Potential Payments upon Termination or Change-in-Control
As noted above, the Company has entered into employment agreements with Mr.
Blum, Ms. Massoni, Mr. Wilts, and Ms. Granoff which provide for certain payments
upon termination of their employment or a change-in-control of the Company.
On February 28, 2011, Jill Granoff departed her position as Chief
Executive Officer of the Company and resigned her seat on the Board.
Potential Payments upon Termination without Cause or for Good Reason
Mr. Blum Mr. Blum’s employment agreement provides for the
following payments in the event that the Company terminates his employment without cause or if he terminates his employment for good
reason, provided he executes a separation agreement and general release at the time of termination:
·
Continuation of base salary for a period of 12 months;
·
A lump sum payment equal to his target bonus for the fiscal year prior to the
year of termination;
·
Continuation of group medical and life insurance benefits for the salary
continuation period.
In addition, any unvested shares of restricted stock subject to vesting within
twelve months of the termination date will fully vest on the appropriate vesting date. All shares of restricted stock subject
to vesting following 12 months from the termination date will be forfeited.
Ms. Massoni and Mr. Wilts
-
The employment agreements for Ms. Massoni
and Mr. Wilts provide for the following payments in the event that the Company terminates their employment without cause:
·
Continuation of base salary for a period of 6 months (for Ms. Massoni) or 12
months (for Mr. Wilts) (both of which are subject to mitigation upon re-employment or self-employment following termination);
·
A pro rata cash bonus paid in a lump sum for the year in which the
termination occurs if terminated within the final three months of the calendar year (Ms. Massoni);
·
A pro rata cash bonus paid in a lump sum for the year in which the
termination occurs (for Mr. Wilts); and
·
Continuation of group medical and life insurance benefits for the salary
continuation period.
The agreement prohibits Ms. Massoni and Mr. Wilts from soliciting
employees of the Company for twenty-four months following such termination and from competing with the Company and soliciting
customers and suppliers for six months following such termination. In addition, the agreement requires Ms. Massoni and Mr.
Wilts to refrain from making any defamatory or disparaging remarks about the
Company.
Mr. Edelman has a letter of understanding with the Company that provides
continuation of base salary for a period of 12 months or one month of salary continuation for each year of service.
As noted above, the Company believes that employment agreements that
provide for severance payments are necessary to attract and retain senior executives in a highly competitive market for top talent
within the industry and provide consideration to the executives in exchange for protective covenants favorable to the Company.
The level of severance benefits corresponds with the seniority of the executive who will potentially receive such benefits and
the Compensation Committee believes that such benefits are generally consistent with industry practice, based on the Compensation
Committee’s general knowledge of the industry.
Potential Payments upon a Change-in-Control
Mr. Blum Mr. Blum’s employment agreement provides for the
following payments in the event that the Company terminates his employment without cause or if he terminates his employment for good
reason within 60 days of a change-in-control of the Company, provided he executes a separation agreement and general release at the
time of termination:
·
Continuation of base salary for a period of 12 months;
·
A lump sum payment equal to his target bonus for the fiscal year prior to the
year of termination;
·
Continuation of group medical and life insurance benefits for the salary
continuation period.
In addition, any unvested shares of restricted stock subject to vesting within
twelve months of the termination date will fully vest on the appropriate vesting date. All shares of restricted stock subject
to vesting following 12 months from the termination date will be forfeited.
Mr. Edelman has a letter of understanding with the company that provides continuation of base salary for a period of 12 months or one month of salary for each year of service.
15
Ms. Massoni Ms. Massoni’s employment agreement provides that she may elect to terminate her employment with the
Company for a period of one year following a change-in-control of the Company and treat such
termination as a termination of her employment without cause, provided she executes a separation agreement and general release at
the time of termination. If she so elects
following a change-in-control of the Company, she will be entitled to the following payments:
·
Continuation of base salary for a period of 6 months (subject to mitigation
upon re-employment or self-employment following termination);
·
A pro rata cash bonus paid in a lump sum for the year in which the
termination occurs if terminated within the final three months of the calendar year; and
·
Continuation of group medical and life insurance benefits for the salary
continuation period.
