Exhibit 10.6

 

EXECUTION VERSION

 

AMENDED & RESTATED EMPLOYMENT AGREEMENT

 

AMENDED & RESTATED EMPLOYMENT AGREEMENT, dated as of April 14,2015, by and
between Sequential Brands Group, Inc., a Delaware corporation (the “Company”),
and Yehuda Shmidman (the “Executive”).

 

WITNESSETH

 

WHEREAS, the Executive is currently employed as the Chief Executive Officer of
the Company pursuant to an employment agreement between the Company and the
Executive dated as of November 19, 2012 (the “Prior Agreement”); and

 

WHEREAS, the Company and the Executive desire to amend and restate the Prior
Agreement effective as of the date hereof..

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and
Executive hereby agree as follows:

 

1.      Engagement of Executive; Duties; Board. During the Term (as hereinafter
defined in Section 3 below), the Executive shall have the title of Chief
Executive Officer of the Company reporting solely to the Company’s Board of
Directors (the “Board”). Executive will have such responsibilities, duties and
authority customarily associated with the position of Chief Executive Officer.
All areas of the Company will report to Executive including, but not limited to,
licensing, brand management, finance, and legal. In connection with his
employment by the Company, the Executive shall be based in the greater New York
metropolitan area.

 

2.      Time. The Executive shall devote substantially all of his working hours
to his duties hereunder and towards the overall success of the business of the
Company, including but not limited to, strategic direction, execution and
implementation of business plans, developing and achieving budget targets, and
overall business growth of the Company, provided that nothing contained herein
shall be deemed to restrict the Executive from engaging in charitable,
religious, civic or community activities, or from serving on the boards of
directors of non-profit organizations and, with the consent of the Board (such
consent not to be unreasonably withheld, delayed or conditioned), other
for-profit companies which do not compete with the Company, provided that such
activities do not materially interfere with Executive’s duties and
responsibilities under this Agreement.

 

3.      Term. The term of this Agreement shall commence on April 14, 2015 (the
“Effective Date”) and shall continue until December 31, 2018 (the “Term”) unless
otherwise terminated as provided herein. In the event that the Executive remains
an employee of the Company following expiration of the Term and this Agreement
is not extended, he shall be an employee “at will” and shall not be (i) at any
during or following such “at will” employment, entitled to any of the benefits
under this Agreement, or (ii) at any time following such “at will employment”,
subject to any of the restrictions contained in this Agreement (including, but
not limited to, the noncompetition and non-solicitation provisions contained in
Section 7), other than the undertakings contained in Section 6 and the
provisions of Section 10, each of which shall survive any termination or
non-renewal of this Agreement.

 

 

 

  

4.      Compensation.

 

(a)          Base Salary. During the Term, Executive’s base salary will be at a
rate of not less than $600,000 per annum paid in accordance with the Company’s
payroll practices and policies then in effect, with such increases (but not
decreases) as determined by the Board or the Compensation Committee of the Board
(the “Compensation Committee”) from time to time (such salary, as increased from
time to time, the “Base Salary”).

 

(b)          Bonus. During the Term, the Executive shall be entitled to receive
an annual bonus for each fiscal year (the “Annual Bonus”) based upon the
adjusted EBITDA target to be agreed to by the Company and Executive and set
forth in the Board-approved budget for the applicable year (which target shall
be adjusted for the effect of the disposition of any assets prior to the end of
the applicable year). The parties shall use commercially reasonable efforts to
define such target prior to the start of each applicable fiscal year. The target
Annual Bonus amount shall be one hundred fifty percent (150%) of the Base Salary
and shall be paid if the adjusted EBITDA target for the year is attained. If
performance for any year is 80% or more but less than 90% of the adjusted EBITDA
target for that year, 50% on the target Annual Bonus will be paid and if
performance for any year is 90% or more but less than 100% of the adjusted
EBITDA target for that year, 75% on the target Annual Bonus will be paid. In the
event of a sale or other disposition of assets, the adjusted EBITDA target for
the year in which such sale or other disposition occurs shall be reduced by the
amount of EBITDA included in the budget for that year that was attributable to
those assets. Annual Bonuses, if applicable, shall be due and payable by the
Company to the Executive annually, commencing with the fiscal year ended
December 31, 2015, payable in the year following the year for which such Annual
Bonus was earned on the earlier of the date the Company files its 10-K or April
1st of such year. In the event that following fiscal year 2015, the Company
adopts an annual incentive plan designed to grant performance-basedcompensation
in accordance with Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”), the EBITDA targets and bonus amounts will be subject to
(x) approval by the Compensation Committee in accordance with Section 162(m) of
the Code and (y) any other requirements for performance-based compensation under
162(m) of the Code.

 

(c)    Equity Compensation.

 

(i)  Prior Awards. The Executive has received (A) an equity grant (the
“Restricted Stock Award”) in the form of 396,196 restricted shares of the
Company’s common stock (the “Restricted Stock”), of which 297,147 shares of the
Restricted Stock have vested and the remaining 99,049 shares of Restricted Stock
Award will vest on November 19, 2015 and (B) a grant of performance-based
restricted stock units (the “PSUs”) in respect of 300,000 shares of the
Company’s common stock as of January 1, 2014 of which 60,000 shares have vested
and the remaining 240,000 shares will vest based on the attainment of the
performance goals set forth in the PSU award agreement; provided, however, that
upon a “Change in Control,” (i) all unvested shares of Restricted Stock will
immediately vest and (ii) all performance goals applicable to the PSUs shall be
deemed to have been satisfied and the PSUs that would have vested on the last
day of each remaining performance period had all of the performance goals been
satisfied shall vest on each such day provided the Executive remains employed as
of such day. For purposes of this Agreement, a Change in Control shall mean any
of the following:

 

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(1)         Any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) becomes the beneficial
owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
50% or more of either (A) the then-outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (B) the combined voting
power of the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that, for purposes of this Section 4(c)(1), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition by an Excluded Person (as defined below) (ii) any acquisition
directly from the Company, (iii) any acquisition by the Company, (iv) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliate or (v) any acquisition by any
corporation pursuant to a transaction that complies with Sections 4(c)(2)(A) or
4(c)(2)(B) below;

 

(2)          Consummation of (i) a reorganization, merger, statutory share
exchange or consolidation or similar transaction involving the Company or any
affiliate, (ii) a sale or other disposition of all or substantially all of the
assets of the Company, or (iii) the acquisition of assets or stock of another
entity by the Company or any affiliate (each, a “Business Combination”), in each
case unless, following such Business Combination, (A) all or substantially all
of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock (or,
for a non-corporate entity, equivalent securities) and the combined voting power
of the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be or (B) at least a majority of the members
of the board of directors (or, for a non-corporate entity, equivalent governing
body) of the entity resulting from such Business Combination were members of the
incumbent board at the time of the execution of the initial agreement or of the
action of the board providing for such Business Combination; or

 

(3)         A complete liquidation or dissolution of the Company.

