Exhibit 10.12


 


GEORGIA SHONK-SIMMONS

EMPLOYMENT AGREEMENT,
AS AMENDED AND RESTATED


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”) is
dated as of December 20,  2006, and
amended and restated December 23, 2008, by and between Coldwater Creek
Inc., a Delaware corporation (the “Company”), and
Georgia Shonk-Simmons (the “Executive”).


 


WHEREAS, the Company desires to employ the Executive as its President
and Chief Merchandising Officer, and the Executive desires to accept such
employment, on the terms set forth below.


 


Accordingly, the parties hereto agree as follows:


 


1.                                       Term.  The Company hereby employs the Executive, and
the Executive hereby accepts such employment for an initial term commencing as
of the date hereof and ending December 20, 2009, unless sooner terminated
in accordance with the provisions of Section 4 or Section 5, and
which shall automatically renew for an additional one year term unless six
months advance notice is given of non-renewal (the period during which the
Executive is employed hereunder being hereinafter referred to as the “Term”).


 


2.                                       Duties.  The Executive, in her capacity as President
and Chief Merchandising Officer, shall faithfully perform for the Company the
duties of said office and shall perform such other duties of an executive,
managerial or administrative nature as shall be specified and designated from
time to time by the Chief Executive Officer or board of directors or similar
governing body of the Company (the “Board”)
(including the performance of services for, and serving on the Board of
Directors of, any subsidiary or affiliate of the Company without any additional
compensation).  The Executive will be
based at the Company’s headquarters, presently located in Sandpoint,
Idaho.  The Executive shall devote
substantially all of the Executive’s business time and effort to the
performance of the Executive’s duties hereunder, provided that in no event
shall this sentence prohibit the Executive from performing personal and
charitable activities and any other activities approved by the Chief Executive
Officer or the Board, so long as such activities do not materially and
adversely interfere with the Executive’s duties for the Company.


 


3.                                       Compensation.


 


3.1                                 Salary.  The Company shall pay the Executive during
the Term a base salary at the rate of $600,000 per annum (the “Annual Salary”), payable semi-monthly and subject to regular
deductions and withholdings as required by law. 
The Annual Salary may be 


 

















 


increased annually by an
amount as may be approved by the Board or the Compensation Committee of the
Board of Directors (the “Compensation Committee”),
and, upon such increase, the increased amount shall thereafter be deemed to be
the Annual Salary for purposes of this Agreement.


 


3.2                                 Bonus.  The Executive will be entitled to such bonuses
as may be authorized by the Board.  The
Executive’s target bonus amount, when expressed as a percentage of Annual
Salary, will be no less than the target amount that was applicable for fiscal
year 2006, provided, however, that Executive’s Annual Bonus, if any, may be
below, at, or above the target based upon the achievement of individual and
objective Company annual performance criteria established by the Compensation
Committee.  Any Annual Bonus payable to
the Executive hereunder shall be paid no later than 2 1⁄2 months of the fiscal
year following the fiscal year with respect to which the bonus is earned.


 


3.3                                 Equity-Based Awards.   The Executive may from time to time be
awarded such restricted stock units, stock options or other equity-based awards
as the Board or the Compensation Committee determines to be appropriate.


 


3.4                                 Benefits – In
General.  The Executive shall be
permitted during the Term to participate in any group life, hospitalization or
disability insurance plans, health programs, pension and profit sharing plans,
supplemental executive retirement plan and similar benefits that may be
available to other senior executives of the Company generally, on the same
terms as may be applicable to such other executives, in each case to the extent
that the Executive is eligible under the terms of such plans or programs.


 


3.5                                 Personal Days.  During the Term, the Executive shall be
entitled to the number of personal days per year as may be prescribed from time
to time pursuant to the Company’s human resources policies.


 


3.6                                 Expenses.  The Company shall pay or reimburse the
Executive for all ordinary and reasonable out-of-pocket expenses actually
incurred (and, in the case of reimbursement, paid) by the Executive during the
Term in the performance of the Executive’s services under this Agreement,
provided that the Executive submits such expenses in accordance with the
policies applicable to senior executives of the Company generally.


