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):
May 31, 2006

JONES APPAREL GROUP, INC.
(Exact Name of registrant as specified in its charter)

Pennsylvania (State or Other Jurisdiction of Incorporation) 1-10746 (Commission File Number) 06-0935166 (IRS Employer Identification No.)

250 Rittenhouse Circle
Bristol, PA 19007 (Address of principal executive offices)

(215) 785-4000 (Registrant's telephone number, including area code)

Not Applicable 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:

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry Into A Material Definitive Agreement

On May 31, 2006, Jones Apparel Group, Inc. (the "Company") adopted the Jones Apparel Group, Inc. Severance Plan (the "Plan"), effective May 31, 2006. The Plan is intended to provide severance benefits to corporate employees, retail employees of Barney's, Inc. and retail employees employed by Jones Retail Corporation at the level of District Sales Manager or above, who are regular full-time employees employed in the United States.  Union employees are not eligible under the Plan.

The Plan provides for payment of severance benefits, under the conditions described in the Plan, to employees whose employment is terminated involuntarily for the reasons described in the Plan, including reduction in staff or layoff, position elimination, closure of a business unit or organization restructuring.

Following a qualifying involuntary termination, eligible employees are entitled to receive severance benefits, in accordance with guidelines set forth in the Plan, for a period of time determined by the employee's length of service and job classification (i.e., executive vice president and above; vice president and above but below the level of executive vice president; or employee below the level of vice president). Severance benefits consist of continued salary at the same rate as in effect immediately prior to termination and, in some cases, continued group health benefits coverage. If an employee is entitled to receive severance benefits under an employment contract or other written agreement with the Company or other plan or arrangement maintained by the Company, the severance benefits under the Plan will be reduced by the amount of such other severance benefits; if such other severance benefits are greater in the aggregate, then the employee will not receive benefits under the Plan and shall instead receive severance benefits under such other plan, arrangement or agreement. The Company has discretion to determine the amount of severance benefits to be provided to an eligible employee under the Plan, on a case-by-case basis.

The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the Plan, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

In addition, on June 5, 2006, the Company entered into an amended and restated employment agreement (the "Agreement") with Efthimios P. Sotos, effective as of June 5, 2006, with respect to his employment as Chief Financial Officer. Capitalized terms used in this summary but not otherwise defined herein shall have the meanings attributed to them in the Agreement.

The term of the Agreement is for three years ending on June 30, 2009, unless renewed for an additional 12-month period at the Company's option. Mr. Sotos' annual salary under the Agreement will not be less than $500,000, and he is entitled to receive annual bonuses in accordance with the Executive Annual Incentive Plan. Mr. Sotos is also eligible to receive, at the discretion of the Compensation Committee of the Board of Directors, annual grants of restricted stock and/or stock options, in such amounts and subject to such terms and conditions as determined by the Compensation Committee. Mr. Sotos will be entitled to receive perquisites and to participate in all savings and retirement programs and welfare plans and programs that are generally available to other senior executives of the Company.

If the Company terminates Mr. Sotos' employment for "Cause" or if he resigns without "Good Reason," Mr. Sotos will receive only his unpaid salary through the date of termination or resignation. If Mr. Sotos' employment terminates before the end of the term due to death or "Disability," the Company will pay him or his estate, as applicable, (i) any unpaid salary through the date of termination, (ii) an additional six months of salary and (iii) his target bonus (based on 75% of his annual salary at the time of termination) (the "Target Bonus"), prorated through the date of termination. If the Company terminates Mr. Sotos' employment without "Cause" or Mr. Sotos resigns for "Good Reason" and no "Change in Control" has occurred, he will receive (i) any unpaid salary through the date of termination, (ii) the Target Bonus, prorated through the date of termination, (iii) for each month during the remainder of the term of the Agreement, his monthly salary at the time of termination plus 1/12 of the Target Bonus, (iv) continued participation in benefit plans and practices for the remainder of the term of the Agreement and (v) reimbursement for up to $10,000 of executive outplacement services.

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If the Company terminates Mr. Sotos' employment without "Cause" or Mr. Sotos resigns for "Good Reason" following a "Change in Control," he will receive (i) any unpaid salary through the date of termination, (ii) the Target Bonus, prorated through the date of termination, (iii) a lump sum equal to three times 200% of Mr. Sotos' annual salary at the time of termination, (iv) reimbursement for up to $10,000 of executive outplacement services and (v) a lump sum equal to the Company's cost for his continued health insurance, life insurance and retirement benefits for the remainder of the term of the Agreement.

The Agreement also provides for vesting of all previously unvested options and restricted stock upon (i) termination of Mr. Sotos' employment due to "Retirement," death or "Disability," (ii) a "Change in Control," (iii) resignation by Mr. Sotos for "Good Reason" or (iv) termination by the Company without "Cause." In the case of "Retirement," "Disability" or "Change in Control," the accelerated options are exercisable during the remaining original option term (or, if shorter, for three years following death).

The Agreement also contains non-competition restrictions during his employment and for the duration of the "Severance Period" (i.e., the period from the termination date through the expiration of the term of the Agreement), provided that the Company is making the payments due to him (as described above). Mr. Sotos is also prohibited from interfering in the employment of the Company's employees during the period ending two years after the Severance Period.

The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits.

Exhibit No. Description

10.1	Jones Apparel Group, Inc. Severance Plan and Summary Plan Description.
10.2	Amended and Restated Employment Agreement dated as of June 5, 2006 between Jones Apparel Group, Inc. and Efthimios P. Sotos.

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 SIGNATURES

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.

JONES APPAREL GROUP, INC.
(Registrant)

By: /s/ Efthimios P. Sotos 
     Efthimios P. Sotos
     Chief Financial Officer

 Date: June 5, 2006

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Exhibit Index

Exhibit No. Description

10.1	Jones Apparel Group, Inc. Severance Plan and Summary Plan Description.
10.2	Amended and Restated Employment Agreement dated as of June 5, 2006 between Jones Apparel Group, Inc. and Efthimios P. Sotos.

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EX-10

EXHIBIT 10.1

JONES APPAREL GROUP, INC.
SEVERANCE PLAN
AND
SUMMARY PLAN DESCRIPTION

Effective May 31, 2006

PURPOSE OF THE PLAN

The purpose of the Jones Apparel Group, Inc. Severance Plan ("Plan") is to provide severance benefits to eligible employees whose employment with Jones Apparel Group, Inc. (the "Company") and all U.S. domestic Subsidiaries and Affiliates of the Company is terminated involuntarily under the conditions described below.

