10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

     For the fiscal year ended January 29, 2005 or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

     For the transition period from                     to                    

Commission file number 1-16097

THE MEN’S WEARHOUSE, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas (State or Other Jurisdiction of Incorporation or Organization)	74-1790172 (IRS Employer Identification Number)
5803 Glenmont Drive Houston, Texas (Address of Principal Executive Offices)	77081-1701 (Zip Code)

(713) 592-7200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, par value $.01 per share Name of each exchange
on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ. No o.

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ. No o.

     The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the closing price of shares of common stock on the New York Stock Exchange on July 31, 2004, was approximately $812.0 million.

     The number of shares of common stock of the registrant outstanding on April 25, 2005 was 35,965,299 excluding 8,315,494 shares classified as Treasury Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Document	Incorporated as to
Notice and Proxy Statement for the Annual Meeting of Shareholders scheduled to be held June 29, 2005.	Part III: Items 10,11,12, 13 and 14

FORM 10-K REPORT INDEX

10-K Part and Item No.		Page No.
PART I
Item 1.	Business		1
Item 2.	Properties		7
Item 3.	Legal Proceedings		9
Item 4.	Submission of Matters to a Vote of Security Holders		9
PART II
Item 5.	Market for the Company’s Common Equity and Related Stockholder Matters		10
Item 6.	Selected Financial Data		11
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		24
Item 8.	Financial Statements and Supplementary Data		25
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		49
Item 9A.	Controls and Procedures		49
Item 9B.	Other Information		49
PART III
Item 10.	Directors and Executive Officers of the Company		49
Item 11.	Executive Compensation		49
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		50
Item 13.	Certain Relationships and Related Transactions		50
Item 14.	Principal Accountant Fees and Services		50
PART IV
Item 15.	Exhibits and Financial Statement Schedules		51
2004 Long-Term Incentive Plan
Subsidiaries of the Company
Consent of Deloitte & Touch LLP, independent auditors
Certification of Annual Report Pursuant to Sec. 302
Certification of Annual Report Pursuant to Sec. 302
Certification of Annual Report Pursuant to Sec. 906
Certification of Annual Report Pursuant to Sec. 906

PART I

ITEM 1. BUSINESS

General

     The Men’s Wearhouse began operations in 1973 as a partnership and was incorporated as The Men’s Wearhouse, Inc. (the “Company”) under the laws of Texas in May 1974. Our principal corporate and executive offices are located at 5803 Glenmont Drive, Houston, Texas 77081-1701 (telephone number 713/592-7200), and at 40650 Encyclopedia Circle, Fremont, California 94538-2453 (telephone number 510/657-9821), respectively. Unless the context otherwise requires, “Company”, “we”, “us” and “our” refer to The Men’s Wearhouse, Inc. and its wholly owned or controlled subsidiaries.

     Our website address is www.menswearhouse.com. Through the investor relations section of our website, we provide free access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). The SEC also maintains a website that contains the Company’s filings at www.sec.gov.

The Company

     We are one of the largest specialty retailers of men’s suits in the United States and Canada. At January 29, 2005, our U.S. operations included 593 retail apparel stores in 44 states and the District of Columbia, primarily operating under the brand names of Men’s Wearhouse and K&G, with approximately 23% of our locations in Texas and California. At January 29, 2005, our Canadian operations included 114 retail apparel stores in 10 provinces operating under the brand name of Moores Clothing for Men. Below is a brief description of our brands:

     Men’s Wearhouse

     Under the Men’s Wearhouse brand, we target middle and upper-middle income men by offering quality merchandise at everyday low prices. In addition to value, we believe we provide a superior level of customer service. Men’s Wearhouse stores offer a broad selection of designer, brand name and private label merchandise at prices we believe are typically 20% to 30% below the regular prices found at traditional department and specialty stores. Our merchandise includes suits, sport coats, slacks, formal wear, business casual, sportswear, outerwear, dress shirts, shoes and accessories. We concentrate on business attire that is characterized by infrequent and more predictable fashion changes. Therefore, we believe we are not as exposed to trends typical of more fashion-forward apparel retailers, where significant markdowns and promotional pricing are more common. At January 29, 2005, we operated 517 Men’s Wearhouse stores in 44 states and the District of Columbia. These stores are referred to as “Men’s Wearhouse stores” or “traditional stores”.

     We also began a tuxedo rental program in selected Men’s Wearhouse stores during 1999 and now offer tuxedo rentals in substantially all of our Men’s Wearhouse stores. We believe this program generates incremental business for us without significant incremental personnel or real estate costs and broadens our customer base by drawing first-time and younger customers into our stores.

     K&G

     Under the K&G brand, we target the more price sensitive customer. At January 29, 2005, we operated 76 K&G stores in 25 states, which include four stores operating under the name The Suit Warehouse (in the metropolitan Detroit area). Forty-three of the K&G stores offer ladies’ career apparel that is also targeted to the more price sensitive customer.

     We believe that K&G’s more value-oriented superstore approach appeals to certain customers in the apparel market. K&G offers first-quality, current-season apparel and accessories comparable in quality to that of traditional department and specialty stores, at everyday low prices we believe are typically 30% to 70% below the regular prices charged by such stores. K&G’s merchandising strategy emphasizes broad assortments across all major categories, including tailored clothing, casual sportswear, dress furnishings, footwear and accessories. This merchandise selection, which includes brand name as well as private label merchandise, positions K&G to attract a wide range of customers in each of its markets. As with the Men’s Wearhouse brand, K&G’s philosophy of delivering everyday value distinguishes K&G from other retailers that adopt a more promotional pricing strategy.

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     Moores

     Under the Moores brand, we target middle and upper-middle income men in Canada by offering quality merchandise at everyday low prices. Moores is one of Canada’s leading specialty retailers of men’s suits, with 114 retail apparel stores in 10 Canadian provinces at January 29, 2005. Similar to the Men’s Wearhouse stores, Moores stores offer a broad selection of quality merchandise at prices we believe are typically 20% to 30% below the regular prices charged by traditional Canadian department and specialty stores. Moores focuses on conservative, basic tailored apparel that we believe limits exposure to changes in fashion trends and the need for significant markdowns. Moores’ merchandise consists of suits, sport coats, slacks, business casual, dress shirts, sportswear, outerwear, shoes and accessories.

     In October 2003, we extended our tuxedo rental program to our Moores stores. During the first quarter of fiscal 2004, we completed the rollout of this program and began to offer tuxedo rentals at all of our Moores stores.

     Moores distinguishes itself from other Canadian retailers of menswear by manufacturing a significant portion of the tailored clothing for sale in its stores. Moores conducts its manufacturing operations through its wholly owned subsidiary, Golden Brand Clothing (Canada) Ltd. (“Golden Brand”), which is the second largest manufacturer of men’s suits and sport coats in Canada. Golden Brand’s manufacturing facility in Montreal, Quebec, includes a cutting room, fusing department, pant shop and coat shop. At full capacity, the coat shop can produce 13,000 units per week and the pant shop can produce 23,000 units per week. Beginning in 1999, Golden Brand also manufactures product for Men’s Wearhouse stores.

Expansion Strategy

Our expansion strategy includes:
•	opening additional Men’s Wearhouse, K&G and Moores stores in new and existing markets,
•	testing opportunities to market complementary products and services,
•	expanding our corporate apparel program, and
•	identifying strategic acquisition opportunities, including but not limited to international opportunities.

     In general terms, we consider a geographic area served by a common group of television stations as a single market.

     On a limited basis, we have acquired store locations, inventories, customer lists, trademarks and tradenames from existing menswear retailers in both new and existing markets. We may do so again in the future. At present, in 2005 we plan to open approximately 15 new Men’s Wearhouse stores, six new K&G stores and two Moores stores, to close two K&G stores and to expand and/or relocate approximately 24 existing Men’s Wearhouse stores, six existing K&G stores and eight existing Moores stores and to continue expansion in subsequent years. We believe that our ability to increase the number of traditional stores in the United States above 550 will be limited. However, we believe that additional growth opportunities exist through improving and diversifying the merchandise mix, relocating stores, expanding our K&G brand and adding complementary products and services.

     In connection with our strategy of testing opportunities to market complementary products and services, in December 2003 and in September 2004 we acquired the assets and operating leases for 13 and 11, respectively, retail dry cleaning and laundry facilities operating in the Houston, Texas area. We launched a rebranding campaign for these facilities in March 2005. At present, in 2005 we plan to open five retail dry cleaning and laundry facilities and relocate one facility. We may open or acquire additional facilities on a limited basis in 2005 as we continue to test market and evaluate the feasibility of developing a national retail dry cleaning and laundry line of business.

     As of January 29, 2005, we were operating six new casual clothing/sportswear concept stores that were opened during 2004 in order to test an expanded, more fashion-oriented merchandise concept for men and women. These stores are approximately 3,000 to 3,500 square feet and are located in high-end regional malls. They target the 25 to 35 year old customer with Latin-inspired store designs and offerings. In March 2005, it was determined that no further investments would be made into these fashion-oriented test concept stores and that the six stores operating at January 29, 2005 will be wound down over the course of fiscal 2005.

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     During the fourth quarter of fiscal 2004, we opened two test bridal stores in the San Francisco Bay Area in order to test additional opportunities in the bridal industry. These stores are located contiguous to existing Men’s Wearhouse stores. We may open additional stores on a limited basis in 2005 as we continue to test the market and opportunities in the bridal industry. However, we do not expect these operations or expansion efforts to have a material effect on our financial position, results of operations or cash flows for 2005.

Merchandising

     Our stores offer a broad selection of designer, brand name and private label men’s business attire, including a consistent stock of core items (such as navy blazers, tuxedos and basic suits). Although basic styles are emphasized, each season’s merchandise reflects current fabric and color trends, and a small percentage of inventory, accessories in particular, are usually more fashion oriented. The broad merchandise selection creates increased sales opportunities by permitting a customer to purchase substantially all of his tailored wardrobe and accessory requirements, including shoes, at our stores. Within our tailored clothing, we offer an assortment of styles from a variety of manufacturers and maintain a broad selection of fabrics, colors and sizes. Based on the experience and expertise of our management, we believe that the depth of selection offered provides us with an advantage over most of our competitors.

     The Company’s inventory mix includes “business casual” merchandise designed to meet demand for such products resulting from more relaxed dress codes in the workplace. This merchandise consists of tailored and non-tailored clothing (sport coats, casual slacks, knits and woven sports shirts, sweaters and casual shoes) that complements the existing product mix and provides opportunity for enhanced sales without significant inventory risk.

     We do not purchase significant quantities of merchandise overruns or close-outs. We provide recognizable quality merchandise at consistent prices that assist the customer in identifying the value available at our stores. We believe that the merchandise at Men’s Wearhouse and Moores stores is generally offered 20% to 30% below traditional department and specialty store regular prices and that merchandise at K&G stores is generally 30% to 70% below regular retail prices charged by such stores. A ticket is affixed to each item, which displays our selling price alongside a price we believe reflects the regular, non-promotional price of the item at traditional department and specialty stores.

     By targeting men’s business attire, a category of men’s clothing characterized by infrequent and more predictable fashion changes, we believe we are not as exposed to trends typical of more fashion-forward apparel retailers. This allows us to carry basic merchandise over to the following season and reduces the need for markdowns; for example, a navy blazer or gray business suit may be carried over to the next season. Our Men’s Wearhouse and Moores stores have an annual sale that starts around Christmas and runs through the month of January, during which prices on many items are reduced 20% to 50% off the everyday low prices. This sale reduces stock at year-end and prepares for the arrival of the new season’s merchandise. We also have a similar event in mid-summer; however, the level of advertising for promotion of the summer event is lower than that for the year-end event.

     During 2002, 2003 and 2004, 56.5%, 55.2% and 54.4%, respectively, of our total net merchandise sales were attributable to tailored clothing (suits, sport coats and slacks) and 43.5%, 44.8% and 45.6%, respectively, were attributable to casual attire, sportswear, shoes, shirts, ties, outerwear and other.

     In addition to accepting cash, checks or nationally recognized credit cards, we offer our own private label credit card to Men’s Wearhouse and Moores customers. We have contracted with a third-party vendor to provide all necessary servicing and processing and to assume all credit risks associated with a private label credit card program. We believe that the private label credit card provides us with an important tool for targeted marketing and presents an excellent opportunity to communicate with our customers. Beginning in September 2004, all purchases made with the private label credit card at Men’s Wearhouse stores are entitled to a 5% discount. We believe that this change in our private label credit card under our Men’s Wearhouse brand will continue to provide us with an excellent opportunity to develop relationships with our customers. During 2004, our customers used the private label credit card for approximately 17% of our sales at Men’s Wearhouse stores and approximately 15% of our sales at Moores stores.

     We also offer loyalty programs to our Men’s Wearhouse and Moores customers. Under the loyalty programs, customers receive points for purchases. Points are equivalent to dollars spent on a one-for-one basis, excluding any sales tax dollars. Upon reaching 500 points, customers are issued a $50 rewards certificate which they may use to make purchases at Men’s Wearhouse or Moores stores. We believe that the loyalty programs allow us to cultivate

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long-term relationships with our customers. At the Men’s Wearhouse, all customers who register for our “Perfect Fit” loyalty program are eligible to participate and earn points for purchases. At Moores, the loyalty program points are earned only on purchases made with the Moores private label credit card. Prior to September 2004, the loyalty program points at Men’s Wearhouse were also limited to purchases made with the Men’s Wearhouse private label credit card.

Customer Service and Marketing

     The Men’s Wearhouse and Moores sales personnel are trained as clothing consultants to provide customers with assistance and advice on their apparel needs, including product style, color coordination, fabric choice and garment fit. For example, clothing consultants at Men’s Wearhouse stores attend an intensive training program at our training facility in Fremont, California, which is further supplemented with weekly store meetings, periodic merchandise meetings and frequent interaction with all levels of store management.

     We encourage our clothing consultants to be friendly and knowledgeable and to promptly greet each customer entering the store. Consultants are encouraged to offer guidance to the customer at each stage of the decision-making process, making every effort to earn the customer’s confidence and to create a professional relationship that will continue beyond the initial visit. Clothing consultants are also encouraged to contact customers after the purchase or pick-up of tailored clothing to determine whether customers are satisfied with their purchases and, if necessary, to take corrective action. Store personnel as well as Men’s Wearhouse customer services representatives operating from our corporate offices have full authority to respond to customer complaints and reasonable requests, including the approval of returns, exchanges, refunds, re-alterations and other special requests, all of which we believe helps promote customer satisfaction and loyalty.

     K&G stores are designed to allow customers to select and purchase apparel by themselves. For example, each merchandise category is clearly marked and organized by size, and suits are specifically tagged “Athletic Fit,” “Double-Breasted,” “Three Button,” etc., as a means of further assisting customers to easily select their styles and sizes. K&G employees assist customers with merchandise selection, including correct sizing.

     Each of our stores provides on-site tailoring services to facilitate timely alterations at a reasonable cost to customers. Tailored clothing purchased at a Men’s Wearhouse store will be pressed and re-altered (if the alterations were performed at a Men’s Wearhouse store) free of charge for the life of the garment.

     Because management believes that men prefer direct and easy store access, we attempt to locate our stores in regional strip and specialty retail centers or in freestanding buildings to enable customers to park near the entrance of the store.

     Our total annual advertising expenditures, which were $60.1 million, $62.9 million and $60.5 million in 2002, 2003 and 2004, respectively, are significant. The Company advertises principally on television and radio, which we consider the most effective means of attracting and reaching potential customers, and our advertising campaign is designed to reinforce our various brands.

Purchasing and Distribution

     We purchase merchandise from approximately 700 vendors. In 2004, no vendor accounted for 10% or more of purchases. Management does not believe that the loss of any vendor would significantly impact us. While we have no material long-term contracts with our vendors, we believe that we have developed an excellent relationship with our vendors, which is supported by consistent purchasing practices.

     We believe we obtain favorable buying opportunities relative to many of our competitors. We do not request cooperative advertising support from manufacturers, which reduces the manufacturers’ costs of doing business with us and enables them to offer us lower prices. Further, we believe we obtain better discounts by entering into purchase arrangements that provide for limited return policies, although we always retain the right to return goods that are damaged upon receipt or determined to be improperly manufactured. Finally, volume purchasing of specifically planned quantities purchased well in advance of the season enables more efficient production runs by manufacturers who, in turn, generally pass some of the cost savings back to us.

     We purchase a significant portion of our inventory through a direct sourcing program. In addition to finished product, we purchase fabric from mills and contract with certain factories for the assembly of the finished product to be sold in our U.S. and Canadian stores. Our direct sourcing arrangements for fabric and assembly have been with both domestic and foreign mills and factories. During 2002, 2003 and 2004, product procured through the direct

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sourcing program represented approximately 27%, 30% and 30%, respectively, of total inventory purchases for stores operating in the U.S. We expect that purchases through the direct sourcing program will represent approximately 32% of total U.S. purchases in 2005. During 2002, 2003 and 2004, our manufacturing operations at Golden Brand provided 43%, 34% and 32%, respectively, of inventory purchases for Moores stores and 8%, 9% and 10% during 2002, 2003 and 2004, respectively, of inventory purchases for Men’s Wearhouse stores.

     To protect against currency exchange risks associated with certain firmly committed and certain other probable, but not firmly committed, inventory transactions denominated in a foreign currency (primarily the Euro), we enter into forward exchange contracts. In addition, many of the purchases from foreign vendors are secured by letters of credit.

     We have entered into license agreements with a limited number of parties under which we are entitled to use designer labels such as “Gary Player^®” and nationally recognized brand labels such as “Botany^®” and “Botany 500^®” in return for royalties paid to the licensor based on the costs of the relevant product. These license agreements generally limit the use of the individual label to products of a specific nature (such as men’s suits, men’s formal wear or men’s shirts). The labels licensed under these agreements will continue to be used in connection with a portion of the purchases under the direct sourcing program described above, as well as purchases from other vendors. We monitor the performance of these licensed labels compared to their cost and may elect to selectively terminate any license, as provided in the respective agreement. We have also purchased several trademarks, including “Cricketeer^®,” “Joseph & Feiss^®,” “Baracuta^®”, “Pronto Uomo^®,” “Linea Uomo^®,” and “Twinhill^®,” which are used similarly to our licensed labels. Because of the continued consolidation in the men’s tailored clothing industry, we may be presented with opportunities to acquire or license other designer or nationally recognized brand labels.

     All merchandise for Men’s Wearhouse stores is received into our central warehouse located in Houston, Texas. Merchandise for a store is picked and then moved to the appropriate staging area for shipping. In addition to the central distribution center in Houston, we have space within certain Men’s Wearhouse stores or separate hub warehouse facilities in the majority of our markets, which function as redistribution facilities for their respective areas. Most purchased merchandise for Moores and K&G stores is direct shipped by vendors to the stores. However, in fiscal 2005 our K&G stores will begin to receive merchandise consistent with our Men’s Wearhouse stores from our central warehouse located in Houston, Texas. This transition of the receipt of merchandise for our K&G stores is targeted for completion in the third quarter of fiscal 2005.

     We lease and operate 24 long-haul tractors and 54 trailers, which, together with common carriers, are used to transport merchandise from the vendors to our distribution facilities and from the distribution facilities to Men’s Wearhouse stores within each market. We also lease or own 95 smaller van-like trucks, which are used to deliver merchandise locally or within a given geographic region.

Competition

     We believe that the unit demand for men’s tailored clothing has generally declined over the past decade. Our primary competitors include specialty men’s clothing stores, traditional department stores, off-price retailers, manufacturer-owned and independently owned outlet stores and three-day stores. Over the past several years market conditions have resulted in consolidation of the industry. We believe that the principal competitive factors in the menswear market are merchandise assortment, quality, price, garment fit, merchandise presentation, store location and customer service.

     We believe that strong vendor relationships, our direct sourcing program and our buying volumes and patterns are the principal factors enabling us to obtain quality merchandise at attractive prices. We believe that our vendors rely on our predictable payment record and history of honoring promises, including our promise not to advertise names of labeled and unlabeled designer merchandise when requested. Certain of our competitors (principally department stores) may be larger and may have substantially greater financial, marketing and other resources than we have and therefore may have certain competitive advantages.

Seasonality

     Like most retailers, our business is subject to seasonal fluctuations. In most years, over 30% of our net sales and over 40% of our net earnings have been generated during the fourth quarter of each year. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full year (see Note 12 of Notes to Consolidated Financial Statements).

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Trademarks and Servicemarks

     We are the owner in the United States of the trademark and servicemark “The Men’s Wearhouse^®” and of federal registrations therefor expiring in 2009, 2010 and 2012, respectively, subject to renewal. We have also been granted registrations for that trademark and servicemark in 43 of the 44 states (including Texas and California) in which we currently do business (as well as the District of Columbia) and have used those marks. We are also the owner of “MW Men’s Wearhouse (and design)^®” and federal registrations therefor expiring in 2010 and 2011, respectively, subject to renewal. Our rights in the “The Men’s Wearhouse^®” and “MW Men’s Wearhouse (and design) ^®” marks are a significant part of our business, as the marks have become well known through our television and radio advertising campaigns. Accordingly, we intend to maintain our marks and the related registrations.

     We are also the owner in the United States of the servicemarks “The Suit Warehouse^®” and “The Suit Warehouse (and logo),” which are tradenames used by certain of the stores in Michigan operated by K&G, and “K&G^®”, which is a tradename used by K&G stores. K&G stores also operate under the tradenames “K&G Men’s Superstore^®,” “K&G Men’s Center,” “K&G MenSmart” and “K&G Ladies^®.” We own the registrations for “K&G^®,^” “K&G (stylized)^®,” “K&G For Men. For Women. For Less^®,” “K&G For Men. For Less^®,” “K&G Men’s Superstore^®,” “K&G Men’s Superstore (and design)^® ,” “K&G Ladies^®,” and “K&G Superstore^®.” The application for the servicemark “K&G Ladies Superstore” is pending. In addition, we own or license other trademarks/servicemarks used in the business, principally in connection with the labeling of products purchased through the direct sourcing program.

     We are also the owner in the United States of the service mark “MWCLEANERS” as well as certain logos incorporating “MWCLEANERS” or the letters “MW” to identify dry cleaning services. The applications are currently pending with the United States Patent and Trademark Office.

     We own Canadian trademark registrations for the marks “Moores The Suit People^®,” “Moores Vetements Pour Hommes^®,” “Moores Vetements Pour Hommes (and design)^®,^” “Moores Clothing For Men^®” and “Moores Clothing For Men (and design)^®.” Moores stores operate under the tradenames “Moores Clothing For Men” and “Moores Vetements Pour Hommes.”

     We are also the owner in Canada of the service mark “MWCLEANERS” as well as certain logos incorporating “MWCLEANERS” or the letters “MW” to identify dry cleaning services. The applications are currently pending with the Canadian Trademarks Office.

Employees

     At January 29, 2005, we had approximately 13,200 employees, of whom approximately 9,900 were full-time and approximately 3,300 were part-time employees. Seasonality affects the number of part-time employees as well as the number of hours worked by full-time and part-time personnel. Approximately 899 of our employees at Golden Brand belong to the Union of Needletrades, Industrial and Textile Employees. Golden Brand is part of a collective bargaining unit, of which it is the largest company. The current union contract expires in November 2005.

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ITEM 2. PROPERTIES

     As of January 29, 2005, we operated 593 retail apparel stores in 44 states and the District of Columbia and 114 retail apparel stores in the 10 Canadian provinces. The following table sets forth the location, by state or province, of these stores:

	Men’s
United States	Wearhouse		K&G		Moores
California		85
Texas		42		12
Florida		37		2
New York		27		3
Pennsylvania		23		3
Illinois		22		5
Michigan		20		6
Ohio		19		5
Georgia		17		6
Virginia		17		2
Washington		15		2
Massachusetts		14		3
Maryland		14		4
Colorado		12		2
North Carolina		12		2
New Jersey		12		7
Arizona		11
Missouri		11		1
Minnesota		9		2
Tennessee		9		1
Wisconsin		9		1
Connecticut		8		2
Oregon		8
Indiana		7		1
Louisiana		6		1
Alabama		5		1
Utah		5
Nevada		5
New Mexico		4
Kentucky		4		1
Kansas		3		1
Nebraska		3
New Hampshire		3
Oklahoma		3
South Carolina		3
Arkansas		2
Delaware		2
Iowa		2
Idaho		1
Maine		1
Mississippi		1
Rhode Island		1
South Dakota		1
West Virginia		1
District of Columbia		1
Canada
Ontario						50
Quebec						23
British Columbia						14
Alberta						12
Manitoba						5
New Brunswick						3
Nova Scotia						3
Saskatchewan						2
Newfoundland						1
Prince Edward Island						1
Total		517		76		114

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     Men’s Wearhouse and Moores stores vary in size from approximately 2,950 to 15,100 total square feet (average square footage at January 29, 2005 was 5,595 square feet with 66% of stores having between 4,500 and 6,500 square feet). Men’s Wearhouse and Moores stores are primarily located in middle and upper-middle income regional strip and specialty retail shopping centers. We believe our customers generally prefer to limit the amount of time they spend shopping for menswear and seek easily accessible store sites.

     Men’s Wearhouse and Moores stores are designed to further our strategy of facilitating sales while making the shopping experience pleasurable. We attempt to create a specialty store atmosphere through effective merchandise presentation and sizing, attractive in-store signs and efficient checkout procedures. Most of these stores have similar floor plans and merchandise presentation to facilitate the shopping experience and sales process. Designer, brand name and private label garments are intermixed, and emphasis is placed on the fit of the garment rather than on a particular label or manufacturer. Each store is staffed with clothing consultants and sales associates and has a tailoring facility with at least one tailor.

     K&G stores vary in size from approximately 5,400 to 50,000 total square feet (average square footage at January 29, 2005 was 23,291 square feet with 42% of stores having between 15,000 and 25,000 square feet). K&G stores are “destination” stores located primarily in low-cost warehouses and second generation strip shopping centers that are easily accessible from major highways and thoroughfares. K&G has created a 25,000 square foot prototype men’s and ladies’ superstore with fitting rooms and convenient check-out, customer service and tailoring areas. K&G stores are organized to convey the impression of a dominant assortment of first-quality merchandise and to project a no-frills, value-oriented warehouse atmosphere. Each element of store layout and merchandise presentation is designed to reinforce K&G’s strategy of providing a large selection and assortment in each category. We seek to make K&G stores “customer friendly” by utilizing store signage and grouping merchandise by categories and sizes, with brand name and private label merchandise intermixed. To provide our customers with a greater sense of consistency and purchase opportunities, in September 2004 we extended our hours of operation at our K&G stores from four to seven days a week. Prior to September 1, 2004, our K&G stores were open for business on Thursdays, Fridays, Saturdays and Sundays only, except for a limited number of Monday holidays and an expanded schedule for certain holiday periods when the stores were open every day. Each store is typically staffed with a manager, assistant manager and other employees who serve as customer service and sales personnel and cashiers. Each store also has a tailoring facility with at least one tailor.

     We lease our stores on terms generally from five to ten years with renewal options at higher fixed rates in most cases. Leases typically provide for percentage rent over sales break points. Additionally, most leases provide for a base rent as well as “triple net charges”, including but not limited to common area maintenance expenses, property taxes, utilities, center promotions and insurance. In certain markets, we lease between 1,000 and 5,000 additional square feet as a part of a Men’s Wearhouse store or in a separate hub warehouse unit to be utilized as a redistribution facility in that geographic area.

     During 1999, we purchased a 46-acre site in Houston on which we have developed our principal warehouse and distribution facilities. The first phase of development, an approximately 385,000 square foot facility to support our tuxedo rental program and our flat-packed merchandise, became operational during 2001. In early 2003, we implemented an in-house tuxedo dry cleaning plant as part of the facility. In late 2003, we completed phase two of our development, an addition of approximately 242,000 square feet primarily to support the tuxedo rental program. In late 2004, we completed phase three of our development, an additional 300,000 square feet to accommodate the centralization of our warehouse and distribution program for K&G. In early 2005, we developed an additional 150,000 square feet in order to further accommodate our current and future operations as well as our E-commerce activities. We also own a 240,000 square foot facility situated on approximately seven acres of land in Houston, Texas which serves as an office, warehouse and distribution facility. Approximately 65,000 square feet of this facility is used as office space for our financial, information technology and construction departments with the remaining 175,000 square feet serving as a warehouse and distribution center. We also own a 150,000 square foot facility, situated on an adjacent six acres, comprised of approximately 9,000 square feet of office space and 141,000 square feet serving as a warehouse and distribution center.

     Our executive offices in Fremont, California are housed in a 35,500 square foot facility that we own. This facility serves as an office and training facility. We also lease 21,052 square feet of additional office space in two other locations and 27,000 square feet of warehouse space in Richmond, California.

     K&G leases a 100,000 square foot facility in Atlanta, Georgia which serves as an office, distribution and store facility. Approximately 35,000 square feet of this facility is used as office space for financial, information

8

technology and merchandising personnel, 23,000 square feet is used as a distribution center for store fixtures and supplies and the remaining 42,000 square feet is used as a store.

