Document:

*Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

Exhibit 10.1

ENDORSEMENT
AGREEMENT

THIS AGREEMENT, made and
entered into as of this 18th day of October, 2005, is by and between CUTTER &
BUCK INC. of 701 North 34th Street, Suite 400, Seattle, Washington 98103
(the “Company”), and CLUB 59, INC. c/o IMG Worldwide, Inc. of IMG Center,
1360 East 9th Street, Suite 100, Cleveland, Ohio 44114-1782 (“Licensor”):

WITNESSETH

WHEREAS, Annika Sorenstam (“Sorenstam”) is recognized
as a highly skilled professional golfer;

WHEREAS, Company and ESCH & STAM, INC.
entered into an Endorsement Agreement dated as of July 15, 2003, which
agreement will expire on December 31, 2006 (the “2003 Agreement”); and

WHEREAS, Company desires to continue to obtain the
exclusive rights to use the name, fame, image and athletic renown of Sorenstam
in connection with the advertisement and promotion of certain of its products
following the expiration of the 2003 Agreement on December 31, 2006; and

WHEREAS, Sorenstam has licensed all such rights to
Licensor, along with the right to sublicense such rights to third parties.

NOW, THEREFORE, the
parties agree as follows:

1.   Definitions.   As
used herein, the following terms shall be defined as set forth below:

(a)   “Contract
Period” shall mean that period of time commencing on January 1, 2007 and
concluding December 31, 2011, unless terminated sooner as provided herein.

(b)   “Contract Territory” shall mean worldwide.

(c)   “Contract
Year” shall mean the consecutive twelve (12)-month period beginning on any January 1st
during the Contract Period.

(d)   “Gross
Sales” shall mean total revenues, under generally accepted accounting
principles, from sales of the Licensed Products, but does not include any
revenue from sales, use or other transaction taxes, duties, handling, graphics,
embroidery or shipping.

(e)   “Net Sales”
shall mean Gross Sales less Product returns, trade discounts, samples,
allowances, value added services, markdowns, customer chargebacks and
liquidation sales (substantially discounted and out of ordinary distribution
channel) of Licensed Products.

(f)    “Licensed
Products” shall mean the “Tournament Collection by Annika”, the “Annika
Collection by Cutter & Buck” line of Products, or other similarly
named Product lines using the Sorenstam Identification on the Products’ affixed
labels, hang-tags or logos.

(g)   “Products”
shall mean women’s apparel, including women’s shirts, pants, sweaters, jackets
and rainwear.

(h)   “Sorenstam
Identification” means the right to use, subject to the provisions hereof,
Sorenstam’s name, fame, nickname, initials, autograph, voice, video or film
portrayals, facsimile signature, photograph, likeness and image or facsimile
image, and any other means of endorsement by Sorenstam used in connection with
the advertisement and promotion of the Company and the Products (including the
Licensed Products).

2.   Grant of Rights.   In consideration of the
remuneration to be paid to Licensor pursuant hereto, Licensor grants to Company
and to its authorized distributors and sublicensees the right and license
during 

 *Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

the Contract Period to use
the Sorenstam Identification solely in connection with the advertisement,
marketing and promotion of the Products within the Contract Territory as set
forth herein. Licensor agrees not to grant the right to use the Sorenstam
Identification to anyone other than Company in connection with the
advertisement and promotion of Products. It is understood that Company, its
authorized distributors and sublicensees may not use the Sorenstam
Identification in connection with any items for sale or resale, other than the Products
as specified herein. The foregoing rights to use the Sorenstam Identification
is limited to television, radio and print advertising, advertising published
over the Internet (provided such material is limited to advertising or Product
promotion only), public relations and marketing materials, point-of-sale
displays, free standing inserts, videos shown to customers and consumers,
catalogs for customers and consumers, direct mail (including e-mail) and
billboards. Company shall ensure that all uses of Sorenstam Identification
comply with applicable law.

