EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, effective July 1, 1997, by and between
SPORT-XXXXX, INC., a Colorado corporation (the "Company") and XXXXXXXXX X.
XXXXX (the "Executive").
WHEREAS, the Company has, prior to the date of this Agreement, employed
the Executive as the Company's Vice President of Merchandising and Design; and
WHEREAS, the Company desires to continue to employ the Executive on a
full-time basis, and the Executive desires to be so employed by the Company,
from and after the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
ARTICLE I
EMPLOYMENT DUTIES AND BENEFITS
SECTION 1.1 EMPLOYMENT. The Company hereby employs the Executive in the
position described on Schedule 1 hereto as an executive officer of the
Company. The Executive accepts such employment and agrees to perform the
duties and responsibilities assigned to her pursuant to this Agreement.
SECTION 1.2 DUTIES AND RESPONSIBILITIES. The Executive shall hold the
position with the Company which is specified on Schedule 1, which is attached
hereto and incorporated herein by reference. The Executive is employed
pursuant to the terms of this Agreement and agrees to devote full-time to the
business of the Company. The Executive shall perform the duties set forth on
Schedule 1 while employed as an executive officer, and such further duties as
may be determined and assigned to her from time-to-time by the Chief
Executive Officer or the Board of Directors of the Company.
SECTION 1.3 WORKING FACILITIES. The Executive shall be furnished with
facilities and services suitable to the position and adequate for the
performance of the Executive's duties under this Agreement. The Executive's
duties shall be rendered at the Company's offices, or at such other place or
places as the Executive may designate with the Company's approval, which
shall not be unreasonably withheld.
SECTION 1.4 VACATIONS. The Executive shall be entitled each year to a
reasonable vacation of not less than two weeks in accordance with the
established practices of the Company now or hereafter in effect for executive
personnel, during which time the Executive's compensation shall be paid in
full. Should the Company from time-to-time require the Executive to perform
job duties during vacation periods, the Executive shall be entitled to
compensatory vacation time at a mutually agreeable time.
SECTION 1.5 EXPENSES. The Executive is authorized to incur reasonable
expenses for promoting the domestic and international business of the Company
in all respects, including expenses for entertainment, travel and similar
items. The Company will reimburse the Executive for all such expenses upon
the presentation by the Executive, from time-to-time, of an itemized account
of such expenditures.
ARTICLE II
COMPENSATION
SECTION 2.1 BASE SALARY. The Company shall pay to the Executive a base
salary of not less than the amount specified on Schedule 1, subject to annual
review and raises in such base salary. The base salary may be raised by
action of the Board of Directors, and such raises shall thereafter be
included in the Executive's base salary as defined for purposes of this
Agreement and the Company's bonus plan.
SECTION 2.2 BONUS AND BONUS PLAN PARTICIPATION. The Executive shall be
entitled to receive a bonus at such time or times as may be determined by the
Board of Directors of the Company. The Executive shall also be entitled to
receive bonuses of up to 30% of the Executive's base salary in accordance
with the provisions of the Company-wide bonus plan as in effect from time to
time.
ARTICLE III
TERM OF EMPLOYMENT AND TERMINATION
SECTION 3.1 TERM. This Agreement shall be for a term which is specified
on Schedule 1, commencing on its effective date, subject, however, to
termination during such period as provided in this Article. Provided that
the Executive is in compliance with all of her obligations hereunder, the
term of the Executive's employment shall be extended automatically for one
additional year at the end of each year of the term or extended term of this
Agreement on the same terms and conditions as contained in this Agreement,
unless either the Company or the Executive shall, at least 90 days prior to
the expiration of the initial term or of any renewal term, give written
notice of the intention not to renew this Agreement. If the Company gives
such written notice of non-renewal, the provisions of Section 3.3 shall
apply; if the Executive gives such written notice of non-renewal, the
provisions of Section 3.5 shall apply. Automatic renewals shall be effective
in subsequent years on the same day of the same month as the original
effective day and month of this Agreement.