 


4.                                       Termination
upon Death or Disability.  If
the Executive dies during the Term, the obligations of the Company to or with
respect to the Executive shall terminate in their entirety except as otherwise
provided under this Section 4.  If
the Executive becomes eligible for disability benefits under the Company’s
long-term disability plans and arrangements (or, if none apply, would have been
so eligible under the most recent plan or arrangement), the Company shall have
the right, to the extent permitted by law, to terminate the employment of the
Executive upon notice in writing to the Executive and such termination in and
of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement; provided that,, the Company will have no right to terminate the
Executive’s employment if, in the opinion of a qualified physician 


 


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reasonably acceptable to the
Company, it is reasonably certain that the Executive will be able to resume the
Executive’s duties on a regular full-time basis within 90 days of the date the
Executive receives notice of such termination.


 


Upon death of the Executive
or upon termination of the Executive’s employment by virtue of disability the
Executive (or the Executive’s estate or beneficiaries in the case of the death
of the Executive) shall have no right to receive any compensation or benefit
under this Agreement on and after the Effective Date of the Termination (as
defined below in this Section 4) other than the Annual Salary earned and
accrued under this Agreement prior to the Effective Date of the Termination, a
pro-rata bonus for the year of termination based on the target and portion of
year completed, and other benefits, including payment for accrued but unused
vacation, earned and accrued under this Agreement prior to the Effective Date
of the Termination (and reimbursement under this Agreement for expenses
incurred but not paid prior to the Effective Date of the Termination).  In the event of termination by virtue of
disability, in addition to the foregoing, the Executive will also be entitled
to monthly cash payments equal to one twelfth (1/12th) of the Executive’s
Annual Salary in effect on the day of termination for a period of eighteen (18)
months. This Agreement shall otherwise terminate upon the Effective Date of the
Termination and there shall be no further rights with respect to the Executive
hereunder (except as provided in Section 7.13).  For purposes of this Section 4, the “Effective Date of the Termination” shall mean the date of
death or the date on which a notice of termination by virtue of disability is
given by the Company or any later date set forth in such notice of termination.


 


For the avoidance of doubt,
the Executive acknowledges and agrees that the payments set forth in this Section 4
constitute liquidated damages for termination of her employment during the Term
upon her death or by virtue of her disability.


 


5.                                       Other Terminations of
Employment.


 


5.1                                 Termination for
Cause; Termination of Employment by the Executive Without Good Reason.


 


(a)                                  For purposes of
this Agreement, “Cause” shall mean:


 


(i)                                     the Executive’s
commission of any felony;


 


(ii)                                  the Executive’s
commission of an act of fraud, theft or dishonesty;


 


(iii)                               the continuing
failure or habitual neglect by the Executive to perform the Executive’s duties
hereunder;


 


(iv)                              any material violation of
Company policy, including without limitation, the Company’s Corporate Standards
of Conduct;


 


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(v)                                 any material violation by
the Executive of Section 6 below; or


 


(vi)                              the Executive’s
material breach of this Agreement.


 


Notwithstanding the foregoing, if there
exists (without regard to this sentence) an event or condition that constitutes
Cause under clause (iii), (iv), (v) or (vi) above, the Executive
shall have 30 days from the date written notice is given by the Company of such
event or condition to cure such event or condition and, if the Executive does
so, such event or condition shall not constitute Cause hereunder.


 


(b)                                 For purposes of
this Agreement, “Good Reason” shall mean, unless
otherwise consented to by the Executive:


 


(i)                                     the material
reduction of the Executive’s authority, duties and responsibilities, or the
assignment to the Executive of duties materially and adversely inconsistent
with the Executive’s position or positions with the Company and its
subsidiaries;


 


(ii)                                  a material
reduction in Annual Salary of the Executive except in connection with a
reduction in compensation generally applicable to senior management employees
of the Company;


 


(iii)                               a requirement by the Company
that the Executive’s work location be moved more than 50 miles from the Company’s
principal place of business in Sandpoint, Idaho; or


 


(iv)                              the Company’s material and
willful breach of this Agreement.