Payments Upon Termination for Non Renewal
Mr. Blum
Mr. Blum’s employment agreement provides that he
or the Company may elect not to renew the term of the Agreement if written notice of such non-renewal is given at the expiration
date of the agreement. The agreement allows for the enforceability of a noncompete regardless of which party chooses not to
renew. In cases where the Company chooses to enforce the noncompete, Mr. Blum would be entitled to receive the following
payments, provided he executes a separation agreement and general release at the time of termination:
·
Continuation of base salary for a period of 6 months;
·
A lump sum payment equal to his target bonus for the fiscal year prior to the
year of termination;
·
Continuation of group medical and life insurance benefits for the salary
continuation period.
In addition, all unvested stock options will fully accelerate and vest upon
such termination and remain exercisable for 90 days following the termination date.
The potential severance payable to Mr. Blum following a non-renewal of his
agreement is provided to support the enforcement of the important noncompete benefits to the Company.
|
|
|
|
|
|
|
|
Named
Executive Officer
|
Termination without cause or good reason
|
Termination due to change-in-control
|
Termination for non-renewal
|
|
|
|
|
Paul Blum
|
$2,274,829
|
$2,274,829
|
$2,010,079
|
David P. Edelman
|
$633,333
|
$633,333
|
N/A
|
Carol Massoni
|
$450,000
|
$450,000
|
N/A
|
Ingo Wilts
|
$1,000,000
|
N/A
|
N/A
|
Termination Payments for Former CEO
On February 28, 2011, Jill Granoff departed her position as Chief Executive
Officer of the Company. Pursuant to Ms. Granoff’s employment
agreement, the Company will make total incremental cash payments of approximately $3.0
million to Ms. Granoff which includes (i) $1.5 million for continuation of base
salary for a period of 18 months; (ii) a $0.3 million lump sum payment equal to the difference between her target bonus of $1.0 million
for the fiscal year prior to the year of termination less $0.7 million earned and accrued in 2010 and paid in early 2011, (iii) a $0.1 million pro rata cash bonus
paid in a lump sum for the year in which the termination occurs, (iv) a $1.0
million lump sum payment equal to the target bonus award for the current year,
and (v) a $0.1 million lump sum payment for her vested SERP. In addition,
all unvested stock options became fully vested and will remain exercisable
throughout the 18 month salary continuation period. All unvested shares of
restricted stock subject to vesting within twelve months of her departure date
also became fully vested. As of December 31, 2011, Ms. Granoff had been paid $0.7 million for her 2010 bonus and $1.1 million of the $3.0 million incremental payments due to her per the terms of her employment agreement. The remaining $1.9 million of the incremental payments will be paid out in 2012.
Compensation Risk
The Compensation Committee has evaluated the relative risks associated with the Company’s compensation plans, arrangements,
policies and practices for all employees, including the Company’s primary compensation components consisting of base salary, annual
performance-based bonus and long-term equity compensation. Base salaries provide a steady stream of income to our employees, which
mitigates against excessive risk taking with respect to other variable aspects of compensation. As such, the Company believes base salary
compensation presents minimal, if any, risks to the Company. Annual bonus compensation is generally performance-based. This requires the
Company to meet financial objectives in order for bonus compensation to become payable. Corporate employees’ performance incentive
targets are based 100% on Corporate EPS as defined by the Compensation Committee. For all divisional employees, the performance
incentive targets are based 50% on Corporate EPS and 50% on divisional segment income as defined by the Compensation Committee.
Moreover, the performance-based annual bonus compensation for all employees is capped at a percentage of base salary that takes into
consideration the scope and impact of each employee’s role. Given the nature of the Company’s business, the nature of the performance
targets and the limitation on each executive’s maximum bonus compensation, the Company believes that risks arising from annual bonus
compensation are not reasonably likely to have a material adverse effect on the Company. Guaranteed bonuses are contingent upon continued
employment throughout the first year and, therefore, provide no risk. Long-term equity compensation typically vests over years of service and
rewards executives over the long term based on Company stock performance. The Company believes that the vesting criteria and link to
Company stock performance mitigate against excessive risk. While the Company’s compensation policies and practices may present some
potential minimal risk to the Company, based on the overall balanced mix of compensation components and the factors stated above, the
Company believes that the potential rewards outweigh the potential risks to the Company and that such minimal risks are not reasonably likely
to have a material adverse effect on the Company
16
Director Compensation
Directors who are also employees of the Company are not paid any fees or other
remuneration, as such, for service on the Board or any of its Committees.
