Unassociated Document


    

      EXHIBIT
        10.34

      


      EXECUTIVE
        EMPLOYMENT AGREEMENT

       

      This
        employment agreement (the “Agreement”) is made this 19th day of December 2005,
        by and between I.C. Isaacs & Company LP, a Delaware limited partnership (the
“Company”), and Gregg A. Holst, (the “Executive”).

       

      
        	1.	
                Definitions. 
                  The following terms, as used herein, have the following
                  meanings:

              


      

       

      
        	
              	(a)	
                Agreement
                  has the meaning attributed thereto in the
                  preamble;

              


      

       

      
        	
              	(b)	
                Base
                  Salary
                  shall mean $275,000, provided, however, that in the event the Board
                  or the
                  Compensation Committee thereof increases the amount of the Base
                  Salary at
                  any time during the Term, the term “Base Salary” shall mean, from and
                  after the effective date of each such increase, $275,000 plus the
                  aggregate amount of all such increases therein made on or prior
                  to such
                  effective date;

              


      

       

      
        	
              	(c)	
                Board
                  shall mean the Board of Directors of
                  Isaacs;

              


      

       

      
        	
              	(d)	
                Cash
                  Flow Target
                  has the meaning attributed thereto in Section 5(b)(ii);

              


      

       

      
        	
              	(e)	
                Cause
                  has the meanings attributed thereto in Section 10(a);

              


      

       

      
        	
              	(f)	
                Change
                  of Control
                  has the meanings attributed thereto in Section 14(a);

              


      

       

      
        	
              	(g)	
                Common
                  Stock
                  shall mean Isaacs’ common stock, par value $.0001 per
                  share;

              


      

       

      
        	
              	(h)	
                Company
                  has the meaning attributed thereto in the
                  preamble;

              


      

       

      
        	
              	(i)	
                EBIT
                  Target
                  has the meaning attributed thereto in Section 5(b)(i);
                  

              


      

       

      
        	
              	(j)	
                Effective
                  Date
                  shall mean December 27, 2005;

              


      

       

      
        	
              	(k)	
                Executive
                  has the meaning attributed thereto in the
                  preamble;

              


      

       

      
        	
              	(l)	
                Initial
                  Term
                  has the meaning attributed thereto in Section 3;

              


      

       

      
        	
              	(m)	
                Inventory
                  Turns Target
                  has the meaning attributed thereto in Section 5(b)(iii);

              


      

       

      
        	
              	(n)	
                Isaacs
                  has the meaning attributed thereto in Section 2;

              


      

       

      
        	
              	(o)	
                Isaacs
                  Financial Statements
                  shall mean the audited consolidated financials statements included
                  in
                  Isaacs’ Annual Report on SEC Form 10-K, as filed by Isaacs with the SEC
                  for the year in question; 

              


      

       

      
        	
              	(p)	
                Notice
                  has the meaning attributed thereto in Section 16(a);

              


      

       

      
        	
              	(q)	
                Option
                  has the meaning attributed thereto in Section 6;

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      
        	
              	(r)	
                Option
                  Plan
                  shall mean Isaacs’ Amended and Restated Omnibus Stock Option Plan, as
                  amended;

              


      

       

      
        	
              	(s)	
                Option
                  Term
                  has the meaning attributed thereto in Section 6;

              


      

       

      
        	
              	(t)	
                Renewal
                  Term
                  has the meaning attributed thereto in Section 3;

              


      

       

      
        	
              	(u)	
                SEC
                  shall mean the United States Securities and Exchange
                  Commission;

              


      

       

      
        	
              	(v)	
                Severance
                  Payment Period
                  has the meaning attributed thereto in Section 11;

              


      

       

      
        	
              	(w)	
                Severance
                  Payments
                  has the meaning attributed thereto in Section 11;

              


      

       

      
        	
              	(x)	
                Term
                  has the meaning attributed thereto in Section 3;
                  and

              


      

       

      
        	
              	(y)	
                Termination
                  Date
                  shall mean in the context of a termination of the Executive’s
                  employment:

              


      

       

      
        	
              	(i)	
                for
                  Cause, the date on which any of the events specified in Section
                  10(a)
                  shall occur; or

              


      

       

      
        (ii)    without
          Cause:

      

       

