Exhibit 10.27
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), entered into March 29, 2005 to be
effective as of January 1, 2005, by and between Candie's, Inc., a Delaware
corporation (the "Company"), and Neil Cole (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive possesses unique personal knowledge, experience and
expertise concerning the business and operations conducted by the Company; and
WHEREAS, the Company desires to continue to employ the Executive beyond the
term of the current employment agreement between the Executive and the Company,
and the Executive desires to continue to be employed by the Company, upon the
terms and subject to the conditions set forth this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EMPLOYMENT AND DUTIES
1.1. Term of Employment. The Executive's employment under this Agreement shall
commence on January 1, 2005 (the "Start Date") and shall continue until the
third anniversary of the Start Date, unless earlier terminated or canceled
as provided in this Agreement (the "Term").
1.2. General.
1.2.1. During the Term, the Executive shall have the title
of the President and Chief Executive Officer of the
Company and shall have such duties as may be from
time to time delegated to him by the Board of
Directors of the Company (the "Board"). The Executive
shall faithfully and diligently discharge his duties
hereunder and use his best efforts to implement the
policies established by the Board. No other officer
will be appointed with authority over the executive
or business affairs of the Company and the
Executive's responsibilities shall include, among
other things, the power to enter into banking
relationships; to hire and fire employees; to order
merchandise; to engage in advertising and promotion;
and to employ outside consultants and professionals.
1.2.2. The Executive shall devote all of his business time,
attention, knowledge and skills faithfully,
diligently and to the best of his ability, in
furtherance of the business and activities of the
Company; provided, however, that nothing in this
Agreement shall preclude the Executive from devoting
reasonable periods of time required for:
(i) serving as a director or member of a committee of any
organization or corporation involving no conflict of
interest with the interests of the Company and with
the written consent of the Company, which consent
shall not be unreasonably withheld;
(ii) delivering lectures, fulfilling speaking engagements,
and any writing or publication relating to his area
of expertise;
(iii) engaging in professional organization and program
activities; and
(iv) managing his personal investments;
provided that such activities do not materially interfere with the due
performance of his duties and responsibilities under this Agreement as
determined by the Board.
1.2.3. During the Term, the Board shall vote to recommend
the election of the Executive by the Company's
stockholders as a director.
1.3. Reimbursement of Expenses. The Company shall pay to
the Executive the reasonable expenses incurred by him
in the performance of his duties hereunder,
including, without limitation, those incurred in
connection with the use of an automobile, business
related travel or entertainment, or, if such expenses
are paid directly by the Executive, the Company shall
promptly reimburse him for such payments, provided
that the Executive properly accounts for such
expenses in accordance with the Company's policy.
2. COMPENSATION
2.1. Base Salary. During the Term, the Executive shall be
entitled to receive a base salary ("Base Salary") at
a rate of five hundred thousand dollars ($500,000.00)
per annum during the first year of the Term, five
hundred fifty thousand dollars ($550,000.00) per
annum during the second year of the Term and six
hundred thousand dollars ($600,000.00) per annum
during the third year of the Term, which Base Salary
shall be payable in arrears in equal installments not
less frequently than on a bi-monthly basis in
accordance with the payroll practices of the Company,
with such increases as may be determined by the Board
from time to time.
2.2. Additional Salary. In addition to the Base Salary,
the Company shall pay the Executive an additional
salary during the first year of the Term of two
hundred fifty thousand dollars ($250,000.00) payable
sixty-two thousand five hundred dollars ($62,500.00)
on each of the date that this Agreement is signed by
the Executive and April 1, July 1 and October 3,
2005, provided the Executive is employed by the
Company on such respective dates.
