xelb20181231ex109






                                                                                                          EMPLOYMENT AGREEMENT              THIS EMPLOYMENT AGREEMENT (this “Agreement dated February 27, 2019 by and   between XCel Brands, Inc., a Delaware corporation (the “Company”) and Robert W. D’Loren (the   “Executive”)  each  a  “Party”  and  collectively  the  “Parties.”   This  Agreement  replaces  and   supersedes that certain employment agreement dated as of October 1, 2014, as amended as of April   1,  2017,  by  and  between  the  Company  and  the  Executive  (the  “Prior Agreement”).  Unless  otherwise indicated, capitalized terms used herein are defined in Section 2.1 of this Agreement.            WHEREAS, the Company has determined that it is in the best interests of the Company  and its shareholders to enter into an employment agreement with the Executive and the Executive  is willing to serve as an employee of the Company.            NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth  herein, it is agreed by and between the Executive and the Company as follows:                                        ARTICLE I.                              EMPLOYMENT TERMS         1.1.  Employment.  The Company will employ the Executive, and the Executive accepts  employment with the Company, upon the terms and conditions set forth in this Agreement for the  period  beginning  on  the  Effective Date  and  ending  as  provided  in  Section  1.4(a)  hereof  (the  “Employment Period”).         1.2.  Position and Duties.               (a)   Generally.  The Executive shall serve as the Chief Executive Officer of the  Company and, in such capacity shall be responsible for the general management of the business,  affairs and operations of the Company, shall perform such duties as are customarily performed by  a Chief Executive Officer of a company of a similar size and shall have such power and authority  as shall reasonably be required to enable him to perform his duties hereunder; provided, however,  that in exercising such power and authority and performing such duties, he shall at all times be  subject  to  the  authority,  control and  direction  of  the  Board  of  Directors  of  the  Company  (the  “Board”).  The Company agrees that it will use its reasonable best efforts to cause the Executive  to be nominated to and continue to be named Chairman of the Board of Directors during the Term,  it being acknowledged and agreed that the Nominating Committee (or any successor committee of  the Board, or, in the absence of any such committee, the Board) shall retain the ability to apply  reasonable  and  uniform  standards  consistent  with  past  practices  and  corporate  governance  principles to consider the Executive for nomination to the Board and appointment as Chairman of  the Board during the Term. Without limitation on any of the foregoing, the Executive shall have  senior management authority and responsibility with respect to the management and operations of  the Company and its business, including implementation of the business strategy of the Company   consistent with strategy and policies approved by the Board.             135944.00100/114933105v.7  





 






                 (b)   Duties and Responsibilities.  The Executive shall report to the Board and   shall devote a substantial portion of his time to the business and affairs of the Company and its   Subsidiaries.  The Executive shall perform his duties and responsibilities in a diligent, trustworthy,   businesslike and efficient manner and shall use his best efforts during the Employment Period to   protect,  encourage  and  promote  the  best  interests  of  the  Company  and  its  stockholders.  The   Executive shall not engage in any other business activities that could reasonably be expected to   conflict  with  the  Executive’s  duties,  responsibilities  and  obligations  hereunder.  During  the   Employment Period, the Executive shall promptly bring to the Company or its Subsidiaries, as   applicable, all investment or business opportunities relating to the Business of which the Executive   becomes aware.                (c)   Principal Office.  The principal place of performance by the Executive of   his  duties  hereunder  shall  be  the  Company’s  principal  executive  offices  in  the  New  York   Metropolitan area, although the Executive may be required to travel outside of the area where the   Company’s  principal  executive  offices  are  located  in  connection  with  the  business  of  the   Company.          1.3.  Compensation.                (a)   Base Salary.  The Executive’s annual base salary during the Employment   Period shall be $888,500.00 per year (the “Base Salary”).  The Base Salary will be payable to the   Executive  by  the  Company  in  regular  installments  in  accordance with the  Company’s  general   payroll practices.  The Executive shall receive such increases (but not decreases) in his Base Salary   as the Board, or the compensation committee of the Board (the “Compensation Committee”), may   approve  in  its  sole  discretion  from  time  to  time.  Following  the  three-year  anniversary  of  the   Effective Date, the Base Salary shall be reviewed at least annually.                (b)   Cash Bonuses.   Executive shall be eligible for annual cash bonuses (“Cash   Bonus”) for each completed fiscal year (subject to Section 1.4 hereof) of the Company during the   Term in accordance with this Section 1.3(b).  The Cash Bonus for any fiscal year shall be an   amount equal to the IP Income Bonus plus the EBITDA Bonus.   The “IP Income Bonus” for any   fiscal year shall be an amount equal to two and one-half percent (2.5%) of all revenue generated   from sales of the Company’s products and by the trademarks and other intellectual property owned,   operated or managed by the Company (“IP Income”) in excess of $8,000,000 earned in accordance   with GAAP by the Company in such fiscal year provided, however, that any IP Income generated   through Net Sales, shall be multiplied by (i) 7%, in the case of Net Sales from wholesale sales and   private  label  sales  and  (ii)  3%,  in  the  case  of  Net  Sales  from e-commerce  sales  though  the   Company’s web sites.   The “EBITDA Bonus” for any fiscal year shall be an amount equal to five   percent (5%) of the Company’s Adjusted EBITDA for such fiscal year.            The Cash Bonus shall be paid to the Executive on the date that is the earlier of (i) the 90th  day following the end of the fiscal year to which the Cash Bonus relates and (ii) the first business  day following the date the Company’s annual report on Form 10-K for the fiscal year to which the  Cash Bonus relates is filed with the Securities and Exchange Commission. The Executive shall  have the right to elect to receive all or a portion of the Cash Bonus payable for any fiscal year to  be paid through the issuance of shares of the Company’s common stock (under the Company’s                                          2      135944.00100/114933105v.7  





 






   Third Amended and Restated Incentive Plan or any other stockholder approved equity incentive  plan of the Company) based on the average closing sale prices of the Company’s common stock  for the five trading days ending on the day immediately preceding the trading day on which the  Cash Bonus is paid; provided that the Company has a sufficient number of shares available for  issuance  and  not  otherwise  reserved  under  stockholder  approved equity  incentive  plans.   Notwithstanding the foregoing, all payments of Cash Bonuses shall be made on a date that allows  such payments to comply with the requirements of Section 409A of the Code.  Executive shall be  eligible to receive a pro rata portion of the Cash Bonus if Executive’s employment is less than a  full year or ceases prior to the end of the calendar year for which a Cash Bonus has not yet been  paid.                (c)   Options.   Upon execution of this Agreement, the Company shall grant to  the  Executive  under  the  Company’s  Third  Amended  and  Restated  Equity  Incentive  Plan  non- qualified stock options (the “Options”) to purchase up to Two Million Five Hundred Seventy Eight  Thousand Nine Hundred Forty Seven (2,578,947) shares of the Company’s common stock at an  exercise price equal to the last sale price of the common stock on the date of this Agreement.   The  Options shall be exercisable until the ten (10) year anniversary of the date of this Agreement and  shall vest subject to the Executive remaining employed with the Company and based upon the  Company’s common stock achieving the following Target Prices as follows:                       Target Prices  Number of Option Shares                                                  Vesting                        $3.00                     736,842                        $5.00                     626,316                        $7.00                     515,789                        $9.00                     405,263                        $11.00                    294,737                   (d)   Withholding.  All  payments  made  under  this  Agreement  (including Base  Salary, Cash Bonuses, and other amounts) shall be subject to withholding for income taxes, payroll  taxes and other legally required deductions.               (e)   Automobile Allowance.  The Company will furnish the Executive with an  automobile appropriate for his level of position and shall pay to, or on behalf of, the Executive (in  addition to monthly lease or other payments) all of the related expenses for gasoline, insurance,  maintenance, repairs or any other costs associated with the Executive’s automobile.               (f)   Expenses.  The Company will reimburse the Executive for all reasonable  expenses incurred by him in the course of performing his duties under this Agreement that are  consistent with the Company’s policies in effect at that time with respect to travel, entertainment  and other business expenses, subject to the Company’s requirements with respect to reporting and                                         3    135944.00100/114933105v.7  