 


Notwithstanding the foregoing, if there
exists (without regard to this sentence) an event or condition that constitutes
Good Reason, the Company shall have thirty (30) days from the date on which the
Executive gives the written notice thereof to cure such event or condition
(such notice from the Executive to be given within ninety (90) days from the
date the event or condition first occurs) and, if the Company does so, such
event or condition shall not constitute Good Reason hereunder.  Further, an event or condition shall cease to
constitute Good Reason one hundred twenty (120) days after the event or
condition first occurs.  In addition, for
a period of 30 days commencing on the first anniversary of the Change in
Control, a Change in Control shall constitute Good Reason, and in the event
Executive terminates employment, it will be deemed to have occurred within 12
months of a Change in Control for purposes of Section 5.2.


 


(c)                                  The Company may
terminate the Executive’s employment for Cause and such termination in and of
itself shall not be, nor shall it be deemed to be, a breach of this
Agreement.  If the Company terminates the
Executive for Cause, (i) the Executive shall have 


 


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no right to receive any
compensation or benefit under this Agreement on and after the Effective Date of
the Termination (as defined below in this Section 5.1(c)) other than
Annual Salary and other benefits, including payment for accrued but unused
vacation (but excluding any bonuses) earned and accrued under this Agreement
prior to the Effective Date of the Termination (and reimbursement under this
Agreement for expenses incurred but not paid prior to the Effective Date of the
Termination), (ii) the provisions of Section 5.3 shall apply and (iii) this
Agreement shall otherwise terminate upon the Effective Date of the Termination
and the Executive shall have no further rights hereunder (except as provided in
Section 7.13).  For purposes of this
Section 5.1(c), the “Effective Date of the
Termination” shall mean the date on which a notice of termination is
given by the Company or any later date set forth in such notice of termination.


 


(d)                                 The Executive
may terminate her employment without Good Reason.  If the Executive terminates the Executive’s
employment with the Company without Good Reason: (i) the Executive shall
have no right to receive any compensation or benefit under this Agreement on
and after the Effective Date of the Termination (as defined below in this Section 5.1(d))
other than Annual Salary and other benefits, including payment for accrued but
unused vacation (but excluding any bonuses) earned and accrued under this
Agreement prior to the Effective Date of the Termination (and reimbursement
under this Agreement for expenses incurred but not paid prior to the Effective
Date of the Termination), (ii) the provisions of Section 5.3 shall
apply and (iii) this Agreement shall otherwise terminate upon the
Effective Date of the Termination and the Executive shall have no further
rights hereunder (except as provided in Section 7.13).  For purposes of this Section 5.1(d), the
“Effective Date of the Termination”
shall mean the date on which a notice of termination is given by the Executive
or any later date set forth in such notice of termination.


 


(e)                                  In the event the Executive
or the Company elects not to renew this Agreement pursuant to Section 1
above, (i) the Executive shall have no right to receive any compensation
or benefit under this Agreement on and after the Effective Date of the
Termination (as defined below in this Section 5.1(e)) other than Annual
Salary earned and accrued under this Agreement prior to the Effective Date of
the Termination, any bonus for any prior years not yet paid, any bonus earned
with respect to the calendar year in which the Effective Date of Termination occurred,
and other benefits, including payment for accrued but unused vacation, earned
and accrued under this Agreement prior to the Effective Date of the Termination
(and reimbursement under this Agreement for expenses incurred but not paid
prior to the Effective Date of the Termination) and (ii) this Agreement
shall otherwise terminate upon the Effective Date of the Termination and there
shall be no further rights with respect to the Executive hereunder (except as
provided in Section 7.13).  For
purposes of this Section 5.1(e), the “Effective Date of the
Termination” shall mean the date on which a notice of non-renewal is
given by the Executive or the Company, as applicable, or any later date set
forth in such notice of non-renewal.


