Employment Letter – Kenneth Cole

March 10, 2009

Dear Ingo:

This proposed letter agreement is our offer to employ you as
Senior Vice President, Creative Director for Kenneth Cole Productions, Inc. (the
“Company”). The offer contained in this letter is contingent upon full
execution by both parties, satisfactory completion of a background check and you
being legally permitted to work and reside in the United States. To the extent
not expressly provided hererin, the terms of your employment are as stated in
the Company153s current Associate Handbook.

Effective on or before September 1, 2009, and for an initial
period of four years, the Company will employ you and you agree to serve as
Senior Vice President, Creative Director. You will initially be reporting to
Mr. Kenneth Cole and agree to devote your full time and best efforts to perform
the services and duties as the position requires.

Subject to the terms hereof, the term of your employment
under this agreement shall commence on or before September 1, 2009 and shall
continue, unless sooner terminated under Paragraph 7 hereof, until September 1,
2013. This letter agreement shall be automatically extended by one year on
August 31, 2013 and on each September 1st thereafter (the “Renewal Date”),
unless written notice of non-renewal is given by either you or the Company to
the other party at least one hundred eighty (180) days prior to the Renewal
Date.

You represent to the Company that the execution and
performance by you of this letter agreement and your employment hereunder will
not breach or constitute a default under any other agreement to which you are a
party or by which you are bound.

Your compensation shall be as follows:

The annualized salary for the position is Six Hundred
Twenty-Five Thousand Dollars (US$625,000.00) to be paid over 26 bi-weekly pay
periods. This salary is subject to good faith review for possible increase
annually in March of every year, but under no circumstances will your base
salary be reduced below US$625,000, unless previously agreed upon in a signed
writing between the parties. Given your anticipated start date, we will review
your eligibility for an increase in March 2010 and a determination will be made
if a change in salary is warranted. If an increase is not warranted in March
2010, you will be eligible for future increases at the time other salary changes
are being made for similarly situated executives. Again, under no circumstances
will your base salary be reduced below US$625,000, unless previously agreed upon
in a signed writing between the parties. Salary will be subject to withholding
of all taxes payable with respect thereto and deductions for insurance
contributions, etc. For the first taxable year, the Company agrees to reimburse
you for any excess foreign income taxes (on Company-earned income) that are
incurred as a direct result of your relocation to the United States.

Effective upon your commencement date, you will be eligible
to participate in our management bonus plan, which provides for annual awards
based upon both the Company’s financial results and your own performance. For
each year commencing with fiscal 2009 (payable in 2010), the bonus target is 60%
of your base salary for the prior fiscal year with the opportunity to earn up to
200% of

target based on the achievement of predefined performance
metrics. The Company will make its best efforts to provide you with these
predefined performance metrics prior to the commencement of each fiscal year;
provided, however, that where business conditions do not permit, the Company
will provide you with these predefined performance metrics as soon as they are
determined by the Compensation Committee of the Company153s Board of Directors.
For fiscal 2009, you will receive a pro rata share of your bonus, but not less
than One Hundred Fifty Thousand Dollars (US$150,000.00) payable in March 2010.
Payment for earned bonuses is contingent upon being employed by the Company at
the time bonuses are paid, unless as otherwise set forth below.

Within thirty (30) days of your commencement date, the
Company will pay you a Mobility Allowance of up to Forty Thousand Dollars
(US$40,000.00), net of taxes. The Mobility Allowance must be repaid to the
Company in full if you voluntarily terminate your employment prior to the
expiration of one (1) year from your commencement date other than for Good
Reason, as defined below.

Approximately thirty (30) days prior to your anticipated
commencement date, the Company will pay you a one-time Resettlement Allowance of
Ten Thousand Dollars (US$10,000.00) to assist you in defraying miscellaneous,
non-reimbursable expenses associated with your international relocation. The
Resettlement Allowance must be repaid to the Company in full if you voluntarily
terminate your employment prior to the expiration of one (1) year from your
commencement date other than for Good Reason, as defined below.

