8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 13, 2011 (December 13, 2011)

The Warnaco Group, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	001-10857		95-4032739
(State or other jurisdiction of incorporation)	(Commission File Number)		(IRS Employer Identification No.)
501 Seventh Avenue, New York, New York		10018
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 287-8000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 13, 2011, The Warnaco Group, Inc. (the “Registrant”) and Helen McCluskey, the Registrant’s current Chief Operating Officer, entered into an employment agreement (the “McCluskey Agreement”), effective on February 1, 2012 (the “Effective Date”), when Ms. McCluskey will be appointed President and Chief Executive Officer of the Registrant and a member of the Registrant’s board of directors.  Pursuant to the McCluskey Agreement, as of the Effective Date and during her employment, Ms. McCluskey will be entitled to an annual base salary of $1,000,000 and an annual target bonus opportunity of 110% of her annual base salary.

Ms. McCluskey is also entitled to an annual supplemental award with a value equal to 10% (increasing to 13% once she attains age 60) of her total cash compensation earned for the prior fiscal year (each, a “Supplemental Award”).   Fifty percent of each Supplemental Award is in the form of restricted shares (the “Career Shares”) and the remaining 50% of each Supplemental Award is in the form of a credit to a notional account.  The Career Shares and notional accounts generally vest upon the attainment by Ms. McCluskey of certain age and service objectives set forth in the agreement.

The McCluskey Agreement provides that upon termination of her employment due to death or disability after the Effective Date, Ms. McCluskey is entitled to a pro-rata bonus for the portion of the year of termination that has elapsed as of such termination, with such amount based on the Registrant’s performance for such year, as well as vesting of 50% of her unvested Supplemental Awards.  Upon termination of her employment without “Cause” or for “Good Reason” (as those terms are defined in the McCluskey Agreement) after the Effective Date and before she attains age 65 (other than in connection with a “change in control” (as defined in the McCluskey Agreement)), Ms. McCluskey is entitled to, subject to execution of a release of claims and compliance with the restrictive covenants in the McCluskey Agreement: (i) a payment equal to 1.5 times her annual base salary and target bonus opportunity, payable in a lump sum, (ii) a pro-rata bonus for the portion of the year of termination that has elapsed as of such termination, with such amount based on the Registrant’s performance for such year, (iii) vesting of 50% of her unvested restricted stock (other than Career Shares), (iv) a period of 12 months (or the remainder of the term if shorter) to exercise any stock options granted on or after the Effective Date and (v) reimbursement for the cost of continued participation in the Registrant’s medical and dental plans until the earlier of 18 months from the date of termination or the date she obtains coverage from a subsequent employer.  If such termination is on or within one year following a change in control or within 60 days prior to such event (and such termination is in connection with, or in anticipation of, such change in control) and before she attains age 65, subject to execution of a release of claims and compliance with the restrictive covenants in the McCluskey Agreement, Ms. McCluskey is entitled to: (i) three times her base salary and target bonus opportunity, payable in a lump sum, (ii) a pro-rata target bonus for the year of termination, payable in a lump sum, (iii) vesting of all outstanding equity awards (other than Career Shares and any performance unit awards), with 24 months (or the remainder of the term if shorter) to exercise any stock options granted on or after August 11, 2005, (iv) vesting of all outstanding Supplemental Awards and (v) reimbursement for the cost of continued participation in the Registrant’s medical and dental plans until the earlier of 36 months from the date of termination or the date she obtains coverage from a subsequent employer.  For any termination of her employment on or after age 65, Ms. McCluskey is not entitled to severance and her outstanding equity awards (other than Career Shares) will be treated in accordance with the applicable retirement provisions under the Registrant’s equity program, which currently provide for continued vesting of awards and extension of the post-termination exercise period for stock options subject to not engaging in a “Competitive Activity” (as defined in the applicable award agreements).

Under the McCluskey Agreement, as of the Effective Date, Ms. McCluskey will generally be bound by a perpetual confidentiality covenant, a 12-month post-termination non-compete, an 18-month post-termination non-solicit/no hire of employees and an 18 month non-solicit of customers; provided that all restrictive covenants increase to 24 months following termination of her employment on or after she attains age 65.

If any payments, benefits or entitlements provided to Ms. McCluskey under the McCluskey Agreement or otherwise are subject to federal excise tax as excess parachute payments and Ms. McCluskey would be in a better position on an after-tax basis, such payments, benefits or entitlements will be reduced such that no federal excise tax will apply.

On December 13, 2011, the Registrant and Joseph R. Gromek, the Registrant’s President and Chief Executive Officer, entered into an agreement (the “Gromek Agreement”) whereby Mr. Gromek will retire as President and Chief Executive Officer of the Registrant and as a member of its board of directors, effective February 1, 2012, continuing as an employee through March 4, 2012.  Through March 4, 2012, Mr. Gromek will continue to receive his current base salary and benefits and will be paid any earned annual bonus with respect to 2011.  Equity awards granted to Mr. Gromek after 2008 will be treated in accordance with the applicable plans and his current employment agreement, which provides, subject to his compliance with his non-compete and non-solicitation covenants, for continued vesting upon retirement as if he had remained employed, with one year to exercise stock options granted in 2008 and 2009 and the later of two years from his retirement date or six months from the date the last tranche of the option vests to exercise his stock options granted in 2010 and 2011.   Subject to his compliance with his non-compete and non-solicitation covenants, Mr. Gromek will also have one year to exercise stock options granted prior to 2008.

Subject to execution of a release of claims, upon his retirement, Mr. Gromek will be entitled to (i) a pro-rata target bonus for 2012, payable on March 26, 2012, (ii) a fully vested supplemental award for fiscal year 2011 with a value equal to 30% of the actual base salary and bonus he earned for fiscal year 2011, (iii) a fully vested pro-rata supplemental award for fiscal year 2012 equal to 30% of the base salary he earns in 2012 and pro-rata bonus amount for 2012 and (iv) reimbursement for the cost of continued participation in the Registrant’s medical and dental plans until the earlier of 18 months from the date of termination or the date he obtains coverage from a subsequent employer.

The Gromek Agreement incorporates the restrictive covenants in Mr. Gromek’s current employment agreement and, as such, he is bound by a perpetual confidentiality covenant, a 24-month post-retirement non-compete and a 24-month post-retirement non-solicit/no hire of employees and a 24-month post-retirement non-solicit of customers.

The summaries of the McCluskey Agreement and the Gromek Agreement above are qualified in their entirety by reference to the McCluskey Agreement and the Gromek Agreement, which are attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated by reference in their entirety herein.

On December 13, 2011, the Registrant issued a press release announcing the change in the Company’s management described above.  A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8−K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits
10.1	Letter Agreement, dated as of December 13, 2011, by and between The Warnaco Group, Inc. and Helen McCluskey.
10.2	Retirement Agreement, dated as of December 13, 2011, by and between The Warnaco Group, Inc. and Joseph R. Gromek.
99.1	Press Release, dated December 13, 2011.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE WARNACO GROUP, INC.
Date: December 13, 2011	By:	/s/  Lawrence R. Rutkowski
		Name:	Lawrence R. Rutkowski
		Title:	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Document
10.1	Letter Agreement, dated as of December 13, 2011, by and between The Warnaco Group, Inc. and Helen McCluskey.
10.2	Retirement Agreement, dated as of December 13, 2011, by and between The Warnaco Group, Inc. and Joseph R. Gromek.
99.1	Press Release, dated December 13, 2011.

EX-10.1

Exhibit 10.1

December 13, 2011

Ms. Helen McCluskey

2211 Redding Road

Fairfield, CT 06430

Dear Helen,

This letter agreement (this “Agreement”) is made and entered into between The Warnaco Group, Inc. (the “Company”) and you as of the date hereof to be effective on February 1, 2012 (the “Effective Date”).   As of the Effective Date, this Agreement shall supercede in its entirety the current employment agreement between us dated as of December 31, 2008 (the “Original Employment Agreement”).  Capitalized terms not defined herein shall have the meaning set forth in Exhibit A attached hereto.

1.	As of the Effective Date, the Company agrees to employ you and you agree to serve as President and Chief Executive Officer of the Company.  During the Term, in such positions, you will be responsible for the general management of the affairs of the Company and shall perform such other duties and responsibilities as determined by the board of directors of the Company (the “Board”).  It is also the intention of the Company to appoint you as a member of the Board as of the Effective Date.  In carrying out your duties, you shall report to the Board, or the Chairman of the Board as the Board’s designee.  You agree to devote your full time and best efforts to the satisfactory performance of such services and duties as the position requires, and you shall be entitled to (i) serve on the boards of directors of trade associations, charitable organizations and for-profit businesses, subject to the reasonable approval of the Board, (ii) engage in charitable activities and community affairs and (iii) manage your personal investments and affairs, provided that such activities do not interfere with the proper performance of your duties and responsibilities for the Company and are otherwise consistent with the provisions of paragraphs 11 through 14 of this Agreement.
2.	The term (the “Term”) of your employment under this Agreement shall begin on the Effective Date and shall end on the Date of Termination.
3.	Your compensation shall be as follows:
	a.     During the Term, you shall be paid an annual base salary of $1,000,000 (“Base Salary”), payable in accordance with the regular payroll practices of the Company.  Your Base Salary may be reviewed annually by the Compensation Committee of the Board and may be increased (but not

Ms. Helen McCluskey

December 13, 2011

Page 2

decreased) in the Board’s sole discretion, with any such increase administered in compliance with Section 409A of the Code and the Treasury regulations implementing such section (“Section 409A”). After any increase in Base Salary approved by the Board or its designee, the term “Base Salary” as used in this Agreement shall thereafter refer to such increased amount. You shall not be entitled to any additional compensation for service as a member of the Board or for service as an officer or member of any board of directors of any subsidiary or affiliate of the Company.

b.      During the Term, you shall be eligible to receive an annual cash incentive award (“Annual Incentive Award”) under the Company’s Incentive Compensation Plan (or such other incentive plan as may be approved the Company’s shareholders from time to time and is in effect for the applicable fiscal year) (“Bonus Plan”) with a target for fiscal year 2012 and each fiscal year thereafter of 110% of Base Salary (“Target Bonus”). The terms and conditions applicable to any such Annual Incentive Award, including, but not limited to the determination of performance targets, the ultimate amount of such award, and the timing of payment of such award, shall be determined in accordance with the terms of the Bonus Plan.  For the avoidance of doubt, any such Annual Incentive Award shall be payable to you when bonuses under the Bonus Plan for the applicable performance period are paid to other senior executives of the Company, but in all events shall be paid to you between January 15th and March 15th of the fiscal year immediately following the fiscal year for which the Annual Incentive Award has been earned.

c.      During the Term, you shall be eligible to receive future grants of restricted stock and/or options or other forms of equity compensation at the sole discretion of the Compensation Committee of the Board.  You shall be subject to the equity ownership, retention and other requirements applicable to senior executives of the Company.  Except as otherwise expressly provided herein, all equity grants shall be governed by the applicable plan and award agreement; provided that the equity awarded to you pursuant to paragraph 3(c) of the Original Agreement shall continue to be treated in accordance with the provisions of paragraphs 5 through 8 of the Original Agreement, as applicable.