 

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For purposes hereof, the “Excluded Persons” shall mean William Sweedler, Tengram
Capital Partners Gen2 Fund, L.P. and each of their respective Related Parties.
For purposes of hereof, “Related Party” shall mean with respect to any person or
entity, any other person or entity which (i) directly or indirectly, is
controlling, controlled by or under common control with such person or entity,
or (ii) directly or indirectly, is advised, managed, administered by such person
or entity or any person or entity described in the immediately preceding clause
(i). For purposes of this definition, “control” of a person or entity (including
the terms “controlled by” and “under common control with”) means the power,
directly or indirectly, to direct or cause the direction of the management or
policies of such person or entity, whether through ownership of voting
securities, the ability to exercise voting power, or by contract or otherwise.

 

Except as provided in this Agreement, Executive must be in the employ of the
Company at the time of the vesting dates. The Restricted Stock was granted
pursuant to a stock purchase agreement dated as of November 19, 2012 (the
“Restricted Stock Agreement”). At any time during the thirty (30) day period
following the applicable vesting date of the Restricted Stock, Executive shall
have the right to “put” any vested Restricted Stock vesting on such date to the
Company at a per-share price equal to the average closing price per share of the
Company’s common stock on NASDAQ or such other registered national securities
exchange on which the Company’s common stock is then-listed over the five (5)
day period preceding such purchase date (or if such stock is not then listed on
any registered national securities exchange, the fair market value of such stock
as reasonably determined by the Board) for purposes of assisting the Executive
in paying all applicable taxes related to the vesting of such Restricted Stock;
provided, however, that if the Company is restricted pursuant to any contractual
agreement to which it is a party or applicable law from redeeming such
Restricted Stock pursuant to the provisions hereof, the obligation to purchase
any such Restricted Stock shall be suspended until the earlier to occur of April
1st of the following calendar year and the date on which such redemption is not
prohibited by any contractual agreement to which the Company is a party or
applicable law.

 

(ii) Restricted Stock Units. As of the Effective Date, the Company shall grant
to the Executive restricted stock units in respect of 300,000 shares of the
Company’s common stock, 100,000 of which shall be time-vested and 200,000 of
which shall vest based on the attainment of certain share price targets (the
“RSU/PSU Award”). The RSU/PSU Award shall be made pursuant to an award agreement
in the form attached hereto as Exhibit B (the “RSU/PSU Agreement”).

 

(d)          Benefits. Executive shall receive the employee and fringe benefits
generally made available to other executive officers of the Company from time to
time, including health and dental coverage. Executive shall also be added or
continued, as the case may be, as an insured under the Company’s officers and
directors insurance and all other polices which pertain to officers of the
Company. The Company shall pay Executive a car allowance of $1,500 per month
during the Term.

 

(e)          Reimbursement of Expenses. The Company shall pay to Executive the
reasonable expenses incurred by him in the performance of his duties hereunder,
including, without limitation, expenses related to cell phones, blackberrys and
laptop computers and such other expenses incurred in connection with business
related travel or entertainment in accordance with the Company’s policy, or, if
such expenses are paid directly by the Executive, the Company shall promptly
reimburse the Executive for such payments in accordance with the Company’s
policy, provided that the Executive properly accounts for such expenses in
accordance with the Company’s policy.

 

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(f)          Jewish Holidays/Vacation. Executive shall be entitled to three
weeks of paid vacation per year plus all observable Jewish holidays. The
Executive shall use his vacation in the calendar year in which it is accrued.

 

(g) Legal Fees. The Company agrees to pay or reimburse the Executive for all
reasonable attorney’s fees and related expenses incurred by the Executive in
connection with the negotiation and execution of this Employment Agreement.

 

5.           Termination of Employment.

 

(a)          General. The Executive’s employment under this Agreement may be
terminated prior to the expiration of the Term without any breach of this
Agreement only on the following circumstances:

 

(b)          Death. The Executive’s employment under this Agreement shall
terminate upon his death.

 

(c)          Disability. If the Executive suffers a Disability (as defined below
in this sub-section (2)), the Company may terminate the Executive’s employment
under this Agreement 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 the
Executive’s inability to perform his duties and responsibilities hereunder, with
or without reasonable accommodation, due to any physical or mental illness or
incapacity, which condition either (i) has continued for a period of 180 days
(including weekends and holidays) in any consecutive 365-day period, or (ii) is
projected by the Board in good faith after consulting with a doctor selected by
the Company and consented to by the Executive (or, in the event of the
Executive’s incapacity, his legal representative), such consent not to be
unreasonably withheld, that the condition is likely to continue for a period of
at least six (6) consecutive months from its commencement; provided, however,
that in no event shall Executive have a Disability for purposes of this clause
(c) unless Executive has become disabled within the meaning of the Company’s
long term disability plan then in effect and is entitled to receive benefits
thereunder.

 

(d)          Good Reason. The Executive may terminate his employment under this
Agreement for Good Reason after the occurrence of any of the Good Reason events
set forth in the following sentence. For purposes of this Agreement, “Good
Reason” shall mean the occurrence of any of the following events without the
Executive’s prior written consent:

 

(i)          the failure by the Company to timely comply with its material
obligations and agreements contained in this Agreement;

 

(ii)         a material diminution of the authorities, duties or
responsibilities of the Executive set forth in Section 1 above (other than
temporarily while the Executive is physically or mentally incapacitated and
unable to properly perform such duties, as determined by the Board in good
faith) or the assignment to Executive of duties materially inconsistent with his
position as Chief Executive Officer;

 

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(iii) the loss of the title of Chief Executive Officer of the Company or if,
upon or following a Change in Control the Company is not the surviving entity or
survives as a subsidiary of another corporation or entity, the Executive is not
the chief executive officer of the ultimate parent corporation or entity (the
“Parent”);

 

(iv) the involuntary re-location of the Executive to an office outside of the
New York, New York metropolitan area; or

 

(v) a change in the reporting structure so that the Executive reports to someone
other than the Board or, if applicable, the board of directors of the Parent;

 

provided, however, that, within ninety (90) days of any such events having
occurred, the Executive shall have provided the Company with written notice that
such events have occurred and afforded the Company thirty (30) days to cure and
if the Company does not cure to Executive’s reasonable satisfaction then
Executive terminates his employment within one hundred twenty (120) days
following the expiration of such cure period. For purposes of this Agreement,
upon any reduction or diminution in authorities, duties, responsibilities, etc.
the basis for determining whether such reduction or diminution was material
shall be deemed to be the greatest authorities, duties, responsibilities held by
Executive and not the authorities, duties, responsibilities held by Executive
immediately prior to the most recent diminution or reduction (e.g., if the
Company were to reduce Executive’s duties and then at a subsequent time were to
reduce his duties further, for purposes of determining whether the second event
constitutes a Good Reason event, his duties would be compared to those he held
prior to the initial reduction).

