EXHIBIT 10.1
POLO RALPH LAUREN
CORPORATION
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is made effective as of the 28th day of
September, 2009 (the “Effective Date”), by and between
Polo Ralph Lauren Corporation, a Delaware corporation (the
“Corporation”), and Tracey Travis (the
“Executive”).
WHEREAS, the Executive has been
employed with the Corporation pursuant to an Employment Agreement
dated March 26, 2007 (the “2007 Employment
Agreement”); and
WHEREAS, the Corporation and
Executive wish to amend and restate such 2007 Employment Agreement
effective as of the date hereof;
NOW THEREFORE, in consideration of
the mutual covenants and premises contained herein, the parties
hereby agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment Term
. The Corporation hereby agrees to employ
the Executive, and the Executive hereby agrees to serve the
Corporation, on the terms and conditions set forth herein. The
employment of the Executive by the Corporation shall be effective
as of the date hereof and continue until the close of business on
the third anniversary of the Effective Date of this Agreement (the
“Term”), unless terminated earlier in accordance with
Article II hereof.
1.2 Position and Duties
. During the Term the Executive shall
faithfully, and in conformity with the directions of the Board of
Directors of the Corporation and any Committee thereof (the
“Board”) or the management of the Corporation
(“Management”), perform the duties of her employment,
and shall devote to the performance of such duties her full time
and attention. During the Term the Executive shall serve in such
position as the Board or Management may from time to time direct.
During the Term, the Executive may engage in outside activities
provided those activities do not conflict with the duties and
responsibilities enumerated hereunder, and provided further that
the Executive receives written approval in advance from Management
for any outside business activity that may require significant
expenditure of the Executive’s time in which the Executive
plans to become involved, whether or not such activity is pursued
for profit. The Executive shall be excused from performing any
services hereunder during periods of temporary incapacity and
during vacations in accordance with the Corporation’s
disability and vacation policies.
1.3 Place of Performance
. The Executive shall be employed at the
principal offices of the Corporation located in New York, New York,
except for required travel on the Corporation’s
business.
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1.4 Compensation and Related
Matters .
(a) Base Compensation
. In consideration of her services during
the Term, the Corporation shall pay the Executive cash compensation
at an annual rate of not less than seven hundred twenty-five
thousand dollars ($725,000) (“Base Compensation”), less
applicable withholdings. Executive’s Base Compensation shall
be subject to such increases as may be approved by the Board or
Management. The Base Compensation shall be payable as current
salary, in installments not less frequently than monthly, and at
the same rate for any fraction of a month unexpired at the end of
the Term.
(b) Bonus
. During the Term, the Executive shall have
the opportunity to earn an annual bonus in accordance with any
annual bonus program the Corporation maintains that would be
applicable to the Executive.
(c) Stock Awards
. During the Term, the Executive shall be
eligible to participate in the Polo Ralph Lauren Corporation 1997
Long-Term Stock Incentive Plan (the “Incentive Plan”).
All grants to the Executive of stock options and restricted
performance share units (“RPSUs”), if any, are governed
by the terms of the Incentive Plan and are subject, in all cases,
to approval by the Compensation Committee of the Board of Directors
in its sole discretion.
(d) Car Allowance
. During the Term, the Corporation shall pay
Executive a car allowance in the amount of one thousand five
hundred dollars ($1,500) per month, less applicable
withholdings.
(e) Expenses.
During the Term, the Executive shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in performing services
hereunder, including all reasonable expenses of travel and living
while away from home, provided that such expenses are
incurred and accounted for in accordance with the policies and
procedures established by the Corporation.
(f) Vacations
. During the Term, the Executive shall be
entitled to the number of vacation days in each fiscal year, and to
compensation in respect of earned but unused vacation days,
determined in accordance with the Corporation’s vacation
program. The Executive shall also be entitled to all paid holidays
given by the Corporation to its employees.
