Exhibit 10.1

EXECUTION COPY

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment (the “Amendment”) entered into February 15, 2013 to be effective
as of February 1, 2013 (the “Effective Date”) hereby amends certain provisions
of the Employment Agreement entered into as of March 5, 2012 (the “Original
Agreement”), by and between Iconix Brand Group, Inc., a Delaware corporation
(the “Company”), and David Blumberg (“Employee” and together with the Company,
the “parties”).

WHEREAS, the parties have previously entered into the Original Agreement
providing for the terms and conditions of the employment of Employee by the
Company; and

WHEREAS, the parties wish to amend the Original Agreement to extend the term of
the Employee’s employment with the Company and amend certain other provisions of
the Original Agreement as set forth herein.

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. Term. Section 3 of the Original Agreement is hereby deleted in its entirety
and replaced by the following:

“3. Term. The Employee’s engagement under this Agreement, as amended by the
Amendment, shall commence on February 1, 2013 and shall continue until
January 31, 2016, unless otherwise terminated as provided in this Agreement. The
period of time between February 1, 2013 and the termination of the Employee’s
employment under this Agreement shall be referred to herein as the ‘Extension
Term’.”

2. Base Salary. Section 4(a) of the Original Agreement is hereby deleted in its
entirety and replaced by the following:

“4(a) Base Salary. The Employee’s base salary during the Extension Term will be
at a rate of not less than $550,000 per annum, paid in accordance with the
Company’s payroll practices and policies then in effect, with such increases as
determined by the Board of Directors of the Company (the “Board”) or the
Compensation Committee of the Board from time to time (such salary, as increased
from time to time, the “Base Salary”).

3. Equity Awards.

3.1 Existing Awards. All restricted stock units provided for in the Original
Agreement (the “Existing RSU’s”) shall continue to vest in accordance with the
terms and conditions of the Restricted Stock Unit Agreement between the Company
and the Employee dated August 20, 2012, provided that the outside date for the
closing of Acquisitions with respect

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to certain companies to be agreed upon between the Company and the Employee (the
“Target Acquisition Companies”) shall be extended from April 30, 2013 to
July 31, 2013. For purposes of clarification it is agreed and understood that
the first two Acquisitions with respect to the Target Acquisition Companies
shall not be deemed to be Acquisitions for purpose of vesting the PSU’s granted
pursuant to Section 3.3(ii) of this Amendment and shall only apply to the
vesting of the Existing RSU’s; provided that if two such Acquisitions do not
close on or before July 31, 2013, then all subsequent Acquisitions closed during
the Extension Term (including, for purposes of clarification, Acquisitions with
respect to the Target Acquisition Companies) will be deemed to be Acquisitions
for purposes of vesting the PSU’s granted pursuant to Section 3.3(ii) of this
Amendment. In addition, it is agreed and understood that the closing of the
purchase of a majority interest in the Buffalo brand (the “Buffalo Transaction”)
shall be deemed to be the second Acquisition closed during the Term of the
Original Agreement for purposes of the vesting of an additional 10,000 Award
Shares pursuant to Section 4(c) of the Original Agreement and such transaction
shall be included as a transaction with a Target Acquisition Company for
purposes of the vesting extension provided in this Section 3.1.

3.2 RSU’s. In addition to the Existing RSU’s, on the Effective Date the Employee
shall receive an additional grant of restricted stock units of the Company (the
“RSU’s”) equal to 50,000 shares of the Company’s Common Stock. The RSU’s shall
be subject to the terms and conditions of the Company’s 2009 Equity Incentive
Plan (the “2009 Equity Plan” or “2009 Plan”) and a Restricted Stock Unit Award
Agreement between the Company and the Employee in substantially the form
attached to this Amendment as Exhibit A, and which Restricted Stock Unit Award
Agreement shall set forth the following terms and conditions:

 

  (i) Vesting. Vesting of the RSU’s granted pursuant to this Amendment shall be
time based and shall vest in three (3) substantially equal annual installments
subject to the Employee’s continuous employment with the Company through each
such vesting date, with the first installment vesting on December 31, 2013 and
each subsequent installment vesting each December 31 thereafter, with the final
installment vesting on December 31, 2015 (each a “Time Vesting Date”).
Notwithstanding anything to the contrary contained herein, in the event of the
occurrence of a “Change in Control” (as defined in Section 5(d)(iii) of the
Original Agreement), the Employee’s death or the Employee’s Disability (as
defined in Section 5(a)(2) of the Original Agreement) at any time during the
Extension Term, all of the unvested RSU’s shall immediately vest on the date of
the occurrence of such Change in Control or upon the Date of Termination, as the
case may be, and all of the shares of Common Stock covered thereby shall be
distributed to the Employee, or his estate, as the case may be, within thirty
(30) days of the date of the occurrence of such Change in Control or Date of
Termination, as the case may be.

