ex10_5.htm


    
      
        
        

      

      
        
        

        
          

        

      

      
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    Exhibit
      10.5

    EMPLOYMENT
      AGREEMENT

     

    THIS
      AGREEMENT (this “Agreement”), made in New York, New York as of November 13,
      2007  between I.C. Isaacs & Company, Inc., a Delaware corporation
      (the “Company”), and Robert S. Stec (“Executive”).

     

    WHEREAS,
      the Company has entered into an exclusive license agreement (the “Girbaud Men’s
      Agreement”) with Girbaud Design, Inc. and its affiliates, to manufacture and
      market men’s jeanswear, casual, outerwear and active influenced sportswear under
      the Girbaud brand and related trademarks (the “Gibraud Marks”);

     

    WHEREAS,
      the Company has also entered into an exclusive license agreement (the “Girbaud
      Women’s Agreement”) with Latitude Licensing Corp. to manufacture and market
      women’s jeanswear, casualwear and outerwear, including active influenced
      sportswear under the Gibraud Marks;

     

    WHEREAS,
      the Company will engage in negotiations with Girbaud Designs and its affiliates,
      including Latitude Licensing Corp., to extend the exclusive license agreements
      and to make other changes to the Girbaud Men’s Agreement and the Girbaud Women’s
      Agreement;

     

    WHEREAS,
      the Company desires that, from and after the full execution of an agreement
      or
      agreements to extend the exclusive license agreements, Executive shall service
      as its President and Chief Executive Officer, and Executive desires to accept
      such employment on the terms and conditions hereinafter set forth;

     

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants and agreements hereinafter
      set forth, the Company and Executive agree as follows:

     

    1.  Term.

     

    This
      Agreement shall become effective upon, and is conditional upon the full
      execution of an agreement or agreements to extend the exclusive licenses under
      the Girbaud Men’s Agreement and the Girbaud Women’s Agreement (the “Extension
      Agreement”).  Unless earlier terminated in accordance with Section 4
      hereof, the term of this Agreement shall commence on the date on which the
      Extension Agreement is fully executed and shall end on December 31, 2009 (the
      “Term”).  The Term may be extended by the Company for an additional
      two-year period by providing Executive written notice of its election to extend
      the Term on or before June 30, 2009.

     

    2.  Employment.

     

    (a)  Employment
      by the Company; Director.  Executive agrees to be employed by the
      Company during the Term upon the terms and subject to the conditions set forth
      in this Agreement.  Executive shall serve as the President and Chief
      Executive Officer of the Company and shall report to the Board of Directors
      of
      the Company (the “Board of Directors”).  Executive is currently a
      member of the Company’s Board of Directors and agrees to continue serving in
      such capacity.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  Performance
      of Duties.  Throughout the Term, Executive shall faithfully and
      diligently perform Executive’s duties in conformity with the directions of the
      Board of Directors and serve the Company to the best of Executive’s
      ability.  Executive shall devote substantially all of his business
      time and best efforts to the business and affairs of the Company.  In
      his capacity as the President and Chief Executive Officer of the Company,
      Executive shall have such duties and responsibilities as are customary for
      Executive’s positions and any other duties or responsibilities that he may be
      assigned by the Board of Directors.

     

    (c)  Place
      of Performance.  Executive shall be principally based at the
      Company’s offices in New York, New York.  Executive recognizes that
      his duties may require, at the Company’s expense, travel to domestic and
      international locations.

     

    3.  Compensation
      and Benefits.

     

    (a)  Base
      Salary.  The Company agrees to pay to Executive a base salary
      (“Base Salary”) at the annual rate of $660,000 through December 31, 2008, and at
      the annual rate of $700,000 thereafter.  Payments of the Base Salary
      shall be payable in accordance with the Company’s standard payroll
      practices.

     

    (b)  Sign-On
      Bonus.  The Company shall pay Executive, promptly after the
      effective date of this Agreement, a $150,000 cash payment as an inducement
      to
      enter into this Agreement.  Fifty percent of such cash payment (i.e.,
      $75,000) shall be an advance of Executive’s annual performance bonus pursuant to
      Section 3(c) hereof (the “Advance Bonus Payment”).

     

    (c)  Performance
      Bonus. During the Term, Executive shall be eligible to receive an annual
      performance bonus equal to of 50% of Base Salary (“Target Bonus”) for meeting
      the budgeted financial targets for such year, 25% of Base Salary (“Threshold
      Bonus”) for meeting 80% of the budgeted financial targets for such year and 150%
      of Base Salary (“Maximum Bonus”) for meeting 300% of  the budgeted
      financial targets for such year.  The annual performance bonus for a
      year, if any, shall be paid to the Executive during the first 90 days of the
      year following the year to which the bonus relates.  Notwithstanding
      the foregoing, the payment of the first $75,000 of bonuses earned by Executive
      under this Section 3(c) shall be offset by the Advance Bonus
      Payment.

