#1Confidential Presentation to: The Special Committee of Kenneth Cole Productions, Inc. Regarding: Project SILVER June 5, 2012 Bank of America Merrill Lynch#2Notice to Recipient Confidential "Bank of America Merrill Lynch" is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A. member FDIC, Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ("Investment Banking Affiliates"), including in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., which are both registered broker dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed. These materials have been prepared by one or more subsidiaries of Bank of America Corporation for the client or potential client to whom such materials are directly addressed and delivered ("KCP","Kenneth Cole Productions", or the "Company") in connection with an actual or potential mandate or engagement and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with us. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by us. We assume no responsibility for independent investigation or verification of such information (including, without limitation, data from third party suppliers) and have relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the managements of the Company and/or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company and are being furnished and should be considered only in connection with other information, oral or written, being provided by us in connection herewith These materials are not intended to provide t sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Bank of America Corporation or any of its affiliates to provide or arrange any financing for any transaction or to purchase any security in connection therewith. These materials are for discussion purposes only and are subject to our review and assessment from a legal, compliance, accounting policy and risk perspective, as appropriate, following our discussion with the Company. We assume no obligation to update or otherwise revise these materials. These materials have not been prepared with a view toward public disclosure under applicable securities laws or otherwise, are intended for the benefit and use of the Company, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without our prior written consent. These materials may not reflect information known to other professionals in other business areas of Bank of America Corporation and its affiliates. Bank of America Corporation and its affiliates (collectively, the "BAC Group") comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and strategic advisory services and other commercial services and products to a wide range of corporations, governments and individuals, domestically and offshore, from which conflicting interests or duties, or a perception thereof, may arise. In the ordinary course of these activities, parts of the BAC Group at any time may invest on a principal busis or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions, for their own accounts or the accounts of customers, in debt, equity or other securities or financial instruments (including derivatives, bank loans or other obligations) of the Company, potential counterparties or any other company that may be involved in a transaction. Products and services that may be referenced in the accompanying materials may be provided through one or more affiliates of Bank of America Corporation. We have adopted policies and guidelines designed to preserve the independence of our research analysts. The BAC Group prohibits employees from, directly or indirectly, offering a favorable research rating or specific price target, or offering to change a rating or price target to a subject company as consideration or inducement for the receipt of business or for compensation and the BAC Group prohibits research analysts from being directly compensated for involvement in investment banking transactions. We are required to obtain, verify and record certain information that identifies the Company, which information includes the name and address of the Company