 

  (ii) Distribution. Subject to Section 3.2(i) of this Amendment, Section 5(d)
of the Original Agreement as to conditions and timing of distributions of Common
Stock with respect to RSU’s vesting as a result of a termination of employment
and Section 9 of the Original Agreement with regard to timing of equity
distributed as a result of a Separation from Service (as defined in the Original
Agreement) as an employee of the Company, any vested portion of the RSU’s shall
be distributed to the Employee in shares of Common Stock as follows:

 

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  (A) The RSU’s shall be distributed to the Employee fifteen (15) days after the
applicable Time Vesting Date; and

 

  (B) Notwithstanding anything to the contrary contained herein or in the
Original Agreement, other than Sections 5(d)(iii) and 9 of the Original
Agreement, all vested RSU’s (including those vested pursuant to the last
sentence of clause (i) above) shall be distributed in shares of Common Stock to
the Employee simultaneous with the occurrence of a Change in Control.

 

  (iii) Termination. Notwithstanding the foregoing, in the event of a
termination of the Employee’s employment with the Company prior to any Time
Vesting Date (other than as set forth in the second sentence of Subsection
(i) above), the unvested RSU’s at the time of such termination shall vest or be
forfeited as set forth in Section 5(d) of the Original Agreement, as applicable.

3.3 PSU’s. Subject to the last sentence of this Section 3.3, on the Effective
Date, the Employee shall receive a one-time grant of performance stock units of
the Company (the “PSU’s”) issued under the 2009 Equity Plan equal to 200,000
shares of Common Stock of the Company. The PSU’s shall be subject to the terms
and conditions of the 2009 Equity Plan and a Performance Stock Unit Award
Agreement between the Company and the Employee in substantially the form
attached to this Amendment as Exhibit B and which Performance Stock Unit Award
Agreement shall contain the following terms and conditions:

 

  (i) Annual Performance Goal Vesting. Vesting of 133,332 of the PSU’s granted
pursuant to this Amendment shall be performance-based and shall vest in three
(3) substantially equal annual installments beginning on December 31, 2013 and
ending December 31, 2015, subject to the achievement of annual performance goals
as described on Exhibit X attached hereto upon certification of achievement by
the Compensation Committee as set forth on Exhibit X attached hereto.
Notwithstanding anything to the contrary contained herein, in the event of the
occurrence of a “Change in Control” (as defined in Section 5(d)(iii) of the
Original Agreement), the Employee’s death or the Employee’s Disability (as
defined in Section 5(a)(2) of the Original Agreement) at any time during the
Extension Term, all of the unvested PSU’s shall immediately vest on the date of
the occurrence of such Change in Control or upon the Date of Termination, as the
case may be, and all of the shares of Common Stock covered thereby shall be
distributed to the Employee, or his estate, as the case may be, within thirty
(30) days of the date of the occurrence of such Change in Control or Date of
Termination, as the case may be.

 

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  (ii) Transaction Based Vesting. Vesting of 66,668 of the PSU’s granted
pursuant to this Amendment shall be performance-based and shall vest upon the
closing of Acquisitions during the Extension Term. Notwithstanding the
definition of “Acquisition” set forth in Exhibit X attached hereto, in order to
qualify as an “Acquisition” for purposes of this clause (ii), the investment or
acquisition must have a Value (as defined in Exhibit X attached hereto) of
$5,000,000 or more. For purposes of this clause (ii), 11,111 PSU’s will vest
upon the closing of each Acquisition, provided that: (x) except as otherwise
provided in clause (y) below, not more than 22,222 PSU’s shall vest in any one
year pursuant to this clause (ii); (y) in the event that fewer than 22,222 PSU’s
vest in any one year pursuant to this clause (ii), the deficiency will be
carried forward to future years; and (z) in the event that the Company closes
more than two Acquisitions in any one year, the additional Acquisitions will be
carried forward and applied to the next year(s). Thus, by way of example and not
limitation, and pursuant to clause (y) above, if the Company closes one
Acquisition in 2013 and three Acquisitions in 2014, 11,111 PSU’s would vest in
2013 and 33,333 PSU’s would vest in 2014 pursuant to this clause (ii). By way of
further example and without limitation, if the Company closes four Acquisitions
in 2013, one Acquisition in 2014 and no Acquisitions in 2015, 22,222 PSU’s would
vest in 2013, 22,222 PSU’s would vest in 2014 and 11,111 PSU’s would vest in
2015 pursuant to this clause (ii). In addition, in the event that during the
Extension Term, the Company closes Acquisitions that have an aggregate Value of
$200 million or more, all of the PSU’s subject to this clause (ii) will be
deemed to be vested on January 31, 2016 to the extent not previously vested,
subject to the Employee’s continuous employment with the Company through
January 31, 2016.

