PERSONAL SERVICES AGREEMENT
This PERSONAL SERVICES AGREEMENT (the "Agreement") is made and entered into
as of the 29th day of August, 1999 by and between ROYAL PRECISION, INC., a
Delaware corporation (the "Company") on the one hand, and XXXXX XXXXXXX, an
individual residing at 00000 X. Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000
("Xxxxxxx") on the other hand.
WITNESSETH:
WHEREAS, Xxxxxxx and the Company entered into a Consulting Agreement which
terminates on August 29, 1999 (the "Consulting Agreement"); and
WHEREAS, the Company desires to maintain, on a formal basis, access to the
knowledge, information, contacts and experience of Xxxxxxx, as well as name,
likeness and visibility at PGA and Nike events;
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto, intending to be legally bound, agree
as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF XXXXXXX. Xxxxxxx hereby represents
and warrants to the Company that this Agreement is the legal, valid and binding
obligation of Xxxxxxx and is enforceable against Xxxxxxx in accordance with its
terms.
SECTION 2. REPRESENTATIONS OF THE COMPANY. The Company hereby represents and
warrants to Xxxxxxx that this Agreement has been duly authorized, executed and
delivered by the Company, is the legal, valid and binding obligation of the
Company and is enforceable against the Company in accordance with its terms.
SECTION 3. OBLIGATIONS OF XXXXXXX.
3.1. SCOPE. Xxxxxxx shall make himself reasonably available to provide
personal services with the Company, and any of its subsidiaries as the Company
may from time to time designate, on a regular basis as the Company may
reasonably request with respect to matters involving suppliers and purchasers,
potential suppliers and purchasers, business practices, business opportunities,
pricing points and practices, outlook for prices, negotiations of contracts,
personnel and other employment and employee matters relating to the business of
the Company. In addition, Xxxxxxx shall (a) mention and promote the Company and
its products in interviews and conversations where appropriate, (b) wear golf
caps and use golf bags bearing the logo of the Company and or its products
supplied by the Company in each golf tournament in which Xxxxxxx plays, (c) make
a 20 minute presentation at all of Xxxxxxx' or Profile Sports' golf schools on
the benefits of the Company's products and frequency matching, (d) permit four
persons designated by the Company to attend one of Xxxxxxx' or Profile Sports'
golf schools during the term of this Agreement at no cost to the Company or the
persons selected to attend; and (e) use exclusively the grips and shafts of the
Company's subsidiaries while playing golf, which the Company will supply.
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3.2. LIMITATIONS. Xxxxxxx shall perform such personal services as may
reasonably be requested by the Company; provided, however, that (a) Xxxxxxx
shall not be required to perform under this Agreement for more than 20 hours
during any calendar quarter (provided that time spent on the PGA or Nike Tour
shall not count towards this minimum number of hours); and (b) the Company shall
reimburse Xxxxxxx for all of his reasonable out-of-pocket expenses (including,
but not limited to, telephone, fax and travel) incurred by Xxxxxxx in connection
with the performance of the consulting services required hereunder; provided
that no reimbursement for Tour expenses shall be required of the Company.
3.3. COMPENSATION. Xxxxxxx shall be entitled to the payments provided for
in Section 4 below, regardless of the extent to which the Company or its
subsidiaries request the use of the consulting services of Xxxxxxx.
3.4. TERM. The effectiveness of the provisions of Sections 3 and 4 shall
commence on August 30, 1999 (the "Effective Date") and shall end on May 31,
2001, except for the provisions of Section 3.7 which shall continue for an
additional period of two years following the Restricted Period (as hereinafter
defined).
3.7. INDEMNITY. The Company agrees to indemnify and hold Xxxxxxx harmless
against any losses, claims, damages or liabilities to which Xxxxxxx may become
subject in connection with the services which are the subject of this Agreement;
provided, however, that the Company shall not be liable under the foregoing
indemnity in respect of any loss, claim, damage or liability to the extent that
such loss, claim, damage or liability resulted from a breach of the obligations
of Xxxxxxx to the Company in connection with the performance by Xxxxxxx of the
services which are the subject of this Agreement or from the willful misfeasance
or gross negligence of Xxxxxxx.
SECTION 4. PAYMENTS.
4.1. PERSONAL SERVICES FEES. The Company shall pay Xxxxxxx $5,000 per month
commencing September, 1999 through and including May, 2001.
4.2. RELATIONSHIP. The Company is engaging Xxxxxxx as an independent
contractor and not as an employee. In performing his obligations under this
Agreement, Xxxxxxx shall not identify himself as an employee of the Company. In
the event that Xxxxxxx hires one or more employees, Xxxxxxx shall be solely
responsible for all costs and expenses of such employees.