Our non-employee directors are compensated annually as follows. Each
non-employee director receives a quarterly cash retainer of $8,750 per quarter. The Audit Committee chairman receives a
quarterly cash retainer of $3,750 and other members receive $2,500 quarterly. The Compensation and Corporate
Governance/Nominating Committee chairman receive a quarterly cash retainer of
$1,875 and other committee members receive $1,250 quarterly. Non-employee
directors also receive $1,000 for each scheduled Board meeting, Audit Committee
meeting, Compensation Committee meeting and Corporate Governance/Nominating
Committee meeting they attend. The Company’s 2004 Stock Incentive
Plan provides that each non-employee director receives an automatic option grant
at the inception of their service on the Board and annual grants thereafter as
follows: (i) initial grant of an option to purchase 5,000 shares of Class
A Common Stock upon agreeing to serve as a director, and (ii) an annual grant of
either $50,000 of restricted Class A Common Stock or $50,000 of stock options
determined utilizing the Black-Scholes stock option valuation model, at their
discretion, immediately following each Annual Meeting of Shareholders. All
options granted to non-employee directors have a per share exercise price equal
to the market value of one share of Class A Common Stock on the date of grant.
These options expire ten years from the date of grant and vest in 50%
increments on the first and second anniversaries of the grant date. In
addition, non-employee directors are reimbursed by the Company for all travel
expenses related to meetings.
The following table sets forth the aggregate compensation earned by the
non-employee directors for services rendered to the Company during the year ended December 31, 2011:
|
|
|
|
|
Name
|
Fees Earned or
Paid in Cash
($)
|
Stock Awards ($)
(1)
|
Option Awards ($)
(2)
|
Total
($)
|
Michael J. Blitzer
|
$66,000
|
$50,000
|
--
|
$116,000
|
Martin E. Franklin (3)
|
$57,000
|
$50,000
|
--
|
$107,000
|
Robert C. Grayson
|
$71,500
|
$50,000
|
--
|
$121,500
|
Denis F. Kelly
|
$73,605
|
$50,000
|
--
|
$123,605
|
Philip R. Peller
|
$67,000
|
$50,000
|
--
|
$117,000
|
(1)
Each non-employee
director received 4,065 shares of restricted stock in 2011 with a fair value of $50,000 on the date of grant. These amounts
represent the aggregate grant date fair value of awards granted during the year computed in accordance with accounting guidance.
Amounts are based on the stock price on the date of grant. Please refer to Note 12 to the Company’s consolidated
financial statements for the year ended December 31, 2011 included in the Annual Report on Form 10-K for the assumptions used to
calculate these amounts. At December
31, 2011, the aggregate amount of restricted stock outstanding was as follows: Mr. Blitzer—6,184, Mr. Franklin –
6,184, Mr. Grayson – 6,184, Mr. Kelly – 6,184 and Mr. Peller – 6,184.
(2)
No stock options were
granted to our non-employee directors during 2011. At December 31, 2011, the aggregate amount of stock options outstanding was
as follows: Mr. Blitzer5,000, Mr. Franklin 19,167, Mr. Grayson 35,000, Mr. Kelly 35,000 and Mr. Peller
20,000.
(3)
Effective December 31, 2011, Mr. Franklin resigned from the Board of Directors. In addition, Mr. Franklin
resigned from the Corporate Governance/Nominating Committee and Compensation Committee of the Board of
Directors.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee has ever been an officer or employee of the Company
or any of the Company’s subsidiaries or was a party to any disclosed related party transaction involving the Company.
None of the Company’s executive officers has served on the board of directors or on the compensation committee of any
other entity that employs an executive officer who has served on the Company’s Board of Directors or Compensation Committee.
17
Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
DIRECTOR AND OFFICER STOCK OWNERSHIP
The following table sets forth
certain information as of April 9, 2012 with respect to the beneficial ownership of the Class A Common Stock and Class B Common
Stock, by (i) each director and nominee for director of the Company who owns
shares of any class of the Company’s voting securities, (ii) the
Company’s Named Executive Officers and (iii) all directors and executive
officers of the Company, as a group. Except as otherwise indicated, each
person listed has sole voting power with respect to the shares beneficially
owned by such person.