and other information that will allow us to identify the Company in accordance, as applicable, with the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) and such other laws, rules and regulations as applicable within and outside the United States. We do not provide legal, compliance, tax or accounting advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by us to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. If any person uses or refers to any such tax statement in promoting, marketing or recommending a partnership or other entity, investment plan or arrangement to any taxpayer, then the statement expressed herein is being delivered to support the promotion or marketing of the transaction or matter addressed and the recipient should seek advice based on its particular circumstances from an independent tax advisor. Notwithstanding anything that may appear herein or in other materials to the contrary, the Company shall be permitted to disclose the tax treatment and tax structure of a transaction (including any materials, opinions or analyses relating to such tax treatment or tax structure, but without disclosure of identifying information or, except to the extent relating to such tax structure or tax treatment, any nonpublic commercial or financial information) on and after the earliest to occur of the date of (i) public announcement of discussions relating to such transaction, (ii) public announcement of such transaction or (iii) execution of a definitive agreement (with or without conditions) to enter into such transaction; provided, however, that if such transaction is not consummated for any reason, the provisions of this sentence shall cease to apply. Copyright 2012 Bank of America Corporation. Bank of America Merrill Lynch#3Table of Contents Table of Contents 1. Proposed Transaction 2. Financial Analysis Appendix 1 Bank of America Merrill Lynch 51 11#4Proposed Transaction Bank of America Merrill Lynch#5Transaction Structure Per Share Consideration Total Consideration Treatment of Options and Restricted Stock Financing Summary of Selected Transaction Terms Merger of a wholly-owned subsidiary of a company formed by Kenneth Cole (such entity, "Parent") with and into Kenneth Cole Productions, Inc. ("KCP". "Kenneth Cole Productions or the Company") $15.25 per share in cash for each outstanding share of KCP Class A common stock not currently owned by Kenneth Cole and his family 17% premium to KCP's unaffected closing share price on February 23, 2012 ( ■ $294 million implied equity value / $245 million implied transaction value (2) ■ ■All in-the-money options to purchas KCP Class A common stock (whether vested or unvested) entitled to receive difference, if any, of per share consideration less applicable exercise price (less taxes required to be withheld) Restricted stock under Kenneth Cole Productions stock plans will be amended and holders thereof will be entitled to receive upon vesting per share consideration for each outstanding share (less taxes required to be withheld) Options and other awards held by Mr. Cole will be cancelled ☐ Executed debt financing commitment letter from Wells Fargo Bank, National Association; 1903 Onshore Funding, LCC (a fund controlled by Tennenbaum Capital Partners, LLC); and Special Value Continuation Partners LP Debt financing package consisting of asset-based revolving credit facility and term loan -$110 million asset-based revolving credit facility (-$53 million expected to be drawn at closing) -$55 million term loan Executed equity financing commitment letters from Cole Family Holdco, LLC and Marlin Equities VII, LLC Source: Draft, datel fume 4, 2012 of Agreement and Plan of Merger, Kenneth Cole Productions management and FactSet (1) Closing share price of $13.07 on February 23, 2012, the last traling day prior to announcement that Kenneth Cole sabitted an initial offer to acquire KCP for $15.00 per share. (2) Based on 10.3 million class A shares and 8.0 million class 8 shares outstanding, 2.5 million options outstanding with