4.3. OTHER BENEFITS. During the term of this Agreement, the Company shall
provide to Xxxxxxx (a) the same health insurance on the same terms as is made
available to executives of the Company, (b) the promotional materials,
presentation formats and staff training, if any, necessary for Xxxxxxx to
effectively deliver the presentations required under Section 3.1(c) of this
Agreement and (c) golf caps and a staff bag, grips and shafts for Xxxxxxx' use
in all tournaments in which Xxxxxxx plays.
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SECTION 5. DEFINITION OF "PERSON". For all purposes of this Agreement, "Person"
means any individual, partnership, corporation, limited liability company,
trust, or other entity.
SECTION 6. TERMINATION.
6.1. FOR CAUSE. Xxxxxxx recognizes the detriment to the Company that would
result from the impairment of public confidence in the honest and orderly
conduct, the integrity and good character of Xxxxxxx. Xxxxxxx agrees not to
promote any political views or organizations, including without limitation, the
Tour Players Association, while promoting the Company or its products. Xxxxxxx
therefore acknowledges that if he was engaged or should engage in gross and
willful misconduct injurious to the Company, the Company will have the right to
terminate this Agreement. In addition, the Company may terminate this Agreement
if Xxxxxxx fails, in any material respect, in the reasonable determination of
the Company's Board of Directors, to perform his obligation under this
Agreement, and such failure, if curable, shall continue for 30 days after
written notice to Xxxxxxx specifying the events constituting such failure.
6.2. CHANGE IN CONTROL, ETC. The Company may elect to terminate this
Agreement upon (a) a "Change in Control" (as hereinafter defined) or (b) Xxxxxxx
selling at least 75% of the shares of common stock of the Company he currently
owns. For the purposes hereof, a Change in Control of the Company has occurred
when, without the approval of a majority of the Board of Directors elected prior
to any Change in Control: (i) any person (defined for the purposes of this
paragraph to mean any person within the meaning of Section 13(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")), acquires, directly or
indirectly, the beneficial ownership (determined under Rule 13d-3 of the
regulations promulgated by the Securities and Exchange Commission under Section
13(d) of the Exchange Act) of securities issued by the Company having 20% or
more of the voting power of all of the voting securities issued by the Company
in the election of directors at the next meeting of the holders of voting
securities to be held for such purpose; or (ii) a majority of the directors
elected at any meeting of the holders of voting securities of the Company are
persons who were not nominated for such election by the Board of Directors of
the Company or a duly constituted committee of the Board of Directors of the
Company having authority in such matters; or (iii) the Company merges or
consolidates with or transfers substantially all of its assets to another
person.
SECTION 7. COVENANT NOT TO COMPETE. Xxxxxxx acknowledges that (a) the Company is
in the business of designing and distributing golf club grips, shafts and other
equipment for use in the playing of golf (the "Business"), (b) Xxxxxxx is one of
the limited number of persons who developed such Business, and is a founder of a
subsidiary of the Company, (c) the Business is conducted throughout the United
States, (d) his work has given him, and his consulting for the Company will
continue to give him proprietary information and trade secrets of and
confidential information concerning the Company, and (e) the agreements and
covenants contained in this Section 7 are essential in order to induce the
Company to enter into the Agreement and to protect the Business and goodwill of
the Company. Accordingly, Xxxxxxx covenants and agrees as follows:
7.1. TERM. For a period commencing on the Effective Date and ending on the
later of (a) May 31, 2001, or (b) the date of the termination of Xxxxxxx'
retention by the Company (such period of time being referred to herein as the
"Restricted Period"), Xxxxxxx shall not, within the United States of America or
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Japan (the "Territory"), directly or indirectly, (i) engage in the Business or
any aspect of the Business for Xxxxxxx' own account, (ii) enter the employ of,
or render any services to, any Person (other than the Company or any subsidiary
of the Company) engaged in the Business or any aspect of the Business, (iii)
become associated with any Person engaged in the Business as an individual,
partner, shareholder (other than as a shareholder owning not more than 5% of the
voting securities of any corporation having more than 500 stockholders),
officer, director, employee, principal, agent, consultant or trustee, or (iv)
solicit, attempt to solicit or accept any business (which is related to any
aspect of the Business) to be conducted within the Territory (or help any other
Person solicit or accept any such business) from any Person who, during the 12
months preceding the date of termination or expiration of Xxxxxxx' retention by
the Company, is a customer or supplier of the Company or who during the
Restricted Period becomes, and is known by Xxxxxxx to be, a customer or supplier
of the Company. Nothing in this Agreement shall prohibit Xxxxxxx from sponsoring
products or companies that are not directly competitive with Company or any of
its subsidiaries.
