Exhibit 10.1
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CHAIRMAN AND FOUNDER EMPLOYMENT AGREEMENT
This Chairman and Founder Employment Agreement ("Agreement") is
entered into as of January 1, 1997, by and between Callaway Golf Company, a
California corporation (the "Company"), and Xxx Xxxxxxxx ("Xx. Xxxxxxxx").
1. TERM. The Company hereby employs Xx. Xxxxxxxx and Xx. Xxxxxxxx
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hereby accepts employment pursuant to the terms and provisions of this Agreement
for the term commencing January 1, 1997 and terminating December 31, 1999 unless
this Agreement is earlier terminated as hereinafter provided. Unless such
employment is earlier terminated, upon the expiration of the term of this
Agreement, Xx. Xxxxxxxx'x status shall be one of at will employment.
2. SERVICES.
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(a) Xx. Xxxxxxxx, who is the Chairman of the Board and Founder of the
Company and Chairman of the Board of Callaway Golf Ball Company, a wholly-owned
subsidiary of the Company, shall serve in addition as Chief of Advertising,
Press and Public Relations of the Company. Xx. Xxxxxxxx'x duties shall be the
usual and customary duties of the offices in which he serves. As Chief of
Advertising, Press and Public Relations, Xx. Xxxxxxxx shall report to the Chief
Executive Officer of the Company.
(b) Xx. Xxxxxxxx shall be required to comply with all policies and
procedures of the Company, as such shall be adopted, modified or otherwise
established by the Company from time to time.
3. SERVICES TO BE EXCLUSIVE. During the term hereof, Xx. Xxxxxxxx
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agrees to devote his full productive time and best efforts to the performance of
Xx. Xxxxxxxx'x duties hereunder pursuant to the supervision and direction of the
Company's Board of Directors. Xx. Xxxxxxxx further agrees, as a condition to
the performance by the Company of each and all of its obligations hereunder,
that so long as Xx. Xxxxxxxx is employed by the Company, Xx. Xxxxxxxx will not
directly or indirectly render services of any nature to, otherwise become
employed by, or otherwise participate or engage in any other business without
the Company's prior written consent. It is expressly understood that, to the
extent necessary, the Company has consented to Xx. Xxxxxxxx'x devotion of time
and effort to the preparation, writing, publication, sale and promotion of his
autobiography (working title "Big Xxxxxx and Me"), and that the Company expects
and hopes that Xx. Xxxxxxxx will be actively involved with the sale and
promotion of this book, and that Xx. Xxxxxxxx will make personal appearances in
book promotional tours and events in the U.S. and internationally. Xx. Xxxxxxxx
further agrees to execute such secrecy, non-disclosure, patent, trademark,
copyright and other proprietary rights agreements, if any, as the Company may
from time to time reasonably
require. Nothing herein contained shall be deemed to preclude Xx. Xxxxxxxx from
having outside personal investments and involvement with appropriate community
activities, and from devoting a reasonable amount of time to such matters,
provided that this shall in no manner interfere with or derogate from Xx.
Xxxxxxxx'x work for the Company.
4. COMPENSATION.
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The Company agrees to pay Xx. Xxxxxxxx during the term of this
Agreement a base salary at the rate of $750,000.00 per year. In addition, Xx.
Xxxxxxxx shall be considered annually for payment of a discretionary bonus, to
be set in such amount as shall be fixed by the Board of Directors or such other
entity or person as shall be specified by the Board of Directors.
5. EXPENSES AND BENEFITS.
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(a) Reasonable and Necessary Expenses. In addition to the
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compensation provided for in Section 4 hereof, the Company shall reimburse Xx.
Xxxxxxxx for all reasonable, customary, and necessary expenses incurred in the
performance of Xx. Xxxxxxxx'x duties hereunder. Xx. Xxxxxxxx shall first
account for such expenses by submitting a signed statement itemizing such
expenses prepared in accordance with the policy set by the Company for
reimbursement of such expenses. The amount, nature, and extent of such expenses
shall always be subject to the control, supervision, and direction of the
Company. Notwithstanding the foregoing, and in addition to any other
compensation and reimbursement of expenses pursuant to the Company's regular
policies and practices, the Company shall pay to Xx. Xxxxxxxx a special expense
allowance of $35,000.00 per year for Company-related business expenses for which
Xx. Xxxxxxxx shall have no obligations with respect to accounting and submitting
signed, itemized statements to the Company. Moreover, because of Xx. Xxxxxxxx'x
status as Founder of the Company, and the substantial travel demands placed upon
Xx. Xxxxxxxx as Chairman and Chief of Advertising, Press and Public Relations,
as well as those demands associated with writing, preparing, publishing, selling
and promoting his autobiography, it is expected that the Company shall make
available for Xx. Xxxxxxxx'x business use a chartered Challenger aircraft, or
its equivalent, when and where practicable.
