EXHIBIT 10.04
EMPLOYMENT AGREEMENT
1. PARTIES.
The parties to this Agreement are AVID SPORTSWEAR, INC., a California
corporation, hereinafter called "Employer", and XXXXXX X. XXX, hereinafter
called "Employee".
2. RECITALS.
This Agreement is made with reference to the following facts:
2.01 Employer desires to employ Employee, as Chief Executive Officer and
President for AVID SPORTSWEAR, INC. and Employee desires to be
employed by Employer in accordance with the provisions of this
Employment Agreement. Employer is desirous of formalizing the
employment of Employee pursuant to this Agreement.
2.02 The parties desire by this Agreement to memorialize the terms and
conditions of employment and the compensation and benefits to be
provided by Employer to Employee.
3. AGREEMENT.
THE PARTIES AGREE AS FOLLOWS:
3.01 EMPLOYMENT. Employer hereby engages Employee, and Employee hereby
accepts employment from Employer, upon the terms and conditions
herein set forth.
3.02 TERM. The term of this Agreement shall be for a period of three (3)
years, commencing on the effective date of this Agreement and
terminating on the third anniversary thereof; subject, however, to
prior termination as herein provided. This Agreement shall be
automatically renewed for succeeding terms of one (1) year each
unless either party, at least four (4) months prior to the
expiration of any term, gives written notice of intent not to renew
this Agreement.
3.03 SERVICES TO BE RENDERED. Employee is engaged as Chief Executive
Officer and President of AVID SPORTSWEAR, INC., to render such
services for and on behalf of Employer as is consistent with such
offices.
Employee shall not, without the express written consent of Employer,
directly or indirectly during the term of this Agreement, render services
of a business nature to or for any other person or firm for compensation,
or engage in any activity competitive with or adverse to Employer's
business in the United States, whether alone, as a partner, or as an
officer, director, employee or shareholder of any other corporation or as
a trustee, fiduciary or other representative of any other entity.
3.04 COMPENSATION. Employer agrees to pay Employee during the term of this
Agreement, and Employee hereby accepts as full compensation for the
performance of services hereunder, the current and deferred compensation
and other benefits set forth on Exhibit "A" attached hereto and
incorporated herein by this reference. All current compensation shall be
subject to customary withholding tax and other employment taxes as
required with respect to compensation paid by an employer to an employee.
3.05 EXPENSES. During the period of employment, Employee shall be
reimbursed for all reasonable and necessary business expenses in
accordance with the general policy of Employer.
3.06. VACATION. Employee shall be entitled to a paid vacation of four (4)
weeks without loss of compensation, or such greater length as may be
approved from time to time by Employee.
3.07 EMPLOYER'S AUTHORITY. Employee agrees to observe and comply with the
rules and regulations of Employer, either orally or in writing,
respecting performance of Employee's duties and to carry out and to
perform orders, directions and policies stated by Employer to
Employee, from time to time, either orally or in writing, provided
no material change in Employee's responsibilities shall be made.
3.08 ACCOUNTING. True and accurate records of accounts shall be kept in
accordance with good accounting practices and shall be available at
any reasonable time for inspection by Employee.
3.09 TERMINATION. Notwithstanding the term of this Agreement, this
Agreement shall be terminated upon the happening of any of the
following events:
a). Whenever Employer and Employee shall mutually agree to
termination in writing;
b). Death of Employee;
c). Employee remains sick, is disabled or is unable to perform the
essential functions of his job, with or without reasonably
accommodation, for the period of three (3) consecutive months as
determined by professionally qualified medical experts reasonably
acceptable to Employer and to Employee or his agent;
d). For Cause, which shall be deemed to exist if; 1). Employee
willfully refuses to perform his responsibilities hereunder after
written notice thereof specifying the particulars and a reasonable
opportunity (not to exceed thirty (30) days) to cure such failures
are given to Employee; 2). Employee engages in acts of dishonesty or
fraud in connection with his services the performance of Employee's
duties hereunder; or 3). Employee engages in other serious
misconduct of such a nature that the continued employment of
Employee may reasonably be expected to adversely affect the business
of properties of Employer. e).Notwithstanding any of the provisions
of subparagraphs (a) and (b) above, upon sixty (60) days prior
written notice by either Employer or Employee to the other.