 

  (iii)

Distribution. Subject to the terms of the 2009 Plan as to conditions and timing
of distributions of Common Stock with respect to PSU’s granted pursuant to this
Amendment and vesting as a result of a termination of employment and Section 9
of the Original Agreement with regard to timing of equity distributed as a
result of a Separation from Service as an employee of the Company, any vested
portion of the PSU’s granted pursuant to this Amendment shall be distributed to
the Employee in shares of Common Stock in the year following the year of each
applicable Performance Vesting Date (as defined in Exhibit X) following the
Compensation Committee’s certification of the level of attainment of the annual
performance goals. Notwithstanding anything to the contrary contained herein,
except as to Sections 5(d) and 9 of the Original Agreement, all vested PSU’s
(including those vested pursuant to the last sentence of clause (i) above) shall
be distributed to the Employee in shares of Common Stock simultaneous with the
occurrence of the Change in Control. Notwithstanding anything to the contrary
contained herein or in the 2009 Plan, except as to Sections 5(d) and 9 of the
Original Agreement, if the employment of Employee with the Company is terminated
by the

 

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  Employee for Good Reason then, in addition to retaining any previously earned
PSU’s, the Employee shall be entitled to receive the pro rata portion of any
PSU’s earned during the year of termination, to the extent earned based upon an
adjustment of the absolute goals performance goals (as described in Exhibit X
attached hereto) for the year of termination after adjustment of such
performance goals to take into account the shortened performance period
resulting from his termination of employment. Moreover, notwithstanding anything
to the contrary contained herein or in the 2009 Plan, upon a termination of the
Employee’s employment for Cause (as defined in the Original Agreement) he shall
be entitled to retain any PSU’s that vested prior to the date of termination.

4. Bonus. Throughout the Extension Term, the Employee shall be eligible to
participate in the executive bonus plan then in effect. He shall be eligible for
a bonus of up to 100% of his then current Base Salary to be superseded by the
maximum amount available under the Company’s executive bonus plan, if
established.

5. Acquisition Payments. Commencing on the Effective Date, there shall be no
further Acquisition Payments or Acquisition Bonus Payments made to the Employee
pursuant to Sections 4(b) or 4(e) of the Original Agreement, provided that the
Employee shall be entitled to receive the Acquisition Payment associated with
the closing of the Buffalo Transaction, with such Acquisition Payment to be
calculated and paid pursuant to Section 4(b) of the Original Agreement.
Notwithstanding the foregoing, (i) Acquisition Payments shall be made to the
Employee pursuant to Section 4(b) of the Original Agreement (including, for
purposes of clarification, the definitions set forth in Section 4(i) of the
Original Agreement) with respect to any Acquisition with respect to a Target
Acquisition Company that closes within one hundred eighty (180) days following
the Effective Date; and (ii) the total amount payable to Employee pursuant to
this Section 5 with respect to Acquisitions with Target Acquisition Companies
shall not exceed Seven Hundred Fifty Thousand Dollars ($750,000.00) (expressly
excluding from such calculation the Acquisition Payment to be made to the
Employee associated with the closing of the Buffalo Transaction. Except as
otherwise provided in this Section 5, Sections 4(b), 4(e) and 4(i) of the
Original Agreement are hereby deleted.

6. Scope of Amendment. Except as specifically amended hereby, the Original
Agreement shall continue in full force and effect, unamended, from and after the
date hereof.

7. Definitions. Capitalized terms not otherwise defined in this Amendment shall
have the meaning ascribed to such terms in the Original Agreement.

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Amendment to
Employment Agreement, intending to be legally bound hereby, as of the date first
above written.

 

ICONIX BRAND GROUP, INC.