 

(e)          Without Good Reason. The Executive may voluntarily terminate his
employment under this Agreement without Good Reason upon written notice by the
Executive to the Company at least thirty (30) days prior to the effective date
of such termination (which termination the Company may, in its sole discretion,
make effective earlier than the date set forth in the Notice of Termination (as
hereinafter defined in sub-section (h) below)).

 

(f)          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) any gross negligence or 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 a Disability);

 

(ii) the indictment of the Executive for, or his conviction of or plea of guilty
or nolo contendere to, a felony;

 

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(iii) the Executive’s willfully engaging in misconduct (which shall include
theft, fraud, or embezzlement) in the performance of his duties for the Company
which is injurious to the Company (monetarily or otherwise);

 

(iv) the Executive’s trading of securities or willful disclosure of non-public
information in each case constituting a violation of insider trading laws which
is injurious to the Company, monetarily or otherwise;

 

(v) any chemical dependence of the Executive which materially and adversely
affects the performance of his duties and responsibilities to the Company or any
of its subsidiaries; provided, however, that the taking of prescribed
prescription medication shall not constitute a chemical dependence of the
Executive hereunder; or

 

(vi) a material breach by the Executive of this Agreement.

 

provided, however, that in each case (other than (ii), or (iv)), the Company
shall have provided the Executive with written notice within ninety (90) days of
the event(s) alleged to constitute Cause, the Executive has been afforded at
least thirty (30) days to cure same and has failed to cure the event(s) within
such 30 day period; provided, further, that in the case of willful misconduct
under clause (iii), in order to cure, the Executive shall have to cure such
willful misconduct to the reasonable satisfaction of the Board.

 

(g)          Without Cause. The Company may terminate the Executive’s employment
under this Agreement without Cause immediately upon written notice by the
Company to the Executive.

 

(h)          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
of Termination” shall mean a written 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.

 

(i)          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(c)
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(d) or 5(f) above, the date
specified in the Notice of Termination after the expiration of any applicable
cure periods, (d) if the Executive’s employment is terminated pursuant to
subsection 5(e) above, the date specified in the Notice of Termination which
shall be at least thirty (30) days after Notice of Termination is given, or such
earlier date as the Company shall determine, in its sole discretion, (e) if the
Executive’s employment is terminated pursuant to subsection 5(g), the date on
which a Notice of Termination is given and (f) if Executive is terminated upon
expiration of the Term, the date of the expiration of the Term.

 

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(j)          Compensation Upon Termination.

 

(i)          Termination for Cause, without Good Reason or Expiration of Term.
If the Executive’s employment shall be terminated upon the expiration of the
Term, by the Company for Cause or by the Executive without Good Reason, the
Executive shall receive from the Company: (1) any earned but unpaid Base Salary
through the Date of Termination, paid in accordance with the Company’s standard
payroll practices; (2) reimbursement for any unreimbursed expenses properly
incurred and paid in accordance with Section 4(e) through the Date of
Termination; (3) payment for any accrued but unused vacation time in accordance
with Company policy; and (4) such benefits, and other payments, if any, as to
which the Executive (and his eligible dependents) may be entitled under, and in
accordance with the terms and conditions of, the employee benefit arrangements,
plans and programs of the Company as of the Date of Termination, other than any
severance pay plan ((1) though (4), (the “Amounts and Benefits”), and the
Company shall have no further obligation with respect to this Agreement other
than as provided in Section 8 of this Agreement. In addition, any portion of the
Restricted Stock Award or any other outstanding equity or incentive award that
remains unvested on the Date of Termination shall be forfeited as of the Date of
Termination.

 

(ii)         Termination without Cause or for Good Reason. If prior to the
expiration of the Term, the Executive resigns from his employment hereunder for
Good Reason or the Company terminates the Executive’s employment hereunder
without Cause (other than a termination by reason of death or Disability), then
the Company shall pay or provide the Executive the Amounts and Benefits and the
following:

 

(1)         an amount equal to 2.0 times the sum of (x) the then-current Base
Salary and (y) the greater of (i) the actual Annual Bonus for the year
immediately preceding the year in which the Date of Termination occurs or (ii)
150% of Executive’s then-current Base Salary. The amount payable pursuant to
this Section 5(j)(ii)(1) shall be paid in full in a lump sum cash payment to be
made to the Executive on the date that is thirty (30) days following the Date of
Termination;

 

(2)         any Annual Bonus earned but unpaid for a prior year (the “Prior Year
Bonus”), which shall be payable in full in a lump sum cash payment to be made to
the Executive on the date that is thirty (30) days following the Date of
Termination or the date such bonus would be paid if Executive had remained an
employee of the Company, if later;

 

(3)         in the event such resignation or termination occurs following the
Company’s first fiscal quarter of any year, a pro-rata portion of the
Executive’s Annual Bonus for the fiscal year in which the Executive’s
termination occurs based on actual results for such year (determined by
multiplying the amount of such Annual Bonus which would be due for the full
fiscal year by a fraction, the numerator of which is the number of days during
the fiscal year of termination that the Executive is employed by the Company and
the denominator of which is 365), paid in accordance with Section 4(b) (“Pro
Rata Bonus”). The Pro Rata Bonus shall be payable at the time the Annual Bonus
would have been paid if Executive’s employment had not terminated;

 