d.      During the Term, you shall be entitled to an annual award with an aggregate grant date value equal to 10% of the sum of Base Salary plus Annual Bonus (as defined in this paragraph 3(d)) if you will be less than age 60 by the end of the fiscal year immediately preceding the year in which the award is made and 13% of such amount if you will be age 60 or

Ms. Helen McCluskey

December 13, 2011

Page 3

older by the end of the applicable fiscal year immediately preceding the year in which the award is made (“Supplemental Award”).  For this purpose, Base Salary shall be the Base Salary paid to you for the fiscal year immediately prior to the award year and Annual Bonus shall be the Annual Incentive Award awarded to you by the Board under the Bonus Plan for the fiscal year immediately preceding the fiscal year in which the Supplemental Award is made.  The Supplemental Award shall not be awarded to you until after the determination by the Board of your Annual Incentive Award for such prior fiscal year (but in no event later than 70 days thereafter), with 50% of the value of the Supplemental Award awarded in the form of restricted shares pursuant to the applicable Stock Incentive Plan (“Career Shares”) and 50% awarded in the form of a credit to a bookkeeping account maintained by the Company for your account (the “Notional Account”).  Any Career Shares awarded hereunder shall be governed by the applicable Stock Incentive Plan and, if applicable, the related award agreement.  For purposes of this paragraph 3(d), each Career Share shall be valued based on the definition of Fair Market Value in the applicable Stock Incentive Plan ("Share").  For the Notional Account, the Company shall select the investment alternatives available to you for deemed (not actual) investment, which investment alternatives shall be those available under the Company’s 401(k) plan.  The balance in the Notional Account shall periodically be credited (or debited) with the deemed positive (or negative) return based on returns of the permissible investment alternative or alternatives under the Company’s 401(k) plan as selected in advance by you for deemed (not actual) investment (and in accordance with the applicable rules of such plan or investment alternative) to apply to such Notional Account, with such deemed returns calculated in the same manner and at the same times as the return on such investment alternative(s).  The Company’s obligation to pay the amount credited to the Notional Account, including any return thereon provided for in this paragraph 3(d), shall be an unfunded obligation to be satisfied from the general funds of the Company.  Except as otherwise provided in paragraphs 6 or 8 below, or in the applicable Stock Incentive Plan or award agreement, and provided that you are employed by the Company on such vesting date, any Supplemental Award granted in the form of Career Shares will vest as follows:  50% of  your Career Shares will vest on the earlier of your 62nd birthday or upon your obtaining 15 years of Vesting Service (as defined in this paragraph 3(d)) and 100% of  your Career Shares will vest on the earliest of (i) your 65th birthday, (ii) upon your obtaining 20 years of Vesting Service or (iii) the 10th anniversary of the date of grant.  Except as otherwise provided in paragraphs 6 or 8 below, and provided that you are employed by the Company on such vesting date, any Supplemental Award granted as a credit to the Notional Account (as

Ms. Helen McCluskey

December 13, 2011

Page 4

adjusted for any returns thereon) (“Adjusted Notional Account”)) shall vest as follows:  50% on the earlier of your 62nd birthday or upon your obtaining 5 years of Vesting Service and 100% on the earlier of your 65th birthday or upon your obtaining 10 years of Vesting Service.  For purposes of this paragraph 3(d), Vesting Service shall mean the period of time that you are employed by the Company as an executive officer.  Subject to paragraph 27 hereof, upon vesting the Career Shares will be delivered to you in the form of Shares.  In addition, provided you are employed with the Company on the relevant vesting date, any unvested Adjusted Notional Account shall vest upon the occurrence of a Qualifying Change in Control. The vested balance in the Adjusted Notional Account, if any, shall not be distributed to you until there has been a Separation From Service or, if earlier, there has been a Qualifying Change in Control and, at such time, shall only be distributed at the earliest time that satisfies the requirements of this paragraph 3(d).  Upon a Qualifying Change in Control, the vested Adjusted Notional Account shall be paid to you in a lump-sum cash payment on the date of such Qualifying Change in Control.  In addition, if your employment is terminated for any reason, after taking into account paragraphs 6 or 8 hereof, any unvested Supplemental Awards (whether in the form of Career Shares or the Adjusted Notional Account) shall be forfeited and any vested balance in the Adjusted Notional Account, subject to paragraph 27 hereof, shall be paid to you in a cash lump-sum payment within 30 days following the occurrence of your Separation From Service; provided, however, that if you are a “specified employee” as determined pursuant to Section 409A as of the date of your Separation From Service, such distribution of the vested balance in the Adjusted Notional Account shall not be made until the earlier of your death or the first business day of the seventh calendar month following the month in which your Separation From Service occurs.  You can elect to delay the time and/or form of payment of the Adjusted Notional Account under this paragraph 3(d), provided such election is delivered to the Company in writing at least 12 months before the scheduled payment date for such payment and the new payment date for such payment shall be consistent with the applicable deferral rules under Section 409A.  Upon the expiration or termination of the Term, the vesting and payment dates in this paragraph 3(d) (without regard to paragraphs 6 or 8, as applicable) and the election right in this paragraph 3(d) shall continue to apply to any outstanding Supplemental Award awarded under the Original Employment Agreement as well as this Agreement.

4.

During the Term, and subject, of course, to the Company’s right to amend, modify or terminate any benefit plan or program, you shall be entitled to

Ms. Helen McCluskey

December 13, 2011

Page 5

	participate in all Company employee benefit plans applicable to senior executives, including the following benefits/perquisites:
	a.      Reimbursement of reasonable business expenses incurred in carrying out your duties and responsibilities under this Agreement, subject to documentation in accordance with Company policy.
	b.      Perquisites provided to other senior executive, including a monthly car allowance of up to $1,500.
	c.      Vacation — four weeks paid vacation per calendar year.
	d.      Company-paid term life insurance payable to your designated beneficiary in the amount of $2 million; provided that the Company is able to obtain such insurance for a commercially reasonable premium.
	e.      Company-paid annual executive physical exam.
	Notwithstanding anything elsewhere to the contrary, except to the extent any reimbursement, payment or entitlement pursuant to this paragraph 4 does not constitute a “deferral of compensation” within the meaning of Section 409A, (i) the amount of expenses eligible for reimbursement or the provision of any in-kind benefit (as defined in Section 409A) to you during any calendar year will not affect the amount of expenses eligible for reimbursement or provided as in-kind benefits to you in any other calendar year, (ii) the reimbursements for expenses for which you are entitled shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred, and (iii) the right to payment or reimbursement or in-kind benefits may not be liquidated or exchanged for any other benefit.
5.	In the event your employment is terminated without Cause by the Company (other than upon Retirement or death or due to Disability) or you resign for Good Reason (and provided paragraph 8 below does not apply), you shall be entitled to:
	a.      Base Salary through the Date of Termination, to be paid to you in a cash lump sum on the first regularly scheduled payroll date following the Date of Termination or such earlier date as may be required by applicable law.
	b.      Payment of an amount equal to one and a half (1.5) times the sum of (a) Base Salary plus (b) Target Bonus, both in effect as of Date of Termination (without taking into account any reduction under clause (ii) of the definition of Good Reason if you have terminated your employment for Good Reason based on such clause), to be paid to you in a cash lump sum on the 60th day following the Date of Termination.

Ms. Helen McCluskey

December 13, 2011

Page 6

	c.      A pro-rata bonus for the fiscal year in which the Date of Termination occurs, based on the Company’s performance for such year (determined by multiplying the amount of the Annual Incentive Award you would have received under the Bonus Plan had your employment continued through the end of such fiscal year by a fraction, the numerator of which is the number of days during such fiscal year that you are employed by the Company and the denominator of which is 365), payable in accordance with paragraph 3(b) above.
	d.      Immediate vesting as of the Date of Termination of 50% of any restricted stock (other than Career Shares) that remains unvested as of the Date of Termination and, for any options granted on or after the Effective Date, continued exercisability of any outstanding stock options that have vested as of the Date of Termination for 12 months following the Date of Termination, or the remainder of the option term, if shorter.
	e.      Provided you make a timely election under COBRA, continued participation on the same terms as immediately prior to the Date of Termination (including costs of premiums) for you and your eligible dependents in the Company’s medical and dental plans in which you and your eligible dependents were participating immediately prior to the Date of Termination until the earlier of (a) the 18th month anniversary of the Date of Termination, or (b) the date, or dates, you receive equivalent coverage under the plans and programs of a subsequent employer; provided, that, at the Company’s election, you shall pay the full cost of such COBRA premiums and the Company shall promptly reimburse you for its portion of the premiums (as if you had continued in employment); provided, further, that in no event shall there be any gross up provided by the Company for any tax liabilities or otherwise.
	f.      Any amounts earned, accrued or owing to you but not yet paid, which shall be paid to you in accordance with the terms and conditions of the applicable plan or arrangement.
	g.      As a condition to receiving the payments and entitlements pursuant to this paragraph 5 (other than clauses (a) and (f) hereof), you hereby agree to execute and deliver to the Company a release of claims in the form of Exhibit B attached hereto no later than 45 days following the Date of Termination and not revoke such release within the applicable revocation period.
6.	In the event your employment is terminated upon death or by the Company due to Disability, you (or your estate or legal representative, as the case may be) shall be entitled to:

N Ms. Helen McCluskey

December 13, 2011

Page 7

	a.      Base Salary through the Date of Termination, to be paid to you in a cash lump sum on the first regularly scheduled payroll date following the Date of Termination or such earlier date as may be required by applicable law.
	b.      A pro-rata bonus for the fiscal year in which the Date of Termination occurs, based on the Company’s performance for such year (determined by multiplying the amount of the Annual Incentive Award you would have received under the Bonus Plan had your employment continued through the end of such fiscal year by a fraction, the numerator of which is the number of days during such fiscal year that you are employed by the Company and the denominator of which is 365), payable in accordance with paragraph 3(b) above.
	c.      Any amounts earned, accrued or owing to you but not yet paid, which shall be paid to you in accordance with the terms and conditions of the applicable plan or arrangement.
	d.      Immediate vesting as of the Date of Termination of 50% of any previously granted Supplemental Award that remains unvested as of the Date of Termination, payable in accordance with paragraph 3(d) above.
7.	In the event the Company terminates your employment for Cause, you voluntarily resign or upon your Retirement, you shall be entitled to Base Salary through the Date of Termination, to be paid to you in a cash lump sum on the first regularly scheduled payroll date following the Date of Termination or such earlier date as may be required by applicable law.  A voluntary resignation (other than a Retirement) shall be effective on 60 days prior written notice; subject to earlier termination by the Company in accordance with clause (ii) of the definition of Date of Termination, and, provided that such notice is given, shall not be deemed to be a breach of this Agreement.  A Retirement shall be effective on 90 days prior written notice from either the Company or you; and provided that such notice is given, shall not be deemed to be a breach of this Agreement.  Upon Retirement, you shall also be entitled to any amounts or entitlements earned, accrued or owing to you but not yet paid, including, without limitation, treatment of your outstanding equity awards in accordance with the applicable retirement provisions of the Company’s equity plans and programs.  Amounts described in the immediately preceding sentence shall be paid to you in accordance with the terms and conditions of the applicable plan or arrangement.
8.	In the event your employment is (i) terminated without Cause by the Company (other than upon Retirement or death or due to Disability) or you resign for Good Reason, in both cases upon or within one year following a Change in Control or (ii) terminated without Cause by the Company (other than upon Retirement or death or due to Disability) within 60 days prior to a Change in Control and such