By:

  /s/ Neil Cole  

 

  Name: Neil Cole   Title: Chief Executive Officer

EMPLOYEE:

/s/ David Blumberg

DAVID BLUMBERG

 

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EXHIBIT X

PSU Performance Goals for PSU’s awarded pursuant to Section 3.3 of the Amendment

A. PSU Allocation.

The PSU’s shall be allocated to each performance goal set below as follows:
(i) 22.22% of the PSU’s to the achievement of EBITDA Growth (as defined below)
(the “EBITDA Shares”); (ii) 22.22% of the PSU’s to the achievement of EPS Growth
(as defined below) (the “EPS Shares”); (iii) 22.22% of the PSU’s to the
achievement of Free Cash Flow (as defined below) (the “Free Cash Flow Shares”);
and (iv) 16.67% of the PSU’s to the closing of up to two Acquisitions (as
defined below) during each of the three Performance Periods (the “Acquisition
Shares”).

B. Performance Goals.

i. Performance goals established for purposes of the grant of the PSU’s are
intended to be “performance-based” under Section 162(m) of the Code and
constitute a “Performance Measure” as set forth in the 2009 Equity Plan.

ii. Except as expressly provided in Section 3 of the Amendment, with regard to
acceleration, the performance goals for each applicable Performance Period (as
defined below) shall be based on the attainment of specified levels of the
Company’s EBITDA, earnings per common share (diluted), excluding Extraordinary
Items, as defined below (“EPS”), and Free Cash Flow, as defined below, over the
Performance Periods. The number of PSU’s will be vested and delivered based on
the level of (x) Absolute EBITDA Growth or Relative EBITDA Growth, (y) Absolute
EPS Growth or Relative EPS Growth and (z) Free Cash Flow achieved, as specified
below. The Company agrees that the Compensation Committee, upon confirmation by
the Company’s independent certified public accountants, shall certify the
attainment of the foregoing metrics for each Performance Period to the extent
and in the manner required by Section 162(m) of the Code.

iii. The three (3) year performance goals for EBITDA and EPS (“Absolute EBITDA
Growth” and “Absolute EPS Growth”) shall be based on the Company’s actual EBITDA
for the year ending December 31, 2012 (calculated as set forth in the definition
of EBITDA Growth below as if January 1, 2012 to December 31, 2012 were a
Performance Period) and the Company’s actual EPS for the year ending
December 31, 2012 as reported by the Company.

For the three (3) year Performance Periods, the Target levels for each of the
EBITDA and EPS measures (with such levels being based on the actual 2012 results
as aforesaid) shall be compounded annually at 10% over the three (3) year period
and the Threshold levels shall be compounded annually at 5% over the three
(3) year period. Payouts for EBITDA Growth or EPS Growth between 5% and 10%
shall equal (1) 50% plus (2) (a) 50% times (b) the ratio between (i) the actual
EBITDA or EPS, as the case may be, minus the Threshold level for such category,
divided by (ii) the Target level for such category minus the Threshold level for
such category. The resulting payout percentage is the Absolute Payout
Percentage.

 

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For each of the three (3) year Performance Periods, the Target level for Free
Cash Flow shall be $125 Million.

For avoidance of doubt, and recognizing that the following numbers are intended
to be provided as an example and are not be based on any projections or actual
results, in the event that the Company’s actual EBITDA for the year ending
December 31, 2012 is $250 million, then $275 million shall be the Target EBITDA
Level, as defined below, against which to judge absolute EBITDA Growth for the
January 1, 2013 through December 31, 2013 Performance Period, and accordingly,
the three (3) year Target absolute EBITDA Levels (that is, 10% increases in
respect of the base Target level compounded annually) for each of the
Performance Periods would be $275 million (2013), $302.5 million (2014) and
$332.75 million (2015); correspondingly, the three (3) year Threshold absolute
EBITDA Levels (that is, 5.0% increases compounded annually) for each of the
Performance Periods would be $262.5 million (2013), $275.625 million (2014) and
$289.40625 million (2015). The same methodology shall be used based on the
Company’s actual EPS for the year ended December 31, 2012.