a weighted avenge exercise price of $16.24 per share (strike prices ranging from $5.36- $3427 per share) and 0.5 million restricted stock units (RSU) Calculated pursuant to the tressery stock method Assames all options and stock asands outstanding nest upon change of control. Assames cash of $49 million as of March 31, 2012 1 Bank of America Merrill Lynch#6No-Shop Provision Certain Termination Provisions Certain Closing Conditions Summary of Selected Transaction Terms (Cont'd) ■ No-shop provision, subject to exercise of KCP's Special Committee's fiduciary duties with respect to a superior proposal Mutual written consent ■ If the merger has not been consummated within 180 days from signing of the merger agreement By the non-breaching party if the other party materially breaches the merger agreement ■ Change in recommendation by the Company Board or the Special Committee in response to a superior proposal or an intervening event Under certain circumstances, expenses must be reimbursed by the other party, the Company will pay a $3 million termination fee in connection with a change in recommendation and Parent will pay the Company, in the case of failure to obtain financing, a $3 million fee, or in the case of a material uncured breach by Parent, a $15 million fee ■ Approval by a majority of the outstanding shares of KCP Class A common stock held by shareholders other than family shareholders, including Mr. Cole and affiliates or associates of family shareholders Absence of legal prohibitions ■ No KCP material adverse effect Sewnor: Draft, dated June 4, 2012, of Agreement and Plan of Merger. 2 Bank of America Merrill Lynch#7Implied Transaction Multiples Kenneth Cole Productions Share Prices Premium / (Discount) to: Closing Share Price ($14.64) (6/4/12) Unaffected Share Price ($13.07) (2/23/12) 45-Day Average ($11.94) 52-Week High ($13.98) (2/25/11) Diluted Share Count Implied Equity Value Plus: Debt Less: Cash Implied Enterprise Value Implied Enterprise Value as a Multiple of Sales Share Price as a Multiple of Adjusted EPS LTM (3/31/12) 2012E 2013E Adjusted EBITDA LTM (3/31/12) 2012E 2013E 2012E 2013E Source: Public filings and Kenneth Cole Productions management projections Note: Dollars in millions csopt per she tulus. Metrics: $478 487 544 $24 21 30 $0.40 0.60 (3) Bundened for stock-based compensation and adjusted for one-time expesses and impairment charges (6) Adjusted for one-time items and normalt KCP Unaffected Closing Share Price $13.07 3 (11%) 0% 9% (7%) 19.112 $250 0 (49) $201 0.42x 0.41 0.37 8.2x 9.4 6.6 32.7x 21.6 Per Share Consideration $15.25 4% 17% 28% 9% 19.259 $294 0 (49) $245 0.51x 0.50 0.45 10.0x 11.4 8.1 (1) Closing share price on February 23, 2012, the last trading day prior to announcement that Kenneth Cole sabwitted an initial offer to acquire KCP for $15.00 pers. (2) Based on the 45 days and 52 avcks prior to February 23, 2012, the last trading day prior to announcement fiset Kenneth Cole submitted an initial offer to acquire KCP for $15.00 per share. (3) Based on 10.3 mon class A shares and 8.0 million des 8 shares outstanding 2.5 million options cutstanding with a uvighted average exercise price of $16.24 per share (steke prices ranging from $5.36-534.27 per share and 0.5 million RSUS. Calculated pursuant to the treasury stock metal Assames all options and stock awards outstanding vest open change of control Projectal debt and cesh balances as of March 31, 2012. 