Except as otherwise provided herein or by the Company in writing after the effective date hereof, this Plan (i) is the sole arrangement of the Company regarding Severance-type benefits to eligible employees and (ii) replaces and supersedes all prior plans, programs, understandings and arrangements providing Severance-type benefits to eligible employees.

Notwithstanding anything to the contrary in this Plan, if an employee is eligible for Severance-type benefits under either (i) the Barneys New York Severance Plan or (ii) an employment or other written agreement with the Employer providing for Severance-type benefits ("Alternative Benefits"), such employee shall remain and be eligible for those benefits; provided, that if the amount of Severance-type benefits to which an employee may be entitled under the Barneys New York Severance Plan or such agreement providing for Alternative Benefits would be greater in the aggregate than the benefits which the Employee would otherwise be eligible to receive under this Plan, then the employee shall not receive benefits under this Plan but instead shall be entitled to receive such Alternative Benefits.

This document contains the official text of the Plan.

DEFINITIONS

Affiliate of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person.

Company means Jones Apparel Group, Inc.

Designated Termination Date means the date specified by an Employer as an employee's last day of active work.

Employer means the Company and all U.S. domestic Subsidiaries and Affiliates of the Company.

Person means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

Plan Administrator means the Company or such other person or committee appointed from time to time by the Company to administer the Plan.

Severance-type benefits means post-termination compensation under any employment agreement or other written agreement between the Employer and the employee or other plan or arrangement maintained by the Employer, other than compensation that is paid solely as consideration for a covenant not to compete with the Employer.

Subsidiary of any person means another person, an amount of the voting securities, other voting rights or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body or, if there are no such voting interests, more than 50% of the equity interest of which is owned directly or indirectly by such first person.

ELIGIBLE EMPLOYEES

The benefits under this Plan are limited to corporate employees, all retail employees of Barney's, Inc., and retail employees employed by Jones Retail Corporation at the level of District Sales Manager or above, in all instances who are classified by an Employer as regular full-time employees and whose regular place of employment is within the United States. Notwithstanding anything to the contrary, union employees are not eligible under this Plan.

INVOLUNTARY TERMINATION OF EMPLOYMENT

• Involuntary Termination

An employee will be eligible for severance benefits under this Plan only if the Plan Administrator, in its sole discretion, determines that the employee's employment has been terminated involuntarily for any of the following reasons:

• Reduction in staff or layoff.
• Position elimination.
• Closure of a business unit.
• Organization restructuring.
• Such other circumstances as the Plan Administrator deems appropriate for the payment of severance benefits.

An employee who terminates employment for any reason prior to his or her Designated Termination Date will not be considered to have terminated employment involuntarily unless his or her Employer provides otherwise in writing.

• Termination of Employment Not Eligible for Severance Benefits

Unless the Company provides otherwise in writing, an employee will not be eligible for severance benefits if the Plan Administrator, in its sole discretion, determines that the employee's employment is terminated for any of the following reasons:

• Resignation or other voluntary termination of employment.
• Failure to return to work upon the expiration of an authorized leave of absence.
• Death or disability.
• Termination for cause or for behavior prejudicial to the Employer, as determined by the Plan Administrator in its sole discretion.
• Termination for gross misconduct or violation of company policy.
• Termination for poor performance.

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An employee who terminates employment for any reason prior to his or her Designated Termination Date will be considered to have terminated employment voluntarily unless his or her Employer provides otherwise in writing.

• Other Employment Offer

Unless the Company provides otherwise in writing, an employee will not be eligible to receive benefits under this Plan if the Plan Administrator, in its sole discretion, determines that any of the following events has occurred prior to the employee's Designated Termination Date:

• The employee has been offered, but has refused to accept, a suitable position with the Company or any of its Subsidiaries or Affiliates; OR
• The employee's employment has been terminated in connection with a sale or transfer, merger, establishment of a joint venture, or other corporate transaction, and the employee has been offered a suitable position by the successor employer; OR
• The employee's employment is terminated in connection with the "outsourcing" of operational functions and he or she has been offered a suitable position by the outsourcing vendor.

CONDITIONS FOR PAYMENT OF SEVERANCE BENEFITS

An employee who is involuntarily terminated will not receive severance benefits under this Plan unless the Plan Administrator, in its sole discretion, determines that the employee has satisfied all of the following conditions:

• Work Until Last Day Designated

The employee must continue to be actively at work through his or her Designated Termination Date or such earlier date as may be specified by his or her Employer in writing, unless the employee is absent due to vacation, temporary layoff, or an approved absence from work (including leave under the Family and Medical Leave Act).

• Execution of Release and Other Separation Documents

The employee must execute and deliver to the Company a general release of claims in a form satisfactory to the Company within the period specified by the Company.

• Return of Company Property and Settlement of Expenses

The employee must return all company property and satisfactorily settle all expenses owed to the Company and any of its Subsidiaries or Affiliates.

SEVERANCE BENEFITS

The severance benefits to be provided to an eligible employee will be determined in accordance with the Severance Benefit Guidelines attached to this Plan subject to the reductions set forth below; provided, that the Company has the right, in its sole discretion, and on a case-by case basis, to determine the amount of severance benefits to be provided to an eligible employee.

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• Reduction for Other Severance Benefits

In the event that an employee

• is entitled to receive Severance-type benefits under another plan or arrangement maintained by the Employer, or
   

• is covered by an employment agreement or other written agreement with the Employer providing for Severance-type benefits,

then the severance benefits payable to the employee under this Plan will be reduced by the amount of Severance-type benefits payable to the employee under such other plan, arrangement or agreement, unless the Company provides otherwise in writing. For the avoidance of doubt, if the Severance-type benefits payable under such other plan, arrangement or agreement are greater in the aggregate than the severance benefits payable to the employee under this Plan, then the employee shall not receive benefits under this Plan, and shall instead receive the Severance-type benefits under such other plan, arrangement or agreement.

REEMPLOYMENT

The following rules apply if an employee is reemployed by the Company or any of its Subsidiaries, Affiliates or successors.