     

    (d)  Restricted
      Stock Units.  The Company shall grant to Executive 500,000
      restricted stock units (individually, an “RSU” and collectively, the
“RSUs”).  Each RSU represents the obligation of the Company to deliver
      a share of common stock of the Company, in accordance with and subject to the
      provisions of the I.C. Isaacs & Company, Inc. 2007 Stock Incentive Plan, as
      it may be amended from time to time, and a Restricted Stock Unit Agreement
      in
      substantially the form attached hereto as Exhibit A.  One third
      of the RSUs shall immediately vest upon the grant of the RSUs and an additional
      one-third of the RSUs shall vest on each of the first and second anniversary
      of
      the date on which the RSUs are granted.  The Company shall deliver to
      Executive a share of Company common stock with respect to each vested RSU on
      the
      third anniversary of the date on which the RSUs are granted (the “Delivery
      Date”); provided, however, if the Delivery Date is during a “blackout period”
under the Company’s policy regarding securities trading, then the delivery of
      the shares of Company common stock to Executive shall be delayed until the
      first
      day following the end of the blackout period; provided further, that, in all
      events, such shares shall be delivered to Executive no later than the later
      of
      (i) the last day of the calendar year in which the Delivery Date occurs or
      (ii)
      the 15th day of
      the third calendar month following the Delivery Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)  Benefits
      and Perquisites.  Executive shall be entitled to participate in
      any benefit plans and programs, or to receive any benefits and perquisites,
      generally provided by the Company to senior executives of the Company, including
      without limitation family medical insurance (subject to applicable employee
      contributions).  Executive shall be entitled to receive twenty (20)
      days of annual paid vacation.

     

    (f)  Business
      Expenses.  The Company agrees to reimburse Executive, in
      accordance with its standard senior executive policies from time to time in
      effect, for all reasonable and necessary travel, business entertainment and
      other business expenses incurred by Executive in connection with the performance
      of his duties under this Agreement.  Such reimbursements shall be made
      by the Company on a timely basis upon submission by Executive of reasonable
      documentation supporting such expenses.

     

    (g)  Payment.  Payment
      of all compensation and benefits to Executive specified in this Section 3 and
      in
      Section 5 of this Agreement (i) shall be made in accordance with the relevant
      Company policies in effect from time to time to the extent the same are
      consistently applied, and (ii) shall be subject to all legally required and
      customary withholdings.

     

    (h)  Cessation
      of Employment.  Subject to and as provided in Section 5, in the
      event Executive shall cease to be employed by the Company for any reason, then
      Executive’s compensation and benefits, if any, shall cease on the date of such
      event, except as otherwise specifically provided herein or as required by
      law.

     

    4.  Termination
      of Employment.  Executive’s employment hereunder may be terminated
      prior to the end of the Term under the following circumstances.

     

    (a)  Death.  Executive’s
      employment hereunder shall terminate upon Executive’s death.

     

    (b)  Executive
      Becoming Totally Disabled.  The Company may terminate Executive’s
      employment hereunder at any time after Executive becomes “Totally
      Disabled.”  For purposes of this Agreement, Executive shall be
“Totally Disabled” in the event Executive is unable to perform the duties and
      responsibilities contemplated under this Agreement for a period of 90
      consecutive days due to physical or mental incapacity or
      impairment.  During any period that Executive fails to perform
      Executive’s duties hereunder as a result of incapacity due to physical or mental
      illness (the “Disability Period”), Executive shall continue to receive the
      compensation and benefits provided by Section 3 of this Agreement until
      Executive’s employment hereunder is terminated; provided, however, that the
      amount of base compensation and benefits received by Executive during the
      Disability Period shall be reduced by the aggregate amounts, if any, payable
      to
      Executive under any disability benefit plan or program provided to Executive
      by
      the Company; and provided further that in no event shall such payments be made
      for a period in excess of 29 months.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  Termination
      by the Company for Cause.  The Company may terminate Executive’s
      employment hereunder for Cause at any time after providing written notice to
      Executive.  For purposes of this Agreement, the term “Cause” shall
      mean any of the following:  (i) the neglect or failure or refusal of
      Executive to perform any material duty of Executive hereunder (other than as
      a
      result of total or partial incapacity due to physical or mental illness), which
      neglect or refusal has, in the good faith determination of the Board, a negative
      impact on the Company; (ii) the engaging by Executive in gross negligence
      or misconduct which is injurious to the Company or any of its affiliates,
      monetarily or otherwise; (iii) perpetration of an intentional and knowing fraud
      against or affecting the Company or any of its affiliates or any customer,
      client, agent, or employee thereof; (iv) any willful or intentional act that
      could reasonably be expected to injure the reputation, business, or business
      relationships of the Company or any of its affiliates or Executive’s reputation
      or business relationships; (v) Executive’s material failure to comply with,
      and/or a material violation by Executive of, the internal policies of the
      Company or any of its affiliates and/or procedures or any laws or regulations
      applicable to Executive’s conduct as an employee of the Company; (vi)
      Executive’s conviction (including conviction on a nolocontendere
      plea) of a felony or any crime involving fraud, dishonesty or moral turpitude;
      (vii) the breach of a covenant set forth in Section 6; or (viii) any other
      material breach by Executive of this Agreement; provided, however, that, if
      susceptible of cure, a termination by the Company under Sections 4(c)(i),
      4(c)(v) or 4(c)(viii) shall be effective only if, within 14 days following
      delivery of a written notice by the Company to Executive that the Company is
      terminating his employment for Cause, Executive has failed to cure the
      circumstances giving rise to Cause.

     

    (d)  Termination
      by the Company Without Cause.  The Company may terminate
      Executive’s employment hereunder at any time for any reason or no reason by
      giving Executive sixty (60) days prior written notice of the
      termination.  Following any such notice, the Company may reduce or
      remove any and all of Executive’s duties, positions and titles with the
      Company.