 






     documentation  of  such  expenses.   All  expense  reimbursement  payments  for  documented   expenses shall be made in accordance with the Company expense reimbursement policy; provided,   however, that payments pursuant to this Section 1.3(f) shall be made within thirty (30) days after   the  date  that  the  Executive  notifies  the  Company  of  such  expense;  provided,  further,  that  the   Executive shall notify the Company of such expenses no later than six (6) months after the end of  the calendar year in which such expenses were incurred.                (g)   Vacation; Holiday Pay and Sick Leave.  The Executive shall be entitled to  five (5) weeks’ paid vacation in each calendar year, which if not taken during any year may be  carried forward to any subsequent year.  Executive shall receive holiday pay and paid sick leave  as  provided  to  other  executive  employees  of  the  Company.  Upon cessation  of  Executive’s  employment  for  any  reason,  Executive  shall  receive  pay  for  all accrued  and  unused  vacation,  calculated at his base salary rate in effect at the time of the cessation of his employment, provided  that the amount of vacation that Executive shall be entitled to accrue during the Term shall be in  accordance with Company policy.               (h)   Additional Benefits.  During the Employment Period, the Executive shall  be entitled to participate (for himself and, as applicable, his dependents) in the group medical, life,  401(k)  and  other  insurance  programs,  employee  benefit  plans  and  perquisites  which  may  be  adopted by the Board or the Compensation Committee, from time to time, for participation by the  Company’s  senior  management  or  executives,  as  well  as  dental,  life  and  disability  insurance  coverage, with payment of, or reimbursement for, such insurance premiums by the Company,  subject to, in all cases, the terms and conditions established by the Board with respect to such plans  (collectively, the “Benefits”); provided, however, that the Board, in its reasonable discretion, may  revise  the  terms  of  any  Benefits  so  long  as  such  revision  does not  have  a  disproportionately  negative impact on the Executive vis-à-vis other Company employees, to the extent applicable.               (i)   Life and Disability Insurance.  The Company shall, in accordance with the  Company’s policies, reimburse or pay on behalf of the Executive for up to $15,000 and $10,000  per year for Life and Disability Insurance premiums, respectively, with such reimbursements  made in the calendar year in which the expense is incurred.               (j)   Indemnification.  The Executive shall be entitled to indemnification by the  Company in the same circumstances and to the same extent as the other executive officers and  directors  of  the  Company,  which  indemnification  shall  in  no  event  be  less  favorable  to  the  Executive than the fullest scope of indemnification permitted by applicable  Delaware law (or any  such greater scope of indemnification provided by agreement or by the terms of the Company’s  Certificate of Incorporation or By-Laws to any executive officer or director of the Company).  The  Executive shall also be named as an additional insured under the directors’ and officers’ liability  insurance policy maintained by the Company and shall be entitled to the same level of coverage  provided thereby to the other executive officers and directors of the Company.               (k)   Stock Options.   In the event that the Company elects from time to time   during the Employment Period to award to its senior management or executives, generally, options   to purchase shares of the Company’s stock pursuant to any stock option plan or similar program,   the Executive shall be entitled to participate in any such stock option plan or similar program on a   basis consistent with the participation of other senior management or executives of the Company.                                          4      135944.00100/114933105v.7  





 






           1.4.   Term and Termination.                (a)   Duration.  The Employment Period shall commence on the Effective Date   and shall terminate three (3) years from the Effective Date (the “Term”), unless earlier terminated   by  the  Company  or  the  Executive  as  set  forth  in  this  Section  1.4.  The  Term  shall  renew   automatically for one-year periods, unless either party gives the other party written notice of its   intention not to renew the Agreement no later than 90 days prior to the expiration of the then   current Term.  The Employment Period shall be terminated prior to the then-applicable expiration   of  the  Term  upon  the  first  to  occur  of  (i)  termination  of  the  Executive’s  employment  by  the   Company for Cause, (ii) termination of the Executive’s employment by the Company without   Cause, (iii) the Executive’s resignation with Good Reason, (iv) the Executive’s resignation other   than for Good Reason or (v) the Executive’s death or Disability.  The Executive shall not terminate   the Employment Period, with or without Good Reason, unless he gives the Company written notice   that  he  intends  to  terminate  the  Employment  Period  at  least  90 days  prior  to  the  Executive’s   proposed Termination Date.  As a condition to Executive receiving any payments or benefits under   Section  1.4(b)  or  Section  1.4(c), the  Executive  shall  execute  and  deliver  to  the  Company  the   General Release in the form attached hereto as Exhibit A.                (b)   Severance  Upon  Termination  Without  Cause,  Upon  Resignation  by  the   Executive For Good Reason or Failure to Renew Term.  If the Employment Period is terminated   by the Company without Cause or if the Executive resigns for Good Reason, or if the Company   fails  to  renew  the  Term  (in  which  case  termination  of  the  Executive’s  employment  shall  be   effective at the expiration of the then-current Term), then the Executive will be entitled to receive   (1) any unpaid Base Salary through and including the Termination Date and any other amounts,   including any unpaid Cash Bonuses or other entitlements then due and owing to the Executive as   of the Termination Date; (2) an amount equal to the Executive’s Base Salary (at the rate in effect   on the date the Executive’s employment is terminated) for the greater of the remainder of the Term   or a two-year period following the Executive’s termination of employment as described in this   Section 1.4(b) plus two times the average annual Cash Bonuses paid in the immediate preceding   12 months, payable in a lump sum on the date immediately following the Executive’s “separation   from service” (within the meaning of Section 409A of the Code) occurring in connection with such   termination and (3) continue to participate in the Company’s group medical plan on the same basis   as he previously participated or receive payment of, or reimbursement for, COBRA premiums (or,   if COBRA coverage is not available, reimbursement of premiums paid for other medical insurance   in an amount not to exceed the COBRA premium) for a 36-month period following the Executive’s   termination  of  employment; provided  that  if  the  Executive  is  provided  with  health  insurance   coverage by a successor employer, any such coverage and reimbursement by the Company shall   cease.   Each of clauses (1), (2) and (3) in the preceding sentence is referred to as a “Severance   Payment”.  The Executive also shall be entitled to receive payment for all reimbursable expenses   or other entitlements then due and owing to the Executive as of the Termination Date including   payments in full for any amounts due and owing under Section 1.3(e).   If the Executive breaches  his obligations under Section 1.6, 1.7, 1.8 or 1.9 of this Agreement, the Company’s obligation to   make any Severance Payments and provide any Benefits shall cease as of the date of such breach;   provided, that if the Executive cures such breach within 10 days of receiving written notice from   the Company of such breach (which notice the Company shall provide promptly to the Executive   after learning of such breach), the Company shall promptly pay all Severance Payments not made                                          5      135944.00100/114933105v.7  





