EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as
of the 1st day of July, 1998 between GOLFGEAR INTERNATIONAL, INC.,
a Nevada corporation (the "Corporation"), and XXXXXX X. XXXXXXXX
("Employee").
WHEREAS, the Board of Directors of the Corporation believes
that the continuation of the services of Employee as Chief
Executive Officer and President of the Corporation would be of
great value to the Corporation, and the Corporation is desirous of
retaining Employee's services for an additional number of years as
set forth in this Agreement; and
WHEREAS, Employee is willing to accept such continued
employment by the Corporation upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the
mutual covenants herein contained and of the mutual benefits herein
provided, the Corporation and Employee hereby agree as follows:
TERM OF EMPLOYMENT
1.01 Specified Period. The Corporation hereby employs
Employee and Employee hereby accepts employment with the
Corporation for a further period of five (5) years, beginning on
July 1, 1998 and ending on June 30, 2003.
1.02 Automatic Renewal. This Agreement shall be renewed
automatically for succeeding terms of one (1) year each on the same
terms and conditions unless either party gives notice to the other
at least ninety (90) days prior to the expiration of any term of
his or its intention not to renew this Agreement.
DUTIES AND OBLIGATIONS OF EMPLOYEE
2.01 General Duties. Employee shall serve as the Chief
Executive Officer and President of the Corporation, and in such
capacity he shall continue to be responsible for the same services
and acts as he has been in the past, subject at all times to the
policies set by the Corporation's Board of Directors.
2.02 Devotion to Corporation's Business. Employee shall
devote substantially all of his working time and energy to the
interest and business of the Corporation, and shall, to the best of
his skill and ability, use his best efforts and endeavors to
promote the business of the Corporation and protect its goodwill,
both as now enjoyed and hereafter acquired. So long as no material
detraction from the above services occurs, Employee may from time
to time, as is reasonable, devote time to personal investments and
projects, and to charitable and other community activities.
2.03 Competitive Activities. During the term of this
Agreement Employee shall not, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner,
stockholder, officer, director, or in any other individual or
representative capacity, engage or participate in any business that
is in competition in my manner whatsoever with the business of the
Corporation.
2.04 Trade Secrets.
(a) The parties acknowledge and agree that during
the term of this Agreement and in the course of discharge of his
duties hereunder, Employee shall have access to and become
acquainted with information concerning the operation and processes
of the Corporation, including, without limitation, financial, sales
marketing and personnel information that is owned by the
Corporation and regularly used in the operation of its business,
and that such information constitutes the Corporation's trade
secrets.
(b) Employee specifically agrees that he shall not
misuse, misappropriate, or disclose any such trade secrets,
directly or indirectly, to any other person or use them in any way,
either during the term of this Agreement or at any time thereafter,
except as is required in the course of his employment hereunder.
(c) Employee further agrees that all files, records, documents
equipment and similar materials relating to the Corporation's
business, whether prepared by Employee or others, are
and shall remain exclusively the property of the Corporation, and
upon termination of this Agreement for any reason all such items
then in Employee's possession shall be returned to the Corporation.
OBLIGATIONS OF THE CORPORATION
3.01 General. The Corporation shall provide Employee
with the compensation, benefits and business expense reimbursements
specified elsewhere in this Agreement, and with a private office,
secretarial help, office equipment and other facilities and
services suitable to Employee's position and adequate for the
performance of his duties.
3.02 Indemnification. The Corporation shall, and hereby
does, indemnify Employee for all losses sustained by Employee in
direct consequence of the discharge of his duties on the
Corporation's behalf. Such indemnification includes the duty to
defend Employee against any actions or claims that may be asserted
against him by reason of or related to his discharge of such
duties.
3.03 Reorganization. The Corporation shall not merge or
consolidate with any other corporation until such corporation
expressly assumes the duties and obligations of the Corporation
herein set forth.
COMPENSATION OF EMPLOYEE
4.01 Annual Salary.
(a) As compensation for the services to be performed hereunder,
Employee shall receive a salary at the rate of $90,000.00 per annum,
payable not less than once per month during the term of employment.
(b) Employee shall receive annual increases in salary of not less
than ten percent (10%) and further increases as may be determined by
the Corporation's Board of Directors in its sole discretion at its annual
meeting or at any specially called meeting.
4.02 Additional Compensation. In addition to the fixed
salary enumerated above, the Corporation will pay Employee a sum
equal to five percent (5%) of the net earnings of the Corporation
for each fiscal year (provided, however, such additional
compensation for any fiscal year will not exceed $200,000). "Net
earnings" for purposes of this paragraph will mean gross income
(not including non-recurring capital gains not arising in the
ordinary course of business) less expenses deducted from such sum
in accordance with generally accepted accounting principles to
arrive at net income except for the following items, which will not
be deducted to arrive at this figure: (1) all federal, state and
local taxes, (2) depreciation, (3) profit participations, (4) non-
recurring capital expenditures not arising in the ordinary course
of business, (5) write-offs, and (6) capital reserves.