     Moores leases a 37,700 square foot facility in Toronto, Ontario, comprised of approximately 17,900 square feet of office space and 19,800 square feet utilized for warehousing and distribution. Moores also leases a 48,930 square foot facility in Toronto that is utilized as its tuxedo distribution center. In January 2005, Moores purchased a building of approximately 131,000 square feet which will be utilized as its new tuxedo distribution center. The lease for the 48,930 square foot facility expires in early 2007. Negotiations for early termination of this lease or for the subletting of these premises are presently in progress. The new tuxedo distribution center is expected to be in operation by the end of the first quarter of fiscal 2005. In addition, Moores leases a 94,700 square foot warehouse and distribution center facility in Montreal, Quebec, and a 230,000 square foot facility in Montreal, Quebec, comprised of approximately 13,000 square feet of office space, 37,600 square feet of warehouse space and 179,400 square feet of manufacturing space.

     The lease for the 94,700 square foot warehouse and distribution center in Montreal will expire in early 2005. Moores will not renew this lease. Instead, in 2004, Moores purchased vacant land from the City of Montreal and constructed a 79,000 square foot facility on this land to function as its new warehouse and distribution center in Montreal, Quebec. This facility is comprised of 75,400 square feet of warehouse and distribution center operations and 3,600 square feet of office space. The newly constructed facility began operations in January 2005.

ITEM 3. LEGAL PROCEEDINGS

     On April 18, 2003, a lawsuit was filed against the Company in the Superior Court of California for the County of Orange, Case No. 03CC00132 (the “Orange County Suit”). The Orange County Suit was brought as a purported class action and alleges several causes of action, each based on the factual allegation that in the State of California the Company misclassified its managers and assistant managers as exempt from the application of certain California labor statutes. Because of this alleged misclassification, the Orange County Suit alleges that the Company failed to pay overtime compensation and provide the required rest periods to such employees. The Orange County Suit seeks, among other things, declaratory and injunctive relief along with an accounting as to alleged wages, premium pay, penalties, interest and restitution allegedly due the class defendants. We believe that the Orange County Suit will be resolved in 2005; however, no assurance can be given that the anticipated resolution will be realized. We do not believe the ultimate resolution of the Orange County Suit will have a material adverse effect on our financial position, results of operations or cash flows.

     On April 1, 2004, a lawsuit was filed against the Company in the Superior Court of California for the County of Los Angeles, Case No. BC313038 (the “PII Suit”). The PII Suit, which was brought as a purported class action, alleges two causes of action, each based on the factual allegation that the Company requests or requires, in conjunction with a customer’s use of his or her credit card, the customer to provide personal identification information which is recorded upon the credit card transaction form. The PII Suit seeks: (i) civil penalties pursuant to the California Civil Code; (ii) an order enjoining the Company from requesting or requiring that a customer provide personal identification information which is then recorded on the transaction form; (iii) permanent and preliminary injunctions against the Company requesting or requiring that a customer provide personal identification information which is then recorded on the transaction form; (iv) restitution of all funds allegedly acquired by means of any act or practice declared by the Court to be unlawful or fraudulent or to constitute a violation of the California Business and Professions Code; (v) attorney’s fees; and (vi) costs of suit. The Court has not yet decided whether the action may proceed as a class action. The Court has determined that the claim for restitution may not proceed. We have reached a tentative settlement; however, no assurance can be given that the Court will approve the settlement or that the anticipated resolution will be realized. We do not believe the ultimate resolution of the PII Suit will have a material adverse effect on our financial position, results of operations or cash flows.

     In addition, we are involved in various routine legal proceedings, including ongoing litigation, incidental to the conduct of our business. Management believes that none of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended January 29, 2005.

9

PART II

ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock is traded on the New York Stock Exchange under the symbol “MW.” The following table sets forth, on a per share basis for the periods indicated, the high and low sale prices per share for our common stock as reported by the New York Stock Exchange:

	High		Low
Fiscal Year 2003
First quarter ended May 3, 2003	$	17.05	$	11.76
Second quarter ended August 2, 2003		26.00		15.80
Third quarter ended November 1, 2003		30.90		23.95
Fourth quarter ended January 31, 2004		31.25		21.41
Fiscal Year 2004
First quarter ended May 1, 2004	$	28.14	$	22.83
Second quarter ended July 31, 2004		27.25		22.90
Third quarter ended October 30, 2004		31.94		24.88
Fourth quarter ended January 29, 2005		34.51		30.15

     On April 25, 2005, there were approximately 1,580 holders of record and approximately 18,300 beneficial holders of our common stock.

     We have not paid cash dividends on our common stock and we currently intend to retain all of our earnings for the future operation and expansion of our business. Our credit agreement prohibits the payment of cash dividends on our common stock (see Note 3 of Notes to Consolidated Financial Statements).

10

ITEM 6. SELECTED FINANCIAL DATA

     The following selected statement of earnings, balance sheet and cash flow information for the fiscal years indicated has been derived from our audited consolidated financial statements. The Selected Financial Data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and notes thereto. References herein to years are to the Company’s 52-week or 53-week fiscal year, which ends on the Saturday nearest January 31 in the following calendar year. For example, references to “2004” mean the fiscal year ended January 29, 2005. All fiscal years for which financial information is included herein had 52 weeks, except 2000 which had 53 weeks.

	2000 (5)			2001 (5)			2002 (5)			2003 (5)			2004
	(as restated-			(as restated-			(as restated-			(as restated-
	note 13)			note 13)			note 13)			note 13)
	(Dollars and shares in thousands, except
	per share and per square foot data)
Statement of Earnings Data:
Net sales	$	1,333,501		$	1,273,154		$	1,295,049		$	1,392,680		$	1,546,679
Gross margin		514,404			450,049			454,239			513,446			603,004
Operating income		140,896			72,779			69,300			81,783			118,088
Net earnings		84,505			42,628			42,355			49,734			71,356
Net earnings per share of common stock:
Basic	$	2.02		$	1.04		$	1.04		$	1.28		$	1.98
Diluted	$	1.99		$	1.03		$	1.04		$	1.27		$	1.94
Weighted average shares outstanding		41,769			40,997			40,590			38,789			36,029
Weighted average shares outstanding plus dilutive potential common shares		42,401			41,446			40,877			39,295			36,813
Operating Information:
Percentage increase/(decrease) in comparable US store sales (1)		3.3	%		(10.2	)%		(3.1	)%		6.1	%		7.3	%
Percentage increase/(decrease) in comparable Canadian store sales (1)		8.3	%		4.2	%		(2.1	)%		(5.1	)%		7.1	%
Average square footage — all stores (2)		6,520			7,046			7,174			7,411			7,497
Average sales per square foot of selling space (3)	$	406		$	336		$	319		$	338		$	368
Number of retail apparel stores (4) :
Open at beginning of the period		614			651			680			689			693
Opened		39			32			16			13			20
Acquired		1			¾			¾			¾			¾
Closed		(3	)		(3	)		(7	)		(9	)		(6	)
Open at end of the period		651			680			689			693			707
Cash Flow Information:
Capital expenditures	$	81,312		$	67,169		$	47,380		$	49,663		$	85,392
Depreciation and amortization		35,245			43,877			46,885			50,993			53,319
Purchase of treasury stock		7,871			30,409			28,058			109,186			11,186

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	February 3,		February 2,		February 1,		January 31,		January 29,
	2001 (5)		2002 (5)		2003 (5)		2004 (5)		2005
	(as restated-		(as restated-		(as restated-		(as restated-
	note 13)		note 13)		note 13)		note 13)
Balance Sheet Information:
Cash and cash equivalents	$	84,426	$	38,644	$	84,924	$	132,146	$	165,008
Working capital		317,923		303,539		326,060		357,045		388,229
Total assets		722,810		728,976		780,104		878,127		993,322
Long-term debt		42,645		37,740		38,709		131,000		130,000
Shareholders’ equity		490,521		504,809		526,585		487,792		568,848

(1)	Comparable store sales data is calculated by excluding the net sales of a store for any month of one period if the store was not open throughout the same month of the prior period. Fiscal year 2000 is calculated on a 52-week basis.
(2)	Average square footage — all stores is calculated by dividing the total square footage for all stores open at the end of the period by the number of stores open at the end of such period.
(3)	Average sales per square foot of selling space is calculated by dividing total selling square footage for all stores open the entire year into total sales for those stores.
(4)	Retail apparel stores include stores operating under our Men’s Wearhouse, K&G and Moores brands.
(5)	Fiscal years 2002 and 2003 have been restated to reflect certain lease accounting adjustments as discussed in Note 13 of Notes to Consolidated Financial Statements. Conforming adjustments have been made to fiscal years 2000 and 2001.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Restatement of Financial Statements

     Management’s Discussion and Analysis of Financial Condition and Results of Operations as presented herein gives effect to the restatement of our consolidated financial statements for fiscal 2002 and 2003 for certain lease accounting adjustments. See Note 13 of Notes to Consolidated Financial Statements for a description of the adjustments.

General

     The Men’s Wearhouse opened its first store in Houston, Texas in August 1973, and we are now one of the largest specialty retailers of men’s suits in the United States and Canada. At January 29, 2005, we operated 707 retail apparel stores with 593 stores in the United States and 114 stores in Canada. Our U.S. stores are primarily operated under the brand names of Men’s Wearhouse (517 stores) and K&G (76 stores) in 44 states and the District of Columbia. Our Canadian stores are operated under the brand name of Moores Clothing for Men in ten provinces. For 2004, we had revenues of $1.547 billion and net earnings of $71.4 million, compared to revenues of $1.393 billion and net earnings of $49.7 million in 2003 and revenues of $1.295 billion and net earnings of $42.4 million in 2002. The more significant factors impacting these results are addressed in the “Results of Operations” discussion below.

     Under the Men’s Wearhouse and Moores brands, which contributed approximately 80% of our revenues, we target middle and upper-middle income men by offering quality merchandise at everyday low prices. Because we concentrate on men’s “wear-to-work” business attire which is characterized by infrequent and more predictable fashion changes, we believe we are not as exposed to trends typical of more fashion-forward apparel retailers, where significant markdowns and promotional pricing are more common. In addition, because this inventory mix includes “business casual” merchandise, we are able to meet demand for such products resulting from the trend over the past decade toward more relaxed dress codes in the workplace. We also strive to provide a superior level of customer service by training our sales personnel as clothing consultants and offering on-site tailoring services in each of our stores. We believe that the quality, value, selection and service we provide to our Men’s Wearhouse and Moores customers have been significant factors in enabling us to consistently gain market share within both the U.S. and Canadian markets for men’s tailored apparel. In addition, we have expanded our customer base and leveraged our existing infrastructure by completing the rollout of our tuxedo rental program to nearly all of our Men’s Wearhouse stores in early 2002 and to all of our Moores stores during the first quarter of fiscal 2004. As a percentage of total revenues, tuxedo rentals have grown from 2.5% in 2002 to 3.7% in 2003 and 5.0% in 2004. These revenues are expected to continue to increase in 2005 as the program continues to mature.

     Under the K&G brand, we target the more price sensitive customer with a value-oriented superstore approach. K&G’s merchandising strategy emphasizes broad assortments of men’s apparel across all major categories, including tailored clothing, casual sportswear, dress furnishings, footwear and accessories. In addition, 43 of the 76 K&G stores operating at January 29, 2005 offer ladies’ career apparel that is also targeted to the more price sensitive customer. Although K&G employees assist customers with merchandise selection, including correct sizing, the stores are designed to allow customers to select and purchase apparel by themselves. Each store also provides on-site tailoring services.

     Like most retailers, our business is subject to seasonal fluctuations. In most years, more than 30% of our net sales and more than 40% of our net earnings have been generated during the fourth quarter of each year. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full year.

     We opened 16 stores in 2002, 13 stores in 2003 and 20 stores in 2004 under our Men’s Wearhouse, K&G and Moores brands. Expansion is generally continued within a market as long as management believes it will provide profitable incremental sales volume. In 2005, we plan to open approximately 15 new Men’s Wearhouse stores, six new K&G stores and two new Moores stores and to expand and/or relocate approximately 24 existing Men’s Wearhouse stores, six existing K&G stores and eight existing Moores stores. The average cost (excluding telecommunications and point-of-sale equipment and inventory) of opening a new store is expected to be approximately $0.4 million in 2005. Although we believe that our ability to increase the number of Men’s Wearhouse stores in the U.S. above 550 will be limited, we believe that additional growth opportunities exist through improving and diversifying the merchandise mix, relocating stores, expanding our K&G brand and adding complementary products and services.

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     We have closed 22 stores in the three years ended January 29, 2005. Generally, in determining whether to close a store, we consider the store’s historical and projected performance and the continued desirability of the store’s location. In determining store contribution, we consider net sales, cost of sales and other direct store costs, but exclude buying costs, corporate overhead, depreciation and amortization, financing costs and advertising. Store performance is continually monitored and, occasionally, as regions and shopping areas change, we may determine that it is in our best interest to close or relocate a store. In 2002, five stores were closed due to substandard performance or lease expiration and two stores were closed when their operations were combined with other existing area stores. In 2003, nine stores were closed due to substandard performance. In 2004, six stores were closed due to substandard performance or lease expiration. We plan to close two stores in 2005.

     During 2004, we opened six new casual clothing/sportswear concept stores in order to test an expanded, more fashion-oriented merchandise concept for men and women. In March 2005, it was determined that no further investments would be made into these stores and that the six stores operating at January 29, 2005 will be wound down over the course of fiscal 2005.

Critical Accounting Policies

     The preparation of our consolidated financial statements requires the appropriate application of accounting policies in accordance with generally accepted accounting principles. In many instances, this also requires management to make estimates and assumptions about future events that affect the amounts and disclosures included in our financial statements. We base our estimates on historical experience and various assumptions that we believe are reasonable under the circumstances. However, since future events and conditions and their effects cannot be determined with certainty, actual results will differ from our estimates and such differences could be material to our financial statements.

     Our accounting policies are described in Note 1 of Notes to Consolidated Financial Statements. We consistently apply these policies and periodically evaluate the reasonableness of our estimates in light of actual events. Historically, we have found our critical accounting policies to be appropriate and our estimates and assumptions reasonable. We believe our critical accounting policies and our most significant estimates are those that relate to inventories and long-lived assets, including goodwill, our estimated liabilities for the self-insured portions of our workers’ compensation and employee health benefit costs and our income taxes.

     Our inventory is carried at the lower of cost or market. Cost is determined on the average cost method for approximately 78% of our inventory and on the retail inventory method for the remaining 22%. Our inventory cost also includes estimated procurement and distribution costs (warehousing, freight, hangers and merchandising costs) associated with the inventory, with the balance of such costs included in cost of sales. We make assumptions, based primarily on historical experience, as to items in our inventory that may be damaged, obsolete or salable only at marked down prices and reduce the cost of inventory to reflect the market value of these items. If actual damages, obsolescence or market demand is significantly different from our estimates, additional inventory write-downs could be required. In addition, procurement and distribution costs are allocated to inventory based on the ratio of annual product purchases to average inventory cost. If this ratio were to change significantly, it could materially affect the amount of procurement and distribution costs included in cost of sales.

     We make judgments about the carrying value of long-lived assets, such as property and equipment and amortizable intangibles, and the recoverability of goodwill whenever events or changes in circumstances indicate that an other-than-temporary impairment in the remaining value of the assets recorded on our balance sheet may exist. We test goodwill for impairment annually in the fourth quarter of each year or more frequently if circumstances dictate. To estimate the fair value of long-lived assets, including goodwill, we make various assumptions about the future prospects for the brand that the asset relates to and typically estimate future cash flows to be generated by these brands. Based on these assumptions and estimates, we determine whether we need to take an impairment charge to reduce the value of the asset stated on our balance sheet to reflect its estimated fair value. Assumptions and estimates about future values and remaining useful lives are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results. In 2003 and 2004 respectively, we recorded pretax impairment charges of $2.5 million and $2.2 million, respectively, related to certain technology assets.

     We self-insure portions of our workers’ compensation and employee medical costs. We estimate our liability for future payments under these programs based on historical experience and various assumptions as to participating

14

employees, health care costs, number of claims and other factors, including industry trends and information provided to us by our insurance broker. We also use actuarial estimates with respect to workers’ compensation. If the number of claims or the costs associated with those claims were to increase significantly over our estimates, additional charges to earnings could be necessary to cover required payments.

     Significant judgment is required in determining the provision for income taxes and the related taxes payable and deferred tax assets and liabilities since, in the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, our tax returns are subject to audit by various domestic and foreign tax authorities that could result in material adjustments or differing interpretations of the tax laws. Although we believe that our estimates are reasonable and are based on the best available information at the time that we prepare the provision, actual results could differ from these estimates resulting in a final tax outcome that may be materially different from that which is reflected in our consolidated financial statements.

Results of Operations

     The following table sets forth the Company’s results of operations expressed as a percentage of net sales for the periods indicated:

	Fiscal Year
	2002			2003			2004
Net sales		100.0	%		100.0	%		100.0	%
Cost of goods sold, including buying, distribution and occupancy costs		64.9			63.1			61.0
Gross margin		35.1			36.9			39.0
Selling, general and administrative expenses		29.7			31.0			31.4
Operating income		5.4			5.9			7.6
Interest income		(0.1	)		(0.1	)		(0.1	)
Interest expense		0.2			0.3			0.4
Earnings before income taxes		5.3			5.7			7.3
Provision for income taxes		2.0			2.1			2.7
Net earnings		3.3	%		3.6	%		4.6	%

2004 Compared with 2003

     The following table presents a breakdown of 2003 and 2004 net sales of the Company from stores open in each of these periods (in millions):

	Net Sales
					Increase/
Stores	2003		2004		(Decrease)
Stores opened in 2004	$	—	$	18.3	$	18.3
Stores opened in 2003		12.0		34.9		22.9
Stores opened before 2003		1,376.7		1,479.6		102.9
		1,388.7		1,532.8		144.1
Other		4.0		13.9		9.9
Total	$	1,392.7	$	1,546.7	$	154.0

     The Company’s net sales increased $154.0 million, or 11.1%, to $1.547 billion for 2004 due mainly to a $117.7 million increase in clothing and alteration sales and an $26.5 million increase in tuxedo rental revenues. Our U.S. comparable store sales (which are calculated by excluding the net sales of a store for any month of one period if the store was not open throughout the same month of the prior period) increased 7.3% due mainly to increased store traffic levels at our traditional Men’s Wearhouse stores and at our K&G stores where the hours of operation were extended from four days to seven days a week beginning September 1, 2004. We also experienced a strong response from customers during the third quarter of 2004 due to the expansion of our Men’s Wearhouse customer loyalty program. At our core Men’s Wearhouse brand, a 5.5% increase in unit suit sales helped drive increases in other product categories as well as in alteration sales. In addition, our U.S. tuxedo rental business continued to grow with a 40.9% increase in tuxedo rental revenues. In Canada, comparable store sales increased 7.1% as a result of improved unit suit sales and the rollout of the tuxedo rental business to all Moores stores at the beginning of this fiscal year. Combined U.S. and Canadian tuxedo rental revenues increased from 3.7% of total revenues in 2003 to 5.0% of total revenues in 2004.

15

     Gross margin increased $89.6 million, or 17.4%, to $603.0 million in 2004. As a percentage of sales, gross margin increased from 36.9% in 2003 to 39.0% in 2004. This increase in gross margin percentage resulted mainly from continued growth in our tuxedo rental business, which carries a significantly higher incremental gross margin impact than our clothing sales, and from higher cumulative mark-ups that produced higher clothing product margins. The gross margin percentage was also increased as occupancy cost, which is relatively constant on a per store basis and includes store related rent, common area maintenance, utilities, repairs and maintenance, security, property taxes and depreciation, decreased modestly as a percentage of sales from 2003 to 2004. However, on an absolute dollar basis, occupancy costs increased by 6.7% from 2003 to 2004 due mainly to higher rent expense from our increased store count and renewals of existing leases at higher rates and increased depreciation.

     Selling, general and administrative (“SG&A”) expenses, as a percentage of sales, were 31.4% in 2004 compared to 31.0% in 2003, with SG&A expenditures increasing by $53.3 million or 12.3% to $484.9 million. On an absolute dollar basis, advertising decreased by $2.4 million, store salaries increased by $27.1 million and other SG&A increased by $28.6 million. As a percentage of sales, advertising expense decreased from 4.5% to 3.9%, store salaries increased from 12.3% to 12.8% and other SG&A expenses increased from 14.2% to 14.7%. On an absolute dollar basis, the principal components of SG&A expenses increased primarily due to (i) increased commissions due to higher sales, (ii) increased store salaries, benefits and other costs associated with store personnel additions for tuxedo rental operations, (iii) increased travel and training expenses related to incremental training for new and existing store personnel, (iv) increased legal costs related to various matters being litigated, (v) consulting costs associated with ongoing Sarbanes Oxley Section 404 compliance efforts and (vi) recognition of a $2.2 million pretax impairment charge related to certain technology assets. SG&A expenses were reduced in 2003 by the recognition of a $4.4 million deferred pretax gain from the sale in March 2002 of certain technology assets to an unrelated company regularly engaged in the development and licensing of software to the retail industry. However, the gain recognized in 2003 was more than offset by $2.9 million in costs related to store closures, $2.5 million in costs related to the write-off of certain technology assets and $3.7 million in litigation costs related to certain California lawsuits.

     Interest expense increased from $4.0 million in 2003 to $5.9 million in 2004 while interest income remained at $1.5 million. Weighted average borrowings outstanding increased from $70.0 million in the prior year to $130.9 million in 2004, and the weighted average interest rate on outstanding indebtedness decreased from 4.6% to 3.6%. The increase in the weighted average borrowings was due primarily to the issuance of $130.0 million of 3.125% Notes in a private placement on October 21, 2003. A portion of the proceeds from the Notes was used to repay outstanding indebtedness. The decrease in the weighted average interest rate was due primarily to the lower interest rate on the Notes. See further discussion of the Notes in Note 3 of Notes to Consolidated Financial Statements and “Liquidity and Capital Resources” herein.

     Our effective income tax rate was 37.3% for each of the years ended January 29, 2005 and January 31, 2004. The effective tax rate was higher than the statutory U.S. federal rate of 35% primarily due to the effect of state income taxes.

     These factors resulted in 2004 net earnings of $71.4 million or 4.6% of net sales, compared with 2003 net earnings of $49.7 million or 3.6% of net sales.

2003 Compared with 2002

     The following table presents a breakdown of 2002 and 2003 net sales of the Company from stores open in each of these periods (in millions):

	Net Sales
					Increase/
Stores	2002		2003		(Decrease)
Stores opened in 2003	$	—	$	12.0	$	12.0
Stores opened in 2002		24.6		36.1		11.5
Stores opened before 2002		1,266.9		1,340.6		73.7
		1,291.5		1,388.7		97.2
Other		3.5		4.0		0.5
Total	$	1,295.0	$	1,392.7	$	97.7

     The Company’s net sales increased $97.7 million, or 7.5%, to $1.393 billion for 2003 due mainly to a $78.8 million increase in clothing and alteration sales and an $18.3 million increase in tuxedo rental revenues. Our U.S. comparable store sales increased 6.1% as improvement was experienced in nearly all product categories. At our core

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Men’s Wearhouse brand, a 14.9% increase in unit suit sales helped drive increases in other product categories as well as in alteration sales. In addition, our tuxedo rental business continued to grow following its rollout to nearly all of the Men’s Wearhouse stores in early 2002 with tuxedo rental revenues increasing from 2.5% of total net sales in 2002 to 3.7% in 2003. Store traffic also increased, not only from our tuxedo rental customers, but also from efforts started in 2002 to increase our mix of opening price point product and to increase our penetration into the traditional clothing market. In Canada, comparable store sales for 2003 decreased 5.1% from 2002 due mainly to unusually severe and extended winter weather conditions during the first quarter, a shorter summer sale period during the second quarter and softer demand overall in the Canadian men’s apparel market experienced throughout 2003. However, this decrease was more than offset by the foreign currency exchange rate translation effect from the strengthening of the Canadian dollar.

     Gross margin increased $59.2 million, or 13.0%, to $513.4 million in 2003. As a percentage of sales, gross margin increased from 35.1% in 2002 to 36.9% in 2003. This increase in gross margin percentage resulted mainly from continued growth in our tuxedo rental business, which carries a significantly higher incremental gross margin impact than our clothing sales, and from higher cumulative mark-ups that produced higher clothing product margins. The gross margin percentage was also increased as occupancy cost, which is relatively constant on a per store basis and includes store related rent, common area maintenance, utilities, repairs and maintenance, security, property taxes and depreciation, decreased modestly as a percentage of sales from 2002 to 2003. However, on an absolute dollar basis, occupancy costs increased by 5.3% from 2002 to 2003 due mainly to higher rent expense from our increased store count and renewals of existing leases at higher rates and increased depreciation.

     Selling, general and administrative (“SG&A”) expenses, as a percentage of sales, were 31.0% in 2003 compared to 29.7% in 2002, with SG&A expenditures increasing by $46.7 million or 12.1% to $431.7 million. On an absolute dollar basis, advertising increased by $2.8 million, store salaries increased by $15.3 million and other SG&A increased by $28.6 million. As a percentage of sales, advertising expense decreased from 4.6% to 4.5%, store salaries increased from 12.1% to 12.3% and other SG&A expenses increased from 13.0% to 14.2%. On an absolute dollar basis, the principal components of SG&A expenses increased primarily due to (i) the elimination of media spending reductions imposed in 2002, (ii) increased commissions and bonuses due to higher sales, (iii) increased store and warehouse salaries, benefits and other costs associated with a 47% increase in unit tuxedo rentals, (iv) increased non-store salaries, benefits and other costs related to our expansion strategies and (v) higher insurance costs. SG&A expenses were reduced by the recognition of a $4.4 million deferred pretax gain from the sale, in March 2002, of certain technology assets to an unrelated company regularly engaged in the development and licensing of software to the retail industry (see “Other Matters” herein). However, the gain recognized in 2003 was more than offset by $2.9 million in costs related to store closures, $2.5 million in costs related to the write-off of certain technology assets and $3.7 million in litigation costs related to certain California lawsuits.

     Interest expense, net of interest income, increased from $1.3 million in 2002 to $2.5 million in 2003. Weighted average borrowings outstanding increased $30.2 million from the prior year to $70.0 million in 2003, and the weighted average interest rate on outstanding indebtedness decreased from 4.9% to 4.6%. The increase in the weighted average borrowings was due primarily to the issuance of $130.0 million of 3.125% Notes in a private placement on October 21, 2003. A portion of the proceeds from the Notes was used to repay the balance outstanding on our Canadian credit facility. The decrease in the weighted average interest rate was due primarily to the lower interest rate on the Notes. Interest expense was offset by interest income from the investment of excess cash of $1.0 million in 2002 and $1.5 million in 2003. See further discussion of the Notes in Note 3 of Notes to Consolidated Financial Statements and “Liquidity and Capital Resources” herein.

     Our effective income tax rate for the year ended January 31, 2004 was 37.3% compared to 37.7% for the prior year. The effective tax rate was higher than the statutory federal rate of 35% primarily due to the effect of state income taxes.

     These factors resulted in 2003 net earnings of $49.7 million or 3.6% of net sales, compared with 2002 net earnings of $42.4 million or 3.3% of net sales.

Liquidity and Capital Resources

     In January 2003, we replaced an existing $125.0 million revolving credit facility which was scheduled to mature in February 2004 with a new revolving credit agreement with a group of banks (the “Credit Agreement”) that provides for borrowing of up to $100.0 million through February 4, 2006. In July 2004, we amended the Credit Agreement to extend the maturity date to July 7, 2009. The Credit Agreement is secured by substantially all of the stock of the subsidiaries of The Men’s Wearhouse, Inc. Advances under the Credit Agreement bear interest at a rate

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per annum equal to, at our option, the agent’s prime rate or the reserve adjusted LIBOR rate plus a varying interest rate margin up to 2.25%. The Credit Agreement also provides for fees applicable to unused commitments ranging from 0.275% to 0.500%. As of January 29, 2005, there were no borrowings outstanding under the Credit Agreement.

     The Credit Agreement contains certain restrictive and financial covenants, including the requirement to maintain a minimum level of net worth and certain financial ratios. The Credit Agreement also prohibits payment of cash dividends on our common stock. We were in compliance with the covenants in the Credit Agreement as of January 29, 2005.

     On October 21, 2003, we issued $130.0 million of 3.125% Notes in a private placement. A portion of the net proceeds from the Notes was used to repay outstanding indebtedness and to repurchase shares of our common stock under the program authorized by the Board in September 2003 (see below); the balance is reserved for general corporate purposes, which may include additional purchases of our common stock under our share repurchase program. Interest on the Notes is payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2004. The Notes will mature on October 15, 2023. However, holders may require us to purchase all or part of the Notes, for cash, at a purchase price of 100% of the principal amount per Note plus accrued and unpaid interest on October 15, 2008, October 15, 2013 and October 15, 2018 or upon a designated event. Beginning on October 15, 2008, we will pay additional contingent interest on the Notes if the average trading price of the Notes is above a specified level during a specified period. In addition, we may redeem all or a portion of the Notes on or after October 20, 2008, at 100% of the principal amount of the Notes plus any accrued and unpaid interest, contingent interest and additional amounts, if any. We also have the right to redeem the Notes between October 20, 2006 and October 19, 2008 if the price of our common stock reaches certain levels.