Class A Common Stock
Class B Common Stock
|
|
|
|
|
|
Name of Beneficial Owner
|
Number of Shares
|
Percent
|
|
Number of Shares
|
Percent
|
Kenneth D. Cole (1)
|
9,595,256
|
52.4%
|
(2)
|
8,010,497
|
100%
|
Jill Granoff (1)
|
226,282
|
1.2%
|
(3)
|
|
|
David P. Edelman (1)
|
72,044
|
*
|
(4)
|
|
|
Ingo Wilts (1)
|
46,250
|
*
|
(5)
|
|
|
Paul Blum (1)
|
35,000
|
*
|
(6)
|
|
|
Carol Massoni (1)
|
3,228
|
*
|
(7)
|
|
|
Denis F. Kelly
|
73,128
|
*
|
(8)
|
|
|
Robert C. Grayson
|
61,412
|
*
|
(9)
|
|
|
Philip R. Peller (1)
|
32,429
|
*
|
(10)
|
|
|
Michael J. Blitzer (1)
All directors and executive officers as a group (13 persons)+
|
16,412
10,253,402
|
*
56.0%
|
(11)
|
8,010,497
|
100%
|
_________
* Less than 1.0%
+ Consists of the Board of Directors and all executive officers of the Company including Named
Executive Officers.
(1)
The beneficial owner’s address is
c/o Kenneth Cole Productions, Inc., 603 West 50th Street, New York, NY 10019.
(2)
Includes (a) 6,424,792 shares which Mr.
Cole has the right to acquire within 60 days upon the conversion of 6,424,792
shares of Class B Common Stock, (b) 120,000 shares of Class B Common Stock held
by the Kenneth Cole Foundation of which Mr. Cole is a co-trustee with his wife,
which can be converted into Class A shares, (c) 187,500 shares of Class B Common
Stock held by KMC Partners L.P. of which Mr. Cole is the living partner with 95%
ownership, which can be converted into Class A shares, (d) 132,021 shares of
Class B Common Stock held in the 2010 Kenneth
D. Cole Grantor Remainder Trust, which can be converted into Class A shares, (e)
204,852 shares of Class B Common Stock held in the 2010 Kenneth D. Cole Grantor
Remainder Trust, which can be converted into Class A shares, (f) 470,666 shares
of Class B Common Stock held in the 2009 Kenneth D. Cole Grantor Remainder
Annuity Trust, which can be converted into Class A shares (g) 470,666 shares of
Class B Common Stock held in the 2009 Kenneth D. Cole Family Grantor Remainder
Annuity Trust, which can be converted into Class A shares, (h) 150,000 shares of
Class A Common Stock held by the Kenneth Cole 1994 Charitable Remainder Trust,
of which Mr. Cole is the sole trustee, (i) 293,333 shares of Class A
Common Stock held by Mr. Cole, (k) 1,071,426 shares which Mr. Cole has the right
to acquire within 60 days upon the exercise of options granted to him under the
Company’s 2004 Stock Incentive Plan, as amended, and (l) 25,000 of restricted
shares that will vest within 60 days under the Company’s 2004 Stock
Incentive Plan, as amended.
(3)
Includes 209,400 stock options with the
right to acquire within 60 days upon exercise under the 2004 Stock Incentive Plan, as amended.
(4)
Includes 52,500 stock options with the right to acquire within 60 days upon exercise under the Company’s 2004 Stock Incentive Plan, as amended.
(5)
Includes 46,250 stock options with the right to acquire within 60 days upon exercise under the Company’s 2004 Stock Incentive Plan, as amended.
(6)
Includes 25,000 restricted shares that
will vest within 60 days under the Company’s 2004 Stock Incentive Plan, as amended
(7)
Includes 2,500 stock options with the right to acquire within 60 days upon exercise under the 2004 Stock Incentive Plan, as amended.
(8)
Includes 35,000 stock options which Mr.
Kelly has the right to acquire within 60 days upon exercise and 2,119 restricted
shares that will vest within 60 days under the Company’s 2004 Stock Incentive
Plan, as amended. Mr. Kelly’s address is c/o
Scura Partners Securities LLC
, 630 Fifth Avenue,
Suite 1401, New York, NY 10111.
(9)
Includes 35,000 stock options which Mr.
