Document:

Exhibit 10.2

Return
    to 10Q
    Exhibit
      10.2

     

    

     

    SEPARATION
      AGREEMENT AND GENERAL RELEASE

     

    This
      Separation Agreement and General Release (this “Agreement”) is made and entered
      into by and between Peter J. Rizzo and I.C. Isaacs & Co., Inc.

     

    DEFINITIONS

     

    As
      used
      throughout this Agreement:

     

    1. “Rizzo”
      refers to Peter J. Rizzo, his heirs, executors, administrators, agents,
      successors, assigns and dependents.

     

    2. “Isaacs”
      refers to I.C. Isaacs & Co., Inc., together with its respective past and
      present parents, subsidiaries, and affiliates, and its respective past and
      present officers, directors, agents, employees, successors and assigns, in
      both
      their individual and corporate capacities.

     

    RECITALS

     

    WHEREAS,
      Rizzo had been employed as Chief Executive Officer of Isaacs and had been
      Chairman of the Board of Directors for Isaacs;

     

    WHEREAS,
      pursuant to this Agreement, Rizzo has resigned as Chief Executive Officer and
      Chairman of the Board of Isaacs, effective as of April 5, 2007 (the “Termination
      Date”); and 

     

    WHEREAS,
      the parties hereto desire to settle any and all potential disputes relating
      to
      Rizzo’s employment and the termination thereof;

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements hereinafter
      set forth, and intending to be and being legally bound hereby, the parties
      agree
      as follows:

     

    AGREEMENT

     

    1.  Effective
      immediately, Rizzo hereby: (a) resigns his employment with Isaacs as Chief
      Executive Officer, (b) resigns his position as Chairman of the Board of Isaacs,
      (c)\ resigns his position as a Director on the Board of Directors of
      Isaacs, and (d) resigns any and all positions he has, whether as a director,
      officer, or otherwise, with any affiliate of Isaacs or otherwise by reason
      of
      his employment with Isaacs. Isaacs hereby accepts such
      resignations.

     

    2.  Rizzo
      represents that he does not have any claim, action or proceeding pending against
      Isaacs, or which arises out of his employment by Isaacs or the termination
      thereof.

     

    3.  In
      full
      and complete consideration for Rizzo’s promises, covenants and agreements set
      forth herein, Isaacs will continue to pay Rizzo’s base salary at the rate of
      $550,000 per annum (“Base Salary”) through the date that is one year following
      the Termination Date in accordance with Isaacs’ normal payroll practices. In
      addition, Isaacs will pay Rizzo a pro rata portion of his 2007 bonus for work
      performed in his capacity as Chief Executive Officer in the amount of $45,547.75
      (“2007 Bonus”). In addition, if Rizzo timely elects to continue medical and/or
      dental insurance coverage pursuant to COBRA, Isaacs shall provide such coverage
      without charge to Rizzo from the Termination Date through the date that is
      one
      year following the Termination Date (the “Benefit Period”); thereafter, Rizzo
      shall be responsible for paying the required COBRA premium for the remainder
      of
      the term of his continuation coverage. During the Benefit Period, Rizzo will
      continue to participate in all of Isaacs’ benefit plans not covered by COBRA in
      which he participated immediately prior to the Termination Date so long as
      such
      coverage is available under such applicable plans in accordance with applicable
      law. In the event that any insurance coverage previously offered is not
      available under such applicable plans, Isaacs will use reasonable efforts to
      convert any such insurance coverage into individual coverage for Rizzo and
      pay
      the premium associated with such coverage for the Benefit Period, provided
      that
      such coverage costs Isaacs no more than the cost per annum to Isaacs prior
      to
      the Termination Date. In the event that any such insurance coverage is not
      converted into individual coverage for Rizzo, Isaacs shall pay Rizzo an amount
      equal to the cost per annum to Isaacs of such coverage prior to the Termination
      Date. Rizzo’s stock options will fully vest upon termination of employment.
      Thereafter, Rizzo will have one year from the Termination Date to exercise
      his
      options. All payments to Rizzo pursuant to this Agreement will be less all
      applicable deductions and withholdings. Subject to the provisions of Section
      17
      below, no payments shall be made for the six-month period following the
      Termination Date and an amount equal to six months of the Base Salary shall
      be
      paid in a lump sum on the date that is six months following the Termination
      Date. The 2007 Bonus will be paid in April 2008.

     

    4.  (i)
      Rizzo
      shall not be entitled to any payment or continued payment or benefits under
      Section 3 of this Agreement if Rizzo is in willful material breach of any
      covenant contained in this Agreement, and such breach, if susceptible to cure,
      is not substantially cured within 15 days after written notice of such breach
      is
      delivered to Rizzo.

     

    (ii)
      Rizzo shall not be entitled to any payment or continued payment or benefits
      under Section 3 of this Agreement in the event a court of competent jurisdiction
      renders a preliminary or final determination that any covenant in this Agreement
      is unenforceable or invalid in its entirety, provided that Rizzo contended
      in
      the proceeding resulting in such determination that this Agreement was invalid
      or unenforceable in whole or in part.

