Employment Agreement between dELiA*s, Inc. and Walter Killough



 Exhibit 10.2 
  
  
 dELiA*s, INC. 
 Employment Agreement for Walter Killough 
  
  
  







 dELiA*s, INC. 
 Employment Agreement for Walter Killough 
  

					
	 	  	 	  	Page
	 1.
	  	Definitions	  	1
			
	 2.
	  	Term of Employment	  	2
			
	 3.
	  	Position, Duties and Responsibilities	  	3
			
	 4.
	  	Base Salary	  	3
			
	 5.
	  	Annual Incentive Awards	  	3
			
	 6.
	  	Long-Term Stock Incentive Programs	  	3
			
	 7.
	  	Employee Benefit Programs/Annual Health Exams/Board of Directors	  	4
			
	 8.
	  	Disability	  	4
			
	 9.
	  	Reimbursement of Business and Other Expenses	  	5
			
	 10.
	  	Termination of Employment	  	5
			
	 11.
	  	Confidentiality; Cooperation with Regard to Litigation; No Disparagement	  	8
			
	 12.
	  	Non-competition	  	9
			
	 13.
	  	Non-solicitation	  	10
			
	 14.
	  	Remedies	  	10
			
	 15.
	  	Resolution of Disputes	  	11
			
	 16.
	  	Indemnification	  	11
			
	 17.
	  	Effect of Agreement on Other Benefits	  	11
			
	 18.
	  	Assignability; Binding Nature	  	12
			
	 19.
	  	Representation	  	12
			
	 20.
	  	Entire Agreement	  	12
			
	 21.
	  	Amendment or Waiver	  	12
			
	 22.
	  	Severability	  	12
			
	 23.
	  	Survivorship	  	12
			
	 24.
	  	Beneficiaries/References	  	13
			
	 25.
	  	Governing Law/Jurisdiction	  	13
			
	 26.
	  	Notices	  	13
			
	 27.
	  	Headings	  	13
			
	 28.
	  	Counterparts	  	13
			
	 29.
	  	Tax Matters	  	13
			
	 30.
	  	Termination of Current Employment Agreement	  	15








 EMPLOYMENT AGREEMENT 
 AGREEMENT, made and entered into as of the 2nd day of December, 2008 by and between dELiA*s, Inc., a Delaware corporation (together with its successors and assigns permitted under this Agreement, the “Company”), and
Walter Killough (the “Executive”). 
 WITNESSETH: 
 WHEREAS, Company and Executive are parties to an Employment Agreement dated as of December 6, 2005, as amended (the “Current Employment
Agreement”); and 
 WHEREAS, the Company and Executive desire to terminate the Current Employment Agreement and Company desires to
employ the Executive pursuant to this Agreement embodying the terms of such employment (this “Agreement”) and the Executive desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this
Agreement; 
 NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable
consideration, the receipt of which is mutually acknowledged, the Company and the Executive (individually a “Party” and together the “Parties”) agree as follows: 
 1. Definitions. 
  

	(a)	“Amended and Restated 2005 Stock Incentive Plan” shall have the meaning set forth in Section 6 below. 

  

	(b)	“Base Salary” shall have the meaning set forth in Section 4 below. 

  

	(c)	“Board” shall mean the Board of Directors of the Company. 

  

	(d)	“Cause” shall have the meaning set forth in Section 10(b) below. 

  

	(e)	“Change in Control” shall be deemed to have occurred as of the first day that any one or more of the following conditions is satisfied: 

 (i) Any person or “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than the Company, any subsidiary of the Company, the Executive, or any of their respective Affiliates (each, an “Affiliated Entity”), becomes the “beneficial owner”(as that term is defined in Rule
13d- 3 under the Exchange Act) of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the
right to vote in the election of directors; 
 (ii) any one of the following occurs: (A) any merger or consolidation of the Company with
or into another entity (other than an Affiliated Entity), except a merger or consolidation (x) in which persons who were stockholders of the Company immediately prior to the merger or consolidation own, immediately thereafter, directly or
indirectly, more than 20% of the combined voting power ordinarily (and apart from rights accruing under special circumstances) having the right to vote in the election of directors of the continuing or surviving entity or (y) in which the
directors of the Company immediately prior to such merger or consolidation would, immediately thereafter, constitute at least a majority of the directors of the continuing or surviving entity; (B) any sale, exchange, lease, transfer or other
disposition (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Company on a consolidated basis to any person or group other than an Affiliated Entity; or (C) any complete liquidation
or dissolution of the Company; or 
  

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 (iii) individuals who, during any period of 12 consecutive months, are members of the Board of Directors
of the Company at the beginning of such period (the “Existing Directors”), cease, for any reason, to constitute a majority of the number of directors of the Company as determined in the manner prescribed in the Company’s
Certificate of Incorporation and Bylaws; provided, however, that if the election or nomination for election of any new director was approved by a vote of at least 50% of the Existing Directors, such new director shall be considered an Existing
Director. 
  

	(f)	“Confidential Information” shall have the meaning set forth in Section 11 below. 

