LIZ CLAIBORNE, INC. EXECUTIVE TERMINATION BENEFITS AGREEMENT

Exhibit 10.3

LIZ CLAIBORNE, INC.
EXECUTIVE TERMINATION BENEFITS AGREEMENT

This second amended and restated Executive Termination Benefits Agreement (this “ Agreement ”), dated as of the 14th day of July, 2009 (the “ Effective Date ”), is by and between Liz Claiborne, Inc., a Delaware corporation (the “ Company ”), and William L. McComb (the “ Executive ”).

WHEREAS, the Company’s Board of Directors (the “ Board ”) recognizes that the possibility of a change in control of the Company and the uncertainty and questions which it may raise may result in the departure or distraction of the Executive to the detriment of the Company and its stockholders;

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the Executive to his assigned duties in the face of the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by the possibility, threat or occurrence of a change in control of the Company;

WHEREAS, should the Company be faced with a possible change in control situation, in addition to the Executive’s regular duties, he may be called upon to assist in the assessment of proposals, advise management and the Board as to whether such proposals would be in the best interests of the Company and its stockholders, and to take such other actions as the Board might determine to be appropriate;

WHEREAS, the Company and the Executive originally entered into this Agreement on October 13, 2006 and, in order to avoid certain adverse federal income tax consequences to the Executive as a result of Section 409A of the Internal Revenue Code of 1986, as amended (“ Section 409A ”), the Company and the Executive amended and restated this Agreement as of December 24, 2008;

WHEREAS, the Company and the Executive desire to amend and restate this Agreement as of the date first written above in order to reflect the replacement of the Executive’s amended and restated employment agreement dated as of December 24, 2008 with the severance benefits agreement between the Company and the Executive dated the date hereof (the “ Severance Benefits Agreement ”).

NOW, THEREFORE, to assure the Company that it will have the continued undivided attention and services of the Executive and the availability of his advice and counsel notwithstanding the possibility, threat or occurrence of a bid to take over control of the Company, and to induce the Executive to remain in the employ of the Company in such a circumstance, for the benefit of the Company and its shareholders, and for other good and valuable consideration, the Company and the Executive agree as follows:

1.  Term of Agreement .

(a) Except as otherwise provided in Section 1(b) below, this Agreement shall be effective as of the date hereof and shall continue in effect until the end of the “Agreement Term” as such term is used in the Severance Benefits Agreement.

(b) If a Change in Control shall have occurred at any time during the period in which this Agreement is effective, then notwithstanding any provision hereof to the contrary, this Agreement shall be effective and continue in effect for (i) the remainder of the month in which the Change in Control occurred and (ii) a term of thirty-six (36) months beyond the month in which such Change in Control occurred; provided that if any obligations of the Company hereunder shall not have been fully and finally discharged at the end of such thirty-six (36) month period, this Agreement shall remain in effect until such obligations shall have been finally discharged in full. The period commencing on the earlier of a Potential Change in Control (if applicable) or Change in Control and ending with the conclusion of such thirty-six (36) month period shall be referred to hereinafter as the “ Protected Period ”.

2.  Change in Control and Potential Change in Control .

(a) For purposes of this Agreement, a “ Change in Control ” shall be deemed to have occurred:

(i) if any person as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time (the “ Exchange Act ”), and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (a “ Person ”), but excluding the Company, any subsidiary of the Company and any employee benefit plan sponsored or maintained by the Company or any subsidiary of the Company (including any trustee of such plan acting as trustee), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13(d)-3 under the Exchange Act, as amended from time to time) of Company securities representing 25% or more of either (i) the then outstanding shares of the Company’s common stock or (ii) the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), or (B) any acquisition by any corporation or similar entity pursuant to a reorganization, merger or consolidation if following such reorganization, merger or consolidation, the conditions described in sub-clauses (1), (2) and (3) of Section 2(a)(iii) below have been satisfied; or

(ii) if individuals who, as of the date hereof, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds (2/3) of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) upon consummation of a reorganization, merger or consolidation of the Company (a “ Business Combination ”), in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the then outstanding shares of common stock of the Company and the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (2) no Person (excluding (A) any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination and (B) any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, 25% or more of, respectively, the then outstanding shares of the common stock of the Company, or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors) beneficially owns, directly or indirectly, 25% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement relating to, or of the action of the Incumbent Board providing for, such Business Combination; or

(iv) upon consummation of the sale or other disposition of all or substantially all of the assets of the Company, unless following such transaction (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the then outstanding shares of common stock of the Company and the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors immediately prior to such transaction beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the acquiring corporation (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (2) no Person (excluding (A) any employee benefit plan (or related trust) of the Company or such acquiring corporation and (B) any Person beneficially owning, immediately prior to such transaction, 25% or more of, respectively, the then outstanding shares of the common stock of the Company, or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors) beneficially owns, directly or indirectly, 25% or more of, respectively, the then outstanding shares of common stock of the acquiring corporation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (3) at least a majority of the members of the board of directors of the acquiring corporation were members of the Incumbent Board at the time of the execution of the initial agreement relating to, or of the action of the Incumbent Board providing for, such sale or disposition; or

(v) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

(b) For purposes of this Agreement, a “ Potential Change in Control ” shall be deemed to have occurred if (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) any Person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or (iii) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred; provided that the Board shall not be precluded from adopting a resolution to the effect that for purposes of this Agreement, it is the good faith opinion of the Board that a Potential Change in Control has been abandoned and that a Potential Change in Control no longer exists.