     

    5.  
      (i)Rizzo
      acknowledges that during the course of his past employment with Isaacs and
      pursuant to Section 10 of this Agreement, he has had, and will continue to
      have,
      access to proprietary information and confidential records of Isaacs, and has
      made, and will continue to make, use of proprietary information and confidential
      records of Isaacs. Rizzo agrees that he shall not, directly or indirectly,
      hereafter use for his own purpose or for the benefit of any person or entity
      other than Isaacs, nor otherwise disclose, any proprietary information to any
      individual or entity, unless such disclosure has been authorized in writing
      by
      Isaacs or is otherwise required by law. Rizzo acknowledges and understands
      that
      the term “proprietary information” includes, but is not limited to: (a) the
      software products, programs, applications, and processes utilized by Isaacs;
      (b) the name and/or address of any licensor, customer, vendor or
      distributor of Isaacs or any information concerning the transactions or
      relations of any licensor, customer, vendor or distributor of Isaacs or any
      of
      its or their partners, principals, directors, officers or agents; (c) any
      information concerning any product, technology, or procedure employed by Isaacs
      but not generally known to its or their customers, vendors or competitors,
      or
      under development by or being tested by Isaacs but not at the time offered
      generally to customers, vendors or distributors; (d) any information concerning
      the structure or content of the proprietary databases of any of Isaacs; (e)
      any
      information relating to the computer software, computer systems, pricing or
      marketing methods, sales margins, cost of goods, cost of material, capital
      structure, operating results, borrowing arrangements or business plans of any
      of
      Isaacs; (f) customer lists and contact information; (g) any information which
      is
      generally regarded as confidential or proprietary in any line of business
      engaged in by Isaacs; (h) product information and future development plans;
      (i)
      any business plans, budgets, advertising or marketing plans; (j) any information
      contained in any of the written or oral policies and procedures or manuals
      of
      Isaacs; (k) any information belonging to customers, vendors or distributors
      of
      Isaacs or any other person or entity which Isaacs has agreed to hold in
      confidence; (l) any inventions, innovations or improvements covered by this
      Agreement; and (m) all written, graphic and other material relating to any
      of
      the foregoing. Rizzo acknowledges and understands that information that is
      not
      novel or copyrighted or patented may nonetheless be proprietary information.
      The
      term “proprietary information” shall not include information (i) generally
      available to and known by or disclosed by Isaacs to the public or information
      that is or becomes available to Rizzo on a non-confidential basis from a source
      other than Isaacs or its directors, officers, employees, partners, principals
      or
      agents (other than as a result of a breach of any obligation of confidentiality)
      or (ii) that is within Rizzo’s general business or industry knowledge,
      know-how or expertise (collectively, “know-how”), provided such know-how is of a
      generic nature not specifically pertaining to Isaacs.

     

    (ii)  Rizzo
      shall not at any time hereafter, except as required by law, directly or
      indirectly publish, make known or in any fashion disclose any confidential
      records to, or permit any inspection or copying of confidential records by,
      any
      individual or entity other than in the course of such individual’s or entity’s
      employment or retention by Isaacs. Rizzo shall deliver promptly to Isaacs all
      property and records of Isaacs, including, without limitation, all confidential
      records. For purposes hereof, “confidential records” means all correspondence,
      reports, memoranda, files, manuals, books, lists, financial, operating or
      marketing records, magnetic, optical, or electronic or other media or equipment
      of any kind which may be in Rizzo’s possession or under his control or
      accessible to him which contain any proprietary information. Rizzo agrees that
      all property and records of Isaacs (including, without limitation, all
      confidential records) shall be and remain the sole property of
      Isaacs.

     

    (iii)  All
      inventions, innovations or improvements (including policies, procedures,
      products, improvements, software, ideas and discoveries, whether patent,
      copyright, trademark, service mark, or otherwise) conceived or made by Rizzo,
      either alone or jointly with others, in the course of his employment with
      Isaacs, belong to Isaacs. Rizzo will promptly disclose in writing such
      inventions, innovations or improvements to Isaacs and perform all actions
      reasonably requested by Isaacs to establish and confirm such ownership by
      Isaacs, including, but not limited to, cooperating with and assisting Isaacs
      in
      obtaining patents, copyrights, trademarks, or service marks for Isaacs in the
      United States and in foreign countries.

     

    (iv)  Rizzo
      agrees that, for six (6) months following the Termination Date, Rizzo shall
      not,
      directly or indirectly, without the express prior written authorization of
      Isaacs, advise or encourage any person who is or was a licensor, customer,
      vendor or supplier of or to Isaacs within the 12-month period immediately
      preceding the Termination Date to terminate his, her or its relationship with
      Isaacs or to reduce the amount of business customarily done with
      Isaacs.

     

    (v)  Rizzo
      acknowledges and agrees that, by virtue of his position, his services, and
      access to and use of confidential records and proprietary information, any
      violation by him of any of the undertakings contained in this Section 5 would
      cause Isaacs immediate, substantial and irreparable injury for which it has
      no
      adequate remedy at law. Rizzo agrees and consents to the entry of an injunction
      or other equitable relief by a court of competent jurisdiction restraining
      any
      violation or threatened violation of any undertaking contained in this Section
      5. Rizzo waives posting by Isaacs of any bond otherwise necessary to secure
      such
      injunction or other equitable relief. Rights and remedies provided for in this
      Agreement are cumulative and shall be in addition to rights and remedies
      otherwise available to Isaacs under any other agreement or applicable
      law.

