Document:

PHILLIPS-VAN HEUSEN CORPORATION

 

EXHIBIT 10.14

PHILLIPS-VAN HEUSEN CORPORATION

2000 STOCK OPTION PLAN

(As Amended Through March 7, 2001)

1.Purpose.  The purposes of the 2000 Stock Option Plan (the
"Plan") are to induce certain individuals to remain in the employ, or to
continue to serve as directors of, or consultants or advisors to, Phillips-Van
Heusen Corporation (the "Company") and its present and future subsidiary
corporations (each a "Subsidiary"), as defined in Section 424(f) of the Internal
Revenue Code of 1986, as amended (the "Code"), to attract new
individuals to enter into such employment or service and to encourage such
individuals to secure or increase on reasonable terms their stock ownership
in the Company.  The Board of Directors of the Company (the "Board") believes
that the granting of stock options (the "Options") under the Plan will
promote continuity of management and increased incentive and personal interest
in the welfare of the Company by those who are or may become primarily
responsible for shaping and carrying out the long range plans of the Company and
securing its continued growth and financial success.  Options granted
hereunder are intended to be either (i) "incentive stock options" (which term,
when used herein, shall have the meaning ascribed thereto by the
provisions of Section 422(b) of the Code) or (ii) options which are not
incentive stock options ("non-qualified stock options") or (iii) a combination
thereof, as determined by the Committee (the "Committee") referred to in Section
5 at the time of the grant thereof.

2.Effective Date of the Plan.  The Plan became effective on April
27, 2000.

3.Stock Subject to Plan.  3,000,000 of the authorized but unissued
shares of the common stock, $1.00 par value, of the Company (the
"Common Stock") are hereby reserved for issue upon the exercise of Options
granted under the Plan; provided, however, that the number of
shares so reserved may from time to time be reduced to the extent that a
corresponding number of issued and outstanding shares of the Common Stock are
purchased by the Company and set aside for issue upon the exercise of Options.
If any Options expire or terminate for any reason without having been
exercised in full, the unpurchased shares subject thereto shall again be
available for the purposes of the Plan.

4.Administration.

(a)Except as otherwise provided in Section 4(b), the Plan shall be
administered by the Committee.  Subject to the express provisions of the Plan,
the Committee shall have complete authority, in its discretion, to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to
it, to determine the terms and provisions of the respective option agreements or
certificates (which need not be identical), to determine the
individuals (each a "Participant") to whom and the times and the prices at which
Options shall be granted, the periods during which each Option shall be
exercisable, the number of shares of the Common Stock to be subject to each
Option and whether such Option shall be an incentive stock option or a non-
qualified stock option and to make all other determinations necessary or
advisable for the administration of the Plan.  In making such determinations,
the Committee may 

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take into account the nature of the services rendered by the respective
individuals, their present and potential contributions to the success of the
Company and the Subsidiaries and such other factors as the Committee in its
discretion shall deem relevant.  The Committee's determination on the
matters referred to in this Section 4 shall be conclusive.  Any dispute or
disagreement which may arise under or as a result of or with respect to any
Option shall be determined by the Committee, in its sole discretion, and any
interpretations by the Committee of the terms of any Option shall be final,
binding and conclusive.

(b)The Chairman of the Board or, if the Chairman is not an executive
officer of the Company, the Chief Executive Officer of the Company or other
executive officer of the Company designated by the Committee who is also a
director (the Chairman, Chief Executive Officer or other designated executive
officer being referred to as the "Designated Director") may administer the Plan
with respect to employees of the Company or a Subsidiary (i) who are not
officers of the Company subject to the provisions of Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
(ii) whose compensation is not subject to the provisions of Section 162(m)
of the Code.  The authority of the Designated Director and Options
granted by the Designated Director shall be subject to such terms, conditions,
restrictions and limitations as may be imposed by the Board, including,
but not limited to, a limit on the aggregate number of shares of Common Stock
subject to Options that may be granted in any one calendar year by the
Designated Director to all such employees of the Company and its Subsidiaries
and a maximum number of shares that may be subject to Options granted
under the Plan in any one calendar year to any single employee by the Designated
Director.  Unless and until the Board shall take further action, the
maximum number of shares of Common Stock that may be subject to Options granted
under the Plan, the Company's 1997 Stock Option Plan and any other stock
option plan then in effect in any one calendar year by the Designated Director
shall be 100,000 in the aggregate and the maximum number of shares of
Common Stock that may be subject to Options granted under the Plan, the
Company's 1997 Stock Option Plan and any other stock option plan then in effect
in any one calendar year by the Designated Director to any single employee shall
be 5,000 in the aggregate.  Any actions duly taken by the Designated
Director with respect to the grant of Options to such employees shall be deemed
to have been taken by the Committee for purposes of the Plan.

