JONES APPAREL GROUP INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>exhibit10_1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
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<title>Exhibit 10.1</title>
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<body>

<b>
<p ALIGN="right">EXHIBIT 10.1</p>
<p ALIGN="CENTER">AMENDED AND RESTATED EMPLOYMENT AGREEMENT</p>
</b>
<p>&nbsp;&nbsp;&nbsp; AGREEMENT made as of March 11, 2002 by and between JONES
APPAREL GROUP, INC., a Pennsylvania corporation (the &quot;Company&quot;), and
WESLEY R. CARD (the &quot;Executive&quot;).</p>
<b><u>
<p ALIGN="CENTER">W I T N E S S E T H</u>:</p>
</b>
<p>&nbsp;&nbsp;&nbsp; WHEREAS, the Executive is a party to the Employment
Agreement dated as of July 1, 2000 with the Company (as amended or supplemented
to date, the &quot;Prior Employment Agreement&quot;).</p>
<p>&nbsp;&nbsp;&nbsp; WHEREAS, the Company wishes to continue to employ the
Executive, and the Executive wishes to continue employment with the Company, on
the terms and conditions hereinafter set forth.</p>
<p><b>&nbsp;&nbsp;&nbsp; NOW, THEREFORE,</b> it is agreed as follows:</p>
<p>&nbsp;&nbsp;&nbsp; 1.<b>&nbsp;&nbsp;&nbsp; Employment.</b> During the term of
this Agreement, the Company shall employ the Executive as the Chief Operating
and Financial Officer of the Company. During the Term, the Executive shall have
such responsibilities, duties and authorities as are commensurate with chief
operating officers and chief financial officers of public entities of similar
size to the Company. The Executive shall report directly to the Chief Executive
Officer of the Company. During the term of this Agreement, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote all of Executive's business time and attention to the
business affairs of the Company, and to perform such responsibilities in a
professional manner. Notwithstanding the foregoing, during the term of this
Agreement, it shall not be a violation of this Agreement for the Executive to
(a) serve on civic or charitable boards or committees; (b) deliver lectures,
fulfill speaking engagements or teach at educational institutions; (c) serve as
a non-employee member of a board of directors of a business entity which is not
competitive with the Company and as to which the Board of Directors of the
Company has given its consent; and (d) attend to personal business, so long as
such activities do not interfere with the performance of the Executive's
responsibilities as a senior executive of the Company in accordance with this
Agreement.</p>
<p>&nbsp;&nbsp;&nbsp; 2.<b>&nbsp;&nbsp;&nbsp;</b> <b>Term.</b> The Company shall
employ the Executive for the period commencing as of March 11, 2002 and ending
as of June 30, 2004 (the &quot;Expiration Date&quot;), as renewed in accordance
with the following sentence (the &quot;Term&quot;). The Executive's employment
with the Company will continue, and this Agreement will be automatically
extended without limitation, for successive 12-month periods commencing July 1
and ending June 30 (a &quot;Contract Year&quot;),</p>
<hr>
<p>&nbsp;<u>unless</u> either party to this Agreement advises the other in
writing, no later than June 30, 2002 and no later than each June 30 thereafter,
that such party does not wish to extend (a &quot;Non-extension Notice&quot;). If
this Agreement shall be so extended, the &quot;Expiration Date&quot; shall mean
the then applicable extended &quot;Expiration Date&quot;, and the
&quot;Term&quot; shall mean the period commencing March 11, 2002 and ending on
the then applicable extended &quot;Expiration Date&quot;.</p>
<p>&nbsp;&nbsp;&nbsp; For example, (i) if by June 30, 2002, neither party has given a Non-extension
Notice to the other, the Term will be automatically extended through June 30,
2005, and (ii) if the Term is so extended through June 30, 2005, then if by June
30, 2003, neither party has given a Non-extension Notice to the other, the Term
will be automatically extended through June 30, 2006.</p>
<p>&nbsp;&nbsp;&nbsp; 3.<b>&nbsp;&nbsp;&nbsp;</b> <b>Salary, Retirement Plans,
Fringe Benefits and Allowances.</p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; Throughout
the Term, the Executive shall receive a salary at the annual rate of not less
than $850,000. The Executive's salary shall be payable at such regular times and
intervals as the Company customarily pays its senior executives from time to
time, but no less frequently than once a month.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; During the
Term, the Executive shall be eligible to participate in all savings and
retirement plans, practices, policies and programs to the extent applicable
generally to other senior executives of the Company.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp; During the
Term, the Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare,
fringe and other benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription drug, dental,
disability, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other senior executives of the Company.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; The
Executive shall be entitled to an aggregate of four (4) weeks paid vacation
during each calendar year of the Term. The Executive shall also be entitled to
the benefits of the Company's policies relating to sick leave and holidays.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp; The
Executive shall have all expenses reasonably incurred by Executive on behalf of
the Company reimbursed by the Company in accordance with the Company's standard
policies and practices. The Executive shall be entitled to first class seating
