EXHIBIT 10(a)
XXXXXXXX, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
XXXXXX X. XXXXXXX
THIS AGREEMENT effective January 1, 1995, is made and entered into by and
between XXXXXXXX, INC. (the Company) and XXXXXX X. XXXXXXX (Xxxxxxx).
1. EMPLOYMENT. The Company hereby employs Xxxxxxx, and Xxxxxxx hereby
----------
accepts employment upon the terms and conditions hereinafter set forth.
2. TERM. Subject to the provisions for termination as hereinafter
----
provided, the term of this Agreement shall commence January 1, 1995.
3. COMPENSATION. For all services rendered by Xxxxxxx under this
------------
Agreement, the Company shall pay Xxxxxxx an annual base salary no less than
Three Hundred and Twelve Thousand Five Hundred ($312,500) Dollars, payable in
bi-weekly installments. Such compensation shall be reviewed periodically in the
sole discretion of the Board's Compensation Committee on the basis of merit and
the Company's financial success and progress.
4. DUTIES. Xxxxxxx is engaged as Chief Executive Officer; however, at his
------
option at any time during the term of this Agreement upon thirty days notice to
the Company, Xxxxxxx can relinquish his title as Chief Executive Officer and
remain as only Chairman of the Board without a change in salary or benefits. As
Chief Executive Officer he shall have complete responsibility for the management
of the operations of the Company, and shall have full authority and
responsibility, subject to the general direction and control of the board of
directors, for formulating policies and administering the Company in all
respects. His power shall include authority to hire and fire personnel of the
Company and to retain consultants when he deems necessary to implement the
Company's policies. The precise services of Xxxxxxx may be extended or reduced
from time to time at the direction of the board of directors, provided any such
expanded services are services normally associated with the position held by
Xxxxxxx. Should Xxxxxxx exercise his option to relinquish his title as Chief
Executive Officer and remain as only Chairman of the Board, his services and
duties shall be those normally associated with the position of Chairman of the
Board.
5. EXTENT OF SERVICES. Xxxxxxx agrees to devote his best efforts to the
------------------
business of the Company and shall not allow any other business interests to
adversely affect his obligations and responsibilities in a material way under
this Agreement. Nothing in this Agreement shall be construed as preventing
Xxxxxxx from (a) investing his assets in any form or manner, (b) serving as a
Chairman, officer, director, advisor, or consultant to another company or
companies; provided, however, that such services are not in connection with a
business which is in direct competition with the Company; or (c) starting and
participating in a new apparel business with members of his family and others,
which consists of a retail chain of sportswear apparel stores, hereinafter
referred to as the "Family Business." The concept regarding said Family
Business has been previously proposed to the Board of Directors of the Company
and has been determined by the Board not to be a corporate opportunity. The
Company hereby acknowledges and agrees that
Xxxxxxx'x involvement in such Family Business would not be a conflict of
interest or in direct competition with the Company.
6. WORKING FACILITIES. Xxxxxxx shall be furnished with a private office,
------------------
stenographic help, and such other facilities and services suitable to Xxxxxxx'x
position and adequate for the performance of the duties required by this
Agreement.
7. EMPLOYEE BENEFITS. Except as otherwise provided herein, Xxxxxxx shall
-----------------
be entitled to receive all of the rights, benefits, and privileges of a
principal executive under any retirement, pension, profit-sharing, insurance,
health and hospital, and other employee benefit plans which may be now in effect
or hereafter adopted.
8. LIFE INSURANCE. The Company shall maintain life insurance in the
--------------
amount of $2,000,000, the beneficiary of which may be named by Xxxxxxx. Upon
termination of employment, the ownership of the life insurance shall be
transferable to Xxxxxxx upon his payment to the company of one-half of the then
cash value of such insurance.
9. AUTOMOBILE ALLOWANCE. The Company shall pay Xxxxxxx an automobile
--------------------
expense allowance of $500 per month.
10. VACATION. Xxxxxxx shall be entitled to annual vacations in a manner
--------
commensurate with Xxxxxxx'x status as a principal executive.
11. DISABILITY. In the event Xxxxxxx shall become disabled during the
----------
term of employment for a continuous period up to ninety days, Xxxxxxx'x salary
shall continue at the same rate as on the date of such disability. As
additional compensation, the Company agrees to pay to Xxxxxxx his cost of
disability insurance which will provide him with disability benefits after a
waiting period of ninety days in an amount no less than two-thirds of his then
current salary, such benefits to continue until the earlier of termination of
Xxxxxxx'x disability or to age 65. For the purpose of this Agreement,
disability shall mean mental or physical illness or condition rendering Xxxxxxx
incapable of performing his normal duties with the Company.
12. PROPRIETARY INTERESTS OF COMPANY. Recognizing and acknowledging that
--------------------------------
nothing in this Agreement prevents Xxxxxxx from providing services to other
companies which are not in direct competition with the Company and nothing
prevents Xxxxxxx from starting up and participating in a new Family Business,
Xxxxxxx agrees that he will not, during or after the term of his employment,
disclose confidential and proprietary information of the Company which are
valuable, special, and unique assets of the Company's business (Trade Secrets).
In the event of a breach or threatened breach by Xxxxxxx of the provisions
of this section, the Company shall be entitled to an injunction restraining
Xxxxxxx from such breach. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedies available to the Company for such
breach or threatened breach, including the recovery of damages, costs, and
attorney fees.