5.Committee.  The Committee shall consist of two or more members
of the Board.  It is intended that all of the members of the Committee
shall be "non-employee directors" within the meaning of Rule 16b-3(b)(3)
promulgated under the Exchange Act, and "outside directors" within the
contemplation of Section 162(m)(4)(C)(i) of the Code.  The Committee shall be
appointed annually by the Board, which may at any time and from time to
time remove any members of the Committee, with or without cause, appoint
additional members to the Committee and fill vacancies, however caused, in the
Committee.  A majority of the members of the Committee shall constitute a
quorum.  All determinations of the Committee shall be made by a majority of
its members present at a meeting duly called and held, except that the Committee
may delegate to any one of its members the authority of the Committee
with respect to the grant of Options to any person who shall not be an officer
and/or director of the Company and who is not, and in the judgment of the
Committee may not be reasonably expected to become, a "covered employee" within
the meaning of Section 162(m)(3) of the Code.  Any decision or
determination of the Committee reduced to writing and signed by all of the
members of the 

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Committee (or by the member(s) of the Committee to whom authority has been
delegated) shall be fully as effective as if it had been made at a meeting
duly called and held.

6.Eligibility.  An Option may be granted only to a key employee of
the Company or a Subsidiary or to a director of the Company or a
Subsidiary who is not an employee of the Company or a Subsidiary or to an
independent consultant or advisor who renders services to the Company or a
Subsidiary.

7.Option Prices.

(a)The initial per share option price of any Option shall be the price
determined by the Committee, but not less than the fair market value of a
share of the Common Stock on the date of grant; provided, however,
that, in the case of a Participant who owns more than 10% of the total
combined voting power of the Common Stock at the time an Option which is an
incentive stock option is granted to him or her, the initial per share
option price shall not be less than 110% of the fair market value of a share of
the Common Stock on the date of grant.

(b)For all purposes of the Plan, the fair market value of a share of the
Common Stock on any date shall be equal to (i) the closing sale price of
the Common Stock on the New York Stock Exchange on the business day
preceding such date or (ii) if there is no sale of the Common Stock on such
Exchange on such business day, the average of the bid and asked prices on such
Exchange at the close of the market on such business day.

8.Option Term.  Participants shall be granted Options for such
term as the Committee shall determine, not in excess of 10 years from the
date of the granting thereof; provided, however, that, in the case
of a Participant who owns more than 10% of the total combined voting
power of the Common Stock at the time an Option which is an incentive stock
option is granted to him or her, the term with respect to such Option shall
not be in excess of five years from the date of the granting thereof.
9.Limitations on Amount of Options Granted.

(a)The aggregate fair market value of the shares of the Common Stock for
which any Participant may be granted incentive stock options which are
exercisable for the first time in any calendar year (whether under the terms of
the Plan or any other stock option plan of the Company) shall not exceed
$100,000.

(b)No Participant shall, during any fiscal year of the Company, be
granted Options under the Plan to purchase more than 500,000 shares of the
Common Stock.
10.Exercise of Options.

(a)Except as otherwise determined by the Committee at the time of grant,
a Participant may not exercise an Option during the period commencing on
the date of the grant of such Option to him or her and ending on the day
immediately preceding the first anniversary of such date.  Except as otherwise
determined by the Committee at the time of grant, a Participant may (i) during
the period commencing on the first anniversary of the date of the grant
of an Option to him or her and ending on the day immediately preceding the
second anniversary of 

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such date, exercise such Option with respect to one-quarter of the shares
granted thereby, (ii) during the period commencing on the second
anniversary of the date of such grant and ending on the day immediately
preceding the third anniversary of the date of such grant, exercise such Option
with respect to one-half of the shares granted thereby, (iii) during the period
commencing on the third anniversary of the date of such grant and ending
on the day immediately preceding the fourth anniversary of such date, exercise
such Option with respect to three-quarters of the shares granted thereby
and (iv) during the period commencing on the fourth anniversary of the date of
such grant and ending at the time the Option expires pursuant to the
terms hereof, exercise such Option with respect to all of the shares granted
thereby.

(b)Except as hereinbefore otherwise set forth, an Option may be exercised
either in whole at any time or in part from time to time.

(c)An Option may be exercised only by a written notice of intent to
exercise such Option with respect to a specific number of shares of the
Common Stock and payment to the Company of the amount of the option price for
the number of shares of the Common Stock so specified; provided,
however, that, if the Committee shall in its sole discretion so determine
at the time of the grant of any Option, all or any portion of such
payment may be made in kind by the delivery of shares of the Common Stock having
a fair market value equal to the portion of the option price so paid;
provided further, however, that no portion of such payment
may be made by delivering shares of the Common Stock acquired upon the
exercise of an Option if such shares shall not have been held by the Participant
for at least six months; and provided further,
however, that, subject to the requirements of Regulation T (as in effect
from time to time) promulgated under the Exchange Act, the Committee may
implement procedures to allow a broker chosen by a Participant to make payment
of all or any portion of the option price payable upon the exercise of an
Option and receive, on behalf of such Participant, all or any portion of the
shares of the Common Stock issuable upon such exercise.