  

	(g)	“Constructive Termination Without Cause” shall have the meaning set forth in Section 10(c) below. 

  

	(h)	“Effective Date” shall have the meaning set forth in Section 2 below. 

  

	(i)	“MIP” shall have the meaning set forth in Section 5 below. 

  

	(j)	“Original Term of Employment” shall have the meaning set forth in Section 2(a) below. 

  

	(k)	“Renewal Term” shall have the meaning set forth in Section 2 below. 

  

	(l)	“Restriction Period” shall have the meaning set forth in Section 12 below. 

  

	(m)	“Severance Period” shall have the meaning set forth in Section 10(c)(ii) below, except as provided otherwise in Section 10(e) below. 

  

	(n)	“Subsidiary” shall have the meaning set forth in Section 11 below. 

  

	(o)	“Term of Employment” shall have the meaning set forth in Section 2 below. 

  

	(p)	“Termination Without Cause” shall have the meaning set forth in Section 10(c) below. 

 2. Term of Employment. 
 (a) The term
of the Executive’s employment under this Agreement shall commence on December 2, 2008 (the “Effective Date”) and end on the fourth anniversary of such date, unless Executive’s employment ceases earlier pursuant to the terms
of this Agreement (the “Original Term of Employment”). The Original Term of Employment shall be automatically renewed for successive one-year terms (the “Renewal Terms”) unless at least 180 days prior to the expiration of the
Original Term of Employment or any Renewal Term, either Party notifies the other Party in writing that Executive or the Company, as the case may be, is electing to terminate this Agreement at the expiration of the then current Term of Employment.
“Term of Employment” shall mean the Original Term of Employment and all Renewal Terms. 
 (b) Notwithstanding anything in this
Agreement to the contrary, at least one year prior to the expiration of the Original Term of Employment, the Parties shall meet to discuss this Agreement and attempt to negotiate a mutually acceptable new employment agreement or amendment to this
Agreement, governing the period subsequent to the Original Term of Employment. Nothing in this subparagraph 2(b) shall obligate Company or Executive to enter into a new employment agreement or an amendment of this Agreement. 
  

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 3. Position, Duties and Responsibilities. 
 (a) Generally. Executive shall serve as the Company’s Chief Operating Officer reporting to the Company’s Chief Executive Officer with the
following functions reporting to him: planning, information technology, production/marketing, finance/legal, operations (stores, distribution center and contact center) and photography. Executive shall have and perform such other duties,
responsibilities, and authorities as shall be reasonably assigned by the Company’s Chief Executive Officer from time to time and as are consistent with the above-mentioned position, which may be modified as the Company’s Chief Executive
Officer deems necessary in his reasonable discretion. Executive shall devote substantially all of Executive’s business time and attention (except for periods of vacation or absence due to illness), and Executive’s best efforts, abilities,
experience, and talent to Executive’s position and the businesses of the Company in accordance with all Company policies. 
 (b)
Other Activities. Anything herein to the contrary notwithstanding, nothing in this Agreement shall preclude the Executive from (i) engaging in reasonable charitable activities and community affairs and (ii) managing Executive’s
personal investments and affairs, provided that such activities do not materially interfere with the proper performance of Executive’s duties and responsibilities under this Agreement and not otherwise detrimental to the interests of the
Company. Unless approved in writing by the Board of the Company, the Executive may not serve on the board of directors of any corporation or the board of any association and/or charitable organization. 
 4. Base Salary. 
 The Executive shall
be paid an annualized salary, payable in accordance with the regular payroll practices (including bi-weekly pay periods) of the Company, of not less than $400,000, less applicable withholdings, subject to annual review thereafter at the start of
each fiscal year for increase at the discretion of the Compensation Committee of the Board (“Base Salary”) and in no event less than the amounts calculated in accordance with Exhibit 4 attached hereto. 
 5. Annual Incentive Awards. 
 Subject
to the terms and conditions of the plan that shall govern eligibility and participation, Executive shall participate in the Company’s Management Incentive Plan each year during the Term of Employment (the “MIP”) with a target annual
incentive award opportunity of no less than 60% of Base Salary or in a successor plan to the MIP that provides the Executive with a substantially equivalent opportunity. See Exhibit 4 attached hereto for the MIP opportunities. Payment of any annual
incentive awards shall be made at the same time that other participants in the MIP receive their incentive awards. 
 6. Long-Term Stock
Incentive Programs. 
 (a) Executive will receive options to purchase 182,500 shares of Common Stock of the Company, par value $0.01 per
share, pursuant to the Amended and Restated 2005 Stock Incentive Plan. Such options shall be exercisable at a purchase price per share equal to the closing price of dELiA*s Common Stock on the NASDAQ market on the business day prior to the date of
this Agreement. The options shall vest in four (4) equal annual installments commencing with the one year anniversary of this Agreement and each of the next three (3) anniversaries of the date of this Agreement thereafter. These options
shall expire ten years from the date of grant. 
  

