WAIVER OF CERTAIN PAYMENTS
WHEREAS, pursuant to the Tommy Hilfiger U.S.A., Inc. ("THUSA") Supplemental
Executive Incentive Compensation Plan (the "Plan"), I am entitled to be awarded
in each fiscal year an amount equal to 5 percent of the Operating Earnings (as
defined in the Plan) of Tommy Hilfiger Corporation, a British Virgin Islands
corporation ("Parent"), and its subsidiaries, less any bonus payments paid or
payable to me under any employment agreement or bonus payment agreement between
me and Parent or THUSA;
WHEREAS, Parent, Tommy Hilfiger (Eastern Hemisphere) Limited, a British
Virgin Islands corporation and a wholly owned subsidiary of Parent, and TH
Europe Holdings Limited, a British Virgin Islands corporation, have entered into
a Stock Purchase Agreement dated as of June 29, 2001 (the "Stock Purchase
Agreement"), pursuant to which T.H. International N.V., a corporation organized
under the laws of the Netherlands Antilles (the "European Company") will become
an indirect wholly-owned subsidiary of Parent (the "Acquisition"); and
WHEREAS, I have agreed with THUSA to waive any increase in my award that
would arise as a result of consolidating the results of operations of the
European Company following the Acquisition, so that if Operating Earnings of
Parent and its subsidiaries determined without consolidating the results of
operations of the European Company and its consolidated subsidiaries
("Unconsolidated Operating Earnings") would be less than the consolidated
Operating Earnings of Parent and its subsidiaries, my award for purposes of the
Plan shall be based upon such lesser Unconsolidated Operating Earnings;
NOW, THEREFORE, in consideration of THUSA's payment to me of $1.00 and
other good and valuable consideration:
1. I do hereby agree that if Unconsolidated Operating Earnings for any
fiscal year would be less than the consolidated Operating Earnings of Parent and
its subsidiaries, I waive my rights to have the excess of Operating Earnings
over the Unconsolidated Operating Earnings be taken into account in computing my
award under the Plan. To implement the foregoing waiver, I agree that for
purposes of calculating the first three quarterly payments in any fiscal year
under Paragraph (B) of Article V of the Plan, it shall be assumed that
Unconsolidated Operating Earnings will be greater than Operating Earnings for
such fiscal year (and therefore the first three quarterly payments in any fiscal
year will be calculated based upon Unconsolidated Operating Earnings));
provided, however, that if, following the completion of the audited financial
statements of the European Company for such fiscal year, Unconsolidated
Operating Earnings were greater than Operating Earnings, the waiver shall not
apply and Operating Earnings for such fiscal year shall be used for purposes of
determining the final award under the Plan for such fiscal year (less amounts
previously paid for the first three quarters of such fiscal year).
2. This waiver shall be construed and governed in all respects under the
laws of the State of New York.
3. Notwithstanding any of the foregoing provisions of this waiver, this
waiver shall terminate and be null and void AB INITIO immediately upon the
termination of the Stock Purchase Agreement before consummation of the
Acquisition.
/s/ Joel J. Horowitz
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Joel J. Horowitz
Date: June 29, 2001
ACCEPTED AND AGREED:
TOMMY HILFIGER USA, INC.
By: /s/ Joel H. Newman
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Name: Joel H. Newman
Title: President - Finance and Administration