(b) Vacation. Xx. Xxxxxxxx shall receive six (6) weeks paid vacation
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for each twelve (12) month period of employment with the Company. The vacation
may be taken any time during the year subject to prior approval by the Company,
such approval not to be unreasonably withheld. Any unused time will accrue from
year to year. The maximum vacation time Xx. Xxxxxxxx may accrue shall be three
times Xx. Xxxxxxxx'x annual vacation benefit. The Company reserves the right to
pay Xx. Xxxxxxxx for unused, accrued vacation benefits in lieu of providing time
off.
(c) Benefits. During Xx. Xxxxxxxx'x employment with the Company
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pursuant to this Agreement, the Company shall provide for Xx. Xxxxxxxx to:
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(i) participate in the Company's health insurance and disability
insurance plans as the same may be modified from time to time;
(ii) receive, if Xx. Xxxxxxxx is insurable under usual
underwriting standards and Xx. Xxxxxxxx'x physical condition does not prevent
him from reasonably qualifying for such insurance coverage, term life insurance
coverage on Xx. Xxxxxxxx'x life, payable to whomever he directs, in the face
amount of $2,000,000.00, such policies to be transferable to Xx. Xxxxxxxx upon
the termination of employment without evidence of insurability;
(iii) participate in the Company's 401(k) pension plan pursuant to
the terms of the plan, as the same may be modified from time to time;
(iv) participate in the Company's Executive Deferred Compensation
Plan, as the same may be modified from time to time; and
(v) participate in any other benefit plans the Company provides
from time to time to executive officers.
(d) Estate Planning and Other Perquisites. To the extent the Company
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provides estate planning and related services, or any other perquisites and
personal benefits to other executive officers from time to time, such services
and perquisites shall be made available to Xx. Xxxxxxxx on the same terms and
conditions.
(e) Stock Options.
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Pursuant to a separate stock option agreement, the Company shall
provide to Xx. Xxxxxxxx options to purchase up to 150,000 shares of the Common
Stock of the Company at the closing price on the NYSE on April 17, 1997. Such
options shall vest as follows:
Shares Vesting Date
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50,000 December 31, 1997
50,000 December 31, 1998
50,000 December 31, 1999
All shares of stock that are issuable upon the exercise of such options granted
to Xx. Xxxxxxxx pursuant to this subsection shall be registered as promptly as
possible with the Securities and Exchange Commission, and shall be approved for
listing on the New York Stock Exchange upon notice of issuance. Except as
otherwise provided herein, in the separate stock option agreement, or in any
other written agreement between the Company and Xx. Xxxxxxxx, vesting of these
stock options shall be conditioned upon Employee's continued employment with the
Company as of the vesting date. Such options shall expire ten (10) years
following vesting if not exercised prior thereto, and shall be
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transferable to the full extent permitted by the law and the Company's stock
option plan from which they are issued.
6. DISABILITY. If on account of any physical or mental disability
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Xx. Xxxxxxxx shall fail or be unable to perform all or substantially all of Xx.
Xxxxxxxx'x duties under this Agreement for a continuous period of up to six (6)
months during any twelve month period during the term of this Agreement, Xx.
Xxxxxxxx shall be entitled to his full compensation and benefits as set forth in
this Agreement. If Xx. Xxxxxxxx'x disability continues after such six (6) month
period, this Agreement is subject to termination pursuant to the provisions of
Section 8(e) hereof.
7. NONCOMPETITION.
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(a) Other Business. To the fullest extent permitted by law, Mr.