(d)The Committee may, in its discretion, permit any Option to be
exercised, in whole or in part, prior to the time when it would otherwise be
exercisable.

(e)(1)Notwithstanding the provisions of Section 10(a) or the last
sentence of Section 13, in the event that a Change in Control shall occur,
then, each Option theretofore granted to any Participant which shall not have
theretofore expired or otherwise been cancelled or become unexercisable
shall become immediately exercisable in full.  For the purposes of this Section
10(e), a "Change in Control" shall be deemed to occur upon (i) the
election of one or more individuals to the Board which election results in one-
third of the directors of the Company consisting of individuals who have
not been directors of the Company for at least two years, unless such
individuals have been elected as directors or nominated for election by the
stockholders as directors by at least three-fourths of the directors of the
Company who have been directors of the Company for at least two years, (ii)
the sale by the Company of all or substantially all of its assets to any Person,
the consolidation of the Company with any Person, the merger of the
Company with any Person as a result of which merger the Company is not the
surviving entity as a publicly held corporation, (iii) the sale or transfer
of shares of the Company by the Company 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 shall own,
after such sales and transfers, at least one-fourth, but less 

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than one-half, of the shares of the Company 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 the Company who have been
directors of the Company for at least two years, (iv) the sale or
transfer of shares of the Company by the Company 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 shall
own, after such sales and transfers, at least one-half of the shares of
the Company having voting power for the election of directors or (v) as defined
in the Participant's employment agreement, if any, with the Company or a
Subsidiary.  For the purposes of this paragraph (1), (i) the term "Affiliate"
shall mean any Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
any other Person, (ii) the term "Person" shall mean any individual,
partnership, firm, trust, corporation or other similar entity and (iii) when two
or more Persons act as a partnership, limited partnership, syndicate or
other group for the purpose of acquiring, holding or disposing of securities of
the Company, such partnership, limited partnership, syndicate or group
shall be deemed a "Person."

(2)In the event that a Change of Control shall occur, then, from and
after the time of such event, neither the provisions of this Section
10(e) nor any of the rights of any Participant thereunder shall be modified or
amended in any way.

(f)Notwithstanding any other provision of the Plan to the contrary,
including, but not limited to, the provisions of Section 10(d), if any
Participant shall have effected a Hardship Withdrawal from a 401(k) Plan
maintained by the Company and/or one or more of the Subsidiaries, then, during
the period of one year commencing on the date of such Hardship Withdrawal, such
Participant may not exercise any Option using cash.  For the purpose of
this Section 10(f), a "Hardship Withdrawal" shall mean a distribution to a
Participant provided for in Reg. § 1.401(k)-1(d)(1)(ii) promulgated under
Section 401(k)(2)(B)(i)(IV) of the Code or an analogous provision of the Puerto
Rico Internal Revenue Code of 1994, as amended (the "Puerto Rico Code")
and the regulations promulgated thereunder, and a "401(k) Plan" shall mean a
plan which is a "qualified plan" within the contemplation of Section 401(a)
of the Code or an analogous provision of the Puerto Rico Code which contains a
"qualified cash or deferred arrangement" within the contemplation of
Section 401(k)(2) of the Code or an analogous provision of the Puerto Rico
Code.

11.Transferability.  (a)  Except as otherwise provided in Section
11(b), no Option shall be assignable or transferable except by will
and/or by the laws of descent and distribution and, during the life of any
Participant, each Option granted to such Participant may be exercised only by
him or her.

(b)  A Participant may, with the prior approval of the Committee, transfer
for no consideration an Option which is a non-qualified stock option to or
for the benefit of the Participant's Immediate Family, a trust for the exclusive
benefit of the Participant's Immediate Family or to a partnership or
limited liability company for one or more members of the Participant's Immediate
Family, subject to such limits as the Committee may establish, and the
transferee shall remain subject to all the terms and conditions applicable to
the Option prior to such transfer.  The term "Immediate Family" shall mean
the Participant's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, former spouse, siblings, nieces, 

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nephews, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-
in-law, or sister-in-law, including adoptive relationships or any person
sharing the Participant's household (other than a tenant or employee).