for air travel on Company business.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp; The Company
shall make available to the Executive all perquisites that are made available to
senior executives of the Company.</p>
<b>
<p>&nbsp;&nbsp;&nbsp;</b>  4.&nbsp;&nbsp;&nbsp; <b>Bonus.</p>
<p>&nbsp;&nbsp;&nbsp;</b> Executive shall participate in the Company's Executive
Annual Incentive Plan (the &quot;Bonus Plan&quot;), pursuant to which the
Executive may be entitled to receive annual bonus payments for each full
calendar year of employment which ends prior to the Expiration Date and&nbsp;</p>
<p align="center">2</p>
<hr>
<p>throughout which the Executive has been employed by the Company, conditioned
upon the attainment of annual criteria and objectives established for
participants in the Bonus Plan.</p>
<p>&nbsp;&nbsp;&nbsp; 5.<b>&nbsp;&nbsp;&nbsp;</b> <b>Stock Options.</b></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; The Company agrees to submit to stockholders, at the Annual Meeting of
Stockholders scheduled for May 22, 2002 (the &quot;May 22 Meeting&quot;), a
proposal to amend the Company's 1999 Stock Incentive Plan (the &quot;1999
Plan&quot;), as follows: (i) to increase the number of shares reserved for
issuance under Section 2 of the Plan from 15,000,000 shares to no fewer than
20,000,000 shares, and (ii) to increase the limitation on the number of options
any Eligible Individual (as defined in the 1999 Plan) may be granted under
Section 4(c) of the Plan during its ten-year term from 3,000,000 shares of
Common Stock to 6,000,000 shares of Common Stock. As an alternative to the above
proposal, the Company may, with the consent of the Executive, submit to
stockholders, at the May 22 Meeting, a proposal to adopt a new stock incentive
plan, upon terms and conditions substantially similar to the 1999 Plan, with a
minimum of 2,000,000 shares reserved for issuance thereunder. The Company shall
use its best efforts to obtain stockholder approval of any such proposal at the
May 22 Meeting. Upon the approval of any proposal authorizing the grant of
additional stock options, the Stock Option Committee of the Board (or the Board
or other Committee with authority) will grant to the Executive an option to
purchase 500,000 Common Shares on the terms and conditions consistent with the
provisions of Section 5(f)(iii)-(v) below, provided, however, that
notwithstanding the provision in the first clause of Section 5(f)(iv) below,
such options shall vest ratably on March 11, 2003, March 11, 2004 and March 11,
2005 (the &quot;Option Grant&quot;). With respect to the vesting provisions of
the Option Grant, and only by way of example, the options subject to the Option
Grant shall vest, under the following circumstances, as follows: assuming the
necessary proposals for the Option Grant are approved by stockholders at the May
22 Meeting, 166,667 options shall vest on March 11, 2002, 166,667 options shall
vest on March 11, 2004 and 166,666 options shall vest on March 11, 2005; or,
assuming the necessary proposals for the Option Grant are not approved by
stockholders at the May 22 Meeting, but are approved at the subsequent annual
meeting of the stockholders of the Company scheduled to be held in May 2003,
166,667 options shall be fully vested upon such grant, 166,667 options shall
vest on March 11, 2004 and 166,666 options shall vest on March 11, 2005.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; In the event the stockholders do not approve any of the proposals set
forth in Section 5(a) above at the May 22 Meeting, the Company agrees to
resubmit the proposal to stockholders at the next Special or Annual Meeting of
Stockholders held by the Company thereafter, and at subsequent Special or Annual
Meetings of Stockholders, until such time as such proposal is approved by
stockholders and the Executive has received the Option Grant. The Company shall
use its best efforts to obtain stockholder approval of any such proposal. Upon
the approval of such proposal, the Stock Option Committee of the Board (or the
Board or other Committee with authority) will grant to the Executive the Option
Grant.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp; In the event that the exercise price per share of the Options granted to
the Executive pursuant to Section 5(a) above (the &quot;March 11 Exercise
Price&quot;) is less than the fair market value of the Company's common stock on
the date of grant of the Option Grant (i.e. the date of stockholder approval as
provided in Sections 5(a) or 5(b) above), the number of options to&nbsp;</p>
<p align="center">3</p>
<hr>
<p> purchase
Common Shares subject to the Option Grant shall be inreased based upon a Black-Scholes
valuation method, or another generally recognized valuation method which is
being used uniformly by the Company for its senior executives; in no event shall
the number of options subject to the Option Grant be less than 500,000. For
example, if the March 11 Exercise Price is $37 and the fair market value of the
common stock of the Company on the date of stockholder approval is $47, the
exercise price of the Option Grant shall be $47, and the number of options
granted, and the Common Shares reserved for issuance, shall be increased so that
the value of the Option Grant based upon the $47 exercise price shall represent
a right to receive the same value that the Executive would have received had the
Option Grant been made at the $37 price, as follows: the product of $10 (the
difference between the $37 March 11 Exercise Price and the $47 exercise price
for the Option Grant) multiplied by 500,000, divided by the Black-Scholes value.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; After first allocating shares for stock options required under that