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Callaway agrees that, while employed by the Company, Xx. Xxxxxxxx will not,
directly or indirectly (whether as agent, consultant, holder of a beneficial
interest, creditor, or in any other capacity), engage in any business or venture
which engages directly or indirectly in competition with the business of the
Company, or have any interest in any person, firm, corporation, or venture which
engages directly or indirectly in competition with the business of the Company.
For purposes of this section, the ownership of interests in a broadly based
mutual fund shall not constitute ownership of the stocks held by the fund.
(b) Other Employees. Except as may be required in the performance of
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his duties hereunder, Xx. Xxxxxxxx shall not cause or induce, or attempt to
cause or induce, any person now or hereafter employed by the Company, or any
subsidiary, to terminate such employment, nor shall Xx. Xxxxxxxx directly or
indirectly employ any person who is now or hereafter employed by the Company for
a period of one (1) year from the date Xx. Xxxxxxxx ceases to be employed by the
Company.
(c) Suppliers. While employed by the Company, and for one (1) year
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thereafter, Xx. Xxxxxxxx shall not cause or induce, or attempt to cause or
induce, any person or firm supplying goods, services or credit to the Company to
diminish or cease furnishing such goods, services or credit.
(d) Conflict of Interest. While employed by the Company, Xx. Xxxxxxxx
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shall not engage in any conduct or enterprise that shall constitute an actual or
apparent conflict of interest with respect to Xx. Xxxxxxxx'x duties and
obligations to the Company.
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8. TERMINATION.
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(a) Termination at the Company's Convenience. Xx. Xxxxxxxx'x
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employment under this Agreement may be terminated by the Company at its
convenience at any time upon the majority vote of the entire Board of Directors.
In the event of a termination at the Company's convenience, Xx. Xxxxxxxx shall
be entitled to receive (i) any compensation accrued and unpaid as of the date of
termination; (ii) the continued payment of base salary at the same rate and on
the same schedule as in effect at the time of termination for a period of time
equal to the remainder of the term of this Agreement; (iii) the immediate
vesting of all unvested stock options held by Xx. Xxxxxxxx as of such
termination date; (iv) the continuation of all benefits and perquisites provided
by Sections 5(c)(i) and (ii) hereof for a period of time equal to the remainder
of the term of this Agreement; and (v) no other severance. At Xx. Xxxxxxxx'x
option, Xx. Xxxxxxxx may elect in writing up to 60 days prior to termination to
receive such payments and benefits as provided by subsection (iii) of this
section in a lump sum payment representing all future payments due, discounted
to their then present value at the prevailing major bank prime rate as of the
date of termination.
(b) Termination at Xx. Xxxxxxxx'x Convenience. Xx. Xxxxxxxx'x
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employment under this Agreement may be terminated immediately by Xx. Xxxxxxxx at
his convenience at any time. In the event of a termination at Xx. Xxxxxxxx'x
convenience, Xx. Xxxxxxxx shall be entitled to receive (i) any compensation
accrued and unpaid as of the date of termination; and (ii) no other severance.
(c) Termination by the Company for Substantial Cause. Xx. Xxxxxxxx'x
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employment under this Agreement may be terminated immediately by the Company for
substantial cause at any time. In the event of a termination by the Company for
substantial cause, Xx. Xxxxxxxx shall be entitled to receive (i) any
compensation accrued and unpaid as of the date of termination; and (ii) no other
severance. "Substantial cause" shall mean for purposes of this subsection
breach of this Agreement, or misconduct, including but not limited to,
dishonesty, theft, use or possession of drugs or alcohol during work, disloyalty
and/or felony criminal conduct.
(d) Termination by Xx. Xxxxxxxx for Substantial Cause. Xx. Xxxxxxxx'x
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employment under this Agreement may be terminated immediately by Xx. Xxxxxxxx
for substantial cause at any time. In the event of a termination by Xx.
Xxxxxxxx for substantial cause, Xx. Xxxxxxxx shall be entitled to receive (i)
any compensation accrued and unpaid as of the date of termination; (ii) the
continued payment of base salary at the same rate and on the same schedule as in
effect at the time of termination for a period of time equal to the remainder of
the term of this Agreement; (iii) the immediate vesting of all unvested stock
options held by Xx. Xxxxxxxx as of such termination date; (iv) the continuation
of all benefits and perquisites provided by Sections 5(c)(i) and (ii) hereof for
a period of time equal to the remainder of the term of this Agreement; and (v)
no other severance. At Xx. Xxxxxxxx'x option, Xx. Xxxxxxxx may elect in writing
up to 60 days prior to termination to receive such payments and benefits as
provided by
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subsection (iii) of this subsection in a lump sum payment representing all
future payments due, discounted to their then present value at the prevailing
major bank prime rate as of the date of termination. "Substantial cause" shall
mean for purposes of this subsection a diminution in Xx. Xxxxxxxx'x title or
duties or any material breach of this Agreement by the Company.
