EMPLOYMENT AGREEMENT Exhibit 10.3
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of May 7,
1997, by and between THE ANTIGUA GROUP, INC., a Nevada corporation with its
principal place of business in Scottsdale, Arizona (the "Company"), and XXXXXX
X. XXXXXXXXX, a resident of the State of Arizona ("Employee").
RECITALS
A. Employee is currently Vice-President of Sales and Marketing of the
Company.
B. Employee is currently an at-will employee of the Company.
C. The Company manufactures and sells various types of apparel on a
national and international basis.
D. The Company and Employee desire to continue Employee's relationship with
the Company and to memorialize the terms of Employee's employment with the
Company.
AGREEMENT
1. Employment. The Company hereby continues to employ Employee as Vice
President of Sales and Marketing of the Company and Employee hereby accepts such
continued employment upon the terms and conditions set forth herein. Employee
shall continue to be employed by the Company in Scottsdale, Arizona. Employee
shall not be required either by the Company or in the performance of his duties
to relocate from the Metropolitan Phoenix area.
2. Duties of Employment. Employee shall continue to serve as Vice President
of Sales and Marketing of the Company. In such capacity, Employee shall continue
to perform such duties and services consistent with Employee's title and
position as Vice President of Sales and Marketing of the Company as the
Company's Board of Directors may assign or delegate to him from time to time. As
of the date hereof, such duties shall include primary responsibility for the
following functions: budgets for the Company's areas of distribution, sales
manager training and evaluation; interaction with and oversight of the Company's
sales force, implementation of the Company's telemarketing initiative;
coordinate key account management and development, coordinate and direct
regional and national sales meetings, direct commission reviews; assist in
structuring the Company's strategic goals and objectives; set budgets for the
Company's marketing efforts; direct development of catalogs, brochures, flyers,
etc.; direct development of Company advertising and public relations efforts;
and direct Company participation in trade shows and conventions. Employee shall
report directly to the Company's Chief Executive Officer.
3. Term. This Agreement shall be effective upon the closing of the Stock
Purchase Agreement dated April 21, 1997 (the "Effective Date") and shall
continue until terminated in accordance with Paragraph 5 hereof.
4. Compensation Benefits. Employee will receive the following compensation
for his services during his term of employment hereunder:
(a) Salary. During the first year of this Agreement, Employee shall
receive a base salary of $114,421 per year, payable in accordance with the
standard payroll policies of the Company. Such salary shall be prorated for any
partial year of employment by Employee hereunder. The base salary will be
reviewed at least annually by the Company's Board of Directors, but in no event
shall the base salary be less than that specified in this Section 4(a) during
the term of this Agreement.
(b) Bonuses. Employee shall participate in the Company's Executive
Incentive Compensation Program at a bonus level equal to 15% of Employee's base
salary. Such bonus shall be paid within sixty (60) days of the end of the
Company's fiscal year and shall be prorated for any partial year of employment
by Employee hereunder.
(c) Stock Options. Concurrently with the execution of this Agreement,
Employee has been granted an option to purchase up to 300,000 shares of the
Common Stock of the Company's parent, Southhampton Enterprises Corp. ("Parent"),
pursuant to Parent's Executive and Employee Stock Option Plan (the "Plan"),
exercisable at any time during the two (2) year period after the date of grant,
at an exercise price per share equal to the market price of Parent's Common
Stock on the date hereof. The number and exercise price of such options is
subject to adjustment to reflect the reverse split of Parent's Common Stock to
be effected after the date hereof. Such options are vested in full as of the
date hereof. Employee shall also participate in the Plan on a going-forward
basis.
(d) Medical Insurance. The Company will provide coverage for Employee
and his dependents during the term of his employment under the Company's health
insurance policy.
(e) Payments Due Under Promissory Note and Stock Repurchase Agreement.
