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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (the "AGREEMENT"), made as of the 28th day
of
June, 2005 by and between CHAMBERS DELAWARE
ACQUISITION COMPANY, a Delaware
corporation, with its principal place of
business located at 5759 Fleet Street,
Suite 220, Carlsbad, California 92008 (the
"COMPANY") and KELLY GREEN, residing
at 165 Little Park Lane, Brentwood,
California 90049 (the "EMPLOYEE").
RECITALS
A. The
Company is a wholly-owned subsidiary of Phoenix Footwear Group,
Inc. ("PHOENIX FOOTWEAR" and together with
the Company, the "BUYER").
B.
Pursuant to the Asset Purchase Agreement by and among the
Company,
Chambers Belt Company ("CHAMBERS BELT"),
the Employee and the other stockholders
of Chambers Belt dated April 18, 2005 (as
amended, supplemented or modified from
time to time, the "ASSET PURCHASE
AGREEMENT"), Chambers Belt agreed to sell to
the Company and the Company agreed to
purchase from Chambers Belt certain
properties, goodwill and tangible and
intangible business assets and assume
certain liabilities of Chambers Belt
necessary for the business of designing,
manufacturing, sourcing, importing,
warehousing, marketing, distributing, and
selling of men's, women's, boy's and girl's
western dress and casual belts and
related leather accessories and products
(collectively, the "BUSINESS").
C.
Concurrently with the execution hereof, pursuant to the terms of
the
Asset Purchase Agreement, the Employee and
the Company executed and delivered to
one another a Non-Competition and
Confidentiality Agreement (as amended,
supplemented or modified from time to time,
the "NON-COMPETITION AGREEMENT").
D. As an
inducement for, and to fulfill a material condition to, the
Company's consummation of the transactions
contemplated in the Asset Purchase
Agreement, Employee is executing this
Agreement pursuant to which Employee shall
become an employee of the Company on the
terms and conditions herein.
NOW,
THEREFORE, in consideration of the promises and mutual
covenants
herein contained, and such other
consideration the receipt and sufficiency is
hereby acknowledged the parties agree as
follows:
ARTICLE 1
EMPLOYMENT
1.1
EMPLOYMENT. The Company hereby retains the Employee and the
Employee
hereby agrees to be retained for employment
on the terms and conditions herein.
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1.2
EMPLOYMENT TERM. The employment term of this Agreement (the
"EMPLOYMENT TERM") shall be from the date
hereof and continue until December 31,
2007 (the "EXPIRATION DATE"), unless
earlier terminated pursuant to Section 3.1
or extended by mutual written agreement by
the parties hereto.
1.3
DUTIES. During the Employment Term, Employee shall serve as the
President of the Chambers Prestige Division
of the Company and shall exercise
such powers and authority as are inherent
in such office and perform such duties
as may be directed by Richard E. White, the
Chief Executive Officer of the
Company, the Board of Directors of the
Company (the "BOARD") and the Chief
Executive Officer of Phoenix Footwear.
During the Employment Term, Employee
shall devote substantially all of his
working time, efforts and attention to the
business and affairs of the Company. The
Employee shall make such reports,
written or verbal, to Richard E. White, the
Chief Executive Officer of the
Company, the Board or the officers or Board
of Directors of Phoenix Footwear
(the "PHOENIX FOOTWEAR BOARD") as any of
them may request from time to time
regarding the Company's business,
operations and other activities undertaken by
Employee on behalf of the Company. During
the Employment Term, Employee shall
provide the executive officers of the
Company and Phoenix Footwear with: (a)
advice regarding the operations of the
Business; (b) introductions and
assistance with relationships (including
customers, third party manufacturers,
purchasing agents and suppliers), products
and markets; and (c) assistance in
implementing the transition following the
Company's purchase of the Business.
Notwithstanding the foregoing, Employee's
duties shall be limited to those
involving the Business and Employee shall
not be required to provide services to
the Company other than with respect to the
Business or to Phoenix Footwear.
1.4
PERFORMANCE OF SERVICES. Employee shall at all times perform
his
duties and discharge his responsibilities
hereunder in a faithful manner, to the
best of his ability and in the best
interests of the Company. Employee shall
observe and comply with such rules,
regulations and policies as may be
reasonably determined from time to time by
the Board whether oral or in writing.
1.5
REPRESENTATIONS AND WARRANTIES.