      (1)    the
        date of
        the Executive’s death;

       

      (2)    if
        due to the
        Executive’s continuous and uninterrupted inability to perform his duties and
        responsibilities under this Agreement for a period of not less than180 days,
        the
        181st day after the date on which such period commenced;

       

      (3)    the
        last date
        of the then current Initial Term of Renewal Term, as the case may be, if
        either
        party gives timely notice to the other of its or his intention not to extend
        the
        Agreement beyond the end of such Initial Term or Renewal Term; or

       

      (4)    the
        61st day
        after the date upon which notice of termination of the Agreement is given
        by the
        Company to the Executive pursuant to Section 11
        hereof,
        or by the Executive to the Company pursuant to Section 12
        hereof,
        as the case may be; or

       

      (iii)    as
        a result
        of the Executive’s resignation for good cause pursuant to Section 13
        of this
        Agreement, the 31st day after the date upon which notice of termination of
        the
        Agreement is given by the Executive to the Company;

       

      (iv)    as
        a result
        of or in connection with a Change of Control:

       

      (1)    on
        the date
        when the Company gives notice of the termination of the Executive’s employment,
        if such employment is terminated other than for Cause by the Company within
        90
        days prior to a Change of Control;

       

      
        
          
          

        

        
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      (2)    on
        the date
        when the Company (or its successor corporation) gives notice of the termination
        of the Executive’s employment, if such employment is terminated other than for
        Cause at any time after a Change of Control; or

       

      (3)    on
        the date
        when the Executive gives notice of his resignation, provided, that such notice
        is given not more than 90 days following a Change of Control.

       

      2.    Employment.
        The Company hereby employs the Executive as its Executive Vice President
        and
        Chief Financial Officer. The Executive will provide his services hereunder
        principally at the Company’s offices in New York, New York, and occasionally at
        the Company’s offices in Baltimore, Maryland as and when the requisites of his
        employment activities so require. The Executive shall report to the Chief
        Executive Officer of the Company’s parent, I.C. Isaacs & Company, Inc.
        (“Isaacs”). 

       

      3.    Term. 
        This
        Agreement shall become effective on the Effective Date and shall continue
        until
        December 31, 2008 (the “Initial Term”). This Agreement shall be automatically
        extended for additional periods of one calendar year (each, a “Renewal Term”)
        commencing with calendar year 2009 unless, on or before June 30 of the last
        calendar year of the Initial Term or the then current Renewal Term, as the
        case
        may be, either party gives notice to the other of its or his intention not
        to
        extend the Agreement beyond the end of the Initial Term or the then current
        Renewal Term. The Initial Term and all Renewal Terms taken together are
        hereinafter collectively referred to as the “Term.”

       

      4.    Base
        Salary. 
        The
        Executive’s Base Salary during the Term shall be paid in accordance with the
        Company’s normal payroll practices. The payment of the Executive’s Base Salary
        and all other payments made and to be made to the Executive under this Agreement
        shall be made net of all current and lawful withholdings and deductions,
        including those for federal, state and local taxes. The Executive may be
        considered for annual merit increases in his Base Salary based on the business
        performance objectives of the Company or other goals as determined by the
        Board
        or the Compensation Committee thereof in its discretion.

       

      5.    Incentive
        Compensation. 
        In
        addition to his base salary, the Executive shall be entitled to receive
        incentive compensation calculated and paid, as follows:

       

      (a)    Initial
        Term
        and all Renewal Terms. The Executive shall be eligible to receive the following
        bonuses with respect to calendar years 2006, 2007, 2008 and each Renewal
        Term:

       

      (i)    In
        the event
        that the earnings before interest and taxes achieved by Isaacs during any
        of
        such years shall be: 

       

      (1)    not
        less than
        95% of, and not more than 110% of, the “EBIT Target” specified by the Company
        for such year, the Company shall pay the Executive a bonus equal to the greater
        of $57,750 or 21% of his Base Salary for such year;

       

      (2)    not
        less than
        111% of, and not more than 130% of, the “EBIT Target” specified by the Company
        for such year, the Company shall pay the Executive a bonus equal to the greater
        of $77,000 or 28% of his Base Salary for such year; or

       

      
        
          
          

        