Ms. Helen McCluskey

December 13, 2011

Page 8

termination is in connection with, or in anticipation, the Change in Control, you shall be entitled to:

a.      Base Salary through the Date of Termination, to be paid to you in a cash lump sum on the first regularly scheduled payroll date following the Date of Termination or such earlier date as may be required by applicable law.

b.      Subject to clause (h) below, payment of an amount equal to 3 times the sum of (a) Base Salary plus (b) Target Bonus, both in effect as of the Date of Termination (without taking into account any reduction under clause (ii) of the definition of Good Reason if you have terminated your employment for Good Reason based on such clause), to be paid to you in a cash lump sum on the 60th day following the Date of Termination.

c.      A pro-rata Target Bonus for the year of termination, determined by multiplying such Target Bonus by a fraction, the numerator of which is the number of days that you were employed by the Company during the year in which the Date of Termination occurs and the denominator of which is 365, to be paid to you in a cash lump sum on the 60th day following the Date of Termination.

d.      Immediate vesting as of the Date of Termination of all outstanding equity awards (other than Career Shares or any performance unit awards) and treatment of any performance unit awards in accordance with the applicable plan and award agreement, with any stock options granted on or after August 11, 2005 which remain in effect or are granted after the Change in Control remaining exercisable for 24 months following the Date of Termination or the remainder of the option term, if shorter.

e.      Immediate vesting as of the Date of Termination of any previously granted Supplemental Award, payable in accordance with paragraph 3(d) above.

f.      Provided you make a timely election under COBRA, continued participation on the same terms as immediately prior to the Date of Termination (including costs of premiums) for you and your eligible dependents in the Company’s medical and dental plans in which you and your eligible dependents were participating immediately prior to the Date of Termination until the earlier of (a) the 36th month anniversary of the Date of Termination, or (b) the date, or dates, you receive equivalent coverage under the plans and programs of a subsequent employer; provided, that, at the Company’s election, you shall pay the full cost of such medical and/or dental premiums and the Company shall promptly reimburse you for its portion of the premiums (as if you had continued in employment);  provided, further, that in no event shall there be any gross

Ms. Helen McCluskey

December 13, 2011

Page 9

up provided by the Company for any tax liabilities or otherwise.  It is intended by the parties that the Company’s provision of medical and dental benefits hereunder for the first 18 months of the 36-month period be exempt from Section 409A by virtue of the applicability thereto of Treasury Regulation 1.409A-1(b)(9)(B) (the "Separation Pay Exemption").  The Company's provision of medical and dental benefits hereunder for such 18-month period or the remainder of the 36-month period, to the extent not exempt from Section 409A under the Separation Pay Exemption, shall satisfy the following requirements: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during one taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; (ii) any reimbursement shall be made on or before the last day of the taxable year following the taxable year in which the expense was incurred (it being understood by the Company that any such reimbursement shall be made within 30 days following the date on which you remit the applicable premium payments); and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

g.      Any amounts earned, accrued or owing to you but not yet paid, which shall be paid to you in accordance with the terms and conditions of the applicable plan or arrangement.

h.      If your employment is terminated without Cause (other than upon Retirement, or death or Disability) within the 60 days prior to a Change in Control, such termination is in connection with, or in anticipation of, the Change in Control and the Date of Termination is prior to the date the Change in Control occurs, then, subject to clause (i) below: (1) the payments under clause (b) of this paragraph 8 shall be paid to you as follows:  an amount equal to one and a half (1.5) times the sum of (a) Base Salary plus (b) Target Bonus, both in effect on the Date of Termination (without taking into account any reduction under clause (ii) of the definition of Good Reason if you have terminated your employment for Good Reason based on such clause), to be paid to you in a cash lump sum on the 60th day following the Date of Termination and an amount equal to one and a half (1.5) times the sum of (a) Base Salary plus (b) Target Bonus, both in effect on the Date of Termination (without taking into account any reduction under clause (ii) of the definition of Good Reason if you have terminated your employment for Good Reason based on such clause), to be paid to you in a cash lump sum on the later of the date the Change in Control occurs or the 60th day following the Date of Termination (which, for the avoidance of doubt, shall in no event be later than the last day of the applicable two and one-half (2 ½) month short-

Ms. Helen McCluskey

December 13, 2011

Page 10

	term deferral period with respect to such payment, within the meaning of Treasury Regulation Section 1.409A-1(b)(4)).
	i.      As a condition to receiving the payments and entitlements pursuant to this paragraph 8 (other than clauses (a) and (h) hereof), you hereby agree to execute and deliver to the Company a release of claims in the form of Exhibit B attached hereto no later than 45 days following the Date of Termination and not revoke such release within the applicable revocation period.
9.	Any amounts due to you under paragraphs 5, 6, or 8 are considered to be reasonable by the Company and are not in the nature of a penalty. Any payments provided pursuant to paragraph 5 or paragraph 8 shall be in lieu of any salary continuation arrangements under any other severance program or plan of the Company.
10.	a.      Notwithstanding any other provision of this Agreement, upon the termination of your employment for any reason, unless otherwise requested by the Board, you shall immediately resign from all boards of directors of any affiliate of the Company, if any, of which you may be a member, and as a trustee of, or fiduciary to, any employee benefit plans of the Company or any affiliate of the Company. You agree to execute any and all documentation of such resignations upon request by the Company, but you shall be treated for all purposes as having so resigned upon termination of your employment, regardless of when or whether you execute any such documentation.
	b.      Section 409A.  The Company and you agree that this Agreement and the payments and benefits hereunder are intended to comply with, or qualify for exemption from, the requirements of Section 409A (including the Treasury Regulations and other administrative guidance promulgated thereunder), and this Agreement shall be interpreted in a manner consistent with such intent.  Without limiting the foregoing, you expressly agree and acknowledge that neither the Company, any of its affiliates, nor any of their respective employees, directors or representatives shall have any liability to you with respect to the imposition of any early or additional taxes, interest or penalties under Section 409A except in such circumstances where the imposition of such taxes, interest or penalties results from the failure of the Company to pay amounts in accordance with this Agreement and any plan or arrangement applicable to you or results from actions taken by the Company inconsistent with this Agreement.  Notwithstanding anything to the contrary in this Agreement or elsewhere (except for paragraph 3(d) of this Agreement), if you are a “specified employee” as determined pursuant to Section 409A as of the date of your Separation From Service and if any payment, benefit or entitlement provided for in this Agreement or otherwise both (x) constitutes a “deferral of compensation” within the meaning of Section 409A

Ms. Helen McCluskey

December 13, 2011

Page 11

and (y) cannot be paid or provided in a manner otherwise provided herein or otherwise without subjecting you to additional tax, interest or penalties under Section 409A, then any such payment, benefit or entitlement that is payable during the first six months following your Separation From Service shall be paid or provided to you in a cash lump-sum on the earlier of your death or the first business day of the seventh calendar month following the month in which your Separation From Service occurs.  In addition, any payment, benefit or entitlement due upon a termination of your employment that represents a “deferral of compensation” within the meaning of Section 409A (other than any payments due pursuant to paragraph 3(d) of this Agreement) shall only be paid or provided to you upon a Separation From Service, in which case any reference to “Date of Termination” in connection with such payment, benefit or entitlement shall be deemed to be a reference to “Separation From Service” and the actual payment date within any applicable time period specified in the applicable provision of paragraphs 5, 6, 7 or 8 shall be within the Company’s sole discretion.    Notwithstanding anything to the contrary in this Agreement or otherwise, any payment or benefit under this Agreement or otherwise which is exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to you only to the extent the expenses are not incurred or the benefits are not provided beyond the last day of your second taxable year following your taxable year in which your Separation From Service occurs; and provided further that the Company reimburses such expenses no later than the last day of your third taxable year following your taxable year in which your Separation From Service occurs.  Finally, to the extent that the provision of any benefit pursuant to paragraph 5(e) or paragraph 8(f) hereof is taxable to you, any such reimbursement or in-kind benefit shall be paid to you on or before the last day of your taxable year following your taxable year in which the expense is incurred, shall not be subject to liquidation or exchange for any other benefit and shall not, with respect to one taxable year, affect the expenses eligible for reimbursement or the in-kind benefits to be provided in any other taxable year.

11.

During your employment and for 12 months (24 months in the event of your Retirement) following the Date of Termination, you agree that you will not, other than in the ordinary course of performing your duties hereunder or as agreed by the Company in writing, engage in a “Competitive Business,” directly or indirectly, as an individual, partner, shareholder, director, officer, principal, agent, employee, trustee, consultant, or in any relationship or capacity, in any geographic location in which the Company or any of its affiliates is engaged in business.  You shall not be deemed to be in violation of this paragraph 11 by reason of the fact that you own or acquire, solely as an investment, up to two percent (2%) of the outstanding equity securities (measured by value) of any entity. “Competitive Business” shall mean a business engaged in (x) apparel design and/or apparel wholesaling or (y) retailing in competition with any

Ms. Helen McCluskey

December 13, 2011

Page 12

	business the Company or any of its affiliates is conducting at the time of such alleged violation.
12.	You agree that for a period of 18 months (24 months in the event of your Retirement) following the Date of Termination, you will not, without the prior written consent of the Company, directly or indirectly, hire any employee of the Company or any of its affiliates, or solicit or encourage any such employee to leave the employee of the Company or any of its affiliates, as the case may be.  In addition, you agree that for a period of 18 months (24 months in the event of your Retirement) following the Date of Termination, you will not, without the prior written consent of the Company, directly or indirectly, solicit or encourage any customer of the Company or any affiliate of the Company to reduce or cease its business with the Company or any such affiliate of the Company or otherwise interfere with the relationship of the Company or any affiliate of the Company with its customers.
13.	You and the Company each agree to refrain from making any statements or comments of a defamatory or disparaging nature to third parties regarding each other (including, in the case of your obligation hereunder “Company” shall also include an affiliate of the Company and the Company’s officers, directors, personnel or products and, in the case of the Company’s obligation hereunder, “Company” shall include any subsidiary as well as any affiliate of the Company which the Company controls, directly or indirectly). You and the Company each understand that either party should be entitled to respond truthfully and accurately to statements about such party made publicly by you or the Company, as the case may be, provided that such response is consistent with your or the Company’s obligations not to make any statements or comments of a defamatory or disparaging nature as set forth herein above.
14.	During the Term and thereafter, other than in the ordinary course of performing your duties for the Company or as required in connection with providing any cooperation to the Company pursuant to paragraph 20 below, you agree that you will not disclose to anyone or make use of any trade secret or proprietary or confidential information of the Company or any affiliate of the Company, including such trade secret or proprietary or confidential information of any customer or other entity to which the Company owes an obligation not to disclose such information, which you acquire during the course of your employment, including, but not limited to, records kept in the ordinary course of business, except when required to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative body (including a committee thereof) with apparent or actual jurisdiction to order you to divulge, disclose or make accessible such information. The foregoing shall not apply to information that (i) was known to

