EXHIBIT 10.16
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "AGREEMENT") is made in Sarasota,
Florida effective as of February 1, 2000, by and between AVID SPORTSWEAR AND
GOLF CORP., a Nevada corporation (the "COMPANY"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, an
individual residing in Sarasota, Florida (the "EXECUTIVE"), who hereby agree as
hereinafter provided.
Section 1. DEFINITIONS. As used herein, the following terms shall have the
meanings set forth below.
"ACT" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"AGREEMENT" shall have the meaning set forth in the introductory paragraph
hereof.
"BASE COMPENSATION" shall have the meaning set forth in Section 5(a).
"BOARD OF DIRECTORS" means the incumbent directors of the Company as of
the point in time reference thereto is made in this Agreement.
"CAUSE" shall have the meaning set forth in Section 10(b).
"COLA ADJUSTMENT" means the cost of living adjustment, which shall
correspond to the percent rise in prices for the preceding year as measured by
the Consumer Price Index for all Urban Consumers (CPI-UC), All City Average, all
Items (base year 1982-1984 = 100) published by the United States Department of
Labor, Bureau of Labor Statistics (the "INDEX"). The COLA Adjustment shall be
determined by multiplying the amount or figure to be adjusted by a fraction, the
numerator of which is the Index published for the month in which occurs the date
of adjustment and the denominator of which is the Index published for the same
month of the preceding year.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock, par value $.001 per share, of the
Company.
"COMPANY" shall have the meaning set forth in the introductory paragraph
of this Agreement, and shall include Subsidiaries where appropriate.
"COMPETITIVE BUSINESS" shall have the meaning set forth in Section 9(a).
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section
9(c).
"DISABILITY" of the Executive means that, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties on a full time basis for six (6) consecutive months, or
for an aggregate of nine (9) months in any consecutive twelve (12) month period,
and a physician selected by the Executive is of the opinion that (a) he is
suffering from "total disability" as defined in the Company's disability
insurance program or policy and (b) he will qualify for Social Security
Disability Payments and (c) within thirty (30) days after written notice thereof
is given by the Company to the Executive (which notice may be given at any time
after the end of such six (6) or twelve (12) month periods) the Executive shall
not have returned to the performance of his duties on a full-time basis. (If the
Executive is prevented from performing his duties because of Disability, upon
request by the Company, the Executive shall submit to an examination by a
physician selected by the Company, at the Company's expense, and the Executive
shall also authorize his personal physician to disclose to the selected
physician all of the Executive's medical records).
"EMPLOYMENT COMMENCEMENT DATE" means February 1, 2000.
"EMPLOYMENT PERIOD" means that period commencing on the Employment
Commencement Date and ending on the Employment Termination Date.
"EMPLOYMENT TERMINATION DATE" means the date the Employment Period
terminates as provided in Section 10.
"EXECUTIVE" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"FISCAL YEAR" means the fiscal year of the Company ending December 31 or
as such fiscal year as may be amended by the Board of Directors.
"INCENTIVE BONUS COMPENSATION" shall have the meaning set forth in Section
5(b).
"NOTICE OF TERMINATION" shall have the meaning set forth in Section
10(a)(1).
"OFFERING" means any public offering of shares of Common Stock by the
Company or any holder thereof in accordance with the registration requirements
of the Act.
"REGISTRABLE SECURITIES" means any shares of Common Stock now or hereafter
held by the Executive other than Unrestricted Securities.
"REGISTRATION," "REGISTER" and like words mean compliance with all of the
laws, rules and regulations (federal, state and local), and provisions of
agreements and corporate documents pertaining to the public offering of
securities, including registration of any public offering of securities on any
form under the Act.
"RESTRICTED PERIOD" shall have the meaning set forth in Section 9(a).
"SCHEDULED EMPLOYMENT TERMINATION DATE" means the day immediately
preceding the third (3rd) anniversary of the Employment Commencement Date.
2
"SUBSIDIARIES" means wholly owned subsidiaries of the Company.
"UNRESTRICTED SECURITIES" means Common Stock beneficially owned by the
Executive, if any, that can be transferred by the Executive without registration
under the Act.
Section 2. EMPLOYMENT AND TERM. The Company hereby employs the Executive,
and the Executive hereby accepts such employment by the Company, for the
purposes and upon the terms and conditions contained in this Agreement. The term
of such employment shall be for the Employment Period.