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 (b) Subject to the terms and conditions of the Amended and Restated 2005 Stock Incentive Plan governing
eligibility and participation, Executive shall be eligible to participate in and to receive stock incentive awards under the Amended and Restated 2005 Stock Incentive Plan and any successor plan based upon Compensation Committee approval and in
accordance with Exhibit 6 attached hereto. 
 7. Employee Benefit Programs/Annual Health Exam/Board of Directors. 
 (a) During the Term of Employment, the Executive shall be entitled to participate in such employee pension and welfare benefit plans and programs of the
Company as are made available to the Company’s employees generally, as such plans or programs may be in effect or modified from time to time, including, without limitation, health, medical, dental, long-term disability, life insurance, 401(k)
with Company match and employee discounts. Executive will be eligible for four (4) weeks paid vacation as well as Company observed holidays, five (5) sick days and three (3) personal days in accordance with Company policy. The terms
of the Company’s official plan documents shall govern the terms of Executive’s eligibility and participation in Company’s benefit plans. 
 (b) The Company shall provide Executive, at Company’s cost, with an annual physical/health exam by Executive Health Exams or the equivalent. 
 (c) At each annual meeting of the Company’s stockholders during the Term of Employment, the Company will nominate Executive to serve as a member of
the Company’s Board of Directors. Executive’s service as a member of the Company’s Board of Directors will be subject to any required stockholder approval. Upon the termination of Executive’s employment for any reason,
Executive will be deemed to have resigned from the Board of Directors (and any boards of subsidiaries) voluntarily, without any further required action by the Executive, as of the end of the Executive’s employment and Executive, at the Board of
Directors’ request, will execute any documents necessary to reflect his resignation. 
 8. Disability. 
 (a) During the Term of Employment, and subject to the terms and conditions on eligibility and participation as set forth in the Company’s Long-Term
Disability Plan documents, the Executive shall be entitled to disability coverage as described in this Section 8(a). In the event the Executive becomes disabled, as that term is defined under the Company’s Long-Term Disability Plan, the
Executive shall be entitled to receive benefits pursuant to the Company’s Long-Term Disability Plan in place of Executive’s Base Salary and any other employee benefits other than for disabled employees in an amount pursuant to the
Company’s Long-Term Disability Plan in effect at the commencement date of the disability (“Commencement Date”) for a period beginning on the Commencement Date and ending with the Executive’s attainment of age 65. If (i) the
Executive ceases to be disabled (as determined in accordance with the terms of the Long-Term Disability Plan) during the Term of Employment, (ii) Executive’s position or another senior executive position is then vacant and (iii) the
Company requests in writing that Executive resume such position, Executive may elect to resume such position by written notice to the Company within 15 days after the Company delivers its request. If Executive resumes such position, Executive shall
thereafter be entitled to Executive’s Base Salary at the annual rate in effect at the Commencement Date and, for the year Executive resumes Executive’s position, a pro rata annual incentive award and to participate in any other employee
benefit programs outlined in Section 6 and 7 of this Agreement that are then in effect. If Executive ceases to be disabled and does not resume Executive’s position in accordance with the preceding sentence, Executive shall be treated as if
Executive voluntarily terminated Executive’s employment pursuant to Section 10(e) as of the date the Executive ceases to be disabled. If the Executive is not offered Executive’s position or another executive position after Executive
ceases to be disabled during the Term of Employment, Executive shall be treated as if Executive’s employment was terminated without Cause pursuant to Section 10(c) as of the date the Executive ceases to be disabled. 
  

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 (b) Subject to the applicable plan documents, during the period the Executive is receiving disability
benefits pursuant to Section 8(a) above, Executive shall continue to be treated as an employee for purposes of all employee benefits and entitlements in which Executive was participating on the Commencement Date, including without limitation,
the benefits and entitlements referred to in Sections 6 and 7 above, except that the Executive shall not be entitled to receive any annual salary increases or any new stock incentive awards following the Commencement Date. 
 9. Reimbursement of Business and Other Expenses. 
 The Executive is authorized to incur reasonable expenses in carrying out Executive’s duties and responsibilities under this Agreement, and the Company shall promptly reimburse Executive for all business expenses
incurred in connection therewith, subject to documentation in accordance with the Company’s travel and expense reimbursement policy. 
 10. Termination of Employment. 
 (a) Termination Due to Death. In the event the Executive’s employment with the
Company is terminated due to Executive’s death, Executive’s estate or Executive’s beneficiaries, as the case may be, shall be entitled to and their sole remedies under this Agreement shall be: 
 (i) Base Salary through the date of death, which shall be paid in a single lump sum not later than 15 days following the Executive’s death;