The Company will pay you a Temporary Living Allowance of up
to Four Thousand Dollars (US$4,000.00) per month for a maximum period of six (6)
months from your commencement date to cover your living expenses until you
locate permanent housing. In addition, the Company will pay for reasonable and
customary rental broker153s or finder153s fees necessary for you to secure
appropriate rental housing. The Temporary Living Allowance must be repaid to the
Company in full if you voluntarily terminate your employment prior to the
expiration of one (1) year from your commencement date other than for Good
Reason, as defined below.

While you are employed by the Company, and subject to the
Company’s right to amend, modify or terminate any benefit plan or program, you
shall be entitled to earn the following benefits/perquisites:

Group Health Benefits : You are eligible to participate in
the Company153s Health Insurance Plan immediately upon commencement of employment.
This is a contributory plan that currently provides medical and dental coverage.
The parties agree that the Company may modify these plans at its sole
discretion. Upon commencement of employment, you are also eligible for coverage
under the Company153s short-term disability plan, pursuant to the terms of that
plan. You will be eligible for coverage under the Company153s long-term disability
plan ninety (90) days after the commencement of your employment, pursuant to the
terms of that plan.

Profit Sharing Thrift (401K) Plan – You are eligible to
participate in the Company Employee Profit Sharing Thrift (401(k)) Plan on the
first day of the quarter following six (6) months of service. The 401(k) plan is
a pre-tax savings plan that would allow you to save a certain percentage of your
salary on a pre-tax basis for your retirement. Ordinarily, the Company shall
match 25% of the amount you contribute to the plan up to a maximum of 6% of your
contribution. For 2009, the Company has suspended its 401k matching practice and
will revisit making contributions to the Plan at a later period in 2009. You are
still eligible to contribute to the Plan at a maximum rate of 15% of your gross
salary on an annual basis, subject to IRS guidelines.

Supplemental Employee Retirement Plan : After you have
completed one (1) full year of employment with the Company, you will be eligible
to participate in the Company153s Supplemental Employee Retirement Plan in keeping
with the terms of the Plan and the Plan documents. This Plan includes generous
retirement benefits in the form of deferred compensation vesting during your
tenure with the Company as well as substantial life insurance coverage.

Group Life and Accidental Insurance – You are eligible for
coverage under the Company153s Basic Life and Accidental Death and Dismemberment
Insurance policy on the first day of the month following two (2) months of
continuous full time service.

Business Travel Accident Insurance – You are eligible for
coverage under the Company153s Business Travel Accident Insurance Policy upon
commencement of employment. .

Business Expense – The Company will reimburse you for travel,
entertainment and other business expenses incurred by you in connection with the
Company153s business, all in accordance with the Company153s policies and practices.
You may travel business class for all domestic and international flights.

Paid Time Off (PTO) : You are entitled to 20 PTO days
annually.

Paid Sick Leave : 6 sick days and otherwise in accordance
with current Company policy.

Holidays : the Company observes 10 U.S. holidays.

Tax Preparation Assistance – the Company will provide you
access to tax advisory and compliance services provided by Ernst & Young.

Immigration : the Company agrees to sponsor your visa
petition and to pay for all affiliated legal, filing and other related costs.

You will be eligible to participate in the Company153s Stock
Incentive Plan with the Company153s management recommending to the Compensation
Committee of the Company153s Board of Directors an initial grant of 100,000 stock
options. The stock options will vest over four years (20%-20%-20%-40%) and the
grant is subject to all of the terms and conditions set forth in the plan
documents.

Termination by you without Good Reason: If you decide to
terminate your employment with the Company other than for Good Reason, as
defined below, you agree:

to provide the Company with six (6) months prior written
notice;

ii.

to make no public announcement concerning your departure
prior to your termination date without the consent of the Company;

iii.

to continue to perform faithfully the duties assigned to you
on the date of such notice (or such other duties as the Company may assign to
you) from the date of such notice until your termination date.

