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EXHIBIT 10.17
EMPLOYMENT AGREEMENT
Made the 3rd day of April 2001 and effective as of the 1st day
of January 2001 by and between S2 Golf Inc., a New Jersey Corporation with its
principal place of business in Xxxxxxxxx, Xxx Xxxxxx ("X0"), and Xxxxxxx X.
Xxxxxxxxxx of Canton, Ohio ("DAB") as follows:
WHEREAS, the parties desire to: (i) provide for the employment
of DAB in the management of S2; and (ii) provide for a valid and enforceable
covenant by DAB not to compete with S2 in the conduct of its business and in the
geographical area described in Exhibit A hereto ("Business") for the period
herein described; and (iii) fix the compensation of DAB for such services and
covenant;
NOW, THEREFORE, in mutual consideration of the covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. TERM. S2 hereby hires and employs DAB for a period
beginning on the effective date of this Agreement, and terminating on the close
of business on December 31, 2005 unless terminated sooner as provided herein
(the "Employment Period").
2. DUTIES. During the Employment Period, DAB shall devote his
full business time and attention to the business of S2 and to such activities as
may be assigned to him from time to time by S2. DAB will have the titles and
responsibilities of President, Chief Operating Officer and Chief Financial
Officer and will serve S2 diligently and faithfully in the Business and use his
best endeavors to promote the interests of S2 and will perform such services at
such reasonable times and places as S2 may direct in connection with the
Business.
3. SALARY. In consideration of the services to be performed by
DAB, he will receive an annual gross salary of $175,000 (the "Base Salary"). The
Base Salary shall be paid in accordance with S2's regular payroll policies.
4. BONUS. The Compensation Committee of the Board of Directors
of S2 shall annually determine DAB's eligibility for and amount of a bonus based
upon S2's performance against annual budgets to be mutually agreed upon and
applicable prior year's results.
5. STOCK OPTIONS.
(a) On various dates in the past S2 did, and may
again during the Term of this agreement, grant to DAB common stock options for
certain numbers of shares of S2's common stock (the "Stock Options").
(b) The exercise price and the number of shares
exercisable under any Stock Option shall be adjusted accordingly for any
subsequent common stock splits, reverse common stock splits, recapitalizations,
etc.
(c) Notwithstanding any other provision of this
paragraph 5 to the contrary, if a "change in control" (as defined below) of S2
occurs, then (i) all of the then "non-
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vested" shares of any Stock Option shall be and become exercisable immediately
prior to such "change in control" (each, an "Accelerated Share"; combined, the
"Accelerated Shares") (ii) the exercise price for each Accelerated Share of any
Stock Option shall be either (a) one (1) cent ($.01) or (b) the lowest greater
exercise price per Accelerated Share which will not cause the value to DAB of
all the shares of any Stock Options exercised upon such "change in control" to
be considered an "excess parachute payment" under Section 280G of the Internal
Revenue Code of 1986, as amended and (iii) the exercise price of the then
"vested" shares of any Stock Option shall be the exercise price determined in
clause (ii) above; provided, however that in no event shall the exercise price
of the then "vested" shares of any Stock Option be in excess of the Exercise
Price originally determined upon the grant of such Stock Option.
(d) For purpose of subparagraph 5(c), a "change in
control" shall be deemed to have occurred if (i) S2 shall be merged or
consolidated with any corporation (other than with any of its subsidiaries),
(ii) S2 shall sell all or substantially all of its operating properties and
assets or (iii) any person (including any person, association, corporation or
other entity) becomes a beneficial owner, directly or indirectly, of securities
of S2 representing more than 50% of the combined voting power of S2's then
outstanding securities.
6. BENEFITS. During the Employment Period, DAB shall be
entitled to receive the fringe benefits listed on Exhibit B attached hereto. S2
reserves the right to alter, abolish, change or improve any such benefit.
7. TERMINATION.
(a) S2's obligation to pay DAB's salary during the
Employment Period and DAB's employment shall terminate if:
(i) DAB dies; or
(ii) in the event of DAB's Disability, 90
days after the onset of such
Disability (as defined below); or
(iii) S2 has discharged DAB for cause.
Cause shall be determined by S2 in
its sole discretion and shall mean
DAB's personal dishonesty,
incompetence, willful misconduct,
breach of fiduciary duty involving
personal profit, failure to perform
his duties described herein, willful
violation of any law, rule or
regulation (other than traffic
violations or similar offenses) or
final cease and desist order,
material breach of any provision of
this Agreement or acceptance of
employment other than with S2.
(iv) DAB violates the provisions of this
Agreement;
(v) DAB voluntarily terminates his
employment with S2; or
(vi) there has been a "change in control"
and in conjunction with such "change
in control" DAB's duties are
modified,
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without DAB's express written
consent, so as to no longer include
the title and responsibility of
either (a) President or (b) Chief
Operating Officer.
"Disability" is defined as a medically
determinable physical or mental impairment
which renders DAB incapable of performing
his employment duties with S2 and which can
be expected to result in death or to be of
long-continued and indefinite duration. S2
shall select a physician to determine
whether DAB is disabled, as hereinbefore
defined, and such determination shall be
binding and conclusive.
(b) In the event of the termination of DAB's
employment, whether such termination be pursuant to the terms of this paragraph
7, by expiration of the term, or otherwise, all further obligations of S2
hereunder shall terminate. In the event of a termination (other than pursuant to
subparagraphs 7(a)(i) or (vi)), DAB shall continue to observe the covenant not
to compete set forth herein except in the case of a change in control and an
agreeable employment agreement cannot be developed between all parties. In the
event of termination, DAB shall be entitled to any unpaid balance of DAB's
salary prorated and accrued to the date of termination. No provision of this
Agreement shall be construed as to prejudice any right or remedy available to S2
or DAB in any case of termination.