     During certain periods, the Notes are convertible by holders into shares of our common stock initially at a conversion rate of 23.3187 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of $42.88 per share of common stock (subject to adjustment in certain events), under the following circumstances: (1) if the closing sale price of our common stock issuable upon conversion exceeds 120% of the conversion price under specified conditions; (2) if we call the Notes for redemption; or (3) upon the occurrence of specified corporate transactions. Upon conversion of the Notes, in lieu of delivering common stock we may, at our election, deliver cash or a combination of cash and common stock. However, on January 28, 2005, we entered into a supplemental indenture relating to the Notes and irrevocably elected to settle the principal amount at issuance of such Notes in 100% cash when they become convertible and are surrendered by the holders thereof. The Notes are general senior unsecured obligations, ranking on parity in right of payment with all our existing and future unsecured senior indebtedness and our other general unsecured obligations, and senior in right of payment with all our future subordinated indebtedness. The Notes are effectively subordinated to all of our senior secured indebtedness and all indebtedness and liabilities of our subsidiaries.

     In December 2003, we acquired the assets and operating leases for 13 retail dry cleaning and laundry facilities and issued a note payable for $1.0 million as partial consideration. The unsecured note payable, with interest at 4%, was paid in full in January 2005.

     We utilize letters of credit primarily for inventory purchases. At January 29, 2005, letters of credit totaling approximately $14.5 million were issued and outstanding.

     Our primary sources of working capital are cash flow from operations and borrowings under the Credit Agreement. We had working capital of $326.1 million, $357.0 million and $388.2 million at the end of 2002, 2003 and 2004, respectively. Historically, our working capital has been at its lowest level in January and February, and has increased through November as inventory buildup occurs in preparation for the fourth quarter selling season. Working capital at the end of fiscal year 2004 is higher than fiscal year 2002 and 2003 due mainly to our increased inventory levels and cash balances.

     Our operating activities provided net cash of $115.0 million in 2002, $119.7 million in 2003 and $130.0 million in 2004 mainly because cash provided by net earnings, as adjusted for non-cash charges, and increases in payables and accrued expenses more than offset cash used for other assets, inventories (2003 and 2004) and decreases in income taxes payable (2002 and 2004). Inventory decreased $17.3 million in 2002. A modest increase in net sales in 2002, combined with our high inventory levels at the end of 2001 and a modification to our inventory mix at our Men’s Wearhouse stores to increase our offering of opening price point product, resulted in lower planned inventory purchases through most of 2002. However, our buying patterns normalized in the last quarter of 2002 and resulted in an increase of $19.6 million in accounts payable and accrued expenses for the year. In 2003 and 2004, inventories

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increased $21.6 million and $13.7 million, respectively, as sales increased and we continued our normal buying patterns. The increase in accounts payable and accrued expenses of $35.5 million and $28.1 million in 2003 and 2004, respectively, was due to the increased inventories as well as higher bonuses earned as a result of increased sales and, in 2003, higher insurance costs. In 2004, the increase in accounts payable and accrued expenses was also due to the expansion of our Men’s Wearhouse customer loyalty program and increased customer purchases of gift cards. Other assets increased in each of the years primarily due to increased investment in tuxedo rental product. Income taxes payable decreased in 2002 mainly due to a lower effective tax rate associated with the mix of federal and state earnings in 2002; the increase in income taxes payable in 2003 resulted from increased earnings and the timing of tax payments, offset in part by a further reduction in the effective tax rate. The decrease in income taxes payable in 2004 was due primarily to increased estimated tax payments made during the year due to increased earnings and the timing of previous tax payments.

     Our investing activities used net cash of $43.2 million, $55.8 million and $96.9 million in 2002, 2003 and 2004, respectively, due mainly to capital expenditures of $47.4 million, $49.7 million and $85.4 million in 2002, 2003 and 2004, respectively. Our capital expenditures relate to costs incurred for stores opened, remodeled or relocated during the year or under construction at the end of the year, distribution facility additions and infrastructure technology investments as detailed below. However, during 2002, cash used for capital expenditures was partially offset by $6.8 million of net proceeds received from the sale of certain technology assets to an unrelated company regularly engaged in the development and licensing of software to the retail industry. Approximately $4.4 million of this amount was recognized as a pretax operating gain by the Company in the first quarter of 2003 (see “Other Matters” herein). In 2003 and 2004, our cash used by investing activities also included $4.5 million and $11.0 million, respectively, for net assets acquired for 13 and 11, respectively, retail dry cleaning and laundry facilities operating in the Houston, Texas area.

     The following table details our capital expenditures (in millions):

	2002		2003		2004
New store construction	$	6.2	$	8.1	$	14.3
Relocation and remodeling of existing stores		25.1		15.8		18.9
Information technology		8.4		11.5		10.7
Distribution facilities		3.4		12.2		30.5
Other		4.3		2.1		11.0
Total	$	47.4	$	49.7	$	85.4

     Property additions relating to new retail apparel stores include stores in various stages of completion at the end of the fiscal year (no stores at the end of 2002, eight stores at the end of 2003 and eight stores at the end of 2004). Our expenditures for the relocation and remodeling of existing retail apparel stores continue to be substantial as we have opened fewer new stores. Capital expenditures in 2004 also include approximately $10.0 million for the centralization of our warehouse and distribution program for K&G in Houston, Texas and approximately $13.0 million related to our Canadian operations for the new tuxedo distribution center in Toronto, Ontario and for the construction of a new warehouse and distribution center in Montreal, Quebec.

     We used net cash in financing activities of $26.6 million in 2002 mainly for net payments of long-term debt and purchases of treasury stock. In 2003, net cash used in financing activities was $19.7 million due mainly to proceeds received from the issuance of the Notes in October 2003 and proceeds from the issuance of our common stock for options exercised, offset by purchases of treasury stock and the repayment of outstanding indebtedness. The treasury stock purchases were made under stock repurchase programs authorized by our Board of Directors in January 2000, January 2001, November 2002 and September 2003. Under the first three authorized programs, we repurchased 1,480,000 and 1,057,100 shares of our common stock during 2002 and 2003, respectively, at a cost of $28.1 million and $24.1 million, respectively. The average price per share of our common stock repurchased under these programs was $18.96 and $22.80 during 2002 and 2003, respectively. In September 2003, the Board of Directors authorized a program for the repurchase of up to $100.0 million of Company common stock in the open market or in private transactions. This authorization superceded the approximately $1 million we had remaining under the Board’s November 2002 authorization. As of January 31, 2004, we had repurchased under this program 1,405,400 shares at a cost of $42.4 million in private transactions and 1,713,400 shares at a cost of $42.6 million in open market transactions. Under all authorized programs during fiscal 2003, we repurchased 4,175,900 shares of our common stock at a cost of $109.2 million with an average repurchase price of $26.15 per share. As of January 29, 2005, we had repurchased under the September 2003 program 1,405,400 shares at a cost of $42.4 million in private transactions and 2,036,400 shares at a cost of $51.4 million in open market transactions, for a total of 3,441,800 shares at an average price per share of $27.25.

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     In 2004, net cash used in financing activities was $1.6 million due mainly to proceeds from the issuance of our common stock for options exercised, offset by purchases of treasury stock. In June 2004, the Board of Directors authorized a program for the repurchase of up to $50.0 million of our common stock in the open market or in private transactions. This authorization superceded the approximately $6.2 million we had remaining under the September 2003 authorization. As of January 29, 2005, a total of 99,400 shares at a cost of $2.5 million were repurchased in open market transactions under this program at an average price per share of $24.99. During fiscal 2004, a total of 422,400 shares at a cost of $11.2 million were repurchased in open market transactions under all authorized stock repurchase programs at an average price per share of $26.48.

     In connection with our share repurchase programs, we from time to time issued put option contracts and received premiums for doing so, with the premiums being added to our capital in excess of par and effectively reducing the cost of our share repurchases. Under these contracts, the contract counterparties had the option to require us to purchase a specific number of shares of our common stock at specific strike prices per share on specific dates. During 2002, we issued a put contract for 500,000 shares and received a premium of $0.6 million for issuing this contract. The contract counterparty had the option to exercise this contract at a strike price of $22.76 per share on December 17, 2002, but contract completion was required earlier if the market price of our common stock fell below a trigger price of $12.64 per share. During the third quarter of 2002, the market price of our common stock fell below the trigger price and we settled the contract by repurchasing the 500,000 shares at $22.76 per share or $11.4 million; we recorded the shares purchased as treasury stock. We were not obligated to issue any shares under the put contract nor were we obligated to settle in cash.

     Our primary cash requirements are to finance working capital increases as well as to fund capital expenditure requirements which are anticipated to be approximately $60.0 million for 2005. This amount includes the anticipated costs of opening approximately 15 new Men’s Wearhouse stores, six new K&G stores and two Moores stores in 2005 at an expected average cost per store of approximately $0.4 million (excluding telecommunications and point-of-sale equipment and inventory). It also includes approximately $7.0 million for continued development of our distribution facilities in Houston for our K&G brand and future business models. The balance of the capital expenditures for 2005 will be used for telecommunications, point-of-sale and other computer equipment and systems, store relocations, remodeling and expansion and investment in complimentary services and concepts. The Company anticipates that each of the 15 new Men’s Wearhouse stores, each of the six new K&G stores and each of the two Moores stores will require, on average, an initial inventory costing approximately $0.3 million, $1.4 million and $0.5 million, respectively (subject to the seasonal patterns that affect inventory at all stores), which will be funded by our revolving credit facility, trade credit and cash from operations. The actual amount of future capital expenditures and inventory purchases will depend in part on the number of new stores opened and the terms on which new stores are leased. Additionally, the continuing consolidation of the men’s tailored clothing industry may present us with opportunities to acquire retail chains significantly larger than our past acquisitions. Any such acquisitions may be undertaken as an alternative to opening new stores. We may use cash on hand, together with cash flow from operations, borrowings under our revolving credit facility and issuances of equity securities, to take advantage of significant acquisition opportunities.

     On August 16, 2004, we purchased a store (land and building, which we had been leasing) in Dallas, Texas for $1.0 million from 8239 Preston Road, Inc., a Texas corporation of which George Zimmer, Chairman of the Board and CEO of the Company, James E. Zimmer, Senior Vice President-Merchandising of the Company, and Richard Goldman, a former officer and director of the Company, each owned 20% of the outstanding common stock, and Laurie Zimmer, sister of George and James E. Zimmer, owned 40% of the outstanding common stock.

     On August 20, 2004, we purchased a 1980 Gulfstream III aircraft from Regal Aviation L.L.C. (“Regal Aviation”) for $5.0 million. Regal Aviation operates a private air charter service and is a limited liability company of which George Zimmer owns 99%. In addition, on August 20, 2004, we entered into a leasing arrangement with Regal Aviation under which Regal Aviation will operate, manage and market the aircraft as well as provide the appropriate flight personnel and services. The aircraft will be utilized to provide air transportation from time to time for employees of the Company as well as be leased to third parties for charter.

     On October 15, 2004, we purchased, a warehouse facility located in Houston, Texas (the “Facility”) from Zig Zag for $0.7 million. Zig Zag is a Texas joint venture, in which Richard E. Goldman, George Zimmer and James E. Zimmer were the sole and equal joint venturers. Prior to the purchase of the Facility, we leased the Facility from Zig Zag.

     Based on the results of recent appraisals and review of the terms of other Regal Aviation leasing arrangements with unrelated third parties, we believe that the terms of the aircraft purchase and leasing agreements and the terms

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of the store purchase and the Facility purchase are comparable to what would have been available to us from unaffiliated third parties at the time such agreements were entered into.

     We anticipate that our existing cash and cash flow from operations, supplemented by borrowings under our various credit agreements, will be sufficient to fund planned store openings, other capital expenditures and operating cash requirements for at least the next 12 months.

     As substantially all of our cash is held by three financial institutions, we are exposed to risk of loss in the event of failure of any of these parties. However, due to the creditworthiness of these three financial institutions, we anticipate full performance and access to our deposits and liquid investments.

     In connection with our direct sourcing program, we may enter into purchase commitments that are denominated in a foreign currency (primarily the Euro). We generally enter into forward exchange contracts to reduce the risk of currency fluctuations related to such commitments. As these forward exchange contracts are with one financial institution, we are exposed to credit risk in the event of nonperformance by this party. However, due to the creditworthiness of this major financial institution, full performance is anticipated. We may also be exposed to market risk as a result of changes in foreign exchange rates. This market risk should be substantially offset by changes in the valuation of the underlying transactions.

Contractual Obligations

     As of January 29, 2005, the Company is obligated to make cash payments in connection with its long-term debt, noncancelable capital and operating leases and purchase obligations in the amounts listed below. In addition, we utilize letters of credit primarily for inventory purchases. At January 29, 2005, letters of credit totaling approximately $14.5 million were issued and outstanding.

	Payments Due by Period
			<1		1-3		3-5		> 5
(In millions)	Total		Year		Years		Years		Years
Contractual obligations
Long-term debt (a)	$	130.0	$	—	$	—	$	—	$	130.0
Capital lease obligations (b)		2.4		0.7		0.9		0.4		0.4
Operating lease base rentals (b)		461.0		95.4		155.1		110.0		100.5
Purchase obligations (c)		9.0		9.0		—		—		—
Total contractual obligations	$	602.4	$	105.1	$	156.0	$	110.4	$	230.9

(a)   Long-term debt includes our $130.0 million of 3.125% convertible senior notes issued in October 2003. Fixed interest due on these notes is $4.1 million, annually. These borrowings are further described in Note 1 and Note 3 of Notes to Consolidated Financial Statements. The table assumes our long-term debt is held to maturity.

(b)   We lease retail business locations, office and warehouse facilities, copier equipment and automotive equipment under various noncancelable capital and operating leases. Leases on retail business locations specify minimum base rentals plus common area maintenance charges and possible additional rentals based upon percentages of sales. Most of the retail business location leases provide for renewal options at rates specified in the leases. Our future lease obligations would change if we exercised these renewal options and if we entered into additional lease agreements. See Note 10 of Notes to Consolidated Financial Statements for more information.

(c)   Included in purchase obligations are our forward exchange contracts. At January 29, 2005, we had 24 contracts maturing in varying increments to purchase an aggregate notional amount of $9.0 million in foreign currency, maturing at various dates through December 2005. See Note 8 of Notes to Consolidated Financial Statements for more information.

Off-Balance Sheet Arrangements

     Other than the noncancelable operating leases, forward exchange contracts and letters of credit discussed above, the Company does not have any off-balance sheet arrangements that are material to its financial position or results of operations.

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Other Matters

     In January 2000, we formed Chelsea Market Systems, L.L.C. (“Chelsea”), a joint venture company, for the purpose of developing a new point-of-sale software system for the Company and after successful implementation, exploring the possibility of marketing the system to third parties. Under the terms of the agreement forming Chelsea, we owned 50% of Chelsea and Harry M. Levy, a former director and officer, owned 50% with the understanding that Mr. Levy could assign, either directly or indirectly, some of his interest in Chelsea to other persons involved in the project. The point-of-sale system was developed and successfully deployed by the Company during 2000 and 2001. From January 2000 though March 2002, we funded and recognized as expense all of the operating costs of Chelsea, which aggregated $4.5 million. On March 31, 2002, Chelsea sold substantially all of its assets, primarily certain technology assets, to an unrelated company regularly engaged in the development and licensing of software to the retail industry. As a result of the sale by Chelsea, the Company received a net amount of $6.8 million. Approximately $4.4 million of this amount was recognized as a pretax operating gain by the Company in the first quarter of 2003. However, the gain recognized was more than offset by $2.9 million in costs related to store closures, $2.5 million in costs related to the write-off of certain technology assets and $3.7 million in litigation costs related to certain California lawsuits.

Impact of Recently Issued Accounting Pronouncements

     In November 2004, the FASB issued Statement of Financial Accounting Standards No. - “Inventory Costs - an Amendment of Accounting Research Bulletin (“ARB”) No. 43, Chapter 4” (“SFAS No. 151”). SFAS No. 151 amends ARB No. 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be recognized as current period charges. It also requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. We do not expect the adoption of SFAS No. 151 to have a material impact on our financial position, results of operations or cash flows.

     In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”). SFAS No. 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. This Statement establishes the fair value method for measurement and requires all entities to apply this fair value method in accounting for share-based payment transactions. The amount of compensation cost will be measured based on the grant-date fair value of the instrument issued and will be recognized over the vesting period. SFAS No. 123R replaces SFAS 123 and supersedes APB No. 25. The provisions of SFAS No. 123R are effective for the first fiscal year beginning after June 15, 2005, for all awards granted or modified after that date and for those awards granted prior to that date that have not vested.

     SFAS No. 123R requires companies to assess the most appropriate model to calculate the value of the options. In addition, there are a number of other requirements under the new standard that will result in differing accounting treatment than currently required. These differences include, but are not limited to, the accounting for the tax benefit on employee stock options and for stock issued under our employee stock purchase plan. In addition to the appropriate fair value model to be used for valuing share-based payments, we will also be required to determine the transition method to be used at date of adoption. The allowed transition methods include modified prospective and modified retroactive adoption options. Under the modified retroactive options, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The modified prospective method requires that compensation expense be recorded for all unvested stock options and restricted stock at the beginning of the first quarter of adoption of SFAS No. 123R, while the modified retroactive method would record compensation expense for all unvested stock options and restricted stock beginning with the first period restated. We plan to adopt SFAS No. 123R at the beginning of fiscal 2006 using the modified prospective method.

     Upon adoption, SFAS No. 123R will have a significant impact on our consolidated financial statements as we will be required to expense the fair value of our stock option grants and stock purchases under our employee stock purchase plan rather than disclose the impact on our consolidated net earnings and net earnings per share within our footnotes, as is our current practice in accordance with SFAS No. 123. The impact of adoption of SFAS No. 123R cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted SFAS No. 123R in prior periods, the impact of that standard would have approximated the impact of SFAS No. 123 as described in the disclosure of pro forma net earnings and pro forma net earnings per share in Note 1 to our consolidated financial statements.

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Inflation

     The impact of inflation on the Company has been minimal.

Forward-Looking Statements

     Certain statements made herein and in other public filings and releases by the Company contain “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risk and uncertainty. These forward-looking statements may include, but are not limited to, future capital expenditures, acquisitions (including the amount and nature thereof), future sales, earnings, margins, costs, number and costs of store openings, demand for clothing, market trends in the retail clothing business, currency fluctuations, inflation and various economic and business trends. Forward-looking statements may be made by management orally or in writing, including, but not limited to, this Management’s Discussion and Analysis of Financial Condition and Results of Operations section and other sections of our filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and the Securities Act of 1933.

     Actual results and trends in the future may differ materially depending on a variety of factors including, but not limited to, domestic and international economic activity and inflation, our successful execution of internal operating plans and new store and new market expansion plans, performance issues with key suppliers, severe weather, foreign currency fluctuations, government export and import policies and legal proceedings. Future results will also be dependent upon our ability to continue to identify and complete successful expansions and penetrations into existing and new markets and our ability to integrate such expansions with our existing operations.

     Expansion into more fashion-oriented merchandise categories or into complementary products and services may present greater risks. We are continuously assessing opportunities to expand complementary products and services related to our traditional business, such as corporate apparel sales and retail dry cleaning establishments. We may expend both capital and personnel resources on such business opportunities which may or may not be successful.

     Our business is particularly sensitive to economic conditions and consumer confidence. Consumer confidence is often adversely impacted by many factors including local, regional or national economic conditions, continued threats of terrorism, acts of war and other uncertainties. We believe that a decrease in consumer spending will affect us more than other retailers because men’s discretionary spending for items like tailored apparel tends to slow faster than other retail purchases.

     According to industry sources, sales in the men’s tailored clothing market generally have declined over the past several years and increased only modestly in 2004. We believe that this trend is attributable primarily to: (1) men allocating less of their income to tailored clothing and (2) certain employers relaxing their dress codes. We believe that this trend in sales has contributed, and will continue to contribute, to a consolidation among retailers of men’s tailored clothing. Although we have been able to increase our share of the men’s tailored clothing market, we may not be able to continue to expand our sales volume or maintain our profitability within our segment of the retailing industry.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are subject to exposure from fluctuations in U.S. dollar/Euro exchange rates. As further described in Note 8 of Notes to Consolidated Financial Statements and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”, we utilize foreign currency forward exchange contracts to limit exposure to changes in currency exchange rates. At January 29, 2005, we had 24 contracts maturing in varying increments to purchase an aggregate notional amount of $9.0 million in foreign currency, maturing at various dates through December 2005. At January 31, 2004, we had 23 contracts maturing in varying increments to purchase an aggregate notional amount of $15.4 million in foreign currency, maturing at various dates through January 2005. Unrealized pretax losses on these forward contracts totaled approximately $1.0 million at January 31, 2004. Unrealized pretax gains on these forward contracts totaled approximately $0.6 million at January 29, 2005. A hypothetical 10% change in applicable January 29, 2005 forward rates would increase or decrease this pretax gain by approximately $0.9 million related to these positions. However, it should be noted that any change in the value of these contracts, whether real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged item.

     Moores conducts its business in Canadian dollars. The exchange rate between Canadian dollars and U.S. dollars has fluctuated over the last ten years. If the value of the Canadian dollar against the U.S. dollar weakens, then the revenues and earnings of our Canadian operations will be reduced when they are translated to U.S. dollars. Also, the value of our Canadian net assets in U.S. dollars may decline.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

     Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officers, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

     Our management assessed the effectiveness of our internal control over financial reporting as of the end of our most recent fiscal year. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework. Based on such assessment, management concluded that, as of January 29, 2005, our internal control over financial reporting is effective based on those criteria.

     In reaching its conclusion that the internal control over financial reporting was effective as of January 29, 2005, management carefully considered the facts and circumstances surrounding the restatement of the Company’s previously issued financial statements.

     A control deficiency in monitoring compliance with generally accepted accounting principles in the area of accounting for operating leases with scheduled rent increases, the related period of amortization of leasehold improvements and the classification of leasehold incentives received was detected during our assessment process that resulted in cumulative, non-cash adjustments that would have been material to the financial performance of fiscal 2004. As a result, management decided to restate previously issued financial statements (as more fully described in Note 13 to the consolidated financial statements) for the effect of the correction on the prior period results.

     The impact of this correction on the periods subject to restatement was immaterial. Substantially all of the adjustment related to periods prior to fiscal 2002, and the correcting cumulative adjustment was also immaterial to shareholders’ equity as of February 2, 2002. As a result, management concluded that this control deficiency was not a material weakness.

     Management’s assessment of the effectiveness of our internal control over financial reporting as of January 29, 2005 has been audited by Deloitte & Touche LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this report, as stated in their report which appears on page 26 of this Annual Report on Form 10-K.

25

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
The Men’s Wearhouse, Inc.
Houston, Texas

We have audited management’s assessment, included in the accompanying “Management’s Report on Internal Control Over Financial Reporting”, that The Men’s Wearhouse, Inc. and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of January 29, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of January 29, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 29, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended January 29, 2005 of the Company and our report dated April 25, 2005 expressed an unqualified opinion on those financial statements and financial statement schedules and included an explanatory paragraph regarding the restatement of fiscal 2003 and 2002 consolidated financial statements.

	/s/ DELOITTE & TOUCHE LLP
Houston, Texas April 25, 2005

26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
The Men’s Wearhouse, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheets of The Men’s Wearhouse, Inc. and subsidiaries (the “Company”) as of January 29, 2005 and January 31, 2004, and the related consolidated statements of earnings, shareholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended January 29, 2005. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of The Men’s Wearhouse, Inc. and subsidiaries as of January 29, 2005 and January 31, 2004, and the results of their operations and their cash flows for each of the three years in the period ended January 29, 2005, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of January 29, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 25, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in Note 13, the accompanying fiscal 2003 and 2002 consolidated financial statements have been restated.

	/s/ DELOITTE & TOUCHE LLP
Houston, Texas April 25, 2005

27

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands, except shares)

	January 31,			January 29,
	2004			2005
	(as restated-
	note 13)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	132,146		$	165,008
Accounts receivable, net		17,919			20,844
Inventories		388,956			406,225
Other current assets		31,028			34,920
Total current assets		570,049			626,997
PROPERTY AND EQUIPMENT, AT COST:
Land		6,205			8,878
Buildings		29,739			50,511
Leasehold improvements		196,490			219,250
Furniture, fixtures and equipment		241,742			275,822
		474,176			554,461
Less accumulated depreciation and amortization		(250,353	)		(294,393	)
Net property and equipment		223,823			260,068
GOODWILL		43,867			55,824
OTHER ASSETS, net		40,388			50,433
TOTAL	$	878,127		$	993,322
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	115,828		$	132,212
Accrued expenses		71,132			82,923
Income taxes payable		26,044			23,633
Total current liabilities		213,004			238,768
LONG-TERM DEBT		131,000			130,000
DEFERRED TAXES AND OTHER LIABILITIES		46,331			55,706
Total liabilities		390,335			424,474
COMMITMENTS AND CONTINGENCIES (Note 3 and Note 10)
SHAREHOLDERS’ EQUITY:
Preferred stock, $.01 par value, 2,000,000 shares authorized, no shares issued		—			—
Common stock, $.01 par value, 100,000,000 shares authorized, 43,054,815 and 43,593,587 shares issued		431			436
Capital in excess of par		205,636			218,327
Retained earnings		442,074			513,430
Accumulated other comprehensive income		10,357			17,477
Total		658,498			749,670
Treasury stock, 6,979,423 and 7,358,079 shares at cost		(170,706	)		(180,822	)
Total shareholders’ equity		487,792			568,848
TOTAL	$	878,127		$	993,322

The accompanying notes are an integral part of these consolidated financial statements.

28

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
For the Years Ended
February 1, 2003, January 31, 2004, and January 29, 2005
(In thousands, except per share amounts)

	Fiscal Year
	2002			2003			2004
	(as restated-			(as restated-
	note 13)			note 13)
Net sales	$	1,295,049		$	1,392,680		$	1,546,679
Cost of goods sold, including buying, distribution and occupancy costs		840,810			879,234			943,675
Gross margin		454,239			513,446			603,004
Selling, general and administrative expenses		384,939			431,663			484,916
Operating income		69,300			81,783			118,088
Interest income		(981	)		(1,495	)		(1,526	)
Interest expense		2,242			4,006			5,899
Earnings before income taxes		68,039			79,272			113,715
Provision for income taxes		25,684			29,538			42,359
Net earnings	$	42,355		$	49,734		$	71,356
Net earnings per share:
Basic	$	1.04		$	1.28		$	1.98
Diluted	$	1.04		$	1.27		$	1.94
Weighted average common shares outstanding:
Basic		40,590			38,789			36,029
Diluted		40,877			39,295			36,813

The accompanying notes are an integral part of these consolidated financial statements.

29

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
For the Years Ended
February 1, 2003, January 31, 2004 and January 29, 2005
(In thousands, except shares)

									Accumulated
			Capital						Other
	Common		in Excess			Retained			Comprehensive			Treasury
	Stock		of Par			Earnings			(Loss) Income			Stock			Total
BALANCE — February 2, 2002 (as previously reported)	$	424	$	191,888		$	355,128		$	(3,198	)	$	(34,359	)	$	509,883
Cumulative effect on prior years of restatement (note 13)		—		—			(5,143	)		69			—			(5,074	)
BALANCE — February 2, 2002 (as restated-note 13)		424		191,888			349,985			(3,129	)		(34,359	)		504,809
Comprehensive income:
Net earnings (as restated-note 13)		—		—			42,355			—			—			42,355
Translation adjustment (as restated-note 13)		—		—			—			2,397			—			2,397
Change in derivative fair value		—		—			—			822			—			822
Total comprehensive income (as restated-note 13)																45,574
Common stock issued to stock discount plan — 51,359 shares		1		761			—			—			—			762
Common stock issued upon exercise of stock options — 165,105 shares		1		2,272			—			—			—			2,273
Tax benefit recognized upon exercise of stock options		—		624			—			—			—			624
Proceeds from sale of put option contracts		—		601			—			—			—			601
Treasury stock purchased — 1,480,000 shares		—		—			—			—			(28,058	)		(28,058	)
BALANCE — February 1, 2003 (as restated-note 13)		426		196,146			392,340			90			(62,417	)		526,585
Comprehensive income:
Net earnings (as restated-note 13)		—		—			49,734			—			—			49,734
Translation adjustment (as restated-note 13)		—		—			—			9,708			—			9,708
Change in derivative fair value		—		—			—			559			—			559
Total comprehensive income (as restated- note 13)																60,001
Common stock issued to stock discount plan — 48,195 shares		1		742			—			—			—			743
Common stock issued upon exercise of stock options — 421,441 shares		4		7,573			—			—			—			7,577
Tax benefit recognized upon exercise of stock options		—		1,572			—			—			—			1,572
Treasury stock issued to profit sharing plan - 41,841 shares		—		(397	)		—			—			897			500
Treasury stock purchased — 4,175,900 shares		—		—			—			—			(109,186	)		(109,186	)
BALANCE —January 31, 2004 (as restated-note 13)		431		205,636			442,074			10,357			(170,706	)		487,792
Comprehensive income:
Net earnings		—		—			71,356			—			—			71,356
Translation adjustment		—		—			—			7,371			—			7,371
Change in derivative fair value		—		—			—			(251	)		—			(251	)
Total comprehensive income																78,476
Common stock issued to stock discount plan — 49,211 shares		—		1,120			—			—			—			1,120
Common stock issued upon exercise of stock options — 489,561 shares		5		9,751			—			—			—			9,756
Tax benefit recognized upon exercise of stock options		—		1,768			—			—			—			1,768
Amortization of deferred compensation		—		122			—			—			—			122
Treasury stock issued to profit sharing plan – 43,744 shares		—		(70	)		—			—			1,070			1,000
Treasury stock purchased — 422,400 shares		—		—			—			—			(11,186	)		(11,186	)
BALANCE — January 29, 2005	$	436	$	218,327		$	513,430		$	17,477		$	(180,822	)	$	568,848

The accompanying notes are an integral part of these consolidated financial statements.

