Exhibit
10.1


 


AMENDED EXECUTIVE EMPLOYMENT AGREEMENT


 


AMENDED EXECUTIVE EMPLOYMENT
AGREEMENT, effective July 1, 2007, by and between SPORT-HALEY, INC., a Colorado
corporation (the “Company”) and CATHERINE B. BLAIR (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, pursuant to that Amended Executive
Employment Agreement effective June 1, 2005; 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, pursuant to the terms of this Amended
Executive Employment 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 pursuant to the terms of this Amended Executive
Employment Agreement, which Agreement shall supersede and replace the Amended
Executive Employment Agreement effective June 1, 2005 in its entirety. 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 four 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 that are reasonably related to the Company’s business and primarily
for the Company’s benefit, upon the presentation by the Executive, from
time-to-time, of an itemized account of such expenditures. Such expenses shall
be reviewed and approved by the Company’s Chief Financial Officer.


 


Section
1.6  Benefit Plans. From the effective date
of this Agreement, the Executive shall be entitled to participate in all
existing benefit plans provided to the Company’s executive employees including,
to the extent now or hereafter in effect, medical, health, dental, vision,
disability, life insurance and death benefit plans, in accordance with the
terms of such plans.


 


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 Compensation Committee of 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 (if such non-compliance is capable of being remedied;
if not, the Company’s notice of termination shall be effective immediately),
for Cause. 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.


 


As used herein, the term “Cause”
shall be limited to any of the following from and after the date hereof: (i)
any willful breach of any material written policy of the Company that results
in material and demonstrable liability or loss to the Company; (ii) the
engaging by Executive in conduct involving moral turpitude that causes material
and demonstrable injury, monetarily or otherwise, to the Company, including,
but not limited to, misappropriation or conversion of assets of the Company
(other than immaterial assets); (iii) conviction of or entry of a plea of nolo
contendere to a felony, which is not appealed and subsequently reversed or
vacated; or (iv) a material breach of this Agreement by engaging in action in
violation of the restrictive covenants in this Agreement. No act or failure to
act by the Executive shall be deemed “willful” if done, or omitted to be done,
by her in good faith and with the reasonable belief that her action or omission
was in the best interests of the Company.


 


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 twelve additional months’
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 


 


3

















 


Executive shall receive an aggregate of
fifteen 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 bonus last received by the Executive, if any, during
the twelve months prior to termination.


 


Section
3.4  Termination by the Executive with Cause.
The Executive may terminate her employment with the Company at any time, upon
30 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; provided that the Executive must so notify the
Company of the applicable condition within 90 days of the initial existence of
such condition. 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 severance pay equal to
twelve months’ compensation and benefits from the effective date of
termination, 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.


 


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 due to the Executive as of the date of death (but not
for the remainder of the term or extended term), compensation for earned, but
not used, vacation time not taken by the Executive and all expense
reimbursements due to the Executive shall be paid to the Executive’s estate.


 


4

















 


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 terminates 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 termination, equal
to two 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.


 


(b)        The term 
“change of control” is defined for purposes of this Agreement as a (i)
change in the ownership of the Company (as defined in Section 1.409A-3(i)(5)(v)
of the federal tax regulations); (ii) change in the effective control of the
Company (as defined in Section 1.409A-3(i)(5)(vi) of the federal tax
regulations); or (iii) change in the ownership of a substantial portion of the
Company’s assets (as defined in Section 1.409A-3(i)(5)(vii) of the federal tax
regulations). Notwithstanding any provisions to the contrary herein, a change
of control shall not mean any transaction or series of transactions wherein the
Company repurchases its own securities or a “going private” transaction by the
Company or its affiliates, within the meaning of Rule 13e-3 promulgated under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”).


 


The term “non-negotiated
change of control,” shall mean a change of control, as defined above, which is
not negotiated or approved by at least two thirds of the board of directors of
the Company prior to the change of control event.


 


(c)        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 attorneys’ 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.


 


(d)        So long as the Executive is receiving
severance compensation pursuant to this Section 3.7, or Sections 3.3, 3.4 or
3.5, the Executive shall be entitled to continue to participate, at the Company’s
cost, in all existing 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 


 


5

















 


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 3.2 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.


 


Section
3.9  Delay in
Payment of Severance Under Certain Circumstances. Notwithstanding the
timing of payments due to the Executive pursuant to Sections 3.1, 3.3, 3.4,
3.5, or 3.7 hereof, if, on the date of the Executive’s “separation from service”
(as such phrase is defined in Section 1.409A-1(h)(1) of the federal tax
regulations), the Executive is a “specified employee” (as such phrase is
defined in Section 1.409A-1(i) of the federal tax regulations), no such payment
shall be made to the Executive prior to the date that is six months after the
date of the Executive’s separation from service (or, if earlier than the end of
such six-month period, the date of death of the Executive). Payments that, but
for the application of this Section 3.9, would have been made to the Executive
during such six-month period, shall be accumulated and paid to the Executive on
the first day of the seventh month following the date of the Executive’s
separation from service. All other such payments due to the Executive shall be
paid when due pursuant to the terms hereof.


 


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 (“confidential information”). Therefore,
during or 


 


6

















 


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
confidential information, except to the extent authorized by the Company in
writing, or unless the Executive is ordered by a court to produce,  provided the Executive promptly notifies the
Company of receipt of any order or motion to require the production of any
portion of the confidential information. All confidential information, 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 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 3.4 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.


 


7

















 


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.


 


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.


 


8

















 


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.


 


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, 2007.


 


	
   

  	
  SPORT-HALEY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Donald W. Jewell

  	
   

  
	
   

  	
   

  	
  Donald W. Jewell, Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Catherine B. Blair

  	
   

  
	
   

  	
  Catherine B. Blair

  
						



 


9

















 


SPORT-HALEY, INC.


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


Schedule 1


 


Duties and Compensation


 


	
  Executive:

  	
  Catherine B. Blair

  
	
   

  	
   

  
	
  Position:

  	
  Vice President of
  Merchandising and Design

  
	
   

  	
   

  
	
  Base Salary:

  	
  During the year from July
  1, 2007 through June 30, 2008: $160,000 per year, payable bi-weekly; during
  the year from July 1, 2008 through June 30, 2009, and until such Base Salary
  may be further adjusted: $175,000 per year, payable bi-weekly.

  
	
   

  	
   

  
	
  Bonus:

  	
  As determined by the Board
  of Directors and in accordance with Company-wide bonus plan.

  
	
   

  	
   

  
	
  Term:

  	
  July 1, 2007 through June
  30, 2009, subject to automatic one (1) year extensions described in Section
  3.1 of the Amended Executive Employment Agreement.

  
	
   

  	
   

  
	
  Duties and

  	
   

  
	
  Responsibilities:

  	
  Supervision and
  coordination of all merchandising and design operations of the women’s
  division of the Company/Sport-Haley.

  
			



 


 


	
  APPROVED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE COMPANY:

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Donald W. Jewell

  	
   

  	
   

  	
    /s/Catherine
  B. Blair

  	
   

  
	
   

  	
  Donald W. Jewell, Chief
  Executive

  	
   

  	
  Catherine B. Blair

  	
   

  
	
   

  	
  Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Effective Date: July 1,
  2007

  	
   

  	
   

  
						



 


10