EXHIBIT 10.1**EMPLOYMENT AGREEMENT**     This Employment Agreement, by and between SK2, Inc., a Delawarecorporation (the “**Company**”), and Scott Kuhlman, a resident of the State of Minnesota (the"**Executive**”), is entered into on this 19th day of May, 2005 (the “**Effective Date**”).**INTRODUCTION**     A. The Company is a Delaware corporation that desires to employ Executive in accordance withthe terms and conditions stated in this employment agreement (the “**Agreement**”), and wishes toobtain reasonable protection against unfair competition from Executive following a termination ofemployment and to further protect against unfair use of its confidential business and technicalinformation; and Executive is willing to grant the Company the benefits of a covenant not tocompete for these same purposes.     B. Executive wishes to receive compensation from the Company for Executive’s continuedservices and desires to accept continued employment pursuant to the terms and conditions of thisAgreement.**AGREEMENT**     Now, Therefore, in consideration of the foregoing, and for other good and valuableconsideration the receipt and sufficiency of which is hereby acknowledged, the Company andExecutive, each intending to be legally bound, hereby agree as follows:     **1. Employment.**     Subject to all of the terms and conditions of this Agreement, the Company herebyagrees to employ Executive as the Company’s Chief Executive Officer, and Executive hereby acceptssuch employment. Executive shall report to the Company’s Board of Directors.     **2. Term.**     Unless terminated earlier according to the provisions of Section 5, Executive’semployment shall commence as of the Effective Date and shall continue for a three (3) year period(the “**Term**”).     **3. Duties.**     Executive will devote substantially all of his business hours to and, during such time,make the best use of his energy, knowledge, and training in advancing the Company’s interests. Inaddition, Executive may: (i) serve as an executive officer or consultant to other affiliatedentities engaged in wholesale, retail or design activities; (ii) devote a reasonable amount of timeand attention to civic, charitable, or social organizations; (iii) engage in such other activitiesas are specifically approved in writing by the Company’s Board of Directors (the “**Board**”); and (iv)make passive personal investments which do not conflict with the Company’s business nor
 

 
require Executive to devote any significant amount of business time to such investment activity.Executive’s duties and responsibilities shall include, without limitation, assisting in themanagement of the Company’s routine day-to-day business operations, business development andservicing of client accounts, and such other duties and responsibilities as may be assigned by theBoard.     **4. Compensation.**     **(a) Base Salary**. In consideration for Executive’s services under this Agreement, theCompany hereby agrees to pay Executive an annual salary of One Hundred Fifty ThousandDollars ($150,000.00) per year (the “**Base Salary**”). The Base Salary shall be paid no lessoften than monthly.     **(b) Bonus.**Executive shall be entitled to a bonus of up to 100% of Executive’s BaseSalary (as set forth in Section 4(a) above), as determined by the Board, or a compensationcommittee established by the Board.     **(c) Benefits**. Executive shall be entitled to the employee benefits as provided toother Company employees. In addition, Executive shall be entitled to the followingbenefits:     a) an automobile allowance of up to $500 per month.     b) a 20 year term life insurance policy with a death benefit of$2,000,000.     c) a variable life insurance policy with a death benefit of $353,198.00.     **(d) Reimbursement**. The Company shall reimburse Executive for all reasonableout-of-pocket business expenses incurred by Executive on the Company’s behalf; *provided,however*, that Executive properly accounts to the Company for all such expenses inaccordance with the rules and regulations of the Internal Revenue Service under theInternal Revenue Code of 1986, as amended, and in accordance with any standard policies ofthe Company relating to reimbursement of business expenses as such policies exist or may beimplemented in the future.     **5. Termination.**     Prior to the expiration of the Term, this Agreement may be terminated under theprovisions of this Section 5.     **(a) Voluntary Termination**. Executive may voluntarily terminate his employmenthereunder for any reason and at any time after giving at least 30 days prior written noticethereof to the Board.
 