12.Termination of Employment or Service.  In the event a
Participant leaves the employ or service, or ceases to serve as a director, of
the Company and the Subsidiaries, whether voluntarily or otherwise but other
than by reason of his or her death or, in the case of Participant who shall
be an employee or director, retirement, each Option theretofore granted to him
or her which shall not have been exercisable prior to the date of the
termination of his or her employment or service shall terminate immediately.
Each other Option theretofore granted to him or her which shall not have
theretofore expired or otherwise been cancelled shall, to the extent exercisable
on the date of such termination of employment or service and not
theretofore exercised, terminate upon the earlier to occur of the expiration of
30 days after the date of such Participant's termination of employment
or cessation of service and the date of termination specified in such Option.
Notwithstanding the foregoing, if a Participant is terminated for cause
(as defined herein), each Option theretofore granted to him or her which shall
not have theretofore expired or otherwise been cancelled shall, to the
extent not theretofore exercised, terminate forthwith.  In the event a
Participant leaves the employ, or ceases to serve as a director, of the Company
and the Subsidiaries by reason of his or her retirement, each Option theretofore
granted to him or her which shall not have theretofore expired or
otherwise been cancelled shall become immediately exercisable in full and shall,
to the extent not theretofore exercised, terminate upon the earlier to
occur of the expiration of three years after the date of such retirement and the
date of termination specified in such Option.  In the event a
Participant's employment or service with the Company and the Subsidiaries
terminates by reason of his or her death, each Option theretofore granted to
him or her which shall not have theretofore expired or otherwise been cancelled
shall become immediately exercisable in full and shall, to the extent
not theretofore exercised, terminate upon the earlier to occur of the expiration
of three months after the date of the qualification of a representative
of his or her estate and the date of termination specified in such Option.  For
purposes of the foregoing, (a) the term "cause" shall mean:  (i)
the commission by the Participant of any act or omission that would constitute a
crime under federal, state or equivalent foreign law, (ii) the
commission by the Participant of any act of moral turpitude, (iii) fraud,
dishonesty or other acts or omissions that result in a breach of any fiduciary
or other material duty to the Company and/or the Subsidiaries, (iv) continued
substance abuse that renders the Participant incapable of performing his
or her material duties to the satisfaction of the Company and/or the
Subsidiaries, or (v) as defined in the Participant's employment agreement, if
any,
with the Company or a Subsidiary and (b) the term "retirement" shall mean
(I) the termination of a Participant's employment with the Company and
all of the Subsidiaries (x) other than for cause or by reason of his or her
death and (y) on or after the earlier to occur of (1) the first
day of the calendar month in which his or her 65th birthday shall occur and
(2) the date on which he or she shall have both attained his or her
55th birthday and completed 10 years of employment with the Company and/or the
Subsidiaries or (II) the termination of a Participant's service as a
director with the Company and all of the Subsidiaries (x) other than for cause
or by reason of his or her death and (y) on or after the first day of the
calendar month in which his or her 65th birthday shall occur.

13.Adjustment of Number of Shares.  In the event that a dividend
shall be declared upon the Common Stock payable in shares of the Common
Stock, the number of shares of the 

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Common Stock then subject to any Option and the number of shares of the
Common Stock reserved for issuance in accordance with the provisions of the
Plan but not yet covered by an Option and the number of shares set forth in
Section 9(b) shall be adjusted by adding to each share the number of shares
which would be distributable thereon if such shares had been outstanding on the
date fixed for determining the stockholders entitled to receive such
stock dividend.  In the event that the outstanding shares of the Common Stock
shall be changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or of another corporation,
whether through reorganization, recapitalization, stock split-up,
combination of shares, sale of assets, merger or consolidation in which the
Company is the surviving corporation, then, there shall be substituted for
each share of the Common Stock then subject to any Option and for each share of
the Common Stock reserved for issuance in accordance with the provisions
of the Plan but not yet covered by an Option and for each share of the Common
Stock referred to in Section 9(b), the number and kind of shares of stock
or other securities into which each outstanding share of the Common Stock shall
be so changed or for which each such share shall be exchanged.  In the
event that there shall be any change, other than as specified in this Section
13, in the number or kind of outstanding shares of the Common Stock, or of
any stock or other securities into which the Common Stock shall have been
changed, or for which it shall have been exchanged, then, if the Committee
shall, in its sole discretion, determine that such change equitably requires an
adjustment in the number or kind of shares then subject to any Option
and the number or kind of shares reserved for issuance in accordance with the
provisions of the Plan but not yet covered by an Option and the number or
kind of shares referred to in Section 9(b), such adjustment shall be made by the
Committee and shall be effective and binding for all purposes of the
Plan and of each stock option agreement or certificate entered into in
accordance with the provisions of the Plan.  In the case of any substitution or
adjustment in accordance with the provisions of this Section 13, the option
price in each stock option agreement or certificate for each share covered
thereby prior to such substitution or adjustment shall be the option price for
all shares of stock or other securities which shall have been substituted
for such share or to which such share shall have been adjusted in accordance
with the provisions of this Section 13.  No adjustment or substitution
provided for in this Section 13 shall require the Company to sell a fractional
share under any stock option agreement or certificate.  In the event of
the dissolution or liquidation of the Company, or a merger, reorganization or
consolidation in which the Company is not the surviving corporation, then,
except as otherwise provided in Section 10(e) and the second sentence of this
Section 13, each Option, to the extent not theretofore exercised, shall
terminate forthwith.