SECTION 3.2 TERMINATION BY THE COMPANY WITH CAUSE. The Company may
terminate the Executive, at any time, upon ten days' written notice and
opportunity for the Executive to remedy any non-compliance with the terms of
this Agreement, by reason of fraud or gross negligence of the Executive or
the conviction of the Executive of a felony which is not appealed and
subsequently
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reversed or vacated. In such event, the Board of Directors shall provide in
writing to the Executive an opinion of the Board of Directors, signed by each
member voting in favor of termination of the Executive, which shall specify
with particularity the basis for such termination. Upon the date of
termination of this Agreement pursuant to this Section 3.2, the Company's
obligation to pay any compensation shall terminate, at which time the Company
shall be responsible for compensating the Executive for any vacation time not
taken. Subject to this exception and the obligation of the Company to
compensate the Executive through the notice period, no other compensation
shall be payable to the Executive should this Agreement be terminated
pursuant to this Section 3.2.
SECTION 3.3 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Executive's services without cause at any time upon 90 days'
written notice. In such event, in addition to compensating the Executive
during such 90-day notice period, the Company shall be obligated to
compensate the Executive with severance pay equal to 90 days' compensation as
of the date of such termination. Accordingly, in the event the Company
terminates this Agreement without cause or chooses not to renew this
Agreement upon its expiration, the Executive shall receive an aggregate of
six months' salary from and after the date of the Executive's receipt of a
notice of termination through and including the date of termination. In
addition to the foregoing, the Executive shall receive a bonus which shall be
equivalent to 50% of the annual bonus last received by the Executive. In the
event the Executive received no annual bonus within the 12 months preceding
the date of termination, the Executive shall be entitled to receive a minimum
bonus of $15,000 on the date of termination by the Company without cause.
Such bonus provision shall be in addition to the compensation and severance
package hereinabove specified.
SECTION 3.4 TERMINATION BY THE EXECUTIVE WITH CAUSE. The Executive may
terminate her employment with the Company at any time, upon ten days' written
notice and opportunity for the Company to remedy any non-compliance, by
reason of (i) the Company's material failure to perform its duties pursuant
to this Agreement, or (ii) any material diminishment in the duties and
responsibilities, working facilities, or benefits as described in Article I
of this Agreement. The Executive shall not be entitled to the severance
compensation and other benefits described in Section 3.7 below in the event
of termination of this Agreement pursuant to this Section 3.4, except as
otherwise provided in Section 3.7(a), but shall be entitled to the
compensation provided in Section 3.3 upon a determination that the Company
has failed to perform its duties pursuant to this Agreement and that such
failure is material or a determination that the duties and responsibilities,
working facilities, or benefits as described herein have been materially
diminished. Such determination shall be made by the Board of Directors in
their best good faith.
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SECTION 3.5 TERMINATION BY THE EXECUTIVE WITHOUT CAUSE. The Executive,
without cause, may terminate this Agreement upon 90 days' written notice to
the Company. In such event, the Executive shall not be required to render
the services required under this Agreement following such 90-day period.
Compensation for vacation time not taken by the Executive shall be paid to
the Executive at the date of termination. The Executive shall not be
entitled to the severance compensation and other benefits described in
Section 3.7 below in the event of termination of this Agreement pursuant to
this Section 3.5, except as described in Section 3.7(a), but shall be
entitled to the compensation provided in Section 3.3.
SECTION 3.6 TERMINATION UPON DEATH OF THE EXECUTIVE. In addition to any
other provision relating to termination, this Agreement shall terminate upon
the Executive's death. In such event, all unpaid compensation and bonuses,
compensation for vacation time not taken by the Executive and all expense
reimbursements due to the Executive shall be paid to the Executive's estate.
SECTION 3.7 SEVERANCE COMPENSATION AND CONTINUATION OF BENEFITS.
(a) Notwithstanding any other provisions hereof, in the event of a
non-negotiated change in control of the Company and either the Executive or
the Company terminate this Agreement within 60 days of such non-negotiated
change in control, the Executive shall receive severance compensation,
payable in a lump sum within 30 days of such non-negotiated change in
control, equal to three times her annual salary and incentive or bonus
payments, if any, as shall have been paid to the Executive during the most
recent 12-month period concluded prior to the date of her termination or
resignation. If the total amount of the non-negotiated change of control
compensation were to exceed three times the Executive's base compensation
(the average annual taxable compensation of the Executive for the five years
preceding the year in which the change of control occurs), the Company and
the Executive will reduce the lump sum compensation to be received by the
Executive in order to avoid the imposition of the golden parachute tax as
provided in the Tax Reform Act of 1984, as amended by the Tax Reform Act of
1986.