(a) Employee represents and warrants to the Company that his
execution and delivery of this Agreement
and the performance and observation of
his duties and obligations hereunder will
not result in or constitute a breach
of or conflict with any term, covenant,
condition, or provision of any
commitment, contract, or other agreement or
instrument, including, without
limitation, any other employment agreement,
to which Employee is or has been a
party.
(b) Employee shall indemnify, defend, and hold harmless the
Company
and Phoenix Footwear for, from, and against
any and all losses, claims, suits,
damages, expenses, or liabilities,
including reasonable court costs and counsel
fees, which they have incurred or to which
they may become subject, insofar as
such losses, claims, suits, damages,
expenses, liabilities, costs, or fees arise
out of or are based upon any failure of any
representation or warranty of
Employee in Section 1.5(a) hereof to be
true and correct when made.
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ARTICLE 2
COMPENSATION
2.1
SALARY. In consideration for the performance of his services
under
this Agreement as an employee of the
Company, during the Employment Term the
Employee shall receive a salary, payable in
accordance with the regular payroll
practices of the Company, at the annual
rate of Two Hundred Twenty-Seven
Thousand Dollars ($227,000) (the "SALARY").
In addition to the Salary, Employee
shall be eligible to receive an annual
performance bonus based on criteria
established by the Phoenix Footwear Board
or a committee thereof. All Salary
payments and other compensation for
services as an employee pursuant to this
Agreement shall be subject to the customary
withholding of taxes as required by
law.
2.2
REIMBURSEMENT OF EXPENSES. During the Employment Term, the
Employee
shall be entitled to compensation for
expenses reasonably incurred in the
performance of his duties for the Company,
provided appropriate documentation is
provided to the Company and the expenses
are in accordance with the Company's
policies for reimbursement of expenses.
2.3
BENEFITS. During the Employment Term, Employee will be eligible
to
participate in any group life, medical,
health, dental, disability and/or other
benefit plans of the Company on the same
terms generally made available to all
employees of the Company and all executive
level employees of Phoenix Footwear
who hold similar positions with Phoenix
Footwear or any of its subsidiaries as
does Employee with Company, subject to the
eligibility requirements and the
other terms and conditions of such plans.
The Employee shall also be entitled to
participate in any other benefits offered
by Phoenix Footwear or any of its
subsidiaries to their executive level
employees who hold similar positions with
Phoenix Footwear or any of its subsidiaries
as does Employee with Company.
2.4
INCENTIVE STOCK OPTIONS. Concurrently with the execution and
delivery
of this Agreement by the parties hereto,
the Employee shall receive from Phoenix
Footwear an option award under Phoenix
Footwear's 2001 Long-Term Incentive Plan
to purchase up to 40,000 shares of Phoenix
Footwear's common stock at the
closing sales price on the date of this
Agreement. The terms and conditions of
the option award are set forth in and
evidenced by a separate Stock Option
Agreement attached hereto as EXHIBIT A.
2.5
VACATION. During the Employment Term, Employee will be entitled
to
three weeks vacation annually. Vacation may
not be carried over from one
calendar year to the next and shall be
forfeited if not used in any calendar
year.
ARTICLE 3
TERMINATION
3.1 TERMINATION.
The Employee's employment hereunder by the Company shall
terminate upon the first occurrence of any
of the following events:
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(a) Termination for Cause. By the Company on written notice to
the
Employee at any time for "CAUSE," which
shall mean any of the following: (i) any
failure by the Employee to perform his
duties or obligations under this
Agreement; provided, however that Company
shall give Employee written notice any
such alleged failure and Employee shall
have ten (10) days following his receipt
of such written notice to comply (or if
compliance reasonably requires a longer
period, to commence good faith efforts to
comply, and continue to prosecute same
and continue with such efforts until
completion); (ii) any failure by the
Employee to follow the lawful written
instructions of Richard E. White, the
Chief Executive Officer of the Company, the
Board or the Chief Executive Officer
of Phoenix Footwear, (A) such instructions
was within the scope of Employee's
duties, and (B) Employee has not complied
(or if compliance reasonably requires
a longer period, has commenced good faith
efforts to comply, and continue to
prosecute same and continued with such
efforts until completion) with such
instructions within ten (10) days of
written notice of such failure; (iii)
conviction of any felony or a crime
involving moral turpitude, embezzlement, or
misappropriation of assets; (iv) the
habitual use of drugs or intoxicants to an
extent that it impairs Employee's ability
to properly perform his duties; and
(v) any breach of the Non-Competition
Agreement.
