COMMENCEMENT DATE"), and at or before 5:00
p.m., New York City local time, __________________, 2011 ("EXPIRATION DATE"),
but not thereafter, to subscribe for, purchase and receive, in whole or in part,
up to Five Hundred Thousand (500,000) units ("UNITS") of the Company, each Unit
consisting of one share of common stock of the Company, par value $0.0001 per
share ("COMMON STOCK"), and two warrants ("WARRANT(S)") expiring five years from
the effective date ("EFFECTIVE DATE") of the registration statement
("REGISTRATION STATEMENT") pursuant to which Units are offered for sale to the
public ("OFFERING"). Each Warrant is the same as the warrants included in the
Units being registered for sale to the public by way of the Registration
Statement ("PUBLIC WARRANTS"), except that the Warrants shall have an exercise
price of $6.25 per whole share, subject to adjustment as provided in Section 4
of the Warrant Agreement and shall be entitled to cashless exercise rights as
provided in Section 3.4 thereof. If the Expiration Date is a day on which
banking institutions are authorized by law to close, then this Purchase Option
may be exercised on the next succeeding day which is not such a day in
accordance with the terms herein. During the period ending on the Expiration
Date, the Company agrees not to take any action that would terminate the
Purchase Option. This Purchase Option is initially exercisable at $7.50 per Unit
so purchased; provided, however, that upon the occurrence of any of the events
specified in Section 6 hereof, the rights granted by this Purchase Option,
including the exercise price per Unit and the number of Units (and shares of
Common Stock and Warrants) to be received upon such exercise, shall be adjusted
as therein specified. The term "EXERCISE PRICE" shall mean the initial exercise
price or the adjusted exercise price, depending on the context.

                                       1

<Page>

2.   EXERCISE.

     2.1 EXERCISE FORM. In order to exercise this Purchase Option, the exercise
form attached hereto as EXHIBIT A must be duly executed and completed and
delivered to the Company, together with this Purchase Option and payment of the
Exercise Price for the Units being purchased payable in cash or by certified
check or official bank check. If the subscription rights represented hereby
shall not be exercised at or before 5:00 p.m., New York City local time, on the
Expiration Date this Purchase Option shall become and be void without further
force or effect, and all rights represented hereby shall cease and expire.

     2.2 CASHLESS EXERCISE.

          2.2.1 DETERMINATION OF AMOUNT. In lieu of the payment of the Exercise
Price multiplied by the number of Units for which this Purchase Option is
exercisable and in lieu of being entitled to receive Units in the manner
required by Section 2.1, the Holder shall have the right (but not the
obligation) to convert any exercisable but unexercised portion of the Purchase
Option into Units ("Conversion Right") as follows: upon exercise of the
Conversion Right, the Company shall deliver to the Holder (without payment by
the Holder of any of the Exercise Price in cash) that number of Units equal to
the quotient obtained by dividing (x) the "Value" (as defined below) of the
portion of the Purchase Option being converted by (y) the "Current Market Price"
(as defined below). The "Value" of the portion of the Purchase Option being
converted shall equal the remainder derived from subtracting (a)(i) the Exercise
Price of a Unit multiplied by (ii) the number of Units underlying the portion of
this Purchase Option being converted from (b) the Current Market Price of a Unit
multiplied by the number of Units underlying the portion of the Purchase Option
being converted.

The "Current Market Price" of a Unit at any date shall mean (i) if the Units are
listed on a national securities exchange or quoted on the Nasdaq National
Market, the Nasdaq Capital Market or the NASD OTC Bulletin Board (or successor
such as the Bulletin Board Exchange), the average closing price of a Unit for
the thirty (30) trading days immediately preceding the date of determination of
the Current Market Price in the principal trading market for the Units as
reported by the exchange, Nasdaq or the NASD, as the case may be; (ii) if the
Units are not listed on a national securities exchange or quoted on the Nasdaq
National Market, Nasdaq Capital Market or the NASD OTC Bulletin Board (or
successor such as the Bulletin Board Exchange), but is traded in the residual
over-the-counter market, the closing bid price for a Unit on the last trading
day preceding the date in question for which such quotations are reported by the
Pink Sheets, LLC or similar publisher of such quotations; and (iii) if the fair
market value of the Units cannot be determined pursuant to clause (i) or (ii)
above, such price as the Board of Directors of the Company shall determine, in
good faith.