Upon termination for any of the foregoing causes, Employer shall be
entitled to receive all compensation accrued but unpaid as of the date of
termination. Upon resignation by Employee other than for Cause in d) above or
for Good Cause, Employee shall receive payment of the greater of twelve (12)
months current salary and the salary payable during the initial three (3) year
term of this Agreement. Employee shall have no duty to mitigate his damages for
a period of twelve (12) months. Mitigation shall be deemed to include
compensation from employment or consultation.
3.10 CONFIDENTIAL INFORMATION. Employee covenants and agrees that he will
not during the term of this Agreement and for one (1) year from the
termination of his employment unless Employee has been terminated
without cause or resigned for Good Cause (as hereafter defined),
use, directly or indirectly, for his own account or for the account
of any third party, without the prior written consent of Employer,
any observations, data, written materials, customer lists, supplier
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or vendor lists, records or documents relating to Employer which are
of a confidential or proprietary nature and which Employee may have
acquired by virtue of work performed for Employer.
Good Cause shall mean (1) A reduction or non-payment of salary or failure
to annually review salary levels, (2) failure to pay any bonus within
thirty (30) days when due, (3) failure to provide substantially the same
benefits as hereafter provided to other officers of Employer, or (4) a
breach by Employer of the Agreement not cured within thirty (30) days
after notice thereof by Employee, or (5) if Employer relocated its
principal place of business to an area which is outside 25 miles of Los
Angeles County, California, or (6) if Xxxx Xxxxxxxxxx should voluntarily
sell his stock in the parent Employer so that his ownership interest is
diluted to less than 30% of his current ownership, or (7) a material
change in the responsibility of Employee without cause.
All written materials, records and documents made by Employee or
coming into his possession during the term of his employment by and
ownership of shares in Employer concerning the business or affairs of
Employer shall be the sole property of Employer and retained by Employer.
3.11 TRADE SECRETS. Employee agrees that any trade secrets, invention,
improvement, patent, patent application, or writing and any program,
system or novel technique (whether or not capable of being
trademarked, copyrighted or patented), conceived, devised, developed
or otherwise obtained by him during his employment by and ownership
of shares in Employer relating to the business, property, methods,
suppliers or customers of Employer shall remain the sole property of
Employer.
3.12 SOLICITATION OF EMPLOYEES. Employee covenants and agrees that during
the term of this Agreement and for a period of one (1) year from the
termination of his employment, he shall not directly or indirectly
solicit, entice or encourage or resignation of any employee of
Employer.
3.13 COVENANT NOT TO COMPETE. Employee recognized, acknowledges and
agrees that the Employer's customer and client lists and other
records and information pertaining to Employer's customers, clients
and business, as such lists, records and information may exist from
time to time, as well as the respective customer and client lists
and other records and information pertaining to the customer,
clients and business of Employer, to which Employee has had access
as an employee of Employer, are valuable, special and unique assets
which constitute protectable interest of Employer. Employee further
recognizes, acknowledges, and agrees that Employer's customer and
client lists and other records and information pertaining to
Employer's customers are not generally known to the public and have
been subject to reasonable efforts by Employer to maintain their
secrecy. Employee covenants and agrees that during the term of this
Agreement and for a period of one (1) year from the termination of
his employment unless Employee has been terminated without cause and
Employer, (2) directly or indirectly, request or advise any person,
firm, company, partnership, corporation, trust, or entity who is in
competition with Employer to withdraw, curtail or cancel business
with Employer; or (3) for himself on behalf of any other person,
firm, company, partnership, corporation, trust, or entity, actively
engage, assist, or have any active interest in any business which is
directly competitive with any aspect of the business of Employer, as
presently conducted or as said business may evolve in the ordinary
course between the date hereof and the termination of this
Agreement. For purposes of this paragraph "competitive business"
shall mean any business which is engaged in the apparel creation,
design, production, marketing, distribution, or sales of golf
apparel which Employer then sells, including, without limitation,
the companies listed on Exhibit "B". "A customer of Employer" shall
be any person or entity that has purchased goods from Employer in
the twelve (12) month period prior to Employee's termination.
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Employee shall not be prohibited from working for a competitive
business if it engages in the sale of other apparel and Employee
works for such company division selling such other apparel.
