Exhibit 10.16  TIMOTHY O. MARTIN EMPLOYMENT
AGREEMENT  THIS EMPLOYMENT AGREEMENT (this Agreement) is dated as of December 23, 2008, by and
between Coldwater Creek Inc., a Delaware corporation (the Company),
and Timothy O. Martin (the Executive).  WHEREAS, the Company desires to employ the
Executive as its Senior Vice President and Chief Financial 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 January 28, 2012, 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 his capacity as Senior Vice
President and Chief Financial 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.  3.1Salary.  The Company shall pay the Executive during
the Term a base salary at the rate of $325,000 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.  3.2Bonus.  The Executive will be entitled to such
bonuses as may be authorized by the Board. 
The Executives target bonus will be expressed as a percentage of Annual
Salary, 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 following the
fiscal year with respect to which the bonus is earned.  3.3Equity-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.  3.4Benefits
 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
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.  3.5Personal
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.  3.6Expenses.  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.  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  2


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 twelve (12) 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 his employment during the Term upon his death or by virtue of
his disability.  5.Other
Terminations of Employment.  5.1Termination
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;  (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.  3


(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 to be given from the Executive 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.  (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 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 his 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  4


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.  5.2Termination
Without Cause; Termination for Good Reason. 
The Company may terminate the Executives employment at any time without
Cause, for any reason 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 (to the extent the
performance goals for any 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 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
continue to receive  5


health benefits for 12 months and (v) 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 his 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 (at 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 12 months, (iv) all unvested equity awards held by the
Executive shall fully vest and (v) 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 in effect on
the day of termination provided 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 one and one-half (1 1/2) times the Executives Annual Salary and
annual bonus at target level in effect on the date 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).  5.3Nature
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


6.Noncompetition.  6.1Noncompetition.  The Executive agrees with the Company that,
during the Term of this Agreement and for twelve (12) 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, be engaged by or otherwise become
interested in any direct competitor of the Company or any of its subsidiaries
(or any of their successors), as the Companys business is conducted or
contemplated to be conducted during his period of employment with the Company.  6.2Reasonable
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.  6.3Forfeiture
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.  7.1Specific
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 he will be fully able to earn a livelihood for himself and his
dependents if these covenants are specifically enforced against him.  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.  7.2Severability.  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  7


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.  7.3Attorneys
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.  7.4Notices.  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, 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.  7.5Entire
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).  7.6Waivers
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  8


privilege, preclude any other or further exercise thereof or the
exercise of any other such right, power or privilege.  7.7GOVERNING
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.  7.8Assignment.  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.  7.9Withholding.  The Company shall be entitled to withhold
from any payments or deemed payments any amount of withholding required by
law.  No other taxes, fees, impositions,
duties or other charges or offsets of any kind shall be deducted or withheld
from amounts payable hereunder, unless otherwise required by law.  7.10No
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.  7.11Binding
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.  7.12Counterparts.  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.  7.13Survival.  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.  7.14Existing
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.  7.15Headings.  The headings in this Agreement are for
reference only and shall not affect the interpretation of this Agreement.  9


7.16Section 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 7.16,
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.  7.17Certain
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.  10


(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
  GriesemerName:
  Daniel
  GriesemerTitle:
  President
  and Chief Executive Officer/s/ Timothy
  O. MartinTIMOTHY O.
  MARTIN  11