          2.2.2 MECHANICS OF CASHLESS EXERCISE. The Cashless Exercise Right may
be exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date by delivering the Purchase Option with
the duly executed exercise form attached hereto with the cashless exercise
section completed to the Company, exercising the Cashless Exercise Right and
specifying the total number of Units the Holder will purchase pursuant to such
Cashless Exercise Right.

3.   TRANSFER.

     3.1 GENERAL RESTRICTIONS. The registered Holder of this Purchase Option, by
its acceptance hereof, agrees that it will not sell, transfer, assign, pledge or
hypothecate this Purchase Option for a period of one year following the
Effective Date to anyone other than (i) FBW or an underwriter or a selected
dealer in connection with the Offering, or (ii) a bona fide officer or partner
of FBW or of any such underwriter or selected dealer. On and after the first
anniversary of the Effective Date, transfers to others may be made subject to
compliance with or exemptions from applicable securities laws. In order to make
any permitted assignment, the Holder must deliver to the Company the assignment
form attached hereto as EXHIBIT B duly executed and completed, together with the
Purchase Option and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall within five business days transfer this Purchase
Option on the books of the Company and shall execute and deliver a new Purchase
Option or Purchase Options of like tenor to the appropriate assignee(s)
expressly evidencing the right

                                       2

<Page>

to purchase the aggregate number of Units purchasable hereunder or such portion
of such number as shall be contemplated by any such assignment.

     3.2 RESTRICTIONS IMPOSED BY THE ACT. The securities evidenced by this
Purchase Option shall not be transferred unless and until (i) the Company has
received the opinion of counsel for the Holder that the securities may be
transferred pursuant to an exemption from registration under the Act and
applicable state securities laws, the availability of which is established to
the reasonable satisfaction of the Company (the Company hereby agreeing that the
opinion of Davis, Malm & D'Agostine, P.C. shall be deemed satisfactory evidence
of the availability of an exemption), or (ii) a registration statement or a
post-effective amendment to the Registration Statement relating to such
securities has been filed by the Company and declared effective by the
Securities and Exchange Commission (the "COMMISSION") and compliance with
applicable state securities law has been established.

4.   NEW PURCHASE OPTIONS TO BE ISSUED.

     4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in Section 3
hereof, this Purchase Option may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Purchase Option for cancellation, together with the duly executed
exercise or assignment form and funds sufficient to pay any Exercise Price
and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the number
of Units purchasable hereunder as to which this Purchase Option has not been
exercised or assigned.

     4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Purchase Option and
of reasonably satisfactory indemnification or the posting of a bond, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of the Company.

5.   INTENTIONALLY OMITTED.

6.   ADJUSTMENTS.

     6.1 ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The Exercise
Price and the number of Units underlying the Purchase Option shall be subject to
adjustment from time to time as hereinafter set forth:

          6.1.1 STOCK DIVIDENDS - SPLIT-UPS. If after the date hereof, and
subject to the provisions of Section 6.4 below, the number of outstanding shares
of Common Stock is increased by a stock dividend payable in shares of Common
Stock or by a split-up of shares of Common Stock or other similar event, then,
on the effective date thereof, the number of shares of Common Stock underlying
each of the Units purchasable hereunder shall be increased in proportion to such
increase in outstanding shares. In such case, the number of shares of Common
Stock, and the exercise price applicable thereto, underlying the Warrants
underlying each of the Units purchasable hereunder shall be adjusted in
accordance with the terms of the Warrants. For example, if the Company declares
a two-for-one stock dividend and at the time of such dividend this Purchase
Option is for the purchase of one Unit at $7.50 per whole Unit (each Warrant
underlying the Units is exercisable for $6.25 per share), upon effectiveness of
the dividend, this Purchase Option will be adjusted to allow for the purchase of
one Unit at $7.50 per Unit, each Unit entitling the holder to receive two shares
of Common Stock and four Warrants (each Warrant exercisable for $3.125 per
share).

          6.1.2 AGGREGATION OF SHARES. If after the date hereof, and subject to
the provisions of Section 6.4, the number of outstanding shares of Common Stock
is decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, on the effective date thereof, the
number of shares of Common Stock underlying each of the Units purchasable
hereunder shall be decreased in proportion to such decrease in outstanding
shares. In such case, the number of shares of Common Stock, and the exercise
price applicable thereto, underlying the Warrants underlying each of the Units
purchasable hereunder shall be adjusted in accordance with the terms of the
Warrants.