Ms. Helen McCluskey

December 13, 2011

Page 13

	the public prior to its disclosure by you or (ii) becomes known to the public through no wrongful disclosure by or act of you or any of your representatives. In the event you are requested by subpoena, court order, investigative demand, search warrant or other legal process to disclose any information regarding the Company, you agree, unless prohibited by law or Securities and Exchange Commission regulation, to give the Company’s General Counsel prompt written notice of any request for disclosure in advance of your making such disclosure and you shall not disclose such information regarding the Company unless and until the Company has expressly authorized you to do so in writing or the Company has had a reasonable opportunity to object to such a request or to litigate the matter (of which the Company agrees to keep you reasonably informed) and has failed to do so.
15.	You hereby sell, assign and transfer to the Company all of your right, title and interest in and to all inventions, discoveries, improvements and copyrightable subject matter (the “Rights”) which during the period of your employment are made or conceived by you, alone or with others, and which are within or arise out of any general field of the Company’s business or arise out of any work you perform, or information you receive regarding the business of the Company, while employed by the Company. You shall fully disclose to the Company as promptly as available all information known or possessed by you concerning any Rights, and upon request by the Company and without any further remuneration in any form to you by the Company, execute all applications for patents and for copyright registration, assignments thereof and other instruments and do all things which the Company may deem necessary to vest and maintain in it the entire right, title and interest in and to all such Rights.
16.	You agree that at the time of termination of your employment, whether at your instance or the Company, and regardless of the reasons therefore, you will promptly deliver to the Company’s General Counsel, and not keep or deliver to anyone else, any and all of the following which is in your possession or control: (i) Company property (including, without limitation, credit cards, computers, communication devices, home office equipment and other Company tangible property) and (ii) notes, files, memoranda, papers and, in general, any and all physical matter and computer files containing confidential or proprietary information of the Company or any of the Company’s affiliates, including any and all documents relating to the conduct of the business of the Company or any of the Company’s affiliates and any and all documents containing confidential or proprietary information of the customers of the Company or any of the Company’s affiliates, except for (x) any documents for which the Company’s General Counsel has given written consent to removal at the time of termination, (y) any documents on your personal computer if you destroy such documents and give a notarized written affidavit of such destruction and (z) any information

Ms. Helen McCluskey

December 13, 2011

Page 14

	necessary for you to retain for tax purposes (provided you maintain the confidentiality of such information described in the foregoing clauses in accordance with paragraph 14 above).  In addition, you may retain such records as relate to your compensation, benefits, expenses, job-description and job performance, as well as personal memorabilia.
17.	Any failure by you to comply with the provisions of paragraphs 11, 12, 13, 14, 15 or 16 shall relieve the Company of any of its obligations pursuant to this Agreement, including pursuant to paragraphs 5, 6 and 8; provided, however, that if such failure is curable, the Company shall give you prompt notice and a 30-day period to cure such failure.  If so cured, subject to paragraph 29 hereof, all of the Company’s obligations hereunder shall remain in full force and effect.
18.	From and after the date hereof, except as otherwise provided in paragraph 19, should any disagreement, claim or controversy arise between you and the Company with respect to this Agreement or your employment by the Company, the same may be enforced at the option of either party by confidential, binding and final arbitration in New York, New York before a single arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The award of the arbitrator with respect to such disagreement, claim or controversy shall be enforceable in any court of competent jurisdiction and shall be binding upon the parties hereto. You consent to the personal jurisdiction of the Courts of the State of New York (including the United States District Court for the Southern District of New York) in any proceedings for equitable relief. You further agree not to interpose any objection or improper venue in any such proceeding or interpose any defense that the Company has an adequate remedy at law or that the injury suffered by the Company is not irreparable. You and the Company agree that each party shall be responsible for its own costs and expenses, including attorneys’ fees, provided, however, that if you substantially prevail with respect to all claims that are the subject matter of the dispute, your costs, including reasonable attorneys’ fees, shall be borne by the Company; provided that if such costs are not reimbursed in connection with a dispute exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(11) then such payment shall be made by the Company to you in the year following the year in which the dispute is resolved, shall not be subject to liquidation or exchange for any other benefit and shall not, with respect to one taxable year, affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year.
19.	You expressly agree and acknowledge that any breach or threatened breach of any obligation set forth in paragraphs 11, 12, 13, 14, 15 or 16 above will cause the Company (or, as applicable, any affiliate of the Company) irreparable harm for which there is no adequate remedy at law, and as a result of this the Company

Ms. Helen McCluskey

December 13, 2011

Page 15

	shall be entitled to seek the issuance by a court of competent jurisdiction of an injunction, restraining order or other equitable relief in favor of itself, without the necessity of posting a bond and without proving actual damages, restraining you from committing or continuing to commit any such violation.
20.	During any notice period and following the Date of Termination, upon reasonable request by the Company, you shall cooperate with the Company or any of its affiliates with respect to any legal or investigatory proceeding, including any government or regulatory investigation, or any litigation or other dispute relating to any matter in which you were involved or had knowledge during your employment with the Company, subject to your reasonable personal and business schedules. The Company shall reimburse you for all reasonable out-of-pocket costs, such as travel, hotel and meal expenses and reasonable attorneys’ fees, incurred by you in providing any cooperation pursuant to this paragraph 20; provided such expenses shall be paid to you as soon as practicable but in no event later than the end of the calendar year following the calendar year in which the expenses are incurred, subject in all cases to your providing appropriate documentation to the Company.  The Company shall also pay you a reasonable per diem amount for your time (other than for time spent preparing for or providing testimony) which shall be based upon your Base Salary at the Date of Termination, with such per diem paid to you in the calendar month following the month in which you provide such assistance.  Any reimbursement or payment under this paragraph 20 shall not affect the amount of the reimbursement or payment to you in any other taxable year.  The right to payment or reimbursement pursuant to this paragraph 20 shall not be liquidated or exchanged for any other benefit.
21.	You represent and warrant that you have the free and unfettered right to enter into this Agreement and to perform your obligations under it and that you know of no agreement between you and any other person, firm or organization, or any law or regulation, that would be violated by the performance of your obligations under this Agreement. You agree that you will not use or disclose any confidential or proprietary information of any current or prior employer in the course of performing your duties for the Company or any of its affiliates.
22.	The invalidity or unenforceability of any particular provision or provisions of this Agreement (as determined by an arbitrator or a court of competent jurisdiction) shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions had been omitted.
23.	This Agreement (including its Exhibits) and the documents referred to herein constitute the full and complete understanding and agreement of the parties concerning the subject matter hereof and shall be binding on the parties hereof as of the date first written above, but shall not become effective until the Effective

Ms. Helen McCluskey

December 13, 2011

Page 16

	Date, at which time it shall supersede all prior representations, understandings and agreements with respect thereto (other than any agreements governing any equity awards outstanding as of February 1, 2012) and cannot be amended, changed, terminated, or modified in any respect without the written consent of the parties, except that the Company reserves the right in its sole discretion to make changes at any time to the other documents referenced in this Agreement.  For the avoidance of doubt, for any termination of employment prior to February 1, 2012, the Original Employment Agreement shall govern and control (provided that in no event shall entering into this Agreement (or the events occurring as contemplated hereunder) be deemed to constitute “Good Reason” pursuant to the Original Employment Agreement). No waiver by either party of any breach by the other party of any condition or provision contained in this Agreement shall be deemed to be a waiver of a similar or dissimilar condition or provision.
24.	This Agreement shall be binding upon and shall inure to the benefit of successors and assigns of the Company.
25.	This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its provisions as to choice of laws. The respective rights and obligations of the parties hereunder, including without limitation paragraphs 5 through 8, 10 and 11 through 16, shall survive any termination of the Term to the extent necessary to the intended preservation of such rights and obligations.
26.	Any notice given to either you or the Company under this Agreement shall be in writing and shall be deemed to have been given upon actual receipt or refusal to accept receipt, with any such notice duly addressed to you or the Company, as the case may be, at the address indicated below or to such other address as such party may subsequently designate by written notice in accordance with this paragraph 26: If to the Company: The Warnaco Group, Inc., 501 Seventh Avenue, New York, New York 10018, Attention: General Counsel; If to you: at your home address as indicated on the Company’s records.
27.	The Company may withhold from any amounts payable under this Agreement such Federal, state, local or other taxes as shall be required to be withheld pursuant to any applicable law or regulation.
28.	The Company hereby agrees during, and after termination of, your employment to indemnify you and hold you harmless, both during the Term and thereafter, to the fullest extent permitted by law and under the certificate of incorporation and by-laws of the Company against and in respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorneys’ fees), losses, amounts paid in settlement to the extent approved by the Company, and damages resulting from your good faith performance of your

Ms. Helen McCluskey

December 13, 2011

Page 17

	duties as an officer or director of the Company or any affiliate of the Company.  The Company shall reimburse you for expenses incurred by you in connection with any proceeding hereunder upon your written request for such reimbursement and your submission of the appropriate documentation associated with these expenses.  Such request shall include an undertaking by you to repay the amount of such advance or reimbursement if it shall ultimately be determined that you are not entitled to be indemnified hereunder against such costs and expenses.  The Company shall use commercially reasonable efforts to obtain and maintain directors’ and officers’ liability insurance covering you to the same extent as the Company covers its other officers and directors.
29.	Notwithstanding anything herein to the contrary or otherwise, all payments and/or awards hereunder shall be subject to cancellation and recoupment by the Company, and shall be repaid by you to the Company, to the extent required by law or regulation or pursuant to any listing requirement for the Company’s stock, or by any written Company forfeiture or recoupment policy applicable either to employees generally or all senior executives of the Company or any of its affiliates or any written agreement between you and the Company (or any of its affiliates).
30.	a.      If any amount, entitlement, or benefit paid or payable to you or provided for your benefit under this Agreement and under any other agreement, plan or program of the Company (such payments, entitlements and benefits referred to as a “Payment”) is subject to the excise tax imposed under Section 4999 of the Code or any similar federal or state law (an “Excise Tax”), then notwithstanding anything contained in this Agreement to the contrary, to the extent that any or all Payments would be subject to the imposition of an Excise Tax, the Payments shall be reduced (but not below zero) if and to the extent that such reduction would result in your retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the imposition of the Excise Tax), than if you received all of the Payments (such reduced amount is hereinafter referred to as the “Limited Payment Amount”).  The Company shall reduce or eliminate the Payments, by first reducing or eliminating those payments or benefits which are payable in cash and then by reducing or eliminating non-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 below).  For the avoidance of doubt, the parties agree that any Payment or portion thereof that constitutes deferred compensation under Section 409A shall be deemed to be forfeited upon application of any such reduction or elimination to such Payment or portion thereof.

