Common use of Compensation; Accounting Clause in Contracts

Compensation; Accounting. 4.1. As compensation for the designs and services rendered hereunder, the Company shall pay minimum compensation to the Design Company each year during the term of this Agreement. The minimum compensation to the Design Company in connection with the manufacture and sale and importation and sale of Licensed Products for each year shall be as follows: [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] Minimum compensation for each year shall be paid on a quarterly basis, beginning with the minimum compensation payment to be made for the first calendar quarter of [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], in the manner set forth in paragraph 6.2 below. No credit shall be permitted against minimum compensation payable in any year on account of actual or minimum compensation paid in any other year, and minimum compensation shall not be returnable. Minimum Compensation for each year of the "Renewal Term" (as defined in paragraph 8 of the License Agreement) shall be an amount equal to [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. For the purposes of this Agreement, the term "year" shall mean a period of twelve (12)months commencing on each January 1 during the term of this Agreement; provided, however, that the "first year", or "Year V shall mean the period commencing on the date hereof and expiring on December 31, 1999. 4.2. The Company shall pay to the Design Company earned compensation based on the net sales price of Licensed Products manufactured or imported and sold by the Company hereunder. Earned compensation shall equal [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the net sales price of all Licensed Products sold under this Agreement, including, without limitation, sales made pursuant to paragraph 6.3 hereof; provided, however, that no earned compensation shall be due in respect of sales by Company to Polo's outlet stores at the discount specified in paragraph 3.3 of the License Agreement. The Company shall prepare or cause to be prepared statements of operations for the first month in which Licensed Products are offered for sale to the trade, and for each month thereafter for so long as the Company is offering Licensed Products for sale hereunder, which statements shall be furnished to the Design Company together with the earned compensation due for each such month on the last day of the following month. The statement and compensation payment provided on the last day of each April (for the month of March), July (for the month of June), October (for the month of September) and January (for the month of December) during the term shall also include the Company's minimum compensation obligation for the preceding calendar quarter, less the aggregate earned compensation paid for such calendar quarter. The term "net sales price" shall mean the gross sales price of all Licensed Products sold under this Agreement to retailers or, with respect to Licensed Products that are not sold directly or indirectly to retailers, other ultimate consumers (as in the case of accommodation sales by Company to its employees or sales by Company in its own stores), less trade discounts, merchandise returns, sales tax (if separately identified and charged) and markdowns and/or chargebacks which, in accordance with generally accepted accounting principles, would normally be treated as deductions from gross sales, and which, in any event, do not include any chargebacks or the like for advertising, fixture or retail shop costs or contributions, or contributions for in-store personnel. No other deductions shall be taken. Any merchandise returns shall be credited in the month in which the returns are actually made. For purposes of this Agreement, affiliates of the Company shall mean all persons and business entities, whether corporations, partnerships, joint ventures or otherwise, which now or hereafter control, or are owned or controlled, directly or indirectly by the Company, or are under common control with the Company. It is the intention of the parties that compensation will be based on the bona fide wholesale prices at which the Company sells Licensed Products to independent retailers in arms' length transactions. In the event the Company shall sell Licensed Products to its affiliates, compensation shall be calculated on the basis of such a bona fide wholesale price irrespective of the Company's internal accounting treatment of such sale unless such products are sold by its affiliates directly to the end-user consumer, in which case compensation shall be calculated on the basis of the price paid by the end-user consumer, less applicable taxes; provided, however, that compensation on sales to outlet stores owned by the Company shall be calculated on the basis of the actual invoice price to such stores, but in no event less than an amount equal to [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] less than the regular wholesale price of such Licensed Products. The Company shall identify separately in the statements of operations provided to the Design Company pursuant to paragraph 7 hereof, all sales to affiliates.

