Exhibit 10.5
EMPLOYMENT AGREEMENT
This agreement dated as of April 3, 2007, between Everlast
Worldwide Inc., a
corporation incorporated under the laws of the State of Delaware,
with its
principal place of business located at 1350 Broadway (Suite 2300),
New York, NY
10018 [the "Employer"], and Mark Mackay. residing at 109 Bower
Lane, Forest
Hill, MD 21050.
In consideration of the premises together with other good and
valuable
consideration, the parties agree as follows:
1. EMPLOYMENT. Employer employs Employee, and Employee accepts
employment, subject to the terms and conditions set forth in this
agreement.
2. TERM. This agreement shall be effective from, April 3, 2007, for
an
initial term of two (2) year and shall be automatically renewed for
consecutive
one year terms thereafter unless terminated by written notice made
by either
party at least 60 days prior to the expiration date of the original
term or any
renewal thereof.
3. DUTIES. Employer employs Employee as the Senior Vice President -
Licensing of Employer to perform services the same as, or generally
consistent
with, the services generally performed by such an employee and to
assist in such
operations of Employer, as may be reasonably requested by Employer.
4. EXTENT OF SERVICE. Employee shall devote his full business time,
attention and energies, as well as his best talents and abilities,
to the
business of Employer in accordance with Employer's instructions and
directions
and shall not, during the term of this agreement, be engaged in any
other
employment for any other employer.
5. COMPENSATION.
(a) For all services rendered by the Employee under this agreement,
the Client agrees to pay Employee an annual base salary of $220,000
commencing
on the date hereof.
(b) The Employee shall be entitled to be reimbursed promptly for
all
reasonable costs, disbursements, travel, meal, communications,
including
cellular telephone costs, and other out-of-pocket expenses which
are incurred by
him in the performance of his duties hereunder and evidenced by
appropriate
documentation.
(c) In addition to the base salary set forth above, the Employer
agrees to pay the Employee an annual bonus. The Employee's maximum
annual bonus
shall be 30% of his base salary. Bonus of 20% based on 12% of
company achieving
internal EBIT, 8% based on achieving objectives (discretionary).
Additional
bonus of 10% based on Achieving Business Plan target and internal
budget of
increasing licensees' wholesale sales growth of 25% growth of
wholesale sales.
Additional bonus of 10% based on Achieving Business Plan target and
internal
budget of licensing revenue increase of 15%. Thirty Three and one
third (33
1/3%) percent of the bonus for the first year and each subsequent
year of
employment shall be based upon the Employer's achieving its "before
tax profits"
("EBIT") and EPS as set forth in its annual budget and certified by
the
Employer's auditors whose certification shall be conclusive. Thirty
Three and
one third (33 1/3%) percent of the annual bonus shall be determined
by the
qualitative assessment of the Employee's performance by the Chief
Executive
Officer. The additional Thirty Three and one third (33 1/3%)
percent of the
annual bonus will be based on achieving 20% annual revenue growth
in the
sporting goods equipment business.
(d) In addition to the compensation set forth above, the Employee
shall also be considered for annual increases in the aforesaid base
salary and
bonuses in amounts to be determined by the Employer's Chief
Executive Officer.
(e) In addition to the compensation set forth above, the Employee
shall also be issued 10,000 stock options on the first day of his
employment.
Said stock options shall vest annually over three years in
accordance with the
Employer's long term incentive stock option plan and shall have a
strike price
as of the date each option is granted.
(f) In the event the Employee is terminated after six (6) months of
active service, without cause or as a result of a disability as
defined in
Paragraph 8 (b) below, he shall be paid severance payments equal to
one year's
current base salary, less all applicable deductions, payable on
regular biweekly
pay periods. Such severance shall not be applicable upon the
election of the
employee