 


5.2                                 Termination
Without Cause; Termination for Good Reason.  The Company may terminate the Executive’s
employment at any time without Cause, for any reason 


 


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or
no reason, and the Executive may terminate the Executive’s employment with the
Company for Good Reason.  If the Company
or the Executive terminates the Executive’s employment and such termination is
not described in Section 4 or Section 5.1, (i) the Executive
shall have no right to receive any compensation or benefit hereunder on and
after the Effective Date of the Termination (as defined below in this Section 5.2)
other than Annual Salary earned and accrued under this Agreement prior to the
Effective Date of the Termination, any bonus for the prior year not yet paid, a
pro rata bonus for any pending bonus periods in the current year (and
if such Effective Date of Termination is after December 20, 2009, the pro
rata bonus with respect to any pending bonus period shall be paid only to the extent the performance
goals for such pending bonus period are subsequently determined to have been
achieved) and other benefits, including payment for accrued but unused
vacation, earned and accrued under this Agreement prior to the Effective Date
of the Termination (and reimbursement under this Agreement for expenses
incurred but not paid prior to the Effective Date of the Termination), (ii) the
Executive shall receive a cash payment equal to the Severance Payment (as
defined below in this Section 5.2) payable no later than 30 days after the
Effective Date of the Termination, (iii) all unvested equity awards held
by the Executive shall fully vest, provided, however, that if the equity awards
are subject to performance vesting requirements and
such Effective Date of Termination is after December 20, 2009,  such vesting
will only occur to the extent the performance goals for any pending bonus
period are subsequently determined to have been achieved, (iv) the
Executive shall receive accelerated full vesting of Executive’s supplemental
executive retirement plan and payment in accordance with its terms (v) the
Executive shall continue to receive health benefits for 18 months and (vi) this
Agreement shall otherwise terminate upon the Effective Date of the Termination
and the Executive shall have no further rights hereunder (except as provided in
Section 7.13).  Notwithstanding the
foregoing sentence, if the Company terminates Executive’s employment without
Cause or Executive terminates employment for Good Reason on or within 12 months
after a Change in Control,  the Executive
shall have no right to receive any compensation or benefit hereunder on and
after the Effective Date of the Termination (as defined below in this Section 5.2)
other than (i) the Executive shall receive her Annual Salary earned and
accrued under this Agreement prior to the Effective Date of the Termination,
any bonus for the prior year not yet paid, a pro rata bonus (based on target
level) for any pending bonus periods in the current year and other benefits,
including payment for accrued but unused vacation, earned and accrued under
this Agreement prior to the Effective Date of the Termination (and
reimbursement under this Agreement for expenses incurred but not paid prior to
the Effective Date of the Termination), (ii) the Executive shall receive
the applicable Severance Payment, payable no later than 30 days after the
Effective Date of the Termination (iii) the Executive shall receive
continuation of health benefits for 18 months, (iv) all unvested equity
awards held by the Executive shall fully vest, (v) the Executive shall
receive accelerated full vesting of Executive’s supplemental executive
retirement plan and payment in accordance with its terms, and (vi) this
Agreement shall otherwise terminate upon the Effective Date of the Termination
and the Executive shall have no further rights hereunder (except as provided in
Section 7.13).  The “Severance Payment” means one and one-half (1 1/2) times the
Executive’s Annual Salary and annual bonus at target level in effect on the day
of termination, provided that, if the Effective Date of Termination is after December 20,
2009 the Severance Payment will be two and one-half 


 