Section 3. EMPLOYMENT CAPACITY AND DUTIES. The Executive shall be employed
throughout the Employment Period as the President and Chief Executive Officer of
the Company. The Executive shall have the duties and responsibilities incumbent
with the positions of President and Chief Executive Officer of the Company.
Accordingly, and not by way of limitation, as President, Chief Executive Officer
and Chairman of the Board of Directors of the Company, the Executive shall
preside over all meetings of the shareholders of the Company and of the Board of
Directors, superintend and manage the business of the Company and coordinate and
supervise the work of its other officers and employ, direct, fix the
compensation of, discipline and discharge its personnel, employ agents,
professional advisors and consultants and perform all functions of a general
manager of the Company's business. The Company agrees that it will not, without
the Executive's written consent, require the Executive to be based anywhere
other than Sarasota, Florida, except for required travel on the Company's
business to an extent substantially consistent with present travel obligations.
Section 4. EXECUTIVE PERFORMANCE COVENANTS. The Executive accepts the
employment described in Section 3 and agrees to devote significant working time
and efforts (except for absences due to illness and appropriate vacations) to
the business and affairs of the Company as is reasonably required for the
performance of the aforesaid duties and responsibilities. Nothing in this
Agreement shall preclude the Executive from devoting a reasonable amount of his
time and efforts to civic, community, charitable, professional and trade
association affairs and matters and such other activities as may be disclosed to
the Board of Directors.
Section 5. COMPENSATION. The Company shall pay to the Executive for his
services hereunder, the compensation hereinafter provided in this Section 5.
Such compensation shall be paid to the Executive at the time and in the manner
as provided below.
6. BASE COMPENSATION. The Executive shall be paid "BASE
COMPENSATION" for each Fiscal Year at an annual rate of $325,000, which Base
Compensation (less applicable withholding and other employment taxes) shall be
paid on a quarterly basis in the form of common stock of the Company, $0.001 par
value per share (the "COMMON STOCK") on the last business day of each quarter of
each Fiscal Year. The number of shares of Common Stock payable to the Executive
as Base Compensation shall be determined by dividing (i) one quarter of the Base
Compensation (less applicable withholding and other employment taxes) by (ii)
the closing price of the Common Stock on the last business day of each
corresponding quarter, as listed on a national securities exchange, The Nasdaq
National Market Systems, the Nasdaq SmallCap Market or the last reported bid
3
price published in the "pink sheets" or displayed on the National Association of
Securities Dealer, Inc. Over-the-Counter Bulletin Board. No fractional shares of
Common Stock or script representing fractional shares shall be issued in
connection with this Section 5(a). Instead of any fractional shares of Common
Stock which would otherwise be issuable in accordance with this Section 5(a),
the Company shall pay to the Executive a cash adjustment in respect of such
fraction. The Base Compensation (i) may be increased (but may not be decreased)
at any time or from time to time by action of the Board of Directors or any
committee thereof, and (ii) shall be increased by the COLA Adjustment annually
as of the beginning of each Fiscal Year, commencing with the Fiscal Year
beginning January 1, 2001. The Base Compensation shall be pro-rated for any
Fiscal Year hereunder which is less than a full Fiscal Year.
(b) INCENTIVE BONUS COMPENSATION. The Executive shall be eligible
for incentive bonus compensation for each Fiscal Year in an amount to be
determined by the Board of Directors or any committee thereof ("INCENTIVE BONUS
COMPENSATION").
Section 6. PAYMENT OF EXPENSES. The Company shall pay the Executive's
reasonable expenses incurred in providing services to the Company, including
expenses for travel, entertainment and similar items, in accordance with the
Company's expense policies as determined from time to time by the Board of
Directors. If there is a dispute as to the eligibility of an expense for payment
in accordance with the Company's expense policies, then such expense shall be
determined to be payable by the Company if approved by a majority of the Board
of Directors.
Section 7. EMPLOYEE BENEFITS; VACATIONS. During the Employment Period, the
Executive shall receive the benefits and enjoy the perquisites described below:
(a) BENEFIT PLANS. The Executive shall be entitled to participate in
any perquisite, benefit or compensation plan (in addition to the compensation
provided for in Section 5) including any profit sharing plan and 401(k) plan,
medical insurance plan, life insurance plan, health and accident plan and
disability plan which are generally applicable to all salaried employees of the
Company (collectively referred to as the "BENEFIT Plans"). All such Benefit
Plans shall be maintained by the Company, or the Company shall maintain plans
providing substantially similar benefits; provided, however, that the Company
may make modifications in the Benefit Plans so long as such modifications (i)
are generally applicable to all salaried employees of the Company and (ii) do
not discriminate against the Executive or other highly-compensated employees of
the Company.