(b) In the event the Executive is required to hire counsel to negotiate
on her behalf in connection with her termination or a change in control of
the Company, or in order to enforce the rights and obligations as provided
herein, the Company shall reimburse to the Executive all reasonable
attorney's fees which may be expended by the Executive in seeking to enforce
the terms hereof. Such reimbursement shall be paid by the Company every 30
days after the Executive provides to the Company copies of invoices from the
Executive's counsel. Such invoices may be redacted to preserve the
attorney-client privilege or attorney-client confidentiality.
(c) So long as the Executive is receiving severance compensation
pursuant to this Section 3.7, the Executive shall be entitled to continue to
participate, at the Company's cost, in all existing
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benefit plans provided to the Company's executive employees at the time of
the Executive's termination or resignation. Such plans shall include, but are
not limited to, then-existing medical, health, dental, vision, disability,
life insurance and death benefit plans. If the terms of such plans expressly
prohibit the Executive from continuing as a participant in such plans
following the date of resignation or termination, the Company will provide
the Executive with benefits equivalent to, or exceeding, those offered by the
then-existing benefit plans offered to the Company's executive employees, all
at the Company's cost, for the duration of the Executive's right to severance
compensation hereunder.
Any compensation to be paid to the Executive under the foregoing
provisions of this Section 3.7 shall be subject to the Executive complying
with the non-compete provisions of Section 4.1(c) below. In the event the
Executive does not so comply, the Company shall be released from any
obligations to the Executive under this Section 3.7.
SECTION 3.8 OPTIONS. Any options granted to the Executive to purchase
stock of the Company shall become fully vested on the date of termination of
this Agreement, except in the event termination is by the Company for reasons
specified in Section 3.3 of this Agreement. This provision shall serve as a
contractual modification of any option grants or agreements between the
Executive and the Company, whether such grants or agreements shall pre-date
or postdate this Agreement, and is hereby incorporated by reference into each
such option grant or agreement.
ARTICLE IV
CONFIDENTIALITY AND COMPETITION
SECTION 4.1 FURTHER OBLIGATIONS OF THE EXECUTIVE DURING AND AFTER
EMPLOYMENT.
(a) The Executive agrees that during the term of her employment under
this Agreement, she will engage in no other business activities which are or
may be competitive with, or which might place her in a competing position to
that of, the Company or any subsidiary of the Company.
(b) The Executive realizes that during the course of her employment, the
Executive will have produced and/or have access to confidential business
plans, information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and inventions
of the Company and its affiliates. Therefore, during or subsequent to her
employment by the Company, or by an affiliate, the Executive agrees to hold
in confidence and not to directly or indirectly disclose or use or copy or
make lists of any such information, except to the extent authorized by the
Company in writing. All records, files, business plans, documents, equipment
and the like, or copies thereof, relating to Company's business, or the
business of an affiliated company, which the Executive shall prepare, or use,
or come into contact with, shall remain the sole property
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of the Company, or of an affiliated company, and shall not be removed from
the Company's or the affiliated company's premises without its written
consent, and shall be promptly returned to the Company upon termination or
resignation of employment with the Company or its affiliated companies.
(c) Because of her employment by the Company, the Executive will have
access to trade secrets and confidential information about the Company, its
business plans, its business accounts, its business opportunities, its
expansion plans into other geographic areas and its methods of doing
business. The Executive agrees that for a period of one (1) year after
termination or resignation of her employment (except if the Executive
terminates this Agreement for cause under Section 3.5 hereof), she will not,
directly or indirectly, compete with the Company or its affiliates in the
business of designing, merchandising, marketing or contracting for the
manufacture of men's and women's golf apparel, golf outerwear or golf
headwear within the United States. This non-compete agreement shall be void
and of no further force or effect in the event termination occurs under
Section 3.3 or Section 3.7 hereof and the Company fails to pay the Executive
amounts required under Section 3.3 or Section 3.7 hereof.