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(2
1/2) times the Executive’s Annual Salary; and provided further that, if the
Effective Date of Termination occurs within 365 days following the occurrence
of a Change in Control pursuant to the Company’s termination without Cause or
the Executive’s termination for Good Reason (as defined below in this Section 5.1(b)),
the Severance Payment means two and one-half (2 1/2) times Executive’s Annual
Salary and annual bonus at target level in effect on the day of termination.  For purposes of this
Section 5.2, (i) the “Effective Date of the
Termination” shall mean the date of termination specified in the
Company’s or the Executive’s notice of termination, as applicable, and (ii) a
“Change in Control” shall mean: (a) the
acquisition directly or indirectly by any person or related group of persons
(other than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company prior to the
transaction) of beneficial ownership (within the meaning of Rule 13d-3 of
the 1934 Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities; (b) a
change in the composition of the Board over a period of thirty-six
(36) consecutive months or less such that a majority of the Board members
ceases, by reason of one or more contested elections for Board membership, to
be comprised of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still
in office at the time such election or nomination was approved by the Board; or
(c) a sale of all or substantially all of the assets of the Company to
another person or entity (other than a person or entity that directly or
indirectly controls, is controlled by, or is under common control with, the
Company prior to the transaction).


 


5.3                                 Nature of
Payments.  For the
avoidance of doubt, the Executive acknowledges and agrees that the Company’s
payment obligations set forth in this Section 5 constitute liquidated
damages for termination of the Executive’s employment during the Term.


 


6.                                       Noncompetition.


 


6.1                                 Noncompetition.  The Executive agrees with the Company that,
during the Term of this Agreement and for eighteen (18) months thereafter (the “Non-Competition  Restriction Period”),
the Executive will not, directly or indirectly (whether as an officer,
director, employee, consultant, agent, advisor, stockholder, partner, joint
venturer, proprietor or otherwise) engage or otherwise become interested in any
business or activity that directly or indirectly competes with any business of
the Company or any of its subsidiaries (or any of their successors) as
conducted or contemplated during her period of employment with the Company.


 


6.2                                 Reasonable and
Necessary Restrictions.  The
Executive acknowledges that the restrictions, prohibitions and other provisions
hereof, including, without limitation the Restriction Period, are reasonable,
fair and equitable in terms of duration, scope and geographic area, are
necessary to protect the legitimate business interests of the Company and are a
material inducement to the Company to enter into this Agreement.


 


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6.3                                 Forfeiture of
Severance Payments.  In the
event the Executive breaches any provision of Section 6.1, in addition to
any other remedies that the Company may have at law or in equity, the Executive
shall promptly reimburse the Company for any Severance Payments received from,
or payable by, the Company.  In addition,
the Company shall be entitled in its sole discretion to offset all or any
portion of the amount of any unpaid reimbursements against any amount owed by
the Company to the Executive.


 


7.                                       Other Provisions.


 


7.1                                 Specific Performance.  The Executive acknowledges that the
obligations undertaken by such Executive pursuant to Section 6 of this
Agreement are unique and that the Company likely will have no adequate remedy
at law if the Executive shall fail to perform any of such Executive’s
obligations hereunder, and the Executive therefore confirms that the Company’s
right to specific performance of the terms of Section 6 of this Agreement
is essential to protect the rights and interests of the Company.  Accordingly, in addition to any other
remedies that the Company may have at law or in equity, the Company shall have
the right to have all obligations, covenants, agreements and other provisions
of Section 6 of this Agreement specifically performed by the Executive,
and the Company shall have the right to obtain preliminary and permanent
injunctive relief to secure specific performance and to prevent a breach or
contemplated breach of this Agreement by the Executive.  The Executive hereby acknowledges and
warrants that she will be fully able to earn a livelihood for herself and her
dependents if these covenants are specifically enforced against her.  The Executive hereby further acknowledges and
agrees that the Company shall not be required to post bond as a condition to
obtaining or exercising such remedies, and the Executive hereby waives any such
requirement or condition.


 


7.2                                 Severability.  The Executive acknowledges and agrees that
the Executive has had an opportunity to seek advice of counsel in connection
with this Agreement.  If it is determined
that any of the provisions of this Agreement, or any part thereof, is invalid
or unenforceable, the remainder of the provisions of this Agreement shall not thereby
be affected and shall be given full affect, without regard to the invalid
portions.


 


7.3                                 Attorneys’ Fees.  In the event of any legal proceeding relating
to this Agreement or any term or provision thereof, the losing party shall be
responsible to pay or reimburse the prevailing party for all reasonable
attorneys’ fees incurred by the prevailing party in connection with such
proceeding.


