Exhibit
10.1


 


JEROME M. JESSUP


EMPLOYMENT
AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is
dated as of August 3, 2009, by and between Coldwater Creek Inc., a
Delaware corporation (the “Company”), and
Jerome M. Jessup (the “Executive”).


 


WHEREAS,
the Company desires to employ the Executive as its Executive Vice President,
Creative Director, 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 August 3, 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 Executive
Vice President, Creative Director shall faithfully perform for the Company the
duties of said office and shall perform such other duties of an executive,
managerial or administrative nature as shall be specified and designated from
time to time by the Chief Executive Officer or board of directors or similar
governing body of the Company (the “Board”)
(including the performance of services for, and serving on the Board of
Directors of, any subsidiary or affiliate of the Company without any additional
compensation).  The Executive will be
based at the Company’s headquarters, presently located in Sandpoint, Idaho.  The Executive shall devote substantially all
of the Executive’s business time and effort to the performance of the Executive’s
duties hereunder, provided that in no event shall this sentence prohibit the
Executive from performing personal and charitable activities and any other
activities approved by the Chief Executive Officer or the Board, so long as
such activities do not materially and adversely interfere with the Executive’s
duties for the Company.


 


3.             Compensation.


 


3.1           Salary.  The Company shall
pay the Executive during the Term a base salary at the rate of $550,000 per
annum (the “Annual Salary”), payable
semi-monthly and subject to regular deductions and withholdings as required by
law.  The Annual Salary may be increased
annually by an amount as may be approved by the Board or the Compensation
Committee of the Board of Directors (the “Compensation Committee”),
and, upon such increase, the increased amount shall thereafter be deemed to be
the Annual Salary for purposes of this Agreement.


 

















 


3.2           Hiring
Bonus. The Executive will receive
a hiring bonus (the “Hiring Bonus”)
paid in two installments in accordance with and subject to the terms and
conditions of this Section 3.2. The Company will pay the first installment
of such Hiring Bonus to the Executive in the amount of $162,200, less
applicable state and federal tax withholdings, on the first regular payroll
date following commencement of his employment with the Company. If the
Executive resigns without Good Reason (as such term is defined below) or the
Company terminates his employment for Cause (as such term is defined below), in
either case during the first twelve (12) months of his employment, the
Executive will be required to repay 100% of such first installment of the
Hiring Bonus no later than thirty (30) days following the Effective Date of the
Termination set forth in Section 5.1(c) or 5.1(d) below, as
applicable. Provided that the Executive remains in continuous service with the
Company as its Executive Vice President, Creative Director, the Company will
pay to the Executive the second installment of the Hiring Bonus in the amount
of $152,100, less applicable federal and state tax withholdings, on the first
regular payroll date following the first anniversary of continuous employment
with the Company (i.e. the first Monday of the fiscal third quarter of
2010).  If the Executive resigns without
Good Reason or the Company terminates his employment for Cause, in either case
during the first twelve (12) months of his employment, the Executive will
forfeit any rights to receive any portion of such second installment of the
Hiring Bonus upon any such termination of his employment.


 


3.3           Annual Bonus.  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.


 


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


 


3.5           Benefits — In General.  The Executive shall be permitted during the
Term to participate in any group life, hospitalization or disability insurance
plans, health programs, pension and profit sharing plans 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.


 


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


 


3.7           Expenses.  The Company shall pay or reimburse the
Executive for all ordinary and reasonable out-of-pocket expenses actually
incurred (and, in the case of 


 


2

















 


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 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.


 


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


 


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


 


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


 


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


 


3

















 


(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.


 


(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 


 


4

















 


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


 


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


 


5.2           Termination
Without Cause; Termination for Good Reason.  The Company may terminate the Executive’s
employment at any time without Cause, for any reason or no reason, and the
Executive may terminate the Executive’s employment with the Company


 


5

















 


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), the portion of the Hiring Bonus not yet
paid, 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 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 day of termination.  For purposes of this
Section 5.2, (i) the “Effective Date of the
Termination” shall mean the date of termination specified in the
Company’s or the Executive’s notice of termination, as applicable, and (ii) a
“Change in Control” shall mean: 
(a)  the acquisition directly or indirectly by any person or related
group of persons (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company prior to the transaction) of beneficial ownership 


 


6

















 


(within the meaning of Rule 13d-3 of the 1934
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company’s outstanding securities; (b)  a
change in the composition of the Board over a period of thirty-six (36) consecutive
months or less such that a majority of the Board members ceases, by reason of
one or more contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the
Board members described in clause (A) who were still in office at the
time such election or nomination was approved by the Board; or (c) a sale
of all or substantially all of the assets of the Company to another person or
entity (other than a person or entity that directly or indirectly controls, is
controlled by, or is under common control with, the Company prior to the
transaction).


 


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


 


6.             Noncompetition.


 


6.1           Noncompetition.  The Executive agrees with the Company that,
during the Term of this Agreement and for 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.


 


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


 


6.3           Forfeiture of Severance Payments.  In the event the
Executive breaches any provision of Section 6.1, in addition to any other
remedies that the Company may have at law or in equity, the Executive shall promptly
reimburse the Company for any Severance Payments received from, or payable by,
the Company and any amounts paid to the Executive pursuant to Section 3.2.  In addition, the Company shall be entitled in
its sole discretion to offset all or any portion of the amount of any unpaid
reimbursements against any amount owed by the Company to the Executive.


 


7.             Other Provisions.


 


7.1           Specific Performance.  The Executive acknowledges that the
obligations undertaken by such Executive pursuant to Section 6  of this Agreement are unique and that the
Company likely will have no adequate remedy at law if the Executive shall fail
to perform any of 


 


7

















 


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.


 


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


 


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


 


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


 


8

















 


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


 


7.5           Entire Agreement.  This Agreement, and the Coldwater Creek
Inc.  Confidentiality and Intellectual
Property Agreement and Agreement for Non-Solicitation or Recruitment, the offer
letter between the Executive and the Company dated as of [July     ],
2009 (the “Offer Letter”) 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); provided, however, that to the
extent that there any inconsistencies between the provisions of this Agreement
and the provisions of the Offer Letter the provisions of this Agreement shall
govern and supersede any such inconsistent provisions.


 


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


 


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


 


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


 


7.9           Withholding.  The Company shall be entitled to withhold
from any payments or deemed payments any amount of withholding required by
law.  No other taxes, fees, impositions,
duties or other charges or offsets of any kind shall be deducted or withheld
from amounts payable hereunder, unless otherwise required by law.


 


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


 


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


 


9

















 


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


 


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


 


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


 


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


 


7.16         Section 409A of the
Internal Revenue Code.


 


(a)           Anything in this Agreement to the contrary
notwithstanding, if (A) on the date of termination of Executive’s
employment with the Company or a Subsidiary, any of the Company’s stock is
publicly traded on an established securities market or otherwise (within the
meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as
amended (the “Code”)) and (B) as a result of such termination, the
Executive would receive any payment that, absent the application of this Section 7.16,
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


 


10

















 


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.


 


7.17         Certain Definitions.  For purposes of this Agreement:


 


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


 


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


 


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


 


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


 


11

















 


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


 


 


	
   

  	
  COLDWATER CREEK INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel Griesemer

  
	
   

  	
  Name:

  	
  Daniel Griesemer

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Jerome Jessup

  
	
   

  	
  JEROME M. JESSUP

  



 


12