(e) Termination Due to Permanent Disability. Subject to all
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applicable laws, Xx. Xxxxxxxx'x employment under this Agreement may be
terminated immediately by the Company in the event Xx. Xxxxxxxx becomes
permanently disabled. In the event of a termination by the Company due to Xx.
Xxxxxxxx'x permanent disability, Xx. Xxxxxxxx shall be entitled to (i) any
compensation accrued and unpaid as of the date of termination; (ii) the
continued payment of base salary at the same rate and on the same schedule as in
effect at the time of termination for a period of time equal to the remainder of
the term of this Agreement; (iii) the immediate vesting of outstanding but
unvested stock options held by Xx. Xxxxxxxx as of such termination date in a
prorated amount based upon the number of days in the option vesting period that
elapsed prior to Xx. Xxxxxxxx'x termination; (iv) the continuation of all
benefits and perquisites provided by Section 5(c)(i) and (ii) hereof for a
period of time equal to the remainder of the term of this Agreement; and (v) no
other severance. Termination under this subsection shall be effective
immediately upon the date the Board of Directors of the Company formally
resolves that Xx. Xxxxxxxx is permanently disabled. Subject to all applicable
laws, "permanent disability" shall mean the inability of Xx. Xxxxxxxx, by reason
of any ailment or illness, or physical or mental condition, to devote
substantially all of his time during normal business hours to the daily
performance of Xx. Xxxxxxxx'x duties as required under this Agreement for a
continuous period of six (6) months. At Xx. Xxxxxxxx'x option, Xx. Xxxxxxxx may
elect in writing up to 60 days prior to termination to receive such payments and
benefits as provided by subsection (ii) of this section in a lump sum payment
representing all future payments due, discounted to their then present value at
the prevailing major bank prime rate as of the date of termination.
(f) Termination Due to Death. Xx. Xxxxxxxx'x employment under this
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Agreement may be terminated immediately by the Company in the event of Xx.
Xxxxxxxx'x death. In the event of a termination by the Company due to Xx.
Xxxxxxxx'x death, Xx. Xxxxxxxx'x estate shall be entitled to (i) any
compensation accrued and unpaid as of the date of termination; (ii) the
immediate vesting of outstanding but unvested stock options held by Xx. Xxxxxxxx
as of such termination date in a prorated amount based upon the number of days
in the option vesting period that elapsed prior to Xx. Xxxxxxxx'x termination;
and (iii) no other severance. At Xx. Xxxxxxxx'x option, Xx. Xxxxxxxx may elect
in writing at least 60 days prior to termination to receive such payments and
benefits as provided by subsection (ii) of this section in a lump sum payment
representing all future payments due, discounted to their then present value at
the prevailing major bank prime rate as of the date of termination.
(g) Unless otherwise provided, any severance payments or other amounts
due pursuant to this Section 8 shall be paid in cash within thirty (30) days of
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termination. Any severance payments shall be subject to usual and customary
employee payroll practices and all applicable withholding requirements. Except
for such severance pay and other amounts specifically provided pursuant to this
Section 8, Xx. Xxxxxxxx shall not be entitled to any further compensation,
bonus, damages, restitution, relocation benefits, or other severance benefits
upon termination of employment during the term of this Agreement. The amounts
payable to Xx. Xxxxxxxx pursuant to this Section 8 shall not be treated as
damages, but as severance compensation to which Xx. Xxxxxxxx is entitled by
reason of termination of employment under the applicable circumstances. The
Company shall not be entitled to set off against the amounts payable to Xx.