(b) LIFE INSURANCE. Notwithstanding anything herein to the contrary,
during the term of the Employment Period, the Company shall provide the
Executive, at the Company's sole expense, insurance on the life of the
Executive, for the benefit of the Executive, in an amount not less than Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate.
(c) VACATIONS. The Executive shall be entitled in each Fiscal Year
to a vacation of thirty (30) working days, during which time his compensation
4
shall be paid in full, and such holidays and other nonworking days as are
consistent with the policies of the Company for executives generally.
(d) AUTOMOBILE BENEFITS. The Company shall provide the Executive
with the use of an automobile of the Executive's choice, and shall pay all
operating expenses incurred in the use of such automobile. The Company shall
continuously maintain an automobile liability policy for the automobile with
coverage in the minimum amount of $1,000,000 combined single limit on bodily
injury and property damage. The Company hereby agrees to replace such automobile
at the request of the Executive with a new automobile of the Executive's choice;
provided, however, the Company shall not be obligated to replace such automobile
more often than once every two (2) years.
Section 8. COMPANY LIFE INSURANCE; MEDICAL EXAMINATIONS. At any time
during the Employment Period, the Company may, in its discretion, apply for and
procure as owner and for its own benefit, insurance on the life of the
Executive, in such amounts and in such form or forms as the Company may
determine. The Executive shall have no right to any interest in any such policy
or policies, but he shall, at the request of the Company, submit to such medical
examinations, supply such information and execute such applications, instruments
and other documents as reasonably may be required by the insurance company or
companies to whom the Company has applied for such insurance.
If requested by the Company, the Executive shall submit to at least one
medical examination during each Fiscal year at such reasonable time and place
and by a physician or physicians determined and selected by the Company. All the
costs and expenses of said medical examination, including transportation of the
Executive to the place of examination and return, shall be paid by the Company.
The Executive shall be entitled to a copy of all reports and other
information provided to the Company in connection with any examination referred
to in this Section 8. Any failure to pass any such medical examination or to
meet any health criteria or medical standard shall not of itself be cause for
termination of the Employment Period by the Company.
Section 9. CERTAIN COMPANY PROTECTION PROVISIONS. The below provisions of
this Section 9 apply for the protection of the Company and shall survive the
termination of this Agreement.
(a) NONCOMPETITION. Except for Executive's participation in
activities disclosed to the Board of Directors, during the Restricted Period (as
hereinafter defined), the Executive shall not directly or indirectly compete
with the Company by owning, managing, controlling or participating in the
ownership, management or control of, or be employed or engaged by or otherwise
affiliated or associated with, any Competitive Business in any location in which
the Company is doing business as of the Employment Termination Date. As used
herein, the term "RESTRICTED PERIOD" means the Employment Period and a period of
two (2) years thereafter and means the Employment Period if the Company
terminates the Executive without "cause" (as defined in Section 10(b)) or the
Executive terminates his employment for "good reason" (as defined in Section
10(e)). As used herein, a "COMPETITIVE BUSINESS" is any other corporation,
5
partnership, proprietorship, firm, association or other business entity which is
engaged in any business from which the Company derives five percent or more of
its consolidated revenues during the twelve (12) months preceding the Employment
Termination Date or in which the Company has invested five percent (5%) or more
of its total assets as of the time in question, provided, however, that
ownership of not more than five percent (5%) of the stock of any publicly traded
company shall not be deemed a violation of this provision.
(b) NON-INTERFERENCE. During the Restricted Period, the Executive
shall not induce or solicit any employee of the Company or any person doing
business with the Company to terminate his or her employment or business
relationship with the Company or otherwise interfere with any such relationship.
(c) CONFIDENTIALITY. The Executive agrees and acknowledges that, by
reason of the nature of his duties as an officer and employee, he will have or
may have access to and become informed of confidential and secret information
which is a competitive asset of the Company ("CONFIDENTIAL INFORMATION"),
including, without limitation, any lists of customers or suppliers, financial
statistics, research data or any other statistics and plans contained in profit
plans, capital plans, critical issue plans, strategic plans or marketing or
operation plans or other trade secrets of the Company and any of the foregoing
which belong to any person or company but to which the Executive has had access
by reason of his employment relationship with the Company. The Executive agrees
faithfully to keep in strict confidence, and not, either directly or indirectly,
to make known, divulge, reveal, furnish, make available or use (except for use
in the regular course of his employment duties) any such Confidential
Information. The Executive acknowledges that all manuals, instruction books,
price lists, information and records and other information and aids relating to
the Company's business, and any and all other documents containing Confidential
Information furnished to the Executive by the Company or otherwise acquired or
developed by the Executive, shall at all times be the property of the Company.