Compensation; Accounting. 4.1. 4.1 As compensation for the designs and services rendered hereunder, the Company shall pay minimum compensation to the Design Company Partnership each year during the term of this Agreement. The minimum compensation to the Design Company Partnership in connection with the manufacture and sale and importation and sale of Licensed Products for each year shall be as follows: [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] Year 1 (1997) $0 Year 2 $0 Year 3 $0 Year 4 $5,600,000 Year 5 $5,600,000 Minimum compensation for each year shall be paid on a quarterly basis, beginning with the minimum compensation payment to be made for the first calendar quarter of [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]2000, in the manner set forth in paragraph 6.2 below. No credit shall be permitted against minimum compensation payable in any year on account of actual or minimum compensation paid in any other year, and minimum compensation shall not be returnable. Minimum Compensation for each year of the "Renewal Term" (as defined in paragraph 8 of the License Licensee Agreement) shall be an amount equal to [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]ninety percent (90%) of the actual earned compensation due to the Design Partnership for sales of Licensed Products in 2001. For the purposes of this Agreement, the term "year" shall mean a period of twelve (12)months 12) months commencing on each January 1 during the term of this Agreement; provided, however, that the "first year", or "Year V 1" shall mean the period commencing on the date hereof and expiring on December 31, 19991997 (although minimum compensation shall not be due until calendar year 2000). 4.2. 4.2 The Company shall pay to the Design Company Partnership earned compensation based on the net sales price of Licensed Products manufactured or imported and sold by the Company hereunder. Earned compensation shall equal [OMITTEDOmitted; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSIONMaterial Filed Separately With The Securities And Exchange Commission] of the net sales price of all Licensed Products sold under this Agreement, including, without limitation, sales made pursuant to paragraph 6.3 hereof; provided, however, that no earned compensation shall be due in respect of sales by Company to Polo's outlet stores at the discount specified in paragraph 3.3 of the License Agreementhowever,[Omitted; Material Filed Separately With The Securities And Exchange Commission]. The Company shall prepare or cause to be prepared statements of operations for the first month in which Licensed Products are offered for sale to the trade, and for each month thereafter for so long as the Company is offering Licensed Products for sale hereunder, which statements shall be furnished to the Design Company Partnership together with the earned compensation due for each such month on the last day of the following month. The statement and compensation payment provided on the last day of each April (for the month of March), July (for the month of June), October (for the month of September) and January (for the month of December) during the term shall also include the Company's minimum compensation obligation for the preceding calendar quarter, less the aggregate earned compensation paid for such calendar quarter. The term "net sales price" shall mean the gross sales price of all Licensed Products sold under this Agreement to retailers or, with respect to Licensed Products that are not sold directly or indirectly to retailers, other ultimate consumers (as in the case of accommodation sales by Company to its employees or sales by Company in its own stores), less trade discounts, merchandise returns, sales tax (if separately identified and charged) and markdowns and/or chargebacks which, in accordance with generally accepted accounting principles, would normally be treated as deductions from gross sales, and which, in any event, do not include any chargebacks or the like for advertising, fixture or retail shop costs or contributions, or contributions for in-store personnel. No other deductions shall be taken. Any merchandise returns shall be credited in the month in which the returns are actually made. For purposes of this Agreement, affiliates of the Company shall mean all persons and business entities, whether corporations, partnerships, joint ventures or otherwise, which now or hereafter control, or are owned or controlled, directly or indirectly by the Company, or are under common control with the Company. It is the intention of the parties that compensation will be based on the bona fide wholesale prices at which the Company sells Licensed Products to independent retailers in arms' length transactions. In the event the Company shall sell Licensed Products to its affiliates, compensation shall be calculated on the basis of such a bona fide wholesale price irrespective of the Company's internal accounting treatment of such sale unless such products are sold by its affiliates directly to the end-user consumer, in which case compensation shall be calculated on the basis of the price paid by the end-user consumer, less applicable taxes; provided, however, that compensation on sales to outlet stores owned by the Company shall be calculated on the basis of the actual invoice price to such stores, but in no event less than an amount equal to [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] less than the regular wholesale price of such Licensed Products. The Company shall identify separately in the statements of operations provided to the Design Company pursuant to paragraph 7 hereof, all sales to affiliates.the