 






     during such period of dispute and resume making Severance Payments and providing Benefits   promptly following such cure.                  (c)   Severance  upon  a  Change  of  Control.  Anything  contained  herein to  the   contrary notwithstanding, in the event the Executive’s employment hereunder is terminated within   twelve  (12) months  following  a  Change  of  Control  by the  Company  without  Cause  or  by  the   Executive with Good Reason, the Executive shall be entitled to receive the Severance Payment as   described in sub-section (b)(2) above multiplied by two (2) minus $100; provided, however, that   if such lump sum Severance Payment, either alone or together with other payments or benefits,   either cash or non-cash, that the Executive has the right to receive from the Company, including,   but not limited to, accelerated vesting or payment of any deferred compensation, options, stock   appreciation  rights  or  any  benefits  payable  to the  Executive  under  any  plan  for  the  benefit  of   employees, would constitute an “excess parachute payment” (as defined in Section 280G of the  Code), then such lump sum severance payment or other benefit shall be reduced to the largest  amount that will not result in receipt by the Executive of an “excess parachute payment.” The  determination of the amount of the payment described in this subsection shall be made by the  Company’s  independent  auditors  at  the  sole  expense  of  the  Company.  For  purposes  of  clarification  the  value  of  any options  described  above  will  be determined  by  the  Company’s  independent auditors using a Black-Scholes valuation methodology.  Upon a Change of Control,  notwithstanding  the  vesting  and  exercisability  schedule  in  any stock  option  or  other  grant  agreement between the Company and the Executive, all unvested stock options, shares of restricted  stock and other equity awards granted by the Company to the Executive pursuant to any such  agreement shall immediately vest, and all such stock options shall become exercisable and shall  remain  exercisable  for  the  lesser  of  180  days  after  the  date  of  the  Change  of  Control  or  the  remaining term of the applicable option.               (d)   Death  and  Disability.  In  the  event  of  the  death  or  Disability of  the  Executive, the Company shall pay the Executive his Base Salary through the Termination Date, at  the rate then in effect, and all expenses or accrued Benefits arising prior to such termination which  are payable to the Executive pursuant to this Agreement through the Termination Date.  Any other  rights and benefits the Executive may have under employee benefit plans and programs of the  Company generally in the event of the Executive’s Disability shall be determined in accordance  with  the  terms  of  such  plans  and  programs.  In  the event  of  Executive’s  death,  any  rights  and  benefits that the Executive’s estate or any other person may have under employee benefit plans  and programs of the Company generally in the event of the Executive’s death shall be determined  in accordance with the terms of such plans and programs.               (e)   Salary  and  Other  Payments  Through  Termination.  If  the  Executive’s  employment with the Company is terminated during the Term (i) by the Company for Cause or  (ii) by the Executive other than for Good Reason, the Executive will be entitled to receive his Base  Salary at the rate then in effect through the Termination Date, but will not be entitled to receive  any Severance Payments or Benefits after the Termination Date.  The Executive shall be entitled  to receive payment for all reimbursable expenses or other entitlements then due and owing to the  Executive as of the Termination Date.                  (f)   Other Rights.  Except as set forth in this Section 1.4 and Section 1.3, all of   the  Executive’s  rights to  receive  Base  Salary  at  the rate  then in effect, Benefits and the Cash                                         6      135944.00100/114933105v.7  





 






     Bonuses  hereunder  (if  any)  which  accrue  or  become  payable  after  the  termination  of  the   Employment Period shall cease upon such termination.                (g)   Continuing Benefits. Notwithstanding Section 1.4(f), termination pursuant  to  this  Section  1.4  shall  not  modify  or  affect  in  any  way  whatsoever  any  vested  right  of  the  Executive to benefits payable under any retirement or pension plan or under any other employee  benefit plan of the Company, and all such benefits shall continue, in accordance with, and subject  to, the terms and conditions of such plans, to be payable in full to, or on account of, the Executive  after such termination.               (h)   No Duty of Mitigation.  The Executive shall not be required to mitigate the  amount of any payment provided for in this Article I by seeking other employment or otherwise.         1.5.  Intentionally Omitted.         1.6.  Confidential Information.               (a)   The Executive shall not disclose or, directly or indirectly, use at any time,  during the Employment Period or thereafter, any Confidential Information (as defined below) of  which the Executive is or becomes aware, whether or not such information is developed by him,  alone  or  with  others,  except  to  the  extent  that  (i)  such  disclosure  or  use  is  required  by  the  Executive’s performance of the duties assigned to the Executive by the Board, (ii) the Executive  is required by subpoena or similar process to disclose or discuss any Confidential Information,  provided, that in such case, the Executive shall promptly inform the Company in writing of such  event, shall cooperate with the Company in attempting to obtain a protective order or to otherwise  limit or restrict such disclosure to the greatest extent possible, and shall disclose only that portion  of the Confidential Information as is strictly required, or (iii) such Confidential Information is or  becomes generally known to and available for use by the public, other than as a result of any action  or inaction directly or indirectly by the Executive.  At the Company’s expense, the Executive shall  take all appropriate steps to safeguard Confidential Information and to protect it against disclosure,  misuse, espionage, loss and theft.  The Executive acknowledges that the Confidential Information  obtained by him during the course of his employment with the Company is the sole and exclusive  property of the Company and its Subsidiaries, as applicable.               (b)   The  Executive  understands  that  the  Company  and  its  Subsidiaries  will  receive  from  third  parties  confidential  or  proprietary  information  (“Third Party Information”)  subject to a duty on the part of the Company and its Subsidiaries to maintain the confidentiality of  such information and to use it only for certain limited purposes.  During the Employment Period  and in the period specified in such confidentiality agreements, and without in any way limiting the  provisions  of   Section  1.6(a)   above,  the  Executive  will  hold  Third  Party  Information  in  confidence, consistent with the obligations applicable to Confidential Information of the Company   generally, and will not disclose to anyone (other than personnel and agents of the Company or its   Subsidiaries who need to know such information in connection with their work for the Company   or its Subsidiaries) or use, except in connection with his work for the Company or its Subsidiaries,   Third Party Information unless expressly authorized by the Board in writing.                                             7      135944.00100/114933105v.7  





 






                 (c)   As  used  in  this  Agreement,  the  term  “Confidential Information”  means  information that is not generally known to the public and that is related in any way to the actual or  anticipated  business  of  the  Company,  its  Subsidiaries,  its  Affiliates  or  any  of  their  respective  predecessors in interest, including but not limited to (i) business development, growth and other  strategic business plans, (ii) properties available for acquisition, financing development or sale,  (iii) accounting and business methods, (iv) services or products and the marketing of such services  and products, (v) fees, costs and pricing structures, (vi) designs, (vii) analysis, (viii) drawings,  photographs and reports, (ix) computer software, including operating systems, applications and  program listings, (x) flow charts, manuals and documentation, (xi) data bases, (xii) inventions,  devices,  new  developments,  methods  and  processes,  whether  patentable  or  unpatentable  and  whether  or  not  reduced  to  practice,  (xiii)  copyrightable  works,  (xiv)  all  technology  and  trade  secrets, (xv) confidential terms of material agreements and customer relationships, and (xvi) all  similar  and  related  information  in  whatever  form  or  medium.  Confidential  Information  also  expressly excludes Executive’s general know-how and business contacts to the extent that the use  of such information does not violate or breach the terms of Section 1.9.         1.7.  Inventions  and  Patents.  Executive  acknowledges  that  all  discoveries,  concepts,   ideas,  inventions,  innovations,  improvements,  developments,  products,  methods,  processes,   techniques, programs, designs, analyses, drawings, reports, patents, copyrightable works and mask   works (whether or not including any Confidential Information) and all issuances, registrations or   applications related thereto, all other proprietary information or intellectual property and all similar   or related information (whether or not patentable) conceived, developed, contributed to, made, or   reduced to practice by Executive (either alone or with others) while employed by Company or any   of its Subsidiaries or Affiliates or any of their respective predecessors in interest (including prior   to the date of this Agreement) or using the materials, facilities or resources of the Company or any   of its Subsidiaries or Affiliates or any of their respective predecessors in interest (collectively,   “Company Works”)  is  the  sole  and  exclusive  property  of  the  Company  and  its  Subsidiaries.   Executive hereby assigns all right, title and interest in and to all Company Works to the Company   and its Subsidiaries and waives any moral rights he may have therein, without further obligation   or consideration.  Any copyrightable work prepared in whole or in part by the Executive will be   deemed “a work made for hire” under Section 201(b) of the 1976 Copyright Act, and the Company   and its Subsidiaries shall own all of the rights comprised in the copyright therein.  The Executive   shall  promptly  and  fully  disclose  in  writing  all  Company  Works to  the  Company  and  shall   cooperate with the Company and its Subsidiaries to protect, maintain and enforce the Company’s   and its Subsidiaries’ interests in and rights to such Company Works (including, without limitation,   providing  reasonable  assistance  in  securing  patent  protection  and  copyright  registrations  and   executing  all  affidavits,  assignments,  powers-of-attorney  and  other  documents  as  reasonably   requested  by  the  Company,  whether  such  requests  occur  prior  to or  after  termination  of  the   Executive’s employment with the Company).            1.8.  Delivery  of  Materials  Upon  Termination  of  Employment.  As  requested  by  the  Company from time to time and in any event upon the termination of the Executive’s employment  with the Company, the Executive shall promptly deliver to the Company, or at the Company’s  election destroy, all copies and embodiments, in whatever form or medium, of all Confidential  Information, Company Works and other property and assets of the Company and its Subsidiaries  in the Executive’s possession or within his control (including, but not limited to, office keys, access  cards, written records, notes, photographs, manuals, notebooks, documentation, program listings,                                         8      135944.00100/114933105v.7  