Xxxxxxxx hereunder any amounts earned by Xx. Xxxxxxxx in other employment after
termination of his employment with the Company pursuant to this Agreement, or
any amounts which might have been earned by Xx. Xxxxxxxx in other employment had
Xx. Xxxxxxxx sought such other employment. The provisions of this Section 8
shall not limit Xx. Xxxxxxxx'x rights under or pursuant to any other agreement
or understanding with the Company or with Xx. Xxxxxxxx'x participation in, or
terminating distributions and vested rights under, any pension, profit sharing,
insurance or other employee benefit plan of the Company to which Xx. Xxxxxxxx is
entitled pursuant to the terms of such plan.
(h) Termination By Mutual Agreement of the Parties. Xx. Xxxxxxxx'x
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employment pursuant to this Agreement may be terminated at any time upon the
mutual agreement in writing of the parties. Any such termination of employment
shall have the consequences specified in such agreement.
(i) Pre-Termination Rights. The Company shall have the right, at its
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option, to require Xx. Xxxxxxxx to vacate his office or otherwise remain off the
Company's premises prior to the effective date of termination as determined
above, and to cease any and all activities on the Company's behalf.
9. RIGHTS UPON A CHANGE IN CONTROL.
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(a) If a Change in Control (as defined in Exhibit A hereto) occurs
before the termination of Xx. Xxxxxxxx'x employment hereunder, then this
Agreement shall be extended (the "Extended Employment Agreement") in the same
form and substance as in effect immediately prior to the Change in Control,
except that the termination date shall be that date which would permit the
Extended Employment Agreement to continue in effect for an additional period of
time equal to the full term of this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, if
upon or at any time within one year following any Change in Control that occurs
during the term of this Agreement there is a Termination Event (as defined
below), Xx. Xxxxxxxx shall be treated as if he had been terminated for the
convenience of the Company and Xx. Xxxxxxxx shall be entitled to receive the
compensation and other benefits and entitlements set forth in Section 8(a).
Furthermore, except as specifically provided herein, the termination events and
consequences described in Section 8 shall continue to apply
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during the term of the Extended Employment Agreement except that, in the event
of a conflict between Section 8 and the rights of Xx. Xxxxxxxx described in this
Section 9, the provisions of this Section 9 shall govern.
(c) A "Termination Event" shall mean the occurrence of any one or
more of the following, and in the absence of the Xx. Xxxxxxxx'x permanent
disability (defined in Sections 6 and 8(e)), Xx. Xxxxxxxx'x death, and any of
the factors enumerated in Section 8(c) as providing to the Company "substantial
cause" for terminating Xx. Xxxxxxxx'x employment:
(i) the termination or material breach of this Agreement by the
Company;
(ii) a failure by the Company to obtain the assumption of this
Agreement by any successor to the Company or any assignee of all or
substantially all of the Company's assets;
(iii) any material change in the title, position, duties,
responsibilities or status that Xx. Xxxxxxxx had with the Company, as a publicly
traded entity, immediately prior to the Change in Control;
(iv) any reduction, limitation or failure to pay or provide any of
the compensation, reimbursable expenses, stock options, incentive programs, or
other benefits or perquisites provided to Xx. Xxxxxxxx under the terms of this
Agreement or any other agreement or understanding between the Company and Xx.
Xxxxxxxx, or pursuant to the Company's policies and past practices as of the
date immediately prior to the Change in Control; or
(v) any requirement that Xx. Xxxxxxxx relocate or any assignment to
Xx. Xxxxxxxx of duties that would make it unreasonably difficult for Xx.
Xxxxxxxx to maintain the principal residence he had immediately prior to the
Change in Control.
10. SURRENDER OF BOOKS AND RECORDS. Xx. Xxxxxxxx agrees that upon
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termination of employment in any manner, Xx. Xxxxxxxx will immediately surrender
to the Company all lists, books and records of or connected with the business of
the Company, and all other properties belonging to the Company, it being
distinctly understood that all such lists, books, records and other documents
are the property of the Company. However, notwithstanding the foregoing, Xx.
Xxxxxxxx may keep, subject to the provisions of Section 12 of this Agreement and
any and all other confidentiality agreements between Xx. Xxxxxxxx and the
Company, copies of those records maintained by Xx. Xxxxxxxx as Founder of the
Company or otherwise relating to Xx. Xxxxxxxx'x association with the Company
("Retained Copies"). The Company shall have the right to inspect and review all
Retained Copies during normal business hours upon reasonable request.