3.   Prior Approval.   Company agrees that no use of
the Sorenstam Identification nor any item used in connection with the Sorenstam
Identification (including any Licensed Product) will be made hereunder unless
and until the same is approved by Licensor. Licensor agrees that any material,
advertising or otherwise, submitted for approval as provided herein may be
deemed by Company to have been approved hereunder if the same is not
disapproved in writing within ten (10) business days after receipt thereof.
Licensor agrees that it will reasonably cooperate with Company and that any
material submitted hereunder will not be unreasonably disapproved and, if it is
disapproved, that Company will be advised of the specific grounds therefor. If
Company desires immediate approval of advertising material hereunder, Company
shall have the right to directly contact Licensor’s authorized agent to obtain
such approval. Company agrees to protect indemnify and save harmless Licensor,
Sorenstam and their authorized agent, or any of them, from and against my and
all expenses, damages, claims, suits, actions, judgments and costs whatsoever,
arising out of, or in any way connected with any advertising material furnished
by, or an behalf of Company, except with respect to any inaccurate information
furnished by them expressly for use in such advertising.

4.   Remuneration.   In
consideration of the endorsement rights and granted hereunder, Company shall
pay to Licensor the annual fees (the “Annual Fee”) in the Contract Years as
follows:

	
  Contract Year

  	
   

  	
   

  	
   

  	
  Annual Fee

  	
   

  
	
  2007

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
  2008

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
  2009

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
  2010

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
  2011

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  

 

One-half of the Annual Fee will be due on or before January 10
and July 10 of each Contract Year.

 2
 

 *Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

5.   Bonuses.   It
is agreed that should Sorenstam achieve any of the accomplishments set forth in
the following schedule during the Contract Period, then Company will provide
Licensor the additional remuneration set forth below for each such
accomplishment due to the increased value in the Sorenstam Identification.

	
  Accomplishment

  	
   

  	
   

  	
   

  	
  Bonus Amount

  	
   

  
	
  Major win (Dinah
  Shore, U.S. Open, British Open, LPGA Championship) 
 	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
  LPGA Tour Win

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
  PGA Tour Top 20

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  
	
  All Other Event Wins

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  

 

Bonus payments under this Section 5 will be due
within forty-five (45) days following the achievement of each of the
accomplishments set forth above pursuant to the terms set forth in Section 8
below.

6.   Royalty
on Licensed Products.

(a)   Calculation of Royalty Fees.   In addition to the
payments provided in Sections 4 and 5, Company will pay to Licensor in U.S.
Dollars a fee (“Royalty Fee”) of [*] of the Net Sales of Licensed Products sold
by Company directly or through its distributors or sublicensees during the
Contract Term.

(b)   Payment of Royalty Fee.   Company will account for and
pay the Royalty Fee to Licensor within forty-five (45) days following the
end of each fiscal quarter during the Contract Period. Amounts not paid when due will accrue interest from the date
due until paid at the rate of one and one-half percent (1.5%) per month or the
maximum interest permitted by applicable laws, whichever is less.

(c)   Royalty Report.   Company will deliver to Licensor, at
the time each Royalty Fee payment is due, an itemized statement (“Royalty
Report”) (i) indicating the total amount of Net Sales of all Licensed
Products shipped during the previous fiscal quarter, and (ii) showing the
number of Licensed Products sold by category of Product. Company will furnish
the required Royalty Report to Licensor whether or not any Licensed Products
have been sold during the relevant fiscal quarter. The receipt or acceptance by
Licensor of any Royalty Report or of any payments made under this Agreement
will not preclude Licensor from questioning the correctness thereof at any time.
Licensor reserves the right to audit the calculation of Net Sales provided in
the Royalty Report, and Company will cooperate with the Licensor in any such
audit request.