        
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      (3)    more
        than
        130% of the “EBIT Target” specified by the Company for such year, the Company
        shall pay the Executive a bonus equal to the greater of $96,250 or 35% of
        his
        Base Salary for such year;

       

      (ii)    in
        the event
        that the increase in cash and cash equivalents reflected on the consolidated
        statement of cash flows contained in Isaacs’ annual audited financial statements
        for any of such years shall be:

       

      (1)    not
        less than
        95% of, and not more than 110% of, the “Cash Flow Target” specified by the
        Company for such year, the Company shall pay the Executive a bonus equal
        to the
        greater of $46,200 or 16.8% of his Base Salary for such year;

       

      (2)    not
        less than
        111% of, and not more than 130% of, the “Cash Flow Target” specified by the
        Company for such year, the Company shall pay the Executive a bonus equal
        to the
        greater of $61,600 or 22.4% of his Base Salary for such year; or

       

      (3)    more
        than
        130% of the “Cash Flow Target” specified by the Company for such year, the
        Company shall pay the Executive a bonus equal to the greater of $77,000 or
        28%
        of his Base Salary for such year; and

       

      (iii)    in
        the event
        that the number of turns of the Company’s inventory during any of such years
        shall be:

       

      (1)    not
        less than
        95% of, and not more than 110% of, the “Inventory Turns Target” specified by the
        Company for such year, the Company shall pay the Executive a bonus equal
        to the
        greater of $11,550 or 4.2% of his Base Salary for such year;

       

      (2)    not
        less than
        111% of, and not more than 130% of, the “Inventory Turns Target” specified by
        the Company for such year, the Company shall pay the Executive a bonus equal
        to
        the greater of $15,400 or 5.6% of his Base Salary for such year; or

       

      (3)    more
        than
        130% of the “Inventory Turns Target” specified by the Company for such year, the
        Company shall pay the Executive a bonus equal to the greater of $19,250 or
        7% of
        his Base Salary for such year.

       

      (b)    Definitions.
        For purposes of this Agreement, the term:

       

      (i)    “EBIT
        Target”
        shall mean the amount that the Company shall designate as the earnings before
        interest and taxes that Isaacs must achieve in order for the Executive to
        earn
        the bonus described in Section 5(a)(i)
        of this
        Agreement; 

       

      (ii)    “Cash
        Flow
        Target” shall mean the amount that the Company shall designate as the cash
        provided by operating activities that Isaacs must achieve in order for the
        Executive to earn the bonus described in Section 5(a)(ii)
        of this
        Agreement; and

       

      (iii)    “Inventory
        Turns Target” shall mean the number of turns of the Company’s inventory that
        Isaacs must achieve, as designated by the Company, in order for the Executive
        to
        earn the bonus described in Section 5(a)(iii)
        of this
        Agreement.

       

      
        
          
          

        

        
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      (c)    Provisions
        Applicable to the Targets. The EBIT Target, Cash Flow Target and Inventory
        Turns
        Target shall (i) not be greater than any of the EBIT Targets, Cash Flow Targets
        and Inventory Turns Targets applicable to any other senior executive of the
        Company; (ii) be determined by the Compensation Committee of the Board after
        consultation with the Executive; and (iii) be specified in writing by the
        Company not more than 60 days after the first day of each year during the
        Initial Term and each Renewal Term with respect to such year.

       

      (d)    Calculation
        of the Targets. Determination of the achievement of:

       

      (i)    the
        EBIT
        Target shall be made by adding the sum of the interest expense net of interest
        income, and income tax expense (but not income tax benefit) reflected on
        the
        consolidated statement of operations contained in Isaacs Financial Statements
        for the year in question from the line item entitled “net income” on such
        consolidated statement of operations;

       

      (ii)    the
        Cash
        Flow Target shall be made by reference to the line item entitled “cash provided
        by operating activities” reflected on the consolidated statement of cash flows
        contained in the Isaacs Financial Statements for the year in question;
        and

       

      (iii)    the
        Inventory Turns Target shall be made by reference to the quotient obtained
        by
        dividing:

       

      (1)    the
        cost of
        goods sold reflected on the consolidated statement of operations contained
        in
        the Isaacs Financial Statements for the year in question by

       

      (2)    the
        quotient derived by dividing the sum of the beginning and ending inventories
        for
        the year in question, as determined by reference to the notes to the Isaacs
        Financial Statements for such year, by the number 2.