Ms. Helen McCluskey

December 13, 2011

Page 18

b.      All calculations under this paragraph 30 shall be made by a nationally recognized accounting firm designated by the Company and reasonably acceptable to you (other than the accounting firm that is regularly engaged by any party who has effectuated a Change in Control) (the “Accounting Firm”).  The Company shall pay all fees and expenses of such Accounting Firm.  The Accounting Firm shall provide its calculations, together with detailed supporting documentation, both to the Company and you within 45 days after the Change in Control or the Date of Termination, whichever is later (or such earlier time as is requested by the Company) and, with respect to the Limited Payment Amount, shall deliver its opinion to you that you are not required to report any Excise Tax on your federal income tax return with respect to the Limited Payment Amount (collectively, the “Determination”).  Within 5 business days of your receipt of the Determination, you shall have the right to dispute the Determination (the “Dispute”).  The existence of the Dispute shall not in any way affect your right to receive the Payments in accordance with the Determination.  If there is no Dispute, the Determination by the Accounting Firm shall be final binding and conclusive upon the Company and you (except as provided in clause (c) below).

c.      If, after the Payments have been made to you, it is established that the Payments made to you, or provided for your benefit, exceed the limitations provided in clause (a) above (an “Excess Payment”) or are less than such limitations (an “Underpayment”), as the case may be, then the provisions of this clause (c) shall apply.  If it is established pursuant to a final determination of a court or an Internal Revenue Service (the “IRS”) proceeding which has been finally and conclusively resolved, that an Excess Payment has been made, you shall repay the Excess Payment to the Company within 20 days following the determination of such Excess Payment.  In the event that it is determined by (i) the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS, (ii) pursuant to a determination by a court, or (iii) upon the resolution to your satisfaction of the Dispute, that an Underpayment has occurred, the Company shall pay an amount equal to the Underpayment to you within 10 days of such determination or resolution together with interest on such amount at the applicable federal short-term rate, as defined under Section 1274(d) of the Code and as in effect on the first date that such amount should have been paid to you under this Agreement, from such date until the date that such Underpayment is made to you.

Ms. Helen McCluskey

December 13, 2011

Page 19

31. This Agreement may be executed in one or more counterparts, including by facsimile signature, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

[Remainder of page left intentionally blank]

IN WITNESS WHEREOF, the Company and you have voluntarily executed this Agreement as of the date first written above.

Very truly yours,

THE WARNACO GROUP, INC.

 /s/ Elizabeth Wood

Name:  Elizabeth Wood

Title:    Senior Vice President, Human Resources

Agreed to and accepted

/s/ Helen McCluskey

Helen McCluskey

Exhibit A

Definitions

“Cause” shall mean:

(i)	willful misconduct by you which is materially injurious to the Company’s interests;
(ii)	willful breach of duty by you in the course of your employment that is materially injurious to the Company’s interests and which, if curable, is not cured within 10 days after your receipt of written notice from the Company;
(iii)	willful failure by you after having been given written notice from the Company to perform any and all duties commensurate with your position and a reasonable opportunity to perform such duties as are specified in the written notice, other than a failure resulting from your incapacity due to physical or mental illness; or
(iv)	indictment of you for the commission of a felony, a crime involving moral turpitude or any other crime involving the business of the Company which, in the case of such crime involving the business of the Company, is injurious to the business of the Company.

For purposes of this Cause definition, no act or failure to act, on your part shall be considered willful unless it is done, or omitted to be done, in you in bad faith and without reasonable belief that your action was in the best interests of the Company.  The determination to terminate your employment for Cause shall be made by the Board and prior to such determination you shall have the right to appear before the Board or a committee designated by the Board.

“Change in Control” shall mean any of the following:

(i)	any “person” (as such term is used in Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934) or group of persons acting jointly or in concert, but excluding a person who owns more than 5% of the outstanding shares of the Company as of the Effective Date, becomes a “beneficial owner” (as such term is used in Rule 13d-3 promulgated under that Act), of more than 50% of the Voting Stock of the Company;
(ii)	all or substantially all of the assets of the Company are disposed of pursuant to a merger, consolidation or other transaction (unless the shareholders of the Company immediately prior to such merger, consolidation or other transaction beneficially own, directly or indirectly, in substantially the same proportion as they owned the Voting Stock of the Company, all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed to the business of the Company); or
(iii)	approval by the shareholders of the Company of a complete liquidation or dissolution of all or substantially all of the assets of the Company.

For purposes of this Change in Control definition, “Voting Stock” shall mean the capital stock of any class or classes having general voting power, in the absence of specified contingencies, to elect the directors of the Company.  Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any award or amount which provides for the deferral of compensation and is subject to Section 409A, then, to the extent required to comply with Section 409A, the transaction or event described in clause (i), (ii) or (iii) above with respect to such award or amount must also constitute a “change of control event” as defined in the Treasury Regulation §1.409A-3(i)(5).

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Date of Termination” shall mean:

(i)	if your employment is terminated by the Company, the date specified in the notice by the Company to you that your employment is so terminated, which in the case of a Retirement shall be no less than 90 days’ after such notice is provided to you;
(ii)	if you voluntarily resign your employment (other than a Retirement), 60 days after receipt by the Company of written notice that you are terminating your employment (provided, that if you commence other employment, the Company may (a) accelerate the Date of Termination to an earlier date so that there is no overlap with such other employment by providing you with written notice of such action, or, (b) alternatively, place you on paid leave (covering only Base Salary) during such period irrespective of whether you commence other employment);
(iii)	if you terminate your employment and such termination qualifies as a Retirement, 90 days after receipt by the Company of written notice that you are terminating your employment;
(iv)	if your employment is terminated for Disability by the Company, 30 days after written notice is given as specified below in the definition of “Disability”.
(v)	if your employment is terminated by reason of death, the date of death; or
(vi)	if you resign your employment for Good Reason, 30 days after receipt by the Company of timely written notice from you in accordance with paragraph 26 of the letter agreement effective as of February 1, 2012 between you and the Company (the “Letter Agreement”), unless the Company cures the event or events giving rise to Good Reason within 30 days after receipt of such written notice.

“Disability” shall mean your inability, due to physical or mental incapacity, to substantially perform your duties and responsibilities for a period of 180 consecutive days as determined by a medical doctor selected by the Company and reasonably acceptable to you.  In no event shall any termination of your employment occur unless the Company gives you written notice of such termination in accordance with paragraph 26 of the Letter Agreement.

“Good Reason” shall mean the occurrence of any of the following without your consent:

(i)	a material diminution in your authority, duties or responsibilities as Chief Executive Officer of the Company;
(ii)	a reduction in your Base Salary or Target Bonus;
(iii)	a change in reporting structure so that you report to someone other than the Board, or the Chairman of the Board as the Board’s designee;
(iv)	the removal by the Company of you as Chief Executive Officer of the Company;
(v)	the failure of the Company to nominate or renominate you, as the case may be, as a member of the Board, or the removal of you, after such appointment, from the Board;
(vi)	the failure of a successor to all or substantially all of the assets of the Company to assume the Company’s obligations under the Letter Agreement either in writing or as a matter of law; or
(vii)	requiring you to be principally based at any office or location other than Manhattan, New York or any location within a 45 mile radius of Manhattan, New York.

Anything herein to the contrary notwithstanding, you shall not be entitled to resign for Good Reason unless you give the Company written notice of the event constituting “Good Reason” within 60 days of the occurrence of such event and the Company fails to cure such event within 30 days after receipt of such notice.  For the avoidance of doubt, your Retirement shall not constitute a “Good Reason” event.

“Qualifying Change in Control” shall mean the occurrence of a Change in Control as defined in clauses (i) or (ii) of the definition of Change in Control; provided, that, such occurrence qualifies as a “change in control event” under Section 409A and Treasury Regulation Section 1.409A-3(i)(5) (applying the default rules contained therein).

“Retirement” shall mean any termination of your employment with the Company on or after you reach age 65 for any reason (whether by the Company or by you) other than a termination for Cause.

“Separation From Service” shall mean a termination of your employment with the Employer in a manner compliant and consistent with Treasury Regulation Section 1.409A-1(h).  For purposes of this definition, “Employer” shall mean the Company and any entity required to be aggregated with the Company under Treasury Regulation Section 1.409A-1(h)(3) (applying the default rules contained therein).

“Stock Incentive Plan”  shall mean, as applicable, the Company’s  2005 and 2008 Stock Incentive Plans, as amended from time to time, or such other long-term incentive plan(s) as may be approved the Company’s shareholders from time to time.

Exhibit B

AGREEMENT AND RELEASE OF CLAIMS

THIS AGREEMENT AND RELEASE is executed by the undersigned (the “Executive”) as of the date hereof.

WHEREAS, the Executive and The Warnaco Group, Inc. (the “Company”) entered into an employment agreement dated December 13, 2011 (the “Employment Agreement”);

WHEREAS, the Executive has certain entitlements pursuant to the Employment Agreement subject to the Executive’s executing this Agreement and Release and complying with its terms.

NOW, THEREFORE, in consideration of the payments set forth in the Employment Agreement and other good and valuable consideration, the Executive agrees as follows:

The Executive, on behalf of herself and her dependents, heirs, administrators, agents, executors, successors and assigns (the “Executive Releasors”), hereby releases and forever discharges the Company and its affiliated companies and their past and present parents, subsidiaries, successors and assigns and all of the aforesaid companies’ past and present officers, directors, employees, trustees, shareholders, representatives and agents (the “Company Releasees”), from any and all claims, demands, obligations, liabilities and causes of action of any kind or description whatsoever, in law, equity or otherwise, whether known or unknown, that any Executive Releasor had, may have had or now has against the Company or any other Company Releasee as of the date of execution of this Agreement and Release arising out of or relating to the Executive’s employment relationship, or the termination of that relationship, with the Company (or any affiliate), including, but not limited to, any claim, demand, obligation, liability or cause of action arising under any Federal, state, or local employment law or ordinance (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act of 1991, the Workers Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act (other than any claim for vested benefits), the Family and Medical Leave Act, and the Age Discrimination in Employment Act, as amended by the Older Workers’ Benefit Protection Act (“ADEA”)), tort, contract, or alleged violation of any other legal obligation (collectively “Released Executive Claims”).  In addition, in consideration of the promises and covenants of the Company, the Executive, on behalf of herself and the other Executive Releasors, further agrees to waive any and all rights under the laws of any jurisdiction in the United States, or any other country, that limit a general release to any of the foregoing actions, causes of action, claims or charges that are known or suspected to exist in the Executive’s favor as of the date of this Agreement and Release.  Anything to the contrary notwithstanding in this Agreement and Release or the Employment Agreement, nothing herein shall release any Company Releasee from any claims or damages based on (i) any right or claim that arises after the date of this Agreement and Release pertaining to a matter that arises after such date, (ii) any right the Executive may have to enforce paragraphs 5 or 8 (as applicable), paragraphs 18 and 28 of the Employment Agreement, (iii) any right or claim the Executive may have to benefits or equity awards that have accrued or vested as

of the Date of Termination or any right pursuant to any qualified retirement plan or (iv) any right the Executive may have to be indemnified by the Company to the extent such indemnification by the Company or any Affiliate is permitted by applicable law or the Company’s by-laws.