 (ii) the right to exercise all outstanding stock options that are vested as of the date of death for a period of one year following death
or for the remainder of the exercise period, if less; 
 (iii) the restrictions shall lapse on all shares of restricted stock awarded where
restrictions have not yet lapsed; and 
 (iv) other or additional benefits then due or earned in accordance with applicable plans and
programs of the Company. 
 (b) Termination by the Company for Cause. 
 (i) “Cause” shall mean: 
 (A)
Executive’s conviction of, entrance of a plea of guilty or nolo contendere to, a felony unless the Executive’s conduct is so severe or the threat to the Company’s reputation so great that it requires the Company to terminate the
Executive immediately in its reasonable discretion or business judgment; or 
 (B) fraudulent conduct by Executive in connection with the
business affairs of the Company; or 
 (C) theft, embezzlement, or other criminal misappropriation of funds by Executive from the Company
(other than good faith expense account disputes); or 
  

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 (D) Executive’s willful misconduct, which has, or would if generally known, have a material adverse
effect on the goodwill, business, or reputation of the Company; or 
 (E) Executive’s material breach of this Agreement or the written
policies of the Company. 
 For purposes of this Agreement, an act or failure to act on Executive’s part shall be considered “willful” if it
was done or omitted to be done by Executive not in good faith, and shall not include any act or failure to act resulting from any incapacity of Executive. 
 (ii) If the Company terminates the Executive’s employment for Cause, Executive shall be entitled to and Executive’s sole remedies under this Agreement shall be: 
 (A) Base Salary through the date of the termination of Executive’s employment for Cause, which shall be paid in a single lump sum not later than 15
days following the Executive s termination of employment; 
 (B) the right to exercise all outstanding vested stock options that are vested
as of the date of termination during the 30-day period following termination and all unvested stock options shall be forfeited and cancelled; and 
 (C) other or additional benefits, to the extent then due or earned in accordance with applicable plans or programs of the Company. 
 (c) Termination Without Cause or Constructive Termination Without Cause. In the event the Executive’s employment with the Company is terminated without Cause (which termination shall be effective as of the date specified by the
Company in a written notice to the Executive), other than due to death, or in the event there is a Constructive Termination Without Cause (as defined below), the Executive shall be entitled to and Executive’s sole remedies under this Agreement
shall be: 
 (i) Base Salary through the date of termination of the Executive’s employment, which shall be paid in a single lump sum not
later than 15 days following the Executive’s termination of employment; 
 (ii) Base Salary, at the annualized rate in effect
immediately prior to the date of communication (verbal or otherwise) from Company to Executive of termination of the Executive’s employment (or in the event a reduction in Base Salary is the basis for a Constructive Termination Without Cause,
then the Base Salary in effect immediately prior to such reduction), for a period of 12 months following such termination to be paid, less applicable withholdings, in accordance with the Company’s standard payroll cycle (the “Section 10(c)
Severance Period”); provided, further that the salary continuation payment under this Section 10(c)(ii) shall be in lieu of any salary continuation arrangements under any other severance program of the Company or any other agreement
between the Executive and the Company; 
 (iii) a lump sum payment equal to one time Target bonus to be paid within thirty (30) days of
termination; 
 (iv) (A) all unvested options shall vest as of the date of termination; and (B) the right to exercise all
outstanding stock options that are vested as of the date of termination during the one (1) year period following termination or for the remainder of the exercise Period if less; 
 (v) continued participation in all medical, and dental plans at the same benefit level at which Executive was participating on the date of the
termination of Executive’s employment, subject to the terms and conditions of the official plan documents, until the end of the Section 10 (c) Severance Period; and 
  

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 (vi) other or additional benefits then due or earned in accordance with applicable plans and programs of
the Company. 
 “Termination Without Cause” shall mean the termination of Executive’s employment by the Company for any reason other than
Cause (as defined in Section 10 (b)) or due to death, disability or incapacity of Executive. 
 “Constructive Termination Without Cause” shall
mean a termination of the Executive’s employment at Executive’s initiative as provided in this Section 10(c) following the occurrence, without the Executive’s written consent, of one or more of the following events (except as a
result of a prior termination): 
 (A) a material reduction in Executive’s title or a material reduction of Executive’s duties or
responsibilities; 
 (B) a decrease in Executive’s annual Base Salary or target annual incentive award opportunity below 60% of Base
Salary; or 
 (C) a failure by the Company to perform any material obligation under, or breach by the Company of any material provision of,
this Agreement; 
 provided, that in each such case, (1) Executive has given prompt written notice to the Company of the existence or occurrence of the
condition or event (but in no event later than sixty (60) days after its initial existence or occurrence), (2) such condition or event is not cured within thirty (30) days of receipt of written notice from Executive and
(3) Executive terminates his employment under this Section within six (6) months following the initial existence or occurrence of such condition or event; provided, further, that after a Change in Control, “Constructive
Termination Without Cause” shall also mean, without the Executive’s written consent, the relocation of Executive’s principal place of employment outside of a 50-mile radius of Executive’s principal place of employment as in
effect immediately prior to such Change in Control. 
 (d) Change in Control. In the event the Executive’s employment with the
Company is terminated without Cause (which termination shall be effective as of the date specified by the Company in a written notice to the Executive), other than due to death, or in the event there is a Constructive Termination Without Cause (as
defined above), in either case within one (1) year following a Change in Control, the Executive shall be entitled to and Executive’s sole remedies under this Agreement shall be: 
 (i) Base Salary through the date of termination of the Executive’s employment, which shall be paid in a single lump sum not later than 15 days
following the Executive’s termination of employment; 
 (ii) Base Salary, at the annualized rate in effect immediately prior to the
date of communication (verbal or otherwise) from Company to Executive of termination of the Executive’s employment (or in the event a reduction in Base Salary is the basis for a Constructive Termination Without Cause, then the Base Salary in
effect immediately prior to such reduction), for a period of 18 months following such termination to be paid, less applicable withholdings, in accordance with the Company’s standard payroll cycle (the “Section 10 (d) Severance
Period”); provided further that the salary continuation payment under this Section 10(d)(ii) shall be in lieu of any salary continuation arrangements under any other severance program of the Company or any other agreement between the
Executive and the Company; 
  

