EXHIBIT 10.17
PHILLIPS-VAN HEUSEN CORPORATION
LONG-TERM INCENTIVE PLAN
1. Purpose. The purposes of the Plan are to induce the
Company's Chief Executive Officer, Chief Operating Officer and
Chief Financial Officer and to provide such persons with
additional incentive to promote the success of the business of
the Company and its Subsidiaries.
2. Definitions.
(a) Defined Terms. The following words as used in the
Plan shall have the meanings ascribed to each below.
"Award" means a benefit payable under the Plan, as
provided herein.
"Board" means the Board of Directors of the Company.
"Cause" means (i) the commission by the Participant of
any act or omission that would constitute a crime under federal,
state or equivalent foreign law, (ii) the commission by the
Participant of any act of moral turpitude, (iii) fraud,
dishonesty or other acts or omissions that result in a breach of
any fiduciary or other material duty to the Company and/or the
Subsidiaries, (iv) continued substance abuse that renders the
Participant incapable of performing his or her material duties
to the satisfaction of the Company and/or the Subsidiaries, or
(v) as defined in the Participant's employment agreement (or
other document or documents evidencing the terms of the
Participant's employment), if any, with the Company or a
Subsidiary.
"Change in Control" means (i) the election of one or
more individuals to the Board which election results in one-
third of the directors of the Company consisting of individuals
who have not been directors of the Company for at least two
years, unless such individuals have been elected as directors or
nominated for election by the stockholders as directors by
three-fourths of the directors of the Company who have been
directors of the Company for at least two years, (ii) the sale
by the Company of all or substantially all of its assets to any
Person, the consolidation of the Company with any Person, the
merger of the Company with any Person as a result of which
merger the Company is not the surviving entity as a publicly
held corporation, (iii) the sale or transfer of shares of the
Company by the Company and/or any one or more of its
stockholders, in one or more transactions, related or unrelated,
to one or more Persons under circumstances whereby any Person
and its Affiliates shall own, after such sales and transfers, at
least one-fourth, but less than one-half, of the shares of the
Company having voting power for the election of directors,
unless such sale or transfer has been approved in advance by
three-fourths of the directors of the Company who have been
directors of the Company for at least two years, (iv) the sale
or transfer of shares of the Company by the Company and/or any
one or more of its stockholders, in one or more transactions,
related or unrelated, to one or more Persons under circumstances
whereby any Person and its Affiliates shall own, after such
sales and transfers, at least one-half of the shares of the
Company having voting power for the election of directors or (v)
as defined in the Participant's employment agreement (or other
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document or documents evidencing the terms of the Participant's
employment), if any, with the Company or a Subsidiary. For the
purposes hereof, (i) the term "Affiliate" shall mean any Person
that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with,
any other Person, (ii) the term "Person" shall mean any
individual, partnership, firm, trust, corporation or other
similar entity and (iii) when two or more Persons act as a
partnership, limited partnership, syndicate or other group for
the purpose of acquiring, holding or disposing of securities of
the Company, such partnership, limited partnership, syndicate or
group shall be deemed a "Person."
"Code" means the Internal Revenue Code of 1986, as in
effect at the time with respect to which such term is used.
"Committee" means the Compensation Committee of the
Board or such other Committee of the Board that the Board shall
designate from time to time to administer the Plan or any
subcommittee thereof.
"Company" means Phillips-Van Heusen Corporation, a
Delaware corporation.
"Fiscal Year" means each fiscal year of the Company,
as set forth in the Company's books and records.
"Participant" means each of the Company's Chief
Executive Officer, Chief Operating Officer and Chief Financial
Officer.
"Performance Cycle" means a three-year period
commencing on the first day of a Fiscal Year and ending on the
last day of the second subsequent Fiscal Year.
"Plan" means the Phillips-Van Heusen Corporation Long-
Term Incentive Plan, as set forth herein and as may be amended
from time to time.
"Subsidiary" has the meaning ascribed to such term in
section 424(f) of the Code.
(b) Interpretation.
(i) The definitions of terms defined herein shall
apply equally to both the singular and plural forms of the
defined terms.
(ii) Any pronoun shall include the corresponding
masculine, feminine and neuter forms, as the context may
require.
(iii) All references herein to Sections shall be
deemed to be references to Sections of the Plan unless the
context shall otherwise require.
(iv) The headings of the Sections are included for
convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of the
Plan.
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3. Effective Date. The Plan became effective January 31,
2000, subject to ratification by the Company's stockholders.