 






     flow charts, magnetic media, disks, diskettes, tapes computers and handheld devices (including all   software,  files  and  documents  thereon) and any other materials containing  any  Confidential   Information  or  Company  Works)  irrespective  of  the  location  or  form  of  such  material  and,  if   requested by the Company, shall provide the Company with written confirmation that all such   materials have been delivered to the Company or destroyed, as applicable.         1.9.  Non-Compete and Non-Solicitation Covenants.               (a)   The Executive acknowledges and agrees that the Executive’s services to the  Company and its Subsidiaries are unique in nature and that the Company and its Subsidiaries  would be irreparably damaged if the Executive were to provide similar services to any Person  competing  with  the  Company  and  its  Subsidiaries  or  engaged  in  the  Business.  The  Executive  further acknowledges that, in the course of his employment with the Company, he will become  familiar  with  the  Company’s  and  its’  Subsidiaries’  trade  secrets  and  with  other  Confidential  Information.  During  the  Noncompete  Period,  he  shall  not,  directly  or  indirectly,  whether  for  himself or for any other Person, permit his name to be used by or participate in any business or  enterprise (including, without limitation, any division, group or franchise of a larger organization)  that engages or proposes to engage in the Business in the Restricted Territories, other than the  Company and its Subsidiaries or except as otherwise directed or authorized by the Board.  For  purposes of this Agreement, the term “participate in” shall include, without limitation, having any  direct or indirect interest in any Person, whether as a sole proprietor, owner, stockholder, partner,  member,  joint  venturer,  creditor  or  otherwise,  or  rendering  any  direct  or  indirect  service  or  assistance to any Person (whether as a director, officer, supervisor, employee, agent, consultant or   otherwise).  Nothing herein will prohibit the Executive from mere passive ownership of not more   than five percent (5%) of the outstanding stock of any class of a publicly held corporation whose   stock is traded on a national securities exchange or in the over-the-counter market.  As used herein,   the phrase “mere passive ownership” shall include voting or otherwise granting any consents or   approvals  required  to  be  obtained  from  such  Person  as  an  owner of  stock  or  other  ownership   interests in any entity pursuant to the charter or other organizational documents of such entity, but   shall not include, without limitation, any involvement in the day-to-day operations of such entity.                (b)   During  the  Nonsolicitation  Period,  the  Executive  will  not  directly,  or  indirectly  through  another  Person,  solicit,  induce  or  attempt  to  induce any  customer,  supplier,  licensee, or other business relation of the Company or any of its Subsidiaries, or solicit, induce or  attempt  to  induce  any  person  who  is,  or  was  during  the  then-most  recent  12-month  period,  a  corporate officer, general manager or other employee of the Company or any of its Subsidiaries to  terminate such employee’s employment with the Company or any of its Subsidiaries, or hire any  such  person  unless  such  person’s employment  was  terminated  by  the  Company  or  any  of  its  Subsidiaries, or in any way interfere with the relationship between any such customer, supplier,  licensee, employee or business relation and the Company or any of its Subsidiaries.  The Executive  acknowledges and agrees that the Company and its Subsidiaries would be irreparably damaged if  the Executive were to breach any of the provisions contained in this Section 1.9(b).                  (c)   Executive acknowledges that this Agreement, and specifically, this Section   1.9,  does  not  preclude  Executive  from  earning  a  livelihood,  nor  does  it  unreasonably  impose   limitations on Executive’s ability to earn a living.  In addition, Executive agrees and acknowledges                                          9      135944.00100/114933105v.7  





 






     that the potential harm to the Company of its non-enforcement outweighs any harm to Executive   of its enforcement by injunction or otherwise.          1.10. Enforcement.  If, at the time of enforcement of Section 1.6, 1.7, 1.8, 1.9 or 1.10, a   court holds that the restrictions stated herein are unreasonable under circumstances then existing,   the Parties agree that, to the extent permitted by applicable law, the maximum period, scope or   geographical area reasonable under such circumstances will be substituted for the Noncompete   Period, scope or area.  Because the Executive’s services are unique and because the Executive has   access to Confidential Information and Company Works, the Parties agree that money damages   would be an inadequate remedy for any breach of   Section 1.6, 1.7, 1.8, 1.9 or 1.10.  Therefore,   in the event of a breach or threatened breach of Section 1.6, 1.7, 1.8, 1.9 or 1.10, the Company or   any of its Subsidiaries or any of their respective successors or assigns may, in addition to other   rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific   performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the   provisions hereof (without posting a bond or other security).  The Parties hereby acknowledge and   agree that (a) performance of the services of the Executive hereunder may occur in jurisdictions   other than the jurisdiction whose law the Parties have agreed shall govern the construction, validity   and  interpretation  of  this  Agreement,  (b)  the  law  of  the  State  of  New  York  shall  govern   construction, validity and interpretation of this Agreement to the fullest extent possible, and (c)   Section  1.6,  1.7,  1.8,  1.9  or  1.10  shall  restrict  the  Executive  only  to  the  extent  permitted  by   applicable law.          1.11. Survival.  Sections 1.6, 1.7, 1.8, 1.9 and 1.10 will survive and continue in full force   in accordance with their terms notwithstanding any termination of the Employment Period.                                         ARTICLE II.                                 DEFINED TERMS            2.1.  Definitions.  For  purposes  of  this  Agreement,  the  following  terms  will  have  the  following meanings:                   “Adjusted EBITDA”  shall  mean  for  any  period,  for  the  Company  and  its   subsidiaries on a consolidated basis (without duplication), an amount equal to (a) consolidated net   income (as determined in accordance with generally accepted accounting principles of the United   States of America as in effect from time to time) (“Consolidated Net Income”) for such period,   minus, (b) to the extent included in calculating Consolidated Net Income, the sum of, without   duplication, (i) income tax credits for such period, and (ii) gain from extraordinary or non-recurring   items  for  such  period  (including,  without  limitation,  non-cash items  related  to  purchase   accounting), plus (c) the following to the extent deducted in calculating such Consolidated Net   Income, (i) interest expense and other finance costs (whether cash or non-cash) for such period (ii)   the provision for federal, state, local and foreign income taxes for such period, (iii) the amount of   depreciation and amortization expense for such period, (iv) the transaction fees, costs and expenses   incurred  in  connection  with  any  subsequent  asset,  brand,  stock acquisition  or  joint  venture  or   similar transaction in such period, (v) all other extraordinary or non-recurring non-cash charges                                         10      135944.00100/114933105v.7  