2.3. Incentive Bonuses.
2.3.1. In addition to the Base Salary (and, in the first
year of the Term, in addition to the Additional
Salary), the Executive shall receive in each fiscal
year of the Company during the Term that the Company
meets (as derived from the Company's Annual Report on
Form 10-K ("10-K") for such fiscal year) at least
100% of its earnings before interest, taxes,
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depreciation and amortization of fixed assets and
intangible assets ("EBITDA") target for such fiscal
year as determined by the Board (the "Target"), an
incentive bonus (the "Fixed Incentive Bonus") in the
amount of one hundred thousand dollars ($100,000.00)
per annum during the first year of the Term, one
hundred fifty thousand dollars ($150,000.00) per
annum during the second year of the Term and two
hundred thousand dollars ($200,000.00) per annum
during the third year of the Term. The Fixed
Incentive Bonus, if applicable, shall be due and
payable by the Company to the Executive within thirty
(30) days after the filing by the Company of its 10-K
with the Securities and Exchange Commission ("SEC")
with respect to such fiscal year. The Target for the
Company's fiscal year ending December 31, 2005 has
been presented by the Board to the Executive on the
date hereof. The Target for each fiscal year of the
Company thereafter shall be proposed by the
Executive, subject to the approval of the Board, such
approval or alternative Target to be provided in
writing to the Executive at least ten days prior to
the commencement of each such fiscal year of the
Company.
2.3.2. In addition to the Base Salary (and, in the first
year of the Term, in addition to the Additional
Salary) and the Fixed Incentive Bonus, if any, the
Executive shall receive an incentive bonus (the
"Percentage Incentive Bonus"), equal to 5% of the
amount, if any, by which the Company's actual EBITDA
for the fiscal year for which the Percentage
Incentive Bonus is paid (as derived from the 10-K for
such fiscal year) exceeds the greater of (a) the
Target (as defined in Section 2.3.1 hereof) for such
fiscal year, and (b) the highest amount of actual
EBITDA previously achieved during the Term, provided
that the amounts of any negative EBITDA for all prior
years during the Term in which the Company had such
negative EBITDA (and which negative EBITDA was not
previously used in the calculation described in this
proviso) shall reduce EBITDA in the year for which
the calculation is made in determining whether and by
how much (a) and (b) were exceeded. The Percentage
Incentive Bonus, if applicable, shall be due and
payable by the Company to the Executive within thirty
(30) days after the filing by the Company of its 10-K
with the SEC with respect to such fiscal year.
2.4. Early Termination. Anything contained in this Section
2 to the contrary notwithstanding, in the event that
the Executive's employment hereunder is terminated by
the Company without Cause or by the Executive for
Good Reason (as such terms are defined in Section 5.1
hereof) prior to the end of a fiscal year and the
Executive would have been entitled to Incentive
Bonuses under Section 2.3 for such fiscal year but
for such termination, the Executive shall be entitled
to a pro rata portion of the Incentive Bonuses that
would have been payable but for such termination
through the Date of Termination (as defined in
Section 5.3 hereof).
2.5. Stock Options. In addition to the Base Salary,
Additional Salary and the Incentive Bonuses, if any,
the Executive shall receive, as incentive
compensation, options ("Options") to purchase up to
an aggregate of 800,000 shares (the "Shares") of
common stock of the Company, pursuant to and upon the
terms and conditions set forth in the Company's 2002
Stock Option Plan ("Plan"). The Options shall vest
immediately and be exercisable at any time during the
ten year period commencing upon the date of grant,
subject to earlier termination as provided in the
Plan and the option agreement between the Company and
the Executive, at an exercise price per share equal
to the last sales price for the Company's common
stock on the date hereof.
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2.6. Additional Compensation. In addition to the Base
Salary, Additional Salary and the Incentive Bonuses,
if any, and the Options, the Executive shall be
entitled to receive such other cash bonuses and such
other compensation in the form of stock, stock
options or other property or rights as may from time
to time be awarded him by the Board during or in
respect of his employment hereunder.
3. PLACE OF PERFORMANCE. In connection with his
employment by the Company, the Executive shall be
based at the Company's principal executive offices in
New York, New York, subject to the mutual agreement
of the Executive and the Company to relocate him to
another office of the Company. Subject to the
foregoing, in connection with any relocation or
transfer of the Executive outside of the greater New
York metropolitan area, the Company will promptly pay
(or reimburse the Executive for) all reasonable
moving and moving-related expenses (including any
losses incurred as a result of the sale of the
Executive's personal residence) incurred by the
Executive as a consequence of a change of his
principal residence in connection with any such
relocation or transfer.