Employee is the Payee under a Second Amended and Restated Promissory Note from
the Company (the "Promissory Note"). Employee is also entitled to certain
payments from the Company pursuant to the terms of a Stock Repurchase Agreement
dated July 1, 1993 (the "Stock Repurchase Agreement"). Upon the Effective Date:
(i) the Company will pay Employee a total of $83,654.75 due under the Promissory
Note; (ii) Parent will issue to Employee a total of 150,600 shares of Common
Stock of Parent and Warrants to purchase up to 75,300 additional shares of
Common Stock of Parent at an exercise price of $1.00 per share, and (iii) the
Company will execute an Amendment to the Second Amended and Restated Promissory
Note in the form attached hereto as Exhibit "I" which embodies the parties'
agreement concerning the foregoing and the remaining payments due to Employee
under the Note and the Stock Repurchase Agreement.
(f) Other Management Incentive Programs and Benefits. Employee shall
be eligible to participate in all other incentives and benefit programs of the
Company and Parent as are from time to time in effect and offered to other
senior executive employees of the Company and Parent.
5. Termination. This Agreement will continue in full force and effect until
termination by the parties. This Agreement may be terminated by the parties only
in the following ways: (i) it may be renegotiated and replaced by a written
agreement signed by both parties; (ii) the Company may terminate this Agreement
with or without "Cause," as defined below; or (iii) Employee may terminate this
Agreement with or without "Good Reason," as defined below;
6. Termination by the Company.
(a) Termination For Cause. The Company may terminate this Agreement
and Employee's employment for Cause at any time upon written notice.
For purposes of this Agreement, "Cause" shall be limited to discharge
resulting from a good faith and reasonable determination by the Board of
Directors of the Company that Employee: (i) has been convicted of a felony
involving dishonesty, fraud, theft or embezzlement; (ii) on more than one
occasion, has willfully failed or refused in a material respect, after prior
written notice from the Company, to follow the reasonable and lawful policies or
directives established by the Company for its employees of comparable seniority,
or (iii) on more than one occasion, has willfully or refused, after prior
written notice from the Company, to attend to the material duties or
obligations, consistent with Employee's position hereunder, reasonably imposed
upon him under this Agreement.
If this Agreement and Employee's employment hereunder is terminated
for Cause, Employee shall receive no Severance Benefits as otherwise may have
been provided pursuant to Section 9.
(b) Termination Without Cause. The Company also may terminate this
Agreement, and Employee's employment hereunder, without Cause at any time by
giving thirty (30) days prior written notice to Employee. In the event this
Agreement and Employee's employment hereunder are terminated by the Company
without Cause, Employee shall receive Severance Benefits pursuant to Section 9.
7. Termination by Employee. Employee may terminate this Agreement and his
employment hereunder with or without "Good Reason" in accordance with the
provisions of this Section 7.
(a) Termination For Good Reason. Employee may terminate this Agreement
and his employment hereunder for "Good Reason" by giving written notice to the
Company within ninety (90) days, or such longer period as may be agreed to in
writing by the Company, of Employer's receipt of notice of the Occurrence of any
event constituting "Good Reason," as described below.
Employee shall have "Good Reason" to terminate this Agreement and his
employment hereunder upon the occurrence of any of the following events: (i)
Employee is in any way demoted (whether such demotion is by reduction in title
or a reduction in authority, responsibilities or duties) to a position of less
stature or importance within the Company than the position described in Sections
1 and 2; (ii) Employee is required to relocate to an employment location other
than the Metropolitan Phoenix area, or (iii) Employee's annual base salary as
determined pursuant to Section 4 hereof is reduced to a level that is more than
ten percent (10%) less than the annual salary paid to Employee during any prior
contract year, unless, (y) Employee has agreed in writing to that reduction, or
(z) the salaries of the entire senior management staff are reduced on a pro rata
basis according to a policy established by the Company's Board of Directors.
If Employee terminates this Agreement and his employment for Good
Reason, Employee shall receive Severance Benefits pursuant to Section 9.
(b) Termination Without Good Reason. Employee also may terminate this
Agreement and his employment without Good Reason at any time by giving ninety
(90) days prior written notice to the Company. If Employee terminates this
Agreement and his employment hereunder without Good Reason, Employee shall not
be entitled to receive Severance Benefits pursuant to Section 9. In this event,
if so requested by the Company, Employee agrees to cooperate with the Company in
the location of Employee's successor and to participate in the training of such
successor.
