Document:

Exhibit 10.1 - Jai Patel

Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT 
This Agreement is entered into on July 2, 2015, by and between Jaikrishna Patel (“Executive”) and NephroGenex, Inc., a Delaware corporation (the “Company”).
1.Position and Duties. 
(a)Position.  The Company hereby engages Executive as the Chief Medical Officer of the Company.  As such, he shall report directly to the President & Chief Science Officer of the Company and/or the Chief Executive Officer of the Company and have all the responsibilities, duties and authority reasonably expected of a chief medical officer and such other lawful duties consistent with the position and authority of a chief medical officer as may be assigned from time to time by the President & Chief Science Officer of the Company and/or the Chief Executive Officer of the Company.  In addition, without further compensation, Executive shall also serve as a director and/or officer of the Company or one or more of the Company’s subsidiaries or affiliates if so elected or appointed from time to time.  Upon termination of his employment with the Company for any reason, at the written request of the Company, Executive shall resign from any other positions, offices and directorships he may have with the Company or any of its subsidiaries or affiliates.
(b)Obligations to the Company.  Executive shall devote his full business energies, interests, abilities and productive time to his position.  Executive may accept appointment to other corporate and charitable boards with the consent of the Company, which consent will not be withheld if service on such other boards would not materially interfere with his service to the Company.
(c)Right to Provide Services; Conflict of Interest.  Executive hereby represents and warrants to the Company that (i) he has full right and authority to enter into this Agreement and to perform his obligations hereunder, and (ii) the execution and delivery of this Agreement by Executive and the performance of his obligations hereunder will not conflict with or breach any agreement, order or decree to which he is a party or by which he is bound.
(d)Location.  Executive will perform his duties at the Company’s office in Raleigh-Durham, North Carolina.  In addition, Executive will be required to travel as directed by the Company as may be reasonably necessary. 
2.Term.  Executive will be employed by the Company in accordance with the terms of this Agreement commencing as of July 27, 2015 (the “Commencement Date”), and continuing until his employment ceases for any of the following reasons (the “Term”):
(a)either party gives written notice at least thirty (30) days prior to the effective date of such termination; or
(b)the Company terminates Executive’s employment at any time, without advance notice, upon any of the following events (each such event a ground for a termination of Executive’s employment for “Cause”):
		
	i.
	a material breach of any term or condition of this Agreement by Executive, regardless of the reason therefore;

		
	ii.
	Executive’s fraud, breach of trust or fiduciary duty, material dishonesty, misappropriation of funds or similar activity; 

		
	iii.
	Executive’s unauthorized use or disclosure of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company;

		
	iv.
	Executive’s refusal to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, upon the Company’s request; 

		
	v.
	Executive’s debarment or criminal conviction that could lead to debarment, under the Generic Drug Enforcement Act or Executive’s being debarred, excluded or otherwise made ineligible to participate in a “Federal Health Care Program” (as defined in 42 U.S.C. §1320a-7b(f)) or in any other governmental payment program; or

		
	vi.
	Executive’s conviction of, or plea of nolo contendre to, a felony or any crime involving an act of moral turpitude; or

(c)Executive terminates his employment under this Agreement for “Good Reason,” which for this purpose will mean: 
		
	i.
	any material adverse change in Executive’s title, authority or duties (including, without limitation, the assignment to Executive of duties materially inconsistent with his position), or 

		
	ii.
	any other material breach by the Company of any term or condition of this Agreement;

provided that (x) Executive notifies the Company in writing within 30 days after he first becomes aware of such event, (y) the Company fails to cure such event within 90 days after receipt of such written notice, and (z) Executive resigns employment within 60 days following expiration of such cure period; or
(d)automatically upon Executive’s death.
The rights and obligations of Sections 5 and 7 through 10 shall survive any termination of Executive’s employment or the termination or expiration of this Agreement.
3.Compensation.
(a)Base Salary.    The Company shall pay to Executive an annual base salary of $350,000 per year (as increased from time to time, the “Base Salary”).
(b)Annual Bonus.  With respect to each fiscal year of the Company ending during his employment, Executive shall be eligible to earn an annual bonus (an “Annual Bonus”) based on the achievement of reasonable individual and corporate performance objectives established by the Board and communicated to Executive.  The target amount of Executive’s Annual Bonus for each fiscal year will be 35% of the Base Salary paid or payable to Executive for his service in that year.  Any Annual Bonus earned by Executive will be paid no later than March 15th of the year following the end of the applicable fiscal year and Executive must remain employed by the Company through such payment date in order to be eligible to receive the bonus.
(c)Employee Benefits.  Executive will be eligible to participate in the employee benefit plans, policies or arrangements maintained by the Company for its management-level employees, subject to the terms and conditions of such plans, policies or arrangements.
(d)Vacations.  In addition to holidays observed by the Company, Executive will be entitled to accrue four (4) weeks of paid vacation each year in accordance with the published policies of the Company; provided, however, that for the year in which Executive’s employment commences (or any other partial year of service), this vacation allotment will be pro-rated.
(e)Option Award.  As soon as administratively feasible following the Commencement Date, the Company shall grant Executive nonstatutory stock options (the “Options”) with a grant date fair value of $175,000 (as determined by the Company) granted pursuant to and subject to the terms of the NephroGenex, Inc. Amended and Restated 2007 Equity Incentive Plan.  The grant will be further subject to the terms of the Company’s standard stock option award agreement.  The Options will have an exercise price equal to the Fair Market Value of a share of the Company’s Common Stock on the date of grant.  Additionally, in the Company’s discretion, Executive will be eligible to participate in the Company’s annual equity grants commencing with the grants currently anticipated to be made in December 2015 with 