       

      (e)    Payment
        of
        Incentive Compensation. Each of the incentive compensation amounts described
        in
        Section 5(a)
        which
        shall be payable for any calendar year during the Term shall be paid on July
        1
        of the immediately succeeding year, provided, that, except in the case of
        the
        termination of the Executive’s employment (i) as a result of the Company’s
        election not to renew this Agreement at the end of the Initial Term or any
        Renewal Term; or (ii) without cause pursuant to Section 11
        hereof,
        the Executive shall be actively employed by the Company on the date of such
        payment.

       

      (f)    Guaranteed
        Incentive Compensation. Anything elsewhere contained in this Agreement to
        the
        contrary notwithstanding,

       

      (i)    the
        Company
        shall pay guaranteed incentive compensation of $96,250 for the year 2006
        to the
        Executive on April 15, 2006;

       

      (ii)    the
        amount of such guaranteed incentive compensation shall be deducted from any
        incentive compensation for the year 2006 in excess of such amount that the
        Executive would otherwise be entitled to receive;

       

      (iii)    in
        the
        event that the aggregate amount of the incentive compensation for the year
        2006
        that the Executive shall be entitled to receive pursuant to Sections
5(a)(i),
        (ii)
        and (iii) hereof shall be greater than $96,250, the Company shall pay the
        difference between such aggregate amount and $96,250 to the Executive. Payment
        of such amount shall be made in accordance with the provisions of Section
        5(e)
        of this
        Agreement; and

       

      
        
          
          

        

        
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      (iv)    in
        the event
        that the Termination Date occurs in 2006, and the aggregate amount of the
        incentive compensation for such year that the Executive would be entitled
        to
        receive pursuant to Sections 5(a)(i),
        (ii)
        and (iii) hereof shall not be greater than $96,250, the Company shall have
        no
        obligation to pay any further incentive compensation to the Executive
        hereunder.

       

      (g)    Pro-Ration
        of
        Incentive Compensation in Certain Circumstances. In the event that the
        Executive’s employment under this Agreement shall be terminated without cause
        pursuant to Section 11
        hereof,
        any incentive compensation that otherwise would have become due and payable
        to
        the Executive with respect to the year during which the Termination Date
        shall
        occur, pursuant to the provisions of Section 5(a)
        hereof,
        shall be calculated by multiplying the total amount of the incentive
        compensation payable pursuant to Sections 5(a)(i),
        (ii)
        and (iii) for the year in question by a fraction, the numerator of which
        shall
        be the number of days that shall have elapsed between the beginning of such
        year
        and the Termination Date, and the denominator of which shall be
        360.

       

      (h)    Signing
        Bonus. The Company shall pay to the Executive a bonus in the amount of $50,000
        after January 1, 2006 and on or before January 31, 2006.

       

      (i)    Amendment
        of
        Incentive Compensation Provisions. In the event that the Compensation Committee
        of the Board adopts new criteria or procedures for the determination and/or
        payment of the incentive compensation payable hereunder, or modifies such
        incentive compensation determination criteria or payment procedures, the
        Executive hereby agrees to amend this Agreement to incorporate such new or
        modified criteria and/or procedures herein, provided, that, 1) the employment
        agreements of the Company’s Chief Executive Officer and Chief Operating Officer
        are also amended to incorporate such new or modified criteria and/or procedures
        therein; and 2) such amendment shall not reduce the maximum amount of incentive
        compensation payable thereunder.

       

      6.    Stock
        Options. 
        In
        addition to his base salary, and the incentive compensation entitlements
        described in Section 5,
        the
        Executive also shall receive a non-qualified stock option (the “Option”) to
        purchase 100,000 shares of Common Stock, pursuant to the Option Plan. The
        Option
        shall be granted under, and shall be subject to all of the terms and conditions
        of, the Option Plan. Any unexercised portion of the Option shall be exercisable
        for a period of five years commencing on the Effective Date (the “Option Term”),
        provided that (i) the Executive shall have been in the continuous employ
        of the
        Company during the period commencing on the Effective Date and continuing
        through each date on which Executive exercises the Option or the last date
        of
        the Initial Term, whichever shall occur first; and (ii) the Executive’s
        employment shall not be terminated for “Cause” (as such term is hereinafter
        defined) at any time during the Option Term. The Option shall be exercisable
        at
        the price per share which must be applied to all non-qualified stock options
        granted under the Option Plan on the Effective Date. The Executive’s right to
        purchase Common Stock pursuant to the Option shall vest ratably on the first,
        second and third anniversaries, of the Effective Date. The Option shall further
        provide that, in the event that that:

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      (a)    either
        party
        gives notice to the other of its or his intention not to extend the Agreement
        beyond the end of the Initial Term, and the Executive shall be employed by
        the
        Company on the last day of the Initial Term, he shall be entitled to exercise
        the Option, and purchase any and all shares that remain issuable thereunder,
        during the six month period ending on June 30, 2009; or

       

      (b)    the
        Executive’s employment shall be terminated for any reason other than for “Cause”
        or as a result of the Executive’s death, he (or his estate, as the case may be)
        shall be entitled to exercise the Option, to the extent that it shall have
        vested on the Termination Date, and purchase any and all shares that remain
        issuable thereunder, during the one year period ending on the date immediately
        preceding the first anniversary of the Termination Date or such shorter period
        as shall remain until the expiration date of the Option. 

       

      7.    Benefits. 
        During
        the Term, the Executive shall also be entitled to participate in or receive
        benefits under all of the Company’s benefit plans, programs, arrangements and
        practices, including pension, disability, and group life, sickness, accident
        or
        health insurance programs, if any, as may be established from time to time
        by
        the Company for the benefit of executive employees serving in similar capacities
        with the Company (and/or its affiliates), in accordance with the terms of
        such
        plans, as amended by the Company from time to time; it being understood that
        there is no assurance with respect to the establishment of such plans or,
        if
        established, the continuation of such plans during the term of this
        Agreement.

       

      8.    Vacation
        and Sick Leave.

       

      (a)    The
        Executive
        shall be entitled to a total of four weeks of vacation each year, such vacation
        to be in accordance with the terms of the Company’s announced policy for
        executive employees, as in effect from time to time. The Executive may take
        his
        vacation at such time or times as shall not interfere with the performance
        of
        his duties under this Agreement.

       

      (b)    The
        Executive
        shall be entitled to paid sick leave and holidays in accordance with the
        Company’s announced policy for executive employees, as in effect from time to
        time.

       

      9.    Expenses. 
        The Company shall reimburse the Executive for all reasonable expenses incurred
        in connection with his duties on behalf of the Company, (including, in the
        case
        of air travel in excess of 500 miles, business class service, if offered
        and
        available on flights to the destination in question, and first class service
        if
        business class is not so offered and/or available) provided that the Executive
        shall keep, and present to the Company, records and receipts relating to
        reimbursable expenses incurred by him. Such records and receipts shall be
        maintained and presented in a format, and with such regularity, as the Company
        reasonably may require in order to substantiate the Company’s right to claim
        income tax deductions for such expenses. Without limiting the generality
        of the
        foregoing, the Executive shall be entitled to reimbursement for any
        business-related travel, business-related entertainment, and other costs
        and
        expenses reasonably incident to the performance of his duties on behalf of
        the
        company.

       

      
        
          
          

        

        
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      10.    Termination
        of Employment for Cause.
        

       

      (a)    Notwithstanding
        the
        provisions of Section 3
        of this
        Agreement, the Executive’s employment (and all of his rights and benefits under
        this Agreement) shall terminate immediately and without further notice upon
        the
        occurrence of any one or more of the following events (each of which
        individually, and all of which collectively, shall be hereinafter referred
        to as
“Cause”):

       

      (i)    the
        Executive
        (i) is guilty of a criminal offense involving moral turpitude, (ii) is guilty
        of
        or has engaged in criminal or dishonest conduct pertaining to the business
        or
        affairs of the Company (including, without limitation, fraud and
        misappropriation), (iii) has engaged in any act or omission the intended
        or
        likely consequence of which is material injury to the Company’s business,
        property or reputation (iv) has been grossly negligent or has engaged in
        willful
        misconduct, the likely consequence of which is material injury to the Company’s
        business; or

       

      (ii)    the
        Executive
        persists, for a period of 15 days after receipt of written notice from the
        Company, in willful breach in the performance of his duties under this
        Agreement.