     

    6.  Except
      as
      necessary to enforce the terms of this Separation Agreement and General Release,
      and in exchange for and in consideration of the promises, covenants and
      agreements set forth herein, Rizzo hereby releases Isaacs to the maximum extent
      permitted by law from any and all manner of claims, demands, causes of action,
      obligations, damages, or liabilities whatsoever of every kind and nature, at
      law
      or in equity, known or unknown, and whether or not discoverable, which he has
      or
      may have for any period prior to and arising up to his execution of this
      Separation Agreement and General Release, including, but not limited to, any
      claim of defamation, wrongful discharge, breach of contract, any claim for
      additional compensation, any claims arising out of or related to Rizzo’s
      employment by Isaacs and the termination thereof, any claims arising under
      or
      related to any employment agreement, whether oral or written, between Rizzo
      and
      Isaacs, claims for unpaid wages or commissions or bonuses, severance pay, and
      claims of discrimination under the Age Discrimination in Employment Act of
      1967,
      as amended, the Americans with Disabilities Act, Title VII of the Civil Rights
      Act of 1964, as amended, and all other federal, state and local laws, including
      but not limited to any claim for attorneys’ fees or costs.

     

    7.  The
      parties agree that it is a material condition of this Separation Agreement
      and
      General Release that, except as required by law, each party maintain strictly
      confidential, and shall take all reasonable steps to prevent the disclosure
      to
      any person or entity, the existence and terms of this Separation Agreement
      and
      General Release and all disputes and disagreements between Rizzo and Isaacs
      arising out of Rizzo’s employment by Isaacs and the termination thereof. This
      provision does not prohibit either party from providing this information to
      an
      attorney or accountant for purposes of obtaining legal or tax advice, or, in
      the
      case of Rizzo, to members of his immediate family. To the extent Rizzo makes
      any
      disclosure to any attorney, accountant or family member as permitted pursuant
      to
      this Section, he shall instruct such person not to make any further disclosure
      except in accordance with this Section and shall be responsible for such person
      treating such information in the same manner as Rizzo is required to treat
      it
      under this Agreement.

     

    8.  The
      parties agree that it is a material condition of this Separation Agreement
      and
      General Release that Rizzo shall not make or publish any statement (in verbal,
      written, electronic or any other form), or instigate, assist or participate
      in
      the making or publication of any statement (in verbal, written, electronic
      or
      any other form), which would libel, slander or disparage (whether or not such
      disparagement legally constitutes libel or slander) or expose to hatred,
      contempt or ridicule (i) Isaacs; (ii) any of its products, services, affairs,
      or
      operations; or (iii) any of its past or present directors, officers,
      employees, agents, or licensors. By way of example only, such prohibition shall
      include,
      but not be limited to, a negative or derogatory statement made in, or in
      connection with, any article or book, on a website or via the
      internet. Isaacs
      agrees that it will not make any official or internal announcements or issue
      any
      press releases which contain any negative or derogatory statements about Rizzo
      and will advise the members of Isaacs’ Board of Directors that they should not
      make any disparaging remarks, written or verbal, intended to adversely affect
      or
      having a foreseeable result of adversely affecting Rizzo or his business, good
      name or reputation.

     

    9.  Rizzo
      shall reasonably cooperate with Isaacs in connection with any and all actions,
      governmental inquiries or other legal proceedings in which Rizzo’s assistance
      may be requested by Isaacs. Such cooperation shall include, among other things,
      making documents relating to Isaacs in Rizzo’s custody or control available to
      Isaacs or its counsel, making Rizzo reasonably available for interviews by
      Isaacs or its counsel, and being reasonably available to appear as a witness
      at
      deposition, trial or otherwise. In addition, for a period of six (6) months
      following the Termination Date, Rizzo shall reasonably cooperate with Isaacs
      (primarily through telephone conference), as requested by Isaacs, to effect
      a
      transition of his responsibilities and the ongoing conduct of Isaacs’ business,
      and to ensure that Isaacs is aware of all matters being handled by him. Any
      reasonable vouchered out-of-pocket expenses incurred by Rizzo in fulfilling
      his
      obligations under this Section 9 shall be promptly reimbursed by
      Isaacs.

     

    10.  Notwithstanding
      anything to the contrary contained in this agreement, neither Rizzo nor Isaacs
      shall be prohibited or restricted in connection with any communications with
      any
      regulatory or self-regulatory organization or any law enforcement authority
      or
      pursuant to court order or lawful subpoena or other legal process, or from
      making any other disclosure required by law. In the event that Isaacs determines
      to issue a press release the primary purpose of which is to announce the
      resignation of Rizzo as contemplated by this Agreement, Isaacs will provide
      Rizzo with a copy of the proposed press release in advance of its publication
      and agrees to consider any comments to the proposed press release provided
      by
      Rizzo.

     

    11.  Except
      as
      expressly provided in this Separation Agreement and General Release, Rizzo
      shall
      not be entitled to any money or other consideration from Isaacs. Rizzo
      acknowledges he is receiving under this Separation Agreement and General Release
      consideration in addition to anything of value to which he already is
      entitled.