iv. The Relative EBITDA Growth and Relative EPS Growth for each applicable
Performance Period shall be determined by reference to where the actual EBITDA
Growth and actual EPS Growth achieved by the Company during such Performance
Period places the Company in the specified percentile listed below within the
group of companies to be determined by the Compensation Committee prior to the
beginning of each of the 2013 to 2015 Performance Periods, as the same shall be
amended annually by the Compensation Committee (the “Comparative Group”).
Selection of the Comparative Group shall be based on companies with Global
Industrial Classification Standard (GICS) codes 25203010 – Apparel,
Accessories & Luxury Goods and 25203020 – Footwear, with comparable revenue and
earnings levels, which shall be comprised of annual revenue between $100 million
and $5 billion and EBITDA and diluted EPS greater than zero in the most recent
fiscal year. The Comparative Group must include at least 25 companies. If there
are fewer than 25 companies within the revenue range with positive EBITDA and
positive diluted EPS, then the Compensation Committee shall use its discretion
to expand the qualifying revenue range within the foregoing GICS codes. If two
or more of the listed companies merge during the applicable Performance Period,
or if any listed company goes out of business or otherwise ceases to exist as an
independent entity during the applicable Performance Period, reasonable
adjustment shall be made. Annex A is a sample Comparative Group based on 29
companies meeting the foregoing specifications. Calculations shall be made in
accordance with Exhibit Y.

Payouts for the Relative EBITDA Growth and Relative EPS Growth that is at the
50th percentile or higher shall equal (1) 50% plus (2) (a) the difference
between (x) the actual percentile performance of the Company, minus (y) 50th
percentile, where each percentile is converted to a percent (for example, the
60th percentile is equivalent to 60%), times (b) 1.25. The maximum payout for
relative performance is 100%. The resulting percentage is the Relative Payout
Percentage.

A sample pay for relative performance chart is provided below for illustrative
purposes only.

 

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Relative Payout Percentage

Percentile of EBITDA/EPS

Growth

   Percentage of Annual Shares
Vested 90%    100% 85%    93.75% 80%    87.50% 75%    81.25% 70%    75.00% 65%
   68.75% 60%    62.50% 55%    56.25% 50%    50% Under 50%    0%

v. The final payout percentage of each target that is based on growth will be
the greater of the Absolute Payout Percentage and the Relative Payout Percentage
for such target.

Notwithstanding anything above to the contrary, if the Company fails to achieve
positive EBITDA Growth or EPS Growth during any Performance Period, no more than
50% of the Annual EBITDA Shares or Annual EPS Shares, as the case may be, shall
vest as a result of the Company’s achievement of the relevant relative growth
levels.

1. EBITDA Growth: For each Performance Period, the EBITDA Shares allocable to
such Performance Period (the “Annual EBITDA Shares”), shall vest on the
applicable Performance Vesting Date based upon the achievement of Absolute
EBITDA Growth or Relative EBITDA Growth during such Performance Period as
provided in Section B(iii) or B(iv) of this Exhibit (the “EBITDA Level”), using
the higher percentage vesting arrived at using the formulas above.

2. EPS Growth: For each Performance Period, the EPS Shares allocable to such
Performance Period (the “Annual EPS Shares”), shall vest on the applicable
Performance Vesting Date based upon the achievement of Absolute EPS Growth or
Relative EPS Growth during such Performance Period as provided in Section B(iii)
or

 

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B(iv) of this Exhibit, using the higher percentage vesting arrived at using the
formulas above.

3. Free Cash Flow: For each Performance Period, the Free Cash Flow Shares
allocable to such Performance Period shall vest on the applicable Performance
Vesting Date based upon the achievement of Free Cash Flow of $125 Million.

4. Acquisitions: For each Performance Period, the Acquisition Shares allocable
to such Performance Period shall vest in the manner set forth in Section 3.3(ii)
of the Amendment to which this Exhibit X is attached.

C. Catch-Up; Forfeiture. With respect to the EBITDA Growth, EPS Growth and
Acquisition Shares criteria:

1. If, in any year, Absolute Growth within a category does not result in
vesting, because (i) the Absolute Growth required for maximum vesting was not
achieved, or (ii) vesting was achieved based on Relative Growth, then, in later
years, Absolute Growth shall be measured cumulatively to include the Absolute
Growth that did not result in vesting, in order to allow vesting of the earlier
year’s unvested PSU’s (i.e. those that did not vest based on Absolute Growth or
Relative Growth) and then, if available, to those of the later year.

2. If, in any year, Absolute Growth within a category exceeds the percentage
required for maximum vesting in such category, the excess growth shall be
carried back into earlier years (to allow vesting to the extent not previously
achieved by virtue of Absolute Growth or Relative Growth) or forward into later
years (so that cumulative Absolute Growth in the later year is measured from the
point required to achieve maximum vesting in the earlier year).

3. If, in any year, the number of Acquisitions closed does not result in full
vesting of the Acquisition Shares, then, in later years, full vesting of such
Acquisition Shares may be achieved in the manner set forth in Section 3.3(ii) of
the Amendment to which this Exhibit X is attached.