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(4)         subject to the Executive’s timely election of continuation coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), with respect to the Company’s group health insurance plans in which
the Executive participated immediately prior to the Date of Termination (“COBRA
Continuation Coverage”), the Company shall pay the cost of COBRA Continuation
Coverage for the Executive and his eligible dependents until the earliest of (a)
the Executive or his eligible dependents, as the case may be, ceasing to be
eligible under COBRA (or any COBRA-like benefits provided under applicable state
law) and (b) eighteen (18) months following the Date of Termination, (the
benefits provided under this sub-section (4), the “Medical Continuation
Benefits”);

 

(5)          any unvested portion of the Restricted Stock Award and the RSU/PSU
Award shall accelerate and become fully vested on the Date of Termination and
the shares covered by the Restricted Stock Award and the RSU/PSU Award shall be
distributed to the Executive on the date that is thirty (30) days following the
Date of Termination (subject to any securities law restrictions); and

 

(6) if such termination occurs after a Change in Control (or after the execution
of a definitive agreement the consummation of which would constitute a Change in
Control), any unvested PSUs shall accelerate and become fully vested on the Date
of Termination and the shares covered by the PSUs shall be distributed to the
Executive on the date that is thirty (30) days following the Date of Termination
(subject to any securities law restrictions).

 

(iii)        Termination upon Death. In the event of the Executive’s death, the
Company shall pay or provide to the Executive’s estate: (1) continued payment of
the Executive’s Base Salary for the remainder of the year in which the
termination for reason of death occurs, (2) the Amounts and Benefits, (3) the
Prior Year Bonus, and (4) the Pro Rata Bonus. In addition, the Restricted Stock
Award shall vest with respect to the portion of such award that was scheduled to
vest in the year in which the termination for reason of death occurs and the
RSU/PSU Award shall vest in full, and such shares covered by the Restricted
Stock Award and the RSU/PSU Award shall be distributed to the Executive within
thirty (30) days of the Date of Termination (subject to any securities law
restrictions).

 

(iv)        Termination upon Disability. In the event the Company terminates the
Executive’s employment hereunder for reason of Disability, the Company shall pay
or provide to the Executive: (1) the Amounts and Benefits, (2) the Prior Year
Bonus, (3) a Pro Rata Bonus and (4) the Medical Continuation Benefits. In
addition, the Restricted Stock Award shall vest with respect to the portion of
such award that was scheduled to vest in the year in which the termination for
reason of Disability occurs and the RSU/PSU Award shall vest in full, and such
shares covered by the Restricted Stock Award and the RSU/PSU Award shall be
distributed to the Executive within thirty (30) days of the Date of Termination
(subject to any securities law restrictions). Any other unvested portion of the
Restricted Stock Award will be forfeited on the Date of Termination.

 

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(v)         Payments of Compensation Upon Termination. For the avoidance of
doubt, in the event the Executive shall be entitled to receive payments and
benefits pursuant to any one of sub-sections 5(a), (b), (c) or (d) above, he
shall be entitled to no payments or benefits under any other of such
sub-sections.

 

(vi)         Release of Claims. Notwithstanding anything in this Agreement to
the contrary, as a condition of receiving any payment or benefits under Section
5(j)(ii) (other than the Amounts and Benefits), the Executive agrees to execute,
deliver and not revoke a general release and covenant not to sue in favor of the
Company and its subsidiaries and their respective affiliates in substantially
the form attached here to as Exhibit A (the “Release”), before the date that is
thirty (30) days following the Date of Termination. In the event the Release is
not executed and non-revocable prior to the date that is thirty (30) days
following the Date of Termination, all payments and benefits under Section
5(j)(ii) (other than the Amounts and Benefits) shall be forfeited.

 

(vii)       No Duty to Mitigate. The Executive shall not be required to mitigate
the amount of any payment provided for in this Section 5 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
this Section 5 be reduced by any compensation earned by Executive as the result
of Executive’s employment by another employer or business or by profits earned
by Executive from any other source at any time before and after the Executive’s
date of termination (other than as provided in Section 5(j)(ii)(4)).

 

6.           Confidentiality.

 

(a)          The Executive acknowledges that all customer lists and information,
vendor or supplier lists and information, inventions, trade secrets, software
and computer code (whether in object code or source code format), databases,
know-how or other non-public, confidential or proprietary knowledge, information
or data with respect to the products, prices, marketing, services, operations,
finances, business or affairs of the Company or its subsidiaries and affiliates
or with respect to confidential, proprietary or secret processes, methods,
inventions, services, research, techniques, customers (including, without
limitation, the identity of the customers of the Company or its subsidiaries and
affiliates and the specific nature of the services provided by the Company or
its subsidiaries and affiliates), employees (including, without limitation, the
matters subject to this Agreement) or plans of or with respect to the Company or
its subsidiaries and affiliates or the terms of this Agreement (all of the
foregoing collectively hereinafter referred to as, “Confidential Information”)
are property of the Company or its applicable subsidiaries or affiliates. The
Executive further acknowledges that the Company and its subsidiaries and
affiliates intend, and make reasonable good faith efforts, to protect the
Confidential Information from public disclosure. Therefore, the Executive agrees
that, except as (a) required by law or regulation or as legally compelled by
court order (provided that in such case, the Executive shall promptly notify the
Company of such order, shall cooperate with the Company in attempting to obtain
a protective order or to otherwise restrict such disclosure, and shall only
disclose Confidential Information to the minimum extent necessary to comply with
any such law, regulation or order) or (b) required in order to enforce his
rights under this Agreement or any other agreement with the Company and/or its
affiliates, during the Term and at all times thereafter, the Executive shall
not, directly or indirectly, divulge, transmit, publish, copy, distribute,
furnish or otherwise disclose or make accessible any Confidential Information,
or use any Confidential Information for the benefit of anyone other than the
Company and its subsidiaries and affiliates, unless and to the extent that the
Confidential Information becomes generally known to and available for use by the
general public by lawful means and other than as a result of the Executive’s
acts or omissions or such disclosure is necessary in the course of the
Executive’s proper performance of his duties under this Agreement.

 

10

 

  

(b)          The Company and its subsidiaries and affiliates do not wish to
incorporate any unlicensed or unauthorized material into their products or
services. Therefore, the Executive agrees that he will not disclose to the
Company, use in the Company's business, or cause the Company to use, any
information or material which is a trade secret, or confidential or proprietary
information, of any third party, including, but not limited to, any former
employer, competitor or client, unless the Company has a right to receive and
use such information or material. The Executive will not incorporate into his
work any material or information which is subject to the copyrights of any third
party unless the Company has a written agreement with such third party or
otherwise has the right to receive and use such material or information.