• Right to Terminate Benefits

Notwithstanding anything in this Plan to the contrary, in the event that an employee is reemployed before the completion of the scheduled payment of severance benefits, then an Employer shall have the right to terminate the benefits payable under this Plan at any time.

• Repayment of Severance Pay

In the event that an employee is offered reemployment within thirty (30) days after payment of his or her severance pay has commenced and subsequently accepts reemployment, then the employee shall repay to the Company the full amount of severance pay that he or she has received under this Plan.

RIGHT TO TERMINATE BENEFITS

Notwithstanding anything in this Plan to the contrary, in the event that the Plan Administrator determines that an employee has breached any of the terms and conditions set forth in any agreement executed by the employee as a condition to receiving benefits under this Plan, including, but not limited to, the general release of claims, then the Company shall have the right to terminate the benefits payable under this Plan at any time.

GENERAL RULES

• Right to Withhold Taxes

The Company shall withhold such amounts from payments under this Plan as it determines necessary to fulfill any federal, state, or local wage or compensation withholding requirements.

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• No Right to Continued Employment

Neither the Plan nor any action taken with respect to it shall confer upon any person the right to continue in the employ of the Company or any of its Subsidiaries or Affiliates.

• Benefits Non-Assignable

Benefits under the Plan may not be anticipated, assigned or alienated.

• Unfunded Plan

The Company will make all payments under the Plan, and pay all expenses of the Plan, from its general assets. Nothing contained in this Plan shall give any eligible employee any right, title or interest in any property of the Company or any of its Affiliates nor shall it create any trust relationship.

• Governing Laws and Time Limit for Beginning Legal Actions

The provisions of the Plan shall be construed, administered and enforced according to applicable federal law and, where appropriate, the laws of the State of New York without reference to its conflict of laws rules and without regard to any rule of any jurisdiction that would result in the application of the law of another jurisdiction.

No action relating to this Plan or any release or other agreement entered into with respect to this Plan may be brought later than the earlier of second anniversary of the termination of employment or other event giving rise to the claim.

• Severability

The provisions of the Plan are severable. If any provision of the Plan is deemed legally or factually invalid or unenforceable to any extent or in any application, then the remainder of the provisions of the Plan, except to such extent or in such application, shall not be affected, and each and every provision of the Plan shall be valid and enforceable to the fullest extent and in the broadest application permitted by law.

• Section Headings

Section headings are used herein for convenience of reference only and shall not affect the meaning of any provision of this Plan.

ADMINISTRATION OF THE PLAN

The Plan Administrator shall have sole authority and discretion to administer and construe the terms of this Plan, subject to applicable requirements of law. Without limiting the generality of the foregoing, the Plan Administrator shall have complete discretionary authority to carry out the following powers and duties:

• To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;
   
• To interpret the Plan, its interpretation thereof to be final and conclusive on all persons claiming benefits under the Plan;

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• To decide all questions, including without limitation, issues of fact, concerning the Plan, including the eligibility of any person to participate in, and receive benefits under, the Plan; and
   
• To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan.

CLAIMS PROCEDURE

The Plan Administrator reviews and authorizes payment of severance benefits for those employees who qualify under the provisions of the Plan. No claim forms need be submitted. Questions regarding payment of the severance benefits should be directed to Vice President, Benefits or the Plan Administrator.

If an employee feels he or she is not receiving severance benefits which are due, the employee should file a written claim for the benefits with a Vice President in the Human Resources Department. A decision on whether to grant or deny the claim will be made within 90 days following receipt of the claim. If more than 90 days is required to render a decision, the employee will be notified in writing of the reasons for delay. In any event, however, a decision to grant or deny a claim will be made by not later than 180 days following the initial receipt of the claim.

If the claim is denied in whole or in part, the employee will receive a written explanation of the specific reasons for the denial, including a reference to the Plan provisions on which the denial is based.

If the employee wishes to appeal this denial, the employee may write within 60 days after receipt of the notification of denial. The claim will then be reviewed by the Plan Administrator and the employee will receive written notice of the final decision within 60 days after the request for review. If more than 60 days is required to render a decision, the employee will be notified in writing of the reasons for delay before the end of the initial 60 day period. In any event, however, the employee will receive a written notice of the final decision within 120 days after the request for review.

AMENDMENT AND TERMINATION

The Company may amend, modify or terminate this Plan with respect to any employee or group of employees at any time pursuant to a writing executed by any duly authorized officer of the Company. Such amendment, modification or termination will be effective with respect to employees who have not received notice of a Designated Termination Date on the date such amendment is executed.

STATEMENT OF ERISA RIGHTS

As a participant in this Plan you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled to:

• Receive Information About Your Plan and Benefits

Examine, without charge, at the plan administrator's office and at other specified locations all documents governing the plan and a copy of the latest annual report (Form 5500 Series) required to

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be filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

Obtain, upon written request to the plan administrator, copies of documents governing the operation of the plan and copies of the latest annual report (Form 5500 Series), if any required, and updated summary plan description. The administrator may make a reasonable charge for the copies.

Receive a summary of the plan's annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary annual report.

• Prudent Actions by Plan Fiduciaries

In addition to creating rights for plan participants ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including your employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.

• Enforce Your Rights

If your claim for a severance benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within thirty (30) days, you may file suit in a Federal court. In such a case, the court may require the plan administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If it should happen that plan fiduciaries misuse the plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

• Assistance with Your Questions

If you have any questions about your plan, you should contact the plan administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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ADDITIONAL INFORMATION

Plan Sponsor:	Jones Apparel Group, Inc. 180 Rittenhouse Circle Keystone Park Bristol, Pennsylvania 19007 (215) 785-4000
Employer Identification Number (EIN):	06-0935166
Plan Name:	Jones Apparel Group, Inc. Severance Plan
Type of Plan:	Welfare benefit plan - severance pay
Plan Year:	Calendar year
Plan Number:	550
Plan Administrator:	Executive Vice President of Human Resources Jones Apparel Group, Inc. 180 Rittenhouse Circle Keystone Park Bristol, Pennsylvania 19007
Agent for Service of Legal Process:	Plan Administrator

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JONES APPAREL GROUP, INC. SEVERANCE PLAN
SEVERANCE BENEFIT GUIDELINES
EFFECTIVE AS OF MAY 31, 2006

EMPLOYEES BELOW VICE PRESIDENT

An employee may elect to receive either the severance benefits described in OPTION ONE or OPTION TWO below. The election must be made within the time period, and in accordance with the procedures, specified by the Plan Administrator.