     

    (e)  Termination
      by Executive for Good Reason.  Executive may terminate his
      employment hereunder for Good Reason at any time after providing written notice
      to the Company.  For purposes of this Agreement, the term “Good
      Reason” shall mean any of the following:  (i) the Company fails to pay
      the compensation described in Sections 3(a), 3(b) and 3(c) (in accordance with,
      and subject to, such provisions); (ii) Executive no longer holds the offices
      of
      President and Chief Executive Officer or an office of equivalent stature, or
      his
      functions and/or duties are materially diminished by the Board of Directors;
      or
      (iii) Executive’s job site is relocated to a location outside of New York, New
      York, unless the parties mutually agree to such relocation; provided, however,
      that a termination by Executive for Good Reason shall be effective only if,
      within 14 days following delivery of a written notice by Executive to the
      Company that Executive is terminating his employment for Good Reason, the
      Company has failed to cure the circumstances giving rise to Good
      Reason.

     

    (f)  Termination
      by Executive Without Good Reason.  Executive may terminate his
      employment hereunder at any time for any reason or no reason by giving the
      Company sixty (60) days prior written notice of the
      termination.  Following any such notice, the Company may reduce or
      remove any and all of Executive’s duties, positions and titles with the Company,
      and any such reduction or removal shall not constitute Good Reason.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.  Compensation
      Following Termination Prior to the End of the Term.  In the event
      that Executive’s employment hereunder is terminated prior to the end of the Term
      for any reason, Executive shall be entitled only to the following compensation
      and benefits upon such termination:

     

    (a)  General.  On
      any termination of Executive’s employment, he shall be entitled to:

     

    
      	
              (i)  

            	
              any
                accrued but unpaid Base Salary for services rendered through the
                date of
                termination; provided, however, that in the event Executive’s employment
                is terminated pursuant to Section 4(b), the amount of Base Salary
                received
                by Executive during the Disability Period shall be reduced by the
                aggregate amounts, if any, payable to Executive under any disability
                benefit plan or program provided to Executive by the
                Company;

            


    

     

    
      	
              (ii)  

            	
              any
                vacation accrued to the date of termination;
                and

            


    

     

    
      	
              (iii)  

            	
              any
                accrued but unpaid expenses through the date of termination required
                to be
                reimbursed in accordance with Sections 3(f) of this
                Agreement.

            


    

     

    (b)  Termination
      by the Company Without Cause; Termination by Executive for Good
      Reason.  In the event that Executive’s employment is terminated
      prior to the expiration of the Term by the Company without Cause pursuant to
      Section 4(d) or by Executive for Good Reason pursuant to Section 4(e), Executive
      shall be entitled only to the following:

     

    
      	
              (i)  

            	
              those
                items identified in Section 5(a);

            


    

     

    
      	
              (ii)  

            	
              the
                sign-on bonus pursuant to Section 5(b) hereof if not previously
                paid;

            


    

     

    
      	
              (iii)  

            	
              a
                pro rata annual performance bonus pursuant to Section 5(c) hereof
                for the
                year in which Executive’s employment is terminated, determined by
                multiplying the amount Executive would have received had employment
                continued through the end of the year by a fraction, the numerator
                of
                which is the number of days during the year of termination that Executive
                is employed by the Company and the denominator of which is 365, and
                payable (after being offset by the Advance Bonus Payment, to the
                extend
                applicable) at the time the annual performance bonus would have been
                paid
                if Executive’s employment had not terminated;
                and.

            


    

     

    
      	
              (iv)  

            	
              the
                continued payment of the Base Salary (as determined pursuant to Section
                3(a)) for 18 months (such sums to be paid at the times and in the
                amounts
                such Base Salary would have been paid had Executive’s employment not
                terminated).

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  Termination
      by Company Without Cause After a Change in Control; Termination by Executive
      for
      Good Reason After a Change in Control.  In the event that
      Executive’s employment is terminated by the Company without Cause pursuant to
      Section 4(d) or by Executive for Good Reason pursuant to Section 4(e), in either
      case, within 12 months after a Change in Control but prior to the end of the
      Term, Executive shall be entitled to only the following:

     

    
      	
              (i)  

            	
              those
                items identified in Section 5(a);

            


    

     

    
      	
              (ii)  

            	
              the
                sign-on bonus pursuant to Section 5(b) hereof if not  previously
                paid;

            


    

     

    
      	
              (iii)  

            	
              an
                amount equal to Executive’s Target Bonus pursuant to Section 5(c) hereof
                for the year in which Executive’s employment is terminated, payable (after
                being offset by the Advance Bonus Payment, to the extend applicable)
                at
                the time the annual performance bonus would have been paid if Executive’s
                employment had not terminated;

            


    

     

    
      	
              (iv)  

            	
              the
                continued payment of the Base Salary (as determined pursuant to Section
                3(a)) for 18 months (such sums to be paid at the times and in the
                amounts
                such Base Salary would have been paid had Executive’s employment not
                terminated); and

            


    

     

    
      	
              (v)  

            	
              continued
                eligibility for benefits provided under Section 3 hereof for 18 months,
                provided that Executive’s eligibility for such benefits shall terminate to
                the extent that, Executive becomes eligible for such benefits from
                a
                subsequent employer.