7.2. EMPLOYEES; DISPARAGEMENT. Without the prior written consent of the
Company, during the Restricted Period, Xxxxxxx shall not, directly or
indirectly, hire or solicit any employee or consultant or advisor to the Company
or encourage any such employee or consultant or advisor to leave such employment
or retention for any business whether or not a competitor of the Company. During
the Restricted Period, Xxxxxxx shall not disparage the Company or any subsidiary
of the Company or their officers, directors, personnel or services, or
discourage or otherwise attempt to prevent any other Person from doing business
with the Company or any of its subsidiaries. Similarly, the Company, during the
Restricted Period, shall not disparage Xxxxxxx or his services, or discourage or
otherwise attempt to prevent any other Person from doing business with Xxxxxxx.
7.3. CONSIDERATION. Xxxxxxx acknowledges that the Company entering into
this Agreement and the payments and other consideration that he is receiving
under this Agreement constitute full and fair consideration for his covenants
under this Section 7.
7.4. REFORMATION. If a court of competent jurisdiction shall determine that
the terms of this Section 7 are partially or wholly inoperative, unenforceable
or invalid in a particular case because of their time or geographic scope or for
any other reason, such court shall have the power to limit such time or
geographic scope or otherwise to recast the terms of this Section 7 in such case
so as to permit its enforcement to the greatest extent permitted by applicable
law.
7.5. INJUNCTIVE RELIEF. Xxxxxxx specifically acknowledges and agrees that
the remedy at law for any breach of the provisions of Section 7, 8 and 9 will be
inadequate (for reasons which include, but are not limited to, the fact that
Xxxxxxx' talents, and the services to be provided by Xxxxxxx, are unique) and
that the Company, in addition to any other relief available to it, shall be
entitled to temporary and permanent injunctive relief.
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SECTION 8. MAINTAINING CONFIDENTIAL INFORMATION.
8.1. COMPANY INFORMATION. Xxxxxxx agrees that at all times while he is
retained by the Company and for a period of one year thereafter, he will hold in
strictest confidence, and not use, except for the benefit of the Company, or
disclose to anyone, other than directors, officers, employees and counsel of the
Company and Persons to whom such disclosure is authorized by executive officers
of the Company (other than Xxxxxxx) and is made in furtherance of the interest
of the Company, without the written authorization of the Company's Board of
Directors, its Chairman of the Board or President, any trade secrets,
confidential knowledge, data or other proprietary information of the Company or
its subsidiaries (including the trade secrets, confidential knowledge, data or
other proprietary information of the Company), which by way of illustration and
not limitation, include scientific, technical and business information relating
to products, processes, know-how, designs, formulas, methods, developmental or
experimental work, firmware, software (whether executable or source code),
improvements, discoveries, plans for research, new products, marketing and
selling, business plans, budgets and unpublished financial statements, licenses,
prices and costs, suppliers and customers, and information regarding the skills
and compensation of other employees of the Company and its subsidiaries, except
for information that becomes generally available to the public, or information
received on a non-confidential basis from sources other than the Company who are
not in violation of a confidentiality agreement with the Company or a subsidiary
of the Company.
8.2. THIRD PARTY INFORMATION. Xxxxxxx recognizes that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to maintain the
confidentiality of such information and, in such cases, to use it only for
certain limited purposes. Xxxxxxx agrees that he owes the Company and such third
parties, during the term set forth in Section 8.1, a duty to hold all such
confidential or proprietary information in the strictest confidence and not to
disclose it to any Person or use it for the benefit of anyone other than the
Company or such third party, except in a manner that is consistent with the
Company's agreement with the third party.
SECTION 9. ASSIGNMENT OF INVENTIONS AND ORIGINAL WORKS.
9.1. INVENTIONS AND ORIGINAL WORKS RETAINED BY XXXXXXX. Xxxxxxx represents
and warrants that he has heretofore assigned to the Company without further
payment or consideration all his right, title and interest in and to any ideas,
inventions, original works of authorship, developments, improvements or trade
secrets which he solely or jointly conceived or reduced to practice, or caused
to be conceived or reduced to practice while he was an employee of the Company
or which are related to the Business and has granted to the Company a perpetual
right to the molds used to inscribe his name on packaging, grips and other
items, and to the use of his name on such items without any further
consideration. Xxxxxxx confirms that Exhibit A to the Consulting Agreement
continues to be a complete list of all inventions, original works of authorship,
developments, improvements, and trade secrets that Xxxxxxx has, alone or jointly
with others, conceived, developed or reduced to practice before the commencement
of this Agreement, that Xxxxxxx considers to be his property or the property of
third parties. If disclosure of an item on Exhibit A would cause Xxxxxxx to
violate any prior confidentiality agreement, Xxxxxxx understands that he is not
to list such in Exhibit A but is to inform the Company that all items have not
been listed for that reason. A space is provided on Exhibit A for such purpose.