• OPTION ONE - Severance Pay and Payment of Cost for COBRA Coverage

• Severance Pay

2 weeks of Base Pay for each Year of Service

• Minimum of 2 weeks of Base Pay

• Maximum of 26 weeks of Base Pay

The Company, in its sole discretion, may pay the severance pay either (a) in a single lump sum or (b) in installments at the same time and in the same manner as the Company's regular payroll practice until such benefit is paid in full. Payments will begin as soon as practicable after the later of the employee's last day of employment or the date on which the employee's separation agreement and general release becomes effective.

• Continued Group Health Benefit Coverage - Payment of Cost for COBRA Coverage

If the employee elects to continue coverage under the Company's group health benefits plan in accordance with the COBRA continuation coverage requirements, the employee will be required to pay only a portion of the full cost for COBRA coverage during the period equal to the number of weeks used in calculating the amount of the employee's severance pay under this Plan.

• The COBRA coverage cost to be paid by the employee during this severance period will be the same as the amount paid by active employees for the same group health benefits coverage.

After the end of the severance period, the employee, if eligible, will be required to pay the full cost of COBRA coverage in order to continue COBRA coverage for the remainder of the COBRA coverage period.

• OPTION TWO - Severance Pay ONLY

2 weeks of Base Pay for each Year of Service

• Minimum of 2 weeks of Base Pay

• NO maximum

The Company, in its sole discretion, may pay the severance pay either (a) in a single lump sum or (b) in installments at the same time and in the same manner as the Company's regular payroll practice until such benefit is paid in full. Payments will begin as soon as practicable after the later of the employee's last day of employment or the date on which the employee's separation agreement and general release becomes effective.

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JONES APPAREL GROUP, INC. SEVERANCE PLAN
SEVERANCE BENEFIT GUIDELINES
EFFECTIVE AS OF MAY 31, 2006

EMPLOYEES BELOW VICE PRESIDENT

• Definitions

For purposes of determining the amount of severance pay -

• Base Pay means the employee's regular rate of salary (determined on a weekly basis) payable immediately preceding his or her date of termination. Base Pay does not include discretionary bonuses, other variable compensation, or extra pay.
   

• Years of Service means an employee's full and partial years of employment beginning as of the later of (a) his or her most recent date of hire by an Employer or (b) his or her first day of work following a break in service of thirty (30) days or more, until his or her last day of active employment. A partial year of employment will be rounded up to the next highest year.

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JONES APPAREL GROUP, INC. SEVERANCE PLAN
SEVERANCE BENEFIT GUIDELINES
EFFECTIVE AS OF MAY 31, 2006

VICE PRESIDENTS AND ABOVE BUT BELOW
THE LEVEL OF EXECUTIVE VICE PRESIDENT

• Severance Pay

• Amount of Severance Pay

Years of Service	Amount of Severance Pay
Less than 5 years	3 months of Base Pay
5 to 9 years	6 months of Base Pay
10 or more years	12 months of Base Pay

For purposes of determining the amount of severance pay -

• Base Pay means the employee's regular rate of salary (determined on a monthly basis) payable immediately preceding his or her date of termination. Base Pay does not include discretionary bonuses, other variable compensation, or extra pay.
   
• Years of Service means an employee's full and partial years of employment beginning as of the later of (a) his or her most recent date of hire by an Employer or (b) his or her first day of work following a break in service of thirty (30) days or more, until his or her last day of active employment. A partial year of employment will be rounded up to the next highest year.

• Payment of Severance Pay

The Company, in its sole discretion, may pay the severance pay either (a) in a single lump sum or (b) in installments at the same time and in the same manner as the Company's regular payroll practice until such benefit is paid in full. Payments will begin as soon as practicable after the later of the employee's last day of employment or the date on which the employee's separation agreement and general release becomes effective.

Notwithstanding the foregoing, the following rules shall apply to the payment of severance pay to an employee that is not exempt from the requirements of Section 409A of the Internal Revenue Code:

• The severance pay will be paid in a single lump sum.
   
• If the employee is a "key employee" for purposes of Section 409A, then in no event shall payment commence earlier than the end of the six (6) month period beginning on the employee's "separation from service date" (within the meaning of Section 409A).

• Continued Group Health Benefit Coverage - Payment of Cost for COBRA Coverage

If the employee elects to continue coverage under the Company's group health benefits plan in accordance with the COBRA continuation coverage requirements, the employee will be required to

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JONES APPAREL GROUP, INC. SEVERANCE PLAN
SEVERANCE BENEFIT GUIDELINES
EFFECTIVE AS OF MAY 31, 2006

VICE PRESIDENTS AND ABOVE BUT BELOW
THE LEVEL OF EXECUTIVE VICE PRESIDENT

pay only a portion of the full cost for COBRA coverage during the period equal to the number of weeks used in calculating the amount of the employee's severance pay under this Plan.

• The COBRA coverage cost to be paid by the employee during this severance period will be the same as the amount paid by active employees for the same group health benefits coverage.

After the end of the severance period, the employee, if eligible, will be required to pay the full cost of COBRA coverage in order to continue COBRA coverage for the remainder of the COBRA coverage period.

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JONES APPAREL GROUP, INC. SEVERANCE PLAN
SEVERANCE BENEFIT GUIDELINES
EFFECTIVE AS OF MAY 31, 2006

EXECUTIVE VICE PRESIDENTS AND ABOVE

• Severance Pay

• Amount of Severance Pay

Years of Service	Amount of Severance Pay
Less than 5 years	3 months of Base Pay
5 to 9 years	6 months of Base Pay
10 to 19 years	12 months of Base Pay
20 or more years	18 months of Base Pay

For purposes of determining the amount of severance pay -

• Base Pay means the employee's regular rate of salary (determined on a monthly basis) payable immediately preceding his or her date of termination. Base Pay does not include discretionary bonuses, other variable compensation, or extra pay.
   
• Years of Service means an employee's full and partial years of employment beginning as of the later of (a) his or her most recent date of hire by an Employer or (b) his or her first day of work following a break in service of thirty (30) days or more, until his or her last day of active employment. A partial year of employment will be rounded up to the next highest year.