30

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
February 1, 2003, January 31, 2004 and January 29, 2005
(In thousands)

	Fiscal Year
	2002			2003			2004
	(as restated-			(as restated-
	note 13)			note 13)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	42,355		$	49,734		$	71,356
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		46,885			50,993			53,319
Deferred compensation and rent expense		(1,939	)		(1,670	)		(1,373	)
Gain on sale of assets		—			(4,381	)		—
Loss on impairment of assets		—			2,515			2,169
Deferred tax provision		7,468			342			5,222
(Increase) decrease in accounts receivable		(3,596	)		2,809			(2,579	)
(Increase) decrease in inventories		17,338			(21,624	)		(13,709	)
Increase in other assets		(9,998	)		(8,570	)		(12,419	)
Increase in accounts payable and accrued expenses		19,613			35,491			28,060
Increase (decrease) in income taxes payable		(4,951	)		14,076			(903	)
Increase in other liabilities		1,809			15			836
Net cash provided by operating activities		114,984			119,730			129,979
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(47,380	)		(49,663	)		(85,392	)
Net proceeds from sale of assets		6,812			—			—
Net assets acquired		—			(4,500	)		(11,000	)
Investment in trademarks, tradenames and other assets		(2,619	)		(1,644	)		(556	)
Net cash used in investing activities		(43,187	)		(55,807	)		(96,948	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		3,035			8,320			10,876
Proceeds from issuance of debt		—			130,000			—
Bank borrowings		39,624			—			—
Principal payments on debt		(40,743	)		(44,931	)		(1,000	)
Deferred financing costs		(1,075	)		(3,916	)		(276	)
Proceeds from sale of put option contracts		601			—			—
Purchase of treasury stock		(28,058	)		(109,186	)		(11,186	)
Net cash used in financing activities		(26,616	)		(19,713	)		(1,586	)
Effect of exchange rate changes		1,099			3,012			1,417
INCREASE IN CASH AND CASH EQUIVALENTS		46,280			47,222			32,862
Balance at beginning of period		38,644			84,924			132,146
Balance at end of period	$	84,924		$	132,146		$	165,008
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	1,945		$	2,091		$	4,671
Income taxes	$	25,582		$	15,863		$	38,820
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Additional capital in excess of par resulting from tax benefit recognized upon exercise of stock options	$	624		$	1,572		$	1,768
Treasury stock contributed to employee stock plan	$	—		$	500		$	1,000
Note payable issued as partial consideration for assets acquired	$	—		$	1,000		$	—

The accompanying notes are an integral part of these consolidated financial statements.

31

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended February 1, 2003,
January 31, 2004 and January 29, 2005

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization and Business — The Men’s Wearhouse, Inc. and its subsidiaries (the “Company”) is a specialty retailer of menswear. We operate throughout the United States primarily under the brand names of Men’s Wearhouse and K&G and under the brand name of Moores in Canada. We follow the standard fiscal year of the retail industry, which is a 52-week or 53-week period ending on the Saturday closest to January 31. Fiscal year 2002 ended on February 1, 2003, fiscal year 2003 ended on January 31, 2004 and fiscal year 2004 ended on January 29, 2005. Fiscal years 2002, 2003 and 2004 included 52 weeks.

     Principles of Consolidation — The consolidated financial statements include the accounts of The Men’s Wearhouse, Inc. and its wholly owned or controlled subsidiaries. Intercompany accounts and transactions have been eliminated in the consolidated financial statements.

     Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates and assumptions are those relating to inventories and long-lived assets, including goodwill, our estimated liabilities for self-insured portions of our workers’ compensation and employee health benefit costs and our estimates relating to income taxes.

     Cash and Cash Equivalents — Cash and cash equivalents includes all cash in banks, cash on hand and all highly liquid investments with an original maturity of three months or less. As substantially all of our cash is held by three financial institutions, we are exposed to risk of loss in the event of failure of any of these parties. However, due to the creditworthiness of these three financial institutions, we anticipate full performance and access to our deposits and liquid investments.

     Accounts Receivable —Accounts receivable consists of our receivables from third-party credit card providers and other receivables, net of an allowance for uncollectible accounts of $0.4 million at fiscal year end 2003 and 2004. Collectibility is reviewed regularly and the allowance is adjusted as necessary.

     Inventories — Inventories are valued at the lower of cost or market, with cost determined on the average cost method and the retail cost method. Inventory cost includes procurement and distribution costs (warehousing, freight, hangers and merchandising costs) associated with ending inventory.

     Property and Equipment — Property and equipment are stated at cost. Normal repairs and maintenance costs are charged to earnings as incurred and additions and major improvements are capitalized. The cost of assets retired or otherwise disposed of and the related allowances for depreciation are eliminated from the accounts in the period of disposal and the resulting gain or loss is credited or charged to earnings.

     Buildings are depreciated using the straight-line method over their estimated useful lives of 20 to 25 years. Depreciation of leasehold improvements is computed on the straight-line method over the term of the lease, which is generally five to ten years based on the initial lease term plus first renewal option periods that are reasonably assured, or the useful life of the assets, whichever is shorter. Furniture, fixtures and equipment are depreciated using primarily the straight-line method over their estimated useful lives of three to ten years.

     Goodwill and Other Assets — Intangible assets are initially recorded at their fair values. Identifiable intangible assets with finite useful lives are amortized to expense over the estimated useful life of the asset. Trademarks, tradenames and other intangibles are amortized over estimated useful lives of 3 to 17 years using the straight-line method. Identifiable intangible assets with an indefinite useful life, including goodwill, are evaluated annually in the fourth quarter or more frequently if circumstances dictate, for impairment by comparison of their carrying amounts with the fair value of the individual assets. No impairment was identified in fiscal 2002, 2003 or 2004.

32

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     Impairment of Long-Lived Assets — We evaluate the carrying value of long-lived assets, such as property and equipment and amortizable intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined, based on estimated undiscounted future cash flows, that an impairment has occurred, a loss is recognized currently for the impairment.

     Fair Value of Financial Instruments — As of January 31, 2004 and January 29, 2005, management estimates that the fair value of cash and cash equivalents, receivables, accounts payable and accrued expenses are carried at amounts that reasonably approximate their fair value. See Note 3 for the fair values of our long-term debt.

     Revenue Recognition —Revenue is recognized at the time of sale and delivery of merchandise, net of actual sales returns and a provision for estimated sales returns, and excludes sales taxes. Revenues from alteration and other services are recognized upon completion of the services. Proceeds from the sale of gift cards are recorded as a liability and are recognized as revenues when the cards are redeemed.

     Loyalty Program — We maintain a customer loyalty program in our Men’s Wearhouse and Moores stores in which customers receive points for purchases. Points are equivalent to dollars spent on a one-to-one basis, excluding any sales tax dollars. Upon reaching 500 points, customers are issued a $50 rewards certificate which they may redeem for purchases at our Men’s Wearhouse or Moores stores. Generally, reward certificates earned must be redeemed no later than six months from the date of issuance. We accrue the estimated costs of the anticipated certificate redemptions when the certificates are issued and charge such costs to cost of goods sold. Redeemed certificates are recorded as markdowns when redeemed and no revenue is recognized for the redeemed certificate amounts. The estimate of costs associated with the loyalty program requires us to make assumptions related to the cost of product or services to be provided to customers when the certificates are redeemed as well as redemption rates.

     Vendor Allowances — In November 2002, the Emerging Issues Task Force (“EITF”) issued Issue 02-16, “Accounting by a Customer (Including a Reseller) for Cash Consideration Received from a Vendor.” This EITF addresses the accounting treatment for cash vendor allowances received. The adoption of EITF Issue 02-16 in 2003 did not have a material impact on the Company’s financial position, results of operations or cash flows. Vendor allowances are recognized as a reduction of the costs of the merchandise purchased.

     Shipping and Handling Costs — All shipping and handling costs for product sold are recognized as cost of goods sold.

     Operating Leases — Operating leases relate primarily to stores and generally contain rent escalation clauses, rent holidays, contingent rent provisions and occasionally leasehold incentives. Rent expense for operating leases is recognized on a straight-line basis over the term of the lease, which is generally five to ten years based on the initial lease term plus first renewal option periods that are reasonably assured. Rent expense for stores is included in cost of sales as a part of occupancy cost and other rent is included in selling general and administrative expenses. The lease terms commence when we take possession with the right to control use of the leased premises and, for stores, is generally 60 days prior to the date rent payments begin. We capitalize rent amounts allocated to the construction period for leased properties as leasehold improvements. Deferred rent that results from recognition of rent on a straight-line basis is included in other liabilities. Landlord incentives received for reimbursement of leasehold improvements are recorded as deferred rent and amortized as a reduction to rent expense over the term of the lease. Contingent rentals are generally based on percentages of sales and are recognized as store rent expense as they accrue.

     Advertising — Advertising costs are expensed as incurred or, in the case of media production costs, when the commercial first airs. Advertising expenses were $60.1 million, $62.9 million and $60.5 million in fiscal 2002, 2003 and 2004, respectively.

     New Store Costs — Promotion and other costs associated with the opening of new stores are expensed as incurred.

33

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     Store Closures and Relocations — On November 3, 2002, we adopted Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS No. 146”). This statement requires, among other things, that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred rather than when a company commits to such an activity and also establishes fair value as the objective for initial measurement of the liability. As of the fourth quarter of 2002, when we close or relocate a store, the present value of estimated unrecoverable cost, which is substantially made up of the remaining net lease obligation, is charged to expense. Prior to the fourth quarter of 2002, these costs were expensed upon management’s commitment to closing or relocating a store, which was generally before the actual liability was incurred. The adoption of this statement did not have a material impact on our financial position, results of operations or cash flows.

     Stock Based Compensation — As permitted by Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), we account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB No. 25”). We have adopted the disclosure-only provisions of SFAS No. 123 and continue to apply APB No. 25 and related interpretations in accounting for the stock option plans and the employee stock purchase plan.

     In December 2002, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation–Transition and Disclosure” (“SFAS No. 148”). This statement amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The disclosures required by SFAS No. 148 are included below.

     Had we elected to apply the accounting standards of SFAS No. 123, as amended by SFAS No. 148, our net earnings and net earnings per share would have been approximately the pro forma amounts indicated below (in thousands, except per share data):

	Fiscal Year
	2002			2003			2004
Net earnings, as reported	$	42,355		$	49,734		$	71,356
Add: Stock-based compensation, net of tax included in reported net earnings		—			—			77
Deduct: Stock-based compensation, net of tax determined under fair-value based method		(2,977	)		(2,460	)		(3,017	)
Pro forma net earnings	$	39,378		$	47,274		$	68,416
Net earnings per share:
As reported:
Basic	$	1.04		$	1.28		$	1.98
Diluted	$	1.04		$	1.27		$	1.94
Pro forma:
Basic	$	0.97		$	1.22		$	1.90
Diluted	$	0.96		$	1.20		$	1.86

34

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     For purposes of computing pro forma net earnings, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which resulted in a weighted-average fair value of $11.70, $9.99 and $15.82 for grants made during fiscal 2002, 2003 and 2004, respectively. The following weighted average assumptions were used for option grants for each respective period:

	Fiscal Year
	2002			2003			2004
Risk-free interest rates		4.29	%		3.14	%		3.55	%
Expected lives	6 years			6 years			6 years
Dividend yield		0	%		0	%		0	%
Expected volatility		54.14	%		54.75	%		50.93	%

     The effects of applying SFAS No. 123 in this pro forma disclosure may not be indicative of pro forma future amounts. See Note 6 for additional disclosures regarding stock-based compensation.

     Refer to “Recently Issued Accounting Pronouncements” below for a discussion of Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”).

     Derivative Financial Instruments — We enter into foreign currency forward exchange contracts to hedge against foreign exchange risks associated with certain firmly committed, and certain other probable, but not firmly committed, inventory purchase transactions that are denominated in a foreign currency (primarily the Euro). Gains and losses associated with these contracts are accounted for as part of the underlying inventory purchase transactions. These contracts have been accounted for in accordance with Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”), as amended. The disclosures required by SFAS No. 133 are included in Note 8.

     In connection with our share repurchase programs, as described in Note 6, we from time to time issued put option contracts and received premiums for doing so, with the premiums being added to our capital in excess of par. Under these contracts, the contract counterparties had the option to require us to purchase a specific number of shares of our common stock at specific strike prices per share on specific dates. See Note 6 for additional disclosures regarding our put option contracts.

     Foreign Currency Translation — Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the exchange rates in effect at each balance sheet date. Shareholders’ equity is translated at applicable historical exchange rates. Income, expense and cash flow items are translated at average exchange rates during the year. Resulting translation adjustments are reported as a separate component of shareholders’ equity.

     Comprehensive Income — Comprehensive income includes all changes in equity during the period presented that result from transactions and other economic events other than transactions with shareholders.

     Segment Information — We consider our business as one operating segment based on the similar economic characteristics of our three brands. Revenues of Canadian retail operations were $141.9 million, $154.7 million and $174.9 million for fiscal 2002, 2003 and 2004, respectively. Long-lived assets of our Canadian operations were $44.3 million and $63.1 million as of the end of fiscal 2003 and 2004, respectively.

     Accounting for the Effect of Contingently Convertible Debt on Diluted Earnings per Share — In September 2004, the Emerging Issues Task Force (“EITF”) of the FASB reached a consensus on Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” (“EITF 04-8”), and the FASB ratified the consensus in October 2004. The EITF’s consensus states that shares of common stock contingently issuable pursuant to contingent convertible debt instruments should be included in diluted earnings per share computations, if dilutive, regardless of whether the contingent feature has been met. EITF 04-8 is effective for fiscal years ending after December 15, 2004 and must be applied retroactively. Our $130.0 million 3.125% Convertible Senior Notes due 2023 (“Notes”) are contingently convertible into shares of common stock initially at a conversion rate of 23.3187

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

shares of common stock per $1,000 principal amount of Notes and may, at our option, be settled in cash or a combination of cash and common stock. However, on January 28, 2005, we entered into a supplemental indenture relating to the Notes and irrevocably elected to settle the principal amount at issuance of such Notes in 100% cash when they become convertible and are surrendered by the holders thereof. Due to this election, the adoption of EITF 04-8 did not have a material impact on our financial position, results of operations or cash flows. See Note 3 for further information regarding the Notes.

     Recently Issued Accounting Pronouncements — In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, “Inventory Costs — an Amendment of Accounting Research Bulletin (“ARB”) No. 43, Chapter 4” (“SFAS No. 151”). SFAS No. 151 amends ARB No. 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be recognized as current period charges. It also requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. We do not expect the adoption of SFAS No. 151 to have a material impact on our financial position, results of operations or cash flows.

     In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”). SFAS No. 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. This Statement establishes the fair value method for measurement and requires all entities to apply this fair value method in accounting for share-based payment transactions. The amount of compensation cost will be measured based on the grant-date fair value of the instrument issued and will be recognized over the vesting period. SFAS No. 123R replaces SFAS 123 and supersedes APB No. 25. The provisions of SFAS No. 123R are effective for the first fiscal year beginning after June 15, 2005 for all awards granted or modified after that date and for those awards granted prior to that date that have not vested.

     SFAS No. 123R requires companies to assess the most appropriate model to calculate the value of the options. In addition, there are a number of other requirements under the new standard that will result in differing accounting treatment than currently required. These differences include, but are not limited to, the accounting for the tax benefit on employee stock options and for stock issued under our employee stock purchase plan. In addition to the appropriate fair value model to be used for valuing share-based payments, we will also be required to determine the transition method to be used at date of adoption. The allowed transition methods include modified prospective and modified retroactive adoption options. Under the modified retroactive options, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The modified prospective method requires that compensation expense be recorded for all unvested stock options and restricted stock at the beginning of the first quarter of adoption of SFAS No. 123R, while the modified retroactive method would record compensation expense for all unvested stock options and restricted stock beginning with the first period restated. We plan to adopt SFAS No. 123R at the beginning of fiscal 2006 using the modified prospective method.

     Upon adoption, SFAS No. 123R will have a significant impact on our consolidated financial statements as we will be required to expense the fair value of our stock option grants and stock purchases under our employee stock purchase plan rather than disclose the impact on our consolidated net earnings and net earnings per share within our footnotes, as is our current practice in accordance with SFAS No. 123. The impact of adoption of SFAS No. 123R cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted SFAS No. 123R in prior periods, the impact of that standard would have approximated the impact of SFAS No. 123 as described in the disclosure of pro forma net earnings and pro forma net earnings per share elsewhere in this Note 1.

2. EARNINGS PER SHARE

     Basic EPS is computed using the weighted average number of common shares outstanding during the period and net earnings. Diluted EPS gives effect to the potential dilution which would have occurred if additional shares were issued for stock options exercised under the treasury stock method, as well as the potential dilution that could occur if our contingent convertible debt or other contracts to issue common stock were converted or exercised. No dilution from the contingent convertible debt or other contracts has occurred.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     The following table reconciles the earnings and shares used in the basic and diluted EPS computations (in thousands, except per share amounts):

	Fiscal Year
	2002		2003		2004
Net earnings	$	42,355	$	49,734	$	71,356
Weighted average number of common shares outstanding		40,590		38,789		36,029
Basic earnings per share	$	1.04	$	1.28	$	1.98
Weighted average number of common shares outstanding		40,590		38,789		36,029
Assumed exercise of stock options		287		506		784
As adjusted		40,877		39,295		36,813
Diluted earnings per share	$	1.04	$	1.27	$	1.94

3. LONG-TERM DEBT

     In January 2003, we replaced an existing $125.0 million revolving credit facility which was scheduled to mature in February 2004 with a new revolving credit agreement with a group of banks (the “Credit Agreement”) that provides for borrowing of up to $100.0 million through February 4, 2006. In July 2004, we amended the Credit Agreement to extend the maturity date to July 7, 2009. The Credit Agreement is secured by substantially all of the stock of the subsidiaries of The Men’s Wearhouse, Inc. Advances under the Credit Agreement bear interest at a rate per annum equal to, at our option, the agent’s prime rate or the reserve adjusted LIBOR rate plus a varying interest rate margin up to 2.25%. The Credit Agreement also provides for fees applicable to unused commitments ranging from 0.275% to 0.500%. As of January 29, 2005, there were no borrowings outstanding under the Credit Agreement.

     The Credit Agreement contains certain restrictive and financial covenants, including the requirement to maintain a minimum level of net worth and certain financial ratios. The Credit Agreement also prohibits payment of cash dividends on our common stock. We were in compliance with the covenants in the Credit Agreement as of January 29, 2005.

     On October 21, 2003, we issued $130.0 million of 3.125% Notes in a private placement. A portion of the net proceeds from the Notes was used to repay outstanding indebtedness and to repurchase shares of our common stock under the program authorized by the Board in September 2003 (see below); the balance is reserved for general corporate purposes, which may include additional purchases of our common stock under our share repurchase program. Interest on the Notes is payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2004. The Notes will mature on October 15, 2023. However, holders may require us to purchase all or part of the Notes, for cash, at a purchase price of 100% of the principal amount per Note plus accrued and unpaid interest on October 15, 2008, October 15, 2013 and October 15, 2018 or upon a designated event. Beginning on October 15, 2008, we will pay additional contingent interest on the Notes if the average trading price of the Notes is above a specified level during a specified period. In addition, we may redeem all or a portion of the Notes on or after October 20, 2008, at 100% of the principal amount of the Notes plus any accrued and unpaid interest, contingent interest and additional amounts, if any. We also have the right to redeem the Notes between October 20, 2006 and October 19, 2008 if the price of our common stock reaches certain levels.

     During certain periods, the Notes are convertible by holders into shares of our common stock initially at a conversion rate of 23.3187 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of $42.88 per share of common stock (subject to adjustment in certain events), under the following circumstances: (1) if the closing sale price of our common stock issuable upon conversion exceeds 120% of the conversion price under specified conditions; (2) if we call the Notes for redemption; or (3) upon the

37

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

occurrence of specified corporate transactions. Upon conversion of the Notes, in lieu of delivering common stock we may, at our election, deliver cash or a combination of cash and common stock. However, on January 28, 2005, we entered into a supplemental indenture relating to the Notes and irrevocably elected to settle the principal amount at issuance of such Notes in 100% cash when they become convertible and are surrendered by the holders thereof. The Notes are general senior unsecured obligations, ranking on parity in right of payment with all our existing and future unsecured senior indebtedness and our other general unsecured obligations, and senior in right of payment with all our future subordinated indebtedness. The Notes are effectively subordinated to all of our senior secured indebtedness and all indebtedness and liabilities of our subsidiaries.

     In December 2003, we acquired the assets and operating leases for 13 retail dry cleaning and laundry facilities and issued a note payable for $1.0 million as partial consideration. The unsecured note payable, with interest at 4%, was paid in full in January 2005.

     We utilize letters of credit primarily to secure inventory purchases. At January 29, 2005, letters of credit totaling approximately $14.5 million were issued and outstanding.

     The fair value of the Notes, using quoted market prices of the same or similar issues, was approximately $127.1 and $134.7 million at January 31, 2004 and January 29, 2005, respectively. The carrying amounts of all other long-term debt approximate fair value at January 31, 2004 and January 29, 2005.

4. INCOME TAXES

     The provision for income taxes consists of the following (in thousands):

	Fiscal Year
	2002		2003			2004
Current tax expense:
Federal	$	10,246	$	17,889		$	27,067
State		1,010		1,081			2,078
Foreign		6,960		10,226			7,992
Deferred tax expense (benefit):
Federal and state		5,868		3,098			3,333
Foreign		1,600		(2,756	)		1,889
Total	$	25,684	$	29,538		$	42,359

     No provision for U.S. income taxes or Canadian withholding taxes has been made on the cumulative undistributed earnings of Moores (approximately $112.0 million at January 29, 2005). The potential deferred tax liability associated with these earnings is estimated to be $2 million.

     In December 2004, the FASB issued FSP No. FAS109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004 (AJCA)”. The AJCA provides a one-time 85% dividends received deduction for certain foreign earnings that are repatriated under a plan for reinvestment in the United States, provided certain criteria are met. FSP No. 109-2 is effective immediately and provides accounting and disclosure guidance for the repatriation provision. FSP No. 109-2 allows companies additional time to evaluate the effects of the law on its unremitted earnings for the purpose of applying the “indefinite reversal criteria” under APB Opinion No. 23, “Accounting for Income Taxes – Special Areas”, and

38

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

requires explanatory disclosures from companies that have not yet completed the evaluation. The Company is currently evaluating the effects of the repatriation provision and their impact on our consolidated financial statements. We do not expect to complete this evaluation before the end of 2005. The range of possible amounts of unremitted earnings that may be repatriated under this provision, if any, and the related potential income taxes cannot be reasonably estimated until this evaluation is complete.

     A reconciliation of the statutory federal income tax rate to our effective tax rate is as follows:

	Fiscal Year
	2002			2003			2004
Federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		1.3			2.3			1.7
Foreign and Other		1.4			—			0.6
		37.7	%		37.3	%		37.3	%

     At January 31, 2004, we had net deferred tax liabilities of $5.1 million with $14.5 million classified as other current assets and $19.6 million classified as other liabilities (noncurrent). At January 29, 2005, we had net deferred tax liabilities of $10.1 million with $16.2 million classified as other current assets and $26.3 million classified as other liabilities (noncurrent). Our state net operating loss of $1.3 million (pre-tax $34.0 million) and foreign tax credit carryforwards of $0.7 million expire in varying amounts annually from 2005 through 2024 and in 2014, respectively.

     Total deferred tax assets and liabilities and the related temporary differences as of January 31, 2004 and January 29, 2005 were as follows (in thousands):

	January 31,			January 29,
	2004			2005
Deferred tax assets:
Accrued rent and other expenses	$	9,028		$	10,750
Accrued compensation		2,016			2,969
Accrued inventory markdowns		595			1,283
Deferred intercompany profits		3,399			3,212
Unused state operating loss carryforwards		1,609			1,294
Unused foreign tax credits		873			665
Other		620			178
		18,140			20,351
Deferred tax liabilities:
Capitalized inventory costs		(3,483	)		(4,044	)
Property and equipment		(17,289	)		(20,751	)
Intangibles		(1,781	)		(2,499	)
Deferred interest		(674	)		(3,182	)
		(23,227	)		(30,476	)
Net deferred tax liabilities	$	(5,087	)	$	(10,125	)

39

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

5. OTHER ASSETS AND ACCRUED EXPENSES

     Other assets consist of the following (in thousands):

	January 31,			January 29,
	2004			2005
Trademarks, tradenames and other intangibles	$	9,475		$	9,733
Accumulated amortization		(2,450	)		(3,307	)
		7,025			6,426
Tuxedo rental assets, deposits and other		33,363			44,007
Total	$	40,388		$	50,433
Accrued expenses consist of the following (in thousands):
Accrued salary, bonus and vacation	$	24,041		$	27,967
Sales, payroll and property taxes payable		10,725			11,826
Unredeemed gift certificates		13,096			16,062
Accrued workers compensation and medical costs		8,919			8,252
Other		14,351			18,816
Total	$	71,132		$	82,923

6. CAPITAL STOCK, STOCK OPTIONS AND BENEFIT PLANS

     In January 2000, the Board of Directors authorized the repurchase of up to one million shares of our common stock in the open market or in private transactions. On January 31, 2001, the Board authorized an expansion of the program for up to an additional two million shares. On November 19, 2002, the Board of Directors authorized a new stock repurchase program for up to $25.0 million in shares of our common stock. Under the first three authorized programs, we repurchased 1,480,000 and 1,057,100 shares of our common stock during fiscal 2002 and 2003, respectively, at a cost of $28.1 million and $24.1 million, respectively. The average price per share of our common stock repurchased under these programs was $18.96 and $22.80 during fiscal 2002 and 2003, respectively.

     In September 2003, the Board of Directors authorized a program for the repurchase of up to $100.0 million of our common stock in the open market or in private transactions. This authorization superceded the approximately $1.0 million we had remaining under the Board’s November 2002 authorization. As of January 31, 2004, we had repurchased under this program 1,405,400 shares at a cost of $42.4 million in private transactions and 1,713,400 shares at a cost of $42.6 million in open market transactions. Under all authorized programs during fiscal 2003, we repurchased 4,175,900 shares of our common stock at a cost of $109.2 million, with an average repurchase price of $26.15 per share. As of January 29, 2005, we had repurchased under the September 2003 program 1,405,400 shares at a cost of $42.4 million in private transactions and 2,036,400 shares at a cost of $51.4 million in open market transactions, for a total of 3,441,800 shares at an average price per share of $27.25.

     In June 2004, the Board of Directors authorized a program for the repurchase of up to $50.0 million of our common stock in the open market or in private transactions. This authorization superceded the approximately $6.2 million we had remaining under the September 2003 authorization. As of January 29, 2005, a total of 99,400 shares at a cost of $2.5 million were repurchased in open market transactions under this program at an average price per share of $24.99.

40

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     During fiscal 2004, a total of 422,400 shares at a cost of $11.2 million were repurchased in open market transactions under all authorized stock repurchase programs at an average price per share of $26.48.

     In connection with our share repurchase programs, we have from time to time issued put option contracts and received premiums for doing so, with the premiums being added to our capital in excess of par and effectively reducing the cost of our share repurchases. Under these contracts, the contract counterparties had the option to require us to purchase a specific number of shares of our common stock at a specific strike price per share on a specific date. During fiscal 2002, we issued a put contract for 500,000 shares and received a premium of $0.6 million for issuing this contract. The contract counterparty had the option to exercise this contract at a strike price of $22.76 per share on December 17, 2002, but contract completion was required earlier if the market price of our common stock fell below a trigger price of $12.64 per share. During the third quarter of 2002, the market price of our common stock fell below the trigger price and we settled the contract by repurchasing the 500,000 shares at $22.76 per share or $11.4 million; we recorded the shares purchased as treasury stock. We were not obligated to issue any shares under the put contract nor were we obligated to settle in cash.

     We have adopted the 1992 Stock Option Plan (“1992 Plan”) which, as amended, provides for the grant of options to purchase up to 1,071,507 shares of our common stock to full-time key employees (excluding certain officers); the 1996 Long-Term Incentive Plan (formerly known as the 1996 Stock Option Plan) (“1996 Plan”) which, as amended, provides for an aggregate of up to 1,850,000 shares of our common stock with respect to which stock options, stock appreciation rights, restricted stock and performance based awards may be granted to full-time key employees (excluding certain officers); the 1998 Key Employee Stock Option Plan (“1998 Plan”) which, as amended, provides for the grant of options to purchase up to 2,100,000 shares of our common stock to full-time key employees (excluding certain officers); and the 2004 Long-Term Incentive Plan which provides for an aggregate of up to 600,000 shares of our common stock with respect to which stock options, stock appreciation rights, restricted stock and performance based awards may be granted to full-time key employees. The 1992 Plan expired in February 2002 and each of the other plans will expire at the end of ten years following the effective date of such plan; no option may be granted pursuant to the plans after the expiration date. In fiscal 1992, we also adopted a Non-Employee Director Stock Option Plan (“Director Plan”) which, as amended, provides for an aggregate of up to 167,500 shares of our common stock with respect to which stock options, stock appreciation rights or restricted stock awards may be granted to non-employee directors of the Company. In fiscal 2001, the Director Plan’s termination date was extended to February 23, 2012. Options granted under these plans must be exercised within ten years of the date of grant.