3.14 ENFORCEMENT. Employee acknowledges and agrees that the scope, period
of restriction and geographic area of restriction imposed by the
provisions of Section 3.15 are fair and reasonable and are
reasonably required for the protection of Employer. In the event
that any part of these covenants relating to the scope, geographic
area of restriction or the period of restriction shall be determined
by a court of competent jurisdiction to exceed the maximum area or
period of time that such court would deem enforceable under
applicable law, the scope, geographic area of restriction or the
period of restriction, as the case may be, shall be reduced to the
maximum scope, area and period that such court would deem valid and
enforceable.
It is understood by and between the parties hereto that the
foregoing covenants by Employee as set forth above are essential elements of
this Agreement and Employer would not have entered into this Agreement unless
Employee agreed to comply with such covenants. Furthermore, Employee covenants
and agrees that in the event of Employee's actual or threatened breached of any
of the provisions of this Agreement, Employer shall be entitled to an injunction
restraining Employee there from, as damages at law would not be an adequate
remedy. Nothing herein shall be construed as prohibiting Employer from pursuing
any other available remedies for such breach or threatened breach, including the
recovery of damages from Employee. Employer shall also be entitled to recover
attorney fees from Employee in connection with the enforcement of these
provisions.
3.15 GOVERNING CALIFORNIA LAW. This Agreement is drawn to be effective in
and shall be construed in accordance with the laws of the State of
California.
3.16 AMENDMENT. No amendment or variation of the terms of this Agreement
shall be valid unless made in writing and signed by Employee and a
duly authorized representative of Employer. This Agreement
constitutes the only agreement, written or oral, between Employer
and Employee and all prior agreements between Employer and Employee
are of no further force and effect.
3.17 BINDING EFFECT. This Agreement shall bind all parties, their
respective heirs, personal representatives, or assigns, but nothing
herein shall be construed as an authorization or right of any party
to assign the rights or obligations stated hereunder.
3.18 EFFECTIVE DATE OF THIS AGREEMENT. The effective date of this
Agreement is Sept. 11, 1999.
EMPLOYER: EMPLOYEE:
AVID SPORTSWEAR, INC.
A California Corporation
BY: /s/ [Xxxx X. Xxxxxxxxxx] /s/ [Xxxxxx P. Mow]
----------------------------- ------------------------------------
Xxxx X. Xxxxxxxxxx Xxxxxx P. Mow 9/17/99
Chairman
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EXHIBIT "A"
SCHEDULE OF COMPENSATION FOR
XXXXXX X. XXX
1. Current Compensation.
In accordance with Section 3.04 of the Employment Agreement to which this
Schedule is attached, Employee shall be paid total compensation, as follows:
a. A base salary per year of $300,000 payable at the rate of $25,000.00
per month commencing the effective date of the Employment Agreement.
b. Employee shall be eligible for annual salary increase at discretion
of Employer.
c. In addition to base salary, Employer shall pay to Employee the
following: a bonus of $25,000 will be paid thirty (30) days from the
execution date of this Agreement. A $50,000 bonus will be paid six
(6) months from the execution of this Agreement. If no company bonus
plan is established to by Employer, Employee shall continue to
receive the foregoing bonus during the term of this Agreement, so
long as profitability increases each year.
2. Other Benefits.
Employee shall be entitled to participate fully in all such health, disability,
life insurance and other benefits as made available by Employer to its officers.
3. Stock Options.
Employee shall be entitled to receive the stock options that are developed by
Employer for its highly paid executive employees at such time as Employer
establishes a plan.
4. Employee shall be entitled to receive option of Shares of Restriction
Common Shares of Avid Sportswear, Inc./Golf Corporation on signing of this
document. Percentage of Shares will be a minimum of 3% of the outstanding
shares. Employee and Employer shall agree to work out mutually acceptable
and dilution provisions with respect to such option plan.
EXHIBIT "B"
LIST OF COMPETING COMPANIES
1). Xxxxx Xxxxx
2). Como
3). Descente
4). Polo/Xxxxx Xxxxxx
5). Izod Club
6). Xxxxxxxx
7). Cutter & Buck
8). Xxxxx Xxxxxxxx