 

(c)          Notwithstanding anything to the contrary in this Agreement, the
provisions of this Section 6 shall survive any termination or non-renewal of
this Agreement.

 

7.           Noncompetition; Non-solicitation.

 

(a)          Noncompetition. The Executive hereby agrees that while he is
employed by the Company and for the “Restricted Period” (as defined below), he
shall not, directly or indirectly, in any location in which the Company, its
subsidiaries or affiliates or a licensee thereof operates or sells its products
(the “Territory”), 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 or any material business activities of which
Executive was aware that the Company or its direct or indirect subsidiaries had
plans to conduct during the time of Executive’s employment or at the time of his
Date of Termination (each such case, a “Competing Business”). 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,
its subsidiaries and affiliates, provided that such stock holdings are not
greater than five percent (5%) of such corporation. For purposes of this
Agreement, the “Restricted Period” shall mean the following: (i) in the event of
a termination of employment by the Company for Cause or a resignation by the
Executive without Good Reason, a period of twelve (12) months following the
Executive’s termination of employment or (ii) in the event of a termination by
the Company without Cause or a resignation by the Executive for Good Reason, a
period of six (6) months following the Executive’s termination of employment.

 

11

 

  

(b)          Non-solicitation.

 

(i) Employees. The Executive shall not, while he is employed by the Company and
during the period of eighteen (18) months following the Executive’s termination
of employment for any reason, directly or indirectly, (1) employ, cause to be
employed or hired, recruit, solicit for employment or otherwise contract for the
services of, any individual who was or is an employee of the Company or any of
its subsidiaries or affiliates; (2) otherwise induce or attempt to induce any
employee of the Company or any of its subsidiaries or affiliates to terminate
such individual’s employment with the Company or such subsidiary or affiliate,
or in any way interfere with the relationship between the Company or any such
subsidiary or affiliate and any such employee.

 

(ii) Customers. The Executive shall not, while he is employed by the Company and
during the period of twelve (12) months following the Executive’s termination of
employment for any reason, solicit, contact, call upon, communicate with, or
attempt to solicit, contact, call upon, communicate with any Protected Customer
(as hereinafter defined) to directly discourage such Protected Customer from
doing business with the Company or any of its subsidiaries or affiliates. For
purposes of this Section 7, “Protected Customer” means any individual or entity
to whom the Company or any subsidiary or affiliate thereof has sold products or
services or solicited to sell products or services during the final twelve (12)
months of Executive’s employment by the Company.

 

(c)   Company IP; Work Product.

 

(i)          “Intellectual Property” means all intellectual property and
industrial property recognized by applicable requirements of law and all
physical or tangible embodiments thereof, including all of the following,
whether domestic or foreign: (1) patents and patent applications, patent
disclosures and inventions (whether or not patentable), as well as any reissues,
continuations, continuations in part, divisions, revisions, renewals, extensions
or reexaminations thereof; (2) registered and unregistered trademarks, service
marks, trade names, trade dress, logos, slogans and corporate names, and other
indicia of origin, pending trademark and service mark registration applications,
and intent-to-use registrations or similar reservations of marks; (3) registered
and unregistered copyrights and mask works, and applications for registration of
either; (4) Internet domain names, applications and reservations therefor,
uniform resource locators and the corresponding Internet websites (including any
content and other materials accessible and/or displayed thereon); (5)
Confidential Information; and (6) intellectual property and proprietary
information not otherwise listed in (1) through (6) above, including unpatented
inventions, invention disclosures, rights of publicity, rights of privacy, moral
and economic rights of authors and inventors (however denominated), methods,
artistic works, works of authorship, industrial and other designs, methods,
processes, technology, patterns, techniques, data, plant variety rights and all
derivatives, improvements and refinements thereof, howsoever recorded, or
unrecorded; and (7) any goodwill associated with any of the foregoing, damages
and payments for past or future infringements and misappropriations thereof, and
all rights to sue for past, present and future infringements or
misappropriations thereof.

 

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(ii)         Work Product. The Executive agrees to promptly disclose to the
Company any and all work product, including Intellectual Property relating to
the business of the Company and any of its affiliates, that is created,
developed, acquired, authored, modified, composed, invented, discovered,
performed, reduced to practice, perfected, or learned by the Executive (either
solely or jointly with others) directly relating to the Company’s and its
affiliates’ business or within the scope of Executive’s employment during the
Term (collectively, “Work Product,” and together with such Intellectual Property
as may be owned, used, held for use, or acquired by the Company and its
affiliates, the “Company IP”). The Company IP, including the Work Product, is
and shall be the sole and exclusive property of the Company and its affiliates,
as applicable. All Work Product that is copyrightable subject matter shall be
considered a “work made for hire” to the extent permitted under applicable
copyright law (including within the meaning of Title 17 of the United States
Code) and will be considered the sole property of the Company. To the extent
such Work Product is not considered a “work made for hire,” Executive hereby
grants, transfers, assigns, conveys and relinquishes, without any requirement of
further consideration, all right, title, and interest to the Work Product
(whether now or hereafter existing, including all associated goodwill, damages
and payments for past or future infringements and misappropriations thereof and
rights to sue for past and future infringements and misappropriates thereof) to
the Company in perpetuity or for the longest period permitted under applicable
law. The Executive agrees, at the Company’s expense, to execute any documents
requested by the Company or any of its affiliates at any time to give full and
proper effect to such assignment. The Executive acknowledges and agrees that the
Company is and will be the sole and absolute owner of all Intellectual Property,
including all Company IP. The Executive will cooperate with the Company and any
of its affiliates, at no additional cost to such parties (whether during or
after the Term), in the confirmation, registration, protection and enforcement
of the rights and property of the Company and its affiliates in such
intellectual property, materials and assets, including, without limitation, the
Company IP. The Executive hereby waives any so-called “moral rights of authors”
in connection with the Work Product and acknowledges and agrees that the Company
may use, exploit, distribute, reproduce, advertise, promote, publicize, alter,
modify or edit the Work Product or combine the Work Product with other works
including other Company IP, at the Company’s sole discretion, in any format or
medium hereafter devised. The Executive further waives any and all rights to
seek or obtain any injunctive or equitable relief in connection with the Work
Product. Notwithstanding the above, the Executive shall have the right, subject
to Section 6 hereof, to author or collaborate on one or more books or other
similar works (in whatever form, including written, electronic or otherwise) on
any topic(s) whatsoever (including discussion of his experiences as an employee
of the Company) (each, a “Book”), and any such Book shall not be deemed Work
Product or Company IP, and the Company shall have no claim to any rights, title
or interest in any such Book.