certain employment agreement dated March 11, 2002 between the Company and Peter
Boneparth, the Company agrees to allocate to the Option Grant the next shares
that are reserved for issuance pursuant to any of the proposals referred to in
Sections 5(a) and 5(b) above or any other equity plan adopted by the Company. In
the event that any of such proposals are not approved by stockholders and, in
lieu thereof, the Company adopts a non-equity based incentive compensation plan
or plans (in each case, a &quot;Non-equity Plan&quot;) to achieve the same or
similar goals that the Company would have hoped to achieve had the stockholders
approved the proposals, the Executive shall receive, at his option,
&quot;equivalent value&quot; in such non-equity based plan or plans as he would
have received had the Option Grant been made on March 11, 2002. For purposes
hereof, &quot;equivalent value&quot; shall mean the difference between the March
11 Market Price and the fair market value of the Company's common stock on the
date of an award or vesting of an award under a Non-equity Plan. By way of
example, if the March 11 Exercise Price is $37 and the fair market value of the
common stock on the date of an award under a Non-equity Plan is $47, the
&quot;equivalent value&quot; for such award shall be $10 multiplied by the
number of options that would have been vested had the Option Grant been made on
March 11, 2002. In the same example, if the fair market value of the common
stock on the date of the award or the vesting thereof is less that the March 11
Exercise Price, no payments shall be made to the Executive. Notwithstanding
anything contained herein, the Compensation Committee of the Board and the Board
of Directors shall use its best efforts to provide to Executive &quot;equivalent
value.&quot;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp; At all times, the Company shall maintain registrations on Form S-8 or
another applicable form relating to the Common Shares issued in connection with
the exercise of stock options granted pursuant to this Section 5.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp; Subject to the absolute authority of the Stock Option Committee of the
Board of Directors of the Company from time to time to grant (or not to grant)
to eligible individuals options to purchase common stock of the Company
(&quot;Options&quot;), it is the intention of the Company and the expectation of
the Executive that while the Executive is employed hereunder, the Executive will
receive Options annually (in addition to those described in Section 5(a)
hereof), beginning in calendar year 2003, on the following terms and conditions
(and any Options so granted shall be subject to the following terms and
conditions, which shall govern any conflicts in the terms hereof with any terms
and conditions in any stock option agreement):</p>
<p align="center">4</p>
<hr>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;
Target awards will be in an amount (plus or minus 25%) equal to 150% of
Executive's salary;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;
For purposes of determining the number of shares subject to a given
Option grant, the value of such Option shall be determined using the Black-Scholes
valuation method, or another generally recognized valuation method which is
being used uniformly by the Company for its senior executives;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;
The exercise price per share of the Options shall be the fair market
value of the common stock on the date of grant, and the Options shall expire on
the tenth anniversary of the date of grant; and</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp;
The Options shall vest ratably on the first three anniversaries of the
date of grant; provided, however, that all such Options and all other options to
purchase Common Shares then held by the Executive which are not then vested (in
the aggregate being referred to herein as &quot;Accelerated Options&quot;) shall
become fully vested and immediately exercisable during the remaining original
term of each such Accelerated Option, upon the occurrence of any of the
following events (&quot;Acceleration Events&quot;): Executive's Retirement (as
defined herein), death, Disability, a Change in Control (as defined herein), and
termination of Executive's employment by the Company without Cause or by the
Executive for Good Reason; and</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)&nbsp;&nbsp;
The Options shall be granted on such other terms and conditions as are
generally made applicable to Options granted to the other senior executives of
the Company.</p>
<p>&nbsp;&nbsp;&nbsp; 6.<b>&nbsp;&nbsp;&nbsp;</b> <b>Termination of Employment.</p></b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)<b>&nbsp;&nbsp;&nbsp;</b> <b><u>By the Company for Cause, or by the Executive without Good Reason</u>.</b>
The Company may terminate the Executive's employment for Cause (as defined
herein) before the Expiration Date. If the Executive's employment is terminated
for Cause, or if Executive resigns during the Term without Good Reason (as
defined below), the Company shall pay to the Executive any unpaid salary through
the date of termination, as well as reimburse the Executive for any unpaid
reimbursable expenses incurred on behalf of the Company, and thereafter the
Company shall have no additional obligations to the Executive under this
Agreement.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; <b><u>Death or Disability; Retirement</u>.</b> (i) If the Executive's
employment terminates before the Expiration Date because of Executive's death or