4. EMPLOYEE BENEFITS
4.1. Benefit Plans. The Executive shall, during the Term,
be included to the extent eligible thereunder in all
employee benefit plans, programs or arrangements of
general application (including, without limitation,
any plans, programs or arrangements providing for
retirement benefits, options and other equity-based
incentive compensation, profit sharing, bonuses,
disability benefits, health and life insurance, or
vacation and paid holidays) which shall be
established by the Company or any affiliate of the
Company, for, or made available to, their respective
senior executives ("Benefits"). During the Term, the
Benefits described in this paragraph 4 may only be
reduced as a result of a general reduction for senior
executives.
4.2. Vacation. The Executive shall be entitled to not less
than four (4) weeks vacation at full pay for each
year during the Term. Such vacation may be taken in
the Executive's discretion, and at such time or times
as are not inconsistent with the reasonable business
needs of the Company.
4.3. Life Insurance Coverage. The Company shall use its
best efforts to obtain and maintain in full force and
effect during the Term life insurance covering the
life of the Executive for the benefit of his designee
in the amount of $5,000,000, of which up to
$1,000,000 may, at the option of the Executive, be a
whole-life policy and the remainder shall be a term
policy. A schedule of the current life insurance
policies maintained by the Company on the life of the
Executive is attached hereto as Exhibit A.
5. TERMINATION OF EMPLOYMENT
5.1. General. The Executive's employment under this
Agreement may be terminated without any breach of
this Agreement only on the following circumstances:
5.1.1. Death. The Executive's employment under this
Agreement shall terminate upon his death.
5.1.2. Disability. If, as a result of the Executive's
Disability (as defined below), the Executive shall
have been absent from his duties under this Agreement
for sixty (60) consecutive days, the Company may
terminate the Executive's employment upon thirty (30)
days prior written notice; provided that the
Executive has not returned to full time performance
of his duties during such thirty (30) day period. For
purposes hereof, "Disability" shall mean that the
Executive is unable to perform his normal and
customary duties hereunder as a result of physical or
mental illness.
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5.1.3. Good Reason. The Executive may terminate his
employment for Good Reason at any time. For purposes
of this Agreement, "Good Reason" shall mean:
(i) the failure by the Company to comply with its
material obligations and agreements contained in this
Agreement;
(ii) a material diminution of the responsibilities or
title of the Executive with the Company without the
express written consent of the Executive;
(iii) a reduction by the Company in the Base Salary as in
effect on the date hereof, or as the same may be
increased from time to time, without the express
written consent of the Executive; or
(iv) the re-location of the Executive to an office outside
of the greater New York metropolitan area, unless
mutually agreed to;
provided, however, that the Executive shall have provided the Company with
written notice that such actions are occurring and the Company has been afforded
a reasonable opportunity of at least thirty (30) days to cure same.
5.1.4. Cause. The Company may terminate the Executive's
employment under this Agreement for Cause.
Termination for "Cause" shall mean termination of the
Executive's employment because of the occurrence of
any of the following as determined by the Board:
(i) the willful and continued failure by the Executive to
substantially perform his obligations under this
Agreement (other than any such failure resulting from
the Executive's incapacity due to physical or mental
illness); provided, however, that the Company shall
have provided the Executive with written notice that
such actions are occurring and the Executive has been
afforded a reasonable opportunity of at least thirty
(30) days to cure same, or
(ii) the indictment of the Executive for a felony or other
crime involving moral turpitude or dishonesty; or
(iii) the willful engaging in misconduct (including theft,
fraud, embezzlement, and securities law violations)
which is injurious to the Company, monetarily, or
otherwise. For purposes of this Section 5.1.4(iii),
no act, or failure to act, on the part of the
Executive shall be considered "willful" unless done,
or omitted to be done, by him in bad faith and
without reasonable belief that his action or omission
was in the best interest of the Company.
5.2. Notice of Termination. Any termination of the
Executive's employment by the Company or by the
Executive (other than termination by reason of the
Executive's death) shall be communicated by written
Notice of Termination to the other party of this
Agreement. For purposes of this Agreement, a "Notice
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of Termination" shall mean a notice which shall
indicate the specific termination provision in this
Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's
employment under the provision so indicated. 5.3.