13. NONCOMPETE. Recognizing and acknowledging that nothing in this
----------
Agreement prevents Xxxxxxx from providing services to other companies which are
not in direct competition
2
and nothing prevents Xxxxxxx from starting up and participating in a new Family
Business as described above, Xxxxxxx agrees that during the term of this
Agreement and for a period of ten years after termination of employment, Xxxxxxx
will not, directly or indirectly, own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership, management,
operation, or control of any business which manufactures or sells golf-inspired
sportswear which is substantially the same as that of the Company through either
the same channels of distribution as the then current channels of distribution
of the Company or specialty retail golf shops.
As consideration for Xxxxxxx'x noncompete agreement, the Company shall pay
Xxxxxxx compensation equal to the total of (i) 100% of his then current salary
plus (ii) nine times an amount equal to 40% of his then current salary,
provided, however, such compensation shall not be less than $1,437,500. Such
compensation shall be paid in advance annual installments with the first
installment to be in the amount of 100% of his then current salary but not less
than $312,500 and paid on the first day of the first month following his last
day of employment and nine additional advance installments each to be in an
amount equal to 40% of his then current salary but not less than $125,000 and
paid on the anniversary of the first installment date in each of the subsequent
years; provided, however, that in the event of Xxxxxxx'x death during the
noncompete period, any remaining installments shall be paid to any beneficiary
designated by Xxxxxxx or, if no such beneficiary has been designated, to his
estate. The Company also agrees to continue to provide Xxxxxxx full employee
benefits for the first year following termination of his employment.
In the event of Xxxxxxx'x actual or threatened breach of the provisions of
this paragraph, the company shall be entitled to an injunction restraining
Xxxxxxx therefrom. Nothing shall be construed as prohibiting the Company from
pursuing any other available remedies for such breach or threatened breach,
including the recovery of the noncompete compensation described above, damages,
costs, and attorney fees.
14. EXPENSES. Xxxxxxx is authorized to incur reasonable expenses for
--------
promoting and conducting the business of the Company, including expenses for
entertainment, travel and similar items. The Company will reimburse Xxxxxxx for
all such expenses upon the presentation by Xxxxxxx, from time to time, of an
itemized account of such expenditures.
15. TERMINATION OF EMPLOYMENT.
-------------------------
a. Death. In the event of Xxxxxxx'x death during his employment, the
-----
Company shall pay to any beneficiary designated by Xxxxxxx or, if no such
beneficiary has been designated, to his estate, an amount equal to the
compensation which is then due to Xxxxxxx as provided by this Agreement, plus an
amount equal to the total of (i) 100% of his then current salary plus (ii) nine
times an amount equal to 40% of his then current salary, provided, however, the
sum of (i) and (ii) shall not be less than $1,437,500. The payment schedule for
the sum of (i) and (ii) above shall be the same as that set forth in Section 13
above.
b. Termination or Resignation. The Company may terminate Xxxxxxx'x
--------------------------
employment without notice. Xxxxxxx may resign from such employment upon 90 days
written
3
notice to the Company. Upon either such event, Xxxxxxx, if requested by the
Company, shall continue to render his services, and shall be paid the then
current salary and benefits up to the effective date of termination or
resignation, as the case may be.
c. Stock Options. Upon Xxxxxxx'x death or termination of his
-------------
employment without cause or as a result of a change of control of the Company
(as defined by the Compensation Committee and attached to the minutes of
November 4, 1994), all options then held by Xxxxxxx shall become immediately
exercisable for a period of one year in the event of death and for a five-year
period in the event of termination of his employment without cause or as a
result of a change of control of the Company.
16. NOTICES. Any notice required or permitted to be given under this
-------
Agreement shall be sufficient if in writing and delivered in person or sent by
registered or certified mail to Xxxxxxx'x residence in the case of Xxxxxxx or to
its principal office in the case of the Company.
17. WAIVER. The waiver of any provision of this Agreement shall not
------
operate or be construed as a waiver of any other provision of this Agreement.
No waiver shall be valid unless in writing and executed by the party to be
charged therewith.
18. SEVERABILITY/MODIFICATION. In the event that any clause or provision
-------------------------
of this Agreement shall be determined to be invalid, illegal or unenforceable,
such clause or provision may be severed or modified to the extent necessary,
and, as severed and/or modified, this Agreement shall remain in full force and
effect.
19. ASSIGNMENT. The rights and obligations of the Company under this
----------
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. Xxxxxxx acknowledges that the services to be
rendered under this Agreement are unique and personal. Accordingly, Xxxxxxx may
not assign his rights and obligations under this Agreement.
20. ENTIRE AGREEMENT. This instrument contains the entire agreement
----------------
concerning the employment arrangement between the parties and shall, as of the
effective date hereof, supersede all other such agreements between the parties.
It may not be amended except by an agreement in writing signed by both parties.
21. GOVERNING LAW AND JURISDICTION. This Agreement shall be interpreted,
------------------------------
construed, and enforced under the laws of the State of California. The courts
and authorities of
4
the State of California shall have sole jurisdiction and venue over all
controversies which may arise with respect to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the date and
year indicated below, effective January 1, 1995.
THE COMPANY:
XXXXXXXX, INC.
Dated: By: /s/ XXXXXXX X. XXXXXXXXX
--------------------- -------------------------------------
Xxxxxxx X. Xxxxxxxxx, President
XXXXXXX:
Dated: /s/ XXXXXX X. XXXXXXX
--------------------- -------------------------------------
Xxxxxx X. Xxxxxxx
5