       

      (b)    Upon
        a
        termination of the Executive’s employment for Cause, the Company shall pay the
        Executive his base salary through the Termination Date, and the Executive
        shall
        immediately thereafter forfeit all rights and benefits he otherwise would
        have
        been entitled to receive under this Agreement, or otherwise including, but
        not
        limited to, any right to (i) receive compensation and incentive compensation
        pursuant to Sections 4,
        5
        and
7
        of this
        Agreement, except to the extent that such benefits shall have vested and
        continue after the termination of the Executive’s employment under the terms of
        the applicable benefit plans and programs; and (ii) exercise any then
        unexercised portion of the Option. The Company and the Executive thereafter
        shall have no further obligations under this Agreement except as otherwise
        provided in this Section and in Section 13 of this Agreement.

       

      11.    Termination
        of Employment by the Company Without Cause. 
        Notwithstanding the provisions of Section 3
        of this
        Agreement, the Company may elect (a) not to renew this Agreement at the end
        of
        the Initial Term or any Renewal Term; or (b) to terminate the Executive’s
        employment as provided under this Agreement, at any time, for reasons other
        than
        for Cause by notifying the Executive in writing of such termination. If the
        Executive’s employment is terminated pursuant to this Section 11,
        the
        Company shall pay severance payments to the Executive in an aggregate amount
        equal to the Base Salary that was in effect on the date immediately preceding
        the Termination Date, less all tax and other withholdings required to be
        made in
        accordance with the Company’s normal payroll practices (the “Severance
        Payments”). The Severance Payments shall be made in substantially equal
        installments in accordance with the Company’s normal payroll practices then in
        effect during the six month period commencing on the first day of the seventh
        month following the month in which the Termination Date occurs (such six
        month
        period is referred to herein as, the “Severance Payment Period”). In addition to
        the foregoing payments, the Executive’s participation in all of the Company’s
        benefit plans, programs, arrangements and practices, including all disability,
        medical, life insurance and similar programs, but excluding the Option Plan
        and
        any pension, 401-K or similar retirement income or profit sharing plans,
        shall
        continue during 12 month period commencing on the first day of the month
        immediately following the Termination Date. The termination of the Executive’s
        employment as a result of the Executive’s Death, or by the Company as a result
        of his continuous and uninterrupted inability to perform his duties and
        responsibilities under this Agreement, on behalf of the Company for a period
        of
        not less than180 days from the first day of such inability to perform his
        duties, shall be considered to be a termination without cause hereunder by
        the
        Company.

       

      
        
          
          

        

        
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      12.    Termination
        of Employment by the Executive Without Cause. 
        Notwithstanding the provisions of Section 3
        of this
        Agreement, the Executive may terminate this Agreement at any time by giving
        the
        Chief Executive Officer of the Company written notice of his intention to
        terminate this Agreement, at least 60 days prior to the effective date of
        such
        termination. Upon expiration of such 60 day notice period (or such earlier
        date
        as may be approved by the Board), the termination of this Agreement by the
        Executive shall become effective (and such effective date shall be deemed
        to be
        the Termination Date). Upon the Termination Date, the Company’s obligations
        under Sections 4,
        5
        and
7
        of this
        Agreement, shall immediately expire, and all entitlements to receive any
        of the
        benefits, vested and unvested, that the Executive may have been entitled
        to
        receive from the Company pursuant to this Agreement or otherwise prior to
        the
        Termination Date shall thereupon be terminated. In the event that the Executive
        gives notice, on or before December 31, 2006, of his intention to terminate
        this
        Agreement, he shall be obligated to repay to the Company all sums that he
        shall
        have received pursuant to Sections 5(f)
        and (g)
        hereof.

       

      13.    Resignation
        by the Executive For Good Reason. 

       

      (a)    Notwithstanding
        the
        provisions of Section 3
        of this
        Agreement, the Executive shall have the right to terminate his employment
        with
        the Company not later than three (3) months following the occurrence, without
        the Executive’s prior written consent, of any of the following
        occurrences:

       

      (i)    Any
        material
        adverse change or reduction in the functions, duties or responsibilities
        of the
        Executive, or elimination of any office or executive position he currently
        holds
        in the Company or Isaacs, including, but not limited to, the removal of the
        Executive from, or failure to reappoint or reelect the Executive to, any
        such
        position during the Term.