8. Death or Disability. This Agreement will terminate automatically on
Employee's death. Any salary or other amounts due to Employee for services
rendered or expenses incurred prior to his death shall be paid to Employee's
surviving spouse, or if Employee does not leave a surviving spouse, to
Employee's estate, within thirty (30) days of the death of Employee. No other
benefits shall be payable to Employee's heirs pursuant to this Agreement, but
amounts may be payable pursuant to any life insurance or other benefit plans
maintained by the Company for the benefit of Employee or his designee.
The Company agrees to purchase and maintain during the term hereof a
disability policy for Employee with coverage levels and other terms to be
determined by the Company's Compensation Committee.
9. Severance Benefits. If this Agreement and Employee's
employment hereunder are terminated without Cause by the Company pursuant to
Section 6(b) hereof, or if Employee elects to terminate this Agreement for good
reason pursuant to Section 7(a) hereof, Employee shall receive the "Severance
Benefits" provided by this Section 9. The Severance Benefits shall begin
immediately following termination of employment and shall continue to be payable
for a period of six (6) months thereafter.
The Employee's "Severance Benefits" shall consist of the continuation
of: (i) the Employee's salary then in effect as determined pursuant to Section
4; (ii) the continuation of any health, life, disability, or other insurance
benefits that Employee was receiving as of his last day of active employment;
and (iii) the immediate vesting of any and all unvested stock options existing
on the date of termination. If a particular insurance benefit may not be
continued for any contractual reason, the Company shall pay the cash equivalent
to the Employee on a monthly basis or in a single lump sum. The amount of the
cash equivalent of the benefit and whether the cash equivalent will be paid in
monthly installments or in a lump sum will be determined by the Company in the
exercise of its good faith and reasonable discretion.
If Employee voluntarily terminates this Agreement and his employment
without Good Reason; or if the Company terminates the Agreement and Employee's
employment hereunder for Cause, Employee shall receive any unpaid salary to the
effective date of termination but shall not receive any other Severance
Benefits. No Severance Benefits or unearned salary are payable in the event of
Employee's death.
10. Other Benefits. Employee will be entitled to participate in any benefit
plans, including, but not limited to, 401(K), retirement plans, stock option
plans, phantom stock plans, life insurance plans and health and dental plans
generally available to other Company or Parent employees of comparable
seniority, subject to any restrictions (excluding waiting periods and
preexisting condition exclusions relative to health, life and dental plans)
specified in those plans.
Employee is entitled to paid vacation during each year of the contract
according to the vacation policy for other employees of comparable seniority to
be established by the Company's Compensation Committee.
Employee shall be timely reimbursed for all reasonable out-of-pocket
expenses incurred by Employee for the benefit or account of the Company.
11. Confidentiality. Employee acknowledges that Employee has received and
contributed to the production of, Confidential Information, and that Employee
may continue to receive and contribute to the production of Confidential
Information in the future. For purposes of this Agreement, Employee agrees that
"Confidential Information" shall mean information or material proprietary to the
Company or designated as Confidential Information by the Company and not
generally known by non-Company personnel, which Employee develops or to which
Employee may obtain knowledge or access through or as a result of Employee's
relationship with the Company (including information conceived, originated,
discovered or developed in whole or in part by Employee). Confidential
Information includes, but is not limited to, the following types of information
and other information of a similar nature (whether or not reduced to writing):
discoveries, inventions, ideas, concepts, research, development, processes,
procedures, "knowhow", formulae, marketing techniques and materials, marketing
and development plans, business plans, customer names and other information
related to customers, price lists, pricing policies, financial information,
employee compensation and computer programs and systems. Confidential
Information also includes any information described above which the Company
obtains from another party and which the Company or such third party treats as
proprietary or designates as Confidential Information, whether or not owned by
or developed by the Company, and as to which the Company is required to sign a
confidentiality agreement or agrees in another fashion to treat such information
as confidential, provided, however, that Employee is provided with a copy of
such third-party confidentiality agreement or is otherwise fully informed of
such other form of confidentiality agreement at the time such agreement is
entered into by the Company. Employee acknowledges that the Confidential
Information derives independent economic value, actual or potential from not
being xxxxxx known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use.