     Generally, options granted pursuant to the employee plans vest at the rate of 1/3 of the shares covered by the grant on each of the first three anniversaries of the date of grant. However, a significant portion of options granted under these Plans vest annually in varying increments over a period from one to ten years. Under the 1996 Plan and the 2004 Plan, options may not be issued at a price less than 100% of the fair market value of our stock on the date of grant. Under the 1996 Plan and the 2004 Plan, the vesting, transferability restrictions and other applicable provisions of any stock appreciation rights, restricted stock or performance based awards will be determined by the Compensation Committee of the Company’s board of directors. Options granted under the Director Plan vest one year after the date of grant and are issued at a price equal to the fair market value of our stock on the date of grant; provided, however, that the committee who administers the Director Plan may elect to grant stock appreciation rights, having such terms and conditions as the committee determines, in lieu of any option grant. Restricted stock awards granted under the Director Plan vest one year after the date of grant. On January 30, 2004, 4,000 restricted shares were granted to the outside directors at a grant price of $23.29 per share. During fiscal 2004, 8,000 restricted shares were granted to the outside directors at an average price per share of $30.94.

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THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     The following table is a summary of our stock option activity:

				Weighted
	Shares Under			Average		Options
	Option			Exercise Price		Exercisable
Options outstanding, February 2, 2002		2,793,207		$	20.80		1,594,171
Granted		500,800		$	20.42
Exercised		(165,105	)	$	13.77
Forfeited		(125,115	)	$	21.66
Options outstanding, February 1, 2003		3,003,787		$	21.09		1,797,834
Granted		608,125		$	17.23
Exercised		(421,441	)	$	17.98
Forfeited		(75,533	)	$	20.73
Options outstanding, January 31, 2004		3,114,938		$	20.76		1,444,494
Granted		245,000		$	29.28
Exercised		(489,561	)	$	19.93
Forfeited		(115,189	)	$	18.44
Options outstanding, January 29, 2005		2,755,188		$	21.76		1,347,475

     Grants of stock options outstanding as of January 29, 2005 are summarized as follows:

	Options Outstanding					Options Exercisable
			Weighted-
			Average	Weighted-				Weighted-
			Remaining	Average				Average
Range of	Number		Contractual	Exercise		Number		Exercise
Exercise Prices	Outstanding		Life	Price		Exercisable		Price
$   11.90 to 18.00		687,070	4.9 Years	$	14.22		379,819	$	15.57
18.00 to 21.50		795,104	5.7 Years		21.24		352,218		21.19
21.50 to 24.00		783,837	6.6 Years		23.21		338,776		23.44
24.00 to 50.00		489,177	6.2 Years		30.87		276,662		31.17
$   11.90 to 50.00		2,755,188	5.8 Years	$	21.76		1,347,475	$	22.22

     As of January 29, 2005, 1,184,452 options were available for grant under existing plans and 3,393,235 shares of common stock were reserved for future issuance.

     The difference between the option price and the fair market value of our common stock on the dates that options for 165,105, 421,441 and 489,561 shares of common stock were exercised during fiscal 2002, 2003 and 2004, respectively, resulted in a tax benefit to us of $0.6 million, $1.6 million and $1.8 million, respectively, which has been recognized as capital in excess of par.

     We have a profit sharing plan, in the form of an employee stock plan, which covers all eligible employees, and an employee tax-deferred savings plan. Contributions to the profit sharing plan are made at the discretion of the Board of Directors. During fiscal 2002, 2003 and 2004, contributions charged to operations were $0.8 million, $1.7 million and $2.2 million, respectively, for the plans.

     In 1998, we adopted an Employee Stock Discount Plan (“ESDP”) which allows employees to authorize after-tax payroll deductions to be used for the purchase of up to 1,425,000 shares of our common stock at 85% of the lesser of the fair market value on the first day of the offering period or the fair market value on the last day of the offering period. We make no contributions to this plan but pay all brokerage, service and other costs incurred. Effective for offering periods beginning July 1, 2002, the plan was amended so that a participant may not purchase more than 125 shares during any calendar quarter. During fiscal 2002, 2003 and 2004, employees purchased 51,359, 48,195 and

42

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     49,211 shares, respectively, under the ESDP, the weighted-average fair value of which was $14.82, $15.41 and $22.77 per share, respectively. As of January 29, 2005, 1,105,836 shares were reserved for future issuance under the ESDP.

7. GOODWILL AND OTHER INTANGIBLE ASSETS

     Changes in the net carrying amount of goodwill for the years ended January 31, 2004 and January 29, 2005 are as follows (in thousands):

Balance, February 1, 2003	$	36,607
Goodwill of acquired business		4,550
Translation adjustment		2,710
Balance, January 31, 2004		43,867
Goodwill of acquired business		10,538
Translation adjustment		1,419
Balance, January 29, 2005	$	55,824

     In December 2003, we acquired the assets and operating leases for 13 retail dry cleaning and laundry facilities operating in the Houston, Texas area. We acquired an additional 11 facilities in September 2004.

     The gross carrying amount and accumulated amortization of our other intangibles, which are included in other assets in the accompanying balance sheet, are as follows (in thousands):

	January 31,			January 29,
	2004			2005
Trademarks, tradenames and other intangibles	$	9,475		$	9,733
Accumulated amortization		(2,450	)		(3,307	)
Net total	$	7,025		$	6,426

     The pretax amortization expense associated with intangible assets totaled approximately $428,000, $737,000 and $857,000 for fiscal 2002, 2003 and 2004, respectively. Pretax amortization expense associated with intangible assets at January 29, 2005 is estimated to be approximately $886,000 for the fiscal year 2005, $832,000 for fiscal year 2006, $674,000 for each of the fiscal years 2007 and 2008 and $658,000 for fiscal year 2009.

8. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING

     In connection with our direct sourcing program, we may enter into purchase commitments that are denominated in a foreign currency (primarily the Euro). Our practices include entering into foreign currency forward exchange contracts to minimize foreign currency exposure related to forecasted purchases of certain inventories. Under SFAS No. 133, such contracts have been designated as and accounted for as cash flow hedges. The settlement terms of the forward contracts, including amount, currency and maturity, correspond with payment terms for the merchandise inventories. Any ineffective portion of a hedge is reported in earnings immediately. At January 29, 2005, we had 24 contracts maturing in varying increments to purchase an aggregate notional amount of $9.0 million in foreign currency, maturing at various dates through December 2005. At January 31, 2004, we had 23 contracts maturing in varying increments to purchase an aggregate notional amount of $15.4 million in foreign currency, maturing at various dates through January 2005. During fiscal 2003 and 2004, we recognized an insignificant amount of hedge ineffectiveness.

     The changes in the fair value of the foreign currency forward exchange contracts are matched to inventory purchases by period and are recognized in earnings as such inventory is sold. The fair value of the forward exchange contracts is estimated by comparing the cost of the foreign currency to be purchased under the contracts using the exchange rates obtained under the contracts (adjusted for forward points) to the hypothetical cost using the spot rate at year-end. We expect to recognize in earnings through January 28, 2006 approximately $0.4 million, net of tax, of existing net gains presently deferred in accumulated other comprehensive income.

43

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

9. RELATED PARTY TRANSACTIONS

     On August 16, 2004, we purchased a store (land and building, which we had been leasing) in Dallas, Texas for $1.0 million from 8239 Preston Road, Inc., a Texas corporation of which George Zimmer, Chairman of the Board and CEO of the Company, James E. Zimmer, Senior Vice President-Merchandising of the Company, and Richard Goldman, a former officer and director of the Company, each owned 20% of the outstanding common stock, and Laurie Zimmer, sister of George and James E. Zimmer, owned 40% of the outstanding common stock.

     On August 20, 2004, we purchased a 1980 Gulfstream III aircraft from Regal Aviation L.L.C. (“Regal Aviation”) for $5.0 million. Regal Aviation operates a private air charter service and is a limited liability company of which George Zimmer owns 99%. In addition, on August 20, 2004, we entered into a leasing arrangement with Regal Aviation under which Regal Aviation will operate, manage and market the aircraft as well as provide the appropriate flight personnel and services. The aircraft will be utilized to provide air transportation from time to time for employees of the Company as well as be leased to third parties for charter.

     On October 15, 2004, we purchased a warehouse facility located in Houston, Texas (the “Facility”) from Zig Zag for $0.7 million. Zig Zag is a Texas joint venture, in which Richard E. Goldman, George Zimmer and James E. Zimmer were the sole and equal joint venturers. Prior to the purchase of the Facility, we leased the Facility from Zig Zag.

10. COMMITMENTS AND CONTINGENCIES

     Lease commitments

     We lease retail business locations, office and warehouse facilities, copier equipment and automotive equipment under various noncancelable capital and operating leases expiring in various years through 2027. Rent expense for operating leases for fiscal 2002, 2003 and 2004 was $86.0 million, $90.0 million and $95.7 million, respectively, and includes contingent rentals of $0.8 million, $0.6 million and $0.8 million, respectively. Minimum future rental payments under noncancelable capital and operating leases as of January 29, 2005 for each of the next five years and in the aggregate are as follows (in thousands):

	Operating		Capital
Fiscal Year	Leases		Leases
2005	$	95,417	$	717
2006		82,690		534
2007		72,358		412
2008		61,213		275
2009		48,815		122
Thereafter		100,526		368
Total	$	461,019		2,428
Amounts representing interest				(761	)
Capital lease obligations			$	1,667

     Leases on retail business locations specify minimum rentals plus common area maintenance charges and possible additional rentals based upon percentages of sales. Most of the retail business location leases provide for renewal options at rates specified in the leases. In the normal course of business, these leases are generally renewed or replaced by other leases.

     At January 29, 2005, the gross capitalized balance and the accumulated depreciation balance of our capital lease assets was $3.6 million and $2.2 million, respectively, resulting in a net capitalized value of $1.4 million. These assets are included in furniture, fixtures and equipment on the balance sheet. The deferred liability balance of these capital lease assets is included in deferred taxes and other liabilities on the balance sheet.

44

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

     Legal matters

     On April 18, 2003, a lawsuit was filed against the Company in the Superior Court of California for the County of Orange, Case No. 03CC00132 (the “Orange County Suit”). The Orange County Suit was brought as a purported class action and alleges several causes of action, each based on the factual allegation that in the State of California the Company misclassified its managers and assistant managers as exempt from the application of certain California labor statutes. Because of this alleged misclassification, the Orange County Suit alleges that the Company failed to pay overtime compensation and provide the required rest periods to such employees. The Orange County Suit seeks, among other things, declaratory and injunctive relief along with an accounting as to alleged wages, premium pay, penalties, interest and restitution allegedly due the class defendants. We believe that the Orange County Suit will be resolved in 2005; however, no assurance can be given that the anticipated resolution will be realized. We do not believe the ultimate resolution of the Orange County Suit will have a material adverse effect on our financial position, results of operations or cash flows.

     On April 1, 2004, a lawsuit was filed against the Company in the Superior Court of California for the County of Los Angeles, Case No. BC313038 (the “PII Suit”). The PII Suit, which was brought as a purported class action, alleges two causes of action, each based on the factual allegation that the Company requests or requires, in conjunction with a customer’s use of his or her credit card, the customer to provide personal identification information which is recorded upon the credit card transaction form. The PII Suit seeks: (i) civil penalties pursuant to the California Civil Code; (ii) an order enjoining the Company from requesting or requiring that a customer provide personal identification information which is then recorded on the transaction form; (iii) permanent and preliminary injunctions against the Company requesting or requiring that a customer provide personal identification information which is then recorded on the transaction form; (iv) restitution of all funds allegedly acquired by means of any act or practice declared by the Court to be unlawful or fraudulent or to constitute a violation of the California Business and Professions Code; (v) attorney’s fees; and (vi) costs of suit. The court has not yet decided whether the action may proceed as a class action. The Court has determined that the claim for restitution may not proceed. We have reached a tentative settlement; however, no assurance can be given that the court will approve the settlement or that the anticipated resolution will be realized. We do not believe the ultimate resolution of the PII Suit will have a material adverse effect on our financial position, results of operations or cash flows.

     In addition, we are involved in various routine legal proceedings, including ongoing litigation, incidental to the conduct of our business. Management believes that none of these matters will have a material adverse effect on our financial position, results of operations or cash flows.

11. SUBSEQUENT EVENT

     On March 4, 2005, we entered into a Succession Agreement with Eric J. Lane, former President and Chief Operating Officer and current Executive Vice President of the Company. Eric J. Lane, voluntarily and at his request, stepped down as President and Chief Operating Officer effective February 1, 2005 and will serve as an Executive Vice President of the Company through July 31, 2005.

     On March 8, 2005, we committed to a course of action in connection with the termination of operations in our R&D retail concept “Eddie Rodriguez”. We have determined that there will be no further investments made in Eddie Rodriguez and that the six stores operating as of January 29, 2005 will be wound down over the course of fiscal 2005.

45

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

12. QUARTERLY RESULTS OF OPERATIONS (Unaudited)

     Our quarterly results of operations reflect all adjustments, consisting only of normal, recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The consolidated results of operations by quarter for the 2003 and 2004 fiscal years are presented below (in thousands, except per share amounts):

	Fiscal 2003
	Quarters Ended
	May 3,		August 2,		November 1,		January 31,
	2003		2003		2003		2004
	(as restated-		(as restated-		(as restated-		(as restated-
	note 13)		note 13)		note 13)		note 13)
Net sales	$	313,122	$	334,292	$	322,613	$	422,653
Gross margin		111,091		122,807		118,321		161,227
Net earnings	$	10,936	$	11,353	$	8,840	$	18,605
Net earnings per share:
Basic	$	0.28	$	0.29	$	0.23	$	0.50
Diluted	$	0.28	$	0.29	$	0.22	$	0.49

	Fiscal 2004
	Quarters Ended
	May 1,		July 31,		October 30,		January 29,
	2004		2004		2004		2005
	(as restated-		(as restated-		(as restated-
	note 13)		note 13)		note 13)
Net sales	$	360,729	$	369,480	$	357,795	$	458,675
Gross margin		137,810		145,456		139,356		180,382
Net earnings	$	15,055	$	18,380	$	12,878	$	25,043
Net earnings per share:
Basic	$	0.42	$	0.51	$	0.36	$	0.69
Diluted	$	0.41	$	0.50	$	0.35	$	0.67

     As previously reported:

	Fiscal 2003
	Quarters Ended
	May 3,		August 2,		November 1,		January 31,
	2003		2003		2003		2004
Net sales	$	313,122	$	334,292	$	322,613	$	422,653
Gross margin		111,219		122,936		118,438		161,350
Net earnings	$	11,012	$	11,448	$	9,055	$	18,511
Net earnings per share:
Basic	$	0.28	$	0.29	$	0.23	$	0.50
Diluted	$	0.28	$	0.29	$	0.23	$	0.49

	Fiscal 2004 Quarters Ended
	May 1,		July 31,		October 30,
	2004		2004		2004
Net sales	$	360,729	$	369,480	$	357,795
Gross margin		137,872		145,444		139,365
Net earnings	$	15,096	$	18,214	$	12,574
Net earnings per share:
Basic	$	0.42	$	0.51	$	0.35
Diluted	$	0.41	$	0.50	$	0.34

     Due to the method of calculating weighted average common shares outstanding, the sum of the quarterly per share amounts may not equal earnings per share for the respective years.

46

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

13. RESTATEMENT OF FINANCIAL STATEMENTS

     Like many other companies in the retail and restaurant industries, we recently reviewed our accounting treatment for leases and depreciation of related leasehold improvements. Following our review, we determined to restate our prior financial statements for fiscal 2002 and 2003. Although we do not consider that these errors resulted in a material misstatement of our consolidated financial statements for any previously reported annual period, the aggregate effect of correcting the errors in the fourth quarter of fiscal 2004 would have had a material effect on our results of operations for that year.

     Historically, when accounting for leases, we recorded rent expense on a straight-line basis over the initial non-cancelable lease term, with the term commencing generally when the store opened. We depreciated leasehold improvements on those properties over the lesser of the useful life of the asset or an average period, ranging from eight to 15 years for different leasehold groups, which represented the initial non-cancelable lease term plus periods of expected renewal. Landlord incentives received for reimbursement of leasehold improvements were netted against the amount recorded for the leasehold improvements.

     We have conformed our lease terms used for recording straight-line rent and depreciation of leasehold improvements to include renewal option periods where the renewal appears reasonably assured. The lease terms commence when we take possession with the right to control use of the leased premises. We have also adopted a policy of capitalizing rent amounts allocated to the construction period for leased properties as leasehold improvements. Landlord incentives received for reimbursement of leasehold improvements are recorded as deferred rent and amortized as a reduction to rent expense over the term of the lease. We have restated our fiscal 2002 and 2003 consolidated financial statements for these lease accounting matters. We have also restated our quarterly financial results for fiscal 2003 and 2004 as shown in Note 12.

     The restatement adjustments decreased net earnings by $0.1 million and $0.3 million in fiscal 2002 and 2003, respectively. The cumulative effect of these accounting changes is a reduction to retained earnings of $5.1 million as of the beginning of fiscal 2002. The restatement did not have any impact on our previously reported net cash flows or our sales or comparable store sales.

	Fiscal Year 2003
	As Previously
(In thousands, except per share amounts)	Reported			Adjustment			As Restated
Consolidated Balance Sheet:
Other current assets	$	30,858		$	170		$	31,028
Property and equipment, net		215,064			8,759			223,823
Total assets		869,198			8,929			878,127
Income taxes payable		26,096			(52	)		26,044
Deferred taxes and other liabilities		31,682			14,649			46,331
Retained earnings		447,566			(5,492	)		442,074
Accumulated other comprehensive income		10,533			(176	)		10,357
Total shareholders’ equity		493,460			(5,668	)		487,792
Consolidated Statement of Earnings:
Cost of goods sold, including buying, distribution and occupancy costs	$	878,737		$	497		$	879,234
Gross margin		513,943			(497	)		513,446
Selling, general and administrative expenses		431,695			(32	)		431,663
Operating income		82,248			(465	)		81,783
Earnings before income taxes		79,737			(465	)		79,272
Provision for income taxes		29,711			(173	)		29,538
Net earnings		50,026			(292	)		49,734
Basic earnings per share (1)		1.29			(0.008	)		1.28
Diluted earnings per share (1)		1.27			(0.007	)		1.27
Consolidated Statement of Cash Flows:
Cash provided by operating activities	$	118,767		$	963		$	119,730
Cash used in investing activities		(54,844	)		(963	)		(55,807	)

47

THE MEN’S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	Fiscal Year 2002
	As Previously
(In thousands, except per share amounts)	Reported			Adjustment			As Restated
Consolidated Statement of Earnings:
Cost of goods sold, including buying, distribution and occupancy costs	$	840,701		$	109		$	840,810
Gross margin		454,348			(109	)		454,239
Selling, general and administrative expenses		384,956			(17	)		384,939
Operating income		69,392			(92	)		69,300
Earnings before income taxes		68,131			(92	)		68,039
Provision for income taxes		25,719			(35	)		25,684
Net earnings		42,412			(57	)		42,355
Basic earnings per share (1)		1.04			(0.001	)		1.04
Diluted earnings per share (1)		1.04			(0.001	)		1.04
Consolidated Statement of Cash Flows:
Cash provided by operating activities	$	113,026		$	1,958		$	114,984
Cash used in investing activities		(41,229	)		(1,958	)		(43,187	)

(1) Due to the effect of rounding, the sum of the per share amounts may not equal the effect of the adjustment.

48

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     Our management, with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the CEO and CFO have concluded that, as of the end of such period, our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports filed or submitted under the Exchange Act, within the time periods specified in the SEC’s rules and forms.

Internal Control over Financial Reporting

     Management’s Report on Internal Control Over Financial Reporting and the Attestation Report of the Registered Public Accounting Firm thereon appear on pages 25 and 26, respectively, of this Annual Report on Form 10-K. There were no changes in our internal control over financial reporting that occurred during the fourth quarter of fiscal 2004 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     Except as set forth below, the information required by this Item is incorporated herein by reference from our Proxy Statement for the Annual Meeting of Shareholders to be held June 29, 2005.

     The Company has adopted a Code of Ethics for Senior Management which applies to the Company’s Chief Executive Officer and all Presidents, Chief Financial Officers, Principal Accounting Officers, Executive Vice Presidents and other designated financial and operations officers. A copy of such policy is posted on the Company’s website, www.menswearhouse.com, under the heading “Corporate Governance”.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this Item is incorporated herein by reference from our Proxy Statement for the Annual Meeting of Shareholders to be held June 29, 2005.

49

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The following table sets forth certain equity compensation plan information for the Company as of January 29, 2005.

	Number of		Weighted-		Number of Securities
	Securities to be		Average		Remaining Available for
	Issued Upon		Exercise		Future Issuance Under
	Exercise of		Price of		Equity Compensation
	Outstanding		Outstanding		Plans (excluding
	Options		Options		securities in column (a))
Plan Category	(a)		(b)		(c)
Equity Compensation Plans Approved by Security Holders		1,424,526		21.49		1,047,328
Equity Compensation Plans Not Approved by Security Holders (1)		1,330,662		25.05		137,124
Total		2,755,188		21.76		1,184,452

(1) The Company has adopted the 1998 Key Employee Stock Option Plan (the “1998 Plan”) which, as amended, provides for the grant of options to purchase up to 2,100,000 shares of the Company’s common stock to full-time key employees (excluding executive officers), of which 1,245,458 shares are to be issued upon the exercise of outstanding options and 137,124 shares remain available for future issuance under the 1998 Plan. Options granted under the 1998 Plan must be exercised within ten years from the date of grant. Unless otherwise provided by the Stock Option Committee, options granted under the 1998 Plan vest at the rate of 1/3 of the shares covered by the grant on each of the first three anniversaries of the date of grant and may not be issued at a price less than 50% of the fair market value of our stock on the date of grant. However, a significant portion of options granted under these Plans vest annually in varying increments over a period from one to ten years.

In connection with the merger with K&G Men’s Center, Inc. in June 1999, the Company granted substitute options to certain holders of options to purchase shares of common stock of K&G Men’s Center, Inc. who were not eligible to participate in the Company’s stock option plans at a weighted-average exercise price of $44.12. Of the 62,134 shares initially reserved for issuance pursuant to such options, options covering 18,704 shares remain unexercised at this time.

In connection with other acquisitions, the Company entered into employment or consulting arrangements with certain key individuals at the acquired companies and issued to them options to purchase 30,000 shares at an exercise price of $17.42, 22,500 shares at an exercise price of $24.25, and 32,000 shares at an exercise price of $15.98, of which 14,000 shares remain unexercised.

     The additional information required by Item 12 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held June 29, 2005.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item is incorporated herein by reference from our Proxy Statement for the Annual Meeting of Shareholders to be held June 29, 2005.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information required by this Item is incorporated herein by reference from our Proxy Statement for the Annual Meeting of Shareholders to be held June 29, 2005.

50

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. Financial Statements

     The following consolidated financial statements of the Company are included in Part II, Item 8:

Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of January 31, 2004 (as restated-note 13) and January 29, 2005

Consolidated Statements of Earnings for the years ended February 1, 2003 (as restated-note 13), January 31, 2004 (as restated-note 13) and January 29, 2005

Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the years ended February 1, 2003 (as restated-note 13), January 31, 2004 (as restated-note 13) and January 29, 2005

Consolidated Statements of Cash Flows for the years ended February 1, 2003 (as restated-note 13), January 31, 2004 (as restated-note 13) and January 29, 2005

Notes to Consolidated Financial Statements

2. Financial Statement Schedules

     Schedule II – Valuation and Qualifying Accounts

The Men’s Wearhouse, Inc.
(In thousands)

	Balance at		Charged to			Charged to		Deductions					Balance at
	Beginning		Costs			Other		from			Translation		End of
	of Period		and Expenses			Accounts (4)		Reserve (2)			Adjustment		Period
Allowance for uncollectible accounts (1) :
Year ended February 1, 2003	$	322	$	225		$	—	$	(106	)	$	—	$	441
Year ended January 31, 2004		441		360			—		(411	)		3		393
Year ended January 29, 2005		393		300			—		(289	)		1		405
Allowance for sales returns (1) (3) :
Year ended February 1, 2003	$	325	$	—		$	—	$	—		$	—	$	325
Year ended January 31, 2004		325		(53	)		92		—			—		364
Year ended January 29, 2005		364		(96	)		158		—			—		426
Inventory reserves (1) :
Year ended February 1, 2003	$	10,560	$	(3,551	)	$	—	$	—		$	125	$	7,134
Year ended January 31, 2004		7,134		(588	)		—		—			311		6,857
Year ended January 29, 2005		6,857		48			—		—			192		7,097

(1)	The allowance for uncollectible accounts, the allowance for sales returns and the inventory reserves are evaluated at the end of each fiscal quarter and adjusted based on the evaluation.
(2)	Consists primarily of write-offs of bad debt.
(3)	Allowance for sales returns is included in accrued expenses.
(4)	Deducted from net sales.

     All other schedules are omitted because they are not applicable or because the required information is included in the Consolidated Financial Statements or Notes thereto.

51

3. Exhibits

Exhibit
Number		Exhibit
3.1	—	Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 1994).
3.2	—	By-laws, as amended (incorporated by reference from Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 1997).
3.3	—	Articles of Amendment to the Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 1999).
4.1	—	Restated Articles of Incorporation (included as Exhibit 3.1).
4.2	—	By-laws (included as Exhibit 3.2).
4.3	—	Form of Common Stock certificate (incorporated by reference from Exhibit 4.3 to the Company’s Registration Statement on Form S-1 (Registration No. 33-45949)).
4.4	—	Articles of Amendment to the Restated Articles of Incorporation (included as Exhibit 3.3).
4.5	—	Revolving Credit Agreement dated as of January 29, 2003, among the Company and JPMorgan Chase Bank and the Banks listed therein (incorporated by reference from Exhibit 4.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003).
4.6	—	Term Sheet Agreement dated as of January 29, 2003 evidencing the uncommitted CAN$10 million facility of National City Bank, Canada Branch to Golden Brand Clothing (Canada) Ltd. (incorporated by reference from Exhibit 4.7 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003).
4.7	—	Indenture (including form of note) dated October 21, 2003 among the Company and JPMorgan Chase Bank, as trustee, relating to the Company’s 3.125% Convertible Senior Notes due 2023 (incorporated by reference from Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 1, 2003).
4.8	—	Registration Rights Agreement dated October 21, 2003 among the Company and Bear Stearns & Co. Inc., Wachovia Capital Markets, LLC, J.P. Morgan Securities Inc., Fleet Securities, Inc. (incorporated by reference from Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 1, 2003).
4.9	—	First Amendment to Revolving Credit Agreement, dated October 13, 2003 among the Company, JPMorgan Chase Bank and the Banks listed therein (incorporated by reference from Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 1, 2003).
4.10	—	Second Amendment to Revolving Credit Agreement dated July 7, 2004, by and among the Company, JPMoran Chase Bank and the Banks listed therein (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2004).
4.11	—	Supplemental Indenture dated January 28, 2005, by and between the Company and JPMorgan Chase Bank, National Association (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 28, 2005).
*10.1	—	1992 Stock Option Plan (incorporated by reference from Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (Registration No. 33-45949)).
*10.2	—	First Amendment to 1992 Stock Option Plan (incorporated by Reference from Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (Registration No. 33-60516)).
*10.3	—	1992 Non-Employee Director Stock Option Plan (As Amended and Restated Effective January 1, 2004), including the forms of stock option agreement and restricted stock award agreement (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 18, 2005).
*10.4	—	Stock Agreement dated as of March 23, 1992, between the Company and George Zimmer (incorporated by reference from Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (Registration No. 33-45949)).
*10.5	—	Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated November 25, 1994 between the Company, George Zimmer and David Edwab, Co-Trustee of the Zimmer 1994 Irrevocable Trust (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 1995).
*10.6	—	1996 Long-Term Incentive Plan (As Amended and Restated Effective March 29, 2004), including the forms of stock option agreement, restricted stock award agreement and deferred stock unit award agreement (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on March 18, 2005).
*10.7	—	1998 Key Employee Stock Option Plan (incorporated by reference from Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1998).
*10.8	—	First Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (registration No. 333-80033)).
*10.9	—	Second Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2000).

52

Exhibit
Number		Exhibit
*10.10	—	Split-Dollar Agreement dated January 14, 2002, by and between the Company and Eric Lane (incorporated by reference from Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.11	—	Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25, 1995, by and between the Company and David H. Edwab (incorporated by reference from Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.12	—	Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25, 1995, between the Company, David H. Edwab and George Zimmer, Co-Trustee of the David H. Edwab 1995 Irrevocable Trust (incorporated by reference from Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.13	—	First Amendment to Split-Dollar Agreement dated January 17, 2002, between the Company, David H. Edwab and George Zimmer, Trustee of the David H. Edwab 1995 Irrevocable Trust (incorporated by reference from Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.14	—	Amended and Restated Employment Agreement effective as of February 3, 2003, by and between the Company and David H. Edwab (incorporated by reference from Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31,2004).
*10.15	—	Aircraft Lease Agreement dated August 20, 2004, by and between Regal Aviation LLC and MW Sky LLC (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2004).
*10.16	—	2004 Long-Term Incentive Plan (filed herewith).
*10.17	—	Succession Agreement between the Company and Eric J. Lane (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 4, 2005).
21.1	—	Subsidiaries of the Company (filed herewith).
23.1	—	Consent of Deloitte & Touche LLP, independent auditors (filed herewith).
31.1	—	Certification of Annual Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).
31.2	—	Certification of Annual Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).
32.1	—	Certification of Annual Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).
32.2	—	Certification of Annual Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).