The Executive understands that nothing in this Agreement and Release shall be construed to prohibit her from filing a charge with, or participating in any investigation or proceeding conducted by, the Equal Employment Opportunity Commission, National Labor Relations Board, and/or any federal, state or local agency.  Notwithstanding the foregoing, the Executive hereby waives any and all rights to recover monetary damages in any charge, complaint, or lawsuit filed by her or by anyone else on her behalf based on events occurring prior to the date of this Agreement and Release.

The Executive agrees that she shall continue to be bound by, and will comply with, the provisions of paragraphs 11, 12, 13, 14, 15, 16, 20 and 29 of the Employment Agreement and the provisions of such sections, along with paragraphs 18 and 19 of the Employment Agreement, shall be incorporated fully into this Agreement and Release.

The Executive acknowledges that she has been provided a period of at least 21 calendar days (45 calendar days in the case of any termination covered by Section 7(f)(1)(F)(ii) of ADEA) in which to consider and execute this Agreement and Release.  The Executive further acknowledges and understands that she has seven calendar days from the date on which she executes this Agreement and Release to revoke her acceptance by delivering to the Company written notification of her intention to revoke this Agreement and Release in accordance with paragraph 26 of the Employment Agreement.  This Agreement and Release becomes effective when signed unless revoked in writing and in accordance with this seven-day provision.  To the extent that the Executive has not otherwise done so, the Executive is advised to consult with an attorney prior to executing this Agreement and Release.

This Agreement and Release shall be governed by and construed and interpreted in accordance with the laws of New York without reference to principles of conflicts of law.  Capitalized terms, unless defined herein, shall have the meaning ascribed to such terms in the Employment Agreement.

IN WITNESS WHEREOF, the Executive has executed this Agreement and Release as of the date hereof.

Helen McCluskey

Date: 

EX-10.2

Exhibit 10.2

RETIREMENT AGREEMENT

This Retirement Agreement (this “Agreement”) by and between The Warnaco Group, Inc., a Delaware corporation (together with its successors and assigns, the “Company”), and Joseph R. Gromek (the “Executive”), is dated as of December 13, 2011.

WHEREAS, the Executive has been employed by the Company as its President and Chief Executive Officer and has served as a member of the board of directors of the Company (the “Board”);

WHEREAS, the Board and the Company appreciate all of the leadership, hard work and dedication the Executive has provided the Company and its Affiliates over the years;

WHEREAS, the Company and the Executive are party to an employment agreement dated as of December 19, 2007 (the “Employment Agreement”) (all capitalized terms not defined herein shall have the meanings ascribed to them in the Employment Agreement);

NOW, THEREFORE, the Company and the Executive hereby agree as follows:

1.         Resignation as President and Chief Executive Officer.  Effective as of February 1, 2012 (the “Resignation Date”), the Executive shall resign from serving as the President and Chief Executive Officer of the Company and, except as provided in Section 2 of this Agreement, from all other positions the Executive then holds as an officer and employee of the Company or of any of the Company’s Affiliates and as a member of the Board and the board of directors of any of the Company’s Affiliates.  The Executive hereby agrees to execute any and all documentation to effectuate such resignations upon request by the Company, but he shall be treated for all purposes as having so resigned from such positions on the Resignation Date, regardless of when or whether he executes any such documentation.

2.          Transition Period.  During the period commencing on the Resignation Date and continuing through March 4, 2012  (or such earlier date if the Executive’s voluntarily terminates his employment or dies prior to March 4, 2012) (the “Separation Date” and, such continuation period, the “Transition Period”), the Executive shall serve as a non-officer employee of the Company and the Executive’s employment shall terminate without any further action of either party on the Separation Date.

3.          Base Salary; Benefits and Perquisites.  Up through the Resignation Date and during the Transition Period, the Executive shall continue to be paid his current Base Salary, reimbursed business expenses and, subject to the last sentence of this Section 3, participate in employee health and welfare and perquisite plans and programs on the same basis he was participating in such plans and programs on the date of this Agreement.  Except as otherwise expressly provided in this Agreement, the Executive shall not be entitled to receive any other payments, benefits or entitlements.  For the avoidance of doubt, except as otherwise provided in Section 4 and, if applicable, Section 5 below, the Executive shall not be entitled to receive any

annual bonus, long-term incentive and/or equity awards or any Supplemental Awards on or after the date of this Agreement.

4.          Annual Incentive Award.  Following the Resignation Date, the Executive shall be entitled to receive the Annual Bonus for fiscal year 2011 in accordance with the terms and conditions of the applicable bonus plan, payable to the Executive on March 5, 2012.

5.          Additional Payments.  Subject to, and in consideration of, the Executive’s execution and non-revocation of the release of claims against the Company attached hereto as Exhibit A (the “Release”) within 21 days following the Separation Date, the Executive (or his estate, as applicable) shall be entitled to the following:

(a)     in lieu of a bonus for 2012, an amount equal to the Executive’s Target Bonus multiplied by a fraction, the numerator of which is the number of days from January 1, 2012 through the Separation Date and the denominator of which is 365, payable in cash on March 26, 2012;

(b)     a fully vested Supplemental Award for 2011 equal to 30% of the sum of (i) the actual base salary paid to the Executive for fiscal year 2011 and (ii) the bonus paid to the Executive under Section 4 above, to be awarded and paid in accordance with Section 6(b) of the Employment Agreement, provided the grant date shall be March 26, 2012;

(c)     a fully vested pro-rata Supplemental Award for 2012 equal to 30% of the sum of (i) the actual base salary paid to the Executive for fiscal year 2012 and (ii) the amount paid to the Executive under Section 5(a) above, to be awarded and paid in accordance with Section 6(b) of the Employment Agreement, provided the grant date shall be March 26, 2012; and

(d)     provided the Executive makes a timely election under COBRA, continued participation for the Executive and his eligible dependents in the Company’s medical and dental plans in which the Executive and his eligible dependents were participating immediately prior to the Separation Date until the earlier of (a) the 18th month anniversary of the Separation Date, or (b) the date, or dates, the Executive receives equivalent coverage under the plans and programs of a subsequent employer; provided that, at the Company’s election, the Executive shall pay the full cost of such COBRA premiums and the Company shall promptly reimburse the Executive for its portion of the premiums (as if the Executive had continued in employment); and provided, further, that in no event shall there be any gross up provided by the Company for any tax liabilities or otherwise.

6.          Outstanding Equity Awards.  The Executive has previously been granted non-qualified stock options (“Stock Options”), shares of restricted stock (“Restricted Shares”), performance units (“Performance Units”), and restricted stock units (“RSUs”) under the Stock Incentive Plan.  All such Stock Options, Restricted Shares, Performance Units and RSUs (other than Career Units to be granted pursuant to Section 5 above or addressed in Section 7 hereof) shall hereinafter be referred to as the “Equity Awards.”   The Executive’s outstanding Equity

2

Awards, as of the date hereof, are set forth on the schedule attached hereto as Schedule I and, upon the Separation Date, the Equity Awards shall be treated as follows:

(a)     The Executive’s outstanding Performance Units shall continue to vest as if the Executive had remained employed, subject to the Executive not engaging in a Competitive Activity as set forth in the applicable award agreement;

(b)     The Executive’s outstanding Stock Options granted prior to December 19, 2007 are fully vested and, subject to the Executive’s not breaching Section 10 below, shall remain exercisable until the first anniversary of the Separation Date;

(c)     The Executive’s outstanding Stock Options granted in 2008 and 2009 shall be fully vested as of March 4, 2012 and, subject to the Executive’s not breaching Section 10 below, shall remain exercisable until the first anniversary of the Separation Date;

(d)     The Executive’s outstanding Stock Options granted in 2010 and 2011 will continue to vest as if the Executive had remained employed, with all vested stock options remaining exercisable until the later of two years following the Separation Date or six months following the last applicable vesting date for such option grant; provided that if the Company makes a determination that the Executive engaged in a Competitive Activity, all vesting shall cease and the portion of the option grant which is vested as of the date of such determination shall only remain exercisable for one month following such determination; and

(e)     The Executive’s outstanding Restricted Shares and RSUs (other than the Career Units) which vest after the Separation Date shall, subject to the Executive not engaging in a Competitive Activity prior to the applicable vesting date, continue to vest as if the Executive has remained employed.

For purposes of this Section 6, “Competitive Activity” shall have the meaning ascribed to such term in the applicable award agreement.

7.          Supplemental Awards.  The Executive has previously been granted non-qualified deferred compensation in the form of Supplemental Awards (consisting of Career Units and credits to the Executive’s Notional Account).  The Executive’s Career Units, and the Executive’s Adjusted Notional Account balance (not including the Supplemental Awards to be granted pursuant to Section 5 above), are set forth on the schedule attached hereto as Schedule II.  The Supplemental Awards set forth on Schedule II are fully vested and all Supplemental Awards shall be delivered or paid to the Executive (or his estate) in accordance with Section 6(b) of the Employment Agreement.

8.          Non-Disparagement.  On and after the date hereof, the Executive and the Company each agree that the mutual non-disparagement covenants contained in Section 11(d) of the Employment Agreement shall be incorporated by reference in this Agreement and shall remain in full force and effect.

9.          Confidentiality; Assignment of Rights; Return of Property.  On and after the date hereof, the Executive shall continue to be subject to the confidentiality provisions, the

3

assignment of rights (for Rights made or conceived during the Executive’s employment), and return of property provisions set forth in Section 10 of the Employment Agreement, which provisions are incorporated by reference in this Agreement and shall remain in full force and effect.

10.         Non-Competition and Non-Solicitation.  The Executive acknowledges that in the Executive’s capacity in management the Executive has had a great deal of exposure and access to the trade secrets of the Company or its Affiliates and other Confidential Information.  Therefore, to protect such trade secrets and other Confidential Information, in addition to the Executive’s obligations not to engage in a “Competitive Activity” pursuant to the applicable award agreements for any Equity Awards, the Executive agrees as follows:

(a)     During the Executive’s employment with the Company or any Affiliate and for 24 months following the Separation Date, the Executive shall not, other than in the ordinary course of performing the Executive’s duties for the Company prior to the Separation Date or as agreed by the Company in writing, engage in a “Competitive Business,” directly or indirectly, as an individual, partner, shareholder, director, officer, principal, agent, employee, trustee, consultant, or in any relationship or capacity, in any geographic location in which the Company or any of its Affiliates is engaged in business.  The Executive shall not be deemed to be in violation of this Section 10(a) by reason of the fact that the Executive owns or acquires, solely as an investment, up to two percent (2%) of the outstanding equity securities (measured by value) of any entity.  “Competitive Business” shall mean a business engaged in (x) apparel design and/or apparel wholesaling or (y) retailing in competition with any business that the Company or any of its Affiliates is conducting at the time of the alleged violation.