     

    12.  In
      executing this Separation Agreement and General Release, neither Isaacs nor
      Rizzo admits any liability or wrongdoing, and the considerations exchanged
      herein do not constitute an admission of any liability, error, contract
      violation, or violation of any federal, state or local law or
      regulation.

     

    13.  This
      Separation Agreement and General Release shall be binding upon and inure to
      the
      benefit of the parties hereto and their respective successors and permitted
      assigns.

     

    14.  The
      unenforceability or invalidity of any provision or provisions of this Separation
      Agreement and General Release shall not render any other provision or provisions
      hereof unenforceable or invalid.

     

    15.  This
      Separation Agreement and General Release constitutes the entire agreement
      between the parties, supersedes all existing agreements, whether written or
      oral, regarding Rizzo’s employment by Isaacs, and cannot be altered except in a
      writing signed by the parties. The parties acknowledge that they entered into
      this Separation Agreement and General Release voluntarily, that they fully
      understand all of its provisions, and that no representations were made to
      induce execution of this Separation Agreement and General Release which are
      not
      expressly contained herein.

     

    16.  This
      Separation Agreement and General Release shall be deemed to have been made
      in
      the State of New York, and shall be interpreted and construed and enforced
      in
      accordance with the laws of the State of New York without regard to principles
      of conflicts of law or where the parties are located at the time a dispute
      arises. Any dispute arising out of or relating to this Separation Agreement
      and
      General Release shall be commenced in any state or federal court sitting in
      the
      County of New York in the State of New York, and Rizzo and Isaacs consent to
      the
      jurisdiction of such courts for such purposes.

     

    17.  Rizzo
      is
      advised to consult with the attorneys of his choice prior to executing this
      Separation Agreement and General Release. Rizzo acknowledges that he has had
      the
      opportunity to consult with counsel and has had an adequate opportunity to
      review this Separation Agreement and General Release before its
      execution.

     

    18.  Rizzo
      acknowledges that he has been afforded an opportunity to take at least
      twenty-one (21) days to consider this Separation Agreement and General Release
      and has been and hereby is advised to consult with the attorneys of his choice
      prior to executing this Separation Agreement and General Release. Rizzo further
      acknowledges that he will have a period of seven (7) calendar days following
      his
      execution of this Separation Agreement and General Release in which to revoke
      his consent, and that the Separation Agreement and General Release will not
      become effective or enforceable until the revocation period has expired. A
      revocation will become effective only if Rizzo furnishes Isaacs with a written
      notice to I.C. Isaacs & Co., Inc., 475 10th
      Avenue,
      9th
      Floor,
      New York, New York 10018, Attn: Gregg A. Holst, Chief Financial
      Officer, such
      that
      it is actually received within such seven (7) day period. Isaacs will have
      no obligation to make the payments set forth herein unless and until this
      Separation Agreement and General Release becomes effective.

     

    IN
      WITNESS WHEREOF, the parties have executed this Separation Agreement and General
      Release on the dates indicated below.

     

    

    

    /s/Peter
      J. Rizzo     

    Peter
      J.
      Rizzo      Date:
      April 5, 2007

    

    

    I.C.
      Isaacs & Co., Inc.

    

    

    By:
      /s/Gregg
      A. Holst   

    Gregg
      A.
      Holst     Date:
      April 5, 2007

     

    Executive
      Vice President &

     

    Chief
      Financial OfficerExhibit 10.4

    Return
      to 10Q

    Exhibit
      10.4

    
 

    I.C.
      ISAACS & COMPANY, INC. 

    AMENDED
      AND RESTATED OMNIBUS STOCK PLAN

    NONSTATUTORY
      STOCK OPTION GRANT AGREEMENT

     

    AGREEMENT
      dated the 1st day of May, 2007 from I.C. ISAACS & COMPANY, INC., a Delaware
      corporation (the “Company”), to Gregg A. Holst, an employee and a director of
      the Company (“Optionee”). Capitalized terms used without being defined herein
      shall have the meanings ascribed to them by the I.C. Isaacs & Company, Inc.
      Amended and Restated Omnibus Stock Plan, as the same may be amended from time
      to
      time hereafter (the “Plan”).

     

    WHEREAS,
      in order to implement the purposes of the Plan, the Company has granted the
      Optionee an opportunity to purchase shares of its $.0001 par value Common Stock
      (the “Common Stock”), as hereinafter provided; and

     

    WHEREAS,
      on May 1, 2007 (the “Grant Date”) the Compensation Committee of the Board of
      Directors of the Company, acting pursuant to the Plan, granted to the Optionee
      the option evidenced hereby at the exercise price in effect under the Plan
      for
      the Grant Date;

     

    NOW,
      THEREFORE, in consideration of the premises, mutual covenants and agreements
      herein, the Company and Optionee agree as follows:

     

    ARTICLE
      1

    GRANT
      OF OPTION

     

    Section
      1.1 Grant of Option.
      The
      Company has granted to Optionee, pursuant to the provisions of the Plan, a
      non-qualified stock option to purchase from the Company, at a price equal to
      the
      fair market value of the shares on the date of grant, which is $1.26 per share
      (the “Exercise Price”), up to 25,000 shares of Common Stock, subject to the
      provisions of this Option (this “Option”). This Option shall expire at 5:00 p.m.
      Eastern Time on May 1, 2017 (the “Expiration Date”), unless fully exercised or
      terminated earlier pursuant to this Option. The period between the Vesting
      Date
      (as defined below) and the Expiration Date is hereinafter referred to as the
      “Option Term.”