            


    

     

    “Change
      of Control” shall mean (i) the sale of all or substantially all of the assets of
      the Company, (ii) the sale of more than 50% of the outstanding capital stock
      of
      the Company in a non-public sale, (iii) the dissolution or liquidation of the
      Company, or (iv) any merger, share exchange, consolidation or other
      reorganization or business combination of the Company if immediately after
      such
      transaction either (A) persons who were members of the Board of Directors of
      the
      Company immediately prior to such transaction do not constitute at least a
      majority of the Board of Directors of the surviving entity, or (B) persons
      who
      hold a majority of the voting capital stock of the surviving entity are not
      persons who held voting capital stock of the Company immediately prior to such
      transaction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)  No
      Further Liability; Release.  Payment made and performance by the
      Company in accordance with this Section 5 shall operate to fully discharge
      and
      release the Company and its directors, officers, employees, affiliates,
      stockholders, successors, assigns, agents and representatives from any further
      obligation or liability with respect to Executive’s employment and termination
      of employment.  Other than providing the compensation and benefits
      provided for in accordance with this Section 5, the Company and its directors,
      officers, employees, affiliates, stockholders, successors, assigns, agents
      and
      representatives shall have no further obligation or liability to Executive
      or
      any other person under this Agreement.  The payment of any amounts
      pursuant to this Section 5 (other than payments required by law) is expressly
      conditioned upon the delivery by Executive to the Company of a release in form
      and substance reasonably satisfactory to the Company of any and all claims
      Executive may have against the Company and its directors, officers, employees,
      affiliates, successors, assigns, agents and representatives.

     

    (d)             Offset;
      No Obligation to Mitigate.  The Company’s obligation to make the
      payments provided for in this Agreement and otherwise to perform its obligations
      hereunder shall not be affected by any set-off, counterclaim, recoupment,
      defense, or other claim, right, or action that the Company may have against
      the
      Executive or others.  In no event shall the Executive be obligated to
      seek other employment or take any other action by way of mitigation of the
      amounts payable to the Executive under any of the provisions of this Agreement
      and such amounts shall not be reduced whether or not the Executive obtains
      other
      employment.

     

    6.  Exclusive
      Employment; Noncompetition; Nonsolicitation; Nondisclosure of Proprietary
      Information; Surrender of Records; Developments.

     

    6.1           No
      Conflict; No Other Employment.  During the period of Executive’s
      employment with the Company, Executive shall not:  (i) engage in any
      activity which conflicts or interferes with or derogates from the performance
      of
      Executive’s duties hereunder nor shall Executive engage in any other business
      activity, whether or not such business activity is pursued for gain or profit
      and including service as a director of any other company, except as approved
      in
      advance in writing by the Company; provided, however, that Executive shall
      be
      entitled to manage his personal investments and otherwise attend to personal
      affairs, including charitable, social and political activities, in a manner
      that
      does not unreasonably interfere with his responsibilities hereunder, or (ii)
      accept or engage in any other employment, whether as an employee or consultant
      or in any other capacity, and whether or not compensated
      therefor.  Notwithstanding the foregoing, the Company agrees that,
      subject to the second sentence of Section 2(b) hereof, and provided that the
      activity does not conflict or interfere with or derogated from the performance
      of Executives duties to the Company, Executive may continue to act in the
      following positions with the following companies during the Term:  (x)
      Chairman and Chief Executive Officer of Prestige Brands of North Carolina,
      LLC,
      a home furnishings company, and (y) Chief Executive Officer of Brand Force
      One,
      LLC, a marketing consulting company.

     

    6.2           Noncompetition;
      Nonsolicitation.

     