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 (iii) a lump sum payment equal to one time Target bonus to be paid within thirty (30) days of
termination; 
 (iv)(A) all unvested options shall vest as of the date of termination; and (B) the right to exercise all outstanding
stock options that are vested as of the date of termination during the one (1) year period following termination or for the remainder of the exercise period if less; 
 (v) continued participation in all medical, and dental plans at the same benefit level at which Executive was participating on the date of the
termination of Executive’s employment, subject to the terms and conditions of the official plan documents, until the end of the Section 10 (d) Severance Period; and 
 (vi) other or additional benefits then due or earned in accordance with applicable plans and programs of the Company. 
 (e) Voluntary Termination. In the event of a termination of employment by the Executive on Executive’s own initiative after delivery of 90
days advance written notice, other than a termination due to death or Constructive Termination Without Cause, the Executive shall have the same entitlements as provided in Section 10(b)(ii) above for a termination for Cause. Notwithstanding any
implication to the contrary, the Executive shall not have the right to terminate Executive’s employment with the Company during the Term of Employment except in the event of a Constructive Termination Without Cause and any voluntary termination
of employment during the Term of Employment in violation of this Agreement shall be considered a material breach. In the event the Executive becomes disabled, as that term is defined under the Company’s Long Term Disability Plan, the
Executive’s termination of employment shall be governed by the terms of Section 8 of this Agreement. 
 (f) No Mitigation; No
Offset. In the event of any termination of employment under this Section 10, the Executive shall not be obligated to seek other employment; amounts due the Executive under this Agreement shall not be offset by any remuneration attributable
to any subsequent employment that Executive may obtain. 
 (g) Nature of Payments. Any amounts due under this Section 10 are in
the nature of severance payments considered to be reasonable by the Company and are not in the nature of a penalty. 
 (h) Exclusivity of
Severance Payments. Upon termination of the Executive’s employment during the Term of Employment, Executive shall not be entitled to any severance payments or severance benefits from the Company or any payments by the Company on account of
any claim by Executive of wrongful termination, including, but not limited to, claims under any federal, state or local human and civil rights or labor laws, other than the payments and benefits provided in this Section 10. 
 (i) Release of Employment Claims. The Executive agrees, as a condition to receipt of the termination payments and benefits provided for in this
Section 10, that Executive will execute a release agreement, in a form reasonably satisfactory to the Company, releasing any and all claims arising out of the Executive’s employment (other than enforcement of this Agreement). 

11. Confidentiality; Cooperation with Regard to Litigation; No Disparagement 
 (a) During the Term of Employment and thereafter, the Executive shall not, without the prior written consent of the Company, disclose to anyone or make
use of any Confidential Information, except when required to do so in the normal course of conducting business on behalf of the Company, by legal process, by any governmental agency having supervisory authority over the business of the Company or by
any administrative or legislative body (including a committee thereof) that requires Executive to 

  