 


7.4                                 Notices.  All notices, requests, demands, claims, and
other communications hereunder shall be in writing.  Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly delivered (i) two business days after it is
sent by registered or certified mail, return receipt requested, postage
prepaid, (ii) when received if it is sent by facsimile communication
during normal business hours on a business day or one business day after it is
sent by facsimile and received if sent other than during business hours on a
business day, (iii) one business day after it is sent via a reputable
overnight courier service, 


 


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charges prepaid, or (iv) when
received if it is delivered by hand, in each case to the intended recipient as
set forth below:


 


(i)            if to the
Executive, to the address set forth in the records of the Company; and


 


(ii)           if to the Company,


 


Coldwater
Creek, Inc.


One Coldwater Creek Drive


Sandpoint, Idaho 83864


Attention:  Chief Executive Officer


Facsimile:  [                           ]


 


Any such person may by notice given in
accordance with this Section to the other parties hereto designate another
address or person for receipt by such person of notices hereunder.


 


7.5                                 Entire Agreement.  This Agreement, and the Coldwater Creek
Inc.  Confidentiality and Intellectual
Property Agreement and Agreement for Non-Solicitation or Recruitment, contains
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, written or oral, with the Company
or its subsidiaries (or any predecessor of either).


 


7.6                                 Waivers and Amendments.  This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance.  No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege nor any single or partial exercise
of any such right, power or privilege, preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.


 


7.7                                 GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF IDAHO WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.


 


7.8                                 Assignment.  This Agreement, and the Executive’s rights
and obligations hereunder, may not be assigned by the Executive; any purported
assignment by the Executive in violation hereof shall be null and void.  In the event of any Change in Control, the
Company may assign this Agreement and its rights hereunder.


 


7.9                                 Withholding.  The Company shall be entitled to withhold
from any payments or deemed payments any amount of withholding required by
law.  No other taxes, fees, 


 


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impositions, duties or other
charges or offsets of any kind shall be deducted or withheld from amounts
payable hereunder, unless otherwise required by law.


 


7.10                           No Duty to Mitigate.  The Executive shall not be required to
mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise, nor will any payments hereunder be
subject to offset in the event the Executive does mitigate.


 


7.11                           Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.


 


7.12                           Counterparts.  This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts together shall constitute one
and the same instrument.  Each
counterpart may consist of two copies hereof each signed by one of the parties
hereto.


 


7.13                           Survival.  Anything contained in this Agreement to the
contrary notwithstanding, the provisions of Sections 4 through 6 (to the extent
necessary to effectuate the post-termination obligations set forth therein) and
of Section 7 shall survive termination of this Agreement and any
termination of the Executive’s employment hereunder.


 


7.14                           Existing Agreements.  The Executive represents to the Company that
the Executive is not subject or a party to any employment or consulting
agreement, non-competition covenant or other agreement, covenant or
understanding which might prohibit the Executive from executing this Agreement
or limit the Executive’s ability to fulfill the Executive’s responsibilities
hereunder.


 


7.15                           Headings.  The headings in this Agreement are for
reference only and shall not affect the interpretation of this Agreement.


 


7.16                           Parachute Provisions.  If any amount payable to or other benefit
receivable by the Executive pursuant to this Agreement is deemed to constitute
a Parachute Payment (as defined below in this Section 7.16) alone or when
added to any other amount payable or paid to or other benefit receivable or
received by the Executive which is deemed to constitute a Parachute Payment
(whether or not under an existing plan, arrangement or other agreement), and would
result in the imposition on the Executive of an excise tax under Section 4999
of the Internal Revenue Code of 1986, as amended (“Section 4999”),
then, in addition to any other benefits to which the Executive is entitled
under this Agreement, the Executive shall be paid by the Company an amount in
cash equal to the sum of the excise taxes payable by the Executive by reason of
receiving Parachute Payments plus the amount necessary to put the Executive in
the same after-tax position (taking into account any and all applicable
federal, state and local excise, income or other taxes at the highest
applicable rates on such Parachute Payments and on any payments under this Section 7.16
) as if no excise taxes had been imposed 