(d)   Currency.   Whenever it becomes necessary under this Section 6
to convert a monetary amount from a foreign currency to U.S. Dollars (whether
for reporting, statements, or other purposes), such conversion will be made at
the average of the currency exchange rates during the applicable reporting
period, as derived using the “FX History” Currency Tool, Interbank Rate,
currently posted at www.oanda.com (“Conversion Tool”). A conversion for the
purpose of calculating a royalty payment pursuant to this Section 6 will
be weighted according to the relative amount of net sales within each fiscal
quarter. If the Conversion Tool is discontinued or otherwise no longer
available, the parties will use such other index or computation that replaces
the Conversion Tool or otherwise will result in substantially the same
conversion rate as would be obtained by using the Conversion Tool.

(e)   Marketing Commitment.   Company agrees that it will
continue in good faith to produce and market Licensed Products in the same
manner that it is currently producing and marketing such items as of 

 3
 

 *Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

September 1, 2005
unless Company and Sorenstam believe it is not commercially reasonable to
continue to produce and market the Licenced Products.

7.     Services of
Licensor.   (a)  If Company desires to utilize the services
of Sorenstam as a model in connection with Company advertising to promote its
Products or as a part of a special promotional appearance for the Company,
Licensor agrees, at the request of Company to provide the services of Sorenstam
for two (2) days per Contract Year as mutually agreed upon and at places
reasonably convenient to her schedule. Each day shall not exceed five (5) hours
unless otherwise agreed upon, Company agrees that it will reimburse Licensor
for all reasonable travel, lodging and meal expenses incurred by Licensor or
Sorenstam in connection with such services. Licensor agrees to use its best
efforts to cause Sorenstam to make appearances at Company’s booth at the PGA
Show in Orlando, Florida each Contract Year during the Contract Period. If
Sorenstam is unable to attend the PGA Show in any Contract Year, Licensor
agrees that it will provide Sorenstam’s services for 90 minutes in such
Contract Year at a mutually agreed upon time and location. If Sorenstam retires
from competitive golf during the Contract Period, Licensor agrees that
Sorenstam will provide Company with an additional service day per Contract Year
starting in the Contract Year Sorenstam retires from competitive playing. Company
further understands that failure to utilize services of Sorenstam pursuant to
this section shall not result in any reduction in payments to Licensor
hereunder nor may the obligation to provide services be carried forward or
backward to any Contract Year. The obligations of Licensor to provide services
of Sorenstam hereunder are subject to the condition that payments to Licensor
are current and up to date.

(b)   Should
Company use Sorenstam in television advertising to promote Company’s Products,
Company will make all applicable required union scale and pension and welfare
payments.

(c)   During the
Contract Period, Sorenstam shall wear Company Products at all professional golf
events and at all media appearances where appropriate. It is agreed that the
logo or name of Company (the “Company Logo”) shall be affixed to the left chest
locations of all Company Products that Sorenstam wears, when she plays
professional golf. Company agrees that it will be responsible for, and the cost
of, affixing the Company Logo on all such Outerwear. Company acknowledges that
other locations on Sorenstam’s Products are reserved for Licensor’s other
sponsors. Furthermore, Company understands that if Sorenstam participates in a
special team event where there is an official uniform, then Sorenstam is
permitted to wear such uniform during such event (e.g.,
Solheim Cup, World Cup, etc.).

(d)   During each
Contract Year, Company shall supply Sorenstam with sufficient quantities of
Company’s Products (at least 100 pieces of golf apparel) which are
entirely suitable for Sorenstam’s use in tournament competition so she can wear
such apparel while she plays professional golf. Company agrees to pay all
charges in connection with the delivery of Products to Sorenstam, including
shipping charges, air-freight charges and customs charges. Company agrees to
reimburse Sorenstam’s authorized agent for all such reasonable expenses
incurred by it in connection with the transfer of Products and Clothing to
Sorenstam.