Disability (as defined herein), the Company shall pay Executive or Executive's
duly appointed personal representative, as the case may be, (i) any unpaid
salary through the date of death or the Disability Termination Date (as defined
herein), as well as reimbursement of any unpaid reimbursable expenses incurred
on behalf of the Company, (ii) an amount equal to Executive's monthly salary
during each of the six (6) months following Executive's death or the Disability
Termination Date, and (iii) the Target Bonus for the calendar year in which
Executive dies or becomes Disabled, prorated for the portion of such year
preceding Executive's death or the Disability Termination Date, which shall be
paid not later than 120 days after the end of such year. Except as set forth in
this Section</p>
<p align="center">5</p>
<hr>
<p>&nbsp;6(b), the Company shall have no additional obligations to the
Executive under this Agreement in the event of Executive's termination of
employment under this Section 6(b).</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
In addition to the foregoing and notwithstanding any other agreement
between the Executive and the Company, all Accelerated Options which were held
by the Executive at the time of the Executive's Retirement, death or the
Disability Termination Date, shall become fully exercisable and shall remain
exercisable by the Executive or by the Executive's estate or his representative,
as the case may be, during the remaining original term of the Accelerated Option
in the case of the Executive's Retirement or Disability, or during the 3-year
period following the date of the Executive's death.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)<b>&nbsp;&nbsp;&nbsp;</b> <u><b>By the Company without Cause, or by the Executive for Good</b> </u>
<b><u>Reason</u>.</b> (i) The Company may terminate the Executive's employment
before the Expiration Date without Cause, and the Executive may terminate
Executive's employment before the Expiration Date for Good Reason, upon 30-days
written notice to the other party. If the Executive's employment is so
terminated by the Company without Cause, or by the Executive for Good Reason, as
the case may be, the Company shall pay and provide to the Executive (i) any
unpaid salary through the date of termination, as well as reimbursement of any
unpaid reimbursable expenses incurred on behalf of the Company, (ii) the Target
Bonus for the calendar year in which termination occurs, prorated for the
portion of such year preceding termination (payable no later than the 30<sup>th</sup>
day immediately following termination of employment), (iii) during each month of
the Severance Period (as defined below), an amount equal to the sum of (x)
Executive's monthly salary at the rate in effect immediately preceding
termination and (y) one-twelfth of the Executive's Target Bonus for the calendar
year in which termination occurs, (iv) throughout the Severance Period,
continuation of Executive's participation (including the Company's contributions
thereto) in all benefit plans and practices in which Executive was participating
immediately preceding termination, and (v) reimbursement to the Executive for up
to $10,000 of executive outplacement services. Except as set forth in this
Subsection 6(c), the Company shall not have any additional obligations to the
Executive under this Agreement in the event of Executive's termination of
employment under this Subsection 6(c).</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;
In addition to the foregoing and notwithstanding any other agreement
between the Executive and the Company, all Accelerated Options which were held
by the Executive at the time of the termination of the Executive's employment by
the Company without Cause or by the Executive for Good Reason (whether or not
following a Change of Control), shall become fully exercisable and shall remain
exercisable for the same period following termination as would apply if the
Executive's employment had not terminated.</p>
<p align="center">6</p>
<hr>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; <b><u>Change in Control</u>.</b> If, following a &quot;Change in
Control&quot; (as defined herein) and prior to the Expiration Date, the Company
terminates the Executive's employment without Cause, or the Executive terminates
employment hereunder for Good Reason, the Company shall pay to the Executive,
within 20 days following termination, (i) any unpaid salary through the date of
termination, as well as reimbursement of any unpaid reimbursable expenses
incurred on behalf of the Company, (ii) the Target Bonus for the calendar year
in which termination occurs, prorated for the portion of such year preceding
termination, (iii) a lump-sum payment equal to (x) 200% of Executive's yearly
salary at the rate in effect immediately preceding termination, multiplied by
(y) the Severance Multiple (as defined herein), (iv) reimbursement to the
Executive for up to $10,000 of executive outplacement services, and (v) a
lump-sum equal to the Company's cost for health insurance, life insurance and
retirement benefits for the Severance Period.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp; As used herein:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;
the term &quot;Cause&quot; shall mean (v) the Executive's commission of
an act of fraud or dishonesty or a crime involving money or other property of
the Company; (w) the Executive's conviction of a felony or a plea of guilty or <i>nolo
contendere</i> to an indictment for a felony; (x) if, in carrying out Executive's
duties hereunder, the Executive engages in conduct which constitutes willful