 






     (including, without limitation, non-cash items related to purchase accounting and non-cash items   related to earn-outs) and (vi) non-cash stock or equity compensation in such period, other than   non-cash compensation paid to the Executive pursuant to Section 1.3(b) hereof.                   “Business”  means  the  business  of  acquiring  and  licensing  consumer  brands   worldwide.                     “Cause” means with respect to the Executive, the occurrence of one or more of   the following:  (i) conviction of a felony involving moral turpitude, misappropriation of Company  property,  embezzlement  of  Company  funds  or  violation  of  the  securities  laws  relating  to  or  affecting the Company, (ii) persistent and repeated refusal to comply with no less than three written  directives of the Board with respect to an item that the Board deems material to the business and/or  operations of the Company, (iii) reporting to work under the influence of alcohol or illegal drugs,  or the use of illegal drugs (whether or not at the workplace), or (iv) any willful breach of Section  1.6, 1.7, 1.8 or 1.9 of this Agreement.  Notwithstanding the foregoing, termination by the Company  for  Cause  (other  than  pursuant  to  clause  (i)  above)  shall  not  be  effective  until  and  unless  (i)  Executive fails to cure such alleged act or circumstance within 30 days of receipt of notice thereof,  to the satisfaction of the Board in the exercise of its reasonable judgment (or, if within such 30- day period the Executive commences and proceeds to take all reasonable actions to effect such  cure, within such reasonable additional time period (no longer than sixty (60) days) as may be  necessary), and (ii) notice of intention to terminate for Cause has been given by the Company  within thirty (30) days after the Board learns of the act, failure or event constituting Cause, and  (iii) the Board has voted (at a meeting of the Board duly called and held as to which termination  of Executive is an agenda item) by a vote of at least two-thirds of the members of the Board (other  than Executive if Executive is a Board member) to terminate Executive for Cause after Executive  has been given notice of the particular acts or circumstances which are the basis for the termination  for Cause and has been afforded an opportunity to appear with counsel and present his positions  at such meeting and to present his case thereat, and (iv) the Board has given notice of termination  to Executive within five days after such meeting voting in favor of termination.                   “Change of Control” means the occurrence of any of the following (i) a merger  or consolidation to which the Company is a party (other than one in which the stockholders of the  Company  prior  to  the  event  own  a  majority  of  the  voting  power  of  the  surviving  or  resulting  corporation) (ii) a sale, lease, transfer, exclusive license or other disposition of all or substantially  all of the assets of the Company, (iii) a sale or transfer by the Company’s stockholders of voting  control, in a single transaction or a series of transactions, or (iv) when, during any period of twelve  (12) consecutive months, the individuals who, at the beginning of such period, constitute the Board  (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority  thereof; provided, however, that a director who was not a director at the beginning of such twelve   (12)-month period shall be deemed to have satisfied such twelve (12) month requirement (and be   an Incumbent Director) if such director was elected by, or on the recommendation of or with the   approval of, at least a majority of the directors who then qualified as Incumbent Directors either   actually  (because  they  were  directors  at  the  beginning  of  such twelve  (12)-month  period)  or   through the operation of this proviso.                    “Code” means the Internal Revenue Code of 1986 and the Treasury regulations                                          11      135944.00100/114933105v.7  





 






     thereunder, each as amended from time to time.                    “Disability” shall have the meaning set forth in a policy or policies of long-term   disability insurance, if any, the Company obtains for the benefit of itself and/or its employees.  If   there is no definition of “disability” applicable under any such policy or policies, if any, then the   Executive shall be considered disabled due to mental or physical impairment or disability, despite   reasonable accommodations by the Company and its Subsidiaries, to perform his customary or   other comparable duties with the Company or its Subsidiaries immediately prior to such disability   for a period of at least 120 consecutive days or for at least 180 non-consecutive days in any 12-  month period.                    “Effective Date” means January 1, 2019.                    “Fiscal Year” means the fiscal year of the Company and its Subsidiaries.                                  “GAAP” – Means in accordance with generally accepted account principles and   consistent with the Company’s revenue recognition policy.                   “Good Reason” means the occurrence, without the Executive’s written consent,  of one or more of the following events:  (i) the Company reduces the amount of Executive’s Base  Salary or target or Maximum Cash Bonus, (ii) the Company requires that the Executive relocate  his principal place of employment to a site that is more than 50 miles from the Company’s offices  in the New York area or if the Company changes the location of its headquarters without the  consent of Executive to a location that is more than 50 miles from such location, (iii) the Company  materially reduces the Executive’s responsibilities or removes the Executive from the position of  Chief Executive Officer other than pursuant to a termination of his employment for Cause, or upon  the Executive’s death or Disability or (iv) the Company otherwise materially breaches the terms  of this Agreement; provided that no such event shall constitute Good Reason hereunder unless (a)  the Executive shall have given written notice to the Company of the Executive’s intent to resign  for Good Reason within 30 days after the Executive becomes aware of the occurrence of any such  event, which notice shall describe in reasonable detail the event or events constitute the basis for  the Executive’s intention to resign for Good Reason and (b) such event or occurrence, if a breach  susceptible to cure, shall not have been cured or otherwise shall not have been resolved to the  Executive’s reasonable satisfaction, in each case within 30 days of the Company’s receipt of such  notice.  In such case the Executive’s resignation shall become effective on the 61st day after the  Company’s receipt of the aforementioned notice.                   “Net Sales” means wholesale and retail sales of products directly by the Company  (including under its brands and private label) to its customers, including through direct-response  television (i.e., QVC, Inc. and The Home Shopping Network), less any returns, trade discounts,   charge-backs.                                “Noncompete Period” means the Employment Period and six months thereafter.                    “Nonsolicitation Period” means the Employment Period and one year thereafter.                                              12      135944.00100/114933105v.7  





 






                “Person”  means  an  individual,  a  partnership,  a  corporation,  a  limited liability  company,  an  association,  a  joint stock  company,  a  trust,  a  joint  venture,  an  unincorporated  organization,  or  the  United  States  of  America  any  other  nation,  any  state  or  other  political  subdivision  thereof,  or  any  entity  exercising  executive,  legislative,  judicial,  regulatory  or  administrative functions of government.                  “Restricted Territories”  means  (i)  the  United  States  and  its  territories  and  possessions and (ii) any foreign country in which the Company engages  in  business  as  of  the  Termination Date.                  “Subsidiary” means, with respect to any Person, any corporation, limited liability  company, partnership, association, or business entity of which (i) if a corporation, a majority of  the  total  voting  power  of  shares  of  stock  entitled  (without  regard  to  the  occurrence  of  any  contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned  or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that  Person or a combination thereof, or (ii) if a limited liability company, partnership, association, or  other  business  entity  (other  than  a  corporation),  a  majority  of  partnership  or  other  similar  ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person  or one or more Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person  or Persons shall be deemed to have a majority ownership interest in a limited liability company,  partnership,  association,  or  other  business  entity  (other  than a  corporation)  if  such  Person  or  Persons shall be allocated a majority of limited liability company, partnership, association, or other  business entity gains or losses or shall be or control any managing director or general partner or  manager or managing member of such limited liability company, partnership, association, or other  business entity.  For purposes hereof, references to a Subsidiary of any Person shall be given effect  only at such times that such Person has one or more Subsidiaries, and, unless otherwise indicated,  the term Subsidiary refers to a Subsidiary of the Company.                   “Target Price”  shall  mean  the  average  closing  sale  price  of  the  Company’s  common stock for any ten (10) consecutive trading days.                              “Termination Date” means the effective date of the Executive’s termination of  employment with the Company.         2.2.  Other Definitional Provisions.               (a)   Section references contained in this Agreement are references to sections in  this  Agreement,  unless  otherwise  specified.  Each  defined  term used in this Agreement has a  comparable meaning when used in its plural or singular form.  Each gender-specific term used in  this  Agreement  has  a  comparable  meaning  whether  used  in  a  masculine,  feminine  or  gender- neutral form.               (b)   Whenever the term “including” (whether or not that term is followed by the  phrase  “but not limited to”  or  “without limitation”  or  words  of  similar  effect)  is  used  in  this  Agreement in connection with a listing of items within a particular classification, that listing will  be interpreted to be illustrative only and will not be interpreted as a limitation on, or an exclusive  listing of, the items within that classification.                                        13    135944.00100/114933105v.7  