14.Purchase for Investment, Withholding and Waivers.  Unless the
shares to be issued upon the exercise of an Option by a Participant shall
be registered prior to the issuance thereof under the Securities Act of 1933, as
amended, such Participant will, as a condition of the Company's
obligation to issue such shares, be required to give a representation in writing
that he or she is acquiring such shares for his or her own account as
an investment and not with a view to, or for sale in connection with, the
distribution of any thereof.  In the event of the death of a Participant, a
condition of exercising any Option shall be the delivery to the Company of such
tax waivers and other documents as the Committee shall determine.  In
the case of each non-qualified stock option, a condition of exercising the same
shall be the entry by the person exercising the same into such
arrangements with the Company with respect to withholding as the Committee may
determine.  

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15.No Stockholder Status.  Neither any Participant nor his or her
legal representatives, legatees or distributees shall be or be deemed to
be the holder of any share of the Common Stock covered by an Option unless and
until a certificate for such share has been issued.  Upon payment of the
purchase price thereof, a share issued upon exercise of an Option shall be fully
paid and non-assessable.

16.No Restrictions on Corporate Acts.  Neither the existence of
the Plan nor any Option shall in any way affect the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead
of or affecting the Common Stock or the rights thereof, or dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding whether of a
similar character or otherwise.

17.No Employment Right.  Neither the existence of the Plan nor the
grant of any Option shall require the Company or any Subsidiary to
continue any Participant in the employ or service of the Company or such
Subsidiary.

18.Termination and Amendment of the Plan.  The Board may at any
time terminate the Plan or make such modifications of the Plan as it shall
deem advisable; provided, however, that the Board may not without
further approval of the holders of a majority of the shares of the
Common Stock present in person or by proxy at any special or annual meeting of
the stockholders, increase the number of shares as to which Options may
be granted under the Plan (as adjusted in accordance with the provisions of
Section 13), or change the class of persons eligible to participate in the
Plan, or change the manner of determining the option prices.  Except as
otherwise provided in Section 13, no termination or amendment of the Plan may,
without the consent of the Participant to whom any Option shall theretofore have
been granted, adversely affect the rights of such Participant under
such Option.  The Committee may not, without further approval of the holders of
a majority of the shares of the Common Stock present in person or by
proxy at any special or annual meeting of the stockholders, amend any
outstanding Option to reduce the option price, or cancel any outstanding Option
and contemporaneously award a new Option to the same optionee for substantially
the same number of shares at a lower option price.

19.Expiration and Termination of the Plan.  The Plan shall
terminate on April 27, 2010 or at such earlier time as the Board may determine.
Options may be granted under the Plan at any time and from time to time prior to
its termination.  Any Option outstanding under the Plan at the time of
the termination of the Plan shall remain in effect until such Option shall have
been exercised or shall have expired in accordance with its terms.

 

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20.Options for Outside Directors.

(a)A director of the Company who is not an employee of the Company or a
Subsidiary (an "Outside Director") shall be eligible to receive, in
addition to any other Option which he or she may receive pursuant to Section 6,
an annual Option.  Except as otherwise provided in this Section 20, each
such Option shall be subject to all of the terms and conditions of the Plan.

(b)(i)At the first meeting of the Board immediately following each
Annual Meeting of the Stockholders of the Company, each Outside Director
shall be granted an Option, which shall be a non-qualified stock option, to
purchase 8,000 shares of the Common Stock.  Notwithstanding the foregoing,
an Outside Director may not receive a grant under this Section 20 for any year
if and to the extent such Outside Director receives a grant of options to
purchase Common Stock under any other Company stock option plan then in effect
solely for his or her services as a director of the Company for such year
and the aggregate number of shares of Common Stock issuable upon the exercise of
all such options granted for such year would exceed 8,000.

(ii)The initial per share option price of each Option granted to an
Outside Director shall under this Section 20 be equal to the fair market
value of a share of the Common Stock on the date of grant.

(iii)The term of each Option granted to an Outside Director shall be
ten years from the date of the granting thereof.

(iv)All or any portion of the payment required upon the exercise of
an Option granted to an Outside Director may be made in kind by the
delivery of shares of the Common Stock having a fair market value equal to the
portion of the option price so paid; provided, however,
that no portion of such payment may be made by delivering shares of the Common
Stock acquired upon the exercise of an Option if such shares shall not
have been held by such Outside Director for at least six months; and
provided further, however, that, subject to the
requirements
of Regulation T (as in effect from time to time) promulgated under the Exchange
Act, the Committee may implement procedures to allow a broker chosen by
such Outside Director to make payment of all or any portion of the option price
payable upon the exercise of an Option and receive, on behalf of such
Outside Director, all or any portion of the shares of the Common Stock issuable
upon such exercise.