 

13

 

  

(d)          Company Property. All Confidential Information, Company IP, files,
records, correspondence, memoranda, notes or other documents (including, without
limitation, those in computer-readable form) or property relating or belonging
to the Company and its subsidiaries and affiliates, whether prepared by the
Executive or otherwise coming into his possession or control in the course of
the performance of his services under this Agreement, shall be the exclusive
property of the Company and shall be delivered to the Company, and not retained
by the Executive (including, without limitation, any copies thereof), promptly
upon request by the Company and, in any event, promptly upon termination of
Executive’s employment hereunder. Upon termination of Executive’s employment
hereunder, the Executive shall have no rights to and shall make no further use
of any Company IP, including Work Product. The Executive acknowledges and agrees
that he has no expectation of privacy with respect to the Company’s
telecommunications, networking or information processing systems (including,
without limitation, stored computer files, email messages and voice messages),
and that the Executive’s activity and any files or messages on or using any of
those systems may be monitored at any time without notice. Nothing in this
Section 7 shall require the Executive to return to the Company any computers or
telecommunication equipment or tangible property which he owns, including, but
not limited to, personal computers, phones and tablet devices; provided,
however, that Executive shall identify each such device to the Company prior to
termination of employment and either afford the Company a reasonable opportunity
to remove from all such devices any confidential or proprietary information of
the Company stored thereon or provide reasonable satisfaction to the Company
that such confidential or proprietary information was removed from such devices.

 

(e)          Enforcement. The Executive acknowledges that a breach of his
covenants and agreements contained in Sections 6 and 7 would cause irreparable
damage to the Company and its subsidiaries and affiliates, the exact amount of
which would be difficult to ascertain, and that the remedies at law for any such
breach or threatened breach would be inadequate. Accordingly, the Executive
agrees that if he breaches or threatens to breach any of the covenants or
agreements contained in Sections 6 and 7, in addition to any other remedy which
may be available at law or in equity, the Company and its subsidiaries and
affiliates shall be entitled to institute and prosecute proceedings in any court
of competent jurisdiction for specific performance and injunctive and other
equitable relief to prevent the breach or any threatened breach thereof without
bond or other security or a showing of irreparable harm or lack of an adequate
remedy at law. Additionally, upon a material breach by Executive of Section 6 or
Section 7, the unvested Restricted Stock (and any other stock-based awards held
by the Executive) shall be automatically canceled and forfeited without any
further action. The Company and the Executive further acknowledge that the time,
scope, geographic area and other provisions of Sections 6 and 7 have been
specifically negotiated by sophisticated commercial parties and agree that they
consider the restrictions and covenants contained in Sections 6 and 7 to be
reasonable and necessary for the protection of the interests of the Company and
its subsidiaries and affiliates, but if any such restriction or covenant shall
be held by any court of competent jurisdiction to be void but would be valid if
deleted in part or reduced in application, such restriction or covenant shall
apply in such jurisdiction with such deletion or modification as may be
necessary to make it valid and enforceable. The Executive acknowledges and
agrees that the restrictions and covenants contained in Sections 6 and 7 shall
be construed for all purposes to be separate and independent from any other
covenant, whether in this Agreement or otherwise, and shall each be capable of
being reduced in application or severed without prejudice to the other
restrictions and covenants or to the remaining provisions of this Agreement. The
existence of any claim or cause of action by the Executive against the Company
or any of its subsidiaries and affiliates, whether predicated upon this
Agreement or otherwise, shall not excuse the Executive’s breach of any covenant,
agreement or obligation contained in Section 6 or Section 7 and shall not
constitute a defense to the enforcement by the Company or any of its
subsidiaries of such covenant, agreement or obligation; provided, however, that
if upon termination of this Agreement by the Company without “Cause” or by
Executive for “Good Reason”, the Company defaults on any obligation to pay
Executive any amount due and owing Executive under Section 5(j)(ii)(1) or
Section 5(j)(ii)(5), then Executive shall not be required to comply with the
undertakings set forth in Section 7(a) and Section 7(b).

 

14

 

  

8.           Indemnification. The Company shall indemnify the Executive for
actions taken by the Executive as an officer or director of the Company pursuant
to the fullest extent permitted by law; provided, however, that the Company
shall not indemnify the Executive for any losses incurred by the Executive as a
result of or in connection with (a) acts or omissions described in Section 5(f),
or (b) a cause of action by Executive against the Company or its affiliates or
their respective directors, officers, agents, representatives or employees. If
the Executive has any knowledge of any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative, as to
which the Executive may request indemnity under this provision, the Executive
shall give the Company prompt written notice thereof. The Company shall be
entitled to assume the defense of any such proceeding, and the Executive shall
cooperate with such defense.

 

9.           Section 409A of the Code.

 

(a)          It is intended that the provisions of this Agreement comply with
Section 409A of Code and the regulations and guidance promulgated thereunder
(collectively “Code Section 409A”), and all provisions of this Agreement shall
be construed in a manner consistent with the requirements for avoiding taxes or
penalties under Code Section 409A. If any provision of this Agreement (or of any
award of compensation, including equity compensation or benefits) would cause
the Executive to incur any additional tax or interest under Code Section 409A,
the Company shall, upon the specific request of the Executive, use its
reasonable business efforts to in good faith reform such provision to comply
with Code Section 409A; provided, that to the maximum extent practicable, the
original intent and economic benefit to the Executive and the Company of the
applicable provision shall be maintained, but the Company shall have no
obligation to make any changes that could create any additional economic cost or
loss of benefit to the Company. Notwithstanding the foregoing, the Company shall
have no liability with regard to any failure to comply with Code Section 409A so
long as it has acted in good faith with regard to compliance therewith.

 

15

 

  

(b)          A termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “Separation from Service” within the meaning of Section
409A and, for purposes of any such provision of this Agreement, references to a
“resignation,” “termination,” “termination of employment” or like terms shall
mean Separation from Service. Any provision of this Agreement to the contrary
notwithstanding, if at the time of the Executive’s Separation from Service, the
Company determines that the Executive is a “Specified Employee,” within the
meaning of Code Section 409A, based on an identification date of December 31,
then to the extent any payment or benefit that the Executive becomes entitled to
under this Agreement on account of such separation from service would be
considered nonqualified deferred compensation under Code Section 409A, such
payment or benefit shall be paid or provided at the date which is the earlier of
(i) six (6) months and one day after such separation from service, and (ii) the
date of the Executive’s death (the “Delay Period”). Within five days of the end
of the Delay Period, all payments and benefits delayed pursuant to this Section
10(b) (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or provided to the
Executive in a lump-sum, and any remaining payments and benefits due under this
Agreement shall be paid or provided in accordance with the normal payment dates
specified for them herein.