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11. GENERAL RELATIONSHIP. Xx. Xxxxxxxx shall be considered an
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employee of the Company within the meaning of all federal, state and local laws
and regulations, including, but not limited to, laws and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.
12. PROPRIETARY INFORMATION.
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(a) Xx. Xxxxxxxx agrees that any trade secret or proprietary
information of the Company to which Xx. Xxxxxxxx has become privy or may become
privy to as a result of his employment with the Company shall not be divulged or
disclosed to any other party (including, without limit, any person or entity
with whom or in whom Xx. Xxxxxxxx has a business interest) without the express
written consent of the Company, except as otherwise required by law. In
addition, Xx. Xxxxxxxx agrees to use such information only during the term of
this Agreement and only in a manner which is consistent with the purposes of
this Agreement. In the event Xx. Xxxxxxxx believes that he is legally required
to disclose any trade secret or proprietary information of the Company, Xx.
Xxxxxxxx shall give reasonable notice to the Company prior to disclosing such
information and shall take such legally permissible steps as are reasonably
necessary to protect such Company trade secrets or proprietary information,
including but not limited to, seeking orders from a court of competent
jurisdiction preventing disclosure or limiting disclosure of such information
beyond that which is legally required. The Company shall reimburse Xx. Xxxxxxxx
for reasonable legal expenses incurred in seeking said orders.
(b) Except as otherwise required by law, Xx. Xxxxxxxx shall hold in
confidence all trade secret and proprietary information received from the
Company until such information is available to the public generally or to the
Company's competitors through no unauthorized act or fault of Xx. Xxxxxxxx.
Upon termination of this Agreement, Xx. Xxxxxxxx shall promptly return any
written proprietary information in his possession to the Company.
(c) As used in this Agreement, "trade secret and proprietary
information" means information, whether written or oral, not generally available
to the public; it includes the concepts and ideas involved in the Company's
products whether patentable or not; and includes, but is not limited to, the
processes, formulae, and techniques disclosed by the Company to Xx. Xxxxxxxx or
observed by Xx. Xxxxxxxx. It does not include:
(i) Information, which at the time of disclosure, had been
previously published;
(ii) Information which is published after disclosure, unless such
publication is a breach of this Agreement or is otherwise a violation of the
contractual, legal or fiduciary duties owed to the Company, which violation is
known to Xx. Xxxxxxxx; or
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(iii) Information which, subsequent to disclosure, is obtained by
Xx. Xxxxxxxx from a third person who is lawfully in possession of such
information (which information is not acquired in violation of any contractual,
legal, or fiduciary obligation owed to the Company with respect to such
information, and is known by Xx. Xxxxxxxx) and does not require Xx. Xxxxxxxx to
refrain from disclosing such information to others.
(d) The provisions of this Section 12 shall survive the termination or
expiration of this Agreement, and shall be binding upon Xx. Xxxxxxxx in
perpetuity.
13. INVENTIONS AND INNOVATIONS.
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(a) As used in this Agreement, inventions and innovations mean new
ideas and improvements, whether or not patentable, relating to the design,
manufacture, use or marketing of golf equipment or other products of the
Company. This includes, but is not limited to, products, processes, methods of
manufacture, distribution and management, sources of and uses for materials,
apparatus, plans, systems and computer programs.
(b) Xx. Xxxxxxxx agrees to disclose to the General Counsel and the
Board of Directors of the Company any invention or innovation which he develops,
either alone or with anyone else, during the term of Xx. Xxxxxxxx'x employment
with the Company, as well as any invention or innovation based on proprietary
information of the Company which Xx. Xxxxxxxx develops, whether alone or with
anyone else, within twelve (12) months after the termination of Xx. Xxxxxxxx'x
employment with the Company.
(c) Xx. Xxxxxxxx agrees to assign any invention or innovation to the
Company:
(i) which is developed totally or partially while Xx. Xxxxxxxx is
employed by the Company;
(ii) for which Xx. Xxxxxxxx used any of the Company's equipment,
supplies, facilities or proprietary information, even if any or all of such
items are relatively minor, and have little or no monetary value; or
(iii) which results in any way from Xx. Xxxxxxxx'x work for the
Company or relates in any way to the Company's business or the Company's current
or anticipated research and development.