38.2x 25.2 Bank of America Merrill Lynch#8Sources Excess Cash New $110 million Asset-Based Revolving Credit Facility (L+200 bps) New Term Loan (L+850 bps) Kenneth Cole Rollover Equity New Equity Total Sources Transaction Sources and Uses Uses Purchase of Kenneth Cole Productions Equity Transaction Fees and Expenses Financing Fees Total Uses Source: Kenneth Cole Productions management. Note: Dollars in millions (1) Projected cash balance as of September 30, 2012 Tessed (2) Subject to 10% LIBOR floor $ $40 53 55 131 26 $305 $ $294 8 4 $305 % of Pro Forma Capitalization 20% 21% 49% 10% 100% % of Total 96% 3% 1% 100% cash of $5 million, as per Kenneth Cole Production management (3) Based on $15.25 per share price, assuming Kenneth Cole nership of 0.5 mln Class A common shares 8.0 million Class 8 common shares 0.7 million restricted shares and 0.6 milion in the money options at a weightol mege strike price of $11.25 per share (strike prices ranging from $5.36-$14.84 pers (4) Based on a $15.25 per share pice, osaming 10.3 million class A shares and 50 million class 8 shares outstanding, 25 millen options outstanding with a weighted average exercise price of $16.24 per share (strike prices nanging from $5.36-534.27 per share) and 0.5 midio RSUs. Calculated parent to the treasury stock metod. Assumes all options and stock awards outstanding est upon change of control. Bank of America Merrill Lynch#9Financial Analysis Bank of America Merrill Lynch#10Revenue % Growth Gross Profit % Margin Adjusted EBITDA % Margin Adjusted EBIT % Margin Adjusted EPS Free Cash Flow (4) 2008A $492 199 40% (0) (0%) (9) (2%) ($0.19) 6 2009A Financial Summary Kenneth Cole Productions Management Projections $410 (17%) 171 42% (0%) (11) (3%) ($0.38) 4 Historical 2010A $457 11% 196 43% 19 4% 9 2% $0.31 13 Fiscal Year Ending December 31, LTM (3/31/12) Source: Public filings and Kenneth Cole Productions management projections Note: Dollars in millions, et per share values. NM dentes date not meaningful (1) Bunlenel for stock-based compensation and adjusted for one-time expenses and impairments 2011A $479 5% 185 39% 21 4% 11 2% $0.40 (22) $478 - 187 39% 24 5% 5 15 3% - (3) KCP Management Projections 2012E $487 2% 194 40% 21 4% 11 2% $0.40 12 2013E $544 12% 218 40% 30 6% 19 3% $0.60 31 2014E $605 11% 245 40% 42 7% 30 5% $0.95 28 Adjusted for one-time items and nirmalized taxes Calculated as cash flow from operations less opital expenditures, including purchase of intanghe assets. Includes cash impact of one-time items including $70 million of lease contract termination payments and $5.7 million of executive sevce. Additionally, cash flows were negatively impacted by an increase in net arking capital due to internalizing women's sportswear licensing '11A-'12E *12E-14E 2% 5% 2% (3%) CAGR (1%) NM 11% 12% 40% 66% 54% 52% Bank of America Merrill Lynch#11Revenue Segment Income Wholesale Consumer Direct Royalty Income Total Revenue % Growth: Wholesale Consumer Direct Royalty Income Total Revenue Wholesale Consumer Direct Licensing / International Segment Income ( % Margin: Wholesale Consumer Direct Segment Income Less: Other Corporate Expenses Consolidated Adjusted EBIT Segment Financial Summary Kenneth Cole Productions Management Projections 2008A $267 181 44 $492 (8%) 3% (1%) (4%) $28 (17) 35 $46 10% (10%) 9% (55) ($9) 2009A $201 170 39 $410 (25%) (7%) (10 %) (17%) $18 (20) 34 $33 9% (12%) 8% (44) ($11) Historical Fiscal Year Ending December 31, LTM 2011A (3/31/12) 2012E 2013E 2010A $219 192 46 $457 9% 13% 16% 11% $24 (13) 41 $52 11% (7%) 11% (43) $9 $268 164 46 $479 22% (15%) 1% 5% $20 (10) 42 $52 8% (6%) (40) $11 $271 162 6 46 $478 $22 (7) 41 $55 8% 12% KCP Management Projections (40) $15 $274 169 44 $487 2% 3% (4%) 2% $23 (8) 41 $57 9% (5%) 12% (46) $11 $310 186 47 $544 13% 11% 5% 12% $30 (6) 44 $68 10% (3%) 12% (49) $19 2014E $345 209 52 $605 11% 12% 11% 11% $36 (2) 49 $83 10% (1%) 14% (53) $30 "11A-12E 12E-14E CAGR 2% 3% 2% 16% NM (1%) 10% (3%) Source: Pablic filings and Kenneth Cole Productions management projections Note: Dollars in millions "NM denotes data not meaningfal. Per Kenneth Cole Productions management wholesale recense incades international licensing but is excluded in segmient income and included in licensing incom (T) Segment income includes corperate overhead. (2) Banknot for stock-based compensation and adjusted for one-time expenses and impairments. 