respect to the initial annual grant, the size of such grant, if any, shall be appropriately prorated for the period that Executive is employed by the Company in 2015.
4.Business Expenses.  The Company shall pay directly or reimburse Executive for reasonable expenses incurred in the course of his employment in accordance with the Company’s generally applicable policies. Executive shall be entitled to travel at a class of accommodations equivalent to the other members of the Company’s executive team.
5.Severance Upon Certain Terminations.  Upon any termination of Executive’s employment, Executive will receive payment for any accrued but unpaid wages, accrued but unused vacation and for any incurred but unreimbursed business expenses, subject to the Company’s policies for expense reimbursements.  In addition, if the Company terminates Executive’s employment without Cause pursuant to Section 2(a) or Executive resigns his employment for Good Reason pursuant to Section 2(c), Executive will also be entitled to the payments, if any, as set forth below.
(a)Certain Terminations prior to a Change in Control.  If the Company terminates Executive’s employment without Cause pursuant to Section 2(a) or Executive resigns his employment for Good Reason pursuant to Section 2(c), in either case, prior to an occurrence of a “Change in Control” (as such term is defined in Section 5(d) below), then the Company will (i) make a cash lump sum payment to Executive equal to 135% of his Base Salary (at the rate in effect immediately prior to such termination) and (ii) for a period of 12 months, will pay to Executive a monthly stipend equal to Executive’s premiums for continuation of medical and dental benefits pursuant to Executive’s COBRA election; provided, however, that the payments and benefits described in this Section 5(a) are expressly conditioned upon Executive’s execution of a release of employment-related claims against the Company and its affiliates in a form reasonably acceptable to the Company (the “Release”), and upon the Release becoming effective and no longer subject to revocation no later than 60 days following such termination.  The payments under this Section 5(a) will commence or be made, as applicable, on the next payroll date following the date on which the Release becomes effective.  Notwithstanding the foregoing, if the 60 day period following Executive’s termination ends in a calendar year after the year in which Executive’s employment terminates, the payments under this Section 5(a) will commence or be made no earlier than the first day of such later calendar year.  All other rights Executive may have, other than as set forth in this Section, shall terminate upon such termination.  
(b)Certain Terminations Within 12 Months after a Change in Control. If the Company terminates Executive’s employment without Cause pursuant to Section 2(a) or Executive resigns his employment for Good Reason pursuant to Section 2(c), in either case, within 12 months after a Change in Control, then the Company will (i) make a cash lump sum payment to Executive equal to 135% of his Base Salary (at the rate in effect immediately prior to such termination) and (ii) for a period of 12 months, will pay to Executive a monthly stipend equal to Executive’s premiums for continuation of medical and dental benefits pursuant to Executive’s COBRA election; provided, however, that the payments and benefits described in this Section 5(b) are expressly conditioned upon Executive’s execution of a release of employment-related claims against the Company and its affiliates in a form reasonably acceptable to the Company (the “Release”), and upon the Release becoming effective and no longer subject to revocation no later than 60 days following such termination.  The payments under this Section 5(b) will commence or be made, as applicable, on the next payroll date following the date on which the Release becomes effective.  Notwithstanding the foregoing, if the 60 day period following Executive’s termination ends in a calendar year after the year in which Executive’s employment terminates, the payments under this Section 5(b) will commence or be made no earlier than the first day of such later calendar year.  All other rights Executive may have, other than as set forth in this Section, shall terminate upon such termination.  
(c)Certain Terminations More Than 12 Months after a Change in Control. If the Company terminates Executive’s employment without Cause pursuant to Section 2(a) or Executive resigns his employment for Good Reason pursuant to Section 2(c), in either case, more than 12 months 

after a Change in Control, then Executive will not be entitled to any severance and will only receive payment for any accrued but unpaid wages, accrued but unused vacation and for any incurred but unreimbursed business expenses, subject to the Company’s policies for expense reimbursements.  
(d)Definition of a Change in Control.  “Change in Control” means the occurrence, in a single transaction or in a series of related transactions occurring after the Commencement Date of any one or more of the following events: (x) any person or persons acting together becomes the owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction; (y) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such transaction; or (z) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company during any twelve month period, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company to an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition. Notwithstanding the above, a Change in Control shall only be deemed to occur if the Change in Control also qualifies as a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of a corporation’s assets as defined in Treasury Regulation Section 1.409A-3(i)(5). No Change in Control will be deemed to occur because of a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company. 
6.Arbitration.  Any controversy or claim arising out of this Agreement, other than such controversies or claims arising out of either party’s intellectual property rights for which a provisional remedy or equitable relief is sought, shall be settled by final and binding arbitration.  The arbitration shall take place in New York, New York or, at Executive’s option, the county in which Executive primarily resided during his service to the Company.  The arbitration shall be administered by the American Arbitration Association (the “AAA”) by one arbitrator mutually agreed upon by the parties, and if no agreement can be reached within thirty (30) days after names of potential arbitrators have been proposed by the AAA, then by one arbitrator having relevant experience who is chosen by the AAA.  Any award or finding shall be confidential.  Executive and the Company shall share the costs of arbitration equally and each party shall be responsible for its own attorneys’ fees.  The arbitrator may not award attorneys’ fees to either party unless a statute or contract at issue specifically authorizes such an award.
Executive acknowledges and agrees that in the event of any breach or threatened breach of Section 7, 8, 9, or 10 of this Agreement, however, the Company will suffer irreparable damage for which it will have no adequate remedy at law. Accordingly, simultaneously with filing an arbitration claim under this Section, the Company shall be entitled to injunctive and other equitable remedies from any court having jurisdiction over Executive to prevent or restrain, temporarily, preliminarily or permanently, such breach or threatened breach, without the necessity of posting any bond or surety, in addition to any other remedy that Company may have at law or in equity.
7.Company’s Proprietary Rights and Nondisclosure.  Executive recognizes that he may be exposed to or have access to information (including all tangible and intangible 