(d) Xx. Xxxxxxxx understands and agrees that the existence of any
condition set forth in either (c)(i), (ii) or (iii) above is sufficient to
require Xx. Xxxxxxxx to assign his inventions or innovations to the Company.
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(e) All provisions of this Agreement relating to the assignment by Xx.
Xxxxxxxx of any invention or innovation are subject to the provisions of
California Labor Code Sections 2870, 2871 and 2872.
(f) Xx. Xxxxxxxx agrees that any invention or innovation which is
required under the provisions of this Agreement to be assigned to the Company
shall be the sole and exclusive property of the Company. Upon the Company's
request, at no expense to Xx. Xxxxxxxx, Xx. Xxxxxxxx shall execute any and all
proper applications for patents, assignments to the Company, and all other
applicable documents, and will give testimony when and where requested to
perfect the title and/or patents (both within and without the United States) in
all inventions or innovations belonging to the Company.
(g) Xx. Xxxxxxxx shall disclose all inventions and innovations to the
Company, even if Xx. Xxxxxxxx does not believe that he is required under this
Agreement, or pursuant to California Labor Code Section 2870, to assign his
interest in such invention or innovation to the Company. If the Company and Xx.
Xxxxxxxx disagree as to whether or not an invention or innovation is included
within the terms of this Agreement, it will be the responsibility of Xx.
Xxxxxxxx to prove that it is not included.
14. ASSIGNMENT. This Agreement shall be binding upon and shall inure
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to the benefit of the parties hereto and the successors and assigns of the
Company. Except as otherwise specifically provided in writing, Xx. Xxxxxxxx
shall have no right to assign his rights, benefits, duties, obligations or other
interests in this Agreement, it being understood that this Agreement is personal
to Xx. Xxxxxxxx.
15. ATTORNEYS' FEES AND COSTS. If any arbitration or other
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proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute or default in connection with any of its provisions, the
successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and costs incurred in such action or proceeding, in addition to
any relief to which such party may be deemed entitled.
16. ENTIRE UNDERSTANDING. This Agreement sets forth the entire
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understanding of the parties hereto with respect to the subject matter hereof,
and no other representations, warranties or agreements whatsoever as to that
subject matter have been made by Xx. Xxxxxxxx or the Company not herein
contained. This Agreement shall not be modified, amended or terminated except
by another instrument in writing executed by the parties hereto. This Agreement
replaces and supersedes any and all prior understandings or agreements between
Xx. Xxxxxxxx and the Company regarding employment.
17. NOTICES. Any notice, request, demand, or other communication
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required or permitted hereunder, shall be deemed properly given when actually
received
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or within five (5) days of mailing by certified or registered mail, postage
prepaid, to:
Xx. Xxxxxxxx: Xxx Xxxxxxxx
c/o Callaway Golf Company
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Company: Callaway Golf Company
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxx
or to such other address as Xx. Xxxxxxxx or the Company may from time to time
furnish, in writing, to the other.
18. ARBITRATION. Any dispute, controversy or claim arising hereunder
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or in any way related to this Agreement, its interpretation, enforceability, or
applicability, or relating to Xx. Xxxxxxxx'x employment, or the termination
thereof, that cannot be resolved by mutual agreement of the parties shall be
submitted to arbitration. The arbitration shall be conducted by a retired judge
from the Judicial Arbitration and Mediation Service/Endispute ("JAMS") office
located in Orange County, California, who shall have the powers to hear motions,
control discovery, conduct hearings and otherwise do all that is necessary to
resolve the matter. The arbitration award shall be final and binding, and
judgment on the award may be entered in any court having jurisdiction thereof.
It is expressly understood that the parties have chosen arbitration to avoid the
burdens, costs and publicity of a court proceeding, and the arbitrator is
expected to handle all aspects of the matter, including discovery and any
hearings, in such a way as to minimize the expense, time, burden and publicity
of the process, while assuring a fair and just result. In particular, the
parties expect that the arbitrator will limit discovery by controlling the
amount of discovery that may be taken (e.g., the number of depositions or
interrogatories) and by restricting the scope of discovery to only those matters
clearly relevant to the dispute.
19. MISCELLANEOUS.
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(a) Headings. The headings of the several sections and paragraphs of
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this Agreement are inserted solely for the convenience of reference and are not
a part of and are not intended to govern, limit or aid in the construction of
any term or provision hereof.