    (a)  Executive
      acknowledges and recognizes the highly competitive nature of the Company’s
      business and that access to the Company’s confidential records and proprietary
      information renders him special and unique within the Company’s
      industry.  In consideration of the payment by the Company to Executive
      of amounts that may hereafter be paid to Executive pursuant to this Agreement
      (including, without limitation, pursuant to Sections 3 and 5 hereof) and other
      obligations undertaken by the Company hereunder, Executive agrees that during
      (i) his employment with the Company and (ii) the period beginning on the date
      of
      termination of employment for any reason and ending 18 months after the date
      of
      termination of employment (the “Post-Employment Period”), Executive shall not,
      directly or indirectly, engage (as owner, investor, partner, stockholder,
      employer, employee, consultant, advisor, director or otherwise) in any Competing
      Business, provided that ownership by Executive of less than 1% of the
      outstanding common stock of a publicly-traded company that is a Competing
      Business will not be a breach of the provisions of this Section
      6.2(a).  For purposes of this Agreement, “Competing Business” shall
      mean (i) any business engaged in the design or marketing of branded jeanswear
      and sportswear; (ii) any business in which the Company is currently engaged
      anywhere in the world, and (iii) any other business which the Company engages
      in
      anywhere in the world during Executive’s employment with the
      Company.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  In
      further consideration of the payment by the Company to Executive of amounts
      that
      may hereafter be paid to Executive pursuant to this Agreement (including,
      without limitation, pursuant to Sections 3 and 5 hereof) and other obligations
      undertaken by the Company hereunder, Executive agrees that during his employment
      and the Post-Employment Period, he shall not, directly or indirectly, (i)
      solicit, encourage or attempt to solicit or encourage any of the employees,
      agents, consultants or representatives of the Company or any of its affiliates
      to terminate his, her, or its relationship with the Company or such affiliate;
      (ii) solicit, encourage or attempt to solicit or encourage any of the
      employees of the Company or any of its affiliates to become employees or
      consultants of any other person or entity; (iii) solicit, encourage or attempt
      to solicit or encourage any of the consultants of the Company or any of its
      affiliates to become employees or consultants of any other person or entity,
      provided that the restriction in this clause (iii) shall not apply if (A) such
      solicitation, encouragement or attempt to solicit or encourage is in connection
      with a business which is not a Competing Business and (B)
      the
      consultant’s rendering of services for the other person or entity will not
      interfere with the consultant’s rendering of services to the Company; (iv)
      solicit or attempt to solicit any licensor, customer, vendor or distributor
      of
      the Company or any of its affiliates with respect to any product or service
      being furnished, made, sold or leased by the Company or such affiliate, provided
      that the restriction in this clause (iv) shall not apply if such solicitation
      or
      attempt to solicit is (A) in connection with a business which is not a Competing
      Business and (B) does not interfere with, or conflict with, the interests of
      the
      Company or any of its affiliates; or (v) persuade or seek to persuade any
      licensor or customer of the Company or any affiliate to cease to do business
      or
      to reduce the amount of business which any licensor or customer has customarily
      done or contemplates doing with the Company or such affiliate, whether or not
      the relationship between the Company or its affiliate and such licensor or
      customer was originally established in whole or in part through Executive’s
      efforts.  For purposes of this Section 6.2(b) only, the terms
“licensor”, “customer,” “vendor” and “distributor” shall mean a licensor,
      customer, vendor or distributor who has done business with the Company or any
      of
      its affiliates within twelve months preceding the termination of Executive’s
      employment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  During
      Executive’s employment with the Company and during the Post-Employment Period,
      Executive agrees that upon the earlier of Executive’s (i) negotiating with any
      Competitor (as defined below) concerning the possible employment of Executive
      by
      the Competitor, (ii) receiving an offer of employment from a Competitor, or
      (iii) becoming employed by a Competitor, Executive will (A) immediately provide
      written notice to the Company of such circumstances and (B) provide copies
      of
      Section 6 of this Agreement to the Competitor.  Executive further
      agrees that the Company may provide notice to a Competitor of Executive’s
      obligations under this Agreement, including without limitation Executive’s
      obligations pursuant to Section 6 hereof.  For purposes of this
      Agreement, “Competitor” shall mean any entity (other than the Company or any of
      its affiliates) that engages, directly or indirectly, in any Competing
      Business.

     

    (d)  Executive
      understands that the provisions of this Section 6.2 may limit his ability to
      earn a livelihood in a business similar to the business of the Company or its
      affiliates but nevertheless agrees and hereby acknowledges that the
      consideration provided under this Agreement, including any amounts or benefits
      provided under Sections 3 and 5 hereof and other obligations undertaken by
      the
      Company hereunder, is sufficient to justify the restrictions contained in such
      provisions.  In consideration thereof and in light of Executive’s
      education, skills and abilities, Executive agrees that he will not assert in
      any
      forum that such provisions prevent him from earning a living or otherwise are
      void or unenforceable or should be held void or unenforceable.

     

    6.3           Proprietary
      Information.  Executive acknowledges that during the course of his
      employment with the Company he will necessarily have access to and make use
      of
      proprietary information and confidential records of the Company and its
      affiliates.  Executive covenants that he shall not during the Term or
      at any time thereafter, directly or indirectly, use for his own purpose or
      for
      the benefit of any person or entity other than the Company, nor otherwise
      disclose, any proprietary information to any individual or entity, unless such
      disclosure has been authorized in writing by the Company or is otherwise
      required by law.  Executive acknowledges and understands that the term
“proprietary information” includes, but is not limited to:  (a) the
      software products, programs, applications, and processes utilized by the Company
      or any of its affiliates; (b) the name and/or address of any licensor,
      customer or vendor of the Company or any of its affiliates or any information
      concerning the transactions or relations of any licensor, customer or vendor
      of
      the Company or any of its affiliates with the Company or such affiliate or
      any
      of its or their partners, principals, directors, officers or agents; (c) any
      information concerning any product, technology, or procedure employed by the
      Company or any of its affiliates but not generally known to its or their
      customers, vendors or competitors, or under development by or being tested
      by
      the Company or any of its affiliates but not at the time offered generally
      to
      customers or vendors; (d) any information relating to the computer software,
      computer systems, pricing or marketing methods, sales margins, cost of goods,
      cost of material, capital structure, operating results, borrowing arrangements
      or business plans of the Company or any of its affiliates; (e) any information
      which is generally regarded as confidential or proprietary in any line of
      business engaged in by the Company or any of its affiliates; (f) any business
      plans, budgets, advertising or marketing plans; (g) any information contained
      in
      any of the written or oral policies and procedures or manuals of the Company
      or
      any of its affiliates; (h) any information belonging to customers or vendors
      of
      the Company or any of its affiliates or any other person or entity which the
      Company or any of its affiliates has agreed to hold in confidence; (i) any
      Developments (as defined below) covered by this Agreement; and (j) all
      written, graphic and other material relating to any of the
      foregoing.   Executive acknowledges and understands that
      information that is not novel or copyrighted or patented may nonetheless be
      proprietary information.  The term “proprietary information” shall not
      include information generally available to and known by the public or
      information that is or becomes available to Executive on a non-confidential
      basis from a source other than the Company, any of its affiliates, or the
      directors, officers, employees, partners, principals or agents of the Company
      or
      any of its affiliates (other than as a result of a breach of any obligation
      of
      confidentiality).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.4           Confidentiality
      and Surrender of Records.  Executive shall not during the Term or
      at any time thereafter (irrespective of the circumstances under which
      Executive’s employment by the Company terminates), except as required by law,
      directly or indirectly publish, make known or in any fashion disclose any
      confidential records to, or permit any inspection or copying of confidential
      records by, any individual or entity other than in the course of such
      individual’s or entity’s employment or retention by the Company.  Upon
      termination of employment for any reason or upon request by the Company,
      Executive shall deliver promptly to the Company all property and records of
      the
      Company or any of its affiliates, including, without limitation, all
      confidential records.  For purposes hereof, “confidential records”
means all correspondence, reports, memoranda, files, manuals, books, lists,
      financial, operating or marketing records, magnetic tape, or electronic or
      other
      media or equipment of any kind which may be in Executive’s possession or under
      his control or accessible to him which contain any proprietary
      information.  All property and records of the Company and any of its
      affiliates (including, without limitation, all confidential records) shall
      be
      and remain the sole property of the Company or such affiliate during the Term
      and thereafter.