 

(c)          With regard to any provision herein that provides for reimbursement
of costs and expenses or in-kind benefits, except as permitted by Code Section
409A, (i) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the foregoing
clause (ii) shall not be violated with regard to expenses reimbursed under any
arrangement covered by Section 105(b) of the Code solely because such expenses
are subject to a limit related to the period the arrangement is in effect and
(iii) such payments shall be made on or before the last day of the Executive’s
taxable year following the taxable year in which the expense was incurred.

 

(d)          Each payment made under this Agreement shall be designated as a
“separate payment” within the meaning of Code Section 409A.

 

10.         Miscellaneous.

 

(a)          This Agreement shall be deemed to be a contract made under the laws
of the State of New York and for all purposes shall be construed in accordance
with those laws. The Company and Executive unconditionally consent to submit to
the exclusive jurisdiction of the New York State Supreme Court, County of New
York or the United States District Court for the Southern District of New York
for any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby (and agree not to commence
any action, suit or proceeding relating thereto except in such courts), and
further agree that service of any process, summons, notice or document by
registered mail to the address set forth below shall be effective service of
process for any action, suit or proceeding brought against the Company or the
Executive, as the case may be, in any such court.

 

16

 

  

(b)          Executive may not delegate his duties or assign his rights
hereunder. No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company other than pursuant to a merger or
consolidation in which the Company is not the continuing entity, or a sale,
liquidation or other disposition of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets or businesses of the Company and assumes the
liabilities, obligations and duties of the Company under this Agreement, either
contractually or by operation of law. For the purposes of this Agreement, the
term “Company” shall include the Company and, subject to the foregoing, any of
its successors and assigns. 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.

 

(c)          The invalidity or unenforceability of any provision hereof shall
not in any way affect the validity or enforceability of any other provision.
This Agreement reflects the entire understanding between the parties.

 

(d)          This Agreement, the Restricted Stock Agreement and the RSU
Agreement represent the entire understanding of the Executive and the Company
with respect to the employment of the Executive by the Company and contain all
of the covenants and agreements between the parties with respect to such
employment. Any modification or termination of this Agreement will be effective
only if it is in writing signed by the party to be charged.

 

(e)          This Agreement may be executed by the parties in one or more
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

 

(f)          All amounts payable hereunder shall be subject to the withholding
of all applicable taxes and deductions required by any applicable law.

 

11.         Notices. All notices relating to this Agreement shall be in writing
and shall be either personally delivered, sent by telecopy (receipt confirmed)
or mailed by certified mail, return receipt requested, to be delivered at such
address as is indicated below, or at such other address or to the attention of
such other person as the recipient has specified by prior written notice to the
sending party. Notice shall be effective when so personally delivered, one
business day after being sent by telecopy or five days after being mailed.

 

To the Company:

 

Sequential Brands Group, Inc.

c/o Tengram Capital Management, LLC

15 Riverside Avenue

Westport, CT 06880

Attention: Bill Sweedler

 

17

 

  

With a copy to:

 

Sequential Brands Group, Inc.

5 Bryant Park

30th Floor

New York, NY 10018

Attention: Bill Sweedler

 

To the Executive:

 

Mr. Yehuda Shmidman

376 West 245th Street

Bronx, NY 10471

 

 

 

 

 

 

With a copy to:

 

Donald P. Carleen

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004

Fax: (212) 859-4000

 

[signature page follows]

 

18

 

   

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
14th day of April, 2015.

 

 

    SEQUENTIAL BRANDS GROUP, INC.             By:

/s/ William Sweedler

    Name: William Sweedler     Title:

Chairman of the Board of Directors

                                                        EXECUTIVE              
        /s/ Yehuda Shmidman       Yehuda Shmidman      

 

19

 

 

EXHIBIT A

 

EXECUTIVE RELEASE AND COVENANT NOT TO SUE

 

Except as otherwise provided herein, in consideration of the severance payments
and/or benefits I am eligible to receive pursuant to the employment agreement
between Sequential Brands Group, Inc., a Delaware corporation (the “Company”),
and me, dated ____________, 2015 (the “Employment Agreement”), I, Yehuda
Shmidman, on behalf of myself, and on behalf of my heirs, successors and
assigns, hereby knowingly and voluntarily release and discharge, to the fullest
extent permitted by law, the Company. and all of their respective past and
present subsidiaries, affiliates, predecessors, successors and assigns (“Company
Entities”) and, with respect to each and all of the Company Entities, all of
their respective directors, officers, employees, agents, each individually and
in their representative capacities (“Company Entity Officials”) (Company
Entities and Company Entity Officials collectively referred to herein as
“Released Parties”) from any and all claims, demands, agreements, obligations,
expenses, actions, judgments and liabilities of any kind whatsoever, in law,
equity or otherwise, whether known or unknown, suspected or claimed,
specifically mentioned herein or not, which I had, have or may have against any
of the Released Parties by reason of any actual or alleged act, event,
occurrence, omission, practice or other matter whatsoever from the beginning of
time up to and including the date that I sign this Separation and General
Release Agreement (this “Claims”), including that but not limited to Claims
arising out of or in any way relating to: (i)  my employment with any and all of
the Company Entities, including the termination of that employment; (ii) any
common law, public policy, company policy, contract (whether oral or written,
express or implied) or tort law having any bearing whatsoever on the terms and
conditions of my employment; and/or (iii) any federal, state or local law,
ordinance or regulation including, but not limited to, the following (each as
amended, if applicable): Age Discrimination in Employment Act (including Older
Workers Benefit Protection Act); Americans with Disabilities Act; Civil Rights
Act of 1866; Civil Rights Act of 1991; Equal Pay Act; Family and Medical Leave
Act of 1993; National Labor Relations Act; Title VII of the Civil Rights Act of
1964; Worker Adjustment and Retraining Notification Act; New York State and New
York City Human Rights Laws; New York State Labor Law; New York State Worker
Adjustment and Retraining Notification Act; and any other law, ordinance or
regulation regarding discrimination or harassment or terms or conditions of
employment.