     

    ARTICLE
      2

    VESTING

     

    Section
      2.1 Vesting Schedule.
      Unless
      this Option has earlier terminated pursuant to the provisions of this Agreement,
      the Optionee’s right to purchase Common Stock pursuant to this Option shall vest
      with respect to a number of shares of Common Stock as close as possible to
      1/3
      of the total number of shares subject to this Option are vested on May 1, 2007,
      1/3 will vest on May 1, 2008, and the remaining 1/3 will vest on May 1, 2009,
      provided that Optionee shall be an active employee of our consultant to the
      Company or one of its subsidiaries on each of such dates

     

    Section
      2.2 Acceleration of Vesting.
      Unless
      this Option has earlier terminated pursuant to the provisions of this Option,
      vesting of this Option granted to Optionee hereunder shall be accelerated so
      that the unvested portion of this Option shall become 100% vested in Optionee
      upon the earliest to occur of: (i) Optionee’s termination of employment with the
      Company or its subsidiaries due to Disability, as defined in Article 4
      hereunder; (ii) termination of Optionee’s employment with the Company or its
      subsidiaries as a result of Optionee’s death; (iii) termination of Optionee’s
      employment with the Company or its subsidiaries by the Company without “Cause”
(as defined in Optionee’s employment agreement with the Company, dated December
      19, 2005); or (iv) a Change of Control that occurs while Optionee is employed
      by
      the Company or its subsidiaries (each of the foregoing events, a “Triggering
      Event”). For purposes of this Option, the term “Change of Control” shall mean
      (i) the sale of all or substantially all of the assets of the Company, (ii)
      the
      sale of more than 50% of the outstanding capital stock of the Company in a
      non-public sale, (iii) the dissolution or liquidation of the Company, or (iv)
      any merger, share exchange, consolidation or other reorganization or business
      combination of the Company if immediately after such transaction either (A)
      persons who were members of the Board of Directors of the Company immediately
      prior to such transaction do not constitute at least a majority of the Board
      of
      Directors of the surviving entity, or (B) persons who hold a majority of the
      voting capital stock of the surviving entity are not persons who held voting
      capital stock of the Company immediately prior to such transaction. In the
      event
      that the vesting of the Option is accelerated pursuant to this Section 2.2,
      the
“Vesting Date” shall be the date that the Triggering Event occurs.

     

    ARTICLE
      3

    EXERCISE
      OF OPTION

     

    Section
      3.1 Exercisability of Option.
      Unless
      this Option has earlier terminated pursuant to the provisions of Article IV
      hereof, this Option may be exercised at any time, and from time to time during
      the Option Term, with respect to the number of shares subject to the Option
      in
      which Optionee is then vested.

     

    Section
      3.2 Manner of Exercise.
      This
      Option may be exercised, in whole or in part, by delivering written notice
      to
      the Company’s Secretary in such form as the Administrator may require from time
      to time; provided, however, that this Option may not be exercised at any one
      time as to fewer than ten shares (or such lesser number of shares as to which
      this Option is then exercisable). Such notice shall specify the number of shares
      of Common Stock subject to this Option as to which this Option is being
      exercised, and shall be accompanied by full payment of the Exercise Price for
      such shares in accordance with this Section 3.2. The exercise shall be effective
      upon receipt by the Company’s Secretary of such written notice accompanied by
      the required payment. Payment of the Exercise Price shall be made (a) in cash
      (or via certified or cashier’s check, or money order); (b) by a broker-assisted
      cashless exercise in accordance with Regulation T of the Board of Governors
      of
      the Federal Reserve System and the provisions of the next paragraph; or (c)
      by
      any combination of the foregoing. In the Administrator’s sole and absolute
      discretion, the Administrator may authorize payment of the Exercise Price to
      be
      made, in whole or in part, by such other means as the Administrator may
      prescribe. This Option may be exercised only in multiples of whole shares and
      no
      fractional shares shall be issued.

     

    If
      the
      Common Stock is publicly traded on a national exchange, payment of the exercise
      price may be made, in whole or in part, subject to such limitations as the
      Administrator may determine, by delivery of a properly executed exercise notice,
      together with irrevocable instructions: (i) to a brokerage firm approved by
      the
      Company to deliver promptly to the Company the aggregate amount of sale or
      loan
      proceeds to pay the exercise price and any withholding tax obligations that
      may
      arise in connection with the exercise, and (ii) to the Company to deliver such
      purchased shares directly to such brokerage firm.

     

    Section
      3.3 Issuance of Shares and Payment of Cash upon Exercise.
      Upon
      exercise of this Option, in whole or in part, in accordance with the terms
      hereof and upon payment of the Exercise Price for the shares of Common Stock
      as
      to which this Option is exercised, the Company shall issue to Optionee, the
      brokerage firm specified in the Optionee’s delivery instructions pursuant to a
      broker-assisted cashless exercise, or such other person exercising this Option,
      as the case may be, the number of shares of Common Stock so paid for, in the
      form of fully paid and nonassessable Common Stock and, as soon as practicable
      thereafter, shall either deliver certificates therefore or instruct its transfer
      agent to issue such shares in book entry form on the books of the transfer
      agent. Unless such shares are registered or an exemption from registration
      is
      available under applicable federal and state law, if the shares of Common Stock
      issued hereunder are in certificated form, the stock certificates for any such
      shares shall, bear a legend restricting transferability of such shares, and
      if
      the shares are in book entry form, they shall be subject to electronic coding
      or
      stop order restricting transferability of such shares. 