     

    6.5           Inventions
      and Patents.  All inventions, innovations or improvements
      (including policies, procedures, products, improvements, software, ideas and
      discoveries, whether patent, copyright, trademark, service mark, or otherwise)
      conceived or made by Executive, either alone or jointly with others, in the
      course of his employment by the Company, belong to the
      Company.  Executive will promptly disclose in writing such inventions,
      innovations or improvements to the Company and perform all actions reasonably
      requested by the Company to establish and confirm such ownership by the Company,
      including, but not limited to, cooperating with and assisting the Company in
      obtaining patents, copyrights, trademarks, or service marks for the Company
      in
      the United States and in foreign countries.

     

    6.6           Enforcement.  Executive
      acknowledges and agrees that, by virtue of his position, his services and access
      to and use of confidential records and proprietary information, any violation
      by
      him of any of the undertakings contained in this Section 6 would cause the
      Company and/or its affiliates immediate, substantial and irreparable injury
      for
      which it or they have no adequate remedy at law.  Accordingly,
      Executive agrees and consents to the entry of an injunction or other equitable
      relief by a court of competent jurisdiction restraining any violation or
      threatened violation of any undertaking contained in this Section
      6.  Executive waives posting by the Company or its affiliates of any
      bond otherwise necessary to secure such injunction or other equitable
      relief.  Rights and remedies provided for in this Section 6 are
      cumulative and shall be in addition to rights and remedies otherwise available
      to the parties hereunder or under any other agreement or applicable
      law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.  Key
      Man Insurance.  Executive recognizes and acknowledges that the
      Company or its affiliates may seek and purchase one or more policies providing
      key man life insurance with respect to Executive, the proceeds of which would
      be
      payable to the Company or such affiliate.  Executive hereby consents
      to the Company or its affiliates seeking, purchasing and maintaining such
      insurance and will provide such information, undergo such medical examinations
      (at the Company’s expense), execute such documents, and otherwise take any and
      all actions reasonably necessary or desirable in order for the Company or its
      affiliates to seek, purchase, and maintain in full force and effect such policy
      or policies.

     

    8.  Assignment
      and Transfer.

     

    (a)  Company.  This
      Agreement shall inure to the benefit of and be enforceable by, and may be
      assigned by the Company without Executive’s consent to, any purchaser of all or
      substantially all of the Company’s business or assets, or to any successor to
      the Company or any assignee thereof (whether direct or indirect, by purchase,
      merger, consolidation or otherwise).

     

    (b)  Executive.
      The parties hereto agree that Executive is obligated under this Agreement to
      render personal services during the Term of a special, unique, unusual,
      extraordinary and intellectual character, thereby giving this Agreement special
      value.  Executive’s rights and obligations under this Agreement shall
      not be transferable by Executive by assignment or otherwise, and any purported
      assignment, transfer or delegation thereof shall be void; provided, however,
      that if Executive shall die, all amounts then payable to Executive hereunder
      shall be paid in accordance with the terms of this Agreement to Executive’s
      estate.

     

    9.  Miscellaneous.

     

    (a)  Other
      Obligations.  Executive represents and warrants that neither
      Executive’s employment with the Company nor Executive’s performance of
      Executive’s obligations hereunder will conflict with or violate or otherwise are
      inconsistent with any other obligations, legal or otherwise, which Executive
      may
      have.  Executive covenants that he shall perform his duties hereunder
      in a professional manner and not in conflict or violation, or otherwise
      inconsistent with other obligations legal or otherwise, which Executive may
      have.

     

    (b)  Nondisclosure;
      Other Employers.  Executive will not disclose to the Company, use,
      or induce the Company to use, any proprietary information, trade secrets or
      confidential business information of others.  Executive represents and
      warrants that Executive does not possess any property, proprietary information,
      trade secrets and confidential business information belonging to any prior
      employers.