 






                                     ARTICLE III.                             MISCELLANEOUS TERMS              3.1.  Defense of Claims. The Executive agrees that, during the Employment Period, and   for a period of six months after termination of the Executive’s employment, upon request by the   Company, the Executive shall reasonably cooperate with the Company in connection with any   matters  the  Executive  worked  on  during  his  employment  with  the Company  and  any  related   transitional  matters.  In  addition,  during  the  Employment  Period  and  thereafter,  the  Executive   agrees to reasonably cooperate with the Company in the defense of any claims or actions that may   be made by or against the Company that affect the Executive’s prior areas of responsibility or   involve matters about which the Executive has knowledge, except if the Executive’s reasonable   interests  are  adverse  to  the  Company  in  such  claim  or  action  and  provided  that  after  the   Employment Period such level of cooperation shall be reasonable and shall take due account of   the Executive’s work and personal commitments. The Company agrees to promptly reimburse the   Executive for all of the Executive’s reasonable travel and other direct expenses incurred, or to be   reasonably incurred, to comply with the Executive’s obligations under this Section 3.1.            3.2.  Nondisparagement. The Executive agrees to refrain from (i) making, directly or   indirectly, any derogatory comments concerning the Company or its Subsidiaries or any current or   former officers, directors, employees or shareholders thereof or (ii) taking any other action with   respect to the Company or its Subsidiaries which is reasonably expected to result, or does result   in, damage to the business or reputation of the Company, its Subsidiaries or any of its current or   former officers, directors, employees or shareholders.  The Company agrees to refrain from (i)   making, directly or indirectly, any derogatory comments concerning the Executive or (ii) taking   any other action with respect to the Executive which is reasonably expected to result, or does result   in, damage to the reputation of the Executive.  Notwithstanding anything to the contrary contained  herein, nothing in this Agreement shall prohibit or restrict either party from, truthfully and in good  faith: (i) making any disclosure of information required by law; (ii) providing information to, or  testifying  or  otherwise  assisting  in  any  investigation  or  proceeding  brought  by,  any  federal  regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the  Company’s or the Executive’s designated legal, compliance or human resources officers; or (iii)  filing,  testifying,  participating  in  or  otherwise  assisting  in a  proceeding  relating  to  an  alleged  violation of any federal, state or municipal law relating to fraud, or any rule or regulation of the   Securities and Exchange Commission or any self-regulatory organization.          3.3.  Source  of  Payments.  All  payments  provided  under  this  Agreement, other than   payments made pursuant to a plan which provides otherwise and except as otherwise provided   herein, shall be paid in cash from the general funds of the Company, and no special or separate   fund shall be established, and no other segregation of assets shall be made, to assure payment. The   Executive  shall  have  no  right,  title  or  interest  whatsoever  in or  to  any  investments  which  the   Company or its Subsidiaries may make to aid the Company in meeting its obligations hereunder.    To the extent that any person acquires a right to receive payments from the Company hereunder,   such right shall be no greater than the right of an unsecured creditor of the Company.          3.4.  Notices. Any notice provided for in this Agreement must be in writing and must be   either  personally  delivered,  mailed  by  first  class  mail  (postage  prepaid  and  return  receipt                                         15      135944.00100/114933105v.7  





 






   requested), sent by reputable overnight courier service (charges prepaid) or sent by facsimile (with  receipt confirmed) to the recipient at the address or facsimile number indicated below:                     To the Company:                  XCel Brands, Inc.               1333 Broadway, 10th Floor              New York, New York 10018                            With a copy (which shall not constitute notice) to:                              Blank Rome LLP               The Chrysler Building              405 Lexington Avenue              New York, NY 10174-0208              Attn:  Robert Mittman, Esquire              Facsimile: (212) 885-5557                                To the Executive:                  Robert W. D’Loren              c/o XCel Brands, Inc.              1333 Broadway, 10th Floor              New York, New York 10018                            With copies to:                  James F. O’Brien, Esq.               500 North Broadway, Suite 105               Jericho, NY 11753               Telephone: (516) 822-9000               Telecopy:   (516) 822-1050               Attention: James F. O’Brien, Esq.    or such other address or to the attention of such other Person as the recipient Party will have  specified by prior written notice to the sending Party.  Any notice under this Agreement will be  deemed to have been given when so delivered or sent.         3.5.  Severability.  Subject to the express provisions of Section 1.10 relating to certain  specified changes, whenever possible, each provision of this Agreement will be interpreted in such  manner as to be effective and valid under applicable law, but if any provision of this Agreement  is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any  jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any                                         16    135944.00100/114933105v.7  





 






     other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction   as if such invalid, illegal or unenforceable provision had never been contained herein.          3.6.  Complete  Agreement.  This  Agreement  embodies  the  complete  agreement  and  understanding  among  the  Parties  with  regard  to  the  subject  matter  hereof  and  supersedes  and  preempts any prior understandings, agreements or representations by or among the Parties, written   or oral, which may have related to the subject matter hereof in any way.  To the extent that this   Agreement provides greater benefits to the Executive or fewer obligations of the Executive than   available or set forth under the Company’s employee handbook or other corporate policies, then   this Agreement shall prevail.          3.7.  Counterparts.  This Agreement may be executed in separate counterparts, each of   which is deemed to be an original and all of which taken together constitute one and the same   agreement.            3.8.  Assignment.  Without the Executive’s consent, the Company may not assign its   rights and obligations under this Agreement except (i) to a “Successor” (as defined below) or (ii)  to  an  entity  that  is  formed  and  controlled  by  the  Company  or  any  of  its  Subsidiaries.  This  Agreement is personal to the Executive, and the Executive shall not have the right to assign the  Executive’s interest in this Agreement, any rights under this Agreement or any duties imposed  under  this  Agreement,  nor  shall  the  Executive  have  the  right  to  pledge,  hypothecate,  transfer,  assign or otherwise encumber the Executive’s right to receive any form of compensation hereunder  without the prior written consent of the Board.  As used in Sections 3.8   and   3.9, “Successor”  shall include any Person that at any time, whether by purchase, merger or otherwise, directly or  indirectly acquires all or substantially all of the assets of, or ownership interests in, the Company  and its Subsidiaries.         3.9.  Successors  and  Assigns.  This  Agreement  is  intended  to  bind  and  inure  to  the  benefit of and be enforceable by the Company, the Executive, and their respective heirs, successors  and permitted assigns.         3.10. Choice of Law.  This Agreement and the performance of the parties hereunder shall  be governed by the internal laws (and not the law of conflicts) of the State of New York. Any  claim or controversy arising out of or in connection with this Agreement, or the breach thereof,  shall be adjudicated exclusively by the Supreme Court, New York County, State of New York, or  by a federal court sitting in Manhattan in New York City, State of New York. The parties hereto  agree to the personal jurisdiction of such courts and agree to accept process by regular mail in  connection with any such dispute.         3.11. Waiver  of  Jury  Trial.  AS  A SPECIFICALLY  BARGAINED  FOR  INDUCEMENT  FOR  EACH  OF  THE  PARTIES  HERETO  TO  ENTER  INTO  THIS  AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL),  EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY  LAWSUIT  OR  PROCEEDING  RELATING  TO  OR  ARISING  IN  ANY  WAY  FROM  THIS   AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.                                           17      135944.00100/114933105v.7  