(b) Waiver. Failure of either party at any time to require
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performance by the other of any provision of this Agreement shall in no way
affect that party's rights thereafter to enforce the same, nor shall the waiver
by either party of any breach of any provision hereof be held to be a waiver of
any succeeding breach of any provision or a waiver of the provision itself.
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(c) Applicable Law. This Agreement shall constitute a contract under
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the internal laws of the State of California and shall be governed and construed
in accordance with the laws of said state as to both interpretation and
performance.
(d) Severability. In the event any provision or provisions of this
------------
Agreement is or are held invalid, the remaining provisions of this Agreement
shall not be affected thereby.
20. SUPERSEDES OLD OFFICER EMPLOYMENT CONTRACT. Xx. Xxxxxxxx and the
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Company recognize that prior to the effective date of this Agreement they were
parties to a certain Officer Employment Agreement effective January 1, 1995 (the
"Old Officer Employment Agreement"). It is the intent of the parties that as of
the effective date of this Agreement, this Agreement shall replace and supersede
the Old Officer Employment Agreement entirely, that the Old Officer Employment
Agreement shall no longer be of any force or effect except as to Sections 7, 12,
13, 15, 18, 20 and 22 thereof, and that to the extent there is any conflict
between the Old Officer Employment Agreement and this Agreement, this Agreement
shall control and both agreements shall be construed so as to give the maximum
force and effect to the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed effective the date first written above.
XX. XXXXXXXX: COMPANY:
CALLAWAY GOLF COMPANY
a California corporation
/s/ XXX XXXXXXXX By: /s/ XXXXXX X. XXX
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Xxx Xxxxxxxx Xxxxxx X. Xxx, President and C.E.O.
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EXHIBIT A
A "Change in Control" means the following and shall be deemed to occur
if any of the following events occurs:
(a) Any person, entity or group, within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") but
excluding the Company and its subsidiaries and any employee benefit or stock
ownership plan of the Company or its subsidiaries and also excluding an
underwriter or underwriting syndicate that has acquired the Company's securities
solely in connection with a public offering thereof (such person, entity or
group being referred to herein as a "Person") becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either the then outstanding shares of Common Stock or the combined
voting power of the Company's then outstanding securities entitled to vote
generally in the election of directors; or
(b) Individuals who, as of the effective date hereof, constitute the
Board of Directors of the Company (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors of the Company,
provided that any individual who becomes a director after the effective date
hereof whose election, or nomination for election by the Company's shareholders,
is approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered to be a member of the Incumbent Board
unless that individual was nominated or elected by any Person having the power
to exercise, through beneficial ownership, voting agreement and/or proxy, 20% or
more of either the outstanding shares of Common Stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally in the election of directors, in which case that individual shall not
be considered to be a member of the Incumbent Board unless such individual's
election or nomination for election by the Company's shareholders is approved by
a vote of at least two-thirds of the directors then comprising the Incumbent
Board; or
(c) Consummation by the Company of the sale or other disposition by
the Company of all or substantially all of the Company's assets or a
reorganization or merger or consolidation of the Company with any other person,
entity or corporation, other than
(i) a reorganization or merger or consolidation that would result
in the voting securities of the Company outstanding immediately prior thereto
(or, in the case of a reorganization or merger or consolidation that is preceded
or accomplished by an acquisition or series of related acquisitions by any
Person, by tender or exchange offer or otherwise, of voting securities
representing 5% or more of the combined voting power of all securities of the
Company, immediately prior to such acquisition or the first acquisition in such
series of acquisitions) continuing to represent, either by remaining outstanding
or by being converted into voting securities of another entity, more than 50% of
the combined voting power of the voting securities of the Company or such other
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entity outstanding immediately after such reorganization or merger or
consolidation (or series of related transactions involving such a reorganization
or merger or consolidation), or
(ii) a reorganization or merger or consolidation effected to implement
a recapitalization or reincorporation of the Company (or similar transaction)
that does not result in a material change in beneficial ownership of the voting
securities of the Company or its successor; or
(d) Approval by the shareholders of the Company or an order by a court
of competent jurisdiction of a plan of liquidation of the Company.
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