• Payment of Severance Pay

The Company, in its sole discretion, may pay the severance pay either (a) in a single lump sum or (b) in installments at the same time and in the same manner as the Company's regular payroll practice until such benefit is paid in full. Payments will begin as soon as practicable after the later of the employee's last day of employment or the date on which the employee's separation agreement and general release becomes effective. 

Notwithstanding the foregoing, the following rules shall apply to the payment of severance pay to an employee that is not exempt from the requirements of Section 409A of the Internal Revenue Code:

• The severance pay will be paid in a single lump sum.
   
• If the employee is a "key employee" for purposes of Section 409A, then in no event shall payment commence earlier than the end of the six (6) month period beginning on the employee's "separation from service date" (within the meaning of Section 409A).

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JONES APPAREL GROUP, INC. SEVERANCE PLAN
SEVERANCE BENEFIT GUIDELINES
EFFECTIVE AS OF MAY 31, 2006

EXECUTIVE VICE PRESIDENTS AND ABOVE

• Continued Group Health Benefit Coverage - Payment of Cost for COBRA Coverage

If the employee elects to continue coverage under the Company's group health benefits plan in accordance with the COBRA continuation coverage requirements, the employee will be required to pay only a portion of the full cost for COBRA coverage during the period equal to the number of weeks used in calculating the amount of the employee's severance pay under this Plan, or, if earlier, until the expiration of COBRA coverage.

• The COBRA coverage cost to be paid by the employee during this severance period will be the same as the amount paid by active employees for the same group health benefits coverage.

After the end of the severance period, the employee, if eligible, will be required to pay the full cost of COBRA coverage in order to continue COBRA coverage for the remainder of the COBRA coverage period.

• Outplacement

As determined by the Company.

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EX-10

EXHIBIT 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

        AGREEMENT made as of June 5, 2006 by and between JONES APPAREL GROUP, INC., a Pennsylvania corporation (the "Company"), and EFTHIMIOS P. SOTOS (the "Executive").

WITNESSETH:

        WHEREAS, the Executive is a party to the Employment Agreement dated as of July 1, 2004 with the Company (as amended or supplemented to date, the "Prior Employment Agreement"); and

        WHEREAS, the Company wishes to continue to employ the Executive, and the Executive wishes to continue employment with the Company, on the terms and conditions hereinafter set forth.

        NOW, THEREFORE, it is agreed as follows:

        1. Employment. During the term of this Agreement, the Company shall employ the Executive as Chief Financial Officer of the Company. The Executive shall report directly to the Chief Executive Officer of the Company. During the term of this Agreement, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote all of Executive's business time and attention to the business affairs of the Company, and to perform such responsibilities in a professional manner. Notwithstanding the foregoing, during the term of this Agreement, it shall not be a violation of this Agreement for the Executive to (a) serve on a reasonable number of trade and professional organizations; (b) engage in community and charitable affairs; (c) serve as a non-employee member of a board of directors of a business entity which is not competitive with the Company and as to which the Board of Directors of the Company has given its consent; and (d) manage personal investments, so long as such activities do not interfere with the performance of the Executive's responsibilities as a senior executive of the Company in accordance with this Agreement.

        2. Term. The Company shall employ the Executive for the period commencing as of June 5, 2006 and ending as of June 30, 2009, as renewed in accordance with the following sentence (the "Term"). The Company may extend the Term for an additional twelve months by giving notice to the Executive no later than December 31, 2007 of such extension. For avoidance of doubt, if this Agreement shall be so extended, the "Term" shall mean the period commencing June 5, 2006 and ending on June 30, 2010.

        3. Salary, Retirement Plans, Fringe Benefits and Allowances.

            (a) Throughout the Term, the Executive shall receive a salary at the annual rate of not less than $500,000. The Executive's salary shall be payable at such regular times and intervals as the Company customarily pays its senior executives from time to time, but no less

frequently than once a month and shall be subject to future increases at the discretion of the Board of Directors of the Company.

            (b) During the Term, the Executive shall be eligible to participate in all savings and retirement plans, practices, policies and programs to the extent applicable generally to other senior executives of the Company.

            (c) During the Term, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare, fringe and other benefit plans, practices, policies and programs provided by the Company (including, without limitation, medical, prescription drug, dental, disability, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other senior executives of the Company.

            (d) The Executive shall be entitled to an aggregate of four (4) weeks paid vacation during each calendar year of the Term. The Executive shall also be entitled to the benefits of the Company's policies relating to sick leave and holidays.

            (e) The Executive shall have all expenses reasonably incurred by Executive on behalf of the Company reimbursed by the Company in accordance with the Company's standard policies and practices. The Executive shall be entitled to first class seating for air travel on Company business.

            (f) The Company shall make available to the Executive all perquisites that are made available to senior executives of the Company.

        4. Bonus.

        Executive shall participate in the Company's Executive Annual Incentive Plan (the "Bonus Plan"), pursuant to which the Executive may be entitled to receive annual bonus payments for each full calendar year of employment which ends prior to the expiration of the Term (the "Expiration Date") and throughout which the Executive has been employed by the Company, conditioned upon the attainment of annual criteria and objectives established for participants in the Bonus Plan.

        5. Equity Grants.

            (a) Subject to the absolute authority of the Compensation Committee of the Board of Directors of the Company from time to time to grant (or not to grant) to eligible individuals shares of common stock of the Company that are subject to vesting restrictions ("Restricted Stock") and/or options to purchase common stock of the Company ("Options") (Restricted Stock and Options being referred to collectively as, "Equity Grants"), it is the intention of the Company and the expectation of the Executive that while the Executive is employed hereunder, the Executive will be eligible to receive Equity Grants annually, on such terms and conditions as may be determined by the Compensation Committee.

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            (b) All such Equity Grants and all other options to purchase common stock of the Company and shares of common stock of the Company then held by the Executive which are not then vested (in the aggregate being referred to herein as "Accelerated Equity Grants") shall become fully vested and, in the case of options, immediately exercisable during the remaining original term of each such Accelerated Equity Grant (or, if shorter, for three years following death), upon the occurrence of any of the following events ("Acceleration Events"): Executive's Retirement (as defined herein), death, Disability (as defined herein), a Change in Control (as defined herein), and termination of Executive's employment by the Company without Cause (as defined herein) or by the Executive for Good Reason (as defined herein).