4. If PSU’s scheduled to vest on a Performance Vesting Date have not vested on
such date, on a succeeding Performance Vesting Date or on the final Performance
Vesting Date, they shall automatically be forfeited.

D. Fractional Shares. Except as set forth in Exhibit Y, any fractional PSU’s
resulting from the achievement of any of the performance goals shall be
aggregated and any resulting fractional PSU’s from such aggregation shall be
eliminated.

E. Definitions.

“Acquisition” shall mean any direct or indirect investment or acquisition,
including, without limitation, by assignment, license, sublicense, lease,
purchase, merger or otherwise, in a single transaction or series of
transactions, by the Company or any of its now existing or hereafter acquired or
formed subsidiaries or affiliates, in or of any entity, business, brand,

 

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trademark, service mark, patent, license, revenue stream or other asset that
closes during a Performance Period or with respect to which a letter of intent,
memorandum of understanding or similar agreement and/or a definitive agreement
is entered into during the Extension Term and that closes within ninety
(90) days following the end of the Extension Term.

The “Value” of an Acquisition shall mean the projected gross revenue stream to
be derived by the Company from such Acquisition during the first (1st) complete
year following the closing of the Acquisition as set forth in the base line
projections presented to the Board in connection with the approval of such
Acquisition (if and to the extent that such projections exist and are
presented), in all cases before deduction of operational and transaction
expenses, and provided that if and to the extent that the target entity has
received advances and/or other pre-payments in consideration for a reduction in
royalty or other payments to be received by the target entity at any time during
the first (1st) complete year following the closing of the Acquisition, the
projected gross revenue stream to be derived by the Company from such
Acquisition shall be equitably adjusted to take into account the reduction in
royalty or other payments resulting from such advances and/or pre-payments.

For purposes of clarification, the Value of a transaction in which the Company
acquires less than all of any entity, business, brand, trademark, service mark,
patent, license, revenue stream or other asset will be determined based upon the
percentage of such entity, business, brand, trademark, service mark, patent,
license, revenue stream or other asset that is acquired by the Company, with
such Value to be increased if and to the extent that the Company subsequently
acquires all or part of the balance of such entity, business, brand, trademark,
service mark, patent, license, revenue stream or other asset during the
Extension Term. Thus, by way of example, if the Company acquires a 70% interest
in a trademark that has a projected gross revenue stream during the first
complete year following the closing of the Acquisition of $40 million, for
purposes of this Exhibit X the Value of the Acquisition will be deemed to be $28
million. If and when the Company acquires the remaining 30% interest in such
trademark, the acquisition of such 30% interest will not be deemed to be a
separate Acquisition for all purposes of this Exhibit X. For purposes of further
clarification, the acquisition of multiple brands in a single transaction or
series of related transactions will be deemed to be a single Acquisition for all
purposes of this Exhibit X.

“EBITDA Growth” means, with respect to each Performance Period, the percentage
growth in the Company’s consolidated EBITDA, with each component of EBITDA
determined in accordance with generally accepted accounting principles
consistently applied, during such Performance Period as provided in Section
B(iii) of this Exhibit, consistent with the Company’s reporting of EBITDA.
Calculations of relative performance for all companies in the Comparative Group
will be based on Standard & Poor’s Research Insight database.

“EPS Growth” means, with respect to each Performance Period, the percentage
growth in the EPS, as defined in paragraph B(ii) of this Exhibit X, of the
Company during such Performance Period as provided in Section B(iii) of this
Exhibit, consistent with the Company’s reporting in its annual audited financial
statements, or, for any Performance Period that is not a complete fiscal year,
the Company’s most recently filed Quarterly Report on Form 10-Q, and if so
reviewed, as reviewed by the Company’s independent certified accountants,
adjusted, if applicable, for Extraordinary Items. Calculations of relative
performance for all companies in the Comparative Group will be based on
Standard & Poor’s Research Insight database, as adjusted pursuant to the last
sentence of the definition of “Extraordinary Items.”

 

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“Extraordinary Items” means items of extraordinary income or loss, which shall
be deducted (in the case of extraordinary income items) or added (in the case of
extraordinary loss items), as the case may be. In determining what constitutes
extraordinary income or loss, by way of example and not by way of limitation,
(a) it is recognized that the Company is engaged in the business of purchasing
and selling brands, licenses and other intellectual property and, therefore, any
gain or loss incurred as a result of such purchases or sales shall be considered
in the Company’s ordinary course of business and therefore not be considered
extraordinary, and (b) any gain or loss (other than a remeasurement gain or loss
required by generally accepted accounting principles) incurred in connection
with the write-off of securities (other than sales related to transactions
referred to in (a) above), shall be considered extraordinary. The foregoing
calculation shall be made with respect to the companies comprising the
Comparative Group to the extent ascertainable from their public filings.