12% 11% 8% 11% 24% NM 9% 21% 66% Bank of America Merrill Lynch#12Implied Kenneth Cole Productions Per Share Reference Ranges $25.00 $20.00 $15.00 $10.00 $5.00 Methodology Assumptions: $13.98 Low $10.15 $10.15 52-Week Share Price Range Kenneth Cole Productions Reference Range Summary High $13.98 $15.85 Analyst Share Price Target Share Price Target $18.00 Cost of Equity 13.5% $11.60 $9.40 Selected Public Companies Analysis 2012E Adjusted EBITDA" $21 Selected Multiple Range 8.0x $14.00 7 $11.55 Selected Precedent Transactions Analysis 7.0x LTM 3/31/12 Adjusted EBITDA $24 Selected Multiple Range 9.0x (5) Discounted to June 30, 2012 using mid-year convention. Normaland depreciation and amortization calculated as 99.7% of nermeirond 2014E capital expenditures (6) Burdened for stock-hased compensation and adjusted for one-time expenses and impairments Potential Tax Benefits per Share (1) $18.80 $17.30 $13.65 Discounted Cash Flow Analysis 2.5% Discount Rate 11,0% - 13.0% Perpetuity Growth Rate 6.0x Source: Kenneth Cole Productions management projections public fings, Wall Street research FactSet and Capital Note: Dollars in millions, esot per share values. Per share values rownded to nearest 50.05 exoget 52-week high/lour. Based on 10.3 million dess A shares and 50 ilm class B shares outstanding, 2.5 million options outstanding with a weighted average exercise price of $16.24 per share (strike prices ranging from $5.36-534 27 per share) and 0.5 million RSUs Calculated pursuant to the treasury stock method. Assumes all options and stock animls outstanding vest upon change of control Calculated parent to the treasury stock method. Assumes all options and stock and attending vstupes change of control Awmes cash of $49 million as of March 31, 2012 (1) Includes potential tax benefits frowe defereed tax assets and net operating losses ("NOLS") (2) Closing share price on February 23, 2012, the last trading day prive to announcement that Kenneth Cole submitted an initial offer to acpoire KCP for $15.00 per share. (3) For informational purposes. Reflects 52-week high/ as of February 23, 2012, the last trading day prior to announcement that Kenneth Cole satted as initial offer to acquire KCP for $15.00 per share (4) For informational purposes Reflects B. Riley & Co foreand share price target discounted one year at cost of opvity of 13.5%. 3.5% Per Share Consideration: $15.25 KCP Unaffected Closing Share Price: $13.07 Bank of America Merrill Lynch#13EV/2012E EBITDA 12.0x 8.0x 7.6x 4.0x 0.0x 6.0x 5.8x Selected Public Companies 5.1x Oxford Perry True Jones Ellis Religion Group Apparel 10.1x 7.9x 7.6x Footwear & Accessories 6.4x 6.2x Wolverine Steve Fossil Genesco Deckers Madden Brand Management Source: Kenneth Cole Productions management projections, public Slings, FactSet, Capital IQ Wall Street research ceas estimates as of June 4, 2012. Note: Selected pubic companies exdule Cherokee and Fit & Pacices Cherokee multiples are not publicly available and Fifth & Pacific multiples are not meaningfal due to depressol teeds of EBITDA. KCP implied multiplies based on unaffected closing share price of $13.07 on February 23, 2012, the last trading day prior to announcement that Kenneth Cole submitted an initial offer to acquire KCP for $15.00 per shan, KCP EBITDA hundened for stock-based compensation and adjusted for one-time expenses and impairment changes. (1) 8 7.1x KCP (Research) Iconix KCP (Mgmt.) 6.0x 9.4x KCP™ KCP™ Bank of America Merrill Lynch#14Selected Branded Transactions - LTM EBITDA Multiple Date: 14.0x 10.5 7.0x 3.5x 0.0x Transaction Value: 8.7x Colective Brands/ Wolverine Blum, Golden Gate May-12 $1,810 12.6x Timberland VF Corp Jun-11 Selected Precedent Transactions $2.016 8.3x Tommy Hilfiger Philips-Van Heusen Mar-10 $3,140 7.4x Kellwood Sun Capital Sep-07 1926 Source: Wall Street research public filings, press releases and other pubidy mailable sources Note: Deliers in millions 11.3x Stride Riter Payless May-07 $874 6,2x Dec-05 Tommy Hifiger Maxwell Shoes Hat World Jones Apax Genesco $1,379 8.9x 9 Jun-04 7.3x $265 Feb-04 $177 8.4x Converse Nike Ju4-03 $324 6.2x Ju-03 Implied KCP LTM EBITDA Multiple at Per Share Consideration of $15.25 per share: 10.0x Nautical Tommy VF Corp Bahama' Oxford $507 6.0x $325 8.0x Nine West