Compensation; Accounting. 4.1. 4.1 As compensation for the designs and services rendered hereunder, the Company shall pay minimum compensation to the Design Company Partnership each year during the term of this Agreement. The minimum compensation to the Design Company Partnership in connection with the manufacture and sale and importation and sale of Licensed Products for each year shall be as follows: [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSIONYear 1 (1997) $ [ * * * ] Year 2 $ [ * * * ] Year 3 $ [ * * * ] Year 4 $ [ * * * ] Year 5 $ [ * * * ] Minimum compensation for each year shall be paid on a quarterly basis, beginning with the minimum compensation payment to be made for the first calendar quarter of [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION[ * * * ], in the manner set forth in paragraph 6.2 below. No credit shall be permitted against minimum compensation payable in any year on account of actual or minimum compensation paid in any other year, and minimum compensation shall not be returnable. Minimum Compensation for each year of the "Renewal Term" (as defined in paragraph 8 of the License Licensee Agreement) shall be an amount equal to [ * * * ] percent ([OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION***]%) of the actual earned compensation due to the Design Partnership for sales of Licensed Products in 2001. For the purposes of this Agreement, the term "year" shall mean a period of twelve (12)months 12) months commencing on each January 1 during the term of this Agreement; provided, however, that the "first year", or "Year V 1" shall mean the period commencing on the date hereof and expiring on December 31, 19991997 [ * * * ]. 4.2. 4.2 The Company shall pay to the Design Company Partnership earned compensation based on the net sales price of Licensed Products manufactured or imported and sold by the Company hereunder. Earned compensation shall equal [ * * * ] percent ([OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] ***]%) of the net sales price of all Licensed Products sold under this Agreement, including, without limitation, sales made pursuant to paragraph 6.3 hereof; provided, however, that no earned compensation shall be due in respect of sales by Company to Polo's outlet stores at the discount specified in paragraph 3.3 of the License Agreement. The Company shall prepare or cause to be prepared statements of operations for the first month in which Licensed Products are offered for sale to the trade, and for each month thereafter for so long as the Company is offering Licensed Products for sale hereunder, which statements shall be furnished to the Design Company together with the earned compensation due for each such month on the last day of the following month. The statement and compensation payment provided on the last day of each April (for the month of March), July (for the month of June), October (for the month of September) and January (for the month of December) during the term shall also include the Company's minimum compensation obligation for the preceding calendar quarter, less the aggregate earned compensation paid for such calendar quarter. The term "net sales price" shall mean the gross sales price of all Licensed Products sold under this Agreement to retailers or, with respect to Licensed Products that are not sold directly or indirectly to retailers, other ultimate consumers (as in the case of accommodation sales by Company to its employees or sales by Company in its own stores), less trade discounts, merchandise returns, sales tax (if separately identified and charged) and markdowns and/or chargebacks which, in accordance with generally accepted accounting principles, would normally be treated as deductions from gross sales, and which, in any event, do not include any chargebacks or the like for advertising, fixture or retail shop costs or contributions, or contributions for in-store personnel. No other deductions shall be taken. Any merchandise returns shall be credited in the month in which the returns are actually made. For purposes of this Agreement, affiliates of the Company shall mean all persons and business entities, whether corporations, partnerships, joint ventures or otherwise, which now or hereafter control, or are owned or controlled, directly or indirectly by the Company, or are under common control with the Company. It is the intention of the parties that compensation will be based on the bona fide wholesale prices at which the Company sells Licensed Products to independent retailers in arms' length transactions. In the event the Company shall sell Licensed Products to its affiliates, compensation shall be calculated on the basis of such a bona fide wholesale price irrespective of the Company's internal accounting treatment of such sale unless such products are sold by its affiliates directly to the end-user consumer, in which case compensation shall be calculated on the basis of the price paid by the end-user consumer, less applicable taxes; provided, however, that compensation on sales to outlet stores owned by the Company shall be calculated on the basis of the actual invoice price to such stores, but in no event less than an amount equal to [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] less than the regular wholesale price of such Licensed Products. The Company shall identify separately in the statements of operations provided to the Design Company pursuant to paragraph 7 hereof, all sales to affiliates.Licensor hereby