manifestations) regarding the patents, copyrights, trademarks, trade secrets, technology, strategic sales/marketing plans, and business of the Company and agrees as follows:
(a)All Proprietary Information (as defined below), whether presently existing or developed in the future, shall be the sole property of the Company and its assigns.  In addition, the Company and its assigns shall be the sole owner of all intellectual property and other rights in connection with such Proprietary Information.
(b)The term “Proprietary Information” shall mean all inventions, works of authorship, trade secrets, business plans, confidential knowledge, data or any other proprietary information of the Company.  By way of illustration but not limitation, “Proprietary Information” includes, without limitation, (x) inventions, ideas, samples, designs, applications, drawings, methods or processes, formulas, trade secrets, data, source and object codes, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (y) information regarding plans for research, development, new products and service offerings, marketing and selling, business plans, budgets and unpublished financial statements, licenses, sales, pricing, profits and costs, distribution arrangements, suppliers and customers, marketing, customer and partner strategies, business development plans, customer and partner lists; and information regarding the skills and compensation of employees of the Company and the Company’s internal organization.
(c)During and after his service to the Company, Executive will keep in confidence and trust all Proprietary Information and shall not reproduce, use or disclose any Proprietary Information or anything related to such information without the prior written consent of the Company, except as required in the ordinary course of performing the services to be provided hereunder.
8.Nondisclosure of Third-Party Information.  Executive understands that the Company has received and will receive from third parties information that is confidential or proprietary and that is subject to restrictions on the Company’s use and disclosure (“Third-Party Information”).  During and after his service to the Company, Executive will hold Third-Party Information in the strictest confidence and will not disclose or use Third-Party Information, except as permitted by agreement between the Company and the relevant third party, unless expressly authorized to act otherwise by the Company.
9.No Improper Use of Materials.  Executive agrees not to bring to the Company or to use in the performance of services for the Company any materials or documents of a present or former employer of Executive, or any materials or documents obtained by Executive under a binder of confidentiality imposed by reason of another of Executive’s relationships, unless such materials or documents are generally available to the public or Executive has authorization from such present or former employer, client or employee for the possession and unrestricted use of such materials.  Executive understands that Executive is not to breach any obligation of confidentiality that Executive has to present or former employers or clients, and agrees to fulfill all such obligations during his service to the Company.
10.Prohibited Solicitation.  During the Term and for a period of one (1) year following termination of the this Agreement, regardless of the reason for the termination, Executive will not, without the prior written consent of the Company:
(a)either individually or on behalf of or through any third party, directly or indirectly, solicit, entice or persuade or attempt to solicit, entice or persuade any employee of or consultant to the Company to leave the services of the Company; or
(b)either individually or on behalf of or through any third party, directly or indirectly, hire any employee of or consultant to the Company or any person who was an employee of or consultant to the Company within six (6) months prior to the offer to hire.
11.Section 409A.  If the termination giving rise to the payments described in Section 5 is not a “Separation from Service” within the meaning of Treas. Reg. § 1.409A-1(h)(1) (or any successor provision), then the amounts otherwise payable pursuant to that section will instead be deferred without interest and will not be paid until Executive experiences a Separation from Service.  In addition, to the 

extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Internal Revenue Code to any payments due to Executive upon or following his Separation from Service, then notwithstanding any other provision of this Agreement (or any otherwise applicable plan, policy, agreement or arrangement), any such payments that are otherwise due within six months following Executive’s Separation from Service (taking into account the preceding sentence of this paragraph) will be deferred without interest and paid to Executive in a lump sum immediately following that six month period.  This paragraph should not be construed to prevent the application of Treas. Reg. §§ 1.409A-1(b)(4) or 1(b)(9)(iii)(or any successor provisions) to amounts payable to Executive.  For purposes of the application of Treas. Reg. § 1.409A-1(b)(4) (or any successor provision) to amounts payable hereunder, each payment in a series of payments will be deemed a separate payment.
With respect to any expense reimbursement or in-kind benefit provided to Executive that constitutes a “deferral of compensation” within the meaning of Section 409A of the Internal Revenue Code, (a) the expenses must be incurred during Executive’s lifetime, (b) the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive in any other calendar year, (c) reimbursements shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred, and (d) the right to reimbursement or in-kind benefits may not be liquidated or exchanged for any other benefit.
Notwithstanding anything herein to the contrary, the Company shall have no liability to Executive or to any other person if the payments and benefits provided in this Agreement that are intended to be exempt from or compliant with Section 409A are not so exempt or compliant.  
12.Miscellaneous Provisions.
(a)Notice.        Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered, when delivered by a nationally recognized overnight courier with delivery charges prepaid, or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid.  In the case of Executive, mailed notices shall be addressed to him at the home address that he most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.
(b)Modifications and Waivers.    No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(c)Withholding.  The Company may withhold from any amounts payable under this Agreement such federal, state or local income taxes it determines may be appropriate.
(d)Whole Agreement.    This Agreement contains the entire agreement between the parties, including their respective affiliates, concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto, including without limitation the Offer Letter between the Company and Executive, dated as of June 11, 2015.
(e)Choice of Law and Severability.    This Agreement shall be interpreted in accordance with the laws of the State of New York, without regard to its rules and provisions governing choice of laws.  If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage, then such 

provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect.  If any provision of this Agreement is rendered illegal by any present or future statute, law, ordinance or regulation (collectively the “Law”), then such provision shall be curtailed or limited only to the minimum extent necessary to bring such provision into compliance with the Law.  All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation.
(f)No Assignment.    This Agreement and all rights and obligations of Executive hereunder are personal to Executive and may not be transferred or assigned by Executive at any time.  The Company may assign its rights under this Agreement to any entity that assumes the Company’s obligations hereunder in connection with any sale or transfer of all or a substantial portion of the Company’s assets to such entity.
(g)Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Signature page follows]

In Witness Whereof, each of the parties has executed this Executive Employment Agreement, in the case of the Company by its duly authorized officer, on the day and year first above written.
Jaikrishna Patel

/s/ Jaikrishna Patel    

NephroGenex, inc.
By:  /s/ Pierre Legault
Pierre Legault
Chief Executive Officericon-ex1066_475.htm

 

Exhibit 10.66

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, dated as of June 10, 2015, by and between Iconix Brand Group, Inc., a Delaware corporation (the “Company”), and David Jones (the “Executive”).

WITNESSETH

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, pursuant to the terms as provided herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Executive hereby agree as follows:

1. Engagement of Executive; Duties. During the Term (as hereinafter defined in Section 3 below), the Executive shall have the titles of Executive Vice President and Chief Financial Officer of the Company, and shall have the authorities, duties and responsibilities customarily exercised by an individual serving in these positions in a corporation of the size and nature of the Company and such other authorities, duties and responsibilities as may be from time to time delegated to him by the Chief Executive Officer of the Company. The Executive shall faithfully and diligently discharge his duties hereunder and use his best efforts to implement the policies established by the Company. The Executive shall report to the Chief Executive Officer of the Company.

2. Time. The Executive shall devote substantially all of his professional time to the business affairs of the Company.

3. Term. The Executive’s engagement shall commence effective June 29, 2015 (the “Commencement Date”) and shall continue until December 31, 2017 (the “Term”) unless otherwise terminated as provided herein.

4. Compensation.

	
(a)
	
Base Salary. Executive’s base salary for the Term will be at a rate of not less than $575,000 per annum, paid in accordance with the Company’s payroll practices and policies then in effect, with such increases as determined by the Board of Directors of the Company (“Board”) or the Compensation Committee of the Board from time to time (such salary, as increased from time to time, the “Base Salary”).

	
(b)
	
Bonus.