8. [INTENTIONALLY LEFT BLANK.]
9. CONFIDENTIALITY. DAB will treat as confidential and will
not, without written approval of S2, use, other than in the performance of his
designated duties to S2, or publish, disclose, copyright or authorize anyone
else to use, publish, disclose or copyright, during the term of employment under
this Agreement any information relating to inventions, processes, formulas,
systems, plans, programs, studies, techniques, "know-how", products, product
development, product costing, product pricing, or trade secrets of S2, or any
affiliated entitles of S2, or any other information which S2 or such entities
might prefer or require remain undisclosed including information relating to any
of the activities, operations or affairs of S2 or of such entities. DAB will
diligently protect such information against loss by inadvertent or unauthorized
disclosure and will comply with any rules established by S2 for the purpose of
protecting such information.
10. ASSIGNMENT. This Agreement is not assignable by DAB but is
assignable by S2 to any affiliate or successor entity. As used in this
Agreement, the term "S2" shall include any entity to which this Agreement shall
have been assigned by S2.
11. PATENTS AND INVENTIONS. DAB will promptly submit to S2
written disclosures of all inventions, improvements and discoveries, relating to
the Business, whether or
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not patentable (hereinafter call "Inventions"), which are made or conceived by
him, alone or jointly with others, while in its employ. Title to such Inventions
that shall be within the existing or contemplated scope of S2's business at the
time such inventions are made or conceived or which result from or are suggested
by any work he or others may do for or on behalf of S2, together with such
patent, patents or other legal protection as may be obtained thereon in the
United States of America and all foreign countries, shall belong to S2. DAB will
assign any rights or interest in such title to S2, and, upon the request of S2,
will at any time during his employment with S2 and after its termination for any
reason, execute all proper papers for use in applying for, obtaining,
maintaining and enforcing such patents or other legal protection as S2 may
desire and will execute and deliver all proper assignments thereof, when so
requested, without remuneration but at the expense of S2.
12. NON-COMPETITION.
(a) During the term of this Agreement DAB will not,
directly or indirectly, engage in any activity similar to that of any part of
the Business or otherwise in competition with the Business.
(b) For one year after the termination of this
Agreement (for any reason other than as a result of the event described in
subparagraphs 7(a)(i) or (vi)) DAB will not, directly or indirectly, engage in
any activity for any person or entity the purpose of which activity is to assist
such person or entity in any manner in either: (i) soliciting or obtaining an
endorsement of such person's or entity's products by the Ladies Professional
Golf Association ("LPGA") for which S2 has an exclusive or non-exclusive license
from the LPGA or (ii) establishing a women's golf club product line where such
person or entity had no such product line previously.
(c) DAB shall not engage in any activity described in
subparagraphs 12(a) or (b) in any place in the United States of America
involving sales to anyone who, or any entity which, was a customer of S2 during
the Employment Period.
(d) DAB shall be deemed to be engaged in the
activities described in subparagraphs 12(a) or (b) directly or indirectly if he
is an employee, officer, director, trustee, agent, representative or partner of,
or a consultant or advisor to or for, any person, firm, corporation,
association, trust or other entity (other than S2 or any of its affiliates,
subsidiaries, or successors) which is engaged in such business or if he owns,
directly or indirectly, in excess of five percent (5%) of the outstanding stock
or shares or has a beneficial or other financial interest exceeding five percent
(5%) of the net assets of any such person, firm, corporation, association, trust
or other entity. The foregoing shall not be construed to prohibit the mere
ownership of DAB of investments not representing a controlling interest in any
securities traded in over-the-counter market or listed on any national
securities exchange.
(e) DAB agrees that the remedy at law for any breach
or threatened breach of the covenant contained in this paragraph 12 will be
inadequate and that any breach or threatened breach would cause such immediate
and permanent damage as would be impossible to ascertain, and, therefore, DAB
agrees and consents that in the event of any breach or threatened breach of any
provision of such covenant by him, in addition to any and all other legal
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equitable remedies available to S2 for such breach or threatened breach
including a recovery of damages, S2 shall be entitled to obtain preliminary or
permanent injunctive relief without the necessity of proving actual damage by
reason of such breach or threatened breach and, to the extent permitted by
applicable statutes and rules of procedure, a temporary restraining order (or
similar procedural device) may be granted immediately upon the commencement of
such action.
(f) To the extent that any obligation to refrain from
competing within an area, for a period of time or with respect to a produce or
service, as provided in this paragraph 12 is invalid or unenforceable, it shall,
to the extent that it is invalid or unenforceable, be deemed void AB INITIO, and
the remaining obligations imposed by the provisions of this Agreement shall be
fully enforceable as if such invalid or unenforceable provisions had not been
included herein. The parties intend for this covenant to be enforceable to the
maximum extent permitted by law, and if any reviewing court deems it overbroad,
such court may reduce the time element by months, and the area by counties to
achieve the intention of the parties.
13. BINDING EFFECT. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives, successors and permitted
assigns.
14. GOVERNING LAW AND SELECTION OF FORUM. This Agreement shall
in all respects be governed by and construed in accordance with the laws of the
State of New Jersey.
15. SOLE AGREEMENT. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the employment
contemplated hereby and may not be changed or amended orally. No change,
termination or attempted waiver of any of the provisions of this Agreement shall
be of any effect unless the same is set forth in writing and duly executed by
the party against which it is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
ATTEST: S2 GOLF INC.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx
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Xxxxxxx X. Xxxxxx, Secretary Xxxxxx X. Xxxx, Chairman
WITNESS:
/s/ Illegible /s/ Xxxxxxx X. Xxxxxxxxxx (L.S.)
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Xxxxxxx X. Xxxxxxxxxx
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