(g) Other Benefits
. The Executive shall be entitled to
participate in all of the Corporation’s employee benefit
plans and programs in effect during the Term as would by their
terms be applicable to the Executive, including, without
limitation, any life insurance plan, medical insurance plan, dental
care plan, accidental death and disability plan, financial
counseling program and sick/personal leave program. The Corporation
shall not make any changes in such plans or programs that would
adversely affect the Executive’s benefits thereunder, unless
such change occurs pursuant to a plan or program applicable to
other similarly situated employees of the Corporation and does not
result in a proportionately greater reduction in the rights or
benefits of the Executive as compared with other similarly situated
employees of the Corporation. Except as otherwise specifically
provided herein, nothing paid to the Executive under any plan or
program presently in effect or made available in the future shall
be in lieu of the Base Compensation or any bonus payable under
Sections 1.4(a) and 1.4(b) hereof.
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ARTICLE II
TERMINATION OF
EMPLOYMENT
2.1 Termination of Employment
. The Executive’s employment may
terminate prior to the expiration of the Term under the following
circumstances:
(a) Without Cause
. The Executive’s employment shall
terminate upon the Corporation notifying the Executive that her
services will no longer be required.
(b) Death
. The Executive’s employment shall
terminate upon the Executive’s death.
(c) Disability
. If, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall
have been absent and unable to perform the duties hereunder on a
full-time basis for an entire period of six consecutive months, the
Executive’s employment may be terminated by the Corporation
following such six-month period.
(d) Cause
. The Corporation may terminate the
Executive’s employment for Cause. For purposes hereof,
“Cause” shall mean:
(i) deliberate
or intentional failure by the Executive to substantially perform
the material duties of the Executive hereunder (other than due to
disability as defined in 2.1(c)); or
(ii) deliberate
or intentional act of fraud, embezzlement, theft, breach of
fiduciary duty, dishonesty, or any other misconduct or any
violation of law (other than a traffic violation) committed by the
Executive; or
(iii) intentional
wrongful damage to material assets of the Corporation;
or
(iv) the
Executive’s intentional wrongful disclosure of confidential
information of the Corporation or any of its affiliates;
or
(v) the
Executive’s intentional wrongful engagement in any
competitive activity which would constitute a breach of this
Agreement and/or of the Executive’s duty of loyalty;
or
(vi) the
Executive’s intentional breach of any material employment
policy of the Corporation; or
(vii) performance
by the Executive of her employment duties in a manner deemed by the
Corporation, in its sole discretion, to be grossly negligent;
or
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(viii) the
commission of any act by the Executive, whether or not performed in
the workplace, which subjects or, if publicly known, would be
likely to subject the Corporation to public ridicule or
embarrassment, or would likely be detrimental or damaging to the
Corporation’s reputation, goodwill, or relationships with its
customers, suppliers, vendors, or employees.
No act, or failure to act, on the
part of the Executive shall be deemed “intentional” if
it was due primarily to an error in judgment or negligence, but
shall be deemed “intentional” only if done, or omitted
to be done, by the Executive not in good faith and without
reasonable belief that her action or omission was in, or not
opposed to, the best interest of the Corporation. Failure to meet
performance standards or objectives of the Corporation shall not
constitute Cause for purposes hereof.
(e) Voluntary Termination
. The Executive may voluntarily terminate
the Executive’s employment with the Corporation at any time,
with or without Good Reason. For purposes of this Agreement,
“Good Reason” shall mean a termination of employment by
the Executive within sixty (60) days following the occurrence
of (A) a material diminution in or adverse alteration to
Executive’s title, base salary, position or duties, including
no longer reporting to the Chairman & Chief Executive
Officer, or to the President & Chief Operating Officer,
(B) the relocation of the Executive’s principal office
outside the area which comprises a fifty (50) mile radius from
New York City, or (C) a failure of the Corporation to comply
with any material provision of this Agreement provided that the
events described in clauses (A), (B), and (C) above shall not
constitute Good Reason (1) until the Executive provides
written notice to the Corporation of the existence of such
diminution, change, reduction, relocation or failure within thirty
(30) days of its occurrence and (2) unless such
diminution, change, reduction or failure (as applicable) has not
been cured within thirty (30) days after written notice of
such noncompliance has been given by the Executive to the
Corporation.