* Management Compensation or Incentive Plan

     The Company will furnish a copy of any exhibit described above to any beneficial holder of its securities upon receipt of a written request therefore, provided that such request sets forth a good faith representation that, as of the record date for the Company’s 2005 Annual Meeting of Shareholders, such beneficial holder is entitled to vote at such meeting, and provided further that such holder pays to the Company a fee compensating the Company for its reasonable expenses in furnishing such exhibits.

53

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE MEN’S WEARHOUSE, INC.
By	/s/ GEORGE ZIMMER
	George Zimmer
	Chairman of the Board and
	Chief Executive Officer

Dated: April 28, 2005

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated.

Signature	Title	Date
/s/ GEORGE ZIMMER	Chairman of the Board, Chief	April 28, 2005
George Zimmer	Executive Officer and Director
/s/ NEILL P. DAVIS	Executive Vice President, Chief Financial	April 28, 2005
Neill P. Davis	Officer and Principal Financial Officer
/s/ DIANA M. WILSON	Senior Vice President and Principal Accounting Officer	April 28, 2005
Diana M. Wilson
/s/ DAVID H. EDWAB	Vice Chairman of the Board and Director	April 28, 2005
David H. Edwab
/s/ RINALDO S. BRUTOCO	Director	April 28, 2005
Rinaldo S. Brutoco
/s/ MICHAEL L. RAY	Director	April 28, 2005
Michael L. Ray
/s/ SHELDON I. STEIN	Director	April 28, 2005
Sheldon I. Stein
/s/ KATHLEEN MASON	Director	April 28, 2005
Kathleen Mason
/s/ DEEPAK CHOPRA	Director	April 28, 2005
Deepak Chopra
/s/ WILLIAM B. SECHREST	Director	April 28, 2005
William B. Sechrest

54

Exhibit Index

Exhibit
Number		Exhibit
3.1	—	Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 1994).
3.2	—	By-laws, as amended (incorporated by reference from Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 1997).
3.3	—	Articles of Amendment to the Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 1999).
4.1	—	Restated Articles of Incorporation (included as Exhibit 3.1).
4.2	—	By-laws (included as Exhibit 3.2).
4.3	—	Form of Common Stock certificate (incorporated by reference from Exhibit 4.3 to the Company’s Registration Statement on Form S-1 (Registration No. 33-45949)).
4.4	—	Articles of Amendment to the Restated Articles of Incorporation (included as Exhibit 3.3).
4.5	—	Revolving Credit Agreement dated as of January 29, 2003, among the Company and JPMorgan Chase Bank and the Banks listed therein (incorporated by reference from Exhibit 4.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003).
4.6	—	Term Sheet Agreement dated as of January 29, 2003 evidencing the uncommitted CAN$10 million facility of National City Bank, Canada Branch to Golden Brand Clothing (Canada) Ltd. (incorporated by reference from Exhibit 4.7 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003).
4.7	—	Indenture (including form of note) dated October 21, 2003 among the Company and JPMorgan Chase Bank, as trustee, relating to the Company’s 3.125% Convertible Senior Notes due 2023 (incorporated by reference from Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 1, 2003).
4.8	—	Registration Rights Agreement dated October 21, 2003 among the Company and Bear Stearns & Co. Inc., Wachovia Capital Markets, LLC, J.P. Morgan Securities Inc., Fleet Securities, Inc. (incorporated by reference from Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 1, 2003).
4.9	—	First Amendment to Revolving Credit Agreement, dated October 13, 2003 among the Company, JPMorgan Chase Bank and the Banks listed therein (incorporated by reference from Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 1, 2003).
4.10	—	Second Amendment to Revolving Credit Agreement dated July 7, 2004, by and among the Company, JPMoran Chase Bank and the Banks listed therein (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2004).
4.11	—	Supplemental Indenture dated January 28, 2005, by and between the Company and JPMorgan Chase Bank, National Association (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 28, 2005).
*10.1	—	1992 Stock Option Plan (incorporated by reference from Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (Registration No. 33-45949)).
*10.2	—	First Amendment to 1992 Stock Option Plan (incorporated by Reference from Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (Registration No. 33-60516)).
*10.3	—	1992 Non-Employee Director Stock Option Plan (As Amended and Restated Effective January 1, 2004), including forms of stock option agreement and restricted stock award agreement (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 18, 2005).
*10.4	—	Stock Agreement dated as of March 23, 1992, between the Company and George Zimmer (incorporated by reference from Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (Registration No. 33-45949)).
*10.5	—	Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated November 25, 1994 between the Company, George Zimmer and David Edwab, Co-Trustee of the Zimmer 1994 Irrevocable Trust (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 1995).
*10.6	—	1996 Long-Term Incentive Plan (As Amended and Restated Effective March 29, 2004), including the forms of stock option agreement, restricted stock award agreement and deferred stock unit award agreement (incorporated by reference from Exhibit 10.20 to the Company’s Current Report on Form 8-K filed with the Commission on March 18, 2005).

60

Exhibit
Number		Exhibit
*10.7	—	1998 Key Employee Stock Option Plan (incorporated by reference from Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1998).
*10.8	—	First Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (registration No. 333-80033)).
*10.9	—	Second Amendment to 1998 Key Employee Stock Option Plan (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2000).
*10.10	—	Split-Dollar Agreement dated January 14, 2002, by and between the Company and Eric Lane (incorporated by reference from Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.11	—	Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25, 1995, by and between the Company and David H. Edwab (incorporated by reference from Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.12	—	Split-Dollar Agreement and related Split-Dollar Collateral Assignment dated May 25, 1995, between the Company, David H. Edwab and George Zimmer, Co-Trustee of the David H. Edwab 1995 Irrevocable Trust (incorporated by reference from Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.13	—	First Amendment to Split-Dollar Agreement dated January 17, 2002, between the Company, David H. Edwab and George Zimmer, Trustee of the David H. Edwab 1995 Irrevocable Trust (incorporated by reference from Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2002).
*10.14	—	Amended and Restated Employment Agreement effective as of February 3, 2003, by and between the Company and David H. Edwab (incorporated by reference from Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004).
*10.15	—	Aircraft Lease Agreement dated August 20, 2004, by and between Regal Aviation LLC and MW Sky LLC (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2004).
*10.16	—	2004 Long-Term Incentive Plan (filed herewith).
*10.17	—	Succession Agreement between the Company and Eric J. Lane (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 4, 2005).
21.1	—	Subsidiaries of the Company (filed herewith).
23.1	—	Consent of Deloitte & Touche LLP, independent auditors (filed herewith).
31.1	—	Certification of Annual Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).
31.2	—	Certification of Annual Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).
32.1	—	Certification of Annual Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer (filed herewith).
32.2	—	Certification of Annual Report Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer (filed herewith).

* Management Compensation or Incentive Plan

61

EX-10.16

                                                                   EXHIBIT 10.16

                           THE MEN'S WEARHOUSE, INC.

                         2004 LONG-TERM INCENTIVE PLAN

                                                                               .
                                                                               .
                                                                               .

                               TABLE OF CONTENTS



                                                              SECTION
                                                              -------
                                                           
          ARTICLE I -- ESTABLISHMENT, PURPOSE AND DURATION
Establishment...............................................     1.1
Purpose of the Plan.........................................     1.2
Duration of Authority to Make Grants Under the Plan.........     1.3
                      ARTICLE II -- DEFINITIONS
Affiliate...................................................     2.1
Award.......................................................     2.2
Award Agreement.............................................     2.3
Board.......................................................     2.4
Cash-Based Award............................................     2.5
Code........................................................     2.6
Committee...................................................     2.7
Company.....................................................     2.8
Corporate Change............................................     2.9
Covered Employee............................................    2.10
Deferred Stock Unit.........................................    2.11
Deferred Stock Unit Award...................................    2.12
Disability..................................................    2.13
Effective Date..............................................    2.14
Employee....................................................    2.15
Exchange Act................................................    2.16
Fair Market Value...........................................    2.17
Fiscal Year.................................................    2.18
Freestanding SAR............................................    2.19
Holder......................................................    2.20
Incentive Stock Option or ISO...............................    2.21
Mature Shares...............................................    2.22
Nonqualified Stock Option or NQSO...........................    2.23
Option......................................................    2.24
Option Price................................................    2.25
Optionee....................................................    2.26
Option Agreement............................................    2.27
Other Stock-Based Award.....................................    2.28
Parent Corporation..........................................    2.29
Performance-Based Award.....................................    2.30
Performance-Based Compensation..............................    2.31
Performance Goals...........................................    2.32
Performance Period..........................................    2.33
Performance Stock Award.....................................    2.34
Performance Unit Award......................................    2.35
Period of Restriction.......................................    2.36
Plan........................................................    2.37
Restricted Stock............................................    2.38
Restricted Stock Award......................................    2.39
Retirement..................................................    2.40
Stock Appreciation Right or SAR.............................    2.41
Stock.......................................................    2.42
Subsidiary Corporation......................................    2.43
Tandem SAR..................................................    2.44


                                        i




                                                              SECTION
                                                              -------
                                                           
Ten Percent Stockholder.....................................    2.45
Termination of Employment...................................    2.46
TMW Group...................................................    2.47

            ARTICLE III -- ELIGIBILITY AND PARTICIPATION
Eligibility.................................................     3.1
Participation...............................................     3.2

         ARTICLE IV -- GENERAL PROVISIONS RELATING TO AWARDS
Authority to Grant Awards...................................     4.1
Dedicated Shares; Maximum Awards............................     4.2
Non-Transferability.........................................     4.3
Requirements of Law.........................................     4.4
Changes in the Company's Capital Structure..................     4.5
Election Under Section 83(b) of the Code....................     4.6
Forfeiture for Cause........................................     4.7
Forfeiture Events...........................................     4.8

                        ARTICLE V -- OPTIONS
Authority to Grant Options..................................     5.1
Type of Options Available...................................     5.2
Option Agreement............................................     5.3
Option Price................................................     5.4
Duration of Options.........................................     5.5
Amount Exercisable..........................................     5.6
Exercise of Options.........................................     5.7
Transferability of Options..................................     5.8
Notification of Disqualifying Disposition...................     5.9
No Rights as Stockholder....................................    5.10
$100,000 Limitation on Incentive Stock Options..............    5.11

               ARTICLE VI -- STOCK APPRECIATION RIGHTS
Authority to Grant Stock Appreciation Rights Awards.........     6.1
Type of Stock Appreciation Rights Available.................     6.2
Stock Appreciation Right Agreement..........................     6.3
Term of Stock Appreciation Rights...........................     6.4
Exercise of Freestanding SARs...............................     6.5
Exercise of Tandem SARs.....................................     6.6
Payment of SAR Amount.......................................     6.7
Termination of Employment...................................     6.8
Nontransferability of SARs..................................     6.9
No Rights as Stockholder....................................    6.10
Restrictions on Stock Received..............................    6.11

               ARTICLE VII -- RESTRICTED STOCK AWARDS
Restricted Stock Awards.....................................     7.1
Holder's Rights as Stockholder..............................     7.2

             ARTICLE VIII -- DEFERRED STOCK UNIT AWARDS
Authority to Grant Deferred Stock Unit Awards...............     8.1
Deferred Stock Unit Awards..................................     8.2
Deferred Stock Unit Award Agreement.........................     8.3
Payments Under Deferred Stock Unit Awards...................     8.4
Holder's Rights as Stockholder..............................     8.5


                                        ii




                                                              SECTION
                                                              -------
                                                           
     ARTICLE IX -- PERFORMANCE STOCK AND PERFORMANCE UNIT AWARDS
  Authority to Grant Performance Stock and Performance Unit
     Awards.................................................     9.1
  Rights as Stockholder.....................................     9.2
  Increases Prohibited......................................     9.3

     ARTICLE X -- CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS
  Authority to Grant Cash-Based Awards......................    10.1
  Authority to Grant Other Stock-Based Awards...............    10.2
  Value of Cash-Based Awards and Other Stock-Based Awards...    10.3
  Payment of Cash-Based Awards and Other Stock-Based
     Awards.................................................    10.4
  Termination of Employment.................................    10.5
  Nontransferability........................................    10.6

                  ARTICLE XI -- SUBSTITUTION AWARDS

                    ARTICLE XII -- ADMINISTRATION
  Awards....................................................    12.1
  Authority of the Committee................................    12.2
  Decisions Binding.........................................    12.3
  No Liability..............................................    12.4

          ARTICLE XIII -- AMENDMENT OR TERMINATION OF PLAN
  Amendment, Modification, Suspension, and Termination......    13.1
  Awards Previously Granted.................................    13.2

                    ARTICLE XIV -- MISCELLANEOUS
  Unfunded Plan/No Establishment of a Trust Fund............    14.1
  No Employment Obligation..................................    14.2
  Tax Withholding...........................................    14.3
  Written Agreement.........................................    14.4
  Indemnification of the Committee..........................    14.5
  Gender and Number.........................................    14.6
  Severability..............................................    14.7
  Headings..................................................    14.8
  Other Compensation Plans..................................    14.9
  Other Awards..............................................   14.10
  Successors................................................   14.11
  Law Limitations/Governmental Approvals....................   14.12
  Delivery of Title.........................................   14.13
  Inability to Obtain Authority.............................   14.14
  Investment Representations................................   14.15
  Persons Residing Outside of the United States.............   14.16
  No Fractional Shares......................................   14.17
  Arbitration of Disputes...................................   14.18
  Governing Law.............................................   14.19


                                       iii


                                   ARTICLE I

                      ESTABLISHMENT, PURPOSE AND DURATION

     1.1  Establishment.  The Company hereby establishes an incentive
compensation plan, to be known as "The Men's Wearhouse, Inc. 2004 Long-Term
Incentive Plan," as set forth in this document. The Plan permits the grant of
Options (both Incentive Stock Options and Nonqualified Stock Options), Stock
Appreciation Rights, Restricted Stock, Deferred Stock Units, Performance Stock
Awards, Performance Units, Cash-Based Awards, and Other Stock-Based Awards. The
Plan shall become effective and shall be deemed to have been adopted on the date
the Plan is approved by the Board if within one year of that date it shall have
been approved by the holders of at least a majority of the outstanding shares of
voting stock of the Company or if the provisions of the corporate charter,
by-laws or applicable state law prescribes a greater degree of stockholder
approval for this action, the approval by the holders of that percentage, at a
meeting of stockholders (the "Effective Date"), and shall remain in effect as
provided in Section 1.3.

     1.2  Purpose of the Plan.  The purpose of the Plan is to reward certain
corporate officers and other employees of the Company and its Affiliates
(collectively, the "TMW Group") by enabling them to acquire shares of common
stock of the Company and to receive other compensation based on the increase in
value of the common stock of the Company or certain other performance measures.
The Plan is intended to advance the best interests of the Company, its
Affiliates and its stockholders by providing those persons who have substantial
responsibility for the management and growth of the TMW Group with additional
performance incentives and an opportunity to obtain or increase their
proprietary interest in the Company, thereby encouraging them to continue in
their employment with the TMW Group.

     1.3  Duration of Authority to Make Grants Under the Plan.  No Awards may be
granted under the Plan on or after the tenth anniversary of the Effective Date.
The applicable provisions of the Plan will continue in effect with respect to an
Award granted under the Plan for as long as such Award remains outstanding.

                                   ARTICLE II

                                  DEFINITIONS

     The words and phrases defined in this Article shall have the meaning set
out below throughout the Plan, unless the context in which any such word or
phrase appears reasonably requires a broader, narrower or different meaning.

     2.1  "Affiliate" means any corporation, partnership, limited liability
company or association, trust or other entity or organization which, directly or
indirectly, controls, is controlled by, or is under common control with, the
Company. For purposes of the preceding sentence, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any entity or organization, shall mean the
possession, directly or indirectly, of the power (a) to vote more than 50
percent (50%) of the securities having ordinary voting power for the election of
directors of the controlled entity or organization, or (ii) to direct or cause
the direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by contract
or otherwise.

     2.2  "Award" means, individually or collectively, a grant under the Plan of
Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Stock, Deferred Stock Units, Performance Stock Awards, Performance
Units, Cash-Based Awards, and Other Stock-Based Awards, in each case subject to
the terms and provisions of the Plan.

     2.3  "Award Agreement" means an agreement that sets forth the terms and
conditions applicable to an Award granted under the Plan.

     2.4  "Board" means the board of directors of the Company.

     2.5  "Cash-Based Award" means an Award granted to a Holder pursuant to
Article X.

     2.6  "Code" means the United States Internal Revenue Code of 1986, as
amended from time to time.

                                       1


     2.7  "Committee" means a committee of at least two persons, who are members
of the Compensation Committee of the Board and are appointed by the Compensation
Committee of the Board, or, to the extent it chooses to operate as the
Committee, the Compensation Committee of the Board. Each member of the Committee
in respect of his or her participation in any decision with respect to an Award
intended to satisfy the requirements of section 162(m) of the Code must satisfy
the requirements of "outside director" status within the meaning of section
162(m) of the Code; provided, however, that the failure to satisfy such
requirement shall not affect the validity of the action of any committee
otherwise duly authorized and acting in the matter. As to Awards, grants or
other transactions that are authorized by the Committee and that are intended to
be exempt under Rule 16b-3, the requirements of Rule 16b-3(d)(1) with respect to
committee action must also be satisfied.

     2.8  "Company" means The Men's Wearhouse, Inc., a Texas corporation, or any
successor (by reincorporation, merger or otherwise).

     2.9  "Corporate Change" shall have the meaning ascribed to that term in
Section 4.5(c).

     2.10  "Covered Employee" means a Holder who is a "covered employee," as
defined in section 162(m) of the Code and the regulations promulgated
thereunder, or any successor statute.

     2.11  "Deferred Stock Unit" means a unit credited to a Holder's ledger
account maintained by the Company pursuant to Article VIII.

     2.12  "Deferred Stock Unit Award" means an Award granted pursuant to
Article VIII.

     2.13  "Disability" means as determined by the Committee in its discretion
exercised in good faith, a physical or mental condition of the Holder that would
entitle him to payment of disability income payments under the Company's
long-term disability insurance policy or plan for employees as then in effect;
or in the event that the Holder is not covered, for whatever reason under the
Company's long-term disability insurance policy or plan for employees or in the
event the Company does not maintain such a long-term disability insurance
policy, "Disability" means a permanent and total disability as defined in
section 22(e)(3) of the Code. A determination of Disability may be made by a
physician selected or approved by the Committee and, in this respect, the Holder
shall submit to an examination by such physician upon request by the Committee.

     2.14  "Effective Date" shall have the meaning ascribed to that term in
Section 1.1.

     2.15  "Employee" means (a) a person employed by the Company or any
Affiliate as a common law employee or (b) a person who has agreed to become a
common law employee of the Company or any Affiliate and is expected to become
such within six (6) months from the date of a determination made for purposes of
the Plan.

     2.16  "Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time.

     2.17  "Fair Market Value" of the Stock as of any particular date means, if
the Stock is traded on a stock exchange, the closing sale price of the Stock on
that date as reported on the principal securities exchange on which the Stock is
traded, if the Stock is traded in the over-the-counter market, the average
between the high bid and low asked price on that date as reported in such
over-the-counter market, provided that (a) if the Stock is not so traded, (b) if
no closing price or bid and asked prices for the stock was so reported on that
date or (c) if, in the discretion of the Committee, another means of determining
the fair market value of a share of Stock at such date shall be necessary or
advisable, the Committee may provide for another means for determining such fair
market value.

     2.18  "Fiscal Year" means the Company's fiscal year.

     2.19  "Freestanding SAR" means a SAR that is granted independently of any
Option pursuant to Article VI.

     2.20  "Holder" means a person who has been granted an Award or any person
who is entitled to receive Shares (and/or cash in the case of a Stock
Appreciation Right) under an Award.

                                       2


     2.21  "Incentive Stock Option" or "ISO" means an option which is intended,
as evidenced by its designation, as an incentive stock option within the meaning
of section 422 of the Code, the award of which contains such provisions
(including but not limited to the receipt of stockholder approval of the Plan,
if the Award is made prior to such approval) and is made under such
circumstances and to such persons as may be necessary to comply with that
section.

     2.22  "Mature Shares" means shares of Stock that the Holder has held for at
least six months.

     2.23  "Nonqualified Stock Option" or "NQSO" means an Option that is
designated as a nonqualified stock option. Any Option granted hereunder that is
not designated as an incentive stock option shall be deemed to be designated a
nonqualified stock option under the Plan and not an incentive stock option under
the Code.

     2.24  "Option" means an Incentive Stock Option or a Nonqualified Stock
Option granted pursuant to Article V.

     2.25  "Option Price" shall have the meaning ascribed to that term in
Section 5.4.

     2.26  "Optionee" means a person who is granted an Option under the Plan.

     2.27  "Option Agreement" means a written contract setting forth the terms
and conditions of an Option.

     2.28  "Other Stock-Based Award" means an equity-based or equity-related
Award not otherwise described by the terms and provisions of the Plan that is
granted pursuant to Article X.

     2.29  "Parent Corporation" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time of
the action or transaction, each of the corporations other than the Company owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.

     2.30  "Performance-Based Award" means a Performance Stock Award, a
Performance Unit, or a Cash-Based Award granted to a Holder under which the
fulfillment of performance goals determines the degree of payout or vesting.

     2.31  "Performance-Based Compensation" means compensation under an Award
that satisfies the requirements of section 162(m) of the Code for deductibility
of remuneration paid to Covered Employees.

     2.32  "Performance Goals" means one or more of the criteria described in
Article IX on which the performance goals applicable to an Award are based.

     2.33  "Performance Period" means the period of time during which the
performance goals applicable to a Performance-Based Award must be met.

     2.34  "Performance Stock Award" means an Award granted to a Holder pursuant
to Article IX.

     2.35  "Performance Unit Award" means an Award granted to a Holder pursuant
to Article IX.

     2.36  "Period of Restriction" means the period during which Restricted
Stock is subject to a substantial risk of forfeiture (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Committee, in its discretion), as provided in
Article VII.

     2.37  "Plan" means The Men's Wearhouse, Inc. 2004 Long-Term Incentive Plan,
as set forth in this document and as it may be amended from time to time.

     2.38  "Restricted Stock" means shares of restricted Stock issued or granted
under the Plan pursuant to Article VII.

     2.39  "Restricted Stock Award" means an authorization by the Committee to
issue or transfer Restricted Stock to a Holder.

                                       3


     2.40  "Retirement" means retirement in accordance with the terms of a
retirement plan that is qualified under section 401(a) of the Code and
maintained by the Company or an Affiliate in which the Holder is a participant.

     2.41  "Stock Appreciation Right" or "SAR" means any stock appreciation
right granted pursuant to Article VI of the Plan.

     2.42  "Stock" means the common stock of the Company, $.01 par value per
share (or such other par value as may be designated by act of the Company's
stockholders).

     2.43  "Subsidiary Corporation" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of the action or transaction, each of the corporations other than the
last corporation in an unbroken chain owns stock possessing 50 percent or more
of the total combined voting power of all classes of stock in one of the other
corporations in the chain.

     2.44  "Tandem SAR" means a SAR that is granted in connection with a related
Option pursuant to Article VI, the exercise of which shall require forfeiture of
the right to purchase a share of the Stock under the related Option (and when a
share of the Stock is purchased under the Option, the Tandem SAR shall similarly
be canceled).

     2.45  "Ten Percent Stockholder" means an individual who, at the time the
Option is granted, owns stock possessing more than ten percent of the total
combined voting power of all classes of stock or series of the Company or of any
Parent Corporation or Subsidiary Corporation. An individual shall be considered
as owning the stock owned, directly or indirectly, by or for his brothers and
sisters (whether by the whole or half blood), spouse, ancestors and lineal
descendants; and stock owned, directly or indirectly, by or for a corporation,
partnership, estate or trust, shall be considered as being owned proportionately
by or for its stockholders, partners or beneficiaries.

     2.46  "Termination of Employment" means, in the case of an Award other than
an Incentive Stock Option, the termination of the Award recipient's employment
relationship with the Company and all Affiliates. "Termination of Employment"
means, in the case of an Incentive Stock Option, the termination of the
Optionee's employment relationship with all of the Company, any Parent
Corporation, any Subsidiary Corporation and any parent or subsidiary corporation
(within the meaning of section 422(a)(2) of the Code) of any such corporation
that issues or assumes an Incentive Stock Option in a transaction to which
section 424(a) of the Code applies.

     2.47  "TMW Group" shall have the meaning ascribed to that term in Section
1.2.

                                  ARTICLE III

                         ELIGIBILITY AND PARTICIPATION

     3.1  Eligibility.  The persons who are eligible to receive Awards under the
Plan are Employees who have substantial responsibility for or involvement with
the management and growth of one or more members of the TMW Group. However, only
those persons who are, on the dates of grant, key employees of the Company or
any Parent Corporation or Subsidiary Corporation are eligible for grants of
Incentive Stock Options under the Plan.

     3.2  Participation.  Subject to the terms and provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees those
persons to whom Awards shall be granted and shall determine the nature and
amount of each Award.

                                   ARTICLE IV

                     GENERAL PROVISIONS RELATING TO AWARDS

     4.1  Authority to Grant Awards.  The Committee may grant Awards to those
Employees as the Committee shall from time to time determine, under the terms
and conditions of the Plan. Subject only to any

                                       4


applicable limitations set out in the Plan, the number of shares of Stock or
other value to be covered by any Award to be granted under the Plan shall be as
determined by the Committee in its sole discretion.

     4.2  Dedicated Shares; Maximum Awards.  The aggregate number of shares of
Stock with respect to which Awards may be granted under the Plan is 600,000. The
aggregate number of shares of Stock with respect to which Incentive Stock
Options may be granted under the Plan is 600,000. The aggregate number of shares
of Stock with respect to which Nonqualified Stock Options may be granted under
the Plan is 600,000. The aggregate number of shares of Stock with respect to
which Stock Appreciation Rights may be granted under the Plan is 600,000. The
aggregate number of shares of Stock with respect to which Restricted Stock
Awards may be granted under the Plan is 300,000. The aggregate number of shares
of Stock with respect to which Performance Stock Awards may be granted under the
Plan is 300,000. The maximum number of shares of Stock with respect to which
Incentive Stock Options may be granted to an Employee during a Fiscal Year is
200,000. The maximum number of shares of Stock with respect to which
Nonqualified Stock Options may be granted to an Employee during a Fiscal Year is
200,000. The maximum number of shares of Stock with respect to which Stock
Appreciation Rights may be granted to an Employee during a Fiscal Year is
200,000. The maximum number of shares of Stock with respect to which Restricted
Stock Awards may be granted to an Employee during a Fiscal Year is 150,000. The
maximum amount with respect to which Deferred Stock Unit Awards may be granted
to an Employee during a Fiscal Year may not exceed in value the Fair Market
Value of 150,000 shares of Stock determined as of the date of grant. The maximum
number of shares of Stock with respect to which Performance Stock Awards may be
granted to an Employee during a Fiscal Year is 150,000. The maximum number of
shares of Stock with respect to which Performance Unit Awards may be granted to
an Employee during a Fiscal Year is 150,000. The maximum number of shares of
Stock with respect to which Other Stock-Based Awards may be granted to an
Employee during a Fiscal Year is 150,000. The maximum aggregate amount with
respect to which Cash-Based Awards may be awarded or credited to an Employee
during a Fiscal Year may not exceed in value $3,000,000 determined as of the
date of grant. The maximum aggregate amount with respect to which Performance
Unit Awards may be awarded or credited to an Employee during a Fiscal Year may
not exceed in value $3,000,000 determined as of the date of grant. Each of the
foregoing numerical limits stated in this Section 4.2 shall be subject to
adjustment in accordance with the provisions of Section 4.5. The number of
shares of Stock stated in this Section 4.2 shall also be increased by such
number of shares of Stock as become subject to substitute Awards granted
pursuant to Article XI; provided, however, that such increase shall be
conditioned upon the approval of the stockholders of the Company to the extent
stockholder approval is required by law or applicable stock exchange rules. If
any outstanding Award expires or terminates for any reason, is settled in cash
in lieu of shares of Stock or any Award is surrendered, the shares of Stock
allocable to the unexercised portion of that Award may again be subject to an
Award granted under the Plan. If shares of Stock are withheld from payment of an
Award to satisfy tax obligations with respect to the Award, such shares of Stock
will not count against the aggregate number of shares of Stock with respect to
which Awards may be granted under the Plan. If a Stock Appreciation Right is
exercised, only the number of shares of Stock actually issued shall be charged
against the maximum number of shares of Stock that may be delivered pursuant to
Awards under the Plan.

     4.3  Non-Transferability.  Except as specified in the applicable Award
Agreements or in domestic relations court orders, Awards shall not be
transferable by the Holder other than by will or under the laws of descent and
distribution, and shall be exercisable, during the Holder's lifetime, only by
him or her. In the discretion of the Committee, any attempt to transfer an Award
other than under the terms of the Plan and the applicable Award Agreement may
terminate the Award.

