JONES APPAREL GROUP INC
EXHIBIT 10.28
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<TYPE>EX-10
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<FILENAME>exhibit10_38.htm
<DESCRIPTION>EXHIBIT 10.28
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<p align="right"><b>EXHIBIT 10.38</b><br>
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  <table border="0" cellpadding="5" cellspacing="0" width="100%">
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      <td width="50%">As of November 7, 2007</td>
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<p><br>
Ms. Lynne F. Cote<br>
2 Kincaid Lane<br>
Chatham, NJ 07928</p>
<p>Dear Lynne:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reference is made to your
Employment Agreement dated as of January 1, 2002 by and between you (formerly
known as Lynne F. Fish) and McNaughton Apparel Group Inc. (formerly known as
Norton McNaughton of Squire, Inc.), as amended and assigned to Jones Apparel
Group USA, Inc. (the &quot;Employment Agreement&quot;). All capitalized terms
not otherwise defined herein shall have the meanings ascribed thereto in the
Employment Agreement.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For good and valuable
consideration, the receipt and sufficiency are hereby acknowledged, you (the
&quot;Executive&quot;) and Jones Apparel Group USA, Inc. (the
&quot;Company&quot;) agree as follows:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1. <u>Amendment.</u> The terms and
conditions of the Employment Agreement are hereby amended as follows:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a) The first sentence of Section 9(a) of the Employment Agreement is hereby
amended to read as follows:</p>
<blockquote>
  <blockquote>
    <blockquote>
      <p>&quot;The Executive shall not, at any time during the Executive's
      employment by the Company and thereafter until March 31, 2008 (the
      &quot;Non-Compete Period&quot;) (provided that the Company is making the
      payments to the Executive, if any, which may be required hereby during the
      Non-Compete Period) and under the following circumstances, engage or
      become interested (as an owner, stockholder, partner, director, officer,
      employee, consultant or otherwise) (collectively, &quot;Engages&quot;) in
      any business which then competes, directly or indirectly, with the
      business then conducted or licensed by the Company or any of its
      affiliates, including, without limitation, the manufacturing, marketing
      and sale of products by independent licensees under trademarks owned by
      the Company or any of its affiliates&quot; (collectively, a
      &quot;Competitive Business&quot;).</p>
    </blockquote>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) Section 9(b) of the Employment Agreement is hereby amended to read as
follows:</p>
<blockquote>
  <blockquote>
    <blockquote>
      <p>&quot;The Executive shall not, at any time during Executive's
      employment by the Company and thereafter until December 31,</p>
    </blockquote>
  </blockquote>
</blockquote>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <blockquote>
      <p>2011 (provided that the Company is making the payments to the
      Executive, if any, which may be required hereby during the period ending
      December 31, 2009), 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 or any of
      its affiliates, or any person who was such an employee or consultant of
      the Company or any of its affiliates within one year before the
      termination of the Executive's employment; or</p>
    </blockquote>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) A new Section 9(c) is hereby added to the Employment Agreement to read as
follows:</p>
<blockquote>
  <blockquote>
    <blockquote>
      <p>&quot;The Executive shall not at anytime during the Executive's
      employment by the Company and thereafter until December 31, 2009 (provided
      that the Company is making the payments to the Executive, if any, which
      may be required hereby during such period), solicit, induce, or attempt to
      solicit or induce, any person or entity then known by the Executive to be
      a customer or distributor of the Company to terminate or diminish his, her
      or its relationship with the Company; provided that in the event that (i)
      the Executive Engages in a Competitive Business after March 31, 2008,
      solely that fact and solely the fact that such Competitive Business
      sources, manufactures, distributes, merchandises, markets, sells or
      licenses products which compete with any of those sourced, manufactured,
      distributed, merchandised, marketed, sold or licensed by the Company or
      any of its distributors or licensees shall not be a breach or violation of
      this Section 9(c) if such results in such termination or diminution or
      (ii) the decision by a customer or distributor to terminate or diminish
      his, her or its relationship with the Company is made by a person with
      authority which is superior to the Executive's (and such person has not
      been induced by the Executive to make such decision unless the Executive
      has a reasonable, good faith commercial reason to engage in such
      inducement) and such decision is made solely for a reasonable, good faith
      commercial reason, then such termination or diminution shall not be a
      breach or violation of this Section 9(c).&quot;</p>
    </blockquote>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d) Sections 14 and 15 of the Employment Agreement are hereby deleted in their
entirety, Section 16 of the Employment Agreement is hereby renumbered Section
15, and a new Section 14 is hereby added to the Employment Agreement to read as
follows:</p>
<blockquote>
  <blockquote>
    <blockquote>
      <p>&quot;14. <u>Costs</u>. The Company shall reimburse the Executive for
      all reasonable costs and expenses, including without limitation reasonable
      attorneys' fees, of the Executive incurred in any dispute or proceeding
      arising under this Agreement commenced by the Company, so long as the
      Executive prevails in all material respects</p>
    </blockquote>
  </blockquote>
</blockquote>
<p align="center">2&nbsp;</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <blockquote>
      <p>with respect to the Executive's defenses in any such dispute or
      proceeding.&quot;</p>
    </blockquote>
  </blockquote>
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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. <u>Payment</u>. No later than
fourteen (14) days following the execution hereof by the Executive, the Company
shall deliver to the Executive a check, payable to the Executive, in the gross,
lump sum amount of $100,000, less deduction for taxes required by law to be
withheld or deducted as provided under Section 4(c) of this Agreement.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. <u>Mutual Release and Waiver</u>.