(d) In the event a court of competent jurisdiction finds any provision
of this Section 4.1 to be so overbroad as to be unenforceable, then such
provision shall be reduced in scope by the court, but only to the extent
deemed necessary by the court to render the provision reasonable and
enforceable, it being the Executive's intention to provide the Company with
the broadest protection possible against harmful competition.
ARTICLE V
DISABILITY AND ILLNESS
SECTION 5.1 DISABILITY AND SALARY CONTINUATION.
A. DEFINITION OF TOTAL DISABILITY. For purposes of this Agreement, the
terms "totally disabled" and "total disability" shall mean disability as
defined in any total disability insurance policy or policies, if any, in
effect with respect to the Executive. If no insurance policy is in effect,
"total disability" shall mean a medically determinable physical or mental
condition which in the opinion of two independent physicians renders the
Executive unable to perform substantially all of the duties required pursuant
to this Agreement. Total disability shall be deemed to have occurred on the
date of the disabling injury or onset of the disabling illness, as determined
by the two independent physicians.
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B. SALARY CONTINUATION. If the Executive becomes totally disabled
during the term of this Agreement, her full salary shall be continued for 360
days from the date of the disabling injury or onset of the disability illness.
SECTION 5.2 ILLNESS. If the Executive is unable to perform the services
required under this Agreement by reason of illness or physical injury not
amounting to total disability, as defined in this Article, the compensation
otherwise payable to the Executive under this Agreement shall be continued in
full for the remaining term or renewed term of this Agreement, but in no
event for a period exceeding one year.
ARTICLE VI
GENERAL MATTERS
SECTION 6.1 GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Colorado and shall be construed in accordance therewith.
SECTION 6.2 NO WAIVER. No provision of this Agreement may be waived
except by an agreement in writing signed by the waiving party. A waiver of
any term or provision shall not be construed as a waiver of any other term or
provision.
SECTION 6.3 AMENDMENT. This Agreement may be amended, altered or
revoked at any time, in whole or in part, by filing with this Agreement a
written instrument setting forth such changes, signed by each of the parties.
SECTION 6.4 BENEFIT. This Agreement shall be binding upon the Executive
and the Company, and shall not be assignable by the Company without the
Executive's written consent.
SECTION 6.5 CONSTRUCTION. Throughout this Agreement the singular shall
include the plural, and the plural shall income the singular, and the
masculine and neuter shall include the feminine, wherever the context so
requires.
SECTION 6.6 TEXT TO CONTROL. The headings of articles and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
SECTION 6.7 SEVERABILITY. If any provision of this Agreement is
declared by any court of competent jurisdiction to be invalid for any reason,
such invalidity shall not affect the remaining provisions. On the contrary,
such remaining provisions shall be fully severable, and this Agreement shall
be construed and enforced as if such invalid provisions had not been included
in the Agreement.
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SECTION 6.8 AUTHORITY. The officer executing this Agreement on behalf
of the Company has been empowered and directed to do so by the Board of
Directors of the Company.
SECTION 6.9 EFFECTIVE DATE. The effective date of this Agreement shall
be July 1, 1997.
SPORT-XXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx, Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxxxx X. Xxxxx
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SPORT-XXXXX, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
SCHEDULE 1
DUTIES AND COMPENSATION
Executive: Xxxxxxxxx X. Xxxxx
Position: Vice President of Merchandising and Design
Base Salary: $80,000 per year, payable bi-weekly
Bonus: As determined by the Board of Directors and in accordance with
Company-wide bonus plan.
Term: June 30, 1999, subject to automatic one (1) year extensions
described in Section 3.1 of the Executive Employment Agreement
Duties and
Responsibilities: Supervision and coordination of all merchandising and design
operations of the Company.
APPROVED:
THE COMPANY: EXECUTIVE:
By: /s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxxxxx X. Xxxxx
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Xxxxxx X. Xxxxxxxxx, Chief Executive Xxxxxxxxx X. Xxxxx
Officer
Date: July 1, 1997 Date: July 1, 1997
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