       

      (ii)    Any
        reduction
        in the Executive’s Base Salary or any material adverse change in the benefits
        that the Executive shall be entitled to receive pursuant to Section 7
        of this
        Agreement.

       

      (iii)    Any
        requirement imposed upon the Executive to work primarily at a location, other
        than in the New York City metropolitan area, that is more than 100 miles
        from
        the Executive’s residence in Newtown, Pennsylvania, or such other location at
        which the Executive may reside during the Term, provided that such other
        location shall not be more than 100 miles from the Company’s office in the New
        York metropolitan area.

       

      (b)    Notwithstanding
        anything to the contrary set forth in Sections 11
        or
14
        of the
        Agreement, in the event that the Executive gives notice to the Company of
        his
        election to terminate this Agreement for any of the reasons set forth in
        Section
13(a)
        hereof,
        the Company shall pay Severance Payments to the Executive in substantially
        equal
        installments in accordance with the Company’s normal payroll practices then in
        effect during the Severance Payment Period. In addition to the foregoing
        payments, the Executive’s participation in all of the Company’s benefit plans,
        programs, arrangements and practices, including all disability, medical,
        life
        insurance and similar programs, but excluding the Option Plan and any pension,
        401-K or similar retirement income or profit sharing plans, shall continue
        during 12 month period commencing on the first day of the month immediately
        following the Termination Date.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      14.    Change
        of
        Control. 

       

      (a)    Anything
        elsewhere contained in this Agreement to the contrary notwithstanding, if
        Executive’s employment is terminated:

       

      (i)    other
        than
        for Cause by the Company within 90 days prior to a “Change of Control” (as
        defined herein), or

       

      (ii)    other
        than
        for Cause by the Company (or its successor corporation) at any time after
        a
        Change of Control, or

       

      (iii)    as
        a result
        of Executive’s resignation within 60 days following a Change of Control,


       

      such
        termination of employment shall be deemed to be a termination of Executive’s
        employment by the Company without Cause, and he will thereupon be entitled
        to
        receive the payments and benefits that would be due to him upon such occurrence
        pursuant to the provisions of Section 11
        hereof.

       

      (b)    For
        purposes
        of this Agreement, a “Change of Control” shall occur if: 

       

      (i)    any
“Person”
        (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
        Act
        of 1934, as amended), other than François Girbaud, Marithé Bachellerie and/or
        any Person directly or indirectly controlled by either or both of them, is
        or
        becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act),
        directly or indirectly, of securities of Isaacs representing 50% or more
        of the
        total voting power represented by Isaacs’ then outstanding voting securities;


       

      (ii)    any
        merger or
        consolidation of Isaacs with any other Person that has been approved by the
        stockholders of Isaacs, other than a merger or consolidation which would
        result
        in the voting securities of Isaacs outstanding immediately prior thereto
        continuing to represent (either by remaining outstanding or by being converted
        into voting securities of the surviving Person) more than fifty percent (50%)
        of
        the total voting power represented by the voting securities of Isaacs or
        such
        surviving Person outstanding immediately after such merger or consolidation,
        or
        the stockholders of Isaacs approve a plan of complete liquidation of Isaacs;
        or


       

      (iii)    any
        sale,
        merger, dissolution or other disposition of the Company; or

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      (iv)    any
        sale or
        other disposition, in one transaction or a series of related transactions,
        of
        all or substantially all the Company’s assets; or 

       

      (v)    a
        change in
        the composition of the Board occurring within a two-year period, as a result
        of
        which fewer than a majority of the directors are Incumbent Directors. “Incumbent
        Directors” will mean directors who either 1) are directors of Isaacs as of the
        Effective Date, or 2) are elected, or nominated for election, to the Board
        with
        the affirmative votes of at least a majority of the Incumbent Directors at
        the
        time of such election or nomination. For purposes of the preceding, individuals
        who are elected pursuant to clause 2) also shall be considered Incumbent
        Directors.