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divulge, disclose or make accessible such information. In the event that the Executive is so ordered, Executive shall give prompt prior written notice to the
Company in order to allow the Company the opportunity to object to or otherwise resist such order and consents and will not object to the Company’s standing to consent or seek protection relating to any such order. 
 (b) During the Term of Employment and thereafter, Executive shall not disclose the existence or contents of this Agreement beyond what is disclosed in
the proxy statement or documents filed with the government unless and to the extent such disclosure is required by law, by a governmental agency, or in a document required by law to be filed with a governmental agency or in connection with
enforcement of his rights under this Agreement. In the event that disclosure is so required, the Executive shall give prompt prior written notice to the Company in order to allow the Company the opportunity to object to or otherwise resist such
requirement. This restriction shall not apply to such disclosure by Executive to members of Executive’s immediate family, Executive’s tax, legal or financial advisors, any lender or tax authorities or to potential future employers to the
extent necessary, each of whom shall be advised not to disclose such information. Similarly, Executive acknowledges that the Company shall have the right to advise potential or actual future employers of Executive of her post-employment obligations
under this Agreement. 
 (c) During the Term of Employment and thereafter, Executive shall make no statements or remarks to anyone, including
any of Executive’s potential employers or to the Company suppliers, vendors or customers, about the Company or any of the Company’s subsidiaries and their respective directors, officers and employees, that are disparaging, derogatory or
defamatory to them. 
 (d) “Confidential Information” shall mean all information that is not known or available to the public
concerning the business of the Company or any Subsidiary relating to any of their products, product development, designs, costing, marketing plans and strategies, expansion plans and strategies, trade secrets, customers, suppliers, finances, and
business plans and strategies. For this purpose, information known or available generally within the trade or industry of the Company or any Subsidiary shall be deemed to be known or available to the public. Confidential Information shall include
information that is, or becomes, known to the public as a result of a breach by the Executive of the provisions of Section 11(a) above. 
 (e) “Subsidiary” shall mean any corporation controlled directly or indirectly by the Company and any affiliate of the Company. 
 (f) At any time during the Term of Employment when requested by the Company, or immediately upon Executive’s cessation of employment with the Company, Executive shall return all Company property to the Company, including, without
limitation, all Company issued computers, laptops, PDAs, Blackberries or other Company property or Confidential Information. 
 (g) The
Executive agrees to cooperate with the Company, during the Term of Employment and thereafter (including following the Executive’s termination of employment for any reason), by making himself available to testify on behalf of the Company or any
Subsidiary or affiliate of the Company, in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Company, or any Subsidiary or affiliate of the Company, in any such action, suit, or proceeding,
by providing information and meeting and consulting with the Board or its representatives or counsel, or representatives or counsel to the Company, or any Subsidiary or affiliate of the Company, requesting Executive’s provision of testimony or
assistance. 
 12. Non-competition. 
 (a) During the Restriction Period (as defined in Section 12(b) below) and in consideration for any payments pursuant to 

  

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Section 10, the Executive shall not engage in Competition with the Company or any Subsidiary. “Competition” shall mean engaging in any
activity, except as provided below, for a Competitor of the Company or any Subsidiary, whether as an employee, consultant, principal, agent, officer, director, partner, shareholder (except as a less than one percent shareholder of a publicly traded
company) or otherwise. A “Competitor” shall mean any designer, manufacturer, wholesaler or retailer which designs, manufactures, markets or sells in the United States (A) specialty apparel, clothing or accessories to girls and women
between the ages of 11 and 25 and/or (B) apparel, footwear, skateboard, and snowboard products primarily targeting teenage boys (collectively, the “Competitive Business”) and (i) operates stores that engage in the Competitive
Business within seventy-five (75) miles of any store location of the Company, or (ii) operates a catalog business that engages in the Competitive Business or (iii) operates an e-commerce business that engages in the Competitive
Business, including, but not limited to, with respect to items (i), (ii) and (iii) of this Section 12(a), those listed on Exhibit 12 annexed hereto. If the Executive commences employment or becomes a consultant, principal, agent,
officer, director, partner, or shareholder of any entity that is not a Competitor at the time the Executive initially becomes employed or becomes a consultant, principal, agent, officer, director, partner, or shareholder of the entity, future
activities of such entity shall not result in a violation of this provision unless (x) such activities were contemplated at the time the Executive initially became employed or becomes a consultant, principal, agent, officer, director, partner,
or shareholder of the entity (and the contemplation of such activities was known to the Executive) or (y) the Executive commences directly or indirectly overseeing or managing the activities which are competitive with the activities of the
Company or Subsidiary. 
 (b) For the purposes of this Section 12 and Section 13 below, “Restriction Period” shall mean
the period beginning with the Effective Date and ending with (i) the termination of the Section 10 (c) Severance Period or the Section 10 (d) Severance Period, as applicable or (ii) the first anniversary of such
termination if termination is pursuant to Section 10 (b). 
 13. Non-solicitation 
 (a) Employees. During the Restriction Period, Executive shall not induce and/or solicit employees of the Company or any Subsidiary to terminate
their employment. During the portion of the Restriction Period following the termination of the Executive’s employment, the Executive shall not directly or indirectly hire any employee of the Company or any Subsidiary or any person who was
employed by the Company or any Subsidiary within 180 days of such hiring. 
 (b) Vendors/Business Partners. Executive covenants and
agrees that during the Restriction Period, Executive will not influence or attempt to influence vendors, or business partners of the Company or any of its present or future subsidiaries, either directly or indirectly, to divert from the Company
their business to any individual, partnership, firm, corporation or other entity then in competition with the business of the Company or any subsidiary or the Company. 
 14. Remedies. 
 In addition to whatever other rights and remedies the Company may have at equity or in
law, if the Executive breaches any of the provisions contained in Sections 11, 12 or 13 above or any other obligations of Executive to the Company under this Agreement, the Company (a) shall have the right to immediately terminate all payments
and benefits due under this Agreement (b) shall have the right to seek injunctive relief without the necessity for posting a bond and (c) shall have the right to seek attorneys’ fees and costs associated with enforcing its rights
under this Agreement. The Executive acknowledges that such a breach would cause irreparable injury and that money damages would not provide an adequate remedy for the Company and that the Company retains its rights to seek all other available relief
in addition to the relief set forth in this Section. 
  