        6. Termination of Employment.

            (a) By the Company for Cause, or by the Executive without Good Reason. The Company may terminate the Executive's employment for Cause before the Expiration Date. If the Executive's employment is terminated for Cause, or if Executive resigns during the Term without Good Reason, the Company shall pay to the Executive any unpaid salary through the date of termination, as well as reimburse the Executive for any unpaid reimbursable expenses incurred on behalf of the Company, and thereafter the Company shall have no additional obligations to the Executive under this Agreement.

            (b) Death or Disability; Retirement. (i) If the Executive's employment terminates before the Expiration Date because of Executive's death or Disability, the Company shall pay Executive or Executive's duly appointed personal representative, as the case may be, (i) any unpaid salary through the date of death or the Disability Termination Date (as defined herein), as well as reimbursement of any unpaid reimbursable expenses incurred on behalf of the Company, (ii) an amount equal to Executive's monthly salary during each of the six (6) months following Executive's death or the Disability Termination Date, irrespective of the expiration of the Term, and (iii) the Target Bonus (as defined herein) for the calendar year in which Executive dies or becomes Disabled, prorated for the portion of such year preceding Executive's death or the Disability Termination Date, which shall be paid not later than 120 days after the end of such year. Except as set forth in this Section 6(b), the Company shall have no additional obligations to the Executive under this Agreement in the event of Executive's termination of employment under this Section 6(b).

                (ii) In addition to the foregoing and notwithstanding any other agreement between the Executive and the Company, all Accelerated Equity Grants which were held by the Executive at the time of the Executive's Retirement, death or the Disability Termination Date, shall become fully vested and, in the case of options, shall remain exercisable by the Executive or by the Executive's estate or his representative, as the case may be, during the remaining original term of the Accelerated Equity Grant in the case of the Executive's Retirement or Disability or, if shorter, for three years following the date of the Executive's death.

            (c) By the Company without Cause, or by the Executive for Good Reason. (i) The Company may terminate the Executive's employment before the Expiration Date without Cause, and the Executive may terminate Executive's employment before the

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Expiration Date for Good Reason, upon 30 days' written notice to the other party. If the Executive's employment is so terminated by the Company without Cause, or by the Executive for Good Reason, as the case may be, the Company shall pay and provide to the Executive (i) any unpaid salary through the date of termination, as well as reimbursement of any unpaid reimbursable expenses incurred on behalf of the Company, (ii) the Target Bonus for the calendar year in which termination occurs, prorated for the portion of such year preceding termination, which shall be paid not later than 120 days after the end of such year, (iii) during each month of the Severance Period (as defined below), an amount equal to the sum of (x) Executive's monthly salary at the rate in effect immediately preceding termination and (y) one-twelfth of the Executive's Target Bonus for the calendar year in which termination occurs, (iv) throughout the Severance Period, continuation of Executive's participation (including the Company's contributions thereto) in all benefit plans and practices in which Executive was participating immediately preceding termination and (v) reimbursement to the Executive for up to $10,000 of executive outplacement services.

                (ii) In addition to the foregoing and notwithstanding any other agreement between the Executive and the Company, all Accelerated Equity Grants which were held by the Executive at the time of the termination of the Executive's employment by the Company without Cause or by the Executive for Good Reason (whether or not following a Change of Control), shall become fully exercisable and shall remain exercisable for the same period following termination as would apply if the Executive's employment had not terminated.

        (d) Change in Control. (i) If, following a "Change in Control" (as defined herein) and prior to the end of the Term, the Company terminates the Executive's employment without Cause, or the Executive terminates employment hereunder for Good Reason, the Company shall pay to the Executive, within 20 days following termination, (i) any unpaid salary through the date of termination, as well as reimbursement of any unpaid reimbursable expenses incurred on behalf of the Company, (ii) the Target Bonus for the calendar year in which termination occurs, prorated for the portion of such year preceding termination, (iii) a lump sum payment equal to (x) 200% of Executive's yearly salary at the rate in effect immediately preceding termination, multiplied by (y) the Severance Multiple (as defined herein), (iv) reimbursement to the Executive for up to $10,000 of executive outplacement services and (v) a lump sum equal to the Company's cost for health insurance, life insurance and retirement benefits for the Severance Period.

            (ii) In addition to the foregoing and notwithstanding any other agreement between the Executive and the Company, all Accelerated Equity Grants which were held by the Executive at the time of the termination of the Executive's employment by the Company without Cause or by the Executive for Good Reason following a Change of Control (and prior to the end of the Term), shall become vested and fully exercisable and shall remain exercisable for the same period following termination as would apply if the Executive's employment had not terminated.

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            (e) As used herein:

                (i) the term "Cause" shall mean (v) the Executive's commission of an act of fraud or dishonesty or a crime involving money or other property of the Company; (w) the Executive's conviction of a felony or a plea of guilty or nolo contendere to an indictment for a felony that damages the Company; (x) if, in carrying out Executive's duties hereunder, the Executive engages in conduct which constitutes willful misconduct or gross negligence; (y) the Executive's failure to carry out a lawful order of the Board of Directors of the Company or its Chief Executive Officer; or (z) a material breach by the Executive of this Agreement. Any act or failure to act on the part of the Executive which is based upon authority given pursuant to a resolution duly adopted by the Board of Directors of the Company or authorized in writing by the Chief Executive Officer of the Company, or based upon the advice of counsel for the Company, shall not constitute Cause as used herein. For purposes of this provision only, a breach shall be "material" if it is demonstrably injurious to the Company, its affiliates or any of its respective business units, financially or otherwise.

                Cause shall not exist unless and until the Company (i) has delivered to the Executive a written Notice of Termination that specifically identifies the events, actions, or non-actions, as applicable, that the Company believes constitute Cause hereunder, and, in the case of termination for Cause under clauses (x), (y) or (z) above, the Executive has been provided with an opportunity to cure the offending conduct (if curable) within 30 days after delivery of the written Notice of Termination, and has not so cured such conduct (if curable), and (ii) the Executive has been provided an opportunity to be heard (with counsel) within 30 days after delivery of the notice of Termination; provided, however, that in the case of termination for Cause under clauses (x), (y), and (z) above, the date of termination shall be no earlier than 35 days after delivery of the Notice of Termination.