 
     Upon such a voluntary termination, Executive shall have no further rights against theCompany hereunder, except for the right to receive: (i) any unpaid Base Salary with respectto the period prior to the effective date of termination; and (ii) reimbursement ofexpenses to which Executive is entitled under Section 4(d).     **(b) Termination Without Cause**. If the Company terminates this Agreement withoutcause, then the Company shall pay to Executive Executive’s then-current Base Salary for atwenty-four (24) month period after the date of such termination, payable over atwenty-four (24) month period in the same manner as Base Salary is paid and anyunreimbursed out-of-pocket business expenses incurred by Executive on the Company’s behalfpursuant to Section 4(d).     **(c) Termination For Cause**. The Company may terminate Executive’s employment and allof the Company’s obligations under this Agreement at any time “For Cause” (as definedbelow) by giving notice to Executive stating the basis for such termination. AnyTermination under this Section 5(c) shall be effective immediately upon delivery of theabove-described notice or at such other time thereafter as the Company may designate in thenotice. “**For Cause**” shall mean any of the following: (i) dishonesty, fraud, or materialand deliberate injury or attempted injury, in each case related to the Company or itsbusiness; (ii) Executive’s conviction of a felony; or (iii) Executive’s continued failureto satisfactorily perform the duties assigned to him pursuant to Section 3 of thisAgreement for a period of 60 days after a written demand by the Board for such satisfactoryperformance, which demand specifically identifies the manner in which it is alleged thatExecutive has not satisfactorily performed such duties.     If Executive’s employment is terminated For Cause, Executive shall have no furtherrights against the Company hereunder, except for the right to receive: (1) any unpaid BaseSalary with respect to the period prior to the effective date of termination, and (2)reimbursement of expenses to which Executive is entitled under Section 4(d).     **6. Confidentiality and Noncompetition.**     **(a) Confidentiality**. As used in this Section 6, “**Confidential Information**” meansinformation that is not generally known and that is proprietary to the Company or that theCompany is obligated to treat as proprietary, but shall not include any information knownby Executive prior to the Effective Date. Any information that Executive reasonablyconsiders Confidential Information, or that the Company treats as Confidential Information,will be presumed to be Confidential Information (whether the Executive or others originatedit and regardless of how the Executive obtained it).
 

 
     Except as specifically permitted by an authorized officer of the Company or by writtenCompany policies, Executive will not, either during or after his employment by the Company,use Confidential Information for any purpose other than the business of the Company ordisclose it to any person who is not also an executive of the Company unless authorized bythe Board. When Executive’s employment with the Company ends, Executive will promptlydeliver to the Company all records and any compositions, articles, devices, apparatuses andother items that disclose, describe, or embody Confidential Information, including allcopies, reproductions, and specimens of the Confidential Information in Executive’spossession, regardless of who prepared them and will promptly deliver any other property ofthe Company in Executive’s possession (all such foregoing items, the “**Materials**”), whetheror not Confidential Information. The foregoing sentence shall not apply to any Materialsproduced by Executive prior to the Effective Date.     **(b) Competitive Activities**. Executive agrees that, during the Term and for atwenty-four (24) month period afterwards, Executive will not alone or in any capacity withanother firm: directly engage in any commercial activity that competes with the Company’sBusiness (as defined below) within any state in the United States or within any state inwhich the Company directly markets or intends to market or services products or provides orintends to provide services.     Notwithstanding anything to the contrary in this Agreement, the provisions of thisSection 6(b) shall apply in the event that the Executive is terminated without cause for solong as Executive is receiving installments of the Severance Payment. In addition, thisSection 6 shall not apply to any activity of the Executive from and after such time as theCompany (1) shall have ceased all Business activities for a period of 60 days, or (2) shallhave made a decision through its Board not to continue, or shall have ceased for a periodof 60 days, the Company’s Business activities.     Notwithstanding anything to the contrary in this Agreement, the provisions of thisSection 6(b) shall not apply in the event the Executive is employed by or providesconsulting services to an “affiliated” entity formed for the purpose of developing, owningand operating wholesale or retail clothing business. For purposes of this provision,“affiliated” shall mean any entity which shares common ownership with the Company or iswholly or partially owned by the Company.     For purposes of this Section 6, “**Business**” shall mean the operation of retaildistributors of clothing and the design and marketing of men’s and women’s fashion apparel.For the sake of clarity, “Business” does not include private label wholesaling.     **7. Conflictsof Interest.**     Executive agrees that he will not, directly or indirectly, transactbusiness with the Company personally, or as agent, owner, partner or shareholder of any otherentity; *provided*, *however*,
 

 
that any such transaction may be entered into if approved by the Board so long as Executive’sownership or relationship is disclosed to or otherwise known by the Board.