Jones Mar-99 $1,408 Bank of America Merrill Lynch#15Sales % Growth Adjusted EBITDA % Margin Adjusted EBIT % Margin Tax-Effected Adjusted EBIT ( Plus: Depreciation & Amortization Less: Capital Expenditures Less: Change in Operating Assets & Liabilities Unlevered Free Cash Flow Discount Rate 11.0% 12.0% 13.0% Discount Rate 11.0% 12.0% 13.0% Discounted Cash Flows Q3-Q4 2012E 2014E $56 55 55 Cash $48 48 48 Discounted Cash Flow Analysis 39,0% nermalized tax rate for the projection period. (3) Asses cash of $45 million as of June 30, 2012 2010A $457 11.4% $19 4.1% 2.1% $9 9 (4) 3 $15 2.5% $7 $203 178 158 2.5% 2011A $479 4.7% $15.90 14.65 13.65 $21 4.4% $11 2.4% $8 10 PV of Terminal Value at Perpetuity Growth Rate 3.0% (3) (31) ($17) Fiscal Year Ending Dec. 31, 2012E Q3-Q4 $216 189 167 Q1-Q2 $222 (0.5%) 10 1.1% ($3) (1.2%) Implied Per Share Equity Value at Perpetuity Growth Rate 3.0% $16.55 15.20 14.10 $2 ($2) 5 (4) (13) ($13) 3.5% $232 201 177 3.5% $17.30 15.80 14.55 $265 2.4% $19 7.2% $14 5.1% $8 6 (7) 11 $18 2013E $544 11.6% $30 5.6% $19 3.4% $11 12 (9) 7 $20 2.5% $259 233 213 2014E $605 11.4% 6.3x 5.6 5.1 $42 6.9% Source: Public filings and Kenneth Cole Productions management projections Note: Dollars in millions, exopt per share values. Per share values rounded to nearest $0.05 Presest palues as of June 30, 2012, uning mid-year contion. Normalized terminal aur year am 2% inflation and 10-year depreciation period with normalized depreciation equal to 90.7% of capital expenditures, fplied equity value per share based on 10.3 million class A shares and 8.0 million das B shares outstanding, 25 million options outstanding with a weighted average exercise price of $16.24 per share (strike prices ranging from $5.36-534.27 per share) and 0.5 million RSLs. Calmisted pursuant to the treasury stock method, Assames all optices and stock awards outstanding est apue change of control. (1) Bundened for stock-hasol compensation and adjusted for one-dime expenses and impairment charges. (2) Ass $30 5.0% Implied Enterprise Value at Perpetuity Growth Rate 3.0% $19 12 (8) 2 $24 $272 244 222 Normalized 2014E 6.7x 6.0 5.4 $605 2.0% $42 6.9% $35 5.7% $21 7 (8) $21 Implied Adjusted EBITDA Multiple 2.5% 3.0% 3.5% 3.5% $288 256 231 7.2x 6.4 5.7 Bank of America Merrill Lynch#16Appendix Bank of America Merrill Lynch#17Past Three Years $18.00 $15.00- $12.00- $9.00- $6.00- 08/06/09 KCP reported Q2 2009 $3.00 earnings of ($0 18) per. share, above previous guidance of ($0.25) - (50.30) per share $0.00+ 06/04/09 02/12/10 KCP revised Q4 2009 earnings estimates to $0.21 per share, up from previous guidance of $0.04-$0.08 per share 01/08/10 Appendix Kenneth Cole Productions Historical Share Price Performance Source: FactSet Note: Prices reflect closing share price for the respective day 09/17/10 Bloomberg reported that KCP was in talks with Iconix about a potential sale of KCP 08/16/10 Since 1-Month YTD 02/23/11 00/04/11 06/04/10 05/04/09 10/25/10 New York Times reported that talks between Kenneth Cole and Iconix had stalled and were unlikely to resume soon KCP Share Price Performance Through 06/04/12 High Average Low $15.10 $14.92 $14.40 14.52 12.81 12.73 16.35 11.00 10.15 10.15 13.00 10.15 12.07 6.53 11 10.35 16.09 10.89 02/28/11 KCP reported Q4 2010 earnings below Wall Street estimates, and announced that CEO Jill Granoff had resigned 06/09/11 KCP announced that Paul Blum would join the Company as Chief Executive Officer Through 02/23/12 High Average Low $13.07 $12.68 $12.10 13.07 12.30 11.09 13.90 12.02 10.15 13.58 11.01 10.15 12.57 10.15 16.09 16.89 6.53 03/23/11 en 02/24/12 Kenneth Cole offered to acquire all outstanding shares of the Company's Class A common stock that he did not already own for $15.00 per share in cash 10/28/11 KCP Closing Share Price (06/04/12) $14.64 05/03/2012 KCP reported Q1 2012 earnings below Wall Street estimates, and reported consumer direct comparable store sales decline of 2.0%, representing the fifth straight quarter of comparable store sales declines 06/04/12 Bank of America