(b)     During the Executive’s employment with the Company or any Affiliate and for 24 months following the Separation Date, the Executive shall not, other than in the ordinary course of the Company’s business prior to the Separation Date or with the Company’s prior written consent, directly or indirectly, solicit or encourage any customer of the Company or any of its Affiliates to reduce or cease its business with the Company or any such Affiliate or otherwise interfere with the relationship of the Company or any Affiliate with its customers.

(c)     During the Executive’s employment with the Company or any Affiliate and for 24 months following the Separation Date, the Executive shall not, other than in the ordinary course of the Company’s business prior to the Separation Date or with the Company’s prior written consent, directly or indirectly, hire any employee of the Company or any of its Affiliates, or solicit or encourage any such employee to leave the employ of the Company or its Affiliates, as the case may be.

11.         Cooperation.  On and after the date hereof, the Executive and the Company each agree that the provisions of the cooperation covenant contained in Section 13 of the Employment Agreement shall be incorporated by reference in this Agreement and shall remain in full force and effect.

4

12.         Injunctive and Other Relief.  The Executive expressly agrees and acknowledges any breach or threatened breach of any of his obligations under Section 8, Section 9 or Section 10 above will cause the Company immeasurable and irreparable harm for which there is no adequate remedy at law, and as a result of this, the Company shall be entitled to seek the issuance by a court of competent jurisdiction of an injunction, restraining order or other equitable relief in favor of itself, without the necessity of posting a bond, restraining the Executive from committing or continuing to commit any such violation.

13.         No Mitigation; Offset.  The Executive is under no obligation to mitigate damages or the amount of any payment provided for hereunder by seeking other employment or otherwise and, except as otherwise provided in Section 5(d) or Section 6 of this Agreement, such amounts shall not be reduced whether or not the Executive obtains other employment.  Notwithstanding anything herein to the contrary or otherwise, the payment in Section 4 hereof and the Equity Awards shall be subject to cancellation and recoupment by the Company, and shall be repaid by the Executive to the Company, to the extent required by law or regulation or pursuant to any listing requirement for the Company’s stock, or by any Company policy or agreement.

14.         Indemnification; Tax Matters; Resolution of Disputes.  Notwithstanding the other provisions of this Agreement, the indemnification and other provisions set forth in Section 21 of the Employment Agreement, the provisions of Section 14 of the Employment Agreement, and the provisions of Section 24 of the Employment Agreement are incorporated by reference in this Agreement and shall remain in full force and effect; provided, however, where applicable any reference to “this Agreement” in such sections shall mean this Retirement Agreement.

15.         Compliance with Section 409A of the Code.  Notwithstanding other provisions of this Agreement, the provisions relating to Section 409A of the Code set forth in the Employment Agreement (including, without limitations, those provisions set forth in Section 6(b), Section 8 and Section 9(l) of the Employment Agreement) are incorporated by reference in this Agreement and shall remain in full force and effect.

16.         Entire Agreement. As of the date hereof, this Agreement sets forth the entire agreement of the Company and the Executive with respect to the subject matter hereof, and, as of the date hereof, supercedes in its entirety the Employment Agreement and any severance plan, policy or arrangement of the Company; provided that (w) if the Executive is removed as President and Chief Executive Officer of the Company by the Board without Cause prior to the Resignation Date and a Change in Control as defined in clauses (i) or (ii) of such definition has not occurred as of the Executive’s Date of Termination, he shall be entitled to the payments and entitlements set forth in Section 9(a) of the Employment Agreement, (x) if the Executive is removed as President and Chief Executive Officer of the Company by the Board without Cause both prior to the Resignation Date and on or after a Change in Control as defined in clauses (i) or (ii) of such definition has occurred, he shall be entitled to the payments and entitlements set forth in Section 9(d) of the Employment Agreement, (y) if the Executive dies prior to the Resignation Date, his estate shall be entitled to the payments and entitlements set forth in Section 9(b) of the Employment Agreement, and (z) if the Executive terminates his employment for any reason (other than upon death) prior to the Resignation Date or his employment is terminated by the Board for Cause prior to the Resignation Date, he shall be entitled to payments and entitlements set forth in Section 9(c) of the Employment Agreement, and in all such cases, this Agreement

5

shall be null and void and of no further effect.  For the avoidance of doubt, in no event shall clauses (a) through (k) of Section 9 of the Employment Agreement apply for any termination of the Executive’s employment on or after February 1, 2012 and if the Company terminates the Executive’s employment for any reason during the Transition Period, the Executive shall be entitled to the payments and benefits of this Agreement as if he remained employed through March 4, 2012.  Without limiting the generality of the foregoing, the Executive expressly acknowledges and agrees that except as specifically set forth in Section 3, 4, 5, 6 and 7 of this Agreement, he is not entitled to receive any severance pay, severance benefits, compensation or employee benefits of any kind whatsoever from the Company on and after the date hereof.  In addition, as of the date hereof, the Executive expressly waives his right to terminate his employment for Good Reason under the Employment Agreement.

17.         Assignability; Binding Nature; Severability.  Notwithstanding the other provisions of this Agreement, the provisions of Section 16 of the Employment Agreement and Section 19 of the Employment Agreement are incorporated by reference in this Agreement and shall remain in full force and effect; provided, however, that any reference to “this Agreement” in such sections shall mean this Retirement Agreement.

18.         Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York without reference to principles of conflicts of law, provided, however, that Federal law shall apply to the interpretation or enforcement of the provisions incorporated by reference from Section 24 of the Employment Agreement.

19.         Notices.  Any notice given to a Party shall be in writing and shall be deemed to have been given (i) when delivered personally (provided that a written acknowledgement of receipt is obtained), (ii) three days after being sent by certified or registered mail, postage prepaid, return receipt requested, or (iii) two days after being sent by overnight courier (provided that a written acknowledgment of receipt is obtained by the overnight courier), with any such notice duly addressed to the Party concerned at the address indicated below or to such other address as such Party may subsequently designate by written notice in accordance with this Section 19:

If to the Company:	The Warnaco Group, Inc. 501 Seventh Avenue New York, New York 10018 Attention: General Counsel
If to the Executive:	The most recent address in the Company’s records.

20.         Withholding of Taxes.  The tax withholding and other provisions set forth in Section 26 of the Employment Agreement are incorporated by reference in this Agreement and shall remain in full force and effect.

21.         Miscellaneous.  No provision of this Agreement may be amended unless such amendment is agreed to in writing and signed by the Executive and an authorized officer of the Company.  No waiver by either Party of any breach by the other Party of any condition or

6

provision contained in this Agreement to be performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time.  Any waiver must be in writing signed by the Party against whom it is being enforced (either the Executive or an authorized officer of the Company, as the case may be). The captions used in this Agreement are designed for convenient reference only and are not to be used for the purpose of interpreting any provision of this Agreement.

22.         Counterparts.  This Agreement may be executed in one or more counterparts, including by facsimile signature, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

[Remainder of page is left intentionally blank]

7

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above.

THE WARNACO GROUP, INC.
By:	/s/ Jay L. Dubiner
Name:	Jay L. Dubiner
Title:	Senior Vice President, General Counsel and Secretary

THE EXECUTIVE

/s/ Joseph R. Gromek

Joseph R. Gromek

8

EXHIBIT A

AGREEMENT AND RELEASE OF CLAIMS

THIS AGREEMENT AND RELEASE is executed by the undersigned (the “Executive”) as of the date hereof.

WHEREAS, the Executive and The Warnaco Group, Inc. (the “Company”) entered into a retirement agreement dated as of December 13, 2011 (the “Retirement Agreement”);

WHEREAS, the Executive has certain entitlements pursuant to the Retirement Agreement subject to the Executive’s executing this Agreement and Release and complying with its terms.

NOW, THEREFORE, in consideration of the payments set forth in Section 5 of the Retirement Agreement and other good and valuable consideration, the Executive agrees as follows:

The Executive, on behalf of himself and his dependents, heirs, administrators, agents, executors, successors and assigns (the “Executive Releasors”), hereby releases and forever discharges the Company and its affiliated companies and their past and present parents, subsidiaries, successors and assigns and all of the aforesaid companies’ past and present officers, directors, employees, trustees, shareholders, representatives and agents (the “Company Releasees”), from any and all claims, demands, obligations, liabilities and causes of action of any kind or description whatsoever, in law, equity or otherwise, whether known or unknown, that any Executive Releasor had, may have had or now has against the Company or any other Company Releasee as of the date of execution of this Agreement and Release arising out of or relating to the Executive’s employment relationship, or the termination of that relationship, with the Company (or any affiliate), including, but not limited to, any claim, demand, obligation, liability or cause of action arising under any Federal, state, or local employment law or ordinance (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act of 1991, the Workers Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act (other than any claim for vested benefits), the Family and Medical Leave Act, and the Age Discrimination in Employment Act, as amended by the Older Workers’ Benefit Protection Act (“ADEA”)), tort, contract, or alleged violation of any other legal obligation (collectively “Released Executive Claims”).  In addition, in consideration of the promises and covenants of the Company, the Executive, on behalf of himself and the other Executive Releasors, further agrees to waive any and all rights under the laws of any jurisdiction in the United States, or any other country, that limit a general release to any of the foregoing actions, causes of action, claims or charges that are known or suspected to exist in the Executive’s favor as of the date of this Agreement and Release.  Anything to the contrary notwithstanding in this Agreement and Release or the Retirement Agreement, nothing herein shall release any Company Releasee from any claims or damages based on (i) any right or claim that arises after the date of this Agreement and Release pertaining to a matter that arises after such date, (ii) any right the Executive may have to enforce

9

Sections 4, 5, 6, 7 or 14 of the Retirement Agreement, (iii) any right or claim the Executive may have to benefits or equity awards that have accrued or vested as of the Date of Termination or any right pursuant to any qualified retirement plan or (iv) any right the Executive may have to be indemnified by the Company to the extent such indemnification by the Company or any Affiliate is permitted by applicable law or the Company’s by-laws.

The Executive understands that nothing in this Agreement and Release shall be construed to prohibit him from filing a charge with, or participating in any investigation or proceeding conducted by, the Equal Employment Opportunity Commission, National Labor Relations Board, and/or any federal, state or local agency.  Notwithstanding the foregoing, the Executive hereby waives any and all rights to recover monetary damages in any charge, complaint, or lawsuit filed by him or by anyone else on his behalf based on events occurring prior to the date of this Agreement and Release.

The Executive agrees that he shall continue to be bound by, and will comply with, the provisions of Sections 8, 9, 10, and 11 of the Retirement Agreement and the provisions of such sections, along with Section 12 and 13 of the Retirement Agreement, shall be incorporated fully into this Agreement and Release.

The Executive acknowledges that he has been provided a period of at least 21 calendar days in which to consider and execute this Agreement and Release.  The Executive further acknowledges and understands that he has seven calendar days from the date on which he executes this Agreement and Release to revoke his acceptance by delivering to the Company written notification of his intention to revoke this Agreement and Release in accordance with Section 19 of the Retirement Agreement.  This Agreement and Release becomes effective when signed unless revoked in writing and in accordance with this seven-day provision.  To the extent that the Executive has not otherwise done so, the Executive is advised to consult with an attorney prior to executing this Agreement and Release.