Date of Termination. The "Date of Termination" shall
mean (a) if the Executive's employment is terminated
by his death, the date of his death, (b) if the
Executive's employment is terminated pursuant to
subsection 5.1.2 above, thirty (30) days after Notice
of Termination is given (provided that the Executive
shall not have returned to the performance of his
duties on a full-time basis during such thirty (30)
day period), (c) if the Executive's employment is
terminated pursuant to subsections 5.1.3 or 5.1.4
above, the date specified in the Notice of
Termination after the expiration of any applicable
cure periods, and (d) if the Executive's employment
is terminated for any other reason, the date on which
a Notice of Termination is given; provided that if
within thirty (30) days after any Notice of
Termination is given the party or parties receiving
such Notice of Termination notifies the other party
or parties that a dispute exists concerning such
termination, the Date of Termination shall be the
date on which the dispute is finally determined by a
binding and final arbitration award or by a final
judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected).
5.4. Compensation Upon Termination.
5.4.1. Termination for Cause. If the Executive's employment
shall be terminated for Cause, the Company shall pay
the Executive his Base Salary through the Date of
Termination, at the rate in effect at the time Notice
of Termination is given, and all expenses and accrued
Benefits arising prior to such termination which are
payable to the Executive pursuant to this Agreement
through the Date of Termination and the Company shall
have no further obligation with respect to this
Agreement.
5.4.2. Termination without Cause or For Good Reason. Subject
to the provisions of subsection 5.4.3 hereof, if,
prior to the expiration of the Term, the Executive's
employment hereunder is terminated by the Executive
for Good Reason or by the Company without Cause
(other than a termination by reason of Disability),
the Company shall pay to the Executive all expenses
and accrued Benefits arising prior to such
termination which are payable to the Executive
pursuant to this Agreement through the Date of
Termination and the Company shall continue to pay the
Executive his Base Salary as then in effect for the
greater of (i) the remainder of the original Term or
(ii) a period of one year (1) year from the Date of
Termination (such period being referred to
hereinafter as the "Severance Period"), payable in
monthly installments. In addition, during the
Severance Period, the Executive shall be entitled to
continue to participate in all employee benefit plans
that the Company provides (and continues to provide)
generally to its senior executives. The Company shall
also pay all indemnity payments and all legal fees
and expenses incurred by the Executive as a result of
such termination (including all such fees and
expenses, if any, incurred in contesting or disputing
any such termination or in seeking to obtain or
enforce any right or benefit provided by this
Agreement).
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5.4.3. Death During Severance Period. In the event of the
Executive's death during the Severance Period,
payments of Base Salary under this Section 5.4 and
payments under the Company's employee benefit plan(s)
shall continue to be made in accordance with their
terms during the remainder of the Severance Period to
the beneficiary designated in writing for such
purpose by the Executive or, if no such beneficiary
is specifically designated, to the Executive's
estate.
5.4.4. Termination Following Change in Control.
(i) Anything contained herein to the contrary
notwithstanding, in the event the Executive's
employment hereunder is terminated within twelve (12)
months following a Change in Control (as defined
below) by the Company without Cause, or any joint
venturer or partner of the Company existing as of the
date hereof, or by the Executive with Good Reason,
then the Company shall pay to the Executive in
complete satisfaction of its obligations under this
Agreement, as severance pay and as liquidated damages
(because actual damages are difficult to ascertain),
in a lump sum, in cash, within fifteen (15) days
after the Date of Termination, an amount equal to
$100 less than three times the Executive's
"annualized includable compensation for the base
period" (as defined in Section 280G of the Internal
Revenue Code of 1986); provided, however, that if
such lump sum severance payment, either alone or
together with other payments or benefits, either cash
or non-cash, that the Executive has the right to
receive from the Company, including, but not limited
to, accelerated vesting or payment of any deferred
compensation, options, stock appreciation rights or
any benefits payable to the Executive under any plan
for the benefit of employees, which would constitute
an "excess parachute payment" (as defined in Section
280G of the Internal Revenue Code of 1986), then such
lump sum severance payment or other benefit shall be
reduced to the largest amount that will not result in
receipt by the Executive of a parachute payment. The
determination of the amount of the payment described
in this subsection shall be made by the Company's
independent auditors at the sole expense of the
Company. For purposes of clarification the value of
any options described above will be determined by the
Company's independent auditors using a Black-Scholes
valuation methodology.