(e)   On a
semi-annual basis, Sorenstam shall provide to Company colors and styling suggestions
for the Licensed Products that Company wishes to produce. Before each season is
finalized, Company will provide Licensor with the right to review the design
materials for the upcoming season, including color images and fabric samples. The
Company will, in good faith, consider any suggestions by Sorenstam before
finalizing the Product Line, with such review and consideration to constitute
Licensor’s approval as contemplated herein.

 4
 

 *Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

8.   Payments.   All payments shall be made by wire
transfer drawn to the account of “Club 59, Inc.” as follows:

[***]

[***]

[***]

[***]

[***]

[***]

Past due payments hereunder shall bear interest at the
rate of (a) one and one-half percent (1.5%) per month, or (b) the
maximum interest rate permissible under law, whichever is less. All amounts
herein are in United States Dollars.

9.   Authorized Agent.   Licensor hereby designates
IMG Worldwide, Inc. of IMG Center, 1360 East 9th Street, Suite 100,
Cleveland, Ohio 44114-1782, Attention: 
Mark Steinberg as its authorized agent for all purposes hereunder. All
notices or submissions to be made or delivered Company to Licensor pursuant to
this Agreement shall be delivered to said address free of all charges such as,
for example, shipping charges and customs charges. In the event that any such
charges are paid by Licensor or by its authorized agent, Company agrees to make
prompt reimbursement. All notices or submissions to be made or delivered to
Company pursuant to this Agreement shall be delivered to 701 North 34th
Street, Suite 400, Seattle, Washington 98103, Attention:  John T. Wyatt.

10.   Default.   (a) 
If either party at any time during the Contract Period shall (i) fail to
make any payment of any sum of money herein specified to be made, or (ii) fail
to observe or perform any of the covenants, agreements or obligations hereunder
(other than the payment of money), the nondefaulting party may terminate this
Agreement as follows: as to (i) if such payment is not made within ten (10) business
days after the defaulting party shall have received written notice of such
failure to make payment, or as to (ii) if such other default is not cured
within thirty (30) days after the defaulting party shall have received
written notice specifying in reasonable detail the nature of such default. In
order to be a sufficient notice hereunder, any such written notice shall
specify in detail each item of default and shall specify the provision of this
Agreement which applies to each item of default, and shall specify in detail
the action the defaulting party is required to take in order to cure each item
of default. The termination rights set forth in this section shall not
constitute the exclusive remedy of the nondefaulting party hereunder, however,
and if default is made by either party hereunder, the other may resort to such
other remedies as said party would have been entitled to if this section had
been omitted from this Agreement, subject to the terms of this Agreement. Termination
under the provisions of this section shall be without prejudice to any rights
or claims which the terminating party may otherwise have against he defaulting
party, and if Company is the defaulting party, Company shall be responsible for
any and all payments due under the terms of this Agreement in addition to other
liabilities set forth above.

(b)   If Company
shall become bankrupt or insolvent, or if Company’s business shall be placed in
the hands of a receiver, assignee or trustee, whether by voluntary act of
Company or otherwise, the Contract Period shall, at the election of Licensor,
immediately terminate.

 5

 *Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

11.   Use of
Sorenstam Identification After Termination.

(a)   Except as
provided in Section 11(b) below, from and after the termination of
the Contract Period all of the rights of Company to the use of the Sorenstam
Identification shall cease absolutely and Company shall not thereafter use or
refer to the Sorenstam Identification in advertising or promotion in any manner
whatsoever. Except as provided in Section 11(b) below, it is further
agreed that following termination of the Contract Period, Company shall not
advertise, promote, distribute or sell any item whatsoever in connection with
the use of any name, figure, design, logo, trademark or trade name similar to
or suggestive of the Sorenstam Identification.

(b)   (i)   Company
may liquidate and sell its inventory of Licensed Products (including any
inventory then in production) for a period of one hundred eighty (180) days
after the termination date of the Contract Period, subject to the Company’s
continued obligation to pay the Royalty Fee as provided in Section 6
above, and will deliver the Royalty Report with respect to such liquidation
sales within forty-five (45) days following the end of such one hundred eighty
(180) day period.