“Free Cash Flow” means, with respect to each Performance Period, the Company’s
consolidated Free Cash Flow, with each component of Free Cash Flow determined in
accordance with generally accepted accounting principles consistently applied,
consistent with the Company’s reporting of Free Cash Flow.

“Performance Period” means each period from January 1 through December 31 during
the Extension Term, commencing with the period from January 1, 2013 through
December 31, 2013, and ending with the period from January 1, 2015 through
December 31, 2015.

“Performance Vesting Date” means each December 31 during the Extension Term,
commencing with December 31, 2013, and ending with December 31, 2015. Actual
vesting shall occur upon certification of achievement of the performance goals
by the Compensation Committee.

F. Miscellaneous.

With respect to each Performance Period, to the extent any provision contained
herein creates impermissible discretion under Section 162(m) of the Code, such
provision will be of no force or effect.

Certification, other than as to stock price, shall, except as otherwise set
forth herein, be based on the Company’s audited financial statements for the
applicable Performance Period, or, for any Performance Period that is not a
complete fiscal year, the Company’s most recently filed Quarterly Report on Form
10-Q and, if so reviewed, as reviewed by the Company’s independent certified
public accountants. Any determination or certification with respect to EBITDA,
diluted EPS, or Free Cash Flow required under this Exhibit X, except as
otherwise set forth herein, shall be made in accordance with the generally
accepted accounting principles (GAAP) in the United States, as applied by the
Company to the preparation of its financial statements, as in effect on the
Effective Date. In the event of a change in GAAP, or the Company’s application
thereof, any determination or certification with respect to EBITDA, diluted EPS,
or Free Cash Flow based on and/or as provided in the Company’s financial
statements shall be adjusted as required to comply

 

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with the foregoing sentence. Vesting shall only occur upon the certification by
the Compensation Committee of the achievement, whose good faith certification
shall determine whether such achievement occurred. The Compensation Committee
shall meet for the purpose of certification and, to the extent appropriate,
provide the applicable certification promptly (and in any event within 30 days)
after the completion of the audit for the fiscal year; provided, that in the
case of a termination of the Employee’s employment, the Compensation Committee
shall use reasonable business efforts to meet for the purpose of certification
and, to the extent appropriate, provide the applicable certification promptly
(and in any event within 30 days) after the Date of Termination; and provided
further, that in the case of a Change in Control, the Compensation Committee
shall meet for the purpose of certification and, to the extent appropriate,
provide any applicable certification immediately prior to the Change in Control.
The Company shall cause the foregoing meetings and certifications to occur in a
timely manner, which agreement by the Company the parties agree is a material
obligation and agreement of the Company.

Notwithstanding anything to the contrary contained in the Agreement or this
Exhibit X, any dispute under this Exhibit X (including in respect of any dispute
arising following any certification by the Compensation Committee) shall, at the
request of the Company or the Employee, be resolved by the Company’s independent
certified public accountants (with such accountants’ fees and expenses being
paid by the Company).

In the event that following the vesting of any PSU’s there is a restatement of
the Company’s financial statements for the period utilized for determining said
vesting, and the Compensation Committee determines in good faith that such PSU’s
would not have vested based on the restated financials, including as to its
impact on the stock price or market capitalization, if applicable, the
Compensation Committee may require the Employee to repay to the Company (in cash
or by delivery of shares of Common Stock) the value (determined as of the time
of distribution) of any shares of Common Stock distributed to the Employee with
respect to such PSU’s, reduced by any un-refundable taxes paid thereon by the
Employee, and upon such demand such amount shall promptly be paid by the
Employee to the Company.

 

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EXHIBIT Y

Relative EBITDA Growth Performance Measure:

The performance measure is a comparison of the percentile ranking of the
Company’s EBITDA Growth to the EBITDA Growth performance of selected peer group
of companies selected as set forth in Exhibit X. The formula for calculating
percent rank will be based on use of the Microsoft Excel “Percentrank” formula.

The percent of the target grant awarded for achieved EBITDA Growth percentiles
between levels shall be determined by interpolation. The exact number of Annual
EBITDA Shares vested after multiplication by the appropriate factor (or
determined by interpolation) shall be rounded to the nearest whole number of
shares.