Compensation; Accounting. 4.1. 4.1 As compensation for the designs and services rendered hereunder, the Company shall pay minimum compensation to the Design Company Partnership each year during the term of this Agreement. The minimum compensation to the Design Company Partnership in connection with the manufacture and sale and importation and sale of Licensed Products for each year shall be as follows: [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] Year 1 (1996) $ Year 2 $ Year 3 $ Year 4 $ Year 5 $ Year 6 $ Minimum compensation for each year shall be paid on a quarterly basis, beginning on the last day of each month following the end of each calendar quarter during the term hereof (e.g., April 30 for the quarter ending March 31), commencing with the first quarterly payment to be made on April 30, 1996. The amount of earned compensation paid, pursuant to paragraph 4.2 hereof, with respect to sales of Licensed Products in each calendar quarter, shall be deducted from the minimum compensation payment due for such quarter, it being the parties' intent that the Company shall pay the Design Partnership an amount equal to be made the greater of (i) aggregate minimum compensation for each year of the first calendar quarter initial term or (ii) aggregate earned compensation for each year of [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]the initial term. However, in the manner set forth in paragraph 6.2 below. No no credit shall be permitted against minimum compensation payable in any year on account of actual or minimum compensation paid in any other year, and minimum compensation shall not be returnable. Minimum Compensation for For each year during any renewal term of the "Renewal Term" (as defined in paragraph 8 of the License this Agreement) , minimum compensation shall be an amount equal to [OMITTED% of the aggregate earned compensation accrued with respect to the sale of all Licensed Products during the immediately preceding year; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]provided, however, that (i) the minimum compensation in each year shall in no event be less than the minimum compensation due for the immediately preceding year and (ii) the minimum compensation in each year shall in no event be less than $ . For the purposes of this Agreement, the term "year" shall mean a period of twelve (12)months 12) months commencing on each January 1 during the term of this Agreement; provided, however, that the "first year", or "Year V shall mean the period commencing on the date hereof and expiring on December 31, 1999hereof. 4.2. 4.2 The Company shall pay to the Design Company Partnership earned compensation based on the net sales price of Licensed Products manufactured or imported and sold by the Company hereunder. Earned compensation shall equal [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] percent ( %) of the net sales price of all Licensed Products sold under this Agreement, including, without limitation, sales made pursuant to paragraph 6.3 hereof; provided, however, that no earned compensation shall be due in respect of sales by Company to Polo's outlet stores at the discount specified in paragraph 3.3 of the License Agreement. The Company shall prepare or cause to be prepared statements of operations for the first month in which Licensed Products are offered for sale to the trade, and for each month thereafter for so long as the Company is offering Licensed Products for sale hereunder, which statements shall be furnished to the Design Company together with the earned compensation due for each such month on the last day of the following month. The statement and compensation payment provided on the last day of each April (for the month of March), July (for the month of June), October (for the month of September) and January (for the month of December) during the term shall also include the Company's minimum compensation obligation for the preceding calendar quarter, less the aggregate earned compensation paid for such calendar quarter. The term "net sales price" shall mean the gross sales price of all Licensed Products sold under this Agreement to retailers or, with respect to Licensed Products that are not sold directly or indirectly to retailers, other ultimate consumers (as in the case of accommodation sales by Company to its employees or sales by Company in its own stores), less trade discounts, merchandise returns, sales tax (if separately identified and charged) and markdowns and/or chargebacks which, in accordance with generally accepted accounting principles, would normally be treated as deductions from gross sales, and which, in any event, do not include any chargebacks or the like for advertising, fixture or retail shop costs or contributions, or contributions for in-store personnel. No other deductions shall be taken. Any merchandise returns shall be credited in the month in which the returns are actually made. For purposes of this Agreement, affiliates of the Company shall mean all persons and business entities, whether corporations, partnerships, joint ventures or otherwise, which now or hereafter control, or are owned or controlled, directly or indirectly by the Company, or are under common control with the Company. It is the intention of the parties that compensation will be based on the bona fide wholesale prices at which the Company sells Licensed Products to independent retailers in arms' length transactions. In the event the Company shall sell Licensed Products to its affiliates, compensation shall be calculated on the basis of such a bona fide wholesale price irrespective of the Company's internal accounting treatment of such sale unless such products are sold by its affiliates directly to the end-user consumer, in which case compensation shall be calculated on the basis of the price paid by the end-user consumer, less applicable taxes; provided, however, that compensation on sales to outlet stores owned by the Company shall be calculated on the basis of the actual invoice price to such stores, but in no event less than an amount equal to [OMITTED; MATERIAL FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] less than the regular wholesale price of such Licensed Products. The Company shall identify separately in the statements of operations provided to the Design Company pursuant to paragraph 7 hereof, all sales to affiliates.