(c)The provisions of this Section 20 may not be amended except by the
vote of a majority of the members of the Board and by the vote of a
majority of the members of the Board who are not Outside Directors.

 

 

9PHILLIPS-VAN HEUSEN CORPORATION

 

EXHIBIT 10.15

PHILLIPS-VAN HEUSEN CORPORATION

PERFORMANCE INCENTIVE BONUS PLAN

(As amended through March 7, 2001)

 

1.Purpose.  The purposes of the Plan are to induce certain senior
executive employees of the Company and its Subsidiaries to remain in the
employ of the Company and its Subsidiaries, to attract new individuals to enter
into such employ and to provide such persons with additional incentive
to promote the success of the business of the Company and its Subsidiaries.

2.Definitions.

(a)Defined Terms.  The following words as used in the Plan
shall have the meanings ascribed to each below.

"Board" means the Board of Directors of the Company.

"Cause" means (i) the commission by the Participant of any act
or omission that would constitute a crime under federal, state or
equivalent foreign law, (ii) the commission by the Participant of any act of
moral turpitude, (iii) fraud, dishonesty or other acts or omissions that
result in a breach of any fiduciary or other material duty to the Company and/or
the Subsidiaries, (iv) continued substance abuse that renders the
Participant incapable of performing his or her material duties to the
satisfaction of the Company and/or the Subsidiaries, or (v) as defined in the
Participant's employment agreement (or other document or documents evidencing
the terms of the Participant's employment), if any, with the Company or a
Subsidiary.

"Code" means the Internal Revenue Code of 1986, as in effect
at the time with respect to which such term is used.

"Committee" means the committee of the Board that the Board
shall designate from time to time to administer the Plan or any
subcommittee thereof.

"Company" means Phillips-Van Heusen Corporation, a Delaware
corporation.

"Fiscal Year" means each fiscal year of the Company, as set
forth in the Company's books and records.

"Participant" means each senior executive officer of the
Company or a Subsidiary selected by the Committee to be a participant under
the Plan, as provided herein.

"Plan" means the Phillips-Van Heusen Corporation Performance
Incentive Bonus Plan, as set forth herein and as may be amended from time
to time.

"Subsidiary" has the meaning ascribed to such term in section
424(f) of the Code.

(b)Interpretation.

(i)The definitions of terms defined herein shall apply equally to
both the singular and plural forms of the defined terms.

(ii)Any pronoun shall include the corresponding masculine, feminine and
neuter forms, as the context may require.

(iii)All references herein to Sections shall be deemed to be references
to Sections of the Plan unless the context shall otherwise require.

(iv)The headings of the Sections are included for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of the Plan.

3.Committee.  The Plan shall be administered by the Compensation
Committee of the Board or such other committee of the Board that the
Board shall designate from time to time.  The Committee shall consist of two or
more members of the Board each of whom it is intended would be "outside
directors" within the meaning of section 162(m)(4)(C) of the Code.  The
Committee shall be appointed annually by the Board.  The Board may, at any time,
from time to time, remove any members of the Committee, with or without cause,
appoint additional directors as members of the Committee and fill
vacancies on the Committees, however created.  A majority of the members of the
Committee shall constitute a quorum.  All determinations of the
Committee shall be made by a majority vote of its members at a meeting duly
called and held.

4.Administration.

(a)Subject to the express provisions of the Plan, the Committee shall
have complete authority to administer and interpret the Plan.  The
Committee shall establish the performance objectives for any Fiscal Year in
accordance with Section 5 hereof and certify whether such performance
objectives have been attained.  Any determination made by the Committee under
the Plan shall be final and conclusive.  The Committee in its sole
discretion shall resolve any dispute or disagreement that may arise hereunder or
as a result of or in connection with any action taken hereunder.  The
Committee may employ such legal counsel, consultants and agents (including
counsel or agents who are employees of the Company or a Subsidiary) as it may
deem desirable for the administration of the Plan and may rely upon any opinion
received from any such counsel or consultant or agent and any
computation received from such consultant or agent.  The Company shall pay all
expenses incurred in the administration of the Plan, including, without
limitation, for the engagement of any counsel, consultant or agent.  No member
or former member of the Board or the Committee shall be liable for any
act, omission, interpretation, construction or determination made in connection
with the Plan other than as a result of such individual's willful
misconduct.

(b)The Chief Executive Officer of the Company may administer the Plan
with respect to employees of the Company or a Subsidiary whose compensation
is not, and is reasonably not expected to become, subject to the provisions of
Section 162(m) of the Code, subject to such conditions, restrictions and
limitations as may be imposed by the Committee.  Any actions duly taken by the
Chief Executive Officer with respect to the administration of the 

2

Plan and the qualification for and payment of bonuses to employees shall be
deemed to have been taken by the Committee for purposes of the Plan.