(b) Death of Employee. Immediately upon the death of Employee.
(c) Disability of Employee. By the Company on written notice to
the
Employee if Employee becomes "DISABLED"
which means the inability of Employee to
perform his regular duties for the Company
for a total of one hundred twenty
(120) days in any three hundred sixty (360)
day period, as reasonably determined
by the Chief Executive Officer of Phoenix
Footwear in accordance with the
foregoing. For purposes of this Agreement,
Employee shall first be deemed
disabled on the date that is the one
hundred twentieth (120th) day of the
disability in such three hundred sixty
(360) day period.
The Company shall not have the right to terminate Employee prior
to
the Expiration Date except as provided in
this Section 3.1.
Any termination pursuant to a written notice as permitted in
this
Section 3.1 shall take place and be
effective as of the delivery of the written
notice in accordance with the terms of this
Agreement. The date on which such
termination is effective is referred to as
the "TERMINATION DATE."
3.2
PAYMENTS UPON TERMINATION. In the event that the Employment Term
shall
be terminated for any reason, Employee
shall be entitled to receive, upon the
Termination Date: (a) any cash compensation
payable pursuant to Section 2.1
hereof which shall have accrued as of the
Termination Date; (b) any right to
reimbursement for expenses accrued as of
the Termination Date payable pursuant
to Section 2.2 hereof, (c) any rights
Employee shall have accrued as of the
Termination Date under the terms of any
plans or arrangements in which he
participates pursuant to Section 2.3
hereof, and (d) the right to receive the
cash equivalent of vacation days accrued as
of the Termination Date pursuant to
Section 2.5 hereof. The payments provided
for in this Section 3.2 shall be the
only payments that the Employee is entitled
to from the Company in the event of
his termination in accordance with the
terms of Section 3.1 and shall be
considered liquidated damages; provided,
however, that the foregoing liquidated
damages provision shall not apply if such
termination is a material breach of
this Agreement.
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ARTICLE 4
RESTRICTIVE COVENANTS
4.1
CONFIDENTIAL INFORMATION.
(a) The Employee acknowledges and agrees that:
(i) he has and will acquire confidential and proprietary
information belonging to the Company,
Phoenix Footwear and their direct and
indirect subsidiaries (the "PHOENIX
GROUP"), including, but not limited to, the
financial condition, customer lists,
marketing strategy, employee names,
compensation amounts and formulas, sales
amounts, research and development
activities, products, methods of
manufacture, trade secrets, processes, business
or affairs or other confidential or
proprietary information concerning the
businesses engaged in by the Phoenix Group
(the "PHOENIX GROUP BUSINESS") and
any other information concerning the
Phoenix Group Business that is not
generally available to the public (other
than as a result of disclosure directly
or indirectly by Employee in violation of
this Section) (collectively, the
"CONFIDENTIAL INFORMATION"). The Employee
agrees that the failure of any
Confidential Information to be marked or
otherwise labeled as confidential or
proprietary information shall not affect
its status as Confidential Information.
(ii) The Confidential Information is confidential and
proprietary, and the development and
protection of the Confidential Information
represents a substantial investment having
a great economic and commercial value
to the Company and Phoenix Footwear.
(iii) Phoenix Footwear and the Company would be irreparably
damaged if any of the Confidential
Information was disclosed to, or used or
exploited on behalf of, any person other
than the Company or any other member of
the Phoenix Group.
(iv) Employee covenants and agrees that he shall not, at any
time, directly or indirectly, use, exploit,
or disclose to any person or entity,
without the prior written consent of the
Chief Executive Officer of Phoenix
Footwear, any Confidential Information,
except (A) as compelled by any court
decree, subpoena or legal or administrative
order or process; and (B) as is
required by law so long as no other means
are readily available. Employee
further covenants and agrees that he shall
deliver promptly to the Phoenix
Footwear or destroy, at the request and
option of Phoenix Footwear, all tangible
embodiments (and all copies) of the
Confidential Information which are in his
possession.
(c) In the event that Employee intends to disclose any
Confidential
Information as permitted by virtue of
Sections 4.1(a)(iv) above, he will first
notify the Company and