If no list is attached, Xxxxxxx represents that there are no such items.
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9.2. INVENTIONS AND ORIGINAL WORKS ASSIGNED TO THE COMPANY. Xxxxxxx agrees
to make prompt written disclosure to the Company of and will assign to the
Company without further payment or consideration all his right, title and
interest in and to any ideas, inventions, original works of authorship,
developments, improvements or trade secrets which Xxxxxxx may solely or jointly
conceive or reduce to practice, or cause to be conceived or reduced to practice
during the period of his retention by the Company. Xxxxxxx understands that only
ideas, inventions, original works of authorship, developments, improvements and
trade secrets which
(a) were not developed or produced using equipment, supplies, facilities
or trade secrets that belong to the Company or any subsidiary of the
Company, and
(b) do not relate to (i) the Business as it is currently conducted or
contemplated to be conducted or as it may be conducted during the term
of Xxxxxxx' retention by the Company or (ii) actual or contemplated
research or development conducted by the Company, and
(c) were not developed or produced during hours that Xxxxxxx is obligated
to engage in the Company related activities hereunder or for which the
Company pays Xxxxxxx
are not covered by Xxxxxxx' obligations to report and assign under the first
sentence of this Section 9.2.
9.3. WORKS MADE FOR HIRE. Xxxxxxx acknowledges that all original works of
authorship which are made by Xxxxxxx (solely or jointly with others) within the
scope of his duties under this Agreement and which are protectable by copyright
are "works made for hire," as that term is defined in the United States
Copyright Act (17 U.S.C., Section 101).
9.4. OBTAINING LETTERS PATENT, COPYRIGHT REGISTRATIONS AND OTHER
PROTECTIONS. Xxxxxxx will assist the Company in every reasonable way, and at the
sole expense of the Company, to obtain and from time to time enforce United
States and foreign proprietary rights, including patents and copyrights,
relating to any and all inventions, original works of authorship, developments,
improvements or trade secrets of the Company in any and all countries. To that
end Xxxxxxx will execute, verify and deliver such documents and perform such
other acts (including appearing as a witness) as the Company may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such proprietary rights and the assignment thereof. In addition,
Xxxxxxx will execute, verify and deliver assignments of such proprietary rights
to the Company or its designee, without payment or further consideration.
Xxxxxxx' obligation to assist the Company with respect to proprietary rights in
any and all countries shall continue beyond the termination of his retention,
but the Company will compensate Xxxxxxx at a reasonable rate after his
termination for the time actually spent by Xxxxxxx at the Company's request on
such assistance.
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9.5. OBLIGATION TO KEEP THE COMPANY INFORMED. In addition to Xxxxxxx'
obligations under Section 9.2, during the Restricted Period, Xxxxxxx will
promptly disclose to the Company fully and in writing all patent applications
filed by Xxxxxxx or on his behalf. At the time of each such disclosure, Xxxxxxx
will advise the Company in writing of any inventions that he believes are not
required to be assigned to the Company by Section 9.2 above; and Xxxxxxx will at
that time provide to the Company in writing all evidence necessary to
substantiate that belief. Xxxxxxx understands that the Company will, and the
Company agrees to, keep in confidence and will not disclose to third parties
without Xxxxxxx' consent any proprietary information disclosed in writing to the
Company pursuant to this Agreement relating to such inventions. Xxxxxxx will
preserve the confidentiality of any invention that is required to be assigned to
the Company by Section 9.2 above.
9.6. RETURN OF THE COMPANY'S DOCUMENTS. When Xxxxxxx is no longer subject
to a personal services contract with the Company, he will deliver to the Company
(and will not keep in his possession, recreate or deliver to anyone else) any
and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, firmware, software
(whether executable or source code), sketches, materials, equipment, other
documents or property, together with all copies thereof (in whatever medium
recorded) belonging to the Company or any of its subsidiaries, their successors
or assigns.
SECTION 10. MISCELLANEOUS.