You acknowledge that the notice period provided for hereunder
is for the exclusive benefit of the Company, and does not confer any employment
obligation on the Company. The Company may elect, in its sole discretion and
for any reason, to terminate your employment, either immediately or at any point
during the six (6) month period you have indicated. Upon such termination you
shall be entitled only to the payment of the base salary earned and unpaid
through such date and any business expenses otherwise due you, and all
insurance, benefits and other arrangements provided by the Company shall cease
immediately upon termination of your employment (except as otherwise required by
law).

Termination by you for Good Reason. You may, by notice to
the Company, terminate your employment with the Company under this Agreement for
“Good Reason” provided such notice is delivered by you to Mr. Kenneth Cole not
more than 30 days from the date of the occurrence of an event that constitutes
“Good Reason” and the Company is given 30 days from receipt of such notice to
cure such reason and fails to cure such reason within the aforesaid 30-day
period.

For the purposes hereof, “Good Reason” means the Company
reduces your base salary below $625,000 without your prospective, written
consent. In that event, you shall be entitled to consider your employment to
have been constructively terminated by the Company for Good Reason and to leave
the employment of the Company and receive the severance payments and benefits in
accordance with and subject to Paragraph 7(a) of the Agreement as if you had
been terminated by the Company without cause.

In the event your employment with the Company is terminated
by the Company for a reason other than cause, as herein defined, the Company
agrees to provide, and you agree to accept, as the sole and exclusive remedy for
the termination of your employment without cause, the following severance
benefits and arrangements:

Continuing bi-weekly payments of your base salary, at the
rate applicable as of the notice of your termination of employment, for a period
of twelve (12) months. The amount of each bi-weekly base salary payments may be
reduced with respect to any salary or other compensation that you earn in
employment or self-employment during the month in question, provided that any
such reduction will be made in compliance with Section 409A. If at the time of
your termination your salary continuation is scheduled to be paid for periods
after March 15th of the year following the year of your termination, and such
amount scheduled to be

paid after March 15th exceeds the separation pay plan
exception threshold under Section 409A, your salary continuation amount will be
reduced to reflect the Section 409A threshold amount in a manner that complies
with Section 409A. You will be paid an amount equal to the difference between
your salary continuation amount and the Section 409A threshold amount as
determined above within sixty (60) days of your separation date. You hereby
agree that you have a duty to seek full time work actively and in good faith
during the period in which you are collecting salary continuation. In order to
retain your right to receive and keep payments under this Subparagraph, you must
notify the Company in writing immediately upon engaging in self employment or
obtaining alternate employment, including the amount of payments you have
received or will receive.

In the event your employment is terminated under Paragraph 7,
if the Company achieves its performance targets in the fiscal year that your
employment is terminated, you will receive a management bonus on a pro rata
basis for the appropriate performance year. Bonus payouts occur in March of
every year.

Your group medical and life insurance, as described in
Paragraphs 4(a) and (d), will be continued until the termination of your
severance payments under this Paragraph 7(a) or until you become eligible for
coverage as the result of your accepting a position with a new employer,
whichever shall first occur.

The Company acknowledges that any material change in your
responsibilities shall be agreed upon between the parties before such material
changes are implemented. The Company acknowledges and agrees that any such
material change to your responsibilities shall be commensurate with your
stature, experience and position as Senior Vice President, Creative Director.
Within fourteen (14) days of the parties153 mutual agreement to a material change
in your responsibilities, the Company agrees to send a written communication to
you confirming your assent to a material change, and you agree to timely
respond, affirming your assent to such material change (electronic
communication, such as an email exchange, will suffice). In the event you
believe the Company has materially changed your responsibilities without your
consent, or you believe the Company is about to change your responsibilities,
you will so notify the Company153s Chairman of the Board of Directors and Chief
Creative Officer and offer the Company the opportunity to promptly cure such
change(s). It is further understood and agreed that in the event you receive
benefits under this Paragraph, you shall not be entitled to receive any other
compensation or benefits under this letter agreement as a result of the
termination of your employment hereunder and, as a condition to receiving that
severance compensation, you hereby agree to execute a Separation Agreement and
General Release acceptable to both you and the Company within sixty (60) days of
such termination and to make no other claim against the Company or its officers
and/or directors by reason of this letter agreement that exists or could have
existed as of the date of your execution of the Separation Agreement and General
Release.