Upon termination of the Employment Period, the Executive shall return to the
Company any such property or documents which are in his possession, custody or
control, but his obligation of confidentiality shall survive such termination of
the Employment Period until and unless any such Confidential Information shall
have become, through no fault of the Executive, generally known to the trade.
The obligations of the Executive under this Subsection are in addition to, and
not in limitation or preemption of, all other obligations of confidentiality
which the Executive may have to the Company under general legal or equitable
principles.
(d) REMEDIES. It is expressly agreed by the Executive and the
Company that these provisions are reasonable for purposes of preserving for the
Company its business, goodwill and proprietary information. It is also agreed
that if any provision is found by a court having jurisdiction to be unreasonable
because of scope, area or time, then that provision shall be amended to
correspond in scope, area and time to that considered reasonable by a court and
as amended shall be enforced and the remaining provisions shall remain
effective. In the event of any breach of these provisions by the Executive, the
parties recognize and acknowledge that a remedy at law will be inadequate and
the Company may suffer irreparable injury. The Executive acknowledges that the
services to be rendered by him are of a character giving them peculiar value,
the loss of which cannot be adequately compensated for in damages; accordingly
6
the Executive consents to injunctive and other appropriate equitable relief upon
the institution of proceedings therefor by the Company in order to protect the
Company's rights. Such relief shall be in addition to any other relief to which
the Company may be entitled at law or in equity.
Section 10. TERMINATION OF EMPLOYMENT.
(a) NOTICE OF TERMINATION; EMPLOYMENT TERMINATION DATE.
(1) Any termination of the Executive's employment by the
Company or the Executive shall be communicated by written Notice of Termination
to the other party thereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provision so indicated. Furthermore, either the Executive or the Company may
give a Notice of Termination to the other party for the purpose of terminating
this Agreement on the Scheduled Employment Termination Date. Such Notice of
Termination shall have the effect of terminating this Agreement on the Scheduled
Employment Termination Date.
(2) "EMPLOYMENT TERMINATION DATE" shall mean the date on which
the Employment Period and the Executive's right and obligation to perform
employment services for the Company shall terminate effective upon the first to
occur of the following, it being understood that in no event may the Employment
Period be terminated other than as the result of one of the following events:
(A) If the Executive's employment is terminated for
Disability, the date which is thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30) day period);
(B) If the Executive's employment is terminated by the
Executive for Good Reason or otherwise by voluntary action of the Executive (see
Section 10(e)), the date specified in the Notice of Termination, which date
(except with the written consent of the Company to the contrary) shall not be
more than sixty (60) days after the date that the Notice of Termination is
given;
(C) The death of the Executive;
(D) The Scheduled Employment Termination Date;
(E) If the Executive's employment is terminated by the
Company for Cause (see Section 10(b)(1)), the date on which a Notice of
Termination is given; provided that if within thirty (30) days after any Notice
of Termination is given the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Employment
Termination Date shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding and final
7
arbitration award or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected); and
(F) If the Executive's employment is terminated by the
Company other than for Cause, Disability or death of the Executive (see Section
10(f)), the date specified in the Notice of Termination which date (except with
the written consent of the Executive to the contrary) shall not be more than
sixty (60) days after the date that the Notice of Termination is given.