This Agreement and Release shall be governed by and construed and interpreted in accordance with the laws of New York without reference to principles of conflicts of law.  Capitalized terms, unless defined herein, shall have the meaning ascribed to such terms in the Retirement Agreement.

IN WITNESS WHEREOF, the Executive has executed this Agreement and Release as of the date hereof.

Joseph R. Gromek

Date:    

10

Joseph Gromek Equity Summary Schedule I

5-Dec-11

Assumes March 4, 2012 retirement date

Grant Type	PlanID	Grant  Date	Grant  Price	Options/  RES Granted	Options Exercised/ RES lapsed	Options/RES Outstanding	Options Exercisable	Options/ RES Vested	Vesting Date	Options/ RES Vesting	Vesting Date	Options/ RES Vesting	Vesting Date	Options/ RES Vesting	Last date to Exercise
Stock Option Summary 1, 2
NQ	2005	02/28/2006	$23.21	138,300	0	138,300	138,300	138,300							3/4/2013
NQ	2005	03/07/2007	$27.07	75,100	0	75,100	75,100	75,100							3/4/2013
NQ	2005	05/14/2008	$50.13	74,100	0	74,100	74,100	74,100							3/4/2013
NQ	2005	05/13/2009	$27.02	92,100	0	92,100	61,400	61,400	03/04/2012	30,700					3/4/2013
NQ	2005R	03/03/2010	$43.28	49,000	0	49,000	16,334	16,334	03/03/2012	16,333	03/03/2013	16,333			3/4/2014
NQ	2005R	03/01/2011	$55.57	59,700	0	59,700	0	0	03/01/2012	19,900	03/01/2013	19,900	03/01/2014	19,900	9/1/2014
				488,300		488,300	365,234	365,234
Restricted Stock/Unit Summary
RES	2005	05/13/2009	$0.00	36,650	0	36,650	0	0	03/04/2012	36,650
RSU	2005R	03/03/2010	$0.00	22,150	0	22,150	0	0	03/03/2013	22,150
RSU	2005R	03/01/2011	$0.00	27,600	0	27,600	0	0	03/01/2014	27,600
				86,400		86,400
Performance Share/Unit Summary 3, 4
PU	2005R	03/03/2010	$0.00	22,150	0	22,150	0	0	03/03/2013	22,150
PU	2005R	03/01/2011	$0.00	27,600	0	27,600	0	0	03/01/2014	27,600
				49,750		49,750

Notes:

1	Options granted in 2009 or earlier that vest prior to retirement or thereafter must be exercised within 12 months of retirement
2	Options granted 2010 and later that are vested prior to retirement or vest after retirement must be exercised by the later of 2 years from retirement or 6 months from last applicable vesting date
3	Equity granted in 2010 and later is retirement eligible and therefore continues to vest after retirement.
4	Actual number of Performance Shares/Units vesting is contingent on performance and applicable award Agreement. Shares shown are at target.

This schedule is subject to the applicable plan and award agreement, including, if applicable, any requirement not to engage in "Competitive Activity" in order to be eligible for continued vesting of equity awards or to exercise any vested options.

Joseph Gromek Supplemental Award Summary Schedule II

5-Dec-11

Assumes March 4, 2012 retirement date

Grant Type	Expiration  Date	PlanID	Grant  Date	Grant  Price	RES Granted	RES Lapsed	RES Outstanding	RES Vested	Grant Date	Grant Value
Career Shares Summary 1									Notional Account Summary 2
RSU	05/23/2015	2005 SA	05/23/2005	$0.00	12,121	0	12,121	12,121		$264,603.90
RSU	02/28/2016	2005 SA	02/28/2006	$0.00	10,690	0	10,690	10,690		$248,125.05
RSU	03/07/2017	2005 SA	03/07/2007	$0.00	10,784	0	10,784	10,784		$291,910.05
RSU	03/05/2018	2005 SA	03/05/2008	$0.00	12,051	0	12,051	12,051		$450,000.00
RSU	03/04/2019	2005 SA	03/04/2009	$0.00	22,633	0	22,633	22,633		$436,812.45
RSU	03/03/2020	2005 SA	03/03/2010	$0.00	10,961	0	10,961	10,961		$474,375.00
RSU	03/01/2021	2005 SA	03/01/2011	$0.00	11,789	0	11,789	11,789		$655,112.55
					91,029		91,029	91,029
									Investment gain (loss)	$712,851.16
									Balance as of 7/2/2011 3	$3,533,790.16

Notes:

1	Career Shares 100% vested; delivered in January 2013 assuming a retirement date in 2012
2	Notional Account balance is subject to investment gains and losses based on participant investment elections
3	Awards to be delivered in Januiary 2013 assuming a retirement date in 2012

EX-99.1

Exhibit 99.1

For Immediate Release

WARNACO NAMES HELEN MCCLUSKEY PRESIDENT AND CEO;

JOE GROMEK ANNOUNCES HIS RETIREMENT

New York, New York, December 13, 2011—The Warnaco Group, Inc.  [NYSE: WRC], (“Warnaco” or the “Company”), announced today that its Board of Directors has elected Helen McCluskey  President, Chief Executive Officer, and a member of its Board of Directors, effective February 1, 2012. Ms. McCluskey will succeed Joe Gromek, age 65, Warnaco’s President and Chief Executive Officer, who announced that he will retire from the Company and the Board of Directors.  Ms. McCluskey, age 56, currently serves as Chief Operating Officer of Warnaco.

Ms. McCluskey joined Warnaco in 2004 as Group President-Intimate Apparel, and in June 2007 added global responsibility for the Company’s Swimwear brands.  She was promoted to Chief Operating Officer in 2010, adding to her responsibilities oversight of the Calvin Klein Jeans® and Chaps® brands as well as all of the Company’s international businesses and its global supply chain and sourcing operations.  She dramatically expanded the Calvin Klein Underwear business, doubling revenue in a four-year period, and was instrumental in key product launches including Calvin Klein Steel, Calvin Klein X and CK One.  Early in her tenure at Warnaco, Ms. McCluskey was responsible for revitalizing the Company’s core intimate apparel brands to deliver consistent growth and profit contribution.  In addition, she also was responsible for restoring growth and improved financial performance to the Speedo brand.

Prior to joining Warnaco in 2004, Ms. McCluskey served as Group President of the Moderate Women’s Sportswear division of Liz Claiborne Inc. and spent 18 years in Sara Lee Corporation’s intimate apparel units, including serving as President of Playtex Apparel from 1999 to 2001.

Charles R. Perrin, Non-Executive Chairman of Warnaco, said, “The Board, together with Joe, has been working on a succession planning process for several years to assure a smooth and seamless transition of leadership upon Joe’s retirement.  The Board has been fortunate to have had a world class CEO in place since 2003 who has been able to recruit, retain, and mentor top talent, such as Helen, from which we could confidently appoint Warnaco’s next CEO. Since Helen’s arrival, she has impressed the Board, customers, and colleagues alike and she has demonstrated leadership qualities that we believe will ensure Warnaco’s continued

success.  Moreover, she has exhibited a broad and deep knowledge across the Company’s entire operations and has played a vital role in designing our future strategy as well as executing the current plan. We are delighted that she will assume the CEO position.”

Mr. Gromek said, “This announcement is great news for our shareholders, employees, customers and partners around the world. For me, it has been an extraordinary and rewarding experience to lead this company over the past nine years, and while I am deeply proud of the many accomplishments we have achieved, the one I am most proud of is the team we have built. Hiring and mentoring Helen, as she assumed broader responsibilities within Warnaco, was a key element of that important and successful initiative and I am delighted the Board has appointed her as my successor.”

Mr. Gromek joined Warnaco as President and Chief Executive Officer in 2003, during a particularly challenging period in the Company’s history. During his tenure, he reshaped Warnaco from a domestic apparel wholesaler into one of the world’s leading retail organizations and has led Warnaco through an unprecedented period of expansion.  Among his many accomplishments, he instilled a new corporate culture that enabled Warnaco to regain credibility and respectability with shareholders, employees, customers, and partners alike.

Ms. McCluskey said, “I am honored to have been selected as Warnaco’s next President and CEO.  I want to thank the Board for their confidence in me and, in particular, I would like to thank Joe, who has been my mentor and champion since I joined the Company. Warnaco has tremendous opportunity to continue its global expansion, and I look forward to working together with our team to build on the strong foundation we have in place as we pursue our strategic goals and next phase of growth.”

Mr. Perrin added, “On behalf of the entire board, I want to thank Joe for his extraordinary leadership.  Joe’s greatest legacy will be the exceptional management team he developed which will continue to lead this great company going forward. Under Joe’s leadership, Warnaco has thrived, refining its portfolio of brands, expanding its retail operations to a current 1,500 points of distribution, and growing its international presence, now accounting for 60% of annual revenue.  Warnaco has delivered consistent growth in revenue and earnings per share each year during Joe’s tenure and Warnaco’s share price has risen by more than 500% since he joined the Company.”

Prior to joining Warnaco, Mr. Gromek served as President and Chief Executive Officer of Brooks Brothers, Inc., a clothing retailer from 1996 to 2002. Over the last 25 years, he has held senior management positions with Saks Fifth Avenue, Limited Brands, Inc. and AnnTaylor Stores Corporation.

Mr. Gromek is currently a member of the Board of Trustees of The New School, a member of the Board of Governors of the Parsons School of Design, a director of the Education Foundation of the Fashion Institute of Technology, and a director of the American Apparel & Footwear Association. He also sits on the boards of Ronald McDonald House, The Children’s Place and Wolverine World Wide, and is a former Chairman of Volunteers of America. Additionally, he is a member of the Board of Trustees of the Trevor Day School.

ABOUT WARNACO

The Warnaco Group, Inc., headquartered in New York, is a leading global apparel company engaged in the business of designing, sourcing, marketing and selling men’s, women’s and children’s sportswear and accessories, intimate apparel, and swimwear under such owned and licensed brands as Calvin Klein®, Speedo®, Chaps®, and Warner's® and Olga®.

FORWARD-LOOKING STATEMENTS

The Warnaco Group, Inc. notes that certain written, electronic and oral disclosure made by the Company from time to time, may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The forward-looking statements involve risks and uncertainties and reflect, when made, the Company's estimates, objectives, projections, forecasts, plans, strategies, beliefs, intentions, opportunities and expectations. Actual results may differ materially from anticipated results, targets or expectations and investors are cautioned not to place undue reliance on any forward-looking statements. Statements other than statements of historical fact, including, without limitation, future financial targets, are forward-looking statements.

The Company encourages investors to read the section entitled "Risk Factors" and the discussion of the Company's critical accounting policies under "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Discussion of Critical Accounting Policies" included in the Company's Annual Report on Form 10-K, as such discussions may be modified or supplemented by subsequent reports that the Company files with the SEC.   Forward-looking statements speak only as of the date on which they are made, and, except for the Company's ongoing obligation under the U.S. federal securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Media Contact:	Investor Contact:
Wendi Kopsick/Jeff Taufield	Deborah Abraham, Vice President, Investor Relations
Kekst and Company	The Warnaco Group, Inc.
212-521-4867/4815	212-287-8289

###