                (ii) the term "Good Reason" shall mean any one of the following:

                    (1) a material breach of the Company's obligations under this Agreement, which breach has not been cured within ten business days after the Company's receipt of written notice from the Executive of such breach;

                    (2) a reduction in the Executive's then annual base salary;

                    (3) the relocation of the Executive's office to a location more than 30 miles from Executive's present office in New York City;

                    (4) the failure to pay the Executive any undisputed portion of the Executive's compensation within 15 business days after the date of receipt of written notice that such compensation or payment is due;

                    (5) the failure to continue in effect any compensation or benefit plan in which the Executive is participating, unless either (i) an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan; or (ii) the

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failure to continue the Executive's participation therein (or in such substitute or alternative plan) does not discriminate against the Executive, both with respect to the amount of benefits provided and the level of the Executive's participation, relative to other similarly situated participants;

                    (6) a reduction in the Executive's title and status as Chief Financial Officer of the Company, or any change in the Executive's status as reporting directly to the Chief Executive Officer; or the assignment to the Executive of any duties materially inconsistent with the Executive's position (including, without limitation, status, office, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1 of this Agreement, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose any action not taken in bad faith and which is remedied by the Company no later than thirty (30) days after written notice by the Executive;

                    (7) the failure of the Company to comply with its obligations under Section 12(a); or

                    (8) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted in this Agreement.

                (iii) the terms "Disabled" or "Disability" shall mean the Executive's physical or mental incapacity which renders the Executive incapable, even with a reasonable accommodation by the Company, of performing the essential functions of the duties required of Executive by this Agreement for one hundred twenty (120) or more consecutive days; the term "Disability Termination Date" shall mean the date as of which the Executive's employment with the Company is terminated, either by the Executive or by the Company, following the suffering of a Disability by the Executive.

                (iv) the term "Severance Period" shall mean the period commencing with the termination of the Executive's employment and ending with the last day of the Term.

                (v) the term "Severance Multiple" shall mean 3 times.

                (vi) the term "Change in Control" shall have the same meaning as in the Company's 1999 Stock Option Plan, as in effect on the date hereof.

                (vii) the term "Target Bonus" shall mean 75% of Executive's annual salary for the relevant year during the Term.

                (viii) The term "Retirement" shall mean voluntary retirement by the Executive after attaining age 55 with 10 years of service with the Company, or, if the Executive has not attained age 55 and/or has less than l0 years of service with the Company, the Company determines that circumstances exist that warrant the granting of Retirement status.

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            (f) The Executive shall have no obligation to seek other employment or otherwise mitigate the Company's obligations to make payments under this Section 6, and the Company's obligations shall not be reduced by the amount, if any, of other compensation or income earned or received by the Executive after the effective date of Executive's termination.

        7. Effect of Section 280G of the Internal Revenue Code.

            (a) Notwithstanding any other provision of this Agreement to the contrary, and except as provided in Section 7(b), to the extent that any payment or distribution of any type to or for the benefit of the Executive by the Company (or by any affiliate of the Company, any person or entity who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder), or any affiliate of such person or entity, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), is or will be subject to the excise tax imposed under Section 4999 of the Code (the "Excise Tax"), then the Total Payments shall be reduced (but not below zero) if and to the extent that a reduction in the Total Payments would result in the Executive retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if the Executive received the entire amount of such Total Payments. Unless the Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing, the Company shall reduce or eliminate the Total Payments, by first reducing or eliminating the portion of the Total Payments which are not payable in cash and then by reducing or eliminating 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 herein). Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive's rights and entitlements to any benefits or compensation.

            (b) The determination of whether the Total Payments shall be reduced as provided in this Section 7 and the amount of such reduction shall be made at the Company's expense by an accounting firm selected by the Company from among its independent auditors and the five (5) largest accounting firms (an "Eligible Accounting Firm") in the United States (the "Accounting Firm"). The Accounting Firm shall provide its determination (the "Determination"), together with detailed supporting calculations and documentation to the Company and the Executive within ten (10) days of the last day of Executive's employment. If the Accounting Firm determines that no Excise Tax is payable by the Executive with respect to the Total Payments, it shall furnish the Executive with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to any such payments and, absent manifest error, such Determination shall be binding, final and conclusive upon the Company and the Executive. If the Accounting Firm determines that an Excise Tax would be payable, the Executive shall have the right to accept the Determination of the Accounting Firm as to the extent of the reduction, if any, pursuant to this Section 7, or to have such Determination reviewed by another Eligible Accounting Firm selected by the Executive, at the expense of the

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Company, in which case the determination of such second accounting firm shall be binding, final and conclusive upon the Company and Executive.

        8. Company Property. Any trade name or mark, program, discovery, process, design, invention or improvement which the Executive makes or develops, which relates, directly or indirectly, to the business of the Company or its affiliates, or Executive's employment by the Company, shall be considered as "made for hire" and shall belong to the Company and shall be promptly disclosed to the Company. During the Executive's employment and thereafter, the Executive shall, without additional compensation, execute and deliver to or as requested by the Company, any instruments of transfer and take such other action as the Company may reasonably request to carry out the provisions hereof, including filing, at the Company's sole expense, trademark, patent or copyright applications for any trade name or mark, invention or writing covered hereby and assigning such applications to the Company.

        9. Confidential Information. The Executive shall not, either during the term of Executive's employment by the Company or thereafter, disclose to anyone or use (except, in each case, in the performance of Executive's responsibilities hereunder and in the regular course of the Company's business), any information acquired by the Executive in connection with or during the period of Executive's employment by the Company, with respect to any confidential, proprietary or secret aspect of the affairs of the Company or any of its affiliates, including but not limited to the requirements and terms of dealings with existing or potential licensors, licensees, designers, suppliers and customers and methods of doing business, all of which the Executive acknowledges are confidential and proprietary to the Company, and any of its affiliates, as the case may be.

        10. Competition; Recruitment; Non-Disparagement.

            (a) The Executive shall not, at any time during Executive's employment by the Company and during the Severance Period (provided that the Company is making or has made the payments to Executive which may be required hereby during such Severance Period) (the "Non-Compete Period") and under the following circumstances, engage or become interested (as an owner, stockholder, partner, director, officer, employee, consultant or otherwise) in any business which competes, directly or indirectly, with the business conducted by the Company or any of its subsidiaries or affiliates at the time of termination of employment. The ownership of less than 5% of the stock of a publicly owned company which competes with the Company, any of its subsidiaries or affiliates, in and of itself, shall not be considered a violation of the provisions of this Section 10.