 






           3.12. Legal Fees and Court Costs.  In the event that any action, suit or other proceeding   in law or in equity is brought to enforce the provisions of this Agreement, and such action results   in the award of a judgment for money damages or in the granting of any injunction in favor of the   Company, all expenses (including reasonable attorneys’ fees) of the Company in such action, suit   or other proceeding shall be paid by the Executive. In the event that any action, suit or other   proceeding in law or in equity is brought to enforce the provisions of this Agreement, and such   action results in the award of a judgment for money damages or in the granting of any injunction   in favor of the Executive, all expenses (including reasonable attorneys’ fees and travel expenses)   of the Executive in such action, suit or other proceeding shall be paid by the Company.          3.13. Remedies.  Each Party will be entitled to enforce its rights under this Agreement   specifically, to recover damages and costs caused by any breach of any provision of this Agreement   and to exercise all other rights existing in its favor.  Subject to Section 3.12, nothing herein shall   prohibit any arbitrator or judicial authority from awarding attorneys’ fees or costs to a prevailing   Party in any arbitration or other proceeding to the extent that such arbitrator or authority may   lawfully do so.            3.14. Amendment and Waiver.  The provisions of this Agreement may be amended or   waived only with the prior written consent of the Company and the Executive, and no course of  conduct or failure or delay in enforcing the provisions of this Agreement will affect the validity,  binding effect or enforceability of this Agreement.         3.15. Third Party Beneficiaries.  This Agreement will not confer any rights or remedies  upon any Person other than the Parties and their respective successors and permitted assigns and   other than, in the event of the Executive’s death, his estate, to which all of Executive’s rights and   remedies set forth herein shall accrue.          3.16. The Executive’s Representations.  The Executive hereby represents and warrants   to  the  Company  that  (a)  the  execution,  delivery  and  performance  of  this  Agreement  by  the   Executive do not and shall not conflict with, breach, violate or cause a default under any contract,   agreement, instrument, order, judgment or decree to which the Executive is a party or by which he   is bound, (b) the Executive is not a party to or bound by any employment agreement, noncompete   agreement or confidentiality agreement with any other Person (or other agreement with any other   person containing a restriction on the Executive’s right to do business or obligating him to do   business with any other Person on a priority or preferential basis), (c) upon the execution and   delivery  of  this  Agreement  by  the  Company,  this  Agreement  shall  be  the  valid  and  binding   obligation of the Executive, enforceable in accordance with its terms and (d) upon the execution   and delivery of this Agreement by the Company, Executive shall not be in violation of clause (i)   set forth in the definition of Cause and shall not be disabled.         3.17. Amendment to Comply with Section 409A of the Code.  To the extent that this   Agreement or any part thereof is deemed to be a nonqualified deferred compensation plan subject   to Section 409A of the Code and the Treasury Regulations (including proposed regulations) and   guidance promulgated thereunder, (a) the provisions of this Agreement shall be interpreted in a   manner to the maximum extent possible to comply in good faith with Code Section 409A and (b)   the parties hereto agree to amend this Agreement for purposes of complying with Code Section   409A promptly upon issuance of any Treasury regulations or guidance thereunder, provided , that                                         18      135944.00100/114933105v.7  





 






   any such amendment shall not materially change the present value of the benefits payable to the  Executive hereunder or otherwise materially adversely affect the Executive, the Company, or any  affiliate of the Company, without the consent of such party.  With regard to any provision herein  that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by  Code  Section  409A,  (i)  the  right  to  reimbursement  or  in-kind  benefits  shall  not  be  subject  to  liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement,  or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for  reimbursement,  or  in-kind  benefits  to  be  provided,  in  any  other taxable year, and (iii) such  payments shall be made on or before the last day of the Executive’s taxable year following the  taxable year in which the expense was incurred.                                    [END OF PAGE]                          [SIGNATURE PAGE FOLLOWS]                                                  19    135944.00100/114933105v.7  





 






      IN WITNESS  WHEREOF,  the Parties have executed this Employment Agreement as of  the date first written above.                                               XCEL BRANDS, INC.                                              By:  ~~                                                     tie: c ~                                                ........-:: zwc~             w;;:                                                   Robert W. D'Loren                                         19    135944.00100/114933105v.7  





 






                                                                        EXHIBIT A                               FORM OF RELEASE                                                 I,  Robert  W.  D’Loren,  on  behalf  of  myself  and  my  heirs,  successors  and  assigns,  in  consideration of and subject to the performance by XCel Brands, Inc. a Delaware Corporation  (together with its Subsidiaries, the “Company”), of its material obligations under the Employment  Agreement  (the  “Employment Agreement”)  dated  as  of  the  Effective  Date  (as  defined  in  the  Employment Agreement) and Sections 3, 4, 7, 8, 10 and 12 below, do hereby release and forever  discharge as of the date hereof the Company and its Subsidiaries, all present and former directors,  officers,  agents,  representatives,  employees,  successors  and  assigns  of  the  Company  and  its  Subsidiaries, and all direct or indirect owners of each of foregoing (collectively, the “Released  Parties”) to the extent provided below.          1.    I understand that certain of the payments or benefits paid or granted to me under  Section 1.4(b) and Section 1.4(c) of the Employment Agreement represent, in part, consideration  for signing this Mutual General Release and are not salary, wages or benefits to which I was  already entitled. I understand and agree that I will not receive the payments and benefits specified  in Section 1.4(b) or Section 1.4(c) of the Employment Agreement (other than for any other unpaid  compensation, benefits and expenses to which I am entitled thereunder for employment prior to  termination) unless I execute this Mutual General Release and do not revoke this Mutual General  Release within the time period permitted hereafter or breach this Mutual General Release.          2.    Except as provided in paragraph 6 below, and except for compensation and benefits  and  equity  ownership  in  the  Company  I  am  entitled  to  under  the terms of the Employment  Agreement, I knowingly and voluntarily release and forever discharge the Released Parties from  any and all claims, controversies, actions, causes of action, cross-claims, counter-claims, demands,  debts,  compensatory  damages,  liquidated  damages,  punitive  or  exemplary  damages,  other  damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in  equity, both past and present (through the date of this Mutual General Release) and whether known  or unknown, suspected, or claimed against the Released Parties which I, my spouse, or any of my  heirs, executors, administrators or assigns, may have, which arise out of or are connected with my  employment  with,  or  my  separation  from,  the  Company  (including,  but  not  limited  to,  any  allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended;  the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended  (including the Older Workers Benefit Protection Act) (except as provided in paragraph 6 below);  the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family  and Medical Leave Act of 1993; the Civil Rights Act of 1866, as amended; the Worker Adjustment  Retraining  and  Notification  Act;  the  Employee  Retirement  Income  Security  Act  of  1974;  any  applicable  Executive  Order  Programs;  the  Fair  Labor  Standards  Act;  or  their  state  or  local  counterparts; or under any other federal, state or local civil or human rights law, or under any other  local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or  under common law; or arising under any policies, practices or procedures of the Company; or any  claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or  any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters)  (all of the foregoing collectively referred to herein as the “Claims”).                                           21    135944.00100/114933105v.7  





 