     4.4  Requirements of Law.  The Company shall not be required to sell or
issue any shares of Stock under any Award if issuing those shares of Stock would
constitute or result in a violation by the Holder or the Company of any
provision of any law, statute or regulation of any governmental authority.
Specifically, in connection with any applicable statute or regulation relating
to the registration of securities, upon exercise of any Option or pursuant to
any other Award, the Company shall not be required to issue any shares of Stock
unless the Committee has received evidence satisfactory to it to the effect that
the Holder will not transfer the shares of Stock except in accordance with
applicable law, including receipt of an opinion of counsel satisfactory to the
Company to the effect that any proposed transfer complies with applicable law.
The

                                       5


determination by the Committee on this matter shall be final, binding and
conclusive. The Company may, but shall in no event be obligated to, register any
shares of Stock covered by the Plan pursuant to applicable securities laws of
any country or any political subdivision. In the event the shares of Stock
issuable on exercise of an Option or pursuant to any other Award are not
registered, the Company may imprint on the certificate evidencing the shares of
Stock any legend that counsel for the Company considers necessary or advisable
to comply with applicable law, or, should the shares of Stock be represented by
book or electronic entry rather than a certificate, the Company may take such
steps to restrict transfer of the shares of Stock as counsel for the Company
considers necessary or advisable to comply with applicable law. The Company
shall not be obligated to take any other affirmative action in order to cause or
enable the exercise of an Option or any other Award, or the issuance of shares
of Stock pursuant thereto, to comply with any law or regulation of any
governmental authority.

     4.5  Changes in the Company's Capital Structure.

     (a) The existence of outstanding Awards shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, any merger or consolidation of the
Company, any issue of bonds, debentures, preferred or prior preference shares
ahead of or affecting the Stock or Stock rights, the dissolution or liquidation
of the Company, any sale or transfer of all or any part of its assets or
business or any other corporate act or proceeding, whether of a similar
character or otherwise.

     (b) If the Company shall effect a subdivision or consolidation of Stock or
other capital readjustment, the payment of a Stock dividend, or other increase
or reduction of the number of shares of Stock outstanding, without receiving
compensation therefor in money, services or property, then (1) the number, class
or series and per share price of Stock subject to outstanding Options or other
Awards under the Plan shall be appropriately adjusted in such a manner as to
entitle a Holder to receive upon exercise of an Option or other Award, for the
same aggregate cash consideration, the equivalent total number and class or
series of Stock the Holder would have received had the Holder exercised his or
her Option or other Award in full immediately prior to the event requiring the
adjustment, and (2) the number and class or series of Stock then reserved to be
issued under the Plan shall be adjusted by substituting for the total number and
class or series of Stock then reserved, that number and class or series of Stock
that would have been received by the owner of an equal number of outstanding
shares of Stock of each class or series of Stock as the result of the event
requiring the adjustment.

     (c) If while unexercised Options or other Awards remain outstanding under
the Plan (1) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity other than an entity that was wholly-owned by the Company immediately
prior to such merger, consolidation or other reorganization), (2) the Company
sells, leases or exchanges or agrees to sell, lease or exchange all or
substantially all of its assets to any other person or entity (other than an
entity wholly-owned by the Company), (3) the Company is to be dissolved or (4)
the Company is a party to any other corporate transaction (as defined under
section 424(a) of the Code and applicable Department of Treasury regulations)
that is not described in clauses (1), (2) or (3) of this sentence (each such
event is referred to herein as a "Corporate Change"), then, except as otherwise
provided in an Award Agreement (provided that such exceptions shall not apply in
the case of a reincorporation merger), or as a result of the Committee's
effectuation of one or more of the alternatives described below, there shall be
no acceleration of the time at which any Award then outstanding may be
exercised, and no later than ten days after the approval by the stockholders of
the Company of such Corporate Change, the Committee, acting in its sole and
absolute discretion without the consent or approval of any Holder, shall act to
effect one or more of the following alternatives, which may vary among
individual Holders and which may vary among Awards held by any individual Holder
(provided that, with respect to a reincorporation merger in which Holders of the
Company's ordinary shares will receive one ordinary share of the successor
corporation for each ordinary share of the Company, none of such alternatives
shall apply and, without Committee action, each Award shall automati-

                                       6


cally convert into a similar award of the successor corporation exercisable for
the same number of ordinary shares of the successor as the Award was exercisable
for ordinary shares of Stock of the Company):

          (1) accelerate the time at which some or all of the Awards then
     outstanding may be exercised so that such Awards may be exercised in full
     for a limited period of time on or before a specified date (before or after
     such Corporate Change) fixed by the Committee, after which specified date
     all such Awards that remain unexercised and all rights of Holders
     thereunder shall terminate;

          (2) require the mandatory surrender to the Company by all or selected
     Holders of some or all of the then outstanding Awards held by such Holders
     (irrespective of whether such Awards are then exercisable under the
     provisions of the Plan or the applicable Award Agreement evidencing such
     Award) as of a date, before or after such Corporate Change, specified by
     the Committee, in which event the Committee shall thereupon cancel such
     Award and the Company shall pay to each such Holder an amount of cash per
     share equal to the excess, if any, of the per share price offered to
     stockholders of the Company in connection with such Corporate Change over
     the exercise prices under such Award for such shares;

          (3) with respect to all or selected Holders, have some or all of their
     then outstanding Awards (whether vested or unvested) assumed or have a new
     award of a similar nature substituted for some or all of their then
     outstanding Awards under the Plan (whether vested or unvested) by an entity
     which is a party to the transaction resulting in such Corporate Change and
     which is then employing such Holder or which is affiliated or associated
     with such Holder in the same or a substantially similar manner as the
     Company prior to the Corporate Change, or a parent or subsidiary of such
     entity, provided that (A) such assumption or substitution is on a basis
     where the excess of the aggregate fair market value of the Stock subject to
     the Award immediately after the assumption or substitution over the
     aggregate exercise price of such Stock is equal to the excess of the
     aggregate fair market value of all Stock subject to the Award immediately
     before such assumption or substitution over the aggregate exercise price of
     such Stock, and (B) the assumed rights under such existing Award or the
     substituted rights under such new Award as the case may be will have the
     same terms and conditions as the rights under the existing Award assumed or
     substituted for, as the case may be;

          (4) provide that the number and class or series of Stock covered by an
     Award (whether vested or unvested) theretofore granted shall be adjusted so
     that such Award when exercised shall thereafter cover the number and class
     or series of Stock or other securities or property (including, without
     limitation, cash) to which the Holder would have been entitled pursuant to
     the terms of the agreement or plan relating to such Corporate Change if,
     immediately prior to such Corporate Change, the Holder had been the holder
     of record of the number of shares of Stock then covered by such Award; or

          (5) make such adjustments to Awards then outstanding as the Committee
     deems appropriate to reflect such Corporate Change (provided, however, that
     the Committee may determine in its sole and absolute discretion that no
     such adjustment is necessary).

     In effecting one or more of alternatives in (3), (4) or (5) immediately
above, and except as otherwise may be provided in an Award Agreement, the
Committee, in its sole and absolute discretion and without the consent or
approval of any Holder, may accelerate the time at which some or all Awards then
outstanding may be exercised.

     (d) In the event of changes in the outstanding Stock by reason of
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Award and not otherwise provided for by this Section 4.5,
any outstanding Award and any Award Agreements evidencing such Award shall be
subject to adjustment by the Committee in its sole and absolute discretion as to
the number and price of Stock or other consideration subject to such Award. In
the event of any such change in the outstanding Stock, the aggregate number of
shares of Stock available under the Plan may be appropriately adjusted by the
Committee, whose determination shall be conclusive.

     (e) After a merger of one or more corporations into the Company or after a
consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each Holder

                                       7


shall be entitled to have his Restricted Stock appropriately adjusted based on
the manner in which the shares of Stock were adjusted under the terms of the
agreement of merger or consolidation.

     (f) The issuance by the Company of stock of any class or series, or
securities convertible into, or exchangeable for, stock of any class or series,
for cash or property, or for labor or services either upon direct sale or upon
the exercise of rights or warrants to subscribe for them, or upon conversion or
exchange of stock or obligations of the Company convertible into, or
exchangeable for, stock or other securities, shall not affect, and no adjustment
by reason of such issuance shall be made with respect to, the number, class or
series, or price of shares of Stock then subject to outstanding Options or other
Awards.

     4.6  Election Under Section 83(b) of the Code.  No Holder shall exercise
the election permitted under section 83(b) of the Code with respect to any Award
without the written approval of the Chief Financial Officer of the Company. Any
Holder who makes an election under section 83(b) of the Code with respect to any
Award without the written approval of the Chief Financial Officer of the Company
may, in the discretion of the Committee, forfeit any or all Awards granted to
him or her under the Plan.

     4.7  Forfeiture for Cause.  Notwithstanding any other provision of the Plan
or an Award Agreement, if the Committee finds by a majority vote that a Holder,
before or after his Termination of Employment (a) committed a fraud,
embezzlement, theft, felony or an act of dishonesty in the course of his
employment by the Company or an Affiliate which conduct damaged the Company or
an Affiliate or (b) disclosed trade secrets of the Company or an Affiliate, then
as of the date the Committee makes its finding, any Awards awarded to the Holder
that have not been exercised by the Holder (including all Awards that have not
yet vested) will be forfeited to the Company. The findings and decision of the
Committee with respect to such matter, including those regarding the acts of the
Holder and the damage done to the Company, will be final for all purposes. No
decision of the Committee, however, will affect the finality of the discharge of
the individual by the Company or an Affiliate.

     4.8  Forfeiture Events.  The Committee may specify in an Award Agreement
that the Holder's rights, payments, and benefits with respect to an Award shall
be subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may include, but
shall not be limited to, Termination of Employment for cause, termination of the
Holder's provision of services to the Company or its Affiliates, violation of
material policies of the TMW Group, breach of noncompetition, confidentiality,
or other restrictive covenants that may apply to the Holder, or other conduct by
the Holder that is detrimental to the business or reputation of the TMW Group.

                                   ARTICLE V

                                    OPTIONS

     5.1  Authority to Grant Options.  Subject to the terms and provisions of
the Plan, the Committee, at any time, and from time to time, may grant Options
under the Plan to eligible persons in such number and upon such terms as the
Committee shall determine.

     5.2  Type of Options Available.  Options granted under the Plan may be
Incentive Stock Options intended to satisfy the requirements of section 422 of
the Code or Nonqualified Stock Options that are not intended to satisfy the
requirements of section 422 of the Code.

     5.3  Option Agreement.  Each Option grant under the Plan shall be evidenced
by an Option Agreement that shall specify (a) whether the Option is intended to
be an ISO or a NQSO, (b) the Option Price, (c) the duration of the Option, (d)
the number of shares of Stock to which the Option pertains, (e) the exercise
restrictions applicable to the Option, and (f) such other provisions as the
Committee shall determine that are not inconsistent with the terms and
provisions of the Plan. Notwithstanding the designation of an Option as an ISO
in the applicable Option Agreement, to the extent the limitations of section 422
of the Code are exceeded with respect to the Option, the portion of the Option
in excess of the limitation shall be treated as a NQSO.

                                       8


     5.4  Option Price.  The price at which shares of Stock may be purchased
under an Option (the "Option Price") shall not be less than 100 percent (100%)
of the Fair Market Value of the shares of Stock on the date the Option is
granted. However, in the case of a Ten Percent Stockholder, the Option Price for
an Incentive Stock Option shall not be less than 110 percent (110%) of the Fair
Market Value of the shares of Stock on the date the Incentive Stock Option is
granted. Subject to the limitations set forth in the preceding sentences of this
Section 5.4, the Committee shall determine the Option Price for each grant of an
Option under the Plan.

     5.5  Duration of Options.  An Option shall not be exercisable after the
earlier of (i) the general term of the Option specified in Section 5.5(a), or
(ii) the period of time specified herein that follows the Optionee's death,
Disability, Retirement or other Termination of Employment. Unless the Optionee's
applicable Option Agreement specifies otherwise, an Option shall not continue to
vest after the Optionee's Termination of Employment for any reason other than
the death or Disability of the Optionee.

     (a) General Term of Option.  Unless the Option Agreement specifies a
shorter general term, an Option shall expire on the tenth anniversary of the
date the Option is granted. Notwithstanding the foregoing, unless the Option
Agreement specifies a shorter term, in the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, the Option shall expire on the fifth
anniversary of the date the Option is granted.

     (b) Early Termination of Option Due to Termination of Employment Other Than
for Death, Disability or Retirement.  Except as may be otherwise expressly
provided by the Committee in an Option Agreement, an Option shall terminate on
the earlier of (1) the date of the expiration of the general term of the Option
or (2) the date that is one day less than one month after the date of the
Optionee's Termination of Employment, whether with or without cause, for any
reason other than the death, Disability or Retirement of the Optionee, during
which period the Optionee shall be entitled to exercise the Option in respect of
the number of shares of Stock that the Optionee would have been entitled to
purchase had the Optionee exercised the Option on the date of such Termination
of Employment. The Committee shall determine whether an authorized leave of
absence, absence on military or government service, or any other absence from
service shall constitute a termination of the employment relationship between
the Optionee and the Company and all Affiliates. Notwithstanding the foregoing,
in the case of an Incentive Stock Option, if an Optionee has an authorized leave
of absence from employment with the Company, a Parent Corporation or a
Subsidiary Corporation that exceeds 90 days and the Optionee's right to
reemployment is not guaranteed by either statute or contract, the Optionee will
be deemed to incur a Termination of Employment on the 91st day of such leave.

     (c) Early Termination of Option Due to Death.  Unless the Committee
specifies otherwise in the applicable Option Agreement, in the event of the
Optionee's Termination of Employment due to death before the date of expiration
of the general term of the Option, the Optionee's Option shall terminate on the
earlier of the date of expiration of the general term of the Option or the first
anniversary of the date of the Optionee's death, during which period the
Optionee's executors or administrators or such persons to whom such Options were
transferred by will or by the laws of descent and distribution, shall be
entitled to exercise the Option in respect of the number of shares of Stock that
the Optionee would have been entitled to purchase had the Optionee exercised the
Option on the date of his death.

     (d) Early Termination of Option Due to Disability.  Unless the Committee
specifies otherwise in the applicable Option Agreement, in the event of the
Termination of Employment due to Disability before the date of the expiration of
the general term of the Option, the Optionee's Option shall terminate on the
earlier of the expiration of the general term of the Option or the first
anniversary of the date of the Termination of Employment due to Disability,
during which period the Optionee shall be entitled to exercise the Option in
respect of the number of shares of Stock that the Optionee would have been
entitled to purchase had the Optionee exercised the Option on the date of such
Termination of Employment.

     (e) Early Termination of Option Due to Retirement.  Unless the Committee
specifies otherwise in the applicable Option Agreement, in the event of the
Optionee's Termination of Employment due to Retirement before the date of the
expiration of the general term of the Option, the Optionee's Option shall
terminate on the earlier of the expiration of the general term of the Option or
the first anniversary of the date of the Termination of Employment due to
Retirement, during which period the Optionee shall be entitled to exercise

                                       9


the Option in respect of the number of shares of Stock that the Optionee would
have been entitled to purchase had the Optionee exercised the Option on the date
of such Termination of Employment.

     After the death of the Optionee, the Optionee's executors, administrators
or any person or persons to whom the Optionee's Option may be transferred by
will or by the laws of descent and distribution, shall have the right, at any
time prior to the termination of the Option to exercise the Option, in respect
to the number of all of the remaining unexercised and unexpired shares of Stock
subject to the Option.

     5.6  Amount Exercisable.  Each Option may be exercised at the time, in the
manner and subject to the conditions the Committee specifies in the Option
Agreement in its sole discretion. Unless the Committee specifies otherwise in an
applicable Option Agreement, an Option Agreement shall set forth the following
terms regarding the exercise of the Option covered by the Option Agreement:

          (a) No Option granted under the Plan may be exercised until an
     Optionee has completed one year of continuous employment with the Company
     or any subsidiary of the Company following the date of grant;

          (b) Beginning on the day after the first anniversary of the date of
     grant, an Option may be exercised up to 1/3 of the shares subject to the
     Option;

          (c) After the expiration of each succeeding anniversary date of the
     date of grant, the Option may be exercised up to an additional 1/3 of the
     shares initially subject to the Option, so that after the expiration of the
     third anniversary of the date of grant, the Option shall be exercisable in
     full;

          (d) To the extent not exercised, installments shall be cumulative and
     may be exercised in whole or in part until the Option expires on the tenth
     anniversary of the date of grant.

     However, the Committee, in its discretion, may change the terms of exercise
so that any Option may be exercised so long as it is valid and outstanding from
time to time in part or as a whole in such manner and subject to such conditions
as the Committee may set. In addition, the Committee, in its discretion, may
accelerate the time in which any outstanding Option may be exercised. However,
in no event shall any Option be exercisable on or after the tenth anniversary of
the date of the grant of the Option.

     5.7  EXERCISE OF OPTIONS.

     (a) General Method of Exercise.  Subject to the terms and provisions of the
Plan and an Optionee's Option Agreement, Options may be exercised in whole or in
part from time to time by the delivery of written notice in the manner
designated by the Committee stating (1) that the Optionee wishes to exercise
such option on the date such notice is so delivered, (2) the number of shares of
Stock with respect to which the Option is to be exercised and (3) the address to
which the certificate representing such shares of Stock should be mailed. Except
in the case of exercise by a third party broker as provided below, in order for
the notice to be effective the notice must be accompanied by payment of the
Option Price and any applicable tax withholding amounts which must be made at
the time of exercise by any combination of the following: (a) cash, certified
check, bank draft or postal or express money order for an amount equal to the
Option Price under the Option, (b) Mature Shares with a Fair Market Value on the
date of exercise equal to the Option Price under the Option (if approved in
advance by the Committee or an executive officer of the Company), (c) an
election to make a cashless exercise through a registered broker-dealer (if
approved in advance by the Committee or an executive officer of the Company) or
(d) except as specified below, any other form of payment which is acceptable to
the Committee. If Mature Shares are used for payment by the Optionee, the
aggregate Fair Market Value of the shares of Stock tendered must be equal to or
less than the aggregate Option Price of the shares of Stock being purchased upon
exercise of the Option, and any difference must be paid by cash, certified
check, bank draft or postal or express money order payable to the order of the
Company.

     If, at the time of receipt by the Company or its delegate of such written
notice, (i) the Company has unrestricted surplus in an amount not less than the
Option Price of such shares of Stock, (ii) all accrued cumulative preferential
dividends and other current preferential dividends on all outstanding shares of
preferred stock of the Company have been fully paid, (iii) the acquisition by
the Company of its own shares of Stock for the purpose of enabling such Optionee
to exercise such Option is otherwise permitted by applicable

                                       10


law, does not require any vote or consent of any stockholder of the Company and
does not violate the terms of any agreement to which the Company is a party or
by which it is bound, and (iv) there shall have been adopted, and there shall be
in full force and effect, a resolution of the Board authorizing the acquisition
by the Company of its own shares of stock for such purpose, then such Optionee
may deliver to the Company, in payment of the Option Price of the shares of
Stock with respect to which such Option is exercised, (x) certificates
registered in the name of such Optionee that represent a number of shares of
stock legally and beneficially owned by such Optionee (free of all liens, claims
and encumbrances of every kind) and having a Fair Market Value on the date of
receipt by the Company or its delegate of such written notice that is not
greater than the Option Price of the shares of Stock with respect to which such
Option is to be exercised, such certificates to be accompanied by stock powers
duly endorsed in blank by the record holder of the shares of Stock represented
by such certificates, with the signature of such record holder guaranteed by a
national banking association, and (y) if the Option Price of the shares of Stock
with respect to which such Option is to be exercised exceeds such Fair Market
Value, a cashier's check drawn on a national banking association and payable to
the order of the Company, in an amount, in United States dollars, equal to the
amount of such excess. Notwithstanding the provisions of the immediately
preceding sentence, the Committee, in its sole discretion, may refuse to accept
shares of Stock in payment of the Option Price of the shares of Stock with
respect to which such Option is to be exercised and, in that event, any
certificates representing shares of Stock that were received by the Company or
its delegate with such written notice shall be returned to such Optionee,
together with notice by the Company or its delegate to such Optionee of the
refusal of the Committee to accept such shares of Stock. If, at the expiration
of seven business days after the delivery to such Optionee of such written
notice from the Company or its delegate, such Optionee shall not have delivered
to the Company or its delegate a cashier's check drawn on a national banking
association and payable to the order of the Company in an amount, in United
States dollars, equal to the Option Price of the shares of Stock with respect to
which such Option is to be exercised, such written notice from the Optionee to
the Company or its delegate shall be ineffective to exercise such Option.

     Whenever an Option is exercised by exchanging shares of Stock owned by the
Optionee, the Optionee shall deliver to the Company or its delegate certificates
registered in the name of the Optionee representing a number of shares of Stock
legally and beneficially owned by the Optionee, free of all liens, claims, and
encumbrances of every kind, accompanied by stock powers duly endorsed in blank
by the record holder of the shares represented by the certificates, (with
signature guaranteed by a commercial bank or trust company or by a brokerage
firm having a membership on a registered national stock exchange). The delivery
of certificates upon the exercise of Option is subject to the condition that the
person exercising the Option provide the Company with the information the
Company might reasonably request pertaining to exercise, sale or other
disposition of an Option.

     (b) Issuance of Shares.  Subject to Section 4.4 and Section 5.7(c), as
promptly as practicable after receipt of written notification and payment, in
the form required by Section 5.7(a), of an amount of money necessary to satisfy
any withholding tax liability that may result from the exercise of such Option,
the Company shall deliver to the Optionee certificates for the number of shares
with respect to which the Option has been exercised, issued in the Optionee's
name. Delivery of the shares shall be deemed effected for all purposes when a
stock transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Optionee, at the address specified by the
Optionee.

     (c) Exercise Through Third-Party Broker.  The Committee may permit an
Optionee to elect to pay the Option Price and any applicable tax withholding
resulting from such exercise by authorizing a third-party broker to sell all or
a portion of the shares of Stock acquired upon exercise of the Option and remit
to the Company a sufficient portion of the sale proceeds to pay the Option Price
and any applicable tax withholding resulting from such exercise.

     (d) Limitations on Exercise Alternatives.  The Committee shall not permit
an Optionee to pay such Optionee's Option Price upon the exercise of an Option
by having the Company reduce the number of shares of Stock that will be
delivered pursuant to the exercise of the Option. In addition, the Committee
shall not permit an Optionee to pay such Optionee's Option Price upon the
exercise of an Option by using shares of Stock other than Mature Shares. An
Option may not be exercised for a fraction of a share of Stock.

                                       11


     5.8  Transferability of Options.

     (a) Incentive Stock Options.  No ISO granted under the Plan may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all ISOs
granted to an Optionee under the Plan shall be exercisable during his or her
lifetime only by the Optionee, and after that time, by the Optionee's heirs or
estate.

     (b) Nonqualified Stock Options.  Except as otherwise provided in an
Optionee's Option Agreement, no NQSO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in an Optionee's Option Agreement, all NQSOs granted to an
Optionee under the Plan shall be exercisable during his or her lifetime only by
such Optionee.

     Any attempted assignment of an Option in violation of this Section 5.8
shall be null and void.

     5.9  Notification of Disqualifying Disposition.  If any Optionee shall make
any disposition of shares of Stock issued pursuant to the exercise of an ISO
under the circumstances described in section 421(b) of the Code (relating to
certain disqualifying dispositions), such Optionee shall notify the Company of
such disposition within ten (10) days thereof.

     5.10  No Rights as Stockholder.  An Optionee shall not have any rights as a
stockholder with respect to Stock covered by an Option until the date a stock
certificate for such Stock is issued by the Company; and, except as otherwise
provided in Section 4.5, no adjustment for dividends, or otherwise, shall be
made if the record date therefor is prior to the date of issuance of such
certificate.

     5.11  $100,000 Limitation on Incentive Stock Options.  To the extent that
the aggregate Fair Market Value of Stock with respect to which Incentive Stock
Options first become exercisable by a Holder in any calendar year exceeds
$100,000, taking into account both shares of Stock subject to Incentive Stock
Options under the Plan and Stock subject to incentive stock options under all
other plans of the Company, such Options shall be treated as Nonqualified Stock
Options. For this purpose, the "Fair Market Value" of the Stock subject to
Options shall be determined as of the date the Options were awarded. In reducing
the number of Options treated as Incentive Stock Options to meet the $100,000
limit, the most recently granted Options shall be reduced first. To the extent a
reduction of simultaneously granted Options is necessary to meet the $100,000
limit, the Committee may, in the manner and to the extent permitted by law,
designate which shares of Stock are to be treated as shares acquired pursuant to
the exercise of an Incentive Stock Option.

                                   ARTICLE VI

                           STOCK APPRECIATION RIGHTS

     6.1  Authority to Grant Stock Appreciation Rights Awards.  Subject to the
terms and provisions of the Plan, the Committee, at any time, and from time to
time, may grant Stock Appreciation Rights under the Plan to eligible persons in
such number and upon such terms as the Committee shall determine. Subject to the
terms and conditions of the Plan, the Committee shall have complete discretion
in determining the number of SARs granted to each Employee and, consistent with
the provisions of the Plan, in determining the terms and conditions pertaining
to such SARs.

     6.2  Type of Stock Appreciation Rights Available.  SARs granted under the
Plan may be Freestanding SARs, Tandem SARs or any combination of these forms of
SARs. Subject to the terms and conditions of the Plan, a SAR granted under the
Plan shall confer on the recipient a right to receive, upon exercise thereof, a
cash amount equal to the excess of (a) the Fair Market Value of one share of the
Stock on the date of exercise over (b) the grant price of the SAR, which shall
not be less than 100 percent of the Fair Market Value of one share of the Stock
on the date of grant of the SAR and in no event less than par value of one share
of the Stock. The grant price of a Freestanding SAR shall not be less than the
Fair Market Value of a share of the Stock on the date of grant of the SAR. The
grant price of a Tandem SAR shall equal the Option Price of the Option which is
related to the Tandem SAR.

                                       12


     6.3  Stock Appreciation Right Agreement.  Each Award of SARs granted under
the Plan shall be evidenced by an Award Agreement that shall specify (a) whether
the SAR is intended to be a Freestanding SAR or a Tandem SAR, (b) the grant
price of the SAR, (c) the term of the SAR, (d) the vesting and termination
provisions and (e) such other provisions as the Committee shall determine that
are not inconsistent with the terms and provisions of the Plan. The Committee
may impose such additional conditions or restrictions on the exercise of any SAR
as it may deem appropriate.

     6.4  Term of Stock Appreciation Rights.  The term of a SAR granted under
the Plan shall be determined by the Committee, in its sole discretion; provided
that no SAR shall be exercisable on or after the tenth anniversary date of its
grant.

     6.5  Exercise of Freestanding SARs.  Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes.

     6.6  Exercise of Tandem SARs.

     (a) Tandem SARs may be exercised for all or part of the shares of Stock
subject to the related Option upon the surrender of the right to exercise the
equivalent portion of the related Option. A Tandem SAR may be exercised only
with respect to the shares of Stock for which its related Option is then
exercisable.

     (b) Notwithstanding any other provision of the Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (1) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (2) the value of
the payout with respect to the Tandem SAR may be for no more than 100 percent
(100%) of the excess of the Fair Market Value of the shares of Stock subject to
the underlying ISO at the time the Tandem SAR is exercised over the Option Price
of the underlying ISO; and (3) the Tandem SAR may be exercised only when the
Fair Market Value of the shares of Stock subject to the ISO exceeds the Option
Price of the ISO.

     6.7  Payment of SAR Amount.  Upon the exercise of a SAR, an Employee shall
be entitled to receive payment from the Company in an amount determined by
multiplying:

          (a) The excess of the Fair Market Value of a share of the Stock on the
     date of exercise over the grant price of the SAR by

          (b) The number of shares of Stock with respect to which the SAR is
     exercised.

At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Stock of equivalent value, in some combination thereof or in any other
manner approved by the Committee in its sole discretion. The Committee's
determination regarding the form of SAR payout shall be set forth in the Award
Agreement pertaining to the grant of the SAR.

     6.8  Termination of Employment.  Each Award Agreement shall set forth the
extent to which the grantee of a SAR shall have the right to exercise the SAR
following the grantee's Termination of Employment. Such provisions hall be
determined in the sole discretion of the Committee, may be included in the Award
Agreement entered into with the grantee, and need not be uniform among all SARs
issued pursuant to the Plan and may reflect distinctions based on the reasons
for termination.

     6.9  Nontransferability of SARs.  Except as otherwise provided in a
Holder's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Holder's Award Agreement, all SARs granted to a Holder
under the Plan shall be exercisable during his or her lifetime only by the
Holder, and after that time, by the Holder's heirs or estate. Any attempted
assignment of a SAR in violation of this Section 6.9 shall be null and void.

     6.10  No Rights as Stockholder.  A grantee of a SAR award, as such, shall
have no rights as a stockholder.

     6.11  Restrictions on Stock Received.  The Committee may impose such
conditions and/or restrictions on any shares of Stock received upon exercise of
a SAR granted pursuant to the Plan as it may deem advisable

                                       13


or desirable. These restrictions may include, but shall not be limited to, a
requirement that the Holder hold the shares of Stock received upon exercise of a
SAR for a specified period of time.

                                  ARTICLE VII

                            RESTRICTED STOCK AWARDS

     7.1  Restricted Stock Awards.  The Committee may make Awards of Restricted
Stock to eligible persons selected by it. The amount of, the vesting and the
transferability restrictions applicable to any Restricted Stock Award shall be
determined by the Committee in its sole discretion. If the Committee imposes
vesting or transferability restrictions on a Holder's rights with respect to
Restricted Stock, the Committee may issue such instructions to the Company's
share transfer agent in connection therewith as it deems appropriate. The
Committee may also cause the certificate for Shares issued pursuant to a
Restricted Stock Award to be imprinted with any legend which counsel for the
Company considers advisable with respect to the restrictions or, should the
Shares be represented by book or electronic entry rather than a certificate, the
Company may take such steps to restrict transfer of the Shares as counsel for
the Company considers necessary or advisable to comply with applicable law.