The computation of net earnings and Employee's additional
compensation payable under this clause will be calculated by the
Corporation's independent auditors or such other independent
accounting firm as the Corporation may designate. The
calculation will be completed on or before 90 days after the end of
the fiscal year. Such calculation is final and binding on both
parties. The Corporation will thereafter promptly send, or cause
to be sent, a copy of such calculation to Employee, and will pay
the sum stated in such calculation on or before 30 days after the
close of the applicable year.
4.03 Death Benefit. Should Employee die during the term
of this Agreement, the Agreement shall terminate as of the last day
of the month of his death. Corporation shall pay to his legal
representatives, or to his surviving widow (provided that Employee
has so instructed Corporation in writing prior to his death) the
fixed salary specified in Item 4.01(a) above herein for six (6)
months following his death. This amount shall be paid either in a
lump sum or in equal monthly payments, as the Board of Directors
shall determine.
4.04 Tax Withholding. The Corporation shall have the
right to deduct or withhold from the compensation due to Employee
under Item 4.01 above any and all sums required for federal income
and Social Security taxes and all state or local taxes now
applicable or that may be enacted and become applicable in the
future. No withholdings shall be made from the consulting fee
described in Item 4.02 above since Employee, at that time, shall be
acting as an independent contractor.
EMPLOYEE BENEFITS
5.01 Annual Vacation. Employee shall be entitled to
twenty-one (21) days vacation time each year without loss of
compensation. In the event that Employee is unable for any reason
to take the total amount of vacation time authorized herein during
any year, he may accrue up to eleven (11) days and add it to
vacation time for any following year.
5.02 Illness. Employee shall be entitled to seven (7)
days per year as sick leave with full pay. Any unused sick leave
at the end of any year shall be paid to Employee as compensation on
a per diem basis.
5.03 Medical Coverage. The Corporation agrees to
include Employee in the coverage of its medical insurance,
including, if applicable, dental insurance, and to pay all premiums
for such coverage of Employee.
BUSINESS EXPENSES
6.01 Automobile Expenses. The Corporation shall
promptly reimburse Employee for all expenses incurred by Employee
with respect to the use by Employee of his personal automobile in
connection with the business of the Corporation, including, without
limitation, gasoline costs, insurance premiums and expenses of
maintenance and repair, but in no event shall such reimbursable
expenses exceed $750 per month.
6.02 Other Business Expenses. the Corporation shall
promptly reimburse Employee for all other reasonable business
expenses incurred by Employee in connection with the business of
the Corporation, including, without limitation, travel, gifts and
entertainment expenses. As an alternative to the reimbursement of
such expenses, the Corporation may furnish Employee with credit
cards issued in the name of the Corporation for use by Employee for
direct payment of such authorized business expenses.
TERMINATION OF EMPLOYMENT
7.01 Termination for Cause.
(a) The Corporation reserves the right to terminate this
Agreement by written notice to Employee if Employee willfully
breaches or habitually neglects the duties which he is required
to perform under the terms of this Agreement; or commits such
acts of dishonesty, fraud, misrepresentation or other acts of
moral turpitude as would prevent the effective performance of his
duties.
(b) The notice of termination required by Item 7.01(a) above
shall specify the ground for the termination and shall be supported
by a statement of all relevant facts. Termination under this
Item 7.01 shall be considered "for cause" for the purposes of this
Agreement.
7.02 Termination Without Cause.
(a) This Agreement shall be terminated on the death of Employee.
(b) The Corporation reserves the right to terminate this
Agreement within ninety (90) days after Employee suffers any
physical or mental disability that would prevent the
performance of his duties under this Agreement. Such a termination
shall be effected by giving ten (10) days written notice of
termination to Employee.
GENERAL PROVISIONS
8.01 Notices. Any notices to be given hereunder by any
party to another party shall be in writing and may be transmitted
by personal delivery or by certified mail return receipt requested.
Mailed notices shall be addressed to a party at the address
appearing below such party's signature, but a party may change that
address by written notice in accordance with this Item. Notices
delivered personally shall be deemed communicated on the date of
receipt; mailed notices shall be deemed communicated on the second
day after the date of mailing.
8.02 Attorneys' Fees. If any legal action is instituted
to enforce or interpret any term of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which
that party may be entitled.
8.03 Entire Agreement. This Agreement supersedes any
and all other agreements, written or oral, with respect to the
employment of Employee by the Corporation and contains all of the
covenants and agreements with respect to such employment. Any
modification of this Agreement will be effective only if in writing
and signed by the party to be charged.
8.04 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
California.
8.05 Invalidity. If any provision hereof is held by a
court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall continue in full
force and effect without impairment.
8.06 Waiver. The failure of a party to insist on strict
compliance with any term or condition hereof by the other party
shall not be deemed a waiver of that term or condition, nor shall
any waiver or relinquishment of any right or power at any one time
or times be deemed a waiver or relinquishment of that right or
power for all or any other times.
Executed as of the date first written above.
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx, Secretary
XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