10.1. THIS AGREEMENT. This Agreement and the agreements and instruments
required to be executed and delivered hereunder set forth the entire agreement
of the parties with respect to the subject matter hereof and supersede and
discharge all prior agreements (written or oral) and negotiations and all
contemporaneous oral agreements concerning such subject matter and negotiations.
There are no oral conditions precedent to the effectiveness of this Agreement.
10.2. NON-WAIVER. Neither the failure of nor any delay by either party to
this Agreement to enforce any right hereunder or to demand compliance with its
terms is a waiver of any right hereunder. No action taken pursuant to this
Agreement on one or more occasions is a waiver of any right hereunder or
constitutes a course of dealing that modifies this Agreement.
10.3. WAIVERS. No waiver of any right or remedy under this Agreement shall
be binding on either party unless it is in writing and is signed by the party to
be charged. No such waiver of any right or remedy under any term of this
Agreement shall in any event be deemed to apply to any subsequent default under
the same or any other term contained herein.
10.4. AMENDMENTS. No amendment, modification or termination of this
Agreement shall be binding on either party hereto unless it is in writing and is
signed by the party to be charged.
10.5. SUCCESSORS. The terms of this Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, personal
representatives or corporate successors.
10.6. THIRD PARTIES. Nothing herein expressed or implied is intended or
shall be construed to give any person other than the parties hereto any rights
or remedies under this Agreement.
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10.7. JOINT PREPARATION. This Agreement shall be deemed to have been
prepared jointly by the parties hereto. Any ambiguity herein shall not be
interpreted against either party hereto and shall be interpreted as if each of
the parties hereto had prepared this Agreement.
10.8. RULES OF CONSTRUCTION. In this Agreement, unless the context
otherwise requires, words in the singular number include the plural, and in the
plural include the singular; and words of the masculine gender include the
feminine and the neuter, and when the sense so indicates words of the neuter
gender may refer to any gender. The preamble and the recitals are part of this
Agreement. The captions and section numbers appearing in this Agreement are
inserted only as a matter of convenience. They do not define, limit or describe
the scope or intent of the provisions of this Agreement.
10.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
either party hereto may execute this Agreement by signing and delivering one or
more counterparts.
10.10. LEGAL MATTERS. The parties, being concerned that either party may
obtain some advantage by having the law of the jurisdiction of its principal
place of business apply, and agreeing in concept to have this Agreement subject
to the laws of a neutral jurisdiction, whose laws are perceived as being fair in
general to the business community at large, have determined and agreed as
follows: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS. EACH OF THE PARTIES AGREES THAT ANY LEGAL ACTION BETWEEN
THE PARTIES RELATING TO THE ENTRY INTO OR PERFORMANCE OF THIS AGREEMENT, OR THE
INTERPRETATION OR ENFORCEMENT OF TERMS HEREOF, SHALL BE BROUGHT IN A FEDERAL OR
STATE COURT LOCATED IN NEW CASTLE COUNTY, DELAWARE, HAVING JURISDICTION OF THE
SUBJECT MATTER THEREOF, AND EACH PARTY IRREVOCABLY CONSENTS TO PERSONAL
JURISDICTION IN ANY SUCH FEDERAL OR STATE COURT, WAIVES ANY RIGHT TO OBJECT TO
SUCH VENUE OR TO ASSERT THE DEFENSE OF FORUM NON-CONVENIENS, AND AGREES THAT
SERVICE OF PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL IN ACCORDANCE
WITH, SECTION 10.11 HEREOF.
10.11. NOTICES. Any notices or other communications required or permitted
by this Agreement shall be in writing and shall be delivered either by personal
delivery, by nationally recognized overnight courier service, by facsimile, by
first class mail or by registered or certified mail, return receipt requested,
addressed to the party at the address appearing below the signature of such
party, or to such other address as either party shall have previously designated
to the other by written notice given in the manner hereinabove set forth.
Notices shall be deemed given one day after being sent, if sent by overnight
courier; when delivered and receipted for, if hand delivered; when received, if
sent by facsimile or other electronic means or by first class mail; or when
receipted for (or upon the date of attempted delivery where delivery is refused
or unclaimed), if sent by certified or registered mail, return receipt
requested.
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SIGNATURES
IN WITNESS WHEREOF the parties have signed this Agreement as of this 29th
day of August, 1999.
ROYAL PRECISION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxx Xxxxxxx
----------------------------------- -----------------------------------
Xxxxxx X. Xxxxxxxxx, President XXXXX XXXXXXX
Address: 00000 Xxxxx Xxxxxx Xxxx Address: 00000 X. Xxxxxxxx Xxxx
Xxxxx 0 Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