(b) TERMINATION FOR CAUSE:
(1) The Company may terminate the Executive's employment and
the Employment Period for Cause. For the purposes of this Agreement, the Company
shall have "CAUSE" to terminate employment hereunder only (A) if termination
shall have been the result of an act or acts of willful misconduct materially
injurious to the Company, monetarily or otherwise, or (B) upon the willful and
continued failure by the Executive substantially to perform his duties with the
Company (other than any such failure resulting from incapacity due to mental or
physical illness) after a demand in writing for substantial performance is
delivered by the Board of Directors, which demand specifically identifies the
manner in which the Board believes that the Executive has not substantially
performed his duties, and such failure results in demonstrably material injury
to the Company. The Executive's employment shall in no event be considered to
have been terminated by the Company for Cause if such termination took place as
the result of (i) bad judgment or negligence, or (ii) any act or omission
without intent of gaining therefrom directly or indirectly a profit to which the
Executive was not legally entitled, or (iii) any act or omission believed in
good faith to have been in or not opposed to the interest of the Company, or
(iv) any act or omission in respect of which a determination is made that the
Executive met the applicable standard of conduct prescribed for indemnification
or reimbursement or payment of expenses under the Articles of Incorporation of
the Company or the laws of the State of Nevada, in each case as in effect at the
time of such act or omission. The Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Board of Directors at a meeting of
the Board of Directors called and held for the purpose (after not less than
thirty (30) days' written notice to the Executive and an opportunity for him
together with his counsel, to be heard before the Board of Directors, such
notice of meeting to indicate the specific termination provision of this
Agreement relied upon and specify in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated), of finding that in the good faith opinion of the Board of Directors
the Executive was guilty of conduct set forth above in clauses (A) or (B) of the
second sentence of this paragraph and specifying the particulars thereof in
detail.
(2) If the Executive's employment shall be terminated for
Cause, the Company shall pay the Executive within ten (10) days of such
termination, his unpaid Base Compensation through the Employment Termination
Date at the rate in effect at the time Notice of Termination is given, plus (2)
any expenses incurred in accordance with Section 6 hereof.
8
(c) TERMINATION FOR DISABILITY. The Company may terminate the
Executive's employment because of the Disability of the Executive and thereafter
shall pay to the Executive (or his successors) (1) his unpaid Base Compensation
through the sixth (6th) full month following the Employment Termination Date at
his then effective Base Compensation rate; plus (2) any accrued but unpaid
Incentive Compensation, plus (3) any expenses incurred in accordance with
Section 6 hereof.
(d) TERMINATION UPON EXECUTIVE'S DEATH. In the event of the
Executive's death, the Company shall pay to the Executive's estate (1) any
unpaid amount of Base Compensation through the date of death at the then
effective Base Compensation rate, plus (2) any accrued but unpaid Incentive
Compensation, plus (3) any expenses incurred in accordance with Section 6
hereof. All previously granted stock options, rights, warrants and awards shall
fully vest on the death of the Executive, except that the provisions of the
Company's Stock Incentive Plan and any other Benefit Plan shall control the
benefits and awards covered thereby.
(e) TERMINATION OF EMPLOYMENT BY THE EXECUTIVE.
(1) The Executive may terminate his employment for Good Reason
and receive the payments and benefits specified in Section 10(f) in the same
manner as if the Company had terminated his employment without Cause. For
purposes of this Agreement, "GOOD REASON" will exist if any one or more of the
following occur:
(A) Failure by the Company to honor any of its
obligations under this Agreement, including, without limitation, its obligations
under Section 3 (EMPLOYMENT CAPACITY AND DUTIES). Section 4 (EXECUTIVE
PERFORMANCE COVENANTS). Section 5 (Compensation). Section 6 (REIMBURSEMENT OF
EXPENSES). Section 7 (EMPLOYEE BENEFITS, VACATIONS). Section 13
(INDEMNIFICATION) and Section 15 (SUCCESSORS AND ASSIGNS); or
(B) Any purported termination by the Company of the
Executive's employment that is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 10(a) above and, for purposes of this
Agreement, no such purported termination shall be effective; or
(C) If there is a Change in Control of the Company (as
defined below) and the employment of the Executive is concurrently or
subsequently terminated (i) by the Company without Cause, (ii) by service of a
Notice of Termination or (iii) by the resignation of the Employee because he has
reasonably determined in good faith that his titles, authorities,
responsibilities, salary, bonus opportunities or benefits have been materially
diminished, or that a material adverse change in his working conditions has
occurred or the Company has breached this Agreement. For the purpose of this
Agreement, a "CHANGE IN CONTROL" of the Company has occurred when: (x) any
person (defined for the purposes of this Section 10 to mean any person within
the meaning of Section 13(d) of the Securities Exchange Act of 1934 (the
"EXCHANGE ACT")), other than the Company, or an employee benefit plan
established by the Board of Directors of the Company, acquires, directly or
indirectly, the beneficial ownership (determined under Rule 13d-3 of the
regulations promulgated by the Securities and Exchange Commission under Section
9
13(d) of the Exchange Act) of securities issued by the Company having twenty
percent (20%) or more of the voting power of all of the voting securities issued
by the Company in the election of directors at the meeting of the holders of
voting securities to be held for such purpose; or (y) a majority of the
directors elected at any meeting of the holders of voting securities of the
Company are persons who were not nominated for such election by the Board of
Directors of the Company or a duly constituted committee of the Board of
Directors of the Company having authority in such matters; or (z) the Company
merges or consolidates with or transfers substantially all of its assets to
another person.