 


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with respect to Parachute
Payments (the “Gross-Up Payment”).  Notwithstanding the foregoing, if the
Parachute Payment does not exceed 110% of three (3) times the Executive’s “base
amount” as defined within Section 280G of the Internal Revenue Code of
1986, as amended, then the Company will not pay the Gross-Up Payment, and the
payments due under this Agreement shall be reduced so that the Parachute
Payments would not result in the imposition of an excise tax under Section 4999.  The amount of any payment under this Section 7.16
shall be computed by a certified public accounting firm mutually and reasonably
acceptable to the Executive and the Company, the computation expenses of which
shall be paid by the Company.  “Parachute Payment” shall mean any payment deemed to
constitute a “parachute payment” as defined in Section 280G


 


7.17                           Section 409A of the
Internal Revenue Code.


 


(a)                                  Anything in this Agreement to the
contrary notwithstanding, if (A) on the date of termination of Executive’s
employment with the Company or a Subsidiary, any of the Company’s stock is
publicly traded on an established securities market or otherwise (within the
meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as
amended (the “Code”)) and (B) as a result of such termination, the
Executive would receive any payment that, absent the application of this Section 7.17,
would be subject to interest and additional tax imposed pursuant to Section 409A(a) of
the Code as a result of the application of Section 409A(a)(2)(B)(i) of
the Code, then no such payment shall be payable prior to the date that is the
earliest of (1) 6 months after the Executive’s termination date, (2) the
Executive’s death or (3) such other date as will cause such payment not to
be subject to such interest and additional tax.


 


(b)                                 It is the intention of the parties that
payments or benefits payable under this Agreement not be subject to the
additional tax imposed pursuant to Section 409A of the Code (“409A”).  To the extent such potential payments or
benefits could become subject to such Section, the parties shall cooperate to
amend this Agreement with the goal of giving the Executive the economic
benefits described herein in a manner that does not result in such tax being
imposed.


 


(c)                                  Except as otherwise provided under this
Agreement, all reimbursements to the Executive shall be paid as promptly as
practical and in any event not later than the last day of the calendar year in
which the expenses are incurred, and the amount of the expenses eligible for
reimbursement during any calendar year will not affect the amount of expenses
eligible for reimbursement in any other calendar year.  With respect to payments under this
Agreement, for purposes of 409A, each severance payment and COBRA continuation reimbursement
payment will be considered one of a series of separate payments, and the
Executive’s termination date will be treated as the Executive’s separation from
service as defined under 409A.


 


(d)                                 Amounts payable under this Agreement
following the Executive’s termination of employment, other than those expressly
payable on a deferred or installment basis, will be paid as promptly as
practical after such a termination of employment and, in any event, within 2 1⁄2
months after the end of the year in which employment terminates.


 


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7.18                           Certain Definitions.  For purposes of this Agreement:


 


(a)                                  an “affiliate”
of any person means another person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, such first person, and includes subsidiaries.


 


(b)                                 A “business day”
means the period from 9:00 am to 5:00 pm on any weekday that is not a banking
holiday in New York City, New York.


 


(c)                                  A “person”
means an individual, corporation, limited liability company, partnership,
association, trust or any other entity or organization, including any court,
administrative agency or commission or other governmental authority.


 


(d)                                 A “subsidiary” of any person
means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its board of directors or other governing body (or, if
there are no such voting interests or no board of directors or other governing
body, 50% or more of the equity interests of which) is owned directly or
indirectly by such first person.


 


IN WITNESS WHEREOF, the parties hereto have signed their names as of
the day and year first above written.


 


	
   

  	
  COLDWATER CREEK INC.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Daniel Griesemer

  
	
   

  	
  Name:

  	
  Daniel Griesemer

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    /s/ Georgia Shonk-Simmons

  
	
   

  	
  GEORGIA SHONK-SIMMONS

  
				



 


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