                                       3

<Page>

          6.1.3 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In case of
any reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, by a Holder of the number of shares of
Common Stock of the Company obtainable upon exercise of this Purchase Option and
the underlying Warrants immediately prior to such event; and if any
reclassification also results in a change in shares of Common Stock covered by
Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.

          6.1.4 CHANGES IN FORM OF PURCHASE OPTION. This form of Purchase Option
need not be changed because of any change pursuant to this Section, and Purchase
Options issued after such change may state the same Exercise Price and the same
number of Units as are stated in the Purchase Options initially issued pursuant
to this Agreement. The acceptance by any Holder of the issuance of new Purchase
Options reflecting a required or permissive change shall not be deemed to waive
any rights to an adjustment occurring after the Commencement Date or the
computation thereof.

     6.2 SUBSTITUTE PURCHASE OPTION. In case of any consolidation of the Company
with, or merger of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute and deliver to the Holder a
supplemental Purchase Option providing that the holder of each Purchase Option
then outstanding or to be outstanding shall have the right thereafter (until the
stated expiration of such Purchase Option) to receive, upon exercise of such
Purchase Option, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the number
of shares of Common Stock of the Company for which such Purchase Option might
have been exercised immediately prior to such consolidation, merger, sale or
transfer. Such supplemental Purchase Option shall provide for adjustments which
shall be identical to the adjustments provided in Section 6. The above provision
of this Section shall similarly apply to successive consolidations or mergers.

     6.3 ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock or
Warrants upon the exercise of the Purchase Option, nor shall it be required to
issue scrip or pay cash in lieu of any fractional interests, it being the intent
of the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of Warrants, shares of Common Stock or
other securities, properties or rights.

7. RESERVATION AND LISTING. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of the Purchase Options or the Warrants underlying the
Purchase Option, such number of shares of Common Stock or other securities,
properties or rights as shall be issuable upon the exercise thereof. The Company
covenants and agrees that, upon exercise of the Purchase Options and payment of
the Exercise Price therefor, all shares of Common Stock and other securities
issuable upon such exercise shall be duly and validly issued, fully paid and
non-assessable and not subject to preemptive rights of any stockholder. The
Company further covenants and agrees that upon exercise of the Warrants
underlying the Purchase Options and payment of the respective Warrant exercise
price therefor, all shares of Common Stock and other securities issuable upon
such exercise shall be duly and validly issued, fully paid and non-assessable
and not subject to preemptive rights of any stockholder. As long as the Purchase
Options shall be outstanding, the Company shall use its best efforts to cause
all (i) Units and shares of Common Stock issuable upon exercise of the Purchase
Options, (iii) Warrants issuable upon exercise of the Purchase Options and (iv)
shares of Common Stock issuable upon exercise of the Warrants included in the
Units issuable upon exercise of the Purchase Option to be listed

                                       4

<Page>

(subject to official notice of issuance) on all securities exchanges (or, if
applicable on the Nasdaq National Market, SmallCap Market, OTC Bulletin Board or
any successor trading market) on which the Units, the Common Stock or the Public
Warrants issued to the public in connection herewith may then be listed and/or
quoted.

8.   CERTAIN NOTICE REQUIREMENTS.

     8.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be construed as
conferring upon the Holders the right to vote or consent as a stockholder for
the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of the Purchase Options and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the
Company shall give written notice of such event at least fifteen days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
conversion or exchange of securities or subscription rights, or entitled to vote
on such proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer books, as
the case may be. Notwithstanding the foregoing, the Company shall deliver to
each Holder a copy of each notice given to the other stockholders of the Company
at the same time and in the same manner that such notice is given to the
stockholders.

     8.2 EVENTS REQUIRING NOTICE. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.

     8.3 NOTICE OF CHANGE IN EXERCISE PRICE. The Company shall, promptly after
an event requiring a change in the Exercise Price pursuant to Section 6 hereof,
send notice to the Holders of such event and change ("PRICE NOTICE"). The Price
Notice shall describe the event causing the change and the method of calculating
same and shall be certified as being true and accurate by the Company's
President and Chief Executive Officer.

