Under Mr. Murphy's leadership since joining the Company in 2007, the Company has made significant organizational and strategic changes to position its brands and divisions for growth and expansion, both in North America and globally. The Committee approved this award for two reasons: (i) to provide a strong incentive for successful execution on the Company's growth strategies and further improvement in the company's financial performance in 2012, 2013 and 2014; and (ii) to ensure retention of Mr. Murphy during this critical phase for the Company. In light of this award, the Committee expects that there will be no additional equity grants to Mr. Murphy through at least the fiscal year 2014.

The grant has been designed to pay for performance over a 3-year period. The target number of shares that may be earned is an aggregate of 1,000,000 (with a potential range of 0 to 2,000,000 shares). Shares will be earned based upon attainment of annual Company earnings objectives as defined by annual EBIT achievement for each of the fiscal years 2012, 2013 and 2014. The target number of shares is allocated evenly across the three years.    No shares will be earned if threshold performance is not achieved.

In considering this grant, the Committee noted that the performance shares originally granted to Mr. Murphy in 2007 gave him the opportunity to earn up to 2,000,000 shares based upon cumulative net earnings over a four year period from 2008 to 2011. During this period, the global recession and unprecedented cotton prices occurred, contributing to the fact that no performance shares were earned by Mr. Murphy.

Any shares earned under the Agreement will vest in January 2015, subject to Mr. Murphy's continued employment by the Company on that date. Shares may also continue to vest, to the extent applicable performance goals are achieved, if Mr. Murphy's employment with the Company terminates under specified circumstances during the third year of the award (in fiscal 2014). In addition, shares may vest, to the extent applicable performance goals are achieved, if Mr. Murphy's employment with the Company terminates under specified circumstances within twelve months after or 60 days prior to a "change in control" of the Company (as defined in the Agreement). The specified circumstances referred to in the preceding two sentences are: (i) involuntarily termination by the Company other than for cause, death, or disability, or (ii) resignation for good reason or a material diminution of responsibilities (each as defined in the Agreement). To the extent shares vest or continue to vest prior to the last day of fiscal 2014 under the specified circumstances listed above, the value of the ultimate award will be reduced by shares having a value on the payment date equal to $9,777,500, which is the estimated value of the post-termination payments Mr. Murphy would be entitled to receive under his original employment agreement with the Company. The vesting and termination provisions are described in detail in Sections 3, 4 and 5 of the attached Agreement.