       

      15.    Confidential
        Information. 
        The
        Executive agrees that, during the term of his employment with the Company,
        and
        for a period of one year after the termination of his employment for any
        reason
        whatsoever (including the non-renewal of this agreement by either party),
        he
        shall not disclose to any person or use the same in any way, other than in
        the
        discharge of his duties under this Agreement in connection with the business
        of
        the Company, any trade secrets or confidential or proprietary information
        of the
        Company, including, without limitation, any information or knowledge relating
        to
        (i) the business, operations or internal structure of the Company, (ii) the
        clients (or customers) or potential clients (or potential customers) of the
        Company, (iii) any method and/or procedure (such as records, programs, systems,
        correspondence, or other documents), relating or pertaining to projects
        developed by the Company or contemplated to be developed by the Company,
        or (iv)
        the Company’s business, which information or knowledge the Executive shall have
        obtained during the term of this Agreement, and which is otherwise of a secret
        or confidential nature. Further, upon leaving the employ of the Company for
        any
        reason whatsoever, the Executive shall not take with her, without prior written
        consent of the Company, any documents, forms or other reproductions of any
        data
        or any information relating to or pertaining to the Company, any clients
        (or
        customers) or potential clients (or potential customers) of the Company,
        or any
        other confidential information or trade secrets and will promptly return
        any
        such materials already in his possession to the Company. The provisions of
        this
        Section 15
        shall
        survive the termination of this Agreement.

       

      16.    Miscellaneous.

       

      (a)    Notices. Any
        notice, demand, claim, or consent or other communication to be given hereunder
        (“Notice”) shall be given in writing and shall be sent by overnight delivery
        service, such as Federal Express, UPS or Airborne, and addressed, in the
        case of
        the Company, to its office in New York, New York, or in the case of the
        Executive, to the last address that the Executive has given to the
        Company.

       

      (b)    Benefit;
        Non-Assignment. This
        Agreement shall be binding upon and inure to the benefit of, the parties,
        their
        successors, assigns, personal representatives, distributes, heirs and legatees.
        Neither party shall have the right to assign this Agreement, or to delegate
        its
        or his respective obligations hereunder, except that the Company may assign
        this
        Agreement and all of its rights hereunder to any parent or the Company, any
        wholly owned subsidiary of such parent or to any successor in interest to
        the
        Company.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

      (c)    Governing
        Law. This
        Agreement shall be governed by, and construed and enforced in accordance
        with,
        the laws of the State of New York, without giving effect to the principles
        of
        conflicts of law thereof.

       

      (d)    Resolution
        of
        Disputes. Any
        dispute regarding any aspect of this Agreement or any act which allegedly
        has or
        would violate any provision of this Agreement will be submitted to binding
        arbitration. Such arbitration shall be conducted before a single arbitrator
        sitting in New York, New York, in accordance with the rules of the American
        Arbitration Association then in effect. Judgment may be entered on the award
        of
        the arbitrator in any court having competent jurisdiction. In any such
        proceeding, the prevailing party shall be entitled to recover its legal fees
        and
        expenses from the losing party.

       

      (e)    Headings. The
        headings used in this Agreement are solely for convenience of reference and
        will
        not be deemed to limit, characterize, or in any way affect any provision
        of this
        Agreement, and all provisions of this Agreement will be enforced and construed
        as if no heading had been used.

       

      (f)    Merger;
        Modification; Amendment. This Agreement (i) represents the complete terms
        of the
        parties’ agreement regarding the subject matter set forth herein; (ii)
        supersedes any and all prior oral or written agreements and/or understandings
        between and among the parties with respect to the subject matter hereof;
        and
        (iii) may not be amended or modified except in a writing signed by both parties.
        There are no representations, inducements or promises not set forth herein
        on
        which either party has relied or may rely.

       

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

       

      IN
        WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
        of the
        day and year first hereinabove written.

       

      
        	 	 	 
	 	I.
                C. Isaacs &
                Company L.P.
	 	 	 
	 	By:	
                I.C.
                  Isaacs & Company, Inc.

                Its
                  General Partner 

              
	 	 	 
	 	By:  	/s/ PETER
                J.
                RIZZO
	 	
                

              
	 	Peter
                J.
                Rizzo, Chief Executive Officer
	 	 
	 	
                /s/
                  Gregg A. Holst 

              
	 	
                

              
	 	
                Gregg
                  A. Holst

              


      

    

     

     

    
      
        
        

      

      -12-