GOLF ONE INDUSTRIES, INC.
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made and entered into
as of the 31st day of May, 1998 by and between Golf One Industries, Inc., a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx ("Consultant").
1. Engagement and Responsibilities
(a) Upon the terms and subject to the conditions set forth in this
Agreement, the Company hereby engages Consultant as a consultant, and Consultant
accepted such engagement.
(b) Consultant's duties and responsibilities shall include advice and
assistance in the following areas:
(i) assembly and shipment of the Company's products
(ii) order processing and fulfilment;
(iii) financial analysis; and
(iv) labor matters.
(c) The Consultant, as of the date of this Agreement, a director of the
Company. It is understood that the service to be provided by this Agreement are
over and above the services to be provided in his capacity as a director. It is
understood further, however, that Consultant shall perform his services on a
part-time basis.
2. Definitions
"Board" shall mean the Board of Directors of the Company.
"Change of Control" of the Company shall be deemed to have occurred if,
following the IPO, (i) a Person or group of Persons (within the meaning of Rule
13d-5 under the Securities Exchange Act of 1934, as amended) acquires more than
50% of the outstanding voting securities of the Company, or (ii) the Company
sells all or substantially all of its assets.
"Company Group" shall mean the Company and each Person which the
Company directly or indirectly Controls.
"Control" shall mean, with respect to any Person, (i) the beneficial
ownership of more than 50% of the outstanding voting securities of such Person,
or (ii) the power, directly or indirectly, by proxy, voting trust or otherwise,
to elect a majority of the outstanding directors, trustees or other managing
persons of such Person.
"Disability," with respect to Consultant, shall mean that, for physical
or mental reasons, Consultant is unable to perform the essential functions of
Consultant's duties under this Agreement
for 30 consecutive days, or 60 days during any one six month period. Consultant
agrees to submit to a reasonable number of examinations by a medical doctor
advising the Company as to whether Consultant shall have suffered a disability
and Consultant hereby authorizes the disclosure and release to the Company and
its agents and representatives all supporting medical records. If Consultant is
not legally competent, Consultant's legal guardian or duly authorized
attorney-in-fact will act in Consultant's stead for the purposes of submitting
Consultant to the examinations, and providing the authorization of disclosure.
"Effective Date" shall have the meaning set forth in Section 7 of this
Agreement.
"For Cause" shall mean, in the context of a basis for termination of
Consultant's employment with the Company, that:
(a) Consultant breaches any obligation, duty or agreement under this
Agreement, which breach is not cured or corrected within 30 days of written
notice thereof from the Company; or
(b) Consultant is grossly negligent in the performance of services to
the Company Group, or commits any act of personal dishonesty, fraud,
embezzlement, breach of fiduciary duty or trust against the Company Group; or
(c) Consultant is indicted for, or convicted of, or pleads guilty or
nolo contendere with respect to, theft, fraud, a crime involving moral
turpitude, or a felony under federal or applicable state law; or
(d) Consultant commits any act of personal conduct that, in the
reasonable opinion of the Board, gives rise to any member of the Company Group
of a material risk of liability under federal or applicable state law for
discrimination or sexual or other forms of harassment or other similar
liabilities to employees of the Company.
"IPO" shall mean the Company's initial public offering of Common Stock
pursuant to a registration statement under the Securities Act of 1933, as
amended.
"Person" shall mean an individual or a partnership, corporation, trust,
association, limited liability company, governmental authority or other entity.
3. Compensation
(a) Options. Effective as of the Effective Date, Consultant shall
receive an option under the Company's 1998 Stock Option Plan (the "Plan") to
purchase up to 10,000 shares of Common Stock (such number, and the number set
forth below, to be adjusted for any stock splits, dividends or reverse stock
splits effected after the date hereof and on or prior to the Effective Date), on
the following terms: (i) the exercise price shall be the initial public offering
price of the Common Stock in the IPO; (ii) the option shall vest on the first
annual anniversary of the Effective Date (with accelerated vesting in the event
of a sale of the Company); and (iii) the option shall terminate on the earlier
to occur of: (A) 90 days following termination of Consultant's engagement as a
consultant; and (B) a sale of the Company. The option shall be evidenced by an
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agreement in the standard form in effect as of the Effective Date, as approved
by the Board in connection the Plan.