     Each Restricted Stock Award shall be evidenced by an Award Agreement that
contains any vesting, transferability restrictions and other provisions not
inconsistent with the Plan as the Committee may specify.

     7.2  Holder's Rights as Stockholder.  Subject to the terms and conditions
of the Plan, each recipient of a Restricted Stock Award shall have all the
rights of a stockholder with respect to the shares of Restricted Stock included
in the Restricted Stock Award during the Period of Restriction established for
the Restricted Stock Award. Dividends paid with respect to Restricted Stock in
cash or property other than shares of Stock or rights to acquire shares of Stock
shall be paid to the recipient of the Restricted Stock Award currently.
Dividends paid in shares of Stock or rights to acquire shares of Stock shall be
added to and become a part of the Restricted Stock. During the Period of
Restriction, certificates representing the Restricted Stock shall be registered
in the recipient's name and bear a restrictive legend to the effect that
ownership of such Restricted Stock, and the enjoyment of all rights appurtenant
thereto, are subject to the restrictions, terms, and conditions provided in the
Plan and the applicable Restricted Stock Award Agreement. Such certificates
shall be deposited by the recipient with the Secretary of the Company or such
other officer of the Company as may be designated by the Committee, together
with all stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock which shall be forfeited in accordance with the Plan and the
applicable Restricted Stock Award Agreement.

                                  ARTICLE VIII

                           DEFERRED STOCK UNIT AWARDS

     8.1  Authority to Grant Deferred Stock Unit Awards.  Subject to the terms
and provisions of the Plan, the Committee, at any time, and from time to time,
may grant Deferred Stock Units under the Plan to eligible persons in such
amounts and upon such terms as the Committee shall determine. The amount of, the
vesting and the transferability restrictions applicable to any Deferred Stock
Unit Award shall be determined by the Committee in its sole discretion. The
Committee shall maintain a bookkeeping ledger account which reflects the number
of Deferred Stock Units credited under the Plan for the benefit of a Holder.

     8.2  Deferred Stock Unit Awards.  A Deferred Stock Unit shall be similar in
nature to Restricted Stock except that no shares of Stock are actually
transferred to the Holder until a later date specified in the applicable Award
Agreement. Each Deferred Stock Unit shall have a value equal to the Fair Market
Value of a share of Stock.

     8.3  Deferred Stock Unit Award Agreement.  Each Deferred Stock Unit Award
shall be evidenced by an Award Agreement that contains any vesting,
transferability restrictions and other provisions not inconsistent with the Plan
as the Committee may specify.

                                       14


     8.4  Payments Under Deferred Stock Unit Awards.  Payments pursuant to a
Deferred Stock Unit Award shall be made at such time as the Committee specifies
in the Holder's Award Agreement. Payment under a Deferred Stock Unit Award shall
be made in shares of Stock that have an aggregate Fair Market Value equal to the
value of the Deferred Stock Units.

     8.5  Holder's Rights as Stockholder.  Each recipient of Deferred Stock
Units shall have no rights of a stockholder with respect to the Holder's
Deferred Stock Units. A Holder shall have no voting rights with respect to any
Deferred Stock Unit Awards.

                                   ARTICLE IX

                 PERFORMANCE STOCK AND PERFORMANCE UNIT AWARDS

     9.1  Authority to Grant Performance Stock and Performance Unit
Awards.  Subject to the terms and provisions of the Plan, the Committee, at any
time, and from time to time, may grant Performance Stock and Performance Unit
Awards under the Plan to eligible persons in such amounts and upon such terms as
the Committee shall determine. The amount of, the vesting and the
transferability restrictions applicable to any Performance Stock or Performance
Unit Award shall be based upon the attainment of such Performance Goals as the
Committee may determine. A Performance Goal for a particular Performance Stock
or Performance Unit Award must be established by the Committee prior to the
earlier to occur of (a) 90 days after the commencement of the period of service
to which the Performance Goal relates or (b) the lapse of 25 percent of the
period of service, and in any event while the outcome is substantially
uncertain. A Performance Goal must be objective such that a third party having
knowledge of the relevant facts could determine whether the goal is met. Such a
Performance Goal may be based on one or more business criteria that apply to the
Employee, one or more business units of the Company, or the Company as a whole,
with reference to one or more of the following: earnings per share, earnings per
share growth, total shareholder return, economic value added, cash return on
capitalization, increased revenue, revenue ratios (per employee or per
customer), net income, stock price, market share, return on equity, return on
assets, return on capital, return on capital compared to cost of capital, return
on capital employed, return on invested capital, shareholder value, net cash
flow, operating income, earnings before interest and taxes, cash flow, cash flow
from operations, cost reductions, cost ratios (per employee or per customer),
proceeds from dispositions, project completion time and budget goals, net cash
flow before financing activities, customer growth and total market value. Goals
may also be based on performance relative to a peer group of companies. Unless
otherwise stated, such a Performance Goal need not be based upon an increase or
positive result under a particular business criterion and could include, for
example, maintaining the status quo or limiting economic losses (measured, in
each case, by reference to specific business criteria). In interpreting Plan
provisions applicable to Performance Goals and Performance Stock or Performance
Unit Awards, it is intended that the Plan will conform with the standards of
section 162(m) of the Code and Treasury Regulations sec. 1.162-27(e)(2)(i), and
the Committee in establishing such goals and interpreting the Plan shall be
guided by such provisions. Prior to the payment of any compensation based on the
achievement of Performance Goals, the Committee must certify in writing that
applicable Performance Goals and any of the material terms thereof were, in
fact, satisfied. Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Performance Stock or Performance Unit Awards made
pursuant to the Plan shall be determined by the Committee. If the Committee
imposes vesting or transferability restrictions on a recipient's rights with
respect to Performance Stock or Performance Unit Awards, the Committee may issue
such instructions to the Company's share transfer agent in connection therewith
as it deems appropriate. The Committee may also cause the certificate for shares
of Stock issued pursuant to a Performance Stock or Performance Unit Award to be
imprinted with any legend which counsel for the Company considers advisable with
respect to the restrictions or, should the shares of Stock be represented by
book or electronic entry rather than a certificate, the Company may take such
steps to restrict transfer of the shares of Stock as counsel for the Company
considers necessary or advisable to comply with applicable law.

                                       15


     Each Performance Stock or Performance Unit Award shall be evidenced by an
Award Agreement that contains any vesting, transferability restrictions and
other provisions not inconsistent with the Plan as the Committee may specify.

     9.2  Rights as Stockholder.  Subject to the terms and conditions of the
Plan, each Holder of Performance Stock or Performance Unit Award shall have all
the rights of a stockholder with respect to the shares of Stock included in the
Award during any period in which such shares of Stock are subject to forfeiture
and restrictions on transfer, including without limitation, the right to vote
such shares of Stock, if unrestricted shares of Stock of the same class have the
right to vote. Dividends paid with respect to Performance Stock Awards in cash
or property other than shares of Stock or rights to acquire shares of Stock
shall be paid to the Holder currently. Dividends paid in shares of Stock or
rights to acquire shares of Stock shall be added to and become a part of the
Performance Stock Award.

     9.3  Increases Prohibited.  None of the Committee or the Board of the
Company may increase the amount of compensation payable under a Performance
Stock or Performance Unit Award. If the time at which a Performance Stock or
Performance Unit Award will vest is accelerated for any reason, the number of
shares of Stock subject to the Performance Stock or Performance Unit Award shall
be reduced pursuant to Department of Treasury Regulation section
1.162-27(e)(2)(iii) to reasonably reflect the time value of money.

                                   ARTICLE X

                 CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS

     10.1  Authority to Grant Cash-Based Awards.  Subject to the terms and
provisions of the Plan, the Committee, at any time, and from time to time, may
grant Cash-Based Awards under the Plan to Employees in such amounts and upon
such terms, including the achievement of specific performance goals, as the
Committee shall determine.

     10.2  Authority to Grant Other Stock-Based Awards.  The Committee may grant
other types of equity-based or equity-related Awards not otherwise described by
the terms and provisions of the Plan (including the grant or offer for sale of
unrestricted shares of Stock) in such amounts and subject to such terms and
conditions, as the Committee shall determine. Such Awards may involve the
transfer of actual shares of Stock to Holders, or payment in cash or otherwise
of amounts based on the value of shares of Stock and may include, without
limitation, Awards designed to comply with or take advantage of the applicable
local laws of jurisdictions other than the United States.

     10.3  Value of Cash-Based and Other Stock-Based Awards.  Each Cash-Based
Award shall specify a payment amount or payment range as determined by the
Committee. Each Other Stock-Based Award shall be expressed in terms of shares of
Stock or units based on shares of Stock, as determined by the Committee. The
Committee may establish performance goals in its discretion for Cash-Based
Awards and Other Stock-Based Awards. If the Committee exercises its discretion
to establish performance goals, the number and/or value of Cash-Based Awards or
Other Stock-Based Awards that will be paid out to the Holder will depend on the
extent to which the performance goals are met.

     10.4  Payment of Cash-Based Awards and Other Stock-Based Awards.  Payment,
if any, with respect to a Cash-Based Award or an Other Stock-Based Award shall
be made in accordance with the terms of the Award, in cash or shares of Stock as
the Committee determines.

     10.5  Termination of Employment.  The Committee shall determine the extent
to which a grantee's rights with respect to Cash-Based Awards and Other
Stock-Based Awards shall be affected by the grantee's Termination of Employment.
Such provisions shall be determined in the sole discretion of the Committee and
need not be uniform among all Awards of Cash-Based Awards and Other Stock-Based
Awards issued pursuant to the Plan.

     10.6  Nontransferability.  Except as otherwise determined by the Committee,
neither Cash-Based Awards nor Other Stock-Based Awards may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further, except as otherwise

                                       16


provided by the Committee, a Holder's rights under the Plan, if exercisable,
shall be exercisable during his or her lifetime only by such Holder.

                                   ARTICLE XI

                              SUBSTITUTION AWARDS

     Awards may be granted under the Plan from time to time in substitution for
stock options and other awards held by employees of other corporations who are
about to become Employees, or whose employer is about to become a parent or
subsidiary corporation as contemplated in Section 3.1, conditioned in the case
of an Incentive Stock Option upon the employee becoming an employee of the
Company or a parent or subsidiary corporation of the Company, as the result of a
merger of consolidation of the Company with another corporation, or the
acquisition by the Company of substantially all the assets of another
corporation, or the acquisition by the Company of at least 50 percent (50%) of
the issued and outstanding stock of another corporation as the result of which
it becomes a subsidiary of the Company. The terms and conditions of the
substitute Awards so granted may vary from the terms and conditions set forth in
the Plan to such extent as the Board at the time of grant may deem appropriate
to conform, in whole or in part, to the provisions of the Award in substitution
for which they are granted, but with respect to Options that are Incentive Stock
Options, no such variation shall be such as to affect the status of any such
substitute Option as an incentive stock option under section 422 of the Code.

                                  ARTICLE XII

                                 ADMINISTRATION

     12.1  Awards.  The Plan shall be administered by the Committee or, in the
absence of the Committee, the Plan shall be administered by the Board. The
members of the Committee shall serve at the discretion of the Board. The
Committee shall have full and exclusive power and authority to administer the
Plan and to take all actions that the Plan expressly contemplates or are
necessary or appropriate in connection with the administration of the Plan with
respect to Awards granted under the Plan.

     12.2  Authority of the Committee.  The Committee shall have full and
exclusive power to interpret and apply the terms and provisions of the Plan and
Awards made under the Plan, and to adopt such rules, regulations and guidelines
for implementing the Plan as the Committee may deem necessary or proper, all of
which powers shall be exercised in the best interests of the Company and in
keeping with the objectives of the Plan. A majority of the members of the
Committee shall constitute a quorum for the transaction of business, and the
vote of a majority of those members present at any meeting shall decide any
question brought before that meeting. Any decision or determination reduced to
writing and signed by a majority of the members shall be as effective as if it
had been made by a majority vote at a meeting properly called and held. All
questions of interpretation and application of the Plan, or as to award granted
under the Plan, shall be subject to the determination, which shall be final and
binding, of a majority of the whole Committee. When appropriate, the Plan shall
be administered in order to qualify certain of the Options granted hereunder as
Incentive Stock Options. No member of the Committee shall be liable for any act
or omission of any other member of the Committee or for any act or omission on
his own part, including but not limited to the exercise of any power or
discretion given to him under the Plan, except those resulting from his own
gross negligence or willful misconduct. In carrying out its authority under the
Plan, the Committee shall have full and final authority and discretion,
including but not limited to the following rights, powers and authorities, to:

          (a) determine the persons to whom and the time or times at which
     Awards will be made;

          (b) determine the number and exercise price of shares of Stock covered
     in each Award, subject to the terms and provisions of the Plan;

          (c) determine the terms, provisions and conditions of each Award,
     which need not be identical and need not match the default terms set forth
     in the Plan;

                                       17


          (d) accelerate the time at which any outstanding Award will vest;

          (e) prescribe, amend and rescind rules and regulations relating to
     administration of the Plan; and

          (f) make all other determinations and take all other actions deemed
     necessary, appropriate or advisable for the proper administration of the
     Plan.

     The Committee may make an Award to an individual who the Company expects to
become an Employee of the Company or any of its Affiliates within six (6) months
after the date of grant of the Award, with the Award being subject to and
conditioned on the individual actually becoming an Employee within that time
period and subject to other terms and conditions as the Committee may establish.
The Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award to a Holder in the manner and to the
extent the Committee deems necessary or desirable to further the Plan's
objectives. Further, the Committee shall make all other determinations that may
be necessary or advisable for the administration of the Plan. As permitted by
law and the terms and provisions of the Plan, the Committee may delegate its
authority as identified in Section 12.3.

     The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article XII and all other Articles of the Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all persons. The Committee may employ attorneys, consultants,
accountants, agents, and other persons, any of whom may be an Employee, and the
Committee, the Company, and its officers and Board shall be entitled to rely
upon the advice, opinions, or valuations of any such persons.

     12.3  Decisions Binding.  All determinations and decisions made by the
Committee and the Board pursuant to the provisions of the Plan and all related
orders and resolutions of the Committee and the Board shall be final, conclusive
and binding on all persons, including the Company, its stockholders, Employees,
Holders and the estates and beneficiaries of Employees and Holders.

     12.4  No Liability.  Under no circumstances shall the Company, the Board or
the Committee incur liability for any indirect, incidental, consequential or
special damages (including lost profits) of any form incurred by any person,
whether or not foreseeable and regardless of the form of the act in which such a
claim may be brought, with respect to the Plan or the Company's or the
Committee's roles in connection with the Plan.

                                  ARTICLE XIII

                        AMENDMENT OR TERMINATION OF PLAN

     13.1  Amendment, Modification, Suspension, and Termination.  Subject to
Section 13.2 the Committee may, at any time and from time to time, alter, amend,
modify, suspend, or terminate the Plan and any Award Agreement in whole or in
part; provided, however, that, without the prior approval of the Company's
stockholders and except as provided in Section 4.5, the Committee shall not
directly or indirectly lower the exercise price of a previously granted Option
or the grant price of a previously granted SAR issued under the Plan, and no
amendment of the Plan shall be made without stockholder approval if stockholder
approval is required by applicable law or stock exchange rules.

     13.2  Awards Previously Granted.  Notwithstanding any other provision of
the Plan to the contrary, no termination, amendment, suspension, or modification
of the Plan or an Award Agreement shall adversely affect in any material way any
Award previously granted under the Plan, without the written consent of the
Holder holding such Award.

                                  ARTICLE XIV

                                 MISCELLANEOUS

     14.1  Unfunded Plan/No Establishment of a Trust Fund.  Holders shall have
no right, title, or interest whatsoever in or to any investments that the
Company or any of its Affiliates may make to aid in meeting

                                       18


obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Company and any Holder,
beneficiary, legal representative, or any other person. To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts, except as
expressly set forth in the Plan. No property shall be set aside nor shall a
trust fund of any kind be established to secure the rights of any Holder under
the Plan. All Holders shall at all times rely solely upon the general credit of
the Company for the payment of any benefit which becomes payable under the Plan.
The Plan is not intended to be subject to the Employee Retirement Income
Security Act of 1974, as amended.

     14.2  No Employment Obligation.  The granting of any Award shall not
constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ, or
utilize the services of, any Holder. The right of the Company or any Affiliate
to terminate the employment of any person shall not be diminished or affected by
reason of the fact that an Award has been granted to him, and nothing in the
Plan or an Award Agreement shall interfere with or limit in any way the right of
the Company or its Affiliates to terminate any Holder's employment at any time
or for any reason not prohibited by law.

     14.3  Tax Withholding.  The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Holder any sums required by
federal, state or local tax law to be withheld with respect to the vesting or
exercise of an Award or lapse of restrictions on an Award. In the alternative,
the Company may require the Holder (or other person validly exercising the
Award) to pay such sums for taxes directly to the Company or any Affiliate in
cash or by check within ten days after the date of vesting, exercise or lapse of
restrictions. In the discretion of the Committee, and with the consent of the
Holder, the Company may reduce the number of shares of Stock issued to the
Holder upon such Holder's exercise of an Option to satisfy the tax withholding
obligations of the Company or an Affiliate; provided that the Fair Market Value
of the shares of Stock held back shall not exceed the Company's or the
Affiliate's minimum statutory withholding tax obligations. The Committee may, in
its discretion, permit a Holder to satisfy any minimum tax withholding
obligations arising upon the vesting of Restricted Stock by delivering to the
Holder of the Restricted Stock Award a reduced number of shares of Stock in the
manner specified herein. If permitted by the Committee and acceptable to the
Holder, at the time of vesting of shares of Restricted Stock, the Company shall
(a) calculate the amount of the Company's or an Affiliate's minimum statutory
tax withholding obligation on the assumption that all such shares of vested
Restricted Stock are made available for delivery, (b) reduce the number of such
shares of Stock made available for delivery so that the Fair Market Value of the
shares of Stock withheld on the vesting date approximates the minimum amount of
tax the Company or an Affiliate is obliged to withhold and (c) in lieu of the
withheld shares of Stock, remit cash to the United States Treasury and other
applicable governmental authorities, on behalf of the Holder, in the amount of
the minimum withholding tax due. The Company shall withhold only whole shares of
Stock to satisfy its minimum withholding obligation. Where the Fair Market Value
of the withheld shares of Stock does not equal the Company's minimum withholding
tax obligation, the Company shall withhold shares of Stock with a Fair Market
Value slightly less than the amount of its minimum withholding obligation and
the Holder must satisfy the remaining minimum withholding obligation in some
other manner permitted under this Section 14.3. The withheld shares of Stock not
made available for delivery by the Company shall be retained as treasury shares
or will be cancelled and, in either case, the Holder's right, title and interest
in such shares of Stock shall terminate. The Company shall have no obligation
upon vesting or exercise of any Award or lapse of restrictions on Restricted
Stock until the Company or an Affiliate has received payment sufficient to cover
all minimum tax withholding amounts due with respect to that vesting, exercise
or lapse of restrictions. Neither the Company nor any Affiliate shall be
obligated to advise a Holder of the existence of the tax or the amount which it
will be required to withhold.

     14.4  Written Agreement.  Each Award shall be embodied in a written
agreement or statement which shall be subject to the terms and conditions of the
Plan. The Award Agreement shall be signed by a member

                                       19


of the Committee on behalf of the Committee and the Company or by an executive
officer of the Company, other than the Holder, on behalf of the Company, and may
be signed by the Holder to the extent required by the Committee. The Award
Agreement may contain any other provisions that the Committee in its discretion
shall deem advisable which are not inconsistent with the terms and provisions of
the Plan.

     14.5  Indemnification of the Committee.  The Company shall indemnify each
present and future member of the Committee against, and each member of the
Committee shall be entitled without further action on his or her part to
indemnity from the Company for, all expenses (including attorney's fees, the
amount of judgments and the amount of approved settlements made with a view to
the curtailment of costs of litigation, other than amounts paid to the Company
itself) reasonably incurred by such member in connection with or arising out of
any action, suit or proceeding in which such member may be involved by reason of
such member being or having been a member of the Committee, whether or not he or
she continues to be a member of the Committee at the time of incurring the
expenses, including, without limitation, matters as to which such member shall
be finally adjudged in any action, suit or proceeding to have been negligent in
the performance of such member's duty as a member of the Committee. However,
this indemnity shall not include any expenses incurred by any member of the
Committee in respect of matters as to which such member shall be finally
adjudged in any action, suit or proceeding to have been guilty of gross
negligence or willful misconduct in the performance of his duty as a member of
the Committee. In addition, no right of indemnification under the Plan shall be
available to or enforceable by any member of the Committee unless, within 60
days after institution of any action, suit or proceeding, such member shall have
offered the Company, in writing, the opportunity to handle and defend same at
its own expense. This right of indemnification shall inure to the benefit of the
heirs, executors or administrators of each member of the Committee and shall be
in addition to all other rights to which a member of the Committee may be
entitled as a matter of law, contract or otherwise.

     14.6  Gender and Number.  If the context requires, words of one gender when
used in the Plan shall include the other and words used in the singular or
plural shall include the other.

     14.7  Severability.  In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

     14.8  Headings.  Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms and provisions of the Plan.

     14.9  Other Compensation Plans.  The adoption of the Plan shall not affect
any other option, incentive or other compensation or benefit plans in effect for
the Company or any Affiliate, nor shall the Plan preclude the Company from
establishing any other forms of incentive compensation arrangements for
Employees.

     14.10  Other Awards.  The grant of an Award shall not confer upon the
Holder the right to receive any future or other Awards under the Plan, whether
or not Awards may be granted to similarly situated Holders, or the right to
receive future Awards upon the same terms or conditions as previously granted.

     14.11  Successors.  All obligations of the Company under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.

     14.12  Law Limitations/Governmental Approvals.  The granting of Awards and
the issuance of Shares under the Plan shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.

     14.13  Delivery of Title.  The Company shall have no obligation to issue or
deliver evidence of title for shares of Stock issued under the Plan prior to:

          (a) obtaining any approvals from governmental agencies that the
     Company determines are necessary or advisable; and

                                       20


          (b) completion of any registration or other qualification of the Stock
     under any applicable national or foreign law or ruling of any governmental
     body that the Company determines to be necessary or advisable.

     14.14  Inability to Obtain Authority.  The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any shares of Stock hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such shares of Stock as to
which such requisite authority shall not have been obtained.

     14.15  Investment Representations.  The Committee may require any person
receiving Stock pursuant to an Award under the Plan to represent and warrant in
writing that the person is acquiring the Shares for investment and without any
present intention to sell or distribute such Stock.

     14.16  Persons Residing Outside of the United States.  Notwithstanding any
provision of the Plan to the contrary, in order to comply with the laws in other
countries in which the TMW Group operates or has Employees, the Committee, in
its sole discretion, shall have the power and authority to:

          (a) determine which Affiliates shall be covered by the Plan;

          (b) determine which persons employed outside the United States are
     eligible to participate in the Plan;

          (c) amend or vary the terms and provisions of the Plan and the terms
     and conditions of any Award granted to persons who reside outside the
     United States;

          (d) establish subplans and modify exercise procedures and other terms
     and procedures to the extent such actions may be necessary or
     advisable -- any subplans and modifications to Plan terms and procedures
     established under this Section 14.16 by the Committee shall be attached to
     the Plan document as Appendices; and

          (e) take any action, before or after an Award is made, that it deems
     advisable to obtain or comply with any necessary local government
     regulatory exemptions or approvals.

     Notwithstanding the above, the Committee may not take any actions
hereunder, and no Awards shall be granted, that would violate the Exchange Act,
the Code, any securities law or governing statute or any other applicable law.

     14.17  No Fractional Shares.  No fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, additional Awards, or other property shall be issued or paid in
lieu of fractional shares of Stock or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

     14.18  Arbitration of Disputes.  Any controversy arising out of or relating
to the Plan or an Option Agreement shall be resolved by arbitration conducted
pursuant to the arbitration rules of the American Arbitration Association. The
arbitration shall be final and binding on the parties.

     14.19  Governing Law.  The provisions of the Plan and the rights of all
persons claiming thereunder shall be construed, administered and governed under
the laws of the State of Texas.

                                       21

EX-21.1

                                                                    EXHIBIT 21.1

                        SUBSIDIARIES OF THE REGISTRANT(1)


DOMESTIC SUBSIDIARIES:

The Men's Wearhouse of Michigan, Inc., a Delaware corporation(2)

TMW Realty Inc., a Delaware corporation(2)

TMW Texas General LLC, a Delaware limited liability company(3)

The Men's Wearhouse of Texas LP, a Delaware limited partnership(4)

TMW Marketing Company, Inc., a California corporation(2)

TMW Merchants LLC, a Delaware limited liability company(5)

TMW Purchasing LLC, a Delaware limited liability company(6)

Renwick Technologies, Inc., a Texas corporation(2)

K&G Men's Company Inc., a Delaware corporation(2)(7)

Twin Hill Acquisition Company, Inc., a California corporation(2)(8)

Eddie Rodriguez Company, Inc., a Delaware corporation(2)(9)

5507 Renwick, Inc., a Delaware corporation(2)

MW Sky LLC, a Delaware limited liability company(2)

MWDC Holding Inc., a Delaware corporation(2)

MWDC Texas Inc., a Delaware corporation(10)


FOREIGN SUBSIDIARIES:

Moores Retail Group Inc., a New Brunswick corporation(2)

Moores The Suit People Inc., a New Brunswick corporation(11)(12)

Golden Brand Clothing (Canada) Ltd., a New Brunswick corporation(11)




- ----------

(1) The names of certain subsidiaries are omitted because such unnamed
subsidiaries, considered in the aggregate as a single subsidiary, do not
constitute a significant subsidiary as of January 29, 2005.

(2) 100% owned by The Men's Wearhouse, Inc.

(3) 100% owned by TMW Realty Inc.

(4) TMW Realty Inc. owns a 99% interest as limited partner and TMW Texas General
LLC owns a 1% interest as general partner.

(5) 100% owned by TMW Marketing Company, Inc.

(6) 100% owned by TMW Merchants LLC.

(7) K&G Men's Company Inc. does business under the names K&G, K&G Men's Center,
K&G Men's Superstore, K&G MenSmart, K&G Ladies, K&G Fashion Superstore and The
Suit Warehouse.

(8) Twin Hill Acquisition Company, Inc. does business under the names Twin Hill
and Men's Wearhouse Corporate Sales.

(9) Eddie Rodriguez Company, Inc. does business under the name Eddie Rodriguez
and is qualified to do business in Texas under the name MW-Eddie Rodriguez Co.,
Inc.

(10) MWDC Texas Inc. (formerly known as TMW Ventures, Inc.) is 100% owned by
MWDC Holding Inc. and does business under the names Nesbit's Cleaners, Craig's
Cleaners and MWCleaners.

(11) 100% owned by Moores Retail Group Inc.

(12) Moores The Suit People Inc. does business under the names Moores Clothing
for Men and Moores Vetements Pour Hommes.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-80609 and 333-111227 of The Men’s Wearhouse, Inc. on Form S-3 and Registration Statement Nos. 33-48108, 33-48109, 33-48110, 33-61792, 333-21109, 333-21121, 33-74692, 333-53623, 333-80033, 333-72549, 333-90304, 333-90306 and 333-90308 of The Men’s Wearhouse, Inc. on Form S-8 of our reports dated April 25, 2005, relating to the financial statements and financial statement schedules of The Men’s Wearhouse, Inc., (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the restatement described in Note 13) and management’s report on the effectiveness of internal control over financial reporting appearing in this Annual Report on Form 10-K of The Men’s Wearhouse, Inc. for the year ended January 29, 2005.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas
April 25, 2005

EX-31.1

Exhibit 31.1

Certifications

I, George Zimmer, certify that:

1.	I have reviewed this annual report on Form 10-K of The Men’s Wearhouse, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2005
	By	/s/ GEORGE ZIMMER
		George Zimmer
		Chief Executive Officer

56

EX-31.2

Exhibit 31.2

Certifications

I, Neill P. Davis, certify that:

1.	I have reviewed this annual report on Form 10-K of The Men’s Wearhouse, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2005
	By	/s/ NEILL P. DAVIS
		Neill P. Davis
	Executive Vice President, Chief Financial Officer and Principal Financial Officer

57

EX-32.1

Exhibit 32.1

Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002

Not Filed Pursuant to the Securities Exchange Act of 1934

     In connection with the Annual Report of The Men’s Wearhouse, Inc. (the “Company”) on Form 10-K for the year ended January 29, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George Zimmer, Chief Executive Officer of the Company, certify, pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirement of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 28, 2005
	By	/s/ GEORGE ZIMMER
		George Zimmer
		Chief Executive Officer

58

EX-32.2

Exhibit 32.2

Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002

Not Filed Pursuant to the Securities Exchange Act of 1934

     In connection with the Annual Report of The Men’s Wearhouse, Inc. (the “Company”) on Form 10-K for the year ended January 29, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Neill P. Davis, Chief Financial Officer of the Company, certify, pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirement of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 28, 2005
	By	/s/ NEILL P. DAVIS
		Neill P. Davis
		Executive Vice President, Chief Financial Officer and Principal Financial Officer

59