misconduct or gross negligence; (y) the Executive's failure to carry out a
lawful order of the Board of Directors of the Company or its Chief Executive
Officer; or (z) a material breach by the Executive of this Agreement. Any act or
failure to act on the part of the Executive which is based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or authorized in writing by the Chief Executive Officer of the Company, or based
upon the advice of counsel for the Company, shall not constitute Cause as used
herein. For purposes of this provision only, a breach shall be
&quot;material&quot; if it is demonstrably injurious to the Company, its
affiliates or any of its respective business units, financially or otherwise.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cause shall not exist unless and until the Company (i) has delivered to the
Executive a written Notice of Termination that specifically identifies the
events, actions, or non-actions, as applicable, that the Company believes
constitute Cause hereunder, and, in the case of termination for Cause under
clauses (x), (y) or (z) above, the Executive has been provided with an
opportunity to cure the offending conduct (if curable) within 30 days after
delivery of the written Notice of Termination, and has not so cured such conduct
(if curable), and (ii) the Executive has been provided an opportunity to be
heard (with counsel) within 30 days after delivery of the notice of Termination;
provided, however, that in the case of termination for Cause under clauses (x),
(y), and (z) above, the date of termination shall be no earlier than 35 days
after delivery of the Notice of Termination.</p>
<p>
            &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp; the term &quot;Good Reason&quot; shall mean any one of the
            following:</p>
<p align="center">7</p>
<hr>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1)&nbsp;&nbsp;&nbsp; a material breach of the Company's obligations under this Agreement,
which breach has not been cured within 20 business days after the Company's
receipt of written notice from the Executive of such breach;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(2)&nbsp;&nbsp;&nbsp; a reduction in the Executive's then annual base salary;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(3)&nbsp;&nbsp;&nbsp; the relocation of the Executive's office to a location more than 30 miles
from Executive's present office;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(4)&nbsp;&nbsp;&nbsp; the failure to pay the Executive any undisputed portion of the Executive's
compensation within 15 business days after the date of receipt of written notice
that such compensation or payment is due;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(5)&nbsp;&nbsp;&nbsp; the failure to continue in effect any compensation or benefit plan in
which the Executive is participating, unless either (i) an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan; or (ii) the failure to continue the Executive's
participation therein (or in such substitute or alternative plan) does not
discriminate against the Executive, both with respect to the amount of benefits
provided and the level of the Executive's participation, relative to other
similarly situated participants;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(6)&nbsp;&nbsp;&nbsp; a reduction in the Executive's title and status as Chief Operating and
Financial Officer of the Company, or any change in the Executive's status as
reporting directly to the Chief Executive Officer; or the assignment to the
Executive of any duties materially inconsistent with the Executive's position
(including, without limitation, status, office, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
1 of this Agreement, or any other action by the Company which results in a
material diminution in such position, authority, duties or responsibilities,
excluding for this purpose any action not taken in bad faith and which is
remedied by the Company no later than thirty (30) days after written notice by
the Executive; or</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(7)&nbsp;&nbsp;&nbsp; any purported termination by the Company of the Executive's employment
otherwise than as expressly permitted in this Agreement.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp;
the terms &quot;Disabled&quot; or &quot;Disability&quot; shall mean the
Executive's physical or mental incapacity which renders the Executive incapable,
even with a reasonable accommodation by the Company, of performing the essential
functions of the duties required of Executive by this Agreement for one hundred
twenty (120) or more consecutive days; the term &quot;Disability Termination
Date&quot; shall mean the date as of which the Executive's employment with the
Company is terminated, either by the Executive or by the Company, following the
suffering of a Disability by the Executive.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp;&nbsp;&nbsp;
the term &quot;Severance Period&quot; shall mean the period commencing
with the termination of the Executive's employment and ending with the
Expiration Date.</p>
<p align="center">8</p>
<hr>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(v)&nbsp;&nbsp;&nbsp; the term &quot;Severance Multiple&quot; shall mean 3 times.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)&nbsp;&nbsp;&nbsp;
the term &quot;Change in Control&quot; shall have the same meaning as in
the Company's 1999 Stock Option Plan, as in effect on the date hereof.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vii)&nbsp;&nbsp;&nbsp;
the term &quot;Target Bonus&quot; shall mean 100% of Executive's annual