           3.    This  Release  is  mutual,  and  the Company  hereby  expressly  releases Robert W.  D’Loren, his successors, assigns, heirs, executors and administrators (“D’Loren Parties”) from all  claims and to the same extent as described in the preceding Section 2 .          4.    The Parties represent and acknowledge that they have not assigned or transferred  or purported to assign or transfer, to any person or entity, any right, claim, demand, cause of action,  or other matter mentioned or implied by this Mutual General Release.          5.    I represent, warrant and covenant to each of the Released Parties that at no time  prior  to  or  contemporaneous  with  my  execution  of  this  Mutual  General  Release  have  I  (i)  knowingly engaged in any wrongful conduct against, on behalf of or as the representative or agent  of the Company; (ii) breached any provision of the Employment Agreement; or (iii) violated any  state,  federal,  local  or  other  law,  including  any  securities  laws  or  regulations,  including  the  regulations of FINRA, or any exchange, inter-dealer quotation system or the Over-the-Counter  Bulletin Board or other trading venue on which the Company’s securities are traded.  Each Party  represents,  warrants  and  covenants  to  each  of  the  other  Parties  that  at  no  time  prior  to  or  contemporaneous with his or its execution of this Mutual General Release has any Party filed or  caused or knowingly permitted the filing or maintenance, in any state, federal or foreign court, or  before any local, state, federal or foreign administrative agency or other tribunal, any charge, claim  or action of any kind, nature and character whatsoever (“Claim”), known or unknown, suspected  or unsuspected, that is pending on the date hereof against the other Parties which is based in whole  or  in  part  on  any  matter  referred  to  in  Sections  2  and  3  above;  and,  subject  to  each  Party’s  performance under this Mutual General Release, to the maximum extent permitted by law each  Party shall be prohibited from filing or maintaining, or causing or knowingly permitting the filing  or maintaining, of any such Claim in any such forum.          6.    I agree that this Mutual General Release does not waive or release any rights or  claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after  the date I execute this Mutual General Release. I acknowledge and agree that my separation from  employment with the Company in compliance with the terms of the Employment Agreement shall  not serve as the basis for any claim or action (including, without limitation, any claim under the  Age Discrimination in Employment Act of 1967).          7.    In signing this Mutual General Release, the Parties acknowledge and intend that it  shall  be  effective  as  a  bar  to  each  and  every  one  of  the  Claims  hereinabove  mentioned  or  implied.  The Parties expressly consent that this Mutual General Release shall be given full force  and effect according to each and all of its express terms and provisions, including those relating to  unknown  and  unsuspected  Claims  (notwithstanding  any  state  statute  that  expressly  limits  the  effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as  well  as  those  relating  to  any  other  Claims  hereinabove  mentioned  or  implied.  The  Parties  acknowledge and agree that this waiver is an essential and material term of this Mutual General  Release  and  that  without  such  waiver  the  Parties  would  not  have  agreed  to  the  terms  of  the  Employment Agreement.  The Parties further agree that in the event a claim is brought in violation  of this Mutual General Release, this Mutual General Release shall serve as a complete defense to  such Claims.  I further agree that I am not aware of any pending charge or complaint of the type                                         22    135944.00100/114933105v.7  





 






   described in paragraph 2 as of the execution of this General Release.          8.    The Parties agree that neither this Mutual General Release, nor the furnishing of  the consideration for this Mutual General Release, shall be deemed or construed at any time to be  an admission by any Released Party or the Executive of any improper or unlawful conduct.          9.    I agree that I will forfeit all cash amounts payable by the Company pursuant to the  Employment Agreement that would not have otherwise been paid but for my signing this Mutual  General Release if I challenge the validity of this Mutual General Release.          10.   The Parties agree that this Mutual General Release is confidential and agree not to  disclose any information regarding the terms of this Mutual General Release to any third party,  except  any  tax,  legal  or  other  counsel  consulted  regarding  the meaning  or  effect  hereof  or  as  required by law and except that the Company may disclose this Mutual General Release to its  affiliates and their representatives.  The Executive may also disclose information contained herein  to his immediate family.  The Parties will instruct each of the foregoing not to disclose the same  to anyone.          11.   Any non-disclosure provision in this Mutual General Release does not prohibit or  restrict me (or my attorney) or the Company or its attorney from responding to any inquiry about  this Mutual General Release or its underlying facts and circumstances by any governmental entity.          12.   The Parties specifically acknowledge their continuing obligations to one another  under the Employment Agreement, including without limitation under Section 1.6, Section 1.7,  Section 1.8, Section 1.9 and Section 3.1 of the Employment Agreement.            13.   Whenever  possible,  each  provision  of  this  Mutual  General  Release  shall  be  interpreted in such manner as to be effective and valid under applicable law, but if any provision  of this Mutual General Release is held to be invalid, illegal or unenforceable in any respect under  any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall  not affect any other provision or any other jurisdiction, but this Mutual General Release shall be  reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable  provision had never been contained herein.          14.   Capitalized terms used but not defined herein shall have the meaning given such  terms in the Employment Agreement.    BY SIGNING THIS MUTUAL GENERAL RELEASE, I REPRESENT AND AGREE THAT:                                                        a.   I HAVE READ IT CAREFULLY;                                   b.   I  UNDERSTAND  ALL  OF  ITS  TERMS  AND  KNOW  THAT  I  AM        GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS        UNDER  THE  AGE  DISCRIMINATION  IN  EMPLOYMENT  ACT  OF  1967,  AS        AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE        EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF 1990;                                         23    135944.00100/114933105v.7  





 






         AND  THE  EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT  OF  1974,  AS        AMENDED;                 c.   I VOLUNTARILY CONSENT TO EVERYTHING IN IT;                       d.   I  HAVE  BEEN  ADVISED  TO  CONSULT  WITH  AN  ATTORNEY        BEFORE  EXECUTING  IT  AND  I  HAVE  DONE  SO  OR,  AFTER  CAREFUL        READING  AND  CONSIDERATION,  I  HAVE  CHOSEN  NOT  TO  DO  SO  OF  MY        OWN VOLITION;                       e.   I  HAVE  HAD  AT  LEAST  21  DAYS  FROM  THE  DATE  OF  MY        RECEIPT  OF  THIS  RELEASE,  SUBSTANTIALLY  IN  ITS  FINAL  FORM  ON        _______________ __, _____, TO CONSIDER IT, AND THE CHANGES MADE SINCE        THE  _______________  __,  _____  VERSION  OF  THIS  RELEASE  ARE  NOT        MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;                       f.   THE CHANGES TO THE AGREEMENT SINCE _______________ ___,        _____ EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.                       g.   I  UNDERSTAND  THAT  I  HAVE  SEVEN  (7)  DAYS  AFTER  THE        EXECUTION  OF  THIS  RELEASE  TO  REVOKE  IT  AND  THAT  THIS  RELEASE        SHALL  NOT  BECOME  EFFECTIVE  OR  ENFORCEABLE  UNTIL  THE        REVOCATION PERIOD HAS EXPIRED;                       h.   I HAVE SIGNED THIS MUTUAL GENERAL RELEASE KNOWINGLY        AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED        TO ADVISE ME WITH RESPECT TO IT; AND                       i.   I  AGREE  THAT  THE  PROVISIONS  OF  THIS  MUTUAL  GENERAL        RELEASE  MAY  NOT  BE  AMENDED,  WAIVED,  CHANGED  OR  MODIFIED        EXCEPT  BY  AN  INSTRUMENT  IN  WRITING  SIGNED  BY  AN  AUTHORIZED        REPRESENTATIVE OF THE COMPANY AND BY ME.                               DATE: ___________ __, ______                                                      Robert D’Loren         Acknowledged and agreed as of the date first written above:     XCEL BRANDS, INC.        By:          Name: James Haran     Title:   CFO                                          24    135944.00100/114933105v.7