For purposes of this Agreement, a "Change in Control"
shall be deemed to occur (i) when any "person" as defined in Section 3(a)(9)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and as used in Section 13(d) and 14(d) thereof, including a "group" as
defined in Section 13(d) of the Exchange Act, but excluding the Executive,
the Company or any subsidiary or any affiliate of the Company or any
employee benefit plan sponsored or maintained by the Company or any subsidiary
of the Company (including any trustee of such plan acting as trustee), becomes
the "beneficial owner" (as defined in Rule 13(d)(3) under the Exchange Act) of
securities of the Company representing 15% or more of the combined voting power
of the Company's then outstanding securities; or (ii) when, during any period of
twenty-four (24) consecutive months, the individuals who, at the beginning of
such period, constitute the Board of Directors (the "Incumbent Directors") cease
for any reason other than death to constitute at least a majority thereof;
provided, however, that a director who was not a director at the beginning of
such twenty-four (24) month period shall be deemed to have satisfied such
twenty-four (24) month requirement (and be an Incumbent Director) if such
director was elected by, or on the recommendation of or with the approval of, at
least two-thirds (2/3) of the directors who then qualified as Incumbent
Directors either actually (because they were directors at the beginning of such
twenty-four (24) month period) or through the operation of this proviso; or
(iii) the occurrence of a transaction requiring stockholder approval for the
acquisition of the Company by an entity other than the Company or a subsidiary
or an affiliated company of the Company through purchase of assets, or by
merger, or otherwise.
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(ii) If within twelve (12) months after the occurrence of a Change in Control,
the Company shall terminate the Executive's employment without Cause or the
Executive terminates his employment for Good Reason, then notwithstanding the
vesting and exercisability schedule in any stock option agreement between the
Company and the Executive, all unvested stock options granted by the Company to
the Executive pursuant to such agreement shall immediately vest and become
exercisable and shall remain exercisable for not less than 180 days thereafter.
5.4.5. Termination upon Death or Retirement. In the event of the termination of
the Executive's employment by reason of death or retirement, the Company shall
pay the Executive his Base Salary through the Date of Termination, at the rate
then in effect, and all expenses or accrued Benefits arising prior to such
termination which are payable to the Executive pursuant to this Agreement
through the Date of Termination. In addition, the Executive and/or his
beneficiaries shall be entitled to such other benefits as shall be determined in
accordance with the benefit plans maintained by the Company, including, without
limitation, any benefits to which they are entitled under the life insurance
policy provided for in Section 4.3 hereof.
5.4.6. Termination upon Disability. In the event of the termination of the
Executive's employment by reason of Disability in accordance with the provisions
of Section 5.1.2 hereof, the Company shall pay to the Executive a lump sum cash
payment in an amount equal to the present value of the Base Salary that would
have been payable to the Executive during the remainder of the original Term had
the Agreement not been so terminated, together with all expenses and accrued
Benefits arising prior to such termination which are payable to the Executive
pursuant to this Agreement through the Date of Termination. In addition, the
Executive and/or his beneficiaries shall be entitled to such other benefits as
shall be determined in accordance with the benefit plans maintained by the
Company.
5.4.7. The Executive shall not be required to mitigate the amount of any payment
provided for in this Section 5.4 by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Section 5.4 be reduced by
any compensation earned by the Executive as the result of employment by another
employer or business or by profits earned by the Executive from any other source
at any time before and after the Date of Termination.
6. INSURABILITY; RIGHT TO INSURE
During the continuance of the Executive's employment
hereunder, the Company shall have the right to maintain key man life insurance
in its own name covering the Executive's life in such amount as shall be
determined by the Company, for a term ending on the termination or expiration of
this Agreement. The Executive shall aid in the procuring of such insurance by
submitting to the required medical examinations, if any, and by filling out,
executing and delivering such applications and other instrument in writing as
may be reasonably required by an insurance company or companies to which
application or applications for insurance may be made by or for the Company.