Relative EPS Growth Performance Measure:

The performance measure is a comparison of the percentile ranking of the
Company’s EPS Growth to the EPS Growth performance of selected peer group of
companies selected as set forth in Exhibit X. The formula for calculating
percent rank will be based on use of the Microsoft Excel “Percentrank” formula.

The percent of the target grant awarded for achieved EPS Growth percentiles
between levels shall be determined by interpolation. The exact number of Annual
EPS Shares vested after multiplication by the appropriate factor (or determined
by interpolation) shall be rounded to the nearest whole number of shares.

 

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ANNEX A

Preliminary Comparative Group

 

Company Name

   Ticker
Symbol    GICS Sub-
Industry   

GICS Sub-industry (Descr)

   Sales-
2009      EBITDA
-2009   POLO RALPH LAUIEN CP –CLA    RL    25203010    Apparel, Accessories &
Luxury Goods    $ 4,979       $ 902   HANESBRANDS INC    HBI    25203010   
Apparel, Accessories & Luxury Goods    $ 3,891       $ 429   PHILLIPS-VAN HEUSEN
CORP    PVH    25203010    Apparel, Accessories & Luxury Goods    $ 2,399      
$ 314   FOSSIL INC    FOSL    25203010    Apparel, Accessories & Luxury Goods   
$ 1,549       $ 253   WARNACO GROUP INC    WRC    25203010    Apparel,
Accessories & Luxury Goods    $ 2,020       $ 253   JONES GROUP INC    JNY   
25203010    Apparel, Accessories & Luxury Goods    $ 3,327       $ 247  
CARTER’S INC    CRI    25203010    Apparel, Accessories & Luxury Goods    $
1,626       $ 245    DECKERS OUTDOOR CORP    DECK    25203020    Footwear    $
813       $ 192   GILDAN ACTIVEWEAR INC    GIL    25203010    Apparel,
Accessories & Luxury Goods    $ 1,038       $ 165   QUIKSILVER INC    ZQK   
25203010    Apparel, Accessories & Luxury Goods    $ 1,978       $ 152  
WOLVERINE WOR LD WIDE    WWW    25203020    Footwear    $ 1,101       $ 137  
COLUMBIA SPORTSWEAR CO    COLM    25203010    Apparel, Accessories & Luxury
Goods    $ 1,252       $ 124   UNDER ARMOUR INC    UA    25203010    Apparel,
Accessories & Luxury Goods    $ 856       $ 112   LULULEMON ATHLETICA INC   
LULU    25203010    Apparel, Accessories & Luxury Goods    $ 454       $ 109  
TIMBERLAND CO –CL A    TBL    25203020    Footwear    $ 1,286       $ 109  
SKECHERS USA    SKX    25203020    Footwear    $ 1,436       $ 92   TRUE
RELIGION APPAREL INC    TRLB    25203010    Apparel, Accessories & Luxury Goods
   $ 311       $ 84   OXFORD INDUSTRIES INC    OXM    25203010    Apparel,
Accessories & Luxury Goods    $ 814       $ 67   G-III APPAREL GROUP LTD    GIII
   25203010    Apparel, Accessories & Luxury Goods    $ 801       $ 62  
MAIDENFORM BR ANDS INC    MFB    25203010    Apparel, Accessories & Luxury Goods
   $ 466       $ 58   AMERICAN APPAREL INC    APP    25203010    Apparel,
Accessories & Luxury Goods    $ 559       $ 51   ELLIS PERRY INTL INC    PERY   
25203010    Apparel, Accessories & Luxury Goods    $ 754       $ 49   VERA
BRADLEY INC    VRA    25203010    Apparel, Accessories & Luxury Goods    $ 289
      $ 47   EXCEED CO LTD    EDS    25203010    Apparel, Accessories & Luxury
Goods    $ 304       $ 43   VOLCOM INC    VLCM    25203010    Apparel,
Accessories & Luxury Goods    $ 281       $ 36   CROCS INC    CROX    25203020
   Footwear    $ 646       $ 30   CHEROKEE INC/DE    CHKE    25203010   
Apparel, Accessories & Luxury Goods    $ 33       $ 22   DELTA APPAREL INC   
DLA    25203010    Apparel, Accessories & Luxury Goods    $ 355       $ 19  
ROCKY BRANDS INC    RCKY       Footwear    $ 229       $ 16            Minimum
   $ 33       $ 16            25th Percentile    $ 405       $ 50           
Median    $ 813       $ 109            75th Percentile    $ 1,493       $ 179  
         Maximum    $ 4,979       $ 902  

 

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