(c) For purposes of Sections 3 through 9 of this Agreement, the term “Company” shall include Liz Claiborne, Inc. and any successor thereto, whether by merger, reorganization, consolidation, acquisition of substantially all of its assets or any other means.

3.  Covered Termination .

(a) In the event that the Executive’s employment is terminated during the Protected Period either (i) by the Company without Cause (as defined in Section 3(c) below) or (ii) by the Executive for Good Reason (as defined in Section 3(b) below) (each, a “ Covered Termination ”), the Company will provide the Executive with the payments and benefits set forth in Section 4 below.

(b) For purposes of this Agreement, “ Good Reason ” shall mean the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause as provided below, for such termination exists or has occurred, including without limitation other employment):

(i) failure to elect or reelect or otherwise maintain the Executive in the offices or positions, or substantially equivalent offices or positions, of or with the Company, which the Executive held immediately prior to the Change of Control;

(ii) a significant adverse change in the nature or scope of the authorities, powers, functions, duties or responsibilities attached to the position with the Company which the Executive held immediately prior to the Change in Control;

(iii) a material reduction by the Company, without the Executive’s prior consent, in either (1) the Executive’s annual base salary immediately prior to the Change in Control or (2) the Executive’s target bonus opportunity (expressed as a percentage of the Executive’s annual base salary) immediately prior to the Change in Control;

(iv) the Company’s requiring the Executive, without the Executive’s prior consent, to be based more than fifty (50) miles from the Company’s offices at which the Executive is based immediately prior to the Change in Control (excluding for this purpose required travel on the Company’s business to an extent substantially consistent with the Executive’s business travel obligations immediately prior to the Change in Control), or, in the event the Executive consents to any such relocation of his offices, the failure by the Company to provide the Executive with all of the benefits of the Company’s relocation policy as in effect immediately prior to the Change in Control (other than an insubstantial and inadvertent failure remedied by the Company promptly after receipt of notice thereof given by the Executive);

(v) the failure by the Company, without the Executive’s prior consent, to pay to the Executive any portion of the Executive’s current compensation (for purposes of this clause (v), “current compensation” shall mean the Executive’s annual base salary as in effect on the date hereof or as the same may be increased from time to time, plus the bonuses awarded to the Executive pursuant to the Company’s cash incentive bonus plan), or to pay to the Executive any portion of any installment or deferred compensation under any deferred compensation program of the Company within twenty (20) days after request for payment by the Executive after such deferred compensation is due, in each case, other than an insubstantial and inadvertent failure remedied by the Company promptly after receipt of notice thereof given by the Executive;

(vi) the failure by the Company to continue in effect any then ongoing compensation or benefit plan in which the Executive participates immediately prior to the Change in Control and which is material to the Executive’s total compensation opportunity on either an annual or long-term basis, including, but not limited to, the Company’s 2005 Stock Incentive Plan, any other long-term incentive plan of the Company, or any substitute plan for any of the foregoing adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein on a basis not materially less favorable to the Executive, in terms of the amount of the compensation opportunities so provided, to those provided to the Executive immediately prior to the Change in Control, it being agreed, without limiting the foregoing, for the avoidance of doubt, that the Company shall be deemed to have failed to continue the Executive’s participation in such plans on a basis not materially less favorable to the Executive in the event that the Executive’s target long-term incentive compensation opportunity (expressed as a percentage of the Executive’s base salary) subsequent to the Change of Control shall not equal or exceed his long-term incentive compensation opportunity (expressed as a percentage of the Executive’s base salary) as in effect immediately prior to the Change in Control;

(vii) the failure by the Company to continue to provide the Executive with benefits under the Company’s retirement, life insurance, medical, dental, health, accident and disability plans in which the Executive was participating immediately prior to the Change in Control and which are material to the Executive’s overall compensation;

(viii) the failure of the Company to obtain an agreement from any successor to assume and agree to perform this Agreement as contemplated by Section 9 below prior to the effective date of any such succession, or, if such an agreement is not so obtained, the failure of the Company, within three (3) business days after receiving a written request from the Executive for such agreement, to so provide such agreement; or

(ix) any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 5(a) below.