Grayson has the right to acquire within 60 days upon exercise and 2,119
restricted shares that will vest within 60 days under the Company’s 2004
Stock Incentive Plan, as amended. Mr. Grayson’s address is c/o The
Grayson Company, 200 Park Avenue
South, Suite 1611, New York, NY 10003.
(10)
Includes 20,000 stock options which Mr.
Peller has the right to acquire within 60 days upon exercise and 2,119
restricted shares that will vest within 60 days under the Company’s 2004 Stock
Incentive Plan, as amended.
(11)
Includes 5,000 stock options which Mr.
Blitzer has the right to acquire within 60 days upon exercise and 2,119
restricted shares that will vest within 60 days under the
Company’s 2004 Stock Incentive Plan, as
amended.
18
PERSON OWNING MORE THAN 5% OF COMMON STOCK
The following table sets forth
certain information as of April 9, 2012 with respect to the beneficial ownership of the Class A Common Stock, by each beneficial
holder of more than five percent of any class of the Company’s voting securities. The table excludes 5% beneficial
ownership for directors and officers of the Company that are included on page 18 under the heading “Director and
Officer Stock Ownership.” Each owner listed has sole voting power with
respect to the shares beneficially owned by such person.
Class A Common Stock
|
|
|
|
Name of Beneficial Owner
|
Number of Shares
|
Percent
|
|
Sarbit Advisory Services,
Inc.
Wells Fargo & Company
|
980,278
958,786
|
5.3%
5.2%
|
(1)
(2)
|
(1)
As reported on the Schedule 13G
filed with the Securities and Exchange Commission on February 14, 2012. The address of Sarbit Advisory Services, Inc. is 100-1
Evergreen Place, Winnipeg, MB R3L 0E9.
(2)
As reported on the Schedule 13G
filed with the Securities and Exchange Commission on January 24, 2012. The address of Wells Fargo & Company is 420
Montgomery Street, San Francisco, CA 94104.
19
The Company had the following securities authorized for issuance under equity compensation plans
as of December 31, 2011:
|
|
|
|
|
Plan Category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants, and rights
|
Weighted-average
exercise price of
outstanding options,
warrants, and rights
|
Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
|
|
(a)
|
(b)
|
(c)
|
Equity compensation plans approved by security holders
|
2,808,269
|
$15.74
|
2,873,286
|
Equity compensation plans not approved by security holders
|
N/A
|
N/A
|
N/A
|
20
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Transactions with Related Parties
The Company’s written policy regarding related
party transactions requires the Corporate Governance/Nominating Committee
to review and either approve or disapprove of any related party transaction, as defined below
, prior to entering into any such transaction
. If advance approval of the related party
transaction is not feasible, then the Corporate Governance/Nominating Committee must consider the transaction at its next meeting and determine whether to ratify
the transaction.
The Company defines related party transactions as any transaction, arrangement
or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of
indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year,
(2) the Company is a participant, and (3) any Related Person (as defined below) has or will have a direct or indirect
interest (other than solely as a result of being a director or less than five-percent beneficial owner of the Company or another
entity). A Related Person is any (a) person who is or was at any point during a fiscal year for which the Company filed a
Form 10-K and proxy statement, an executive officer, director or nominee
for election as a director, (b) any person who is greater than a five
percent beneficial ownership of the Company’s common stock, (c) an
immediate family member of any of the foregoing, which shall include a
person’s spouse, parents, stepparents, children, stepchildren, siblings,
mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and
sisters-in-law and anyone residing in such person’s home (other than a
tenant or employee) or (d) any firm, corporation or other entity in which any of
the foregoing persons is employed and which such person has a five percent or
greater beneficial ownership interest. Evan Cole, a Sales Manager, is the brother of
Kenneth D. Cole, the Company’s Chairman of the Board of Directors and Chief Creative Officer. In fiscal
2011, Evan Cole received an aggregate of $151,118 in base salary, bonus and other compensation payments
from the company. During such fiscal year, he also received 664 shares of restricted stock, valued at $7,497, vesting
over a four year period.