Upon any termination of employment, you agree:

to refrain from soliciting any employee relationships of the
Company to terminate his or her employment or from hiring any employee of the
Company for a period of 24 months thereafter;

to refrain from using any confidential or proprietary
information obtained through your employment with the Company, including but not
limited to, the Company’s sourcing, manufacturing, product development,
merchandising, marketing, inventory sales, and sales promotion activities as
well as financial and operational information; and

to refrain from making any statements or comments of a
defamatory or disparaging nature to third parties regarding the Company or its
officers, directors, personnel or products.

Any failure to comply with the provisions of this Paragraph 8
shall relieve the Company of any of its obligations pursuant to this letter
agreement.

You agree that during your employment with the Company,
during any notice period that you continue to receive salary payments pursuant
to Paragraph 6(a), for the first six months that you receive severance payments
pursuant to Paragraph 7, or for a six (6) month period following termination for
cause pursuant to Paragraph 10 (the “Non-Competitive Period”), you shall not,
directly or indirectly, as owner, partner, joint venture, stockholder, employee,
broker, agent, principal, trustee, corporate officer, director, licensor, or in
any capacity whatsoever engage in, become financially interested in, be employed
by, render any consultation or business advice with respect to, or have any
connection with, any business which is competitive with, products or services of
the Company, in any geographic area where, at the time of the termination of
your employment hereunder, the business of the Company or its affiliates was
being conducted or was proposed to be conducted in any manner whatsoever
(“Competitive Activity”).

Notwithstanding anything contained in Paragraph 6(a), you
further agree that should you voluntarily terminate your employment with the
Company without Good Reason, at any time prior to the effective date of your
voluntary termination, the Company may elect, in its sole discretion, to notify
you that it will continue to pay you your base salary for a period of up to six
(6) months from the date you provided written notice. In such event, you agree
not to engage in any Competitive Activity during the prescribed six (6) month
period (“Voluntary Termination Non-Competitive Period”).

You may, however, own any securities of any corporation which
is engaged in such business and is publicly owned and traded but in an amount
not to exceed at any one time one percent (1%) of any class of stock or
securities of such corporation. In addition, you shall not, directly or
indirectly, during the Non-Competitive Period or the Voluntary Termination
Non-Competitive Period, request or cause any suppliers or customers with whom
the Company or its affiliates has a business relationship to cancel or terminate
any such business relationship with the Company or its affiliates.

The Company hereby acknowledges and agrees that it will not
unreasonably withhold its consent for you to commence competitive employment
during the Non-Competitive Period or the Voluntary Termination Non-Competitive
Period, provided that you first communicate with the Company regarding the
details of the particular opportunity and your prospective role and
responsibilities in this new position, and prospectively obtain its written
consent. You understand and agree that in the event that you commence such
competitive employment during the Non-Competitive Period or the Voluntary
Termination Non-Competitive Period having received pre-approval from the
Company, the amount of bi-weekly base salary severance payments paid to you by
the Company may be reduced with respect to any salary or other compensation that
you earn in employment or self-employment during the month in question, provided
that any such reduction will be made in compliance with Section 409A.

If any portion of the restrictions set forth in this
Paragraph should, for any reason, whatsoever, be declared invalid by a court of
competent jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.

You acknowledge that this paragraph applies wherever the
Company and its affiliates conduct business and that, therefore, the territorial
and time limitations set forth in this Paragraph are reasonable and properly
required for the adequate protection of the business of the Company and its
affiliates. In the event a court of competent jurisdiction restricts such
limitations, you agree to the reduction of the territorial or time limitation to
the area or period which such court shall deem reasonable.

The existence of any claim or cause of action by you against
the Company shall not constitute a defense to the enforcement by the Company or
its affiliates of the foregoing restrictive covenants, but such claim or cause
of action shall be determined separately.

10.