         (ii)   If
Company has not disposed of all Licensed Products as provided in Section 11(b)(i) above
by the end of the one hundred eighty (180) day period, Company, at its option,
may either (a) remove or obliterate entirely from such Licensed Products
(and any labels, tags, riders and the like) all references to any Sorenstam
Identification, then sell the same; or (b) destroy all such remaining
Licensed Products.

12.   Trademarks.   Company
agrees that it will not file, during the Contract Period or thereafter, any
application for trademark registration or otherwise obtain or attempt to obtain
ownership of any trademark or trade name within the Contract Territory or in any
other country of the world which consists of the Sorenstam Identification or
any mark, design or logo intended to obtain any rights to Sorenstam
Identification or to identify products as being endorsed by Sorenstam. In the
event that, prior to commencement of the Contract Period, Company has filed one
or more applications for registration of any such trademark, or otherwise has
obtained any rights to such trademark, Company agrees to cause such
applications and/or trademarks to be assigned and transferred to Licensor
forthwith.

13.   Reservation of Rights.   All
rights not herein specifically granted to Company shall remain the property of
Licensor to be used in any manner Licensor deems appropriate. Company
understands that Licensor bas reserved the right to authorize others to use
Sorenstam Identification within the Contract Territory and during the Contract
Period in connection with all tangible and intangible items and services other
than Products themselves. Licensor is not aware of any such rights that would
conflict with the nature or image of Company Products.

14.   Indemnity.   Company
agrees to protect, indemnify and save harmless Licensor, Sorenstam and their
authorized agent or any of them, from and against any and all expenses,
damages, claims, suits, actions, judgments and costs whatsoever, including
reasonable attorneys’ fees, arising out of, or in any way connected with,
actions or omissions of Company, any advertising material famished by, or an
behalf of, Company or my claim or action for personal injury, death or other
cause of action involving alleged defects in Company’s Products or services. Company
agrees to provide and maintain, at its own expense, general commercial and,
product liability insurance with limits no less then $3,000,000 and naming
Licensor and Sorenstam as additional named insureds. Within thirty
(30) days from the date hereof, Company will submit to Licensor evidence
of such policy, requiring that the insurer shall not terminate or materially
modify such without written notice to Licensor at least twenty (20) days
in advance, thereof.

15.   Special Right of Termination.   Company
shall have the right to terminate this Agreement upon written notice to
Licensor if the commercial value of the Sorenstam Identification is
substantially reduced 

 6
 

 *Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

because Sorenstam (i) has
been charged with illegal or immoral conduct which could result in a felony
conviction and such charges have not been dismissed or terminated within ninety
(90) days; or (ii) fails an officially sanctioned drug test or is
criminally convicted of any felony or drug related offense. Any termination
pursuant to this paragraph shall become effective on the thirtieth (30th) day
next following the date of receipt by Licensor of Company’s written notice to
so terminate.

16.   Contract Extension.   Due
to long product development lead times, Company and Licensor agree to begin
discussions for the renewal of this Agreement by July 1, 2011. All terms
of the 2003 Agreement will remain in effect until its expiration on December 31,
2006. The terms of this Agreement will automatically commence on January 1,
2007 and expire on December 31, 2011.

17.   Limited Liability.   Notwithstanding
anything to the contrary herein, in the event Company incurs any expenses,
damages or other liabilities (including, without limitation, reasonable
attorneys’ fees) in connection with the performance or nonperformance of any
term or provision hereof, Licensor’s liability to Company shall not exceed the
remuneration, excluding reimbursement of expenses, actually paid to Licensor by
Company. In no event will Licensor be liable for any indirect, incidental,
reliance, special or consequential damages arising out of the performance or
nonperformance of this Agreement, whether or not Licensor had been advised of
the possibility of such damages. It is understood that Sorenstam is not a party
hereto and has no liability hereunder but is an intended specific third party
creditor beneficiary hereof.