(2) The Executive shall have the right voluntarily to
terminate his employment other than for Good Reason prior to the Scheduled
Employment Termination Date, and if the Executive shall so terminate his
employment, he shall be entitled only to payment of the amounts which would be
payable under Section 10(b)(2) had he been terminated for Cause.
(f) COMPENSATION UPON TERMINATION OTHER THAN FOR CAUSE.
(1) If the Company shall terminate the Executive's employment
other than for Cause, Disability or death, or if the Executive shall terminate
his employment for Good Reason pursuant to Section 10(e)(1) (but not a
termination voluntarily by the Executive other than for Good Reason under
Section 10(e)(2)), then the Company shall pay to the Executive the following
amounts:
(A) (1) His unpaid Base Compensation through the
Employment Termination Date at his then effective Base Compensation, plus (2)
any accrued but unpaid Incentive Bonus Compensation, plus (3) any expenses
incurred in accordance with Section 6 hereof.
(B) In addition, the Company shall pay to the Executive
promptly in a single lump sum in cash an amount equal to the lesser of (i) his
unpaid Base Compensation through the Scheduled Employment Termination Date, or
(ii) the product of two (2), multiplied by one hundred percent (100%) of the
aggregate total amount which would have been payable to Executive under Section
5 for the entire Fiscal Year in which occurs the Employment Termination Date as
if his employment had not been terminated (and without deduction or offset for
any amounts actually paid for such Fiscal Year on account of Base Compensation
or Incentive Bonus Compensation, under Section 5, this Section 10 or otherwise),
and assuming for purposes of calculating (x) the Base Compensation, one hundred
percent (100%) of the amount thereof at the annual rate payable for such Fiscal
Year pursuant to Section 5(a) and (y) the Incentive Bonus Compensation, an
amount equal to the Incentive Bonus Compensation paid to the Executive in the
previous Fiscal Year.
(C) The Company shall also pay all legal fees and
expenses incurred as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination, in
seeking to obtain or enforce any right or benefit provided by this Agreement, or
in interpreting this Agreement). The Company agrees, in the event the Executive
desires to relocate within one year after the Employment Termination Date, to
pay for (or reimburse) all reasonable moving expenses incurred relating to a
10
change of principal residence in connection with such relocation and to
indemnify the Executive in connection with any loss he may sustain in the sale
of his primary residence.
(D) The Executive shall be under no obligation to seek
other employment and there shall be no offset against any amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that the Executive may obtain (any amounts due under
Section 10(f) are in the nature of severance payments, or liquidated damages, or
both, and are not in the nature of a penalty).
(2) Unless Executive is terminated for Cause, the Company
shall maintain in full force and effect, for the Executive's continued benefits
through the Scheduled Employment Terminate Date, all active and retired Benefit
Plans and other benefit programs or arrangements in which he was entitled to
participate immediately prior to the Scheduled Employment Terminate Date (except
as specified in Section 7(a) of this Agreement), provided that continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that participation in any such plan or program is
barred, the Company shall arrange to provide him with benefits substantially
similar to those which he is entitled to receive under such plans and programs.
(g) COMPENSATION UPON DISABILITY. During any period that the
Executive fails to perform his duties hereunder as a result of incapacity due to
physical or mental illness, he shall continue to receive his full Base
Compensation at the rate then in effect and his full Incentive Bonus
Compensation until this Agreement is terminated pursuant to Section 10(c)
hereof. Thereafter, his benefits shall be determined in accordance with the
Company's Benefit Plans.
Section 11. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION.
(1) At any time after the date hereof, and subject to the
other provisions of this Section 11, the Executive shall have the right,
exercisable by making a written request to the Company, to demand that the
Company effect the Registration of any Registrable Securities in accordance with
the provisions of the Act. The Company shall then comply with Section 11(a)(2)
hereof. Any provision herein to the contrary notwithstanding, the right to
demand Registration pursuant to this Section 11 shall be limited to one
Registration demand per calendar year. A right to demand Registration hereunder
shall be deemed to have been exercised and all of the Company's demand
Registration obligations hereunder for such calendar year shall be deemed to be
fully satisfied when the registration statement filed on account of such
exercise has been declared effective by the Commission. If any other executive
of the Company exercises his or her right, if any, to demand that the Company
effect the Registration of any Registrable Securities, then the Executive shall
have the right to Register an equivalent number of Registrable Securities
without reducing the number demand Registrations the Executive shall have in any
calendar year.