2.2 Date of Termination
. The date of termination shall
be:
(a) if the Executive’s
employment is terminated by the Executive’s death, the date
of the Executive’s death;
(b) if the Executive’s
employment is terminated by reason of Executive’s disability
pursuant to Section 2.1(c) or by the Corporation pursuant to
Sections 2.1(a) or 2.1(d), the date specified by the
Corporation; and
(c) if the Executive’s
employment is terminated by the Executive, the date on which the
Executive notifies the Corporation of her termination.
2.3 Effect of Termination of
Employment .
(a) If the Executive’s
employment is terminated by the Corporation pursuant to
Section 2.1(a), or if the Executive resigns for Good Reason
pursuant to Section 2.1(e), the Executive shall only be
entitled to the following:
(i)
Severance . Subject to
Section 2.3(a)(v) and Section 4.1(a) hereof, the
Corporation shall: (a) beginning with the first payroll period
following the 30 th day
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following the date of termination of
Executive’s employment, continue to pay the Executive, in
accordance with the Corporation’s normal payroll practice,
her Base Compensation, as in effect immediately prior to such
termination of employment, for the longer of the balance of the
Term or the one-year period commencing on the date of such
termination (whichever period is applicable shall be referred to
herein as the “Severance Period”), provided that the
initial payment shall include Base Compensation amounts for all
payroll periods from the date of termination through the date of
such initial payment; and (b) pay to the Executive, on the
last business day of the Severance Period, an amount equal to the
bonus paid to the Executive for the most recently completed fiscal
year prior to the fiscal year in which her employment is
terminated. If the Corporation has not paid any such bonus to the
Executive in such prior fiscal year, then the Corporation shall not
be obligated to make any bonus payment to the Executive. Under no
circumstances shall the Executive be entitled to any bonus payment
for the fiscal year in which her employment is terminated.
Notwithstanding the foregoing, in order to receive any severance
benefits under this Section 2.3(a)(i), the Executive must sign
and not timely revoke a release and waiver of claims against the
Corporation, its successors, affiliates, and assigns, in a form
acceptable to the Corporation on or prior to the 30
th day following the date of termination of
Executive’s employment.
(ii)
Stock Awards . The Executive’s
rights with respect to any stock options and RPSUs provided to the
Executive by the Corporation shall be governed by the provisions of
the Corporation’s Incentive Plan and the respective award
agreements, if any, under which such awards were granted, except as
provided in Section 4.1(a).
(iii)
Welfare Plan Coverages . The
Executive shall continue to participate during the Severance Period
in any group medical or dental insurance plan she participated in
prior to the date of her termination, under substantially similar
terms and conditions as an active employee; provided that
participation in such group medical or dental insurance plan shall
only continue for as long as permitted under COBRA and further,
shall correspondingly cease at such time as the Executive
(a) becomes eligible for a future employer’s medical
and/or dental insurance coverage (or would become eligible if the
Executive did not waive coverage) or (b) violates any of the
provisions of Article III as determined by the Corporation in its
sole discretion. Notwithstanding the foregoing, the Executive may
not continue to participate in such plans on a pre-tax or
tax-favored basis.
(iv)
Retirement Plans . Without limiting
the generality of the foregoing, it is specifically provided that
the Executive shall not accrue additional benefits under any
pension plan of the Corporation (whether or not qualified under
Section 401(a) of the Internal Revenue Code of 1986, as
amended) during the Severance Period.
(v)
Section 409A . Notwithstanding
any provision in this Agreement to the contrary, no amounts shall
be payable pursuant to Section 2.3(a) or Section 4.1(a)
unless the Executive’s termination of employment constitutes
a “separation from service” within the meaning of
Section 1.409A-1(h) of the Department of Treasury Regulations.