In consideration of the mutual promises contained in this Agreement, the Company
and the Executive agree as set forth below.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a) <u>Release by the Company</u>. Subject to the limitation set forth below in
Section 3(e), the Company, on behalf of itself and its affiliates, irrevocably
releases the Executive, her attorneys, agents, representatives, advisors,
executors, administrators and heirs and the successors, predecessors and assigns
of each of the foregoing (and those acting on their behalf in any capacity
whatsoever) from all claims, counterclaims, actions, complaints, causes of
actions, judgments, debts, rights to indemnification, demands or suits, at law
or in equity, known or unknown, arising from, relating to or otherwise
concerning the Executive's employment with the Company or the termination
thereof, which the Company or any of its past and present parents, subsidiaries
or affiliates and the successors, predecessors and assigns of each of the
foregoing ever had, now have or hereafter can, shall or may have, for, upon or
by reason of any matter, cause or thing whatsoever, from the beginning of the
world to the date of this Agreement, including any such claims based on theories
of contract or tort. The Company covenants on behalf of itself and its
affiliates not to sue the Executive or any other person or entity described
above, at law or in equity, in any forum, for any claims, counterclaims,
actions, complaints or causes of actions as set forth in this provision.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) <u>Release by the Executive</u>. In consideration of the payments and the
benefits provided by the Company to the Executive pursuant to this Agreement,
and subject to the limitations set forth below in Sections 3(c) and 3(e), the
Executive irrevocably releases the Company, its past and present parents,
subsidiaries, affiliates, directors, officers, employees, shareholders,
attorneys, agents, representatives and advisors and the successors, predecessors
and assigns of each of the foregoing (and those acting on their behalf in any
capacity whatsoever) (collectively, the &quot;Company Releases Parties&quot;)
from all claims, counterclaims, actions, complaints, causes of actions,
judgments, debts, rights to indemnification, demands or suits, at law or in
equity, known or unknown, arising from, relating to or otherwise concerning the
Executive's employment with the Company or the termination thereof, which the
Executive or any of her executors, administrators or heirs and the successors,
predecessors and assigns of each of the foregoing ever had, now have or
hereafter can, shall or may have, for, upon or by reason of any matter, cause or
thing whatsoever, from the beginning of the world to the date of this Agreement.
This includes, but is not limited to, any claims arising out of federal, state
or local wage payment, discrimination, sexual harassment, hostile work
environment, retaliation, and fair employment practice law, including Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C Sections 2000e et seq.,
the Age Discrimination in Employment Act, as amended , 29 U.S.C Sections 621 et
seq., the Americans with Disabilities Act, as amended, 42 U.SC. Sections 12101
et seq., The Family and Medical leave Act of 1993, as amended, 29 U.S.C. Sections
2601 et seq., the Fair Labor Standards Act as 1938, as amended, 29 U.S.C. Sections
201 et seq., the&nbsp;</p>
<p align="center">3</p>
<hr noshade size="1" color="#000000">
<p>Employment Retirement Income Security Act of 1974, as amended 29 U.S.C. Sections
1001 et seq., the New York Human Rights Law, as amended, N.Y. Exec. Law Sections
290 et seq., the Administrative Code of the City of New York, Title 8, Civil
Rights Sections 8-101 et seq., and any other federal, state or local law or
ordinance (whether common law or statutory) dealing with discrimination in
employment on the basis of sex, gender, age, race, color, national origin,
religion, disability or equal pay requirements, including such claims bases on
theories of the Executive's mental and physical condition, sexual harassment,
hostile work environment, retaliation, contract or tort. The Executive covenants
not to sue the Company or any other person or entity described above, at law or
in equity, in any forum, for any claims, counterclaims, actions, complaints or
causes of actions as set forth in this provision.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) <u>Representations of the Executive</u>. The Executive hereby represents,
warrants and covenants that she was represented by an attorney of her own
selection regarding the release and waiver in Section 3(b) (the
&quot;Release&quot;). The Executive acknowledges that she enters into the
Release voluntarily and with full knowledge and understanding of the provisions
set forth in this Section 3 after consulting with her counsel. The Executive
further acknowledges that with the advice of counsel she has decided to waive
the need for 21 calendar days from the receipt of this Agreement to consider the
Release of federal age discrimination claims. The Executive may revoke the
Release of federal age discrimination claims during the seven calendar days
following execution of the Agreement (the &quot;Revocation Period&quot;) by
