Exhibit
10.4


 





 


701 North 34th
Street, Suite 400


Seattle, WA 98103


1-800-929-9299


 


 


March 24, 2003


 


Frances M. Conley


Cutter & Buck Inc.


Seattle, WA 98103


 


Dear Fran,


 


The Board of Directors
recently authorized a Retention Incentive Program for a few employees who are
key to the Company’s future success. 
You are certainly among those key people, and I am pleased to tell you
that you have been granted the following:


 


Retention
Incentive


 


If you are employed by the
Company on March 20, 2004, the Company will grant you a bonus of  $187,500. This payment will be paid as soon
after March 20, 2004 as practicable; or if the Company consummates a merger,
consolidation, sale of all or substantially all of the Company’s assets or
liquidation, before then, 50% will be due upon consummation of the transaction,
and 50% six months thereafter.


 


The purpose of this
retention incentive payment is to entice you to stay with Cutter & Buck at
least through the above date, and to help it get to a new level of
professionalism and profitability.


 


Other terms of the
Retention Incentive Program are set forth in the attached Exhibit A.


 


In any undertaking, success depends on the vision, the
will, the efforts, and the integrity of key people.  You and your work really matter, and I thank you and appreciate
your contribution.


 


 


CUTTER & BUCK INC.


COMPENSATION COMMITTEE


 


 


/s/ Larry C. Mounger, Chair


 


 

















 


EXHIBIT
A


 


 


GENERAL
TERMS OF RETENTION INCENTIVE PROGRAM


 


 


                1.             The
Compensation Committee of the Board of Directors of the Company (the
“Committee”) shall administer the Retention Incentive Program and adopt rules
and regulations to implement the Retention Incentive Program. Decisions of the
Committee shall be final and binding on all parties who have an interest in the
Retention Incentive Program.  The
Committee may at any time amend the Retention Incentive Program, provided that
such action shall not adversely affect the participants in the Retention
Incentive Program.


 


                2.             No
eligible employee shall earn any portion of a cash payment under the Retention
Incentive Program unless and until the specific date set forth in this
Program.  If an eligible employee ceases
to be employed by either the Company or one or more of its subsidiaries for any
reason on or before the date when the cash payment is due, then he or she shall
not earn or receive any cash payment under the Retention Incentive Program.


 


                3.             No
cash payment under the Retention Incentive Program shall actually be funded,
set aside or otherwise segregated prior to payment.  The obligation to pay the cash payment under the Retention
Incentive Program shall at all times be an unfunded and unsecured obligation of
the Company.  Retention Incentive
Program participants shall have the status of general creditors and shall look
solely to the general assets of the Company for the payment of their cash
payments.


 


                4.             No
Retention Incentive Program participant shall have the right to alienate,
pledge or encumber his or her interest in the Retention Incentive Program, and
such interest shall not (to the extent permitted by law) be subject in any way
to the claims of the employee’s creditors or to attachment, execution or other
process of law.


 


                5.             No
action of the Company in establishing the Retention Incentive Program, no
action taken under the Retention Incentive Program by the Committee and no
provision of the Retention Incentive Program itself shall be construed to grant
any person the right to remain in the employ of the Company or its subsidiaries
for any period of specific duration. 
Rather, each employee will be employed “at will,” which means that
either such employee or the Company may terminate the employment relationship
at any time and for any reason, with or without cause.


 


                6.             This
Retention Incentive Program document is the full and complete agreement between
the eligible employees and the Company on the terms described herein.


 


 


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