     

    Section
      3.4 Legal Compliance.
      The
      Company shall not be obligated to cause to be issued any shares of Common Stock
      pursuant hereto unless and until the Company is advised by its counsel that
      the
      issuance and delivery of such certificates is in compliance with all applicable
      laws, regulations of governmental authority and the requirements of any
      securities exchange on which shares of Common Stock are traded.  The
      Administrator may require, as a condition of the issuance and delivery of
      certificates evidencing shares of Common Stock pursuant to the terms hereof,
      that the recipient of such shares make such covenants, agreements and
      representations, and that such certificates bear such legends, as the
      Administrator, in its sole discretion, deems necessary or
      desirable.  

     

    ARTICLE
      4

    TERMINATION
      OF OPTION

     

    Section
      4.1 Termination, In General.
      This
      Option shall terminate and be of no force or effect after the Expiration Date,
      unless terminated prior to such time as provided below. 

     

    Section
      4.2 Termination of Employment for Cause.
      In the
      event that the Optionee’s employment with the Company is terminated for Cause,
      this Option shall terminate on the commencement of business of the effective
      date of such termination of employment with respect to all shares of Common
      Stock not purchased hereunder prior to such Termination Date.

     

    The
      good
      faith determination by the Administrator of whether the Optionee’s employment
      was terminated by the Company or one of its subsidiaries for Cause shall be
      final and binding for all purposes hereunder.

     

    Section
      4.3 Upon Optionee’s Death.
      Unless
      this Option has earlier terminated for Cause or due to the Optionee’s Disability
      or the Company’s termination of Optionee’s employment without Cause, upon
      Optionee’s death, Optionee’s executor, personal representative, or the person(s)
      to whom this Option shall have been transferred by will or the laws of descent
      and distribution, as the case may be, may exercise all or any part of the
      outstanding Option, provided such exercise occurs within one year after the
      date
      of Optionee’s death, but not later than the Expiration Date of this Option.
      Unless sooner terminated, this Option shall terminate upon the expiration of
      such one year period.

     

    Section
      4.4 Termination of Employment by Reason of Disability.
      Unless
      this Option has earlier terminated for Cause or due to the Optionee’s death or
      the Company’s termination of Optionee’s employment without Cause, in the event
      that Optionee ceases, by reason of Disability, to be an employee of the Company
      or any of the Company’s subsidiaries, any unexercised portion of this Option may
      be exercised in whole or in part at any time within one year after the date
      of
      Optionee’s termination of employment due to Disability, but not later than the
      Expiration Date of this Option. Unless sooner terminated, this Option shall
      terminate upon the expiration of such one year period. For purposes of this
      Option, Disability shall mean the inability to engage in any substantial gainful
      activity by reason of any medically determinable physical or mental impairment
      which can be expected to result in death or which has lasted or can be expected
      to last for a continuous period of not less than 12 months. The Administrator
      may require such proof of Disability as the Administrator in its sole discretion
      deems appropriate and the Administrator’s determination as to whether Optionee
      is Disabled shall be final and binding on all parties concerned.

     

    Section
      4.5 Termination of Employment.
      In the
      event that the Optionee’s employment with the Company is terminated other than
      for cause or due to the Optionee’s death or Disability, any unexercised portion
      of this Option that was vested as of the date of termination of employment
      may
      be exercised in whole or in part at any time within the one year period
      following the Optionee’s termination of employment, but not later than the
      Expiration Date of this Option. In the event that Optionee dies during the
      one
      year period, any unexercised portion of this Option that was vested as of the
      date of death may be exercised in whole or in part at any time within one year
      after the date of death, but not later than the Expiration Date of this Option.
      Unless sooner terminated, this Option shall terminate upon the expiration of
      such one year or one-year period. 

     

    Section
      4.6 Leave of Absence.
      For
      purposes of this Option, the Optionee’s employment with the Company or any of
      the Company’s subsidiaries shall not be deemed to terminate if the Optionee
      takes any military leave, sick leave, or other bona fide leave of absence
      approved by the Administrator of 90 days or less. In the event of a leave in
      excess of 90 days, the Optionee’s employment shall be deemed to terminate on the
      91st day of the leave unless the Optionee’s right to re-employment with the
      Company or Affiliate remains guaranteed by statute or contract.

     

    Section
      4.7 Termination of Employment, Definition.
      References on this Agreement to the Optionee’s termination of employment from
      the Company shall mean the termination of the Optionee’s employment with the
      Company, provided, however, that (i) a transfer of Optionee’s employment
      relationship from the Company to a subsidiary or vice versa or from one
      subsidiary to another subsidiary shall not constitute a termination of
      employment, and (ii) an employee who terminates such relationship with the
      Company but continues in a consulting relationship with the Company shall not
      incur a termination of employment until such individual terminates the last
      of
      such relationships with the Company.