salary for any given year during the Term.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (viii)&nbsp;&nbsp;&nbsp;
the term &quot;Retirement&quot; shall mean voluntary retirement by the
Executive after attaining age 55 with 10 years of service with the Company, or,
if the Executive has not attained age 55 and/or has less than 10 years of
service with the Company, the Company determines that circumstances exist that
warrant the granting of Retirement status.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp; The Executive shall have no obligation to seek other employment or
otherwise mitigate the Company's obligations to make payments under this Section
6, and the Company's obligations shall not be reduced by the amount, if any, of
other compensation or income earned or received by the Executive after the
effective date of Executive's termination.</p>
<p>&nbsp;&nbsp;&nbsp; 7.&nbsp;&nbsp;&nbsp; <b>Effect of Section 280G of the Internal Revenue Code.</p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; Notwithstanding any other provision of this Agreement to the contrary,
and except as provided in Section 7(b), to the extent that any payment or
distribution of any type to or for the benefit of the Executive by the Company
(or by any affiliate of the Company, any person or entity who acquires ownership
or effective control of the Company or ownership of a substantial portion of the
Company's assets (within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the &quot;Code&quot;), and the regulations thereunder),
or any affiliate of such person or entity, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the &quot;Total Payments&quot;), is or will be subject to the excise
tax imposed under Section 4999 of the Code (the &quot;Excise Tax&quot;), then
the Total Payments shall be reduced (but not below zero) if and to the extent
that a reduction in the Total Payments would result in the Executive retaining a
larger amount, on an after-tax basis (taking into account federal, state and
local income taxes and the Excise Tax), than if the Executive received the
entire amount of such Total Payments. Unless the Executive shall have given
prior written notice specifying a different order to the Company to effectuate
the foregoing, the Company shall reduce or eliminate the Total Payments, by
first reducing or eliminating the portion of the Total Payments which are not
payable in cash and then by reducing or eliminating cash payments, in each case
in reverse order beginning with payments or benefits which are to be paid the
farthest in time from the Determination (as defined herein). Any notice given by
the Executive pursuant to the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement governing the Executive's
rights and entitlements to any benefits or compensation.</p>
<p align="center">9</p>
<hr>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; The determination of whether the Total Payments shall be reduced as
provided in this Section 7 and the amount of such reduction shall be made at the
Company's expense by an accounting firm selected by the Company from among its
independent auditors and the five (5) largest accounting firms (an
&quot;Eligible Accounting Firm&quot;) in the United States (the &quot;Accounting
Firm&quot;). The Accounting Firm shall provide its determination (the
&quot;Determination&quot;), together with detailed supporting calculations and
documentation to the Company and the Executive within ten (10) days of the last
day of Executive's employment. If the Accounting Firm determines that no Excise
Tax is payable by the Executive with respect to the Total Payments, it shall
furnish the Executive with an opinion reasonably acceptable to the Executive
that no Excise Tax will be imposed with respect to any such payments and, absent
manifest error, such Determination shall be binding, final and conclusive upon
the Company and the Executive. If the Accounting Firm determines that an Excise
Tax would be payable, the Executive shall have the right to accept the
Determination of the Accounting Firm as to the extent of the reduction, if any,
pursuant to this Section 7, or to have such Determination reviewed by another
Eligible Accounting Firm selected by the Executive, at the expense of the
Company, in which case the determination of such second accounting firm shall be
binding, final and conclusive upon the Company and Executive.</p>
<p>&nbsp;&nbsp;&nbsp; 8.&nbsp;&nbsp;&nbsp; <b>Company Property.</b> Any trade name or mark, program, discovery,
process, design, invention or improvement which the Executive makes or develops,
which relates, directly or indirectly, to the business of the Company or its
affiliates, or Executive's employment by the Company, shall be considered as
&quot;made for hire&quot; and shall belong to the Company and shall be promptly
disclosed to the Company. During the Executive's employment and thereafter, the
Executive shall, without additional compensation, execute and deliver to or as
requested by the Company, any instruments of transfer and take such other action
as the Company may reasonably request to carry out the provisions hereof,
including filing, at the Company's sole expense, trademark, patent or copyright
applications for any trade name or mark, invention or writing covered hereby and
assigning such applications to the Company.</p>
<p>&nbsp;&nbsp;&nbsp; 9.&nbsp;&nbsp;&nbsp; <b>Confidential Information.</b> The Executive shall not, either during
the term of Executive's employment by the Company or thereafter, disclose to
anyone or use (except, in each case, in the performance of Executive's
responsibilities hereunder and in the regular course of the Company's business),