 

I agree that I have entered into this Release as a compromise and in full and
final settlement of all Claims, if any, that I have or may have against any and
all of the Released Parties up to and including the date that I sign this
Release (except as otherwise expressly set forth below). I also agree that,
although I may hereafter discover Claims presently unknown or unsuspected, or
new or additional facts from those which I now knows or believe to be true, I
intend to provide a complete waiver of all Claims based on any facts and
circumstances, whether known or unknown, up to and including the date that I
sign this Agreement (except as otherwise expressly set forth below).

 

However, notwithstanding the foregoing, I am not releasing, and for the
avoidance of doubt Claims do not include, my rights, if any, (i) to
indemnification by the Company or any of its affiliates, to the maximum extent
permitted by law, for all claims or proceedings, or threatened claims or
proceedings, arising out of or relating to my service as an officer, director or
employee, as the case may be, of the Company or any of its subsidiaries, (ii) to
payment of any authorized but unreimbursed business expenses incurred prior to
the termination of my employment with the Company or any of its subsidiaries in
accordance with Section 4(e) of my Employment Agreement, (iii) under any
employee pension or welfare plan or program in which I participate or
participated, (iv) to receive payments, severance and benefits under Section
5(j) of the Employment Agreement, (v) to be indemnified pursuant to Section 8 of
the Employment Agreement or pursuant to other agreements to which I may be
entitled to indemnification, and (vi) to any equity awards I have received prior
to the date of termination of my employment, including the Restricted Stock
Award, the RSU/PSU Award and the PSUs. Furthermore, I am not releasing any
rights or claims that may arise after the date on which I sign this Release or
that cannot be released by a private settlement agreement (such as statutory
claims for worker’s compensation/disability insurance benefits and unemployment
compensation).

 

20

 

  

I represent that I have not assigned or transferred my rights with respect to
any Claims covered by this Release and that I have not filed, directly or
indirectly any legal proceeding against the Released Parties regarding any such
Claims. If I commence (or commenced) or participate in any action or proceeding
(including as a member of a class of persons) regarding Claims covered by this
Release, I acknowledge and agree that this Release shall be a complete defense
in such action or proceeding and, to the maximum extent permitted by law, I and
my heirs, successors and assigns will have no right to obtain or receive, and
will not seek or accept, any damages, settlement or relief of any kind
(including attorneys’ fees and costs) as a result of such action or proceeding.

 

In addition, I acknowledge and agree that I am and will continue to be bound by
the terms and conditions set forth in the Employment Agreement (including the
restrictive covenants) (the “Continuing Obligations”),all of which continue to
remain in full force and effect for the periods set forth therein
notwithstanding the termination of my employment and are hereby incorporated
herein by reference.

 

In further consideration of the payment and/or benefits I am eligible to receive
pursuant to the Employment Agreement, I agree to reasonably cooperate with the
Company Entities, their legal counsel and designees regarding any current or
future claim, investigation (internal or otherwise), inquiry or litigation
relating to any matter with which I was involved or had knowledge or which
occurred during my employment, with such assistance including, but not limited
to, meetings and other consultations, signing affidavits and documents that are
factually accurate, attending depositions and providing truthful testimony (in
each case, without requiring a subpoena); provided, however, that the Company
will reimburse me for my reasonable expenses (including attorneys’ fees and
travel expenses) actually incurred by me in connection with such cooperation (it
being understood that if any such expenses are expected to exceed $5,000,
Executive shall inform the Company prior to incurring such expenses to provide
the Company with an opportunity to either agree to reimburse Executive for such
expenses or advise Executive not to provide such cooperation necessitating the
incurrence of such expenses).

 

21

 

  

I acknowledge and agree that:

 

1. The payment and/or benefits I am receiving under the Employment Agreement
constitute consideration over and above any payments and/or benefits that I
might be entitled to receive without executing this Release.

 

2. The Company advised me to consult with an attorney prior to executing this
Release.

 

3. I was given a period of at least 21 days within which to consider this
Release and that I must sign and return this Release no later than __________,
201_.

 

4. The Company has advised me of my statutory right to revoke my acceptance of
the terms of this Release at any time within seven (7) days of my signing of
this Release.

 

5. I warrant and represent that my decision to accept this Release was (a)
entirely voluntary on my part; (b) not made in reliance on any inducement,
promise or representation, whether express or implied, other than the
inducements, representations and promises expressly set forth in the Employment
Agreement or in the Release; and (c) did not result from any threats or other
coercive activities to induce acceptance of this Release.

 

In the event I decide to exercise my right to revoke within seven (7) days of my
acceptance of this Release, I warrant and represent that I will do the
following: (1) notify the Company in writing of my intent to revoke my
agreement, and (2) simultaneously return in full the consideration, if any,
received from the Company Entities pursuant to the Employment Agreement and
which consideration was expressly subject to my signing this Release.

 

Upon its effectiveness, this Release, the Employment Agreement and the
Continuing Obligations, together with any applicable equity award agreements and
equity plans, contains the entire agreement and understanding of the parties
relating to the subject matter hereof and supersedes and replaces all prior and
contemporaneous agreements, representations and understandings (whether oral or
written) regarding the subject matter hereof. Once executed by me, this Release
may be modified only in a document signed by me and the Company and referring
specifically hereto, and no handwritten changes to this Release will be binding
unless initialed by me and the Company. If any portion of this Release is held
to be unenforceable by any court of competent jurisdiction, the parties intend
that such portion be modified to make it enforceable to the maximum extent
permitted by law. If any such portion (other than the general release
provisions) cannot be modified to be enforceable, such portion shall become null
and void leaving the remainder of this Release in full force and effect.

 

This Release shall be binding upon and inure to the benefit of (i) the Released
Parties, including the successors and assigns of the Released Parties, all of
which are intended third-party beneficiaries, and (ii) me and my heirs,
successors and assigns. This Release is not an admission of liability or
wrongdoing by me or any of the Released Parties, and such wrongdoing or
liability is expressly denied.

 

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I further warrant and represent that I fully understand and appreciate the
consequence of my signing this Release and that I am signing it voluntarily.

 

IN WITNESS WHEREOF, I hereby acknowledge receipt of consideration and execute
the foregoing agreement at              , this day of             , 20  .

 

      Yehuda Shmidman

 

Witnessed by         on this          day of          , 20   .

 

      WITNESS

 

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