     

    ARTICLE
      5

    ADJUSTMENTS;
      BUSINESS COMBINATIONS

     

    Section
      5.1 Adjustments for Events Affecting Common Stock.
      In the
      event of changes in the Common Stock of the Company by reason of any stock
      dividend, split-up, recapitalization, merger, consolidation, business
      combination or exchange of shares and the like, the Administrator shall make
      appropriate adjustments to the number, kind and price of shares covered by
      this
      Option, and shall, in its discretion and without the consent of the Optionee,
      make any other adjustments in this Option, including but not limited to reducing
      the number of shares subject to this Option or providing or mandating
      alternative settlement methods such as settlement of this Option in cash or
      in
      shares of Common Stock or other securities of the Company or of any other
      entity, or in any other matters which relate to this Option as the Administrator
      shall, in its sole discretion, determine to be necessary or appropriate in
      order
      to prevent the dilution or enlargement of rights under this Option.

     

    Section
      5.2 Modifications or Adjustments for Unusual Events.
      Notwithstanding anything in the Plan or this Option to the contrary and without
      the consent of the Optionee, the Administrator, in its sole discretion, may
      make
      (a) in order to facilitate any business combination that is authorized by the
      Board, any modifications to this Option, including but not limited to
      cancellation, forfeiture, surrender or other termination of this Option in
      whole
      or in part regardless of the vested status of this Option; and/or (b) any
      adjustments in the terms and conditions of, and the criteria included in, this
      Option in recognition of unusual or nonrecurring events affecting the Company,
      or the financial statements of the Company or any subsidiary of the Company,
      or
      of changes in applicable laws, regulations, or accounting principles, whenever
      the Administrator determines that such adjustments are appropriate in order
      to
      prevent dilution or enlargement of the benefits or potential benefits intended
      to be made available under this Option or the Plan.

     

    Section
      5.3 Binding Nature of Adjustments.
      Modifications or adjustments under this Article 5 will be made by the
      Administrator, whose determination as to what adjustments, if any, will be
      made
      and the extent thereof will be final, binding and conclusive. No fractional
      shares will be issued pursuant to this Option on account of any such
      modifications or adjustments.

     

    ARTICLE
      6

    MISCELLANEOUS

     

    Section
      6.1 Non-Guarantee of Employment.
      Nothing
      in the Plan or this Option shall alter the employment status of Optionee, nor
      be
      construed as a contract of employment between the Company or any of the
      Company’s subsidiaries, and Optionee, or as a contractual right of Optionee to
      continue in the employ of the Company or any of its subsidiaries, or as a
      limitation of the right of the Company, or any of the Company’s subsidiaries to
      discharge Optionee at any time with or without cause or notice.

     

    Section
      6.2 No Rights of Stockholder.
      Optionee shall not have any of the rights of a stockholder with respect to
      the
      shares of Common Stock that may be issued upon the exercise of this Option
      until
      such shares of Common Stock have been issued to Optionee upon the due exercise
      of this Option. No adjustment shall be made for dividends or distributions
      or
      other rights for which the record date is prior to the date such shares are
      issued, whether by means of a stock certificate or certificates or in book
      entry
      form.

     

    Section
      6.3 Non-Qualified Nature of Option.
      This
      Option is intended to be an agreement concerning a stock option arrangement
      which does not qualify under section 422 of the Internal Revenue Code, and
      this
      Option shall be so construed. Optionee acknowledges that, upon exercise of
      this
      Option, Optionee will recognize taxable income in an amount equal to the excess
      of the then Fair Market Value of the shares over the Exercise Price and must
      comply with the provisions of Section 6.6 of this Option with respect to any
      tax
      withholding obligations that arise as a result of such exercise.

     

    Section
      6.4 Confidential Information.
      In
      consideration of the granting of this Option, Optionee agrees and covenants
      that, except as specifically authorized by the Company, the Optionee will keep
      confidential any trade secrets or confidential or proprietary information of
      the
      Company or any Affiliate which are now or which hereafter may become known
      to
      Optionee as a result of Optionee’s employment by the Company, the Company or any
      of the Company’s subsidiaries, and shall not at any time, directly or
      indirectly, disclose any such information to any person, firm, corporation
      or
      other entity, or use the same in any way other than in connection with the
      business of the Company or any Affiliate, at all times during and after
      Optionee’s employment.

     

    Section
      6.5 The Company’s Rights.
      The
      existence of this Option shall not affect in any way the right or power of
      the
      Company or its stockholders to make or authorize any or all adjustments,
      recapitalizations, reorganizations or other changes in the Company’s capital
      structure or its business, or any merger or consolidation of the Company, or
      any
      issue of bonds, debentures, preferred or other stocks with preference ahead
      of
      or convertible into, or otherwise affecting the Common Stock or the rights
      thereof, or the dissolution or liquidation of the Company, or any sale or
      transfer of all or any part of the Company’s assets or business, or any other
      corporate act or proceeding, whether of a similar character or
      otherwise.