5.Determination of Participation, Performance Criteria and
Bonuses.

(a)Participation and Performance Criteria.  The Committee shall
determine who the Participants for each Fiscal Year will be and establish
the performance objective or objectives that must be satisfied in order for a
Participant to be eligible to receive a bonus for such Fiscal Year, within
90 days of the commencement of such Fiscal Year.  Notwithstanding the
foregoing, if a person whose compensation is not, and is reasonably not
expected to become, subject to the provisions of Section 162(m) of the Code,
becomes employed by the Company and/or one or more of its Subsidiaries more
than 90 days after a Fiscal Year commences or the Committee determines that a
senior executive employee of the Company and/or one or more of its
Subsidiaries whose compensation is not, and is reasonably not expected to
become, subject to the provisions of Section 162(m) of the Code should become
a Participant after such 90-day period has ended, the Committee shall establish
the performance objective or objectives that must be satisfied in order
for a Participant to receive a bonus for such Fiscal Year at the time such
determination is made.

(b)Performance Objectives.  Performance objectives shall be based
upon the achievement of earnings targets, with respect to (i) the
Company, for Participants with corporate responsibilities and (ii) a Subsidiary
or a division or business unit of the Company or a Subsidiary, for
Participants who are responsible for a Subsidiary, division or business unit.
For Participants with responsibility for more than one Subsidiary,
division or business unit, performance objectives shall be established for each
such Subsidiary, division and business unit for which he has
responsibility, in each case, as established by the Committee.  The Committee
shall establish three earnings targets for each Fiscal Year for the
Company and, to the extent necessary, due to the responsibilities of a
Participant, each Subsidiary, division and business unit.  The three targets
shall consist of a threshold level (below which no bonus shall be payable), a
plan level and a maximum level (above which no additional bonus shall be
payable).

(c)Bonus Percentages.

(i)At the time that the Committee determines the Participants and
establishes the performance criteria with respect to a Fiscal Year, it shall
determine the bonus percentage payable to each Participant with respect to such
Fiscal Year if the applicable threshold, plan or maximum level of
earnings is attained.  The bonus percentages represent the percentage of a
Participant's base salary that he shall be entitled to receive as a bonus if
the corresponding earnings are attained.  There shall be no limit to the minimum
or maximum bonus percentages that may be established for any Fiscal
Year, bonus percentages may differ from Participant to Participant in any Fiscal
Year and a Participant's bonus percentages may change from year to
year, but with respect to each Participant for each Fiscal Year, the bonus
percentage for attaining the maximum level of earnings shall exceed the bonus
percentage for attaining the plan level of earnings which, in turn, shall exceed
the bonus percentage for attaining the threshold level of earnings.  In
determining the bonus percentage for each Participant, the Committee may take
into account the nature of the services rendered by such Participant, his
past, present and potential contribution to the Company and its Subsidiaries,
his seniority with the 

3

Company or any of its Subsidiaries and such other factors as the Committee,
in its discretion, shall deem relevant.

(ii)If a threshold, plan or maximum level of earnings is achieved, each
applicable Participant shall receive a bonus equal to his base salary as
of the last day of the applicable Fiscal Year times the applicable assigned
bonus percentage.  If the level of earnings achieved falls between two of
the target levels, then each applicable Participant shall receive a bonus equal
to his base salary as of the last day of the applicable Fiscal Year
times a percentage that is on a straight line interpolation between the bonus
percentages for the two target levels.  If a maximum level of earnings is
exceeded, each applicable Participant shall receive a bonus equal to his base
salary as of the last day of the applicable Fiscal Year times the bonus
percentage assigned to the maximum level of earnings.

(d)Termination of Employment During Fiscal Year.  If a
Participant's employment terminates during a Fiscal Year he was determined to be
a
Participant by reason of his death or disability and for no other reason, such
Participant or his estate shall receive the bonus, if any, which would
otherwise have been payable to such Participant for such Fiscal Year pro rated
to the portion of such Fiscal Year actually worked by such Participant.
Any such bonus shall be paid promptly after it is determined to be payable.

(e)Determination of Bonuses.  The Committee shall determine
whether any earnings targets were achieved for a Fiscal Year, which
Participants shall have earned bonuses as the result thereof, and the bonus
percentage such Participants are entitled to no later than the end of the
first quarter of the Fiscal Year immediately subsequent to the Fiscal Year with
respect to which the bonuses were earned.

(f)Absolute Maximum Bonus.  Notwithstanding any other provision in
the Plan to the contrary, the maximum bonus that may be paid to any
Participant under the Plan with respect to any Fiscal Year may not exceed
$3,000,000.

6.Payment.