(b) Expense Reimbursement. Consultant shall be entitled to
reimbursement from the Company for the reasonable out-of-pocket costs and
expenses which Consultant incurs in connection with the performance of
Consultant's duties and obligations under this Agreement in a manner consistent
with the Company's practices and policies therefor.
4. Term of Engagement
Consultant's engagement pursuant to this Agreement shall commence on
the Effective Date and shall terminate on the earliest to occur of the
following:
(a) one year from the Effective Date;
(b) upon the death of Consultant;
(c) upon delivery to Consultant of written notice of termination by the
Company if Consultant shall suffer a Disability;
(d) upon delivery to Consultant of written notice of termination by the
Company For Cause; or
(e) upon a Change of Control of the Company.
5. Confidentiality.
Consultant agrees not to disclose or use at any time (whether during or
after Consultant's employment with the Company) for Consultant's own benefit or
purposes or the benefit or purposes of any other Person any trade secrets,
information, data, or other confidential information relating to customers,
development programs, costs, marketing, trading, investment, sales activities,
promotion, credit and financial data, financial methods, plans, or the business
and affairs of the Company Group generally, provided that the foregoing shall
not apply to information which is not unique to the Company Group or which is
generally known to the industry or the public other than as a result of
Consultant's breach of this covenant. Consultant agrees that upon termination of
his consulting engagement with the Company for any reason, he will return to the
Company immediately all memoranda, books, papers, plans, information, letters
and other data, and all copies thereof or therefrom, in any way relating to the
business of the Company Group except that he may retain personal notes,
notebooks, diaries, rolodexes and addresses and phone numbers. Consultant
further agrees that he will not retain or use for his account at any time any
trade names, trademark or other proprietary business designation used or owned
in connection with the business of any member of the Company Group.
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6. Miscellaneous
(a) Notices. All notices, requests, demands and other communications
(collectively, "Notices") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service, courier, facsimile transmission or
by United States first class, registered or certified mail, addressed to the
following addresses:
If to the Company, to:
Golf One Industries, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Chief Executive Officer
If to Consultant, to:
Consultant's address as set forth on the books
and records of the Company
Any Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails. Any
party may from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this Section.
(b) Entire Agreement. This Agreement contains the sole and entire
agreement and understanding of the parties with respect to the entire subject
matter of this Agreement, and any and all prior discussions, negotiations,
commitments and understandings, whether oral or otherwise, related to the
subject matter of this Agreement are hereby merged herein. No represen tations,
oral or otherwise, express or implied, other than those contained in this
Agreement have been relied upon by any party to this Agreement.
(c) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
(d) Governing Law. This Agreement has been made and entered into in the
State of California and shall be construed in accordance with the laws of the
State of California.
(e) Captions. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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(g) Attorneys' Fees. If any action or proceeding is brought to enforce
or interpret any provision of this Agreement, the prevailing party shall be
entitled to recover as an element of its costs, and not its damages, its
reasonable attorneys' fees, costs and expenses. The prevailing party is the
party who is entitled to recover its costs in the action or proceeding. A party
not entitled to recover its costs may not recover attorneys' fees. No sum for
attorneys' fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover its costs or
attorneys' fees.
(h) Independent Contractor. It is the intention of the parties to this
Agreement that Consultant is, and shall be deemed to be, an independent
contractor with respect to the subject matter hereof, and nothing contained
herein shall be deemed or construed in any manner whatsoever as creating any
partnership, joint venture or other similar relationship between Consultant and
the Company.
7. Effective Date
This Agreement shall become effective upon the closing of the Company's
initial public offering pursuant to a registration statement filed by the
Company with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Effective Date"). This Agreement shall terminate without
becoming effective: (i) by written notice from the Company to Consultant, or by
Consultant to the Company, given prior to the effectiveness of the registration
statement in connection with IPO if the IPO shall not be completed by August 31,
1998; (ii) if Consultant shall die or suffer a Disability prior to the Effective
Date; or (iii) by written notice from the Company if Consultant shall take or
omit any action which, if Consultant was then employed by the Company, would be
the basis for termination of employment by the Company For Cause.
In Witness Whereof, the parties have executed this Agreement as of the
date first above written.
Golf One Industries, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Its: President
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
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