If you are terminated for “cause” by the Company, you will
not be eligible for any benefits under this letter agreement except COBRA or as
required by other law. “Termination for cause” shall be deemed to occur if the
Company terminates you for willful misconduct injurious to the Company’s
interests if not cured within 14 days of written notice to you by the Company
(if curable), willful breach of duty in the course of your job responsibilities,
if not cured within 14 days of written notice to you by the Company (if
curable), incapacity to perform your duty (for a period of 120 days) or if you
are indicted for the commission of a felony. For the avoidance of any doubt,
your inability to obtain necessary work authorizations or a visa to work in the
United States shall not constitute “cause” for purposes of this Agreement,
provided that such inability to obtain necessary work authorizations or a visa
does not stem from any underlying fraud or willful failure by you to disclose
material information to the Company.

11.

Should any disagreement, claim or controversy arise between
you and the Company with respect to a termination, the same shall be settled by
arbitration in New York, New York before a single arbitrator in accordance with
the Commercial Arbitration Rules of the American Arbitration Association, and
the award of the arbitrator with respect to a termination pursuant to this
letter agreement shall be enforceable in any court of competent jurisdiction and
shall be binding upon the parties hereto, except that the Company may seek
equitable relief with respect to any breaches of Paragraphs 6 through 9 of this
letter agreement.

14.

The invalidity or unenforceability of any particular
provision or provisions of this letter agreement shall not affect the other
provisions hereof and this letter agreement shall be construed in all respects
as if such invalid or unenforceable provisions had been omitted.

15.

This letter agreement constitutes the full and complete
understanding and agreement of the parties, supersedes all prior
representations, understandings and agreements as to your employment by the
Company and cannot be amended, changed, modified in any respect, without the
written consent of the parties, except that the Company reserves the right in
its sole discretion to make changes at any time to the other documents
referenced in this letter agreement.

16.

This letter agreement shall be binding upon and shall inure
to the benefit of successors and assigns of the Company.

17.

This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
provisions as to choice of laws, except insofar as the federal Arbitration Act
applies.

18.

You may not assign your rights or duties under this letter
agreement without the prior written consent of the Company, but the Company may
assign this letter agreement without prior notice to or consent from you.

19.

It is intended that any payments or benefits provided to you
pursuant to this Agreement (any such payments or benefits being referred to as
“Payments”) will not be subject to the additional tax and interest under Section
409A (a “Section 409A Tax”). The provisions of the Agreement will be
interpreted and construed in favor of complying with any applicable requirements
of Section 409A necessary in order to avoid the imposition of a Section 409A
Tax. You hereby are advised to consult with your own tax and legal advisors with
respect to the application of Section 409A to this Agreement. Notwithstanding
the foregoing, the Company does not guarantee the tax treatment of any Payments,
whether pursuant to the Code, federal, state, local or foreign tax laws and
regulations. Each installment payment shall be treated as a single installment
payment under Section 409A.

If, at the time you become entitled to Payments, you are a
“specified employee” (as defined under and determined in accordance with Section
409A), then no Payment considered deferred compensation under Section 409A that
is payable as a result of your separation from service (as defined under and
determined in accordance with Section 409A), shall be paid to you until the
business day that is at least six (6) months following your separation from
service (except in the event of your death during such six-month period) if and
to the extent such delay is required under Section 409A. Any such Payment that
would otherwise have been paid to you during this six-month period shall instead
be aggregated and paid to you in a lump sum, such payment to be made on the
business day that is at least six (6) months after your separation from service.
Any Payments after such date shall not be affected by this provision.”

This offer of employment is contingent upon your review and
execution of all of our standard new-hire paperwork. Per your request, we are
enclosing a copy of our 2008 Executive Benefits Summary for your review.

If the foregoing is agreeable to you, please sign both copies
of this letter agreement and return them to me. A fully executed original will
be returned to you.

Very truly yours,

KENNETH COLE PRODUCTIONS, INC.

/s/ Kenneth D. Cole

By: Kenneth D. Cole

Agreed to and accepted this

10th day of March , 2009

/s/ Ingo Wilts

Ingo Wilts

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