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7. CONFIDENTIALITY; NONCOMPETITION; NONSOLICITATION; NONDISPARAGEMENT
7.1. The Company and the Executive acknowledge that the services to be performed
by the Executive under this Agreement are unique and extraordinary and, as a
result of such employment, the Executive shall be in possession of confidential
information relating to the business practices of the Company. The term
"confidential information" shall mean any and all information (oral and written)
relating to the Company or any of its affiliates, or any of their respective
activities, other than such information which (i) can be shown by the Executive
to be in the public domain (such information not being deemed to be in the
public domain merely because it is embraced by more general information which is
in the public domain) other than as the result of breach of the provisions of
this paragraph 7 or (ii) the Executive is required to disclose under any
applicable laws, regulations or directives of any government agency, tribunal or
authority having jurisdiction in the matter or under subpoena or other process
of law. The Executive shall not, during the Term and for a period of two (2)
years thereafter, except as may be required in the course of the performance of
his duties hereunder, directly or indirectly, use, communicate, disclose or
disseminate to any person, firm or corporation any confidential information
regarding the clients, customers or business practices of the Company acquired
by the Executive, without the prior written consent of the Company; provided,
however, that the Executive understands that Executive shall be prohibited from
misappropriating any trade secret at any time during or after the Term.
7.2. Upon the termination of the Executive's employment for any reason
whatsoever, all documents, records, notebooks, equipment, price lists,
specifications, programs, customer and prospective customer lists and other
materials which refer or relate to any aspect of the business of the Company
which are in the possession of the Executive, including all copies thereof,
shall be promptly returned to the Company.
7.3. The Executive hereby agrees that he shall not, during the Term, and, in the
event that the Executive's employment hereunder is terminated by the Company for
Cause or by the Executive without Good Reason, for a period of two years after
the date of such termination, directly or indirectly, within any county (or
adjacent county) in any State within a fifty (50) mile radius of the location of
any of the Company's offices, engage, have an interest in or render any services
to any business (whether as owner, manager, operator, licensor, licensee,
lender, partner, stockholder, joint venturer, employee, consultant or otherwise)
competitive with the business activities conducted by the Company, its
subsidiaries, or affiliates during the Term. Notwithstanding the foregoing,
nothing herein shall prevent the Executive from owning stock in a publicly
traded corporation whose activities compete with those of the Company's,
provided that such stock holdings are not greater than five percent (5%) of such
corporation.
7.4. The Executive shall not, during the Term, and, in the event that the
Executive's employment hereunder is terminated by the Company for Cause or by
the Executive without Good Reason, for a period of two years after the date of
such termination, directly or indirectly, take any action which constitutes an
interference with or a disruption of any of the Company's business activities
including, without limitation, the solicitations of the Company's customers, or
persons listed on the personnel lists of the Company.
7.5. For purposes of clarification, but not of limitation, the Executive hereby
acknowledges and agrees that the provisions of Sections 7.3 and 7.4 above shall
serve as a prohibition against him from, during the period referred to therein,
directly or indirectly, hiring, offering to hire, enticing, soliciting or in any
other manner persuading or attempting to persuade any officer, employee, agent,
lessor, lessee, licensor, licensee or customer of the Company (but only those
suppliers existing during the time of the Executive's employment by the Company,
or at the termination of his employment), to discontinue or alter his, her or
its relationship with the Company.
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7.6. At no time during or after the Term shall either party hereto, directly or
indirectly, disparage the commercial, business, professional or financial, as
the case may be, reputation of the other party.
7.7. Without intending to limit the remedies available to the Company, the
Executive acknowledges that a breach of any of the covenants contained in this
paragraph 7 may result in material and irreparable injury to the Company, or its
affiliates or subsidiaries, for which there is no adequate remedy at law, that
it will not be possible to measure damages for such injuries precisely and that,
in the event of such a breach or threat the Company shall be entitled to seek a
temporary restraining order and/or a preliminary or permanent injunction
restraining the Executive from engaging in activities prohibited by this
paragraph 7 or such other relief as may be required specifically to enforce any
of the covenants in this paragraph 7. If for any reason it is held that the
restrictions under this paragraph 7 are not reasonable or that consideration
therefor is inadequate, such restrictions shall be interpreted or modified to
include as much of the duration and scope identified in this paragraph as will
render such restrictions valid and enforceable.