(2) Following receipt of a request pursuant to Section
11(a)(1) hereof, the Company shall (i) file within ninety (90) days thereafter a
registration statement on the appropriate form under the Act for the shares of
11
Common Stock that the Company has been requested to Register; (ii) if the
applicable Offering is pursuant to an underwriting agreement, enter into an
underwriting agreement in such form as said managing or sole underwriter shall
require (which must only contain terms and conditions customary for offerings of
equity securities of entities with market capitalizations that are approximately
equal to the Company's then current market capitalization and may contain
customary provisions requiring the Company and the Executive to indemnify and
provide contribution to the underwriter or underwriters of such Offering); and
(iii) use its reasonable best efforts to have such registration statement
declared effective as promptly as practicable and to remain effective for at
least one hundred eighty (180) days. Notwithstanding any other provision hereof,
the Executive acknowledges and agrees that there can be no guarantee or warranty
from or by the Company that any such registration statement will ever be
declared effective by the Commission, and that the Company makes no such
guarantee or warranty in this Agreement.
(b) PIGGY-BACK REGISTRATION. If the Company at any time proposes to
register any of its securities under the Act or pursuant to the Exchange Act,
collectively referred to as the "SECURITIES ACTS," whether or not for sale for
its own account, it will each such time give prompt written notice to the
Executive of its intention to do so (the "REGISTRATION NOTICE"). Upon the
written request of the Executive, made within fifteen (15) business days after
the receipt of the Registration Notice, the Company shall use its best efforts
to effect the registration under the Securities Acts of such amount of the
Executive's Common Stock as the Executive requests, by inclusion of the
Executive's Common Stock in the registration statement that relates to the
securities which the Company proposes to register, PROVIDED that if, at any time
after giving the Registration Notice and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason either not to register or to delay registration
of such securities, the Company may, at its election, give written notice of
such determination to the Executive (the "REFUSAL NOTICE") and, thereupon, (i)
in the case of a determination not to register, shall be relieved of its
obligation to register the Executive's Common Stock in connection with such
terminated registration (but not from its obligation to pay the Registration
Expenses (as defined herein) in connection therewith), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering the
Executive's Common Stock, for the same period as the delay in registering such
other securities.
(c) REGISTRATION EXPENSES. The Company shall pay all Registration
Expenses (as defined herein) in connection with each registration of the
Executive's Common Stock pursuant to this Section 11. For the purposes hereof,
the phrase "REGISTRATION EXPENSES" shall include all expenses incident to the
Company's performance of, or compliance with, this Section 11, including,
without limitation, (i) all registration, filing and NASD fees, (ii) all fees
and expenses of complying with securities or blue sky laws, (iii) all printing
expenses, (iv) the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance, (v) the fees and disbursements of any one counsel and any one
accountant retained by the Executive, (vi) premiums and other costs of policies
of insurance against liabilities arising out of the public offering of the
Executive's Common Stock being registered if the Company desires such insurance,
12
and (vii) any fees and disbursements of underwriters customarily paid by issuers
or sellers of securities, but excluding underwriting discounts and commissions
and transfer taxes, if any.
(d) SURVIVAL. Notwithstanding anything to the contrary contained
herein, the provisions of this Section 11 shall survive the Employment
Termination Date for a period of two (2) years.
Section 12. INDEMNIFICATION. As an employee, officer and director of the
Company, the Executive shall be indemnified against all liabilities, damages,
fines, costs and expenses by the Company in accordance with the indemnification
provisions of the Company's Articles of Incorporation as in effect on the date
hereof, and otherwise to the fullest extent to which employees, officers and
directors of a corporation organized under the laws of Nevada may be indemnified
pursuant to Sections 78.037(1) and 78.751 of the Nevada General Corporation Law,
as the same may be amended from time to time (or any subsequent statute of
similar tenor and effect), subject to the terms and conditions of such statute.