any information acquired by the Executive in connection with or during the
period of Executive's employment by the Company, with respect to any
confidential, proprietary or secret aspect of the affairs of the Company or any
of its affiliates, including but not limited to the requirements and terms of
dealings with existing or potential licensors, licensees, designers, suppliers
and customers and methods of doing business, all of which the Executive
acknowledges are confidential and proprietary to the Company, and any of its
affiliates, as the case may be.</p>
<p align="center">10</p>
<hr>
<p>&nbsp;&nbsp;&nbsp; 10.&nbsp;&nbsp;&nbsp; <b>Competition; Recruitment; Non-Disparagement.</p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; The Executive shall not, at any time during Executive's employment by the
Company and during the Severance Period (provided that the Company is making the
payments to Executive which may be required hereby during such Severance Period)
(the &quot;Non-Compete Period&quot;) and under the following circumstances,
engage or become interested (as an owner, stockholder, partner, director,
officer, employee, consultant or otherwise) in any business which then competes,
directly or indirectly, with the business then conducted by the Company or any
of its subsidiaries or affiliates. The ownership of less than 5% of the stock of
a publicly owned company which competes with the Company, any of its
subsidiaries or affiliates, in and of itself, shall not be considered a
violation of the provisions of this Section 10.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; The Executive shall not, at any time during Executive's employment by the
Company and thereafter until the second anniversary of the expiration of the
Non-Compete Period, recruit, solicit for employment, hire or engage, or assist
any person or entity in recruiting, soliciting for employment, hiring or
engaging, any employee or consultant of the Company, any of its subsidiaries or
affiliates, or any person who was an employee or consultant of the Company, any
of its subsidiaries or affiliates within one year before the termination of the
Executive's employment.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp; For the longer of any period applicable under this Section 10 or a period
of three years immediately following the date of termination, (i) the Company,
and its respective affiliates and employees shall not disparage the Executive,
and (ii) the Executive shall not disparage the Company, or its respective
affiliates and employees.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; The Executive acknowledges that these provisions are necessary for the
protection of the Company, and its subsidiaries and affiliates and are not
unreasonable, because the Executive would be able to recruit and hire personnel
other than employees of the Company, and any of their subsidiaries and
affiliates. The Executive further agrees that a breach of Section 8, 9 or 10 of
this Agreement shall result in the immediate cessation of any payments pursuant
to this Section 10 and Section 6 hereof, if applicable. The duration and the
scope of these restrictions on the Executive's activities are divisible, so that
if any provision of this Section 10 is held or deemed to be invalid, that
provision shall be automatically modified to the extent necessary to make it
valid.</p>
<p>&nbsp;&nbsp;&nbsp; 11.&nbsp;&nbsp;&nbsp; <b>Notices.</b> Any notice or other communication to the Company or to
the Executive under this Agreement shall be in writing and shall be considered
given when mailed by certified mail, return receipt requested, to such party at
Executive's address below, or to the Company at 1411 Broadway, New York, New
York 10018, Attention: General Counsel (or at such other address as such party
may specify by written notice to the other party).</p>
<p align="center">11</p>
<hr>
<p>&nbsp;&nbsp;&nbsp; 12.&nbsp;&nbsp;&nbsp; <b>Successors; Binding Agreement.</p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)<b>&nbsp;&nbsp;&nbsp;</b> <b><u>Company's Successors</u>.</b> No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company,
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the Company is not the continuing entity,
or the sale or liquidation of all or substantially all of the business or assets
of the Company, provided that the assignee or transferee is the successor to all
or substantially all of the business or assets of the Company and such assignee
or transferee assumes all of the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law. The Company will require any such successor to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, &quot;Company&quot; shall mean the Company as
hereinbefore defined and any successor to its business or assets as aforesaid,
which executes and delivers the agreement provided for in this Section 12 or
which otherwise becomes bound by all the terms and provisions of this Agreement
or by operation of law.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; <b><u>Executive's Successors</u></b>. This Agreement shall not be
assignable by the Executive. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. Upon the Executive's death, all amounts to
which Executive is entitled hereunder, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate.</p>
<p>&nbsp;&nbsp;&nbsp; 13.&nbsp;&nbsp;&nbsp; <b>Indemnification.</b> The Company shall indemnify Executive and hold
the Executive harmless, to the maximum extent permitted by applicable law, from
and against all claims, actions, suits, proceedings, loss, damage, liability,
costs, charges and expenses, including reasonable attorneys' fees and costs