4. Eligibility. Participation in the Plan with respect to any
Performance Cycle shall be available only to the Chief Executive
Officer, Chief Operating Officer and Chief Financial Officer of
the Company.
5. Committee. The Plan shall be administered by the
Committee. The Committee shall consist of two or more members
of the Board each of whom it is intended would be "outside
directors" within the meaning of section 162(m)(4)(C) of the
Code. The Committee shall be appointed annually by the Board.
The Board may, at any time, from time to time, remove any
members of the Committee, with or without cause, appoint
additional directors as members of the Committee and fill
vacancies on the Committee, however created. A majority of the
members of the Committee shall constitute a quorum. All
determinations of the Committee shall be made by a majority vote
of its members at a meeting duly called and held.
6. Administration. Subject to the express provisions of the
Plan, the Committee shall have complete authority to administer
and interpret the Plan. The Committee shall establish the
performance objectives for any calendar year in accordance with
Section 5 hereof and certify whether such performance objectives
have been attained prior to the payment of any Award. Any
determination made by the Committee under the Plan shall be
final and conclusive. Any dispute or disagreement that may
arise hereunder or as a result of or in connection with any
action taken hereunder shall be resolved by the Committee in its
sole discretion. The Committee may employ such legal counsel,
consultants and agents (including counsel or agents who are
employees of the Company or a Subsidiary) as it may deem
desirable for the administration of the Plan and may rely upon
any opinion received from any such counsel or consultant or
agent and any computation received from such consultant or
agent. The Company shall pay all expenses incurred in the
administration of the Plan, including, without limitation, for
the engagement of any counsel, consultant or agent. No member
or former member of the Board or the Committee shall be liable
for any act, omission, interpretation, construction or
determination made in connection with the Plan other than as a
result of such individual's willful misconduct.
7. Determination of Participation, Performance Criteria and
Bonuses.
(a) Participation and Performance Criteria. The Committee
shall determine who the Participants for each Performance Cycle
will be and establish the performance objective or objectives
that must be satisfied in order for a Participant to receive an
Award for such Performance Cycle, within 90 days of the
commencement of such Performance Cycle.
(b) Performance Objectives. Performance objectives shall
be based upon earnings per share growth, return on equity
performance or such other performance criteria as may be
established by the Committee. The Committee shall establish
three targets for each Performance Cycle for the performance
objectives established by the Committee. The three targets
shall consist of a threshold level (below which no Award shall
be payable), a plan level and a maximum level (above which no
additional Award shall be payable).
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(c) Award Percentages.
(i) At the time that the Committee determines the
Participants and establishes the performance objectives
with respect to a Performance Cycle, it shall determine the
Award payable to each Participant with respect to such
Performance Cycle if the applicable threshold, plan or
maximum target level is attained. An Award for a
Performance Cycle shall be equal to a percentage of a
Participant's base salary on the last day of such
Performance Cycle. In determining the Award percentage for
each Participant, the Committee may take into account the
nature of the services rendered by such Participant, his
past, present and potential contribution to the Company and
its Subsidiaries, his seniority with the Company or any of
its Subsidiaries and such other factors as the Committee,
in its discretion, shall deem relevant.
(ii) If a threshold, plan or maximum target level is
achieved, each applicable Participant shall receive the
applicable Award determined, as provided above, for the
target level achieved. If the level achieved falls between
two of the target levels, a Participant shall receive an
Award based on a straight line interpolation between the
Awards for the two target levels.
(d) Termination of Employment During Performance Cycle.
If a Participant's employment terminates during a Performance
Cycle for which he was determined to be a Participant by reason
of his death or disability, such Participant or his estate shall
receive the Award, if any, which would otherwise have been
payable to such Participant for such Performance Cycle pro rated
to the portion of such Performance Cycle actually worked by such
Participant. Any such Award shall be paid promptly after it is
determined to be payable.
(e) Determination of Awards. The Committee shall
determine whether any targets were achieved for a Performance
Cycle, which Participants shall have earned bonuses as the
result thereof, and the Awards, if any, to which such
Participants are entitled no later 90 days subsequent to the
last day of the Performance Cycle with respect to which such
Awards were earned.
(f) Change in Control. Notwithstanding the foregoing, in
the event that there shall be a Change In Control during the
third year of a Performance Cycle, each Participant for such
Performance Cycle shall be entitled to receive the Award payable
to such Participant if the maximum target level for such
Performance Cycle had been achieved.
(g) Absolute Maximum Award. Notwithstanding any other
provision in the Plan to the contrary, the maximum Award that
may be paid to any Participant under the Plan with respect to
any Performance Cycle may not exceed $5,000,000.