Information publicly known without breach of this Agreement that is generally
employed by the trade at or after the time Employee first learns of such
information, or generic information or knowledge which Employee would have
teamed in the course of similar employment or work elsewhere in the trade, shall
not be deemed part of the Confidential Information. Employee further agrees:
11.1 To furnish the Company on demand, at any time during or after
employment a complete list of the names and addresses known to employee of all
present, former and potential customers and other contacts gained while an
employee of the Company, whether or not in the possession or within the
knowledge of the Company.
11.2 That all notes, memoranda, documentation and records in any way
incorporating or reflecting any Confidential Information shall belong
exclusively to the Company and Employee agrees to turn over all copies of such
materials in Employee's control to the Company upon request or upon termination
of Employee's employment with the Company.
11.3 That while employed by the Company and thereafter Employee will
hold in confidence and not directly or indirectly reveal, report, publish,
disclose or transfer any of the Confidential Information to any person or
entity, or utilize any of
the Confidential Information for any purpose, except in the course of Employee's
work for the Company.
11.4 That any ideas in whole or in part conceived or made by Employee
during the term of this employment or relationship with the Company which are
made through the use of any of the Confidential Information of the Company or
any of the Company's equipment, facilities, trade secrets or time, or which
result from any work performed by Employee for the Company, shall belong
exclusively to the Company and shall be deemed a part of the Confidential
Information for purposes of this Agreement. Employee hereby assigns and agrees
to assign to the Company all rights in and to such Confidential Information
whether for purposes of obtaining patent or copyright protection or otherwise.
Employee shall acknowledge and deliver to the Company, without charge to the
Company (but at its expense) such written instruments and do such other acts,
including giving testimony in support of Employee's authorship or inventorship,
as the case may be, necessary in the opinion of the Company to obtain patents or
copyrights or to otherwise protect or vest in the Company the entire right and
title in and to the Confidential Information.
12. Non-Competition During Employment. Employee agrees that during the term
of Employee's employment with the Company, Employee will devote all of
Employee's business time and effort to and give undivided loyalty to the
Company, and will not engage in any way whatsoever, directly or indirectly, in
any business that is competitive with the Company or solicit, or in any other
manner work for or assist any business which is competitive with the Company.
During the term of Employee's employment by the Company, Employee will undertake
no planning for or organization of any business activity competitive with the
Company, and Employee will not combine or conspire with any other employee of
the Company or any other person for the purpose of organizing any such
competitive business activity.
13. Non-Competition After Employment. The Company and Employee acknowledge
that Employee will acquire much knowledge and information concerning the
business of the Company as the result of Employee's employment. Competition by
Employee in that business after this Agreement is terminated would severely
injure the Company. Accordingly, provided that the Company is not in material
breach under this Agreement, until six months from the earlier of (y) the
expiration of the term of this Agreement, or (z) the date Employee's employment
with the Company is terminated for any reason whatsoever, Employee will not:
13.1 Within any jurisdiction or marketing area in which the Company is
doing business or is qualified to do business, directly or indirectly own,
manage, operate, control, be employed by or participate in the ownership,
management, operation or control of, or be connected in any manner with, any
business of the type and character engaged and competitive with that conducted
by the Company. For purposes of interpreting the preceding sentence,
the parties acknowledge that while the Company currently competes in the apparel
industry, this provision should not prohibit Employee from participating in the
entire apparel industry, but only those segments of the apparel industry which
compete with the Company's products and services. For these purposes, ownership
of securities of not in excess of 5% of the stock of a company that is publicly
traded on a national securities exchange or is quoted on an automated quotation
system of a national securities association and is part of a national market
system shall not be considered to be competition with the Company or any of its
affiliates.
13.2 Persuade or attempt to persuade any potential customer or client
to which the Company or any of its affiliates has made a proposal or sale, or
with which the Company or any of its affiliates has been having discussions, not
to transact business with the Company or such affiliate, or instead to transact
business with another person or organization.
13.3 Solicit the business of any company which is a customer or client
of the Company or any of its affiliates at any time during Employee's employment
by the Company, or was its customer or client within two years prior to the date
of this Agreement; provided, however, if Employee becomes employed by or
represents a business that exclusively sells products that are wholly dissimilar
from products then marketed or intended to be marketed by the Company, such
contact shall be permissible.