(i) Annual Bonus. Executive shall be entitled to participate in the Company’s executive bonus program then in effect. Executive shall be eligible for an annual bonus (“Annual Bonus”) of up to 100% of Executive’s Base Salary (pro rated for 2015 for the period from the Commencement Date to December 31, 2015), to be superseded by the maximum amount available under the Company’s executive bonus program and any other bonus program generally applicable to senior executives of the Company, provided, that the Executive shall receive a minimum Annual Bonus (the “Minimum Annual Bonus”) of $125,000 for the period from the Commencement Date to December 31, 2015 and $250,000 for each of the 2016 and 2017 calendar years. In the event that the Annual Bonus payment for a calendar year, if any, is based in whole or in part on the results of the audit by the Company’s independent public accountants of the Company’s financial statements for such calendar year, such Annual Bonus shall be paid as soon as reasonably practicable following the completion of such audit; otherwise such Annual Bonus shall be paid by March 15 of the calendar year immediately following the calendar year to which it relates.

(ii) Transition Bonus. The Executive shall receive a transition bonus (the “Transition Bonus”) of $100,000 payable in cash within thirty (30) days after the Commencement Date.

 

 

	
(c)
	
Equity Awards

	
(i)
	
PSU’s. On the Commencement Date, Executive shall receive a one-time grant of performance stock units of the Company (the “PSU’s”) issued under the Company’s Amended and Restated 2009 Equity Incentive Plan (the “2009 Plan”) equal to a number of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) with a Fair Market Value (as defined below) on the Commencement Date of Eight Hundred Seventy-Five Thousand Dollars ($875,000) (the “PSU Award”). The number of PSU’s to be issued shall be determined by dividing $875,000 by the Fair Market Value. The PSU’s shall be subject to the terms and conditions of the 2009 Plan and a Performance Stock Unit Award Agreement, substantially in the form annexed hereto as Exhibit A (the “PSU Award Agreement”) and which PSU Award Agreement shall set forth, in addition to measurement dates and targets to be mutually agreed upon by the Company and Executive, the following terms and conditions:

(A) Vesting. Vesting of the PSU’s granted pursuant to this Agreement shall be performance-based and shall vest as follows: PSU’s with an original Fair Market Value of One Hundred Seventy-Five Thousand Dollars ($175,000) shall vest on December 31, 2015 and PSU’s with an original Fair Market Value of Seven Hundred Thousand Dollars ($700,000) shall vest in two equal annual installments of PSU’s with an original Fair Market Value of Three Hundred Fifty Thousand Dollars ($350,000) each, on December 31, 2016 and December 31, 2017 (each, a “Performance Vesting Date”), subject to the achievement of the performance goals as described in the PSU Award Agreement upon certification of achievement by the Compensation Committee as set forth in the PSU Award Agreement. Notwithstanding anything to the contrary contained herein, in the event of a Change in Control (as defined below), Executive’s Death or Executive’s Disability (as defined below), the unvested PSU’s shall immediately vest on the date the Company incurs such Change in Control or upon the Date of Termination, as the case may be, and the shares covered thereby shall be distributed to Executive, or his estate, as the case may be, within thirty (30) days of the date the Company incurs such Change in Control or Date of Termination, as the case may be.

(B) Distribution. Subject to the terms of the 2009 Plan as to conditions and timing of distribution of Common Stock with respect to PSU’s granted pursuant to this Agreement and vesting as a result of a termination of employment and Section 9 of this Agreement with regard to timing of equity distributed as a result of a Separation from Service as an employee of the Company, any vested portion of the PSU’s granted pursuant to this Agreement shall be distributed to Executive in shares of Common Stock in the year following the year of each applicable Performance Vesting Date following the Compensation Committee’s certification of the level of attainment of the annual performance goals. Notwithstanding anything to the contrary contained herein, except as to Sections 5(d) and 9 of this Agreement, all vested PSU’s (including those vested pursuant to the last sentence of clause (A) above) shall be distributed to Executive in shares of Common Stock simultaneous with the Company incurring a Change in Control. Notwithstanding anything to the contrary contained herein or in the 2009 Plan, except as to Sections 5(d) and 9 of this Agreement, if the employment of Executive with the Company is terminated by the Executive for Good Reason or by the Company without Cause then, in addition to retaining any previously earned PSU’s, the Executive shall be entitled to receive the pro rata portion of any PSU’s earned during the year of termination, to the extent earned based upon an adjustment of the absolute goals performance goals for the year of termination after adjustment of such performance goals to take into account the shortened performance period resulting from his termination of employment. Moreover, notwithstanding anything to the contrary contained herein or in the 2009 Plan, upon a termination of Executive’s employment for Cause (as defined below), he shall be entitled to retain any PSU’s that vested prior to the date of termination.

	
(ii)
	
RSU’s. On the Commencement Date, Executive shall receive a one-time grant of restricted stock units of the Company (the “RSU’s”, and, together with the PSU’s, the “Award”), issued under the 2009 Plan equal to a number of shares of Common Stock with a Fair Market Value on the Commencement Date of Eight Hundred Seventy-Five Thousand Dollars ($875,000) (the “RSU” Award”, and together with the PSU Award, the “Award”). The number of RSU’s to be issued shall be determined by dividing $875,000 by the Fair Market Value. The RSU’s shall be subject to the terms and conditions of the 2009 Plan and a Restricted Stock Unit Award Agreement, substantially in the form annexed hereto as Exhibit B (the “RSU Award Agreement”; and, together with the PSU Award Agreement, the “Award Agreements”), and which RSU Award Agreement shall set forth the following terms and conditions:

(A) Vesting. Vesting of the RSU’s granted pursuant to this Agreement shall be time-based and shall vest as follows, subject to the Executive’s continuous employment with the Company through each vesting date: RSU’s with an original Fair Market Value of One Hundred Seventy-Five Thousand Dollars ($175,000) shall vest on December 31, 2015 and RSU’s with an original Fair Market Value of Seven Hundred Thousand Dollars ($700,000) shall vest in two equal annual installments of RSU’s with an original Fair Market Value of Three Hundred Fifty Thousand Dollars ($350,000) each, on December 31, 2016 and December 31, 2017 (each, a “Time Vesting Date”). Notwithstanding anything to the contrary contained herein, (x) in the event of a Change in Control (as defined below), Executive’s Death or Executive’s Disability (as defined below), the unvested RSU’s shall immediately vest on the date the Company incurs such Change in Control or upon the Date of Termination, as the case may be, and the shares covered thereby shall be distributed to Executive, or his estate, as the case may be, within thirty (30) days of the date the Company incurs such Change in Control or Date of Termination, as the case may be, and (y) in the event the Company terminates the Executive’s employment under this Agreement without Cause (as defined below) or the Executive voluntarily terminates his employment hereunder for Good Reason (as defined below), the unvested RSU’s shall immediately vest on the Date of Termination, and in each case the shares covered thereby shall be distributed to Executive, or his estate, as the case may be, within thirty (30) days of the date the Company incurs such Change in Control or Date of Termination, as the case may be.