     8.4 TRANSMITTAL OF NOTICES. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made when hand delivered, or mailed by express mail or
private courier service: (i) if to the registered Holder of the Purchase Option,
to the address of such Holder as shown on the books of the Company, or (ii) if
to the Company, to the following address or to such other address as the Company
may designate by notice to the Holders:

             Harbor Acquisition Corporation
             One Boston Place - Suite 3630
             Boston, Massachusetts 02108
             Attn:  Chief Executive Officer

9.   MISCELLANEOUS.

     9.1 AMENDMENTS. The Company and FBW may from time to time supplement or
amend this Purchase Option without the approval of any of the Holders in order
to cure any ambiguity, to correct or supplement any provision contained herein
that may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
that the Company and FBW may deem necessary or desirable and that the Company
and FBW deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed
by the party against whom enforcement of the modification or amendment is
sought.

                                       5

<Page>

     9.2 HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.

     9.3 ENTIRE AGREEMENT. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.

     9.4 BINDING EFFECT. This Purchase Option shall inure solely to the benefit
of and shall be binding upon, the Holder and the Company and their permitted
assignees, respective successors, legal representative and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Purchase Option or any
provisions herein contained.

     9.5 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Purchase Option shall
be governed by and construed and enforced in accordance with the laws of the
State of Maryland, without giving effect to conflict of laws. The Company hereby
agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts of the State of Maryland or of the United States of America for the
District of Maryland, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum. Any
process or summons to be served upon the Company may be served by transmitting a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim. The Company and the Holder agree
that the prevailing party(ies) in any such action shall be entitled to recover
from the other party(ies) all of its reasonable attorneys' fees and expenses
relating to such action or proceeding and/or incurred in connection with the
preparation therefor.

     9.6 WAIVER, ETC. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver
of any other or subsequent breach or non-compliance.

     9.7 EXECUTION IN COUNTERPARTS. This Purchase Option may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

     9.8 EXCHANGE AGREEMENT. As a condition of the Holder's receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete exercise of this Purchase Option by Holder, if the Company and FBW
enter into an agreement ("EXCHANGE AGREEMENT") pursuant to which they agree that
all outstanding Purchase Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.

   [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]

                                       6

<Page>

IN WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by
its duly authorized officer as of the ______ day of ________, 2006.

                                 HARBOR ACQUISITION CORPORATION

                                 By:
                                    --------------------------------------
                                    Robert J. Hanks,
                                    Chief Executive Officer

                                       7

<Page>

                                    EXHIBIT A

                  Form to be used to exercise Purchase Option:

Harbor Acquisition Corporation
One Boston Place - Suite 3630
Boston, Massachusetts 02108

Date:                    , 200
     -------------------      ----

     The undersigned hereby elects irrevocably to exercise all or a portion
of the within Purchase Option and to purchase ________ Units of Harbor
Acquisition Corporation and hereby makes payment of $_____ (at the rate of
$_____ per Unit) in payment of the Exercise Price pursuant thereto. Please
issue the Common Stock and Warrants as to which this Purchase Option is
exercised in accordance with the instructions given below.

                                       or

The undersigned hereby elects irrevocably to convert its right to purchase
________ Units purchasable under the within Purchase Option by surrender of
the unexercised portion of the attached Purchase Option (with a "Value" based
of $ based on a "Market Price" of $_____). Please issue the securities
comprising the Units as to which this Purchase Option is exercised in
accordance with the instructions given below.

                                    ---------------------------------------
                                    NOTICE: The signature to this assignment
                                    must correspond with the name as written
                                    upon the face of the purchase option in
                                    every particular, without alteration or
                                    enlargement or any change whatever.

Signature(s) Guaranteed:

-------------------------------------

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15).

                   INSTRUCTIONS FOR REGISTRATION OF SECURITIES

Name
    -----------------------------------------------------------------
                         (Print in Block Letters)

Address
       --------------------------------------------------------------

                                      A-1

<Page>

                                    EXHIBIT B

                   Form to be used to assign Purchase Option:

                                   ASSIGNMENT

     (To be executed by the registered Holder to effect a transfer of the within
Purchase Option):

     FOR VALUE RECEIVED, _____________________________ does hereby sell, assign
and transfer unto the right to purchase Units of Harbor Acquisition Corporation
("COMPANY") evidenced by the within Purchase Option and does hereby authorize
the Company to transfer such right on the books of the Company.

Dated:                       , 200
     -----------------------

                                    ---------------------------------------
                                    Signature

                                    ---------------------------------------
                                    NOTICE: The signature to this assignment
                                    must correspond with the name as written
                                    upon the face of the purchase option in
                                    every particular, without alteration or
                                    enlargement or any change whatever.

Signature(s) Guaranteed:

-------------------------------------------------------------------------------

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]