Section 13. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Sarasota, Florida, in accordance with the rules of the American Arbitration
Association then in effect; provided that all arbitration expenses shall be
borne by the Company. Notwithstanding the pendency of any dispute or controversy
concerning termination or the effects thereof, the Company will continue to pay
the Executive his full compensation in effect immediately before any Notice of
Termination giving rise to the dispute was given (including, but not limited to,
Base Salary and Incentive Compensation) and continue him as a participant in all
compensation, benefit and insurance plans in which he was then participating,
until the dispute is finally resolved. Judgment may be entered on the
arbitrators' award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the Employment Termination Date during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
Section 14. SUCCESSORS AND ASSIGNS. Except as hereinafter expressly
provided, the agreements, covenants, terms and provisions of this Agreement
shall bind the respective heirs, executors, administrators, successors and
assigns of the parties. Specifically, and not by way of limitation of the
foregoing, the Executive shall be bound by the terms and conditions of this
Agreement to any successor assignee of the Company's rights and obligations
hereunder as a result of any merger, consolidation or sale or lease of all or
substantially all of the Company's business sand assets. If any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company fails,
concurrently with the effectiveness of any such succession, to agree in writing
in form and substance reasonably satisfactory to the Executive expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place, then the Executive shall have the right, effected by notice to such
successor not later than ninety (90) days after the effectiveness of such
succession, to terminate the Employment Period under Section 10(e) as though
13
such failure was an uncured breach by the Company of a material covenant or
agreement of the Company contained in this Agreement.
If the Executive should die while any amounts are payable to him
hereunder, or if by reason of his death payments are to be made to him
hereunder, then this Agreement shall inure to the benefit of and be enforceable
by the Executive's executors, administrators, heirs, distributees, devisees and
legatees and all amounts payable hereunder shall then be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee or other
designee or, if there is no such designee, to his estate.
This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder, except as hereinbefore provided in this
Section 14. Without limiting the foregoing, the Executive's right to receive
payments hereunder shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by his will
or by the laws of descent or distribution, and in the event of any attempted
assignment or transfer contrary to this paragraph the Company shall have no
liability to pay to the purported assignee or transferee any amount so attempted
to be assigned or transferred.
As used in this Agreement, the "COMPANY" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in the first
paragraph of this Section 14 or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
Section 15. NOTICES. Any notice or other communication required or desired
to be given hereunder shall be in writing and shall be deemed sufficiently given
when personally delivered or when mailed by first class certified mail, return
receipt requested and postage prepaid, addressed to the parties at their
respective addressed set forth under their respective signatures below or such
other person or addresses as shall be given by notice of any party.
Section 16. WAIVER; REMEDIES CUMULATIVE. No waiver of any right or option
hereunder by any party shall operate as a waiver of any other right or option,
or the same right or option as respects any subsequent occasion for its
exercise, or of any legal remedy. No waiver by any party of any breach of this
Agreement or of any agreement or covenant contained herein shall be held to
constitute a waiver of any other breach or a continuation of the same breach.
All remedies provided by this Agreement are in addition to all other remedies by
it or as provided by law.
Section 17. GOVERNING LAW; SEVERABILITY. This Agreement is made and is
expected to be performed in Florida, and the various terms, provisions,
covenants and agreements, and the performance thereof, shall be construed,
interpreted and enforced under and with reference to the laws of the State of
Florida, unless otherwise indicated herein. It is the intention of the Company
and the Executive to comply fully with all laws and matters of public policy
relating to employment agreements and restrictive covenants, and this Agreement
shall be construed consistently with such laws and public policy to the extent
possible. If and to the extent any one or more covenants, agreements, terms and
provisions of this Agreement or any portion or portions thereof shall be held
14
invalid or unenforceable by a court of competent jurisdiction, then such
covenants, agreements, terms and provisions (or portions thereof) shall be
deemed separable from the remaining covenants, agreements, terms and provisions
of this Agreement and such holding shall in no way affect the validity or
enforceability of any of the other covenants, agreements, terms and provisions
hereof.
Section 48. MISCELLANEOUS. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be modified, changed or amended except in a writing
signed by each of the parties hereto. This Agreement may be signed in multiple
counterparts, each of which shall be deemed an original hereof. The captions of
the several sections and subsections of this Agreement are not a part of the
context hereof, are inserted only for convenience in locating such sections and
subsections and shall be ignored in construing this Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE]
15
IN WITNESS WHEREOF, the Company and the Executive have executed multiple
counterparts of this Agreement.
COMPANY: EXECUTIVE:
AVID SPORTSWEAR & GOLF CORP.
By:
---------------------------------- ---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
16