In determining whether to approve or ratify a related party transaction, the
Corporate Governance/Nominating Committee will take into account whether the transaction is in the best
interests of the Company and its shareholders, on terms no less favorable than
terms generally available to an unaffiliated third-party under the same or
similar circumstances, the extent of the Related Person’s interest in the
transaction and other factors that it deems relevant. No director shall
participate in any discussion or approval of a transaction for which he or she
is a Related Person, except that the director will provide all material
information to the Corporate Governance/Nominating Committee.
Under the Company’s policy, the following related party transactions will
be deemed pre-approved under the terms of the Company’s policy:
·
any transaction with another company at which a Related Person’s only
relationship is as an employee, director or beneficial owner of less than five percent of that company’s shares, if the
aggregate amount involved does not exceed the greater of $100,000, or two percent of that company’s total revenues; and
·
any charitable contribution by the Company to a charitable organization where
a Related Person is an employee, if the aggregate amount involved does not exceed the lesser of $25,000 or two percent of the
charitable organization’s total annual receipts.
During 2011, the Company made payments of $574,000 to a third-party aviation
company which hires and uses an aircraft partially owned by Emack LLC, a company which is wholly owned by the Company’s
Chairman and Chief Creative Officer. Management believes that all
transactions were made on terms and conditions similar to or more favorable than
those available in the marketplace from unrelated parties.
21
Director Independence
The Board of Directors has six directors to the Board of Directors:
Kenneth D. Cole, Paul Blum, Michael J. Blitzer, Robert C. Grayson, Denis F. Kelly and Philip R. Peller. Mr. Martin E.
Franklin, who was a member of the Board of Directors in 2011, resigned as of
December 31, 2011 due to personal time constraints and other Board commitments and had no
disagreements with management. The standing committees of the Board include the Audit
Committee, Compensation Committee and Corporate Governance/Nominating Committee.
Because more than 50% of the voting power of the Company is controlled by
Mr. Cole, the Company is a “controlled company” under the NYSE listing
standards. Accordingly, the Company is exempt from the provisions of the
NYSE listing standards requiring: (i) a board consisting of a majority of
directors who have been determined to be “independent” under the
criteria set forth in the NYSE listing standards; (ii) a nominating committee
composed entirely of such independent directors; and (iii) a compensation
committee composed entirely of such independent directors. However,
notwithstanding this exemption, the Company has decided to follow these
provisions, as described more fully below, and has a Board consisting entirely
of directors determined to be independent in accordance with the listing
standards of the NYSE, with the exception of Mr. Cole and Mr. Blum, and an
Audit, Compensation and Corporate Governance/Nominating Committee composed
entirely of independent directors. Each director attended more than 75% of
the meetings held by the Board and related Committees.
Item 14. Principal Accounting Fees and Services
The following table presents fees for professional audit services rendered by
Ernst & Young LLP for the audit of the Company’s financial statements
for the years ended December 31, 2011 and December 31, 2010, and the
Company’s overall effectiveness of internal controls over financial
reporting for the years ended December 31, 2011 and December 31, 2010, as well
as fees billed for other services rendered by Ernst & Young LLP during those
periods.
|
|
|
|
2011
|
2010
|
|
|
|
Audit fees:
|
$950,000
|
$1,055,000
|
Audit-related fees:
|
--
|
--
|
Tax fees:
|
101,800
|
124,000
|
All other fees:
|
--
|
25,000
|
Total:
|
$1,051,800
|
$1,204,000
|
|
|
|
The nature of services provided in each of the Categories listed above is
described below:
Audit Fees
Includes fees for services rendered for the
audits of the consolidated financial statements of the Company, and the overall effectiveness of internal controls over financial
reporting, quarterly reviews, statutory audits, and accounting consultations necessary to comply with the standards of the Public
Company Accounting Oversight Board (United
States).
Audit Related Fees
Includes fees for accounting guidance and
research and due diligence services.
Tax Fees
Includes fees for review of federal and state tax
returns, tax compliance matters, assistance with tax audits and state tax planning.
All Other Fees
Includes fees for accounting guidance and
research in regards to the Company exploring strategic alternatives.
The Audit Committee’s policy is to approve all audit and permissible
non-audit services provided by the independent registered public accounting firm. All audit and permissible non-audit services
performed by the independent registered public accounting firm during 2011 were pre-approved by the Audit Committee in accordance
with established procedures.
22
PART IV
Item 15.