8. Payment.
(a) Timing. Payment of any Award determined under Section
7 shall be paid (i) within 30 days following the Compensation
Committee's certification as to performance results as set forth
in Section 7(e) above or (ii) in the case of an Award payable in
accordance with the provisions of Section 7(f) above, within 30
days of a Change in Control.
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(b) Forfeiture. Except as otherwise set forth in Section
7(d), in order to remain eligible to receive an Award, a
Participant must be employed by the Company on the payment date
or must have died, become disabled, retired under the Company's
retirement plan or have been discharged without cause subsequent
to the end of the Performance Cycle and prior to the payment
date.
(c) Form of Payment. All Awards payable under the Plan,
if any, shall be payable in cash. All amounts hereunder shall
be paid solely from the general assets of the Company. The
Company shall not maintain any separate fund to provide any
benefits hereunder, and each Participant shall be solely an
unsecured creditor of the Company with respect thereto.
9. General Provisions of the Plan.
(a) Term of the Plan. The Plan shall be effective with
respect to Performance Cycles commencing in 2000 through 2004
and shall terminate upon the payment of all Awards, if any,
earned with respect to the Performance Cycle commencing in 2004,
unless the holders of a majority of the shares of the Company's
Common Stock present in person or by proxy at any special or
annual meeting of the stockholders of the Company occurring on
or prior to the date of the 2004 Annual Meeting of Stockholders
shall approve the continuation of the Plan.
(b) Designation of Beneficiary. Each Participant may
designate a beneficiary or beneficiaries (which beneficiary may
be an entity other than a natural person) to receive any
payments which may be made following the Participant's death.
Such designation may be changed or canceled at any time without
the consent of any such beneficiary. Any such designation,
change or cancellation must be made in a form approved by the
Committee and shall not be effective until received by the
Committee. If no beneficiary has been named, or the designated
beneficiary or beneficiaries shall have predeceased the
Participant, the beneficiary shall be the Participant's spouse
or, if no spouse survives the Participant, the Participant's
estate. If a Participant designates more than one beneficiary,
the rights of such beneficiaries shall be payable in equal
shares, unless the Participant has designated otherwise.
(c) Withholding. Any amount payable to a Participant or a
beneficiary under this Plan shall be subject to any applicable
Federal, state and local income and employment taxes and any
other amounts that the Company or a Subsidiary is required at
law to deduct and withhold from such payment.
10. No Right of Continued Employment. Neither the existence
nor any term of the Plan shall be construed as conferring upon
any Participant any right to continue in the employment of the
Company or any of its Subsidiaries, nor shall participation
herein for any Performance Cycle confer upon any Participant any
right to participate in the Plan with respect to any subsequent
Performance Cycle.
11. No Limitation on Corporate Actions. Nothing contained in
the Plan shall be construed to prevent the Company or any
Subsidiary from taking any corporate action which is deemed by
it to be appropriate or in its best interest, whether or not
such action would have an adverse effect on any Awards made
under the Plan. No employee, beneficiary or other person shall
have any claim against the Company or any Subsidiary as a result
of any such action.
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12. Miscellaneous.
(a) Nonalienation of Benefits. Except as expressly
provided herein, no Participant or beneficiary shall have the
power or right to transfer, anticipate, or otherwise encumber
the Participant's interest under the Plan. The Company's
obligations under this Plan are not assignable or transferable
except to (i) a corporation or other entity which acquires all
or substantially all of the Company's assets or (ii) any
corporation or other entity into which the Company may be merged
or consolidated. The provisions of the Plan shall inure to the
benefit of each Participant and the Participant's beneficiaries,
heirs, executors, administrators or successors in interest.
(b) Severability. If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full
force and effect without regard to such unenforceable provision
and shall be applied as though the unenforceable provision were
not contained in the Plan.
(c) Governing Law. The Plan shall be governed by, and
construed and enforced in accordance with, the laws of the State
of New York, without giving effect to the conflict of law
principles thereof.
13. Amendment and Termination. The Board or the Committee may
at any time amend, suspend, discontinue or terminate the Plan as
it deems advisable; provided, however, that no such action shall
be effective without approval by the holders of a majority of
the shares of the Company's Common Stock present in person or by
proxy at any special or annual meeting of the Company's
stockholders, to the extent such approval is necessary to
continue to qualify the amounts payable hereunder to "covered
employees" (within the meaning of section 162(m) of the Code) as
deductible under section 162(m) of the Code.
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