2

 

(B) Distribution. Subject to the terms of the 2009 Plan as to conditions and timing of distribution of Common Stock with respect to RSU’s granted pursuant to this Agreement and vesting as a result of a termination of employment and Section 9 of this Agreement with regard to timing of equity distributed as a result of a Separation from Service as an employee of the Company, any vested portion of the RSU’s granted pursuant to this Agreement shall be distributed to Executive in shares of Common Stock fifteen (15) days following the Time Vesting Date. Notwithstanding anything to the contrary contained herein, except as to Sections 5(d) and 9 of this Agreement, all vested RSU’s (including those vested pursuant to the last sentence of clause (A) above) shall be distributed to Executive in shares of Common Stock simultaneous with the Company incurring a Change in Control. Moreover, notwithstanding anything to the contrary contained herein or in the 2009 Plan, upon a termination of Executive’s employment for Cause (as defined below), he shall be entitled to retain any RSU’s that vested prior to the date of termination.

	
(iii)
	
For purposes of this Section 4(c), “Fair Market Value” means the average of the last sale prices reported for a share of Common Stock for each of the five (5) trading days preceding the date the Award Agreements are signed by the parties, as reported on the NASDAQ Stock Market.

	
(d)
	
Fringe Benefits. Executive shall receive the fringe benefits generally given to other executive officers of the Company including, but not limited to, major medical, dental, life insurance, and pension including any 401(k) or other profit sharing plan. Executive shall also be added or continued, as the case may be, as an insured under the Company’s officers and directors insurance and all other polices which pertain to officers of the Company. The Company shall pay Executive a car allowance of $1,500 per month during the Term of this Agreement.

	
(e)
	
Reimbursement of Expenses. The Company shall pay to Executive the reasonable expenses incurred by him in the performance of his duties hereunder, including, without limitation, expenses related to cell phones, blackberrys and laptop computers and such other expenses incurred in connection with business related travel or entertainment in accordance with the Company’s policy, or, if such expenses are paid directly by the Executive, the Company shall promptly reimburse the Executive for such payments, provided that the Executive (i) properly accounts for such expenses in accordance with the Company’s policy and (ii) has received prior approval by the Chief Executive Officer of the Company for major expenses.

	
(f)
	
Vacation. Executive shall be entitled to four weeks of paid vacation per year. The Executive shall use his vacation in the calendar year in which it is accrued.

5. Termination of Employment.

(a) General. The Executive’s employment under this Agreement may be terminated without any breach of this Agreement only on the following circumstances:

(1) Death. The Executive’s employment under this Agreement shall terminate upon his death.

(2) Disability. If the Executive suffers a Disability (as defined below in this sub-section (2)), the Company may terminate the Executive’s employment under this Agreement upon thirty (30) days prior written notice; provided that the Executive has not returned to full time performance of his duties during such thirty (30) day period. For purposes hereof, “Disability” shall mean the Executive’s inability to perform his duties and responsibilities hereunder, with or without reasonable accommodation, due to any physical or mental illness or incapacity, which condition either (i) has continued for a period of 180 days (including weekends and holidays) in any consecutive 365-day period, or (ii) is projected by the Board in good faith after consulting with a doctor selected by the Company and consented to by the Executive (or, in the event of the Executive’s incapacity, his legal representative), such consent not to be unreasonably withheld, that the condition is likely to continue for a period of at least six (6) consecutive months from its commencement.

(3) Good Reason. The Executive may terminate his employment under this Agreement for Good Reason at any time on or prior to the 120th day after the occurrence of any of the Good Reason events set forth in the following sentence. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following events without the Executive’s consent:

	
(i)
	
the failure by the Company to timely comply with its material obligations and agreements contained in this Agreement;

	
(ii)
	
a material diminution of the authorities, duties or responsibilities of the Executive set forth in Section 1 above (other than temporarily while the Executive is physically or mentally incapacitated and unable to properly perform such duties, as determined by the Board in good faith);

	
(iii)
	
the loss of the titles of the Executive with the Company set forth in Section 1 above;

	
(iv)
	
the re-location of the Executive to an office outside of New York, New York (the borough of Manhattan);

	
(v)
	
a change in the reporting structure so that the Executive reports to someone other than the Chief Executive Officer.

3

 

provided, however, that, within ninety (90) days of any such events having occurred, the Executive shall have provided the Company with written notice that such events have occurred and afforded the Company thirty (30) days to cure same. The parties agree that a termination for Good Reason shall be treated as an involuntary separation under Code Section 409A (as hereinafter defined in Section 9(a) below); provided, however, that in the event it is finally determined that any taxes are due and payable in connection with the receipt of such consideration by the Executive, then the Executive agrees to pay any taxes, penalties and interest that may arise in connection therewith, and shall indemnify and hold harmless the Company from any taxes, penalties and interest that result therefrom.

(4) Without Good Reason. The Executive may voluntarily terminate his employment under this Agreement without Good Reason upon written notice by the Executive to the Company at least sixty (60) days prior to the effective date of such termination (which termination the Company may, in its sole discretion, make effective earlier than the date set forth in the Notice of Termination (as hereinafter defined in sub-section (b) below)).

(5) Cause. The Company may terminate the Executive’s employment under this Agreement at any time for Cause. Termination for “Cause” shall mean termination of the Executive’s employment because of the occurrence of any of the following as determined by the Board:

	
(i)
	
the willful and continued failure by the Executive to attempt in good faith to substantially perform his obligations under this Agreement (other than any such failure resulting from the Executive’s incapacity due to a Disability); provided, however, that the Company shall have provided the Executive with written notice that such actions are occurring and the Executive has been afforded at least thirty (30) days to cure same;

	
(ii)
	
the indictment of the Executive for, or his conviction of or plea of guilty or nolo contendere to, a felony or any other crime involving moral turpitude or dishonesty;

	
(iii)
	
the Executive’s willfully engaging in misconduct in the performance of his duties for the Company (including theft, fraud, embezzlement, and securities law violations or a violation of the Company’s Code of Conduct or other written policies) that is injurious to the Company, monetarily or otherwise; or

	
(iv)
	
the Executive’s willfully engaging in misconduct other than in the performance of his duties for the Company (including theft, fraud, embezzlement, and securities law violations) that is materially injurious to the Company or, in the good faith determination of the Board, is potentially materially injurious to the Company, monetarily or otherwise.