8. RIGHTS OF INDEMNIFICATION
8.1. The Company shall indemnify the Executive to the fullest extent permitted
by the General Corporation Law of the State of Delaware, as amended from time to
time, for all amounts (including without limitation, judgments, fines,
settlement payments, expenses and attorney's fees) incurred or paid by the
Executive in connection with any action, suit, investigation or proceeding
arising out of or relating to the performance by the Executive of services for,
or the acting by the Executive as a director, officer or employee of the
Company, or any other person or enterprise at the Company's request.
8.2. The Company shall use its best efforts to obtain and maintain in full force
and effect during the Term, directors' and officers' liability insurance
policies providing full and adequate protection to the Executive for his
capacities, provided that the Board shall have no obligation to purchase such
insurance if, in its opinion, coverage is available only on unreasonable terms.
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9. MISCELLANEOUS
9.1. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company:Candie's, Inc.
215 West 40th Street
6th Floor
New York, NY 10018
Attn:Deborah Sorell Stehr
Senior Vice President and General Counsel
with a copy to:Blank Rome LLP
405 Lexington Avenue
New York, NY 10174
Attn: Robert J. Mittman, Esq.
To the Executive:Neil Cole
525 East 72nd Street
Apt 30D
New York, NY 10021
All such notices shall be conclusively deemed to be received
and shall be effective (i) if sent by hand delivery, upon receipt, (ii) if sent
by telecopy or facsimile transmission, upon confirmation of receipt by the
sender of such transmission, (iii) if sent by overnight courier, one business
day after being sent by overnight courier, or (iv) if sent by registered or
certified mail, postage prepaid, return receipt requested, on the fifth day
after the day on which such notice is mailed.
9.2. Severability. Each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law,
such provision will be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
9.3. Binding Effect; Benefits. Executive may not delegate his duties or assign
his rights hereunder. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
9.4. Entire Agreement. This Agreement represents the entire agreement of the
parties and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Executive, including, without
limitation, that certain Employment Agreement dated February 1, 2002 between the
Company and the Executive, which shall be deemed to have terminated on December
31, 2004 . This Agreement may be amended at any time by mutual written agreement
of the parties hereto. In the case of any conflict between any express term of
this Agreement and any statement contained in any employment manual, memo or
rule of general applicability of the Company, this Agreement shall control.
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9.5. Withholding. The payment of any amount pursuant to this Agreement shall be
subject to applicable withholding and payroll taxes, and such other deductions
as may be required under the Company's employee benefit plans, if any.
9.6. Governing Law. This Agreement and the performance of the parties hereunder
shall be governed by the internal laws (and not the law of conflicts) of the
State of New York. Any claim or controversy arising out of or in connection with
this Agreement, or the breach thereof, shall be adjudicated exclusively by the
Supreme Court, New York County, State of New York, or by a federal court sitting
in Manhattan in New York City, State of New York. The parties hereto agree to
the personal jurisdiction of such courts and agree to accept process by regular
mail in connection with any such dispute.
9.7. Legal Fees and Court Costs. In the event that any action, suit or other
proceeding in law or in equity is brought to enforce the provisions of this
Agreement, and such action results in the award of a judgment for money damages
or in the granting of any injunction in favor of the Company, all expenses
(including reasonable attorneys' fees) of the Company in such action, suit or
other proceeding shall be paid by the Executive. In the event that any action,
suit or other proceeding in law or in equity is brought to enforce the
provisions of this Agreement, and such action results in the award of a judgment
for money damages or in the granting of any injunction in favor of the
Executive, all expenses (including reasonable attorneys' fees and travel
expenses) of the Executive in such action, suit or other proceeding shall be
paid by the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed and the Executive has hereunto set his hand, as of the day and
year first above written,
THE COMPANY:CANDIE'S, INC
By:/s/Warren Clamen
--------------------------------
Warren Clamen
Executive Vice President -
Chief Financial Officer
EXECUTIVE:/s/ Neil Cole
--------------------------------
Neil Cole
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