     

    (c)  Cooperation.  Following
      termination of employment with the Company for any reason, Executive shall
      cooperate with the Company, as requested by the Company, to effect a transition
      of Executive’s responsibilities and to ensure that the Company is aware of all
      matters being handled by Executive.  The Company shall reimburse
      Executive’s reasonable out-of-pocket expenses incurred in connection with the
      obligations in this Section 9(c).

     

    (d)  Protection
      of Reputation.  During the Term and thereafter, Executive agrees
      that he will take no action which is intended, or would reasonably be expected,
      to harm the Company or any of its affiliates or its or their reputation or
      which
      would reasonably be expected to lead to unwanted or unfavorable publicity to
      the
      Company or its affiliates.  Nothing herein shall prevent Executive
      from making any truthful statement in connection with any legal proceeding
      or
      investigation by the Company or any governmental authority.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)  Governing
      Law.  This Agreement shall be governed by and construed (both as
      to validity and performance) and enforced in accordance with the internal laws
      of the State of New York, without regard to the principles of conflicts of
      law
      or where the parties are located at the time a dispute arises.

     

    (f)  Arbitration.

     

    
      	
              (i)  

            	
              General.  Executive
                and the Company specifically, knowingly, and voluntarily agree that
                they
                shall use final and binding arbitration to resolve any dispute (an
                “Arbitrable Dispute”) between Executive, on the one hand, and the Company
                (or any affiliate of the Company), on the other hand.  This
                arbitration agreement applies to all matters relating to this Agreement
                and Executive’s employment with and/or termination of employment from the
                Company, including without limitation disputes about the validity,
                interpretation, or effect of this Agreement, or alleged violations
                of it,
                any payments due hereunder and all claims arising out of any alleged
                discrimination, harassment or retaliation, including, but not limited
                to,
                those covered by Title VII of the Civil Rights Act of 1964, as amended,
                the Age Discrimination in Employment Act of 1967, as amended, the
                Americans With Disabilities Act, the New York State Human Rights
                Law, the
                New York City Human Rights Law, the New York Labor Law, or any other
                federal, state or local law relating to discrimination in
                employment.

            


    

     

    
      	
              (ii)  

            	
              Injunctive
                Relief.  Notwithstanding anything to the contrary contained
                herein, the Company and any affiliate of the Company (if applicable)
                shall
                have the right to seek injunctive or other equitable relief from
                a court
                of competent jurisdiction to enforce Section 6 of this
                Agreement.  For purposes of seeking enforcement of Section 6,
                the Company and Executive hereby consent to the jurisdiction of any
                state
                or federal court sitting in the City, County and State of New
                York.

            


    

     

    
      	
              (iii)  

            	
              The
                Arbitration.  Any arbitration pursuant to this Section 9(f)
                will take place in New York, New York, under the auspices of the
                American
                Arbitration Association, in accordance with the Employment Arbitration
                Rules and Mediation Procedures of the American Arbitration Association
                then in effect, and before one arbitrator selected in accordance
                with such
                rules.  Judgment upon the award rendered by the arbitrators may
                be entered in any state or federal court sitting in the City, County
                and
                State of New York, or any other court of competent
                jurisdiction.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              (iv)  

            	
              Fees
                and Expenses.  In any arbitration pursuant to this Section
                9(f), except as otherwise required by law, each party shall be responsible
                for the fees and expenses of its own attorneys and witnesses, and
                the fees
                and expenses of the arbitrators shall be divided equally between
                the
                Company, on the one hand, and Executive, on the other
                hand.  Notwithstanding the foregoing, the prevailing party on a
                claim to enforce the terms of this Agreement shall be entitled to
                the
                reimbursement of his, her or its reasonable fees and expenses in
                connection with such claim, including reasonable attorneys’ fees, from the
                other party.

            


    

     

    
      	
              (v)  

            	
              Exclusive
                Forum.  Except as permitted by Section 9(f)(ii) hereof,
                arbitration in the manner described in this Section 9(f) shall be
                the
                exclusive forum for any Arbitrable Dispute.  Except as permitted
                by Section 9(f)(ii), should Executive or the Company attempt to resolve
                an
                Arbitrable Dispute by any method other than arbitration pursuant
                to this
                Section 9(f), the responding party shall be entitled to recover from
                the
                initiating party all damages, expenses, and attorneys’ fees incurred as a
                result of that breach.

            


    

     

    (g)  Entire
      Agreement.  This Agreement (including the plans referenced in
      Section 3(e)) contains the entire agreement and understanding between the
      parties hereto in respect of Executive’s employment and supersedes, cancels and
      annuls any prior or contemporaneous written or oral agreements, understandings,
      commitments and practices between them respecting Executive’s employment,
      including all prior employment agreements between the Company and Executive,
      which agreement(s) hereby are terminated and shall be of no further force or
      effect.