18.   Waiver.   The failure
of either party at any time or times to demand strict performance by the other
of any of the terms, covenants or conditions set forth herein shall not be
construed as a continuing waiver or relinquishment thereof and each may at any
time demand strict and complete performance by the other of said terms,
covenants and conditions. Any waiver of such rights must be set forth in
writing.

19.   Severability.   If any
provision of this Agreement shall be declared illegal, invalid, void or
unenforceable by any judicial or administrative authority, the validity of any
other provision and of the entire Agreement shall not be affected thereby.

20.   Assignment.   This
Agreement shall bind and inure to the benefit of Company and Licensor, and
their respective successors and assigns.

21.   Arbitration/Governing Law.   This
Agreement shall be governed by, and its provisions enforced in accordance with,
the laws of the State of Ohio, without regard to its principals of conflicts of
laws. In the event a dispute arises under this Agreement which cannot be
resolved, such dispute shall be submitted to arbitration and resolved by a
single arbitrator (who shall be a lawyer not employed by or associated with
either party to this Agreement) in accordance with the Commercial Arbitration Rules of
the American Arbitration Association then in effect. All such arbitration shall
take place at the office of the American Arbitration Association located in
Cleveland, Ohio. Each party is entitled to depose one fact witness and any
expert witness retained by the other party, and to conduct such other discovery
as the arbitrator deems appropriate. The award or decision rendered by the arbitrator
shall be final, binding and conclusive and judgment may be entered upon such
award by any court.

22.   Significance of Headings.   Section headings
contained herein are solely for the purpose of aiding in speedy location of
subject matter and are not in any sense to be given weight in the construction
of this Agreement. Accordingly, in case of any question with respect to the
construction of this Agreement, it is to be construed as though such section
headings had been omitted.

 7
 

 *Information has been omitted pursuant to a request for confidential treatment and has been filed separately with the Securities and Exchange Commission.

23.   No Joint Venture.   This
Agreement does not constitute and shall not be construed as constituting an
association, partnership, joint venture or relationship of principal and agent
or employer and employee between Licensor and Company. Neither party shall have
any right to obligate or bind the other party in any manner whatsoever, and,
except as expressly set forth herein, nothing herein contained shall give, or
is intended to give, any rights of any kind to any person.

24.   Entire Agreement.   This
writing constitutes the entire agreement between the parties hereto and may not
be changed or modified except by a writing signed by the party or parties to be
charged thereby.

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
above written.

	
  CUTTER & BUCK INC.

  	
   

  	
  CLUB 59, INC.

  
	
  By:

  	
   

  	
  JOHN T. WYATT

  	
   

  	
  By:

  	
   

  	
  ANNIKA SORENSTAM

  
	
   

  	
   

  	
  Name:

  	
   

  	
  John T. Wyatt

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President & CEO

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 8Exhibit 10.1

 

Summary of Board of Director Compensation Effective January 1,
2006

 

Annual
retainer of $50,000;

 

Meeting fees of $2,000/meeting;

 

Meeting fees of
$1,500/committee meeting or $3,000/committee meeting for Committee Chairmen;

 

Award of 5,000 shares of
restricted Class A common stock upon initial election to the Board of
Directors;

 

After initial election, annual
formula-based award of 1,500 shares of restricted stock and an additional
discretionary, non-formula based award of 2,000 shares (6,000 shares for the
Chairman of the Board) of restricted stock to be awarded the first trading day
of January each year;

 

Reimbursement for travel and
lodging expenses incurred in attending meetings;

 

Eligibility to participate in
the Company’s group health insurance plan, a portion of the premiums for which
are paid by the Company; and

 

Ability to convert annual cash
compensation into restricted stock under the Company’s 1998 Non-Employee
Director Stock Award Plan, as amended and restated.  The number of shares of restricted stock
granted is determined based on the closing market price of the Company’s Class A
common stock as of the grant date.

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