Exhibits, Financial Statement Schedules
|
|
|
(a)
|
(1) See page F-1 for an index to the
consolidated financial statements submitted as part of this Annual Report. **
|
|
|
|
(2) Schedule II
Valuation and Qualifying Accounts is required to be filed by Item 8 of Form 10-K. **
|
|
|
|
All other schedules, for which provision is made in the applicable
accounting regulations of the SEC are not required under the related instructions, are shown in the financial statements or are
inapplicable and therefore have been omitted.
|
(3) The following exhibits are included in this report:
|
|
Exhibit
No.
|
Description
|
3.01
|
Restated Certificate of Incorporation of
Kenneth Cole Productions, Inc.; Certificate of Merger of Cole Fifth Avenue, Inc.
into Kenneth Cole Productions, Inc.; Certificate of Merger of Cole Productions,
Inc. into Kenneth Cole Productions, Inc.; Certificate of Merger of Cole Sunset,
Inc. into Kenneth Cole Productions, Inc.; Certificate of Merger of Cole Union
Street, Inc. into Kenneth Cole Productions, Inc.; Certificate of Merger of Cole
West, Inc. into Kenneth Cole Productions, Inc.; Certificate of Merger of Kenneth
Cole Woodbury, Inc. into Kenneth Cole Productions, Inc.; Certificate of Merger
of Kenneth Cole Leather Goods, Inc. into Kenneth Cole Productions, Inc.;
Certificate of Merger of Unlisted into Kenneth Cole Productions, Inc.
(Incorporated by reference to Exhibit 3.01 to the Company’s Registration Statement on Form S-1, Registration No. 33-77636).
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3.02
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By-laws. (Incorporated by reference to
Exhibit 3.02 to the Company’s Registration Statement on Form S-1, Registration No. 33-77636).
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3.03
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Certificate of Amendment of the Certificate
of Incorporation of Kenneth Cole Productions, Inc. dated October 15, 2007 (Previously filed as Exhibit 10.32 to the
Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2007 and incorporated herein by reference).
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4.01
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Specimen of Class A Common Stock
Certificate. (Incorporated by reference to Exhibit 4.01 to the Company’s
Registration Statement on Form S-1, Registration No. 33-77636).
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*10.01
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Kenneth Cole Productions, Inc. 1994 Stock
Option Plan. (Incorporated by reference to Exhibit 10.04 to the Company’s
Registration Statement on Form S-1, Registration No. 33-77636).
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*10.02
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Amended and Restated Kenneth Cole
Productions, Inc. 1994 Stock Option Plan (Previously filed as an Exhibit to the Registrant’s Proxy Statement filed on April 22,
1997 and incorporated herein by reference).
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10.03
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Kenneth Cole Productions, Inc. Employee
Stock Purchase Plan (Incorporated by reference to the Company’s
Registration Statement on Form S-8 Registration No. 33-31868, filed on March 7,
2000).
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10.04
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Kenneth Cole Productions, Inc. 2004 Stock
Incentive Plan (Incorporated by reference to the Company’s Registration
Statement on Form S-8 Registration No. 333-119101, filed on September 17,
2004).
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23
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10.05
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Kenneth Cole Productions, Inc. 2004 Stock
Incentive Plan (Incorporated by reference to the Company’s Registration
Statement on Form S-8 Registration No. 333-131724 filed on February 10,
2006).
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10.06
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Kenneth Cole Productions, Inc. 2004 Stock
Incentive Plan (Amended and Restated as of April 20, 2005) (Previously filed as
Exhibit 10.26 to the Registrant’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2006 and incorporated herein by reference).
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10.07
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Kenneth Cole Productions, Inc. Sample Grant
Award Letter (Previously filed as Exhibit 10.27 to the Registrant’s
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006 and
incorporated herein by reference).
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10.08
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Employment Agreement between Kenneth Cole
Productions, Inc. and Michael DeVirgilio dated March 31, 2006 (Previously filed
as Exhibit 10.28 to the Registrant’s Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2006 and incorporated herein by reference).
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10.09
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Credit Agreement between J.P. Morgan
Securities Inc., JPMorgan Chase Bank, National Association, PNC Bank, National
Association, Bank of America, N.A., and Wachovia Bank, National Association, and
Kenneth Cole Productions, Inc. dated as of December 20, 2006. (Previously filed
as Exhibit 10.31 to the Registrant’s Annual Report on Form 10-K for the
year ended December 31, 2006 and incorporate herein by reference).