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 15. Resolution of Disputes. 
 Any disputes arising under or in connection with this Agreement, other than seeking injunctive relief under Section 14, shall be resolved by binding
arbitration, to be held at an office in New York, New York closest to the Company’s principal offices in accordance with the Commercial rules and procedures of the American Arbitration Association, except that disputes arising under or in
connection with Sections 11, 12 and 13 above shall be submitted to the federal or state courts in the State of New York, New York County. Discovery in any arbitration shall be conducted in accordance with the Federal Rules of Civil Procedure.
Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Pending the resolution of any arbitration or court proceeding, the Company shall continue payment of all amounts and benefits due the
Executive under this Agreement. 
 16. Indemnification. 
 (a) Company Indemnity. The Company agrees that if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative
(a “Proceeding”), by reason of the fact that Executive is or was a director, officer or employee of the Company or any Subsidiary or is or was serving at the request of the Company or any Subsidiary as a director, officer, member, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is the Executive’s alleged action in an official
capacity while serving as a director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Company to the fullest extent legally permitted or authorized by the Company’s certificate of incorporation or
bylaws or resolutions of the Company’s Board of Directors or, if greater, by the laws of the State of Delaware, against all cost, expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if Executive has ceased to be a director,
member, officer, employee or agent of the Company or other entity and shall inure to the benefit of the Executive s heirs, executors and administrators. 
 (b) No Presumption Regarding Standard of Conduct. Neither the failure of the Company (including its board of directors, independent legal counsel or stockholders) to have made a determination prior to the
commencement of any proceeding concerning payment of amounts claimed by the Executive under Section 16(a) above that indemnification of the Executive is proper because Executive has met the applicable standard of conduct, nor a determination by
the Company (including its board of directors, independent legal counsel or stockholders) that the Executive has not met such applicable standard of conduct, shall create a presumption that the Executive has not met the applicable standard of
conduct. 
 (c) Liability Insurance. The Company agrees to continue and maintain a directors and officers liability insurance policy
covering the Executive to the extent the Company provides such coverage for its other executive officers, but in no event less than the amount the Company is providing to the Executive on the date of termination of this Agreement. 
 17. Effect of Agreement on Other Benefits. 
 Except as specifically provided in this Agreement, the existence of this Agreement shall not be interpreted to preclude, prohibit or restrict the Executive’s participation in any other employee benefit or other plans or programs in
which Executive currently participates. 
  

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 18. Assignability; Binding Nature. 
 This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case of the Executive) and
permitted assigns. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred to a subsidiary of the Company or in connection with
the sale or transfer of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law. The Company further agrees that, in the event of a sale or transfer of assets as described in the preceding sentence, it
shall use reasonable efforts in order to cause such assignee or transferee to expressly assume the liabilities, obligations and duties of the Company hereunder. No rights or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive other than Executive’s rights to compensation and benefits, which may be transferred only by will or operation of law, except as provided in Section 24 below. 
 19. Representation. 
 Each Party
represents and warrants that it is fully authorized and empowered to enter into this Agreement and that the performance of its obligations under this Agreement will not violate any agreement between it and any other person, firm or organization.

 20. Entire Agreement. 
 This Agreement contains the entire understanding and agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or
oral, between the Parties with respect thereto. 
 21. Amendment or Waiver. 
 No provision in this Agreement may be amended unless such amendment is agreed to in writing and signed by the Executive and an authorized officer of the
Company. No waiver by either Party of any breach by the other Party of any condition or provision contained in this Agreement to be performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same
or any prior or subsequent time. Any waiver must be in writing and signed by the Executive or an authorized officer of the Company, as the case may be. 
 22. Severability and Modification. 
 In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. In the
event that a court or other tribunal determines that the restraints in Sections 11, 12 and 13 are in any way overbroad or unenforceable, the Parties acknowledge and agree that the court or tribunal shall have the right to modify or sever the
restraints in order to enforce them to the fullest extent permitted by applicable law. 
 23. Survivorship. 
 The respective rights and obligations of the Parties hereunder shall survive any termination of the Executive’s employment to the extent necessary to
the intended preservation of such rights and obligations. 
  

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 24. Beneficiaries/References. 
 The Executive shall be entitled, to the extent permitted under any applicable law, to select and change a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following the Executive’s death by giving the Company written notice thereof. In the event of the Executive’s death or a judicial determination of Executive’s incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate or other legal representative. 
 25. Governing Law/Jurisdiction. 
 This Agreement shall be governed by and construed and interpreted in accordance with the
laws of New York without reference to principles of conflict of laws. Subject to Section 15, the Company and the Executive hereby consent to the exclusive jurisdiction of any or all of the following courts for purposes of resolving any dispute
under this Agreement: (i) the United States District Court for New York and (ii) the Supreme Court of the State of New York, New York County. The Company and the Executive hereby waive, to the fullest extent permitted by applicable law,
any objection which it or he may now or hereafter have to such jurisdiction and any defense of inconvenient forum. 
 26. Notices.

