EMPLOYMENT AGREEMENT PRIVATE
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