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10.10
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Employment Agreement between Kenneth Cole
Productions, Inc. and Jill Granoff dated May 5, 2008 (Previously filed as
Exhibit 10.33 to the Registrant’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2008 and incorporated herein by reference).
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10.11
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Receivables management agreement between
The CIT Group/Commercial Services, Inc. and Kenneth Cole Productions, Inc. dated November 7, 2008.
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10.12
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Amendment No. 2 to the Credit Agreement
between J.P. Morgan Securities Inc., JPMorgan Chase Bank, National Association, PNC Bank, National Association, Bank of America,
N.A., and Wachovia Bank, National Association, and Kenneth Cole Productions,
Inc. dated as of July 30, 2009. (Previously filed as Exhibit 10.01 to the
Registrant’s Current Report on Form 8-K filed on August 6, 2009).
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10.13
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Amended and Restated Credit Agreement
between J.P. Morgan Securities Inc., JPMorgan Chase Bank, National Association, PNC Bank, National Association, Bank of America,
N.A., and Wachovia Bank, National Association, and Kenneth Cole Productions,
Inc. dated as of July 30, 2009. (Previously filed as Exhibit 10.01 to the
Registrant’s Current Report on Form 8-K filed on August 6, 2009).
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10.14
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Credit Agreement between Wells Fargo Bank, National
Association and Kenneth Cole Productions, Inc. dated as of August 12, 2011.
(Previously filed as Exhibit 10.1 to the Registrant’s Current Report
on Form 8-K filed on August 18, 2011).
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10.15
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Employment Agreement between Kenneth Cole Productions,
Inc. and Paul Blum dated June 9, 2011.
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+10.16
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Employment Agreement between Kenneth Cole Productions,
Inc. and Carol Massoni dated January 4, 2011.
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**21.01
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List of Subsidiaries.
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**23.01
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Consent of Independent Registered Public Accounting Firm.
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**23.02
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Consent of Independent Appraisal Firm.
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**23.03
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Consent of Independent Appraisal Firm.
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**23.04
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Consent of Independent Appraisal Firm.
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24
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**31.1
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Certification of Chief Executive Officer
pursuant to Securities Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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**31.2
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Certification of Chief Financial Officer
pursuant to Securities Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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+31.3
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Certification of Chief Executive Officer
pursuant to Securities Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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+31.4
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Certification of Chief Financial Officer
pursuant to Securities Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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***32.1
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Certification of Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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***32.2
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Certification of Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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**101.INS
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XBRL Instance Document
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**101.CAL
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XBRL Calculation Linkbase Document
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**101.DEF
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XBRL Definition Linkbase Document
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**101.PRE
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XBRL Presentation Linkbase Document
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**101.LAB
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XBRL Label Linkbase Document
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**101.SCH
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XBRL Schema Document
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___________________________
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*
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Management contract or compensatory plan or
arrangement required to be identified pursuant to Item 15(a) (3) of this report.
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**
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Previously filed with the Annual Report on
Form 10-K filed with the SEC on March 9, 2012, which is being amended hereby.
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***
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Previously furnished with the Annual Report
on Form 10-K filed with the SEC on March 9, 2012, which is being amended hereby.
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+
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Filed herewith.
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25
Signatures
Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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KENNETH COLE PRODUCTIONS, INC.
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By:
/s/ PAUL BLUM
Paul Blum
Chief Executive Officer
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Date: April 24, 2012
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Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ KENNETH D. COLE
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Chairman of the Board and Chief Creative Officer
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April
24, 2012
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Kenneth D. Cole
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/s/ PAUL BLUM
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Chief Executive Officer
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April
24, 2012
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Paul Blum
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/s/ DAVID P.
EDELMAN
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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April
24, 2012
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David P. Edelman
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/s/ MICHAEL J. BLITZER
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Director
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April
24, 2012
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Michael J. Blitzer
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/s/ ROBERT C.
GRAYSON
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Director
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April
24, 2012
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Robert C. Grayson
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/s/ DENIS F. KELLY
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Director
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April
24, 2012
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Denis F. Kelly
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/s/ PHILIP R. PELLER
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Director
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April
24, 2012
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Philip R. Peller
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26