written notice to the General Counsel of the Company. Such a revocation will
extend only to the claims contained in the Release of federal age discrimination
claims, but does not include any other representation, covenant, agreement,
release, or waiver made by the parties hereto. Such revocation is not intended
to affect or impair any other rights, responsibilities or obligations arising
from or relating to this Agreement, except that, in the event of any such
revocation, the Executive shall forfeit and surrender promptly to the Company
any amounts payable, or previously paid, under Section 2 of this Agreement. The
Executive acknowledges that, at the expiration of the Revocation Period, the
Release of federal age discrimination claims shall become effective and shall be
final, binding and irrevocable.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d) <u>Representations of the Company</u>. The Company hereby represents and
warrants that (i) the execution, delivery and performance of this Agreement by
the Company has been fully and validly authorized by all necessary corporate
action, (ii) the officer signing this Agreement on behalf of the Company is duly
authorized to do so, (iii) the execution, delivery and performance of this
Agreement does not violate any applicable law, regulation, order, judgment or
decree or any agreement, plan or corporate governance document to which the
Company is a party or by which it is bound and (iv) upon execution and delivery
of this Agreement by the Executive and the Company, it shall be a valid and
binding obligation of the Company enforceable against it in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e) <u>No Impairment</u>. Nothing in this Section 3 is intended to release or
otherwise affect or impair (i) any rights, responsibilities or obligations
arising from, relating to or otherwise concerning this Agreement, (ii) any
rights the Executive may have to benefits or entitlements under the Company's
401(k) plan or the Company's deferred compensation </p>
<p align="center">4</p>
<hr noshade size="1" color="#000000">
<p>plans or arrangements in which the Executive participates, (iii) the
Executive's eligibility for indemnification and advancement of expenses in
accordance with the certificate of incorporation and by-laws of the Company or
any applicable insurance policy, or (iv) the Executive's and the Company's
rights, and obligations under Sections 6 through 15 of the Employment Agreement,
as amended hereby.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4. <u>Miscellaneous</u>.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a) <u>Notices</u>. Any notice or communication to the Company or to the
Executive under this Agreement shall be in writing and shall be considered given
on the third business day following mailing by certified mail, return receipt
requested, to the Company at 1411 Broadway, New York, New York 10018, Attention:
General Counsel, or to the Executive at the Executive's address on file with the
Company (or at such other address as either party may specify by written notice
to the other party).</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) <u>Entire Agreement</u>. This Agreement and the Employment Agreement
constitute the entire understanding and agreement between the parties with
respect to the subject matter hereof, 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) <u>Tax Withholding</u>. All amounts payable to the Executive hereunder shall
be subject to any required deductions or withholdings from, and the Executive
shall be responsible for, any applicable federal, state, local or other taxes
(including any taxes under Section 409A of the Code).</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d) <u>Section 409A of the Code</u>. For purposes of Section 409A of the Code
and related rules and regulations: (i) the Executive's termination of employment
with the Company shall be treated as an &quot;involuntary separation from
service&quot; within the meaning of Treas. Reg. Sec. 1.409A-1(n); (ii) the
Executive's right to receive payments from the Company pursuant to Section
6(c)(ii) of the Employment Agreement shall be treated as a right to a series of
separate payments under Treas. Reg. Sec. 1-409A-2(b)(2)(iii); and (iii) all
expenses (if any) to be reimbursed to the Executive pursuant to the Employment
Agreement shall be paid promptly and, in any event, no later than December 31 of
the calendar year in which they are incurred, and the Executive's right to such
reimbursement (if any) shall not be subject to liquidation or exchange for any
other benefit.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e) <u>Governing Law</u>. 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). 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">5</p>
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      <td width="50%">Very truly yours,
        <p>JONES APPAREL GROUP USA, INC.</p>
        <p>By: <u>/s/ Ira M. Dansky</u><br>
        Ira M. Dansky<br>
        Secretary</td>
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<p>Agreed in all respects as of<br>
the date above written.</p>
<p><u>/s/ Lynne F. Cote</u><br>
Lynne F. Cote<br>
</p>
<p align="center">6</p>

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