            (b) The Executive shall not, at any time during Executive's employment by the Company and thereafter until the second anniversary of the expiration of the Non-Compete Period, recruit, solicit for employment, hire or engage, or assist any person or entity in recruiting, soliciting for employment, hiring or engaging, any employee or consultant of the Company, any of its subsidiaries or affiliates, or any person who was an employee or consultant of the Company, any of its subsidiaries or affiliates within one year before the termination of the Executive's employment.

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            (c) For the longer of the Non-Compete Period or a period of three years immediately following the date of termination, (i) the Company, and its respective affiliates and employees shall not disparage the Executive, and (ii) the Executive shall not disparage the Company, or its respective affiliates and employees.

            (d) The Executive acknowledges that these provisions are necessary for the protection of the Company, and its subsidiaries and affiliates and are not unreasonable, because the Executive would be able to recruit and hire personnel other than employees of the Company, and any of their subsidiaries and affiliates. The Executive further agrees that a breach of Section 8, 9 or 10 of this Agreement shall result in the immediate cessation of any payments pursuant to this Section 10 and Section 6 hereof, if applicable. The duration and the scope of these restrictions on the Executive's activities are divisible, so that if any provision of this Section 10 is held or deemed to be invalid, that provision shall be automatically modified to the extent necessary to make it valid.

        11. Notices. Any notice or other communication to the Company or to the Executive under this Agreement shall be in writing and shall be considered given when mailed by certified mail, return receipt requested, to such party at Executive's address below, or to the Company at 1411 Broadway, New York, New York 10018, Attention: President (or at such other address as such party may specify by written notice to the other party).

        12. Successors; Binding Agreement.

            (a) Company's Successors. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the business or assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the business or assets of the Company and such assignee or transferee assumes all of the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law. The Company will require any such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business or assets as aforesaid, which executes and delivers the agreement provided for in this Section 12 or which otherwise becomes bound by all the terms and provisions of this Agreement or by operation of law.

            (b) Executive's Successors. This Agreement shall not be assignable by the Executive. This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. Upon the Executive's death, all amounts to which Executive is entitled hereunder, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive's devisee, legatee, or other designee or, if there be no such designee, to the Executive's estate.

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        13. Indemnification. The Company shall indemnify Executive and hold the Executive harmless, to the maximum extent permitted by applicable law, from and against all claims, actions, suits, proceedings, loss, damage, liability, costs, charges and expenses, including reasonable attorneys' fees and costs arising in connection with the Executive's performance of Executive's duties hereunder or Executive's status as an employee, officer, director or agent of the Company or its affiliates, in accordance with the Company's indemnity policies for its senior executives.

        14. Interest on Late Payments. "Undisputed Late Obligations" shall bear interest beginning on the Due Date until paid in full at an annual rate of one percent (1.0%) plus the prime rate as declared from time to time by The Chase Manhattan Bank. For purposes hereof, "Undisputed Late Obligations" shall mean any obligation which remains unpaid 5 days after written notice thereof is delivered to the other party in accordance with Section 11 (the "Due Date") for money under this Agreement owing from one party to another, which obligation (i) is not subject to any bona fide dispute or (ii) has been adjudicated by an arbitration panel or court of competent jurisdiction to be due and payable.

        15. Arbitration. Except as otherwise provided herein, all controversies, claims or disputes arising out of or related to this Agreement shall be settled under the rules of the American Arbitration Association then in effect in the State of New York, as the sole and exclusive remedy of either party, and judgment upon such award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction.

        16. Attorneys' Fees. The Company shall reimburse the Executive (or the Executive shall reimburse the Company) for all reasonable costs, including without limitation reasonable attorneys' fees, of the Executive or the Company, as the case may be, in any dispute, arbitration or proceeding arising under this Agreement (collectively, a "Proceeding"), so long as the Executive or the Company, as the case may be, "prevails in substantial part" with respect to Executive's or the Company's claims or defenses in such Proceeding. For purposes hereof, the Executive shall be deemed to have "prevailed in substantial part" if (i) the Executive is the party originally demanding a Proceeding, and the arbitrator(s) shall have awarded the Executive at least 75% of the amount originally demanded by the Executive, or (ii) the Company is the party originally demanding a Proceeding, and the arbitrator(s) shall have denied the Company the relief originally requested. The Company shall be deemed to have "prevailed in substantial part" if the Executive is the party originally demanding a Proceeding and the arbitrator(s) shall have awarded the Executive less than 25% of the amount originally demanded by the Executive.

        17. Miscellaneous.

            (a) Given that a breach of the provisions of this Agreement would injure the Company irreparably, the Company may, in addition to its other remedies, obtain an injunction or other comparable relief restraining any violation of this Agreement, and no bond, security or other undertaking shall be required of the Company in connection therewith.

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            (b) The provisions of this Agreement are separable, and if any provision of this Agreement is invalid or unenforceable, the remaining provisions shall continue in full force and effect.

            (c) This Agreement constitutes the entire understanding and agreement between the parties, and supersedes the Prior Employment Agreement and all other existing agreements between them and cannot be amended, unless such amendment is in writing and signed by both parties to this Agreement.

            (d) This Agreement shall be governed by and construed in accordance with the laws of the State of New York (other than its choice of laws rules), where it has been entered and where it is to be performed. The parties hereto consent to the exclusive jurisdiction of any federal or state court in the State of New York to resolve any dispute arising under this Agreement or otherwise.

            (e) The headings in this Agreement are solely for convenience of reference and shall not affect its interpretation.

            (f) The failure of either party to insist on strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. For any waiver of a provision of this Agreement to be effective, it must be in writing and signed by the party against whom the waiver is claimed.

            (g) The obligations of the Executive and the Company hereunder shall survive the termination of the term of this Agreement and the Executive's employment hereunder, to the extent necessary to give full effect to the provisions of this Agreement.

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the date first above written.

JONES APPAREL GROUP, INC.

By: /s/ Peter Boneparth
      President

      /s/ Efthimios P. Sotos
      Executive

Address: 484 Wire Mill Road
Stamford, CT 06903