For purposes of this Section 5(a)(5), no act, or failure to act, on the part of the Executive shall be considered “willful,” unless done, or omitted to be done, by him in bad faith and without reasonable belief that his action or omission was in, or not opposed to, the best interest of the Company (including reputationally).

(6) Without Cause. The Company may terminate the Executive’s employment under this Agreement without Cause immediately upon written notice by the Company to the Executive.

	
(b)
	
Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive (other than termination by reason of the Executive’s death) shall be communicated by written Notice of Termination to the other party of this Agreement. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

	
(c)
	
Date of Termination. The “Date of Termination” shall mean (a) if the Executive’s employment is terminated by his death, the date of his death, (b) if the Executive’s employment is terminated pursuant to subsection 5(a)(2) above, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period), (c) if the Executive’s employment is terminated pursuant to subsections 5(a)(3) or 5(a)(5) above, the date specified in the Notice of Termination after the expiration of any applicable cure periods, (d) if the Executive’s employment is terminated pursuant to subsection 5(a)(4) above, the date specified in the Notice of Termination which shall be at least sixty (60) days after Notice of Termination is given, or such earlier date as the Company shall determine, in its sole discretion, and (e) if the Executive’s employment is terminated pursuant to subsection 5(a)(6), the date on which a Notice of Termination is given.

4

 

	
(d)
	
Compensation Upon Termination.

	
(i)
	
Termination for Cause or without Good Reason. If the Executive’s employment shall be terminated by the Company for Cause or by the Executive without Good Reason, the Executive shall receive from the Company: (a) any earned but unpaid Base Salary through the Date of Termination, paid in accordance with the Company’s standard payroll practices; (b) reimbursement for any unreimbursed expenses properly incurred and paid in accordance with Section 4(e) through the Date of Termination; (c) payment for any accrued but unused vacation time in accordance with Company policy; (d) such vested accrued benefits, and other payments, if any, as to which the Executive (and his eligible dependents) may be entitled under, and in accordance with the terms and conditions of, the employee benefit arrangements, plans and programs of the Company as of the Date of Termination, other than any severance pay plan ((a) though (d), the “Amounts and Benefits”), and (e) all vested shares in respect of the Award and the Company shall have no further obligation with respect to this Agreement other than as provided in Section 8 of this Agreement. In addition, any portion of the Award that remains unvested on the Date of Termination shall be forfeited as of the Date of Termination.

	
(ii)
	
Termination without Cause or for Good Reason. If, prior to the expiration of the Term, the Executive resigns from his employment hereunder for Good Reason or the Company terminates the Executive’s employment hereunder without Cause (other than a termination by reason of death or Disability), and the Executive has not received and is not entitled to any payment under Section 5(d)(iii) hereof, then the Company shall pay or provide the Executive the Amounts and Benefits and, subject to Section 9 hereof:

	
1.
	
an amount equal to the sum of all applicable Base Salary for the balance of the Term determined as if such termination had not occurred, plus any unpaid portion of the Transition Bonus, which amount shall be payable in full in a lump sum cash payment to be made to the Executive within thirty (30) days of the Date of Termination;

	
2.
	
any Annual Bonus earned but unpaid for a prior year (the “Prior Year Bonus”) and any unpaid Minimum Annual Bonus for the balance of the Term, which shall be payable in full in a lump sum cash payment to be made to the Executive within thirty (30) days of the Date of Termination;

	
3.
	
in the event such resignation or termination occurs following the Company’s first fiscal quarter of any year, a pro-rata portion of the Executive’s Annual Bonus for the fiscal year in which the Executive’s termination occurs based on actual results for such year (determined by multiplying the amount of such Annual Bonus which would be due for the full fiscal year by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company and the denominator of which is 365), paid in accordance with Section 4(b) (“Pro Rata Bonus”). In the event that the Company has not established an executive bonus plan covering the year of the Term during which the Executive was terminated the pro-rata portion of the bonus due to the Executive shall be based upon the prior year’s Annual Bonus received by the Executive;

	
4.
	
subject to the Executive’s (a) timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), with respect to the Company’s group health insurance plans in which the Executive participated immediately prior to the Date of Termination (“COBRA Continuation Coverage”), and (b) continued payment by Executive of premiums for such plans at the “active employee” rate (excluding, for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars), the Company shall provide COBRA Continuation Coverage for the Executive and his eligible dependents until the earliest of (x) the Executive or his eligible dependents, as the case may be, ceasing to be eligible under COBRA, (y) eighteen (18) months following the Date of Termination, and (z) the Executive becoming eligible for coverage under the health insurance plan of a subsequent employer (the benefits provided under this sub-section (4), the “Medical Continuation Benefits”); and

	
5.
	
in the event a Change in Control shall not have theretofore occurred, and the Executive has terminated this Agreement for Good Reason or the Company has terminated the Executive without Cause, the unvested shares subject to the PSU’s and RSU’s shall vest in accordance with Section 4(c)(i)(B) and 4(c)(ii)(A), respectively.

	
(iii)
	
Termination Following Change in Control. If the Company terminates Executive’s employment without Cause or Executive terminates Executive’s employment for Good Reason within 12 months after a Change in Control, then the Company shall pay to Executive, in a lump sum, in cash, within 15 days after the date of Executive’s termination, an amount equal to $100 less than three times the Executive’s “annualized includable compensation for the base period” (as defined in Section 280G of the Internal Revenue Code of 1986 (the “Code”)); provided, however, that if such lump sum severance payment, either alone or together with other payments or benefits, either cash or non-cash, that the Executive has the right to receive from the Company, including, but not limited to, accelerated vesting or payment of any deferred compensation, options, stock appreciation rights or any benefits payable to Executive under any plan for the benefit of employees, which would constitute an “excess parachute payment” (as defined in Section 280G of the Code), then such lump sum severance payment or other benefit shall be reduced to the largest amount that will not result in receipt by the Executive of an excess parachute payment. In addition to the foregoing, upon a termination of Executive’s employment as set forth above, Executive shall be entitled to receive the payments in the amounts contemplated, and on the dates specified, by sub-section 5(d)(ii)(2), (3) and (4).