     

    Section
      6.6 Withholding of Taxes.
      The
      Company or any of the Company’s subsidiaries shall have the right to deduct from
      any compensation or any other payment of any kind (including withholding the
      issuance of shares of Common Stock) due Optionee the amount of any foreign,
      federal, state or local taxes required by law to be withheld as the result
      of
      the exercise of this Option or the lapsing of any restriction with respect
      to
      any shares of Common Stock acquired on exercise of this Option; provided,
      however, that the value of the shares of Stock withheld may not exceed the
      statutory minimum withholding amount required by law. In lieu of such deduction,
      the Administrator may require Optionee to make a cash payment to the Company
      or
      an Affiliate equal to the amount required to be withheld. If Optionee does
      not
      make such payment when requested, the Company may refuse to issue any shares
      of
      Common Stock under the Plan until arrangements satisfactory to the Administrator
      for such payment have been made.

     

    Section
      6.7 Optionee.
      Whenever the word “Optionee” is used in any provision of this Option under
      circumstances where the provision should logically be construed to apply to
      the
      estate, personal representative or beneficiary to whom this Option may be
      transferred by will or by the laws of descent and distribution, the word
“Optionee” shall be deemed to include such person.

     

    Section
      6.8 Nontransferability of Option.
      This
      Option shall be nontransferable otherwise than by will or the laws of descent
      and distribution and during the lifetime of Optionee, this Option may be
      exercised only by Optionee or, during the period Optionee is under a legal
      disability, by Optionee’s guardian or legal representative. Except as provided
      above, this Option may not be assigned, transferred, pledged, hypothecated
      or
      disposed of in any way (whether by operation of law or otherwise) and shall
      not
      be subject to execution, attachment or similar process.

     

    Section
      6.9 Notices.
      All
      notices and other communications made or given pursuant to this Option shall
      be
      in writing and shall be sufficiently made or given if hand delivered or mailed
      by certified mail, addressed to Optionee at the address contained in the records
      of the Company, or addressed to the Administrator, care of the Company for
      the
      attention of its Corporate Secretary at its principal office or, if the
      receiving party consents in advance, transmitted and received via telecopy
      or
      via such other electronic transmission mechanism as may be available to the
      parties.

     

    Section
      6.10 Entire Agreement.
      This
      Option contains the entire agreement between the parties with respect to the
      subject matter contained herein. Any oral or written agreements,
      representations, warranties, written inducements, or other communications made
      prior to the execution of this Option shall be void and ineffective for all
      purposes.

     

    Section
      6.11 Amendments.
      This
      Option may not be modified, except as provided in the Plan or in a written
      document signed by each of the parties hereto.

     

    Section
      6.12 Conformity with Plan.
      Except
      for the provisions of this Option that are contrary to the provisions of the
      Plan, (a) this Option is intended to conform in all respects with, and is
      subject to all applicable provisions of, the Plan, which is incorporated herein
      by reference; and (b) any inconsistencies between this Option and the Plan
      shall
      be resolved in accordance with the terms of this Option. In the event of any
      ambiguity in this Option or any matters as to which this Option is silent,
      the
      Plan shall govern. A copy of the Plan is available upon request to the
      Administrator.

     

    Section
      6.13 Governing Law.
      This
      Option shall be governed by and construed in accordance with the laws of the
      State of Delaware, other than the conflict of laws principles
      thereof.

     

    Section
      6.14 Headings.
      The
      headings in this Option are for reference purposes only and shall not affect
      the
      meaning or interpretation of this Option.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Option to be executed by its duly
      authorized officer as of the date first above written.

     

    I.C.
      ISAACS & COMPANY, INC.

     

    By:
      /s/ Robert S. Stec

    Name:
      Robert S. Stec

    Title:
      Chief Executive Officer

    

    The
      undersigned hereby acknowledges that he/she has carefully read this Agreement
      and the Plan and agrees to be bound by all of the provisions set forth in such
      documents.

     

    OPTIONEE

     

    /s/
      Gregg A. Holst

    Name: Gregg
      A.
      Holst

    Title: Chief
      Financial Officer

    Date: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CORPORATE
      SECRETARY

    I.C.
      ISAACS & COMPANY, INC.

    3840
      BANK
      STREET

    BALTIMORE,
      MARYLAND 21224

     

    Gentlemen:

     

    I
      hereby
      elect to exercise the Option made to me on May 1, 2007 by I.C. ISAACS &
COMPANY, INC. (the “Company”), pursuant to an Agreement dated May 1, 2007
      concerning the grant subject to all the terms and provisions of the Nonstatutory
      Stock Option Grant Agreement previously executed by me, and the I.C. ISAACS
      & COMPANY, INC. AMENDED AND RESTATED OMNIBUS STOCK PLAN. Pursuant to this
      election, I wish to purchase ____________ shares of Common Stock of the Company
      at a price of $[ ] per share.

     

    Enclosed
      is payment for such shares in the amount of $_____________ in the form
      of:

     

    £ Cash
        £ Certified
      or Cashier’s Check   £ Money
      Order 

     

    £ Irrevocable
      Broker-Assisted Cashless Exercise Instructions

     

    I
      understand that my election will be effective the date this election notice,
      together with the cash, check or other payment of the purchase price, is
      received by the Company as indicated below.

     

    My
      address of record is:

     

    _________________________________

     

    _________________________________

     

    _________________________________

     

    And
      my
      Social Security Number is: __________________

     

    Date:
      ________________________   ___________________________________

    [Optionee]

     

    Received
      by I.C. ISAACS & COMPANY, INC. on ___________________________

     

    By:
      _______________________________

    Title:
      ______________________________

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