Merrill Lynch#18Past Three Years 350% 300%- 250%- 200% 150% 100% 50% 06/04/09 Since 1-Month (3 2/23/2012 YTD 06/04/11 06/04/10 06/04/09 KCP (3%) 12% 38% 27% 28% 98% Relative Share Price Performance Through 06/04/12 S&P 500 (7%) (8%) 2% Appendix Kenneth Cole Productions Relative Share Price Performance 01/08/10 (2%) 20% 36% Selected Companies (8%) (8%) 0% (0%) 40% 108% KCP 8% 23% 13% 77% 08/16/10 Through 02/23/12 S&P 500 4% ww 8% 5% 28% 45% Selected Companies 8% 12% 9% 61% 148% 12 my 03/23/11 J 10/28/11 Souros FactSet Note: Prices reflect closing share price for the respective day (1) Based on closing share prices on June 4, 2012. (2) Selected Companies include Cherokce, Deckers, Fifth & Pacific, Feil Genesos, loomis, Jenes Apparel Group, Oxford Industries, Perry Ellis, Steve Madden, Trie Religion and Winerie Worldwide. (3) Reffects 1-month share price performance from June 4. 2012 and February 23, 2012, respectively. Selected Companies +108% Kenneth Cole Productions +98% S&P 500 +36% 06/04/12 Bank of America Merrill Lynch#19(4) Appendix Illustrative Present Value of KCP Potential Tax Benefits Section 382 Limitation ( Implied Equity Value Long-Term Tax-Exempt Rate 382 Base Limitation (Annual Limitation) Projected Tax Benefits KCP Pre-Tax Earnings Permanent Items Profit Before Tax Deferred Tax Asset Benefit NOL Utilized™ Total Tax Benefit After-Tax Cash Flow Impact ( Beginning NOL Balance Less: NOL Utilized Ending NOL Balance 8.0% 10.0% 12.0% $294 3.26% $10 2H 2012E Net Present Value of Potential Tax Benefits Discount Rate $13.6 0.1 $13.7 $4.5 9.3 $13.7 $5.4 $53.3 (9.3) $44.0 13 Built-in-Gain 15-Year Limitation Annual Limitation (First 5 Years) 2013E $18.8 0.3 $19.1 $1.0 17.3 $18.2 $7.1 Net Built-in-Gain Limitation $44.0 (17.3) $26.7 2014E $30.5 0.3 $30.8 $2.5 17.3 $19.8 $7.7 $26.7 (17.3) $9.5 Implied Value $29.5 28.0 26.7 2015E $37.0 0.3 $37.3 $6.4 9.5 $15.8 $6.2 $9.5 (9.5) $0.0 Implied Value Per Share $1.55 1.45 1.40 2016E and Thereafter $115 15 $8 $39.4 Source: Kenneth Cole Productions management projections Note: Subject to change. Based on ter date as provided by Kenneth Cole Productions as of May 21. 2012 BefA Merrill Lynch does not pude tax advice, and nothing herein shall constitute or be construed as tax ador Dollars is millions, except per share values. (1) Section 382 limitation based on data provided by Kenneth Cole Productions management, (2) Besed on a 515.25 per share price, assuming 10.3 million class A shares and 89 milion class shares outstanding 2.5 million options outstanding with a ghted average exercise price of $16.24 per sher (strike prices ranging from 55.36-534.27 per share) and 0.5 milion RSL C Calculated pursuant to the treasury stock method. Acumes all options and stock and outstanding ned apen change of contr Long-term exempt AFR as of May 2012, as provided by Kenneth Cole Productions management. Net built-in-gain mitation as per Kenneth Cole Productions management. Mustrative 2015E pretex comings as provided by Kenneth Cole Productions management Reflects deferred tax avset benefits of $21 million realized from 2016E througe 2022E and $18 million ind thereafter with an average sitzation perial of 25 years per Kenneth Cole Productions management. $39.4 $15.4 (7) As provided by Kenneth Cole Productions management. (8) Includes deferned MAX asset benefits, including items such as deferred compensation, depreciation and amortization, as per Kenneth Cole Production management, (9) Reflects misure of i) profit before tax less deferred tex asset hengit() sum of annual Nimitations (517 million, including 59 millim of wction 382 limitation and 58 million of net build-in-gaie Nitation) and (ii) beginning NOL Palence of the respective war. (20) 2H 2012 begining balance of 555 million per Kenneth Cole Practions management Assames39% tax rate (11) Present ofurs discounted to June 30, 2012 ing mid-year convention Assames 19 milion dilated shares per Kenneth Cole Productions management. Per share calves rounded te nearest $0.05. Bank of America Merrill Lynch