If the Executive is determined to be a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of
the Internal Revenue Code, as amended, and the rules and
regulations issued thereunder (the “Code”), then no
payment that is payable under Sections 2.3(a)(i) or 4.1(a) hereof
(the “Severance Payment”) on account of
Executive’s “separation from service” shall be
made before
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the date that is at least six months after the
Executive’s “separation from service” (or if
earlier, the date of the Executive’s death) if and to the
extent that the Severance Payment constitutes deferred compensation
(or may be nonqualified deferred compensation) under
Section 409A of the Code and such deferral is required to
comply with the requirements of Section 409A of the Code. For
the avoidance of doubt, no portion of the Severance Payment shall
be delayed for six months after the Executive’s
“separation from service” if such portion
(x) constitutes a “short term deferral” within the
meaning of Section 1.409A-1(a)(4) of the Department of
Treasury Regulations, or (y) (A) it is being paid due to
the Corporation’s termination of the Executive’s
employment without Cause or the Executive’s termination of
employment for Good Reason; (B) it does not exceed two times
the lesser of (1) the Executive’s annualized
compensation from the Corporation for the calendar year prior to
the calendar year in which the termination of the Executive’s
employment occurs, or (2) the maximum amount that may be taken
into account under a qualified plan pursuant to
Section 401(a)(17) of the Code for the year in which the
Executive’s employment terminates; and (C) the payment
is required under this Agreement to be paid no later than the last
day of the second calendar year following the calendar year in
which the Executive incurs a “separation from service.”
For purposes of Section 409A of the Code, the
Executive’s right to receive installment payments pursuant to
Section 2.3(a) shall be treated as a right to receive a series
of separate and distinct payments. To the extent that any
reimbursement of any expense under Section 1.4(e) or in-kind
benefits provided under this Agreement are deemed to constitute
taxable compensation to the Executive, such amounts will be
reimbursed or provided no later than December 31 of the year
following the year in which the expense was incurred. The amount of
any such expenses reimbursed or in-kind benefits provided in one
year shall not affect the expenses or in-kind benefits eligible for
reimbursement or payment in any subsequent year, and the
Executive’s right to such reimbursement or payment of any
such expenses will not be subject to liquidation or exchange for
any other benefit . The determination of whether the
Executive is a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code as of the time of the
Executive’s separation from service shall made by the
Corporation in accordance with the terms of Section 409A of
the Code and applicable guidance thereunder (including without
limitation Treasury Regulation Section 1.409A-1(i) and any
successor provision thereto).
(b) If the Executive’s
employment is terminated by reason of the Executive’s death
or disability, pursuant to Sections 2.1(b) or 2.1(c), the Executive
(or the Executive’s designee or estate) shall only be
entitled to whatever welfare plans benefits are available to the
Executive pursuant to the welfare plans the Executive participated
in prior to such termination, and whatever stock awards may have
been provided to the Executive by the Corporation the terms of
which shall be governed by the provisions of the
Corporation’s Incentive Plan and the respective award
agreements, if any, under which such stock awards were
provided.
(c) If the Executive’s
employment is terminated by the Corporation for Cause or by the
Executive without Good Reason (as defined in Section 2.1(e)),
the Executive shall receive only that portion of the
Executive’s then current Base Compensation payable through
the Executive’s termination date. The Executive’s
rights with respect to any stock awards provided to the Executive
by the Corporation shall be governed by the provisions of the
Corporation’s Incentive Plan and the respective award
agreements, if any, under which such stock awards were
provided.
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ARTICLE III
COVENANTS OF THE
EXECUTIVE
3.1 Non-Compete .
(a) The Corporation and the
Executive acknowledge that: (i) the Corporation has a special
interest in and derives significant benefit from the unique skills
and experience of the Executive; (ii) the Executive will use
and have access to proprietary and valuable Confidential
Information (as defined in Section 3.2 hereof) during the
course of the Executive’s employment; and (iii) the
agreements and covenants contained herein are essential to protect
the business and goodwill of the Corporation or any of its
subsidiaries, affiliates or licensees. Accordingly, except as
hereinafter noted, the Executive covenants and agrees that during
the Term, and for the remainder of such Term following the
termination of Executive’s employment, the Executive shall
not provide any labor, work, services or assistance (whether as an
officer, director, employee, partner, agent, own