13.4 Solicit, endeavor to entice away from the Company or any of its
affiliates, or otherwise interfere with the relationship of the Company or any
of its affiliates with, any person who is employed by or otherwise engaged to
perform services for the Company or any of its affiliates, whether for
Employee's account or for the account of any other person or organization.
14. Injunctive Relief. Employee agrees that it would be difficult to
measure the damage to the Company from any breach by Employee of the covenants
set forth herein, that Injury to the Company from any such breach would be
impossible to calculate, and that money damages would therefore be an inadequate
remedy for any such breach. Accordingly, Employee agrees that if Employee should
breach Sections 11, 12 or 13 of this Agreement, the Company shall be entitled,
in addition to and without limitation of all other remedies it may have, to
injunctions or other appropriate orders to restrain any such breach without
showing or proving any actual damage to the Company. This Section shall survive
termination of Employee's employment.
15. Governing Law. This Agreement shall be interpreted and construed under
the laws of the State of Arizona, which laws shall prevail in the event of any
conflict of law. This Agreement and the obligations hereunder are made and
performable in Maricopa County, Arizona, which shall be the exclusive venue for
any litigation hereunder.
16. Modification of Contract. No waiver or modification of this Agreement
shall be valid unless it is in writing and duly executed by both parties.
17. Judicial Modification of Agreement. If the period of time or the area
specified in Section 11, 12 or 13 herein should be adjudged unreasonable in any
proceeding, then the period of time shall be reduced by such number of months or
the area shall be reduced by the elimination of such portion thereof or both so
that such restrictions may be enforced in such area and for such time as is
adjudged to be reasonable. If Employee violates any of the restrictions
contained in Sections 11, 12 or 13 of this Agreement, then the restrictive
period contained in Section 13 shall not run in favor of Employee from the time
of the commencement of any such violation until such time as such violation
shall be cured by Employee to the satisfaction of the Company.
18. Notices. Any notice to be given hereunder by either party to the other
shall be in writing and may be transmitted by personal delivery or by mail,
registered or certified, postage prepaid with return receipt requested. Notices
shall be addressed to the parties at the following addresses and shall be
effective upon receipt:
If to the Company: The Antigua Group, Inc.
0000 X. 00xx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
If to Employee: Xx. Xxxxxx X. XxXxxxxxx
c/o The Antigua Group, Inc.
0000 X. 00xx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
19. Entire Agreement. This Agreement contains the complete agreement
concerning the employment arrangement between the Company and Employee. This
Agreement supersedes any previous agreements or understandings between the
parties, including but not limited to the Confidentiality and Non-Competition
Agreement between the Company and Employee.
20. Attorneys' Fees. In the event of a dispute or litigation arising
hereunder, the successful party in such dispute or litigation shall be entitled
to recover its costs and reasonable attorneys' fees from the other parties to
such dispute or litigation.
21. Dispute Resolution.
(a) Mediation. Any and all disputes arising under, pertaining to or
touching upon this Agreement, or the statutory rights or obligations of either
party hereto, shall, if not settled by negotiation, be subject to non-binding
mediation before an independent mediator selected by the parties pursuant to
Section
21(b). Any demand for mediation shall be made in writing and served upon the
other party to the dispute, by certified mail, return receipt requested, at the
executive business address of the President of the Company, and at the last
known residence address of Employee, respectively. The demand shall set forth
with reasonable specificity the basis of the dispute and the relief sought. The
mediation hearing will occur at a time and place convenient to the parties in
Phoenix, Arizona within thirty (30) days of the date of selection or appointment
of the mediator.
(b) Selection of Mediator. The parties shall select the mediator from
a panel list made available by the Phoenix, Arizona office of the American
Arbitration Association (the "AAA"). If the parties are unable to agree to a
mediator within ten (10) days of receipt of a demand for mediation, the mediator
will be chosen by alternatively striking from a list of five (5) mediators
obtained from the AAA. The Company shall have the first strike.
22. Effective Date. This Agreement shall be effective as of the Effective
Date.
DATED on May 7, 1997.
THE ANTIGUA GROUP
By /s/ L. Xxxxxx Xxxxxx /s/ Xxxxxx X. XxXxxxxxx
L. Xxxxxx Xxxxxx Xxxxxx X. XxXxxxxxx
Its Chief Executive Officer
COMPANY EMPLOYEE