     

    (h)  Amendment.  This
      Agreement may be amended only by a writing which makes express reference to
      this
      Agreement as the subject of such amendment and which is signed by Executive
      and,
      on behalf of the Company, by its duly authorized officer.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)  Severability.
      If any provision of this Agreement or the application of any such provision
      to
      any party or circumstances shall be determined by any court of competent
      jurisdiction or arbitration panel to be invalid or unenforceable to any extent,
      the remainder of this Agreement, or the application of such provision to such
      person or circumstances other than those to which it is so determined to be
      invalid or unenforceable, shall not be affected thereby, and each provision
      hereof shall be enforced to the fullest extent permitted by law.  If
      any provision of this Agreement, or any part thereof, is held to be invalid
      or
      unenforceable because of the scope or duration of or the area covered by such
      provision, the parties hereto agree that the court or arbitration panel making
      such determination shall reduce the scope, duration and/or area of such
      provision (and shall substitute appropriate provisions for any such invalid
      or
      unenforceable provisions) in order to make such provision enforceable to the
      fullest extent permitted by law and/or shall delete specific words and phrases,
      and such modified provision shall then be enforceable and shall be
      enforced.  The parties hereto recognize that if, in any judicial or
      arbitral proceeding, a court or arbitration panel shall refuse to enforce any
      of
      the separate covenants contained in this Agreement, then that invalid or
      unenforceable covenant contained in this Agreement shall be deemed eliminated
      from these provisions to the extent necessary to permit the remaining separate
      covenants to be enforced.  In the event that any court or arbitration
      panel determines that the time period or the area, or both, are unreasonable
      and
      that any of the covenants is to that extent invalid or unenforceable, the
      parties hereto agree that such covenants will remain in full force and effect,
      first, for the greatest time period, and second, in the greatest geographical
      area that would not render them unenforceable.

     

    (j)  Construction.  The
      headings and captions of this Agreement are provided for convenience only and
      are intended to have no effect in construing or interpreting this
      Agreement.  The language in all parts of this Agreement shall be in
      all cases construed according to its fair meaning and not strictly for or
      against the Company or Executive.  As used herein, the words “day” or
“days” shall mean a calendar day or days.

     

    (k)  Nonwaiver.  Neither
      any course of dealing nor any failure or neglect of either party hereto in
      any
      instance to exercise any right, power or privilege hereunder or under law shall
      constitute a waiver of any other right, power or privilege or of the same right,
      power or privilege in any other instance.  All waivers by either party
      hereto must be contained in a written instrument signed by the party to be
      charged and, in the case of the Company, by its duly authorized
      officer.

     

    (l)  Notices.  Any
      notice required or permitted hereunder shall be in writing and shall be
      sufficiently given if personally delivered or if sent by registered or certified
      mail, postage prepaid, with return receipt requested, addressed:  (i)
      in the case of the Company, to I.C. Isaacs & Company, Inc., 475 10th Avenue,
      9th Floor,
      New York,
      NY  10018, attn.: Chairman of the Board of Directors, with a copy to
      Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York,
      New York 10036, attn.:  Terrence L. Shen, Esq.; and (ii) in the case
      of Executive, to Executive’s last known address as reflected in the Company’s
      records, or to such other address as Executive shall designate by written notice
      to the Company.  Any notice given hereunder shall be deemed to have
      been given at the time of receipt thereof by the person to whom such notice
      is
      given if personally delivered or at the time of mailing if sent by registered
      or
      certified mail.

     

    (m)  Assistance
      in Proceedings, Etc.  Executive shall, without additional
      compensation, during and after the Term, upon reasonable notice, furnish such
      information and proper assistance to the Company as may reasonably be required
      by the Company in connection with any legal or quasi-legal proceeding, including
      any external or internal investigation, involving the Company or any of its
      affiliates.  The Company shall reimburse Executive’s out-of-pocket
      expenses incurred in connection with the obligations in this Section
      9(n).

     

    (n)  Survival.  Cessation
      or termination of Executive’s employment with the Company shall not result in
      termination of this Agreement.  The respective obligations of
      Executive and the Company as provided in Sections 5, 6, 8 and 9 of this
      Agreement shall survive cessation or termination of Executive’s employment
      hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (o)  Condition
      Precedent.  This Agreement shall be of no force and effect if the
      Extension Agreement is not fully executed.

     

    (p)  No
      Representations Regarding Tax Implications. The Company makes no
      representations regarding the tax implications of the compensation and benefits
      to be paid to Executive under this Agreement, including, without limitation,
      under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”).  Notwithstanding anything herein to the contrary, in the
      event that Executive is deemed to be a “specified employee” as defined in
      Section 409A(2)(B)(i) of the Code and Treasury Regulation Section 1.409A(i)
      as
      of the date of the termination of his employment with the Company, any payment
      from the Company triggered by such termination of employment (other than as
      a
      result of your death) that is subject to Section 409A shall not be paid before
      the date that is six months after the date of such termination.  Any
      such amounts not paid within the first six months following the termination
      of
      your employment shall be accumulated and paid on the first day of the seventh
      month following such termination.  All payments made to Executive
      hereunder are intended to constitute separate payments for purposes of Section
      1.409A-2(b)(2) of the Treasury Regulations.

     

    (q)  Counterparts.  This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall be deemed to be one and
      the
      same instrument.

     

    


     

    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
      on
      its behalf by an individual thereunto duly authorized and Executive has duly
      executed this Agreement, all as of the date and year first written
      above.

     

    


     

    I.C.
      ISAACS & COMPANY,
      INC.                                                                                 EXECUTIVE:

    


    


    


    By:
              /s/ GREGG A.
      HOLST                                                                                  /s/
      ROBERT S. STEC
               

    Name:  Gregg
      A.
      Holst                                                                      
Robert S. Stec

           
      Title:    Chief Financial Officer