5

 

For purposes of this Agreement, a “Change in Control” shall mean any of the following:

	
1.
	
any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company Common Stock immediately prior to the merger have the same proportionate ownership of Common Stock of the surviving corporation immediately after the merger;

	
2.
	
any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company;

	
3.
	
any approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company;

	
4.
	
the cessation of control (by virtue of their not constituting a majority of directors) of the Board by the individuals (the “Continuing Directors”) who (x) at the date of this Agreement were directors or (y) become directors after the date of this Agreement and whose election or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the directors then in office who were directors at the date of this Agreement or whose election or nomination for election was previously so approved); or

	
5.
	
(A) the acquisition of beneficial ownership (“Beneficial Ownership”), within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of an aggregate of 25% or more of the voting power of the Company’s outstanding voting securities by any person or group (as such term is used in Rule 13d-5 under the Exchange Act) who beneficially owned less than 10% of the voting power of the Company’s outstanding voting securities on the effective date of this Agreement, (B) the acquisition of Beneficial Ownership of an additional 15% of the voting power of the Company’s outstanding voting securities by any person or group who beneficially owned at least 10% of the voting power of the Company’s outstanding voting securities on the effective date of this Agreement, or (C) the execution by the Company and a stockholder of a contract that by its terms grants such stockholder (in its, hers or his capacity as a stockholder) or such stockholder’s Affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933 (an “Affiliate”)) including, without limitation, such stockholder’s nominee to the Board (in its, hers or his capacity as an Affiliate of such stockholders), the right to veto or block decisions or actions of the Board provided, however, that notwithstanding the foregoing, the events described in items (A), (B) or (C) above shall not constitute a Change in Control hereunder if the acquiror is (aa) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or one of its affiliated entities and acting in such capacity, (bb) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of voting securities of the Company or (cc) a person or group meeting the requirements of clauses (i) and (ii) of Rule 13d-1(b)(1) under the Exchange Act;

	
6.
	
subject to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of a trustee or the conversion of a case involving the Company to a case under Chapter 7.

	
(iv)
	
Termination upon Death. In the event of the Executive’s death, the Company shall pay or provide to the Executive’s estate: (i) the Amounts and Benefits, (ii) the Prior Year Bonus, and (iii) the Pro Rata Bonus. In addition, in the event a Change in Control shall not have theretofore occurred, one hundred percent (100%) of the then remaining unvested Award, if any, shall immediately become vested on the Date of Termination and all such amounts and the shares covered by the Award shall be distributed to the Executive’s estate within thirty (30) days of the Date of Termination.

	
(v)
	
Termination upon Disability. In the event the Company terminates the Executive’s employment hereunder for reason of Disability, the Company shall pay or provide to the Executive: (i) the Amounts and Benefits, (ii) the Prior Year Bonus, (iii) a Pro Rata Bonus and (v) the Medical Continuation Benefits. In addition, in the event a Change in Control shall not have theretofore occurred, one hundred percent (100%) of the then remaining unvested Award, if any, shall immediately become vested on the Date of Termination and all such amounts and the shares covered by the Award shall be distributed to the Executive within thirty (30) days of the Date of Termination.

	
(vi)
	
Payments of Compensation Upon Termination. For the avoidance of doubt, in the event the Executive shall be entitled to receive payments and benefits pursuant to any one of sub-sections 5(d)(i), (ii), (iii), (iv) or (v) above, he shall be entitled to no payments or benefits under any other of such sub-sections, except as expressly set forth in sub-section 5(d)(iii) with respect to payments and benefits contemplated by sub-section 5(d)(ii). Notwithstanding any provision to the contrary contained in this Section 5(d), if any bonus amount is based in whole or in part on the results of the audit by the Company’s independent public accountants of the Company’s financial statements for a calendar year, and such amount cannot be paid within the applicable thirty (30) day period provided for herein, then such amount shall be paid by the later of March 15 of the calendar year immediately following the calendar year to which it relates or the end of the applicable thirty (30) day period.

	
(e)
	
No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Section 5 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 5 be reduced by any compensation earned by Executive as the result of Executive’s employment by another employer or business or by profits earned by Executive from any other source at any time before and after the Executive’s date of termination.

6

 

6. Confidentiality. The Executive shall not divulge to anyone, either during or at any time after the Term, any information constituting a trade secret or other confidential information acquired by him concerning the Company, any subsidiary or other affiliate of the Company, except in the performance of his duties hereunder, including but not limited to its licensees, revenues, business systems and processes (“Confidential Information”). The Executive acknowledges that any Confidential Information is of great value to the Company, and upon the termination of his employment, the Executive shall redeliver to the Company all Confidential Information and other related data in his possession.

7. Noncompetition; Nonsolicitation.

(1) The Executive hereby agrees that during the period commencing on the date hereof and ending December 31, 2017 (the “Non-Compete Term”), he shall not, directly or indirectly, in any location in which the Company, its subsidiaries or affiliates or a licensee thereof operates or sells its products (the “Territory”), engage, have an interest in or render any services to any business (whether as owner, manager, operator, licensor, licensee, lender, partner, stockholder, joint venturer, employee, consultant or otherwise) competitive with the business activities conducted by the Company, its subsidiaries or affiliates, or the business activities that the Company, its subsidiaries or affiliates, have plans to conduct, during the time of Executive’s employment by the Company, or at the termination of his employment. Notwithstanding the foregoing, nothing herein shall prevent the Executive from owning stock in a publicly traded corporation whose activities compete with those of the Company, its subsidiaries and affiliates, provided that such stock holdings are not greater than five percent (5%) of such corporation.

(2) The Executive shall not, during the period commencing on the date hereof and ending on December 31, 2017, directly or indirectly, take any action which constitutes an interference with or a disruption of any of the Company’s business activities including, without limitation, the solicitation of the Company’s or any subsidiary’s customers, suppliers, lessors, lessees, licensors, or licensees, or persons listed on the personnel lists of the Company or any subsidiary.

(3) For purposes of clarification, but not of limitation, the Executive hereby acknowledges and agrees that he shall be prohibited from, during the period commencing on the date hereof and ending on December 31, 2017, directly or indirectly, hiring, offering to hire, enticing, soliciting or in any other manner persuading or attempting to persuade any officer, employee, agent, supplier, lessor, lessee, licensor, licensee or customer of the Company or any subsidiary (but only those suppliers existing during the time of the Executive’s employment by the Company or any subsidiary, or at the termination of his employment), to discontinue or alter his, her or its relationship with the Company or any subsidiary.