(a)Timing.  Payment of any bonus to a Participant shall be made
within 30 days following the Compensation Committee's determination
pursuant to Section 5 that the applicable targets for the preceding Fiscal Year
were achieved, the bonus was earned and what bonus percentage the
Participant is entitled to.

(b)Forfeiture.  Except as otherwise set forth in Section 5(d), in
order to remain eligible to receive a bonus, a Participant must be
employed by the Company on the day of payment or must have died, become
disabled, retired under the Company's retirement plan or have been discharged
without cause prior to payment.

(c)Form of Payment.  All bonuses payable under the Plan, if any,
shall be payable in cash.  All amounts hereunder shall be paid solely
from the general assets of the Company.  The Company shall not maintain any
separate fund to provide any benefits hereunder, and each Participant shall
be solely an unsecured creditor of the Company with respect thereto.

4

7.General Provisions of the Plan.

(a)Effective Date.  The Plan became effective on March 2, 2000,
subject to the ratification of the Plan by the Company's stockholders.

(b)Term of the Plan.  The Plan shall be effective with respect to
Fiscal Years 2000 through 2004 and shall terminate upon the payment of
all bonuses, if any, earned with respect to Fiscal Year 2004, unless the holders
of a majority of the shares of the Company's Common Stock present in
person or by proxy at any special or annual meeting of the stockholders of the
Company occurring on or prior to the date of the 2004 Annual Meeting of
Stockholders shall approve the continuation of the Plan.

(c)Eligibility.  Participation in the Plan with respect to any
Fiscal Year shall be available only to persons (i) who are senior executive
employees of the Company and/or one or more of its Subsidiaries on the date of
the Committee's determination of performance criteria for such Fiscal
Year pursuant to Section 5(a) hereof or (ii) subject to Section 5(a), who
thereafter become employed by the Company and/or one or more of its
Subsidiaries or who are thereafter otherwise determined by the Committee to be
Participants.

(d)Amendment and Termination.  Notwithstanding Section 8(b), the
Board or the Committee may at any time amend, suspend, discontinue or
terminate the Plan as it deems advisable; provided, however, that
no such action shall be effective without approval by the holders of a
majority of the shares of the Company's Common Stock present in person or by
proxy at any special or annual meeting of the Company's stockholders, to
the extent such approval is necessary to continue to qualify the amounts payable
hereunder to "covered employees" (within the meaning of section 162(m)
of the Code) as deductible under section 162(m) of the Code.

(e)Designation of Beneficiary.  Each Participant may designate a
beneficiary or beneficiaries (which beneficiary may be an entity other
than a natural person) to receive any payments which may be made following the
Participant's death.  Such designation may be changed or canceled at any
time without the consent of any such beneficiary.  Any such designation, change
or cancellation must be made in a form approved by the Committee and
shall not be effective until received by the Committee.  If no beneficiary has
been named, or the designated beneficiary or beneficiaries shall have
predeceased the Participant, the beneficiary shall be the Participant's spouse
or, if no spouse survives the Participant, the Participant's estate.  If
a Participant designates more than one beneficiary, the rights of such
beneficiaries shall be payable in equal shares, unless the Participant has
designated otherwise.

(f)Withholding.  Any amount payable to a Participant or a
beneficiary under this Plan shall be subject to any applicable Federal, state
and local income and employment taxes and any other amounts that the Company or
a Subsidiary is required at law to deduct and withhold from such
payment.

8.No Right of Continued Employment.  Neither the existence nor any
term of the Plan shall be construed as conferring upon any Participant
any right to continue in the employment of the Company or any of its
Subsidiaries, nor shall participation herein for any Fiscal Year confer 

5

 

upon any Participant any right to participate in the Plan with respect to any
subsequent Fiscal Year.

9.No Limitation on Corporate Actions.  Nothing contained in
the Plan shall be construed to prevent the Company or any Subsidiary from
taking any corporate action, which is deemed by it to be appropriate or in its
best interest, whether or not, such action would have an adverse effect
on any awards made under the Plan.  No employee, beneficiary or other person
shall have any claim against the Company or any Subsidiary as a result of
any such action.

10.Miscellaneous.

(a)Nonalienation of Benefits.  Except as expressly provided
herein, no Participant or beneficiary shall have the power or right to
transfer, anticipate, or otherwise encumber the Participant's interest under the
Plan.  The Company's obligations under this Plan are not assignable or
transferable except to (i) a corporation or other entity which acquires all or
substantially all of the Company's assets or (ii) any corporation or
other entity into which the Company may be merged or consolidated.  The
provisions of the Plan shall inure to the benefit of each Participant and the
Participant's beneficiaries, heirs, executors, administrators or successors in
interest.

(b)Severability.  If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full force and effect
without regard to such unenforceable provision and shall be applied as though
the unenforceable provision were not contained in the Plan.

(c)Governing Law.  The Plan shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York,
without giving effect to the conflict of law principles thereof.

 

 

 

 

6

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