 Any notice given to a Party shall be in writing and shall be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, or via nationally recognized overnight courier prepaid, duly addressed to the Party concerned at the address indicated below or to such changed address as such Party may subsequently give
such notice of: 
  

			
	If to the Company:	    	dELiA*s, Inc.
		    	50 West 23rd St.
		    	New York, New York 10010
		    	Attention: Vice President Human Resources and Vice President and General Counsel
		
	If to the Executive:	    	Walter Killough
		    	6 Garden Ct.
		    	Mahwah, NJ 07430

 27. Headings. 
 The headings of the sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement. 
 28. Counterparts 
 This Agreement may
be executed in two or more counterparts. 
 29. Tax Matters 
 (a) Tax Withholding. The Company shall withhold from any amounts payable under this Agreement such federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation. 
  

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 (b) Section 409A Compliance. The intent of the parties is that payments and benefits under
this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidelines promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. If Executive notifies the Company (with specificity as to the reason therefore) that Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation
or benefits) would cause Executive to incur any additional tax or interest under Code Section 409A, the Company shall, after consulting with Executive, reform such provision to try to comply with Code Section 409A through good faith
modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and
shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provision of Code Section 409A. 
 (c) Special Section 409A Rules. This paragraph shall apply to all or any portion of any payment or benefit a payable under the Agreement as a
result of termination of Executive’s employment that is not exempted from Code Section 409A (“409A Severance Compensation”). 
 (i) Separation from Service. If the termination of the Employee’s employment does not qualify as a “separation from service” within the meaning of Treasury Regulation section 1.409A-1(h) from the “Company’s
Controlled Group”, then any 409A Severance Compensation will not commence until a “separation from service” occurs or, if earlier, the earliest other date as is permitted under Code Section 409A. For this purpose, the
“Company’s Controlled Group” means the Company (i) any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Company and (ii) any trade or business
(whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Company. 
 (ii) Six-Month
Delay for “Specified Employees”. Notwithstanding any provisions to the contrary in this Agreement, if the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code
Section 409A (a)(2)(B), then with regard to any payment or the provision of any benefit that is specified as subject to this Section, such payment or benefit shall not be made or provided prior to the earlier or (i) the expiration of six
(6)-month period measured from the date of Executive’s “separation from service” (as such term is defined under Code Section 409A), and (ii) the date of Executive’s death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 30(c) (whether they would have otherwise been payable in a single sum or in installments in absence of such delay) shall be reimbursed to the Executive
in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. 
 (d) Excise Tax Reimbursement. If the Executive becomes entitled to one or more payments (with a “payment” including, without limitation,
the vesting of an option or other non-cash benefit or property), whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement with the Company or any affiliated company (the “Total Payments”), which are or
become subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any similar tax that may hereafter be imposed) (the “Excise Tax”), the Company shall pay to the Executive an
additional amount equal to the amount of the Excise Tax imposed. 
  

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 30. Termination of Current Employment Agreement. 
 As of the date of this Agreement, Company and Executive acknowledge and agree that the Current Employment Agreement is terminated. 
 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above. 
  

			
	dELiA*s, INC.
		
	By:	 	 /s/ Robert E. Bernard

	Name:	 	Robert E. Bernard
	Title:	 	Chief Executive Officer
	
	EXECUTIVE
	
	 /s/ Walter Killough

	Walter Killough


  

 15 








 EXHIBIT 4 
  

									
	 	  	Less Than
Threshold	  	Threshold	  	Target	  	Stretch
	 a) Annual Salary Increase %
	  	0	  	3	  	5	  	7
	 b) Annual Bonus % (unchanged)
	  	0	  	30	  	60	  	80

 Based on Company’s Annual Operating Plan as approved by the Board of Directors. 
  

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 EXHIBIT 6 
  

									
	Annual New Stock Option Pool	  	Less Than
Threshold	  	Threshold	  	Target	  	Stretch
	 % of outstanding Stock
	  	0	  	1.0	  	1.5	  	2.0
					
	 - CEO to recommend allocation to compensation committee
	  		  		  		  	

 Based on Company’s Annual Operating Plan as approved by the Board of Directors. 
  

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 EXHIBIT 12 
 Guess? Inc. 
 Aeropostale, Inc. 
 Abercrombie & Fitch, Co. 
 American Eagle Outfitters, Inc. 
 Gap, Inc. 
 Wet Seal, Inc. 
 Pacific Sunwear of California, Inc. 
 Hot Topic, Inc. 
 The Buckle, Inc. 
 J. Crew Group, Inc. 
 Urban
Outfitters, Inc. 
 Charlotte Russe Holding, Inc. 
 Forever 21

 H & M 
 Tween Brands, Inc. 
 Kira Plastilina 
 Garage 
 Top Shops 
 Zara 
 Next Plc 
 AGX 
 Mast Industries

 All subsidiaries, divisions, affiliates and successors of the above-named entities are included. 
  

 18