(4) Without intending to limit the remedies available to the Company, the Executive acknowledges that a breach of any of the covenants contained in this Section 7 may result in material and irreparable injury to the Company, or its affiliates or subsidiaries, for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat the Company shall be entitled to seek a temporary restraining order and/or a preliminary or permanent injunction restraining the Executive from engaging in activities prohibited by this Section 7 or such other relief as may be required specifically to enforce any of the covenants in this Section 7. If for any reason it is held that the restrictions under this Section 7 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted or modified to include as much of the duration and scope identified in this Section 7 as will render such restrictions valid and enforceable.

8. Indemnification. The Company shall indemnify and hold harmless the Executive against any and all expenses reasonably incurred by him in connection with or arising out of (a) the defense of any action, suit or proceeding in which he is a party, or (b) any claim asserted or threatened against him, in either case by reason of or relating to his being or having been an employee, officer or director of the Company, whether or not he continues to be such an employee, officer or director at the time of incurring such expenses, except insofar as such indemnification is prohibited by law. Such expenses shall include, without limitation, the fees and disbursements of attorneys, amounts of judgments and amounts of any settlements, provided that such expenses are agreed to in advance by the Company. The foregoing indemnification obligation is independent of any similar obligation provided in the Company’s Certificate of Incorporation or Bylaws, and shall apply with respect to any matters attributable to periods prior to the date of this Agreement, and to matters attributable to Executive’s employment hereunder, without regard to when asserted.

7

 

9. Section 409A of the Code.

	
(a)
	
It is intended that the provisions of this Agreement comply with Section 409A of Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A. If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A, the Company shall, upon the specific request of the Executive, use its reasonable business efforts to in good faith reform such provision to comply with Code Section 409A; provided, that to the maximum extent practicable, the original intent and economic benefit to the Executive and the Company of the applicable provision shall be maintained, but the Company shall have no obligation to make any changes that could create any additional economic cost or loss of benefit to the Company. The Company shall timely use its reasonable business efforts to amend any plan or program in which the Executive participates to bring it in compliance with Code Section 409A. Notwithstanding the foregoing, the Company shall have no liability with regard to any failure to comply with Code Section 409A so long as it has acted in good faith with regard to compliance therewith.

	
(b)
	
A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean Separation from Service. If the Executive is deemed on the date of termination of his employment to be a “specified employee”, within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by the Company from time to time, or if none, the default methodology, then with regard to any payment, the providing of any benefit or any distribution of equity made subject to this Section to the extent required to be delayed in compliance with Section 409A(a)(2)(B) of the Code, and any other payment, the provision of any other benefit or any other distribution of equity that is required to be delayed in compliance with Section 409A(a)(2)(B) of the Code, such payment, benefit or distribution shall not be made or provided prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s Separation from Service or (ii) the date of the Executive’s death. On the first day of the seventh month following the date of Executive’s Separation from Service or, if earlier, on the date of his death, (x) all payments delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein and (y) all distributions of equity delayed pursuant to this Section 9 shall be made to the Executive. In addition to the foregoing, to the extent required by Section 409A(a)(2)(B) of the Code, prior to the occurrence of a Disability termination as provided in this Agreement, the payment of any compensation to the Executive under this Agreement shall be suspended for a period of six months commencing at such time that the Executive shall be deemed to have had a Separation from Service because either (A) a sick leave ceases to be a bona fide sick leave of absence, or (B) the permitted time period for a sick leave of absence expires (an “SFS Disability”), without regard to whether such SFS Disability actually results in a Disability termination. Promptly following the expiration of such six-month period, all compensation suspended pursuant to the foregoing sentence (whether it would have otherwise been payable in a single sum or in installments in the absence of such suspension) shall be paid or reimbursed to the Executive in a lump sum. On any delayed payment date under this Section there shall be paid to the Executive or, if the Executive has died, to his estate, in a single cash lump sum together with the payment of such delayed payment, interest on the aggregate amount of such delayed payment at the Delayed Payment Interest Rate (as hereinafter defined in this sub-section (b) below) computed from the date on which such delayed payment otherwise would have been made to the Executive until the date paid. For purposes of the foregoing, the “Delayed Payment Interest Rate” shall mean the short term applicable federal rate provided for in Section 1274(d) of the Code as of the business day immediately preceding the payment date for the applicable delayed payment.

	
(c)
	
With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.

8

 

10. Miscellaneous.

	
(a)
	
This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with those laws. The Company and Executive unconditionally consent to submit to the exclusive jurisdiction of the New York State Supreme Court, County of New York or the United States District Court for the Southern District of New York for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby (and agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, notice or document by registered mail to the address set forth below shall be effective service of process for any action, suit or proceeding brought against the Company or the Executive, as the case may be, in any such court.

	
(b)
	
Executive may not delegate his duties or assign his rights hereunder. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company other than pursuant to a merger or consolidation in which the Company is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets or businesses of the Company and assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or by operation of law. For the purposes of this Agreement, the term “Company” shall include the Company and, subject to the foregoing, any of its successors and assigns. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

	
(c)
	
The invalidity or unenforceability of any provision hereof shall not in any way affect the validity or enforceability of any other provision. This Agreement reflects the entire understanding between the parties.

	
(d)
	
This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of the Executive by the Company and contains all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever. Any modification or termination of this Agreement will be effective only if it is in writing signed by the party to be charged.

	
(e)
	
This Agreement may be executed by the parties in one or more counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto.

11. Notices. All notices relating to this Agreement shall be in writing and shall be either personally delivered, sent by telecopy (receipt confirmed) or mailed by certified mail, return receipt requested, to be delivered at such address as is indicated below, or at such other address or to the attention of such other person as the recipient has specified by prior written notice to the sending party. Notice shall be effective when so personally delivered, one business day after being sent by telecopy or five days after being mailed.

To the Company:

Iconix Brand Group, Inc.

1450 Broadway, 3rd Floor

New York, New York 10018

Attention: Neil Cole, Chief Executive Officer

With a copy in the same manner to:

Blank Rome LLP

405 Lexington Avenue

New York, New York 10174

Attention: Robert J. Mittman, Esq.

To the Executive:

David Jones

23 Sire Stakes Drive

Tinton Falls, NJ 07724

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the 10th day of June, 2015.

 

	
Iconix Brand Group, Inc.
	
 
	
 
	
Executive

	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Neil Cole
	
 
	
 
	
/s/ David Jones

	
 
	
 
	
Neil Cole
	
 
	
 
	
David Jones

	
 
	
 
	
Chief Executive Officer
	
 
	
 
	
 

 

9

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