The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Notwithstanding the foregoing, (i) the occurrence of an event that would otherwise constitute Good Reason hereunder shall cease to be an event constituting Good Reason if the Executive does not provide a Notice of Termination to the Company within ninety (90) days of the initial existence of such event, (ii) the Executive must give the Company notice and a 30-day period to cure the event constituting Good Reason and (iii) the Executive must actually terminate his employment within two (2) years following the initial existence of such Good Reason event.

(c) For purposes of this Agreement, “ Cause ” shall mean and be limited to:

(i) the Executive’s willful and intentional repeated failure or refusal, continuing after notice that specifically identifies the breach(es) complained of, to perform substantially his material duties, responsibilities and obligations (other than a failure resulting from the Executive’s incapacity due to physical or mental illness or other reasons beyond the control of the Executive), and which failure or refusal results in demonstrable direct and material injury to the Company;

(ii) any willful and intentional act or failure to act involving fraud, misrepresentation, theft, embezzlement, dishonesty or moral turpitude (collectively, “ Fraud ”) which results in demonstrable direct and material injury to the Company;

(iii) conviction of (or a plea of nolo contendere to) an offense which is a felony in the jurisdiction involved or which is a misdemeanor in the jurisdiction involved but which involves Fraud; or

(iv) the Executive’s complete inability to perform his material duties, responsibilities and obligations on account of a physical or mental incapacity or impairment for a period of more than 180 consecutive days or for an aggregate of 240 days within a 360-day period, which incapacity or impairment continues for more than thirty (30) days after the Executive’s receipt of written notice from the Company given after such 180- or 240-day period has run without the Executive’s return, on a substantially full-time basis, to employment. For purposes of determining whether Cause exists, no act, or failure to act, on the Executive’s part shall be deemed “willful” or “intentional” unless done, or omitted to be done, by the Executive in bad faith, and without reasonable belief that his action or omission was in the best interests of the Company.

For purposes of clause (iv) above, a determination of the Executive’s complete inability to perform his material duties, responsibilities and obligations will be made by a single physician satisfactory to both the Executive and the Company; provided that if the Executive and the Company cannot agree as to a single physician, then each will select a physician and these two together will select a third physician, whose determination will be binding on the Executive and the Company. The Executive shall have the right to present to the Company and such physician such information and arguments on the Executive’s behalf as the Executive deems appropriate, including the opinion of the Executive’s personal physician.

Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to the Executive a copy of a resolution (a “ Cause Resolution ”) duly adopted by the affirmative vote of not less than two-thirds (2/3) of the Board then in office at a meeting of the Board called upon reasonable notice to all Directors and held for such purpose, after reasonable notice to the Executive and an opportunity for the Executive, together with his counsel (if the Executive chooses to have counsel present at such meeting), to be heard before the Board at such meeting, finding that, in the good faith opinion of the Board, the Executive had committed an act constituting “Cause” as herein defined and specifying the particulars thereof in detail. Nothing herein will limit the right of the Executive or his beneficiaries to contest the validity or propriety of any such determination and/or Cause Resolution.

(d) Nothing contained in this Agreement is intended to, or shall operate to, preclude the payment of any amounts (other than cash severance) otherwise payable to the Executive under any of the Company’s employee benefit plans, stock plans, programs and arrangements and/or under the Severance Benefit Agreement, or to limit or otherwise adversely affect such rights as the Executive may have under any contract or agreement with the Company.

4.  Severance Payments and Benefits .

(a) In lieu of any cash severance payments to which the Executive may otherwise be entitled under the Severance Benefit Agreement or otherwise (and which cash payments the Executive hereby expressly waives), and subject to the provisions regarding cutback of benefits in certain circumstances as expressly provided in Section 6(h) below, the Company shall pay or provide to the Executive the following amounts (the “ Severance Payments ”) upon the occurrence of a Covered Termination during the Protected Period (except with respect to clause (iv) below, which shall be paid at the time as specified therein):

(i) an amount equal to three (3) times the amount of the Executive’s effective annual base salary rate, as in effect immediately prior to a Change of Control or the Date of Termination (as defined in Section 5(b) below), whichever amount is higher;

(ii) an amount equal to three (3) times the average annual bonus earned by the Executive under the Company’s cash incentive bonus plan in respect of the three fiscal years of the Company ending prior to (A) the date on which a Change of Control occurred or (B) the date on which the Date of Termination occurred, whichever amount is higher;

(iii) an amount equal to the Executive’s annual bonus earned or accrued in respect of any prior fiscal year of the Company but not yet paid as of the Date of Termination; and

(iv) an amount equal to the product of (x) the greater of (A) the Executive’s target bonus opportunity under the Company’s cash incentive bonus plan for the fiscal year in which the Date of Termination