arising in connection with the Executive's performance of Executive's duties
hereunder or Executive's status as an employee, officer, director or agent of
the Company or its affiliates, in accordance with the Company's indemnity
policies for its senior executives.</p>
<p>&nbsp;&nbsp;&nbsp; 14.&nbsp;&nbsp;&nbsp; <b>Interest on Late Payments.</b> &quot;Undisputed Late Obligations&quot;
shall bear interest beginning on the Due Date until paid in full at an annual
rate of one percent (1.0%) plus the prime rate as declared from time to time by
The Chase Manhattan Bank. For purposes hereof, &quot;Undisputed Late
Obligations&quot; shall mean any obligation which remains unpaid 5 days after
written notice thereof is delivered to the other party in accordance with
Section 11 (the &quot;Due Date&quot;) for money under this Agreement owing from
one party to another, which obligation (i) is not subject to any <i>bona fide</i>
dispute or (ii) has been adjudicated by an arbitration panel or court of
competent jurisdiction to be due and payable.</p>
<p align="center">12</p>
<hr>
<p>&nbsp;&nbsp;&nbsp; 15.&nbsp;&nbsp;&nbsp; <b>Arbitration.</b> Except as otherwise provided herein, all
controversies, claims or disputes arising out of or related to this Agreement
shall be settled under the rules of the American Arbitration Association then in
effect in the State of New York, as the sole and exclusive remedy of either
party, and judgment upon such award rendered by the arbitrator(s) may be entered
in any court of competent jurisdiction.</p>
<p>&nbsp;&nbsp;&nbsp; 16.&nbsp;&nbsp;&nbsp; <b>Attorneys' Fees.</b> The Company shall reimburse the Executive (or the
Executive shall reimburse the Company) for all reasonable costs, including
without limitation reasonable attorneys' fees, of the Executive or the Company,
as the case may be, in any dispute, arbitration or proceeding arising under this
Agreement (collectively, a &quot;Proceeding&quot;), so long as the Executive or
the Company, as the case may be, &quot;prevails in substantial part&quot; with
respect to Executive's or the Company's claims or defenses in such Proceeding.
For purposes hereof, the Executive shall be deemed to have &quot;prevailed in
substantial part&quot; if (i) the Executive is the party originally demanding a
Proceeding, and the arbitrator(s) shall have awarded the Executive at least 75%
of the amount originally demanded by the Executive, or (ii) the Company is the
party originally demanding a Proceeding, and the arbitrator(s) shall have denied
the Company the relief originally requested. The Company shall be deemed to have
&quot;prevailed in substantial part&quot; if the Executive is the party
originally demanding a Proceeding and the arbitrator(s) shall have awarded the
Executive less than 25% of the amount originally demanded by the Executive.</p>
<p>&nbsp;&nbsp;&nbsp; 17.&nbsp;&nbsp;&nbsp; <b>Miscellaneous.</p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; Given that a breach of the provisions of this Agreement would injure the
Company irreparably, the Company may, in addition to its other remedies, obtain
an injunction or other comparable relief restraining any violation of this
Agreement, and no bond, security or other undertaking shall be required of the
Company in connection therewith.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; The provisions of this Agreement are separable, and if any provision of
this Agreement is invalid or unenforceable, the remaining provisions shall
continue in full force and effect.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp; This Agreement constitutes the entire understanding and agreement between
the parties, and supersedes the Prior Employment Agreement and all other
existing agreements between them and cannot be amended, unless such amendment is
in writing and signed by both parties to this Agreement.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; This Agreement shall be governed by and construed in accordance with the
laws of the State of New York (other than its choice of laws rules), where it
has been entered and where it is to be performed. The parties hereto consent to
the exclusive jurisdiction of any federal or state court in the State of New
York to resolve any dispute arising under this Agreement or otherwise.</p>
<p align="center">13</p>
<hr>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp; The headings in this Agreement are solely for convenience of reference
and shall not affect its interpretation.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp; The failure of either party to insist on strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement. For any waiver of a provision of this
Agreement to be effective, it must be in writing and signed by the party against
whom the waiver is claimed.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp; The obligations of the Executive and the Company hereunder shall survive
the termination of the term of this Agreement and the Executive's employment
hereunder, to the extent necessary to give full effect to the provisions of this
Agreement.</p>
<p>&nbsp;&nbsp;&nbsp; IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first above written.</p>
<div align="center">
  <center>
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      <td width="50%"></td>
      <td width="50%">
<p>JONES APPAREL GROUP, INC.</p>
<p>By:<u> /s/ Peter Boneparth<br>
</u>President</p>
<p><u>/s/ Wesley R. Card<br>
</u>Executive</p>
<p>Address: 3 Toftrees Court<br>
Princeton, NJ 08540</p>
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</div>
<p align="center">14</p>

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