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Exhibit 10(o)
PROMOTION AGREEMENT BETWEEN
XXXXXXXX, INC. AND XXXX XXXXXXX
THIS PROMOTION AGREEMENT (the "Agreement") is entered into by and between
XXXXXXXX, INC. (hereinafter the "Company" or "Xxxxxxxx") and XXXX XXXXXXX
(hereinafter "Couples"), effective November 1, 1999.
WHEREAS, this Agreement supercedes and replaces all prior agreements
between the parties including but not limited to that Promotion Agreement dated
September 1, 1994 and all amendments and addenda thereto; and
WHEREAS, the Company desires to retain Couples to provide certain
promotional and other services ("Services") and Couples is willing to provide
such Services; and
WHEREAS, the parties hereto desire to set forth in writing their
understanding and agreement as to the promotional arrangement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties do hereby agree as follows:
DEFINITIONS
As used herein, the terms set forth below shall be defined as follows:
XXXXXXXX APPAREL shall mean all XXXXXXXX(R) brand apparel contained in the
Company's present and future collections.
CONTRACT TERRITORY shall be worldwide.
DISABILITY shall mean mental or physical illness or medical condition
rendering Couples incapable of fulfilling his obligations under this Agreement.
ENDORSEMENT shall include only the right to use the name, any nickname,
initials, autograph, facsimile signature, photograph, portrait, likeness, and/or
endorsement of Couples.
TERMS OF RELATIONSHIP
1. GRANT AND ACCEPTANCE. The Company hereby retains Couples to provide the
below-described Services and Couples agrees to provide the Services upon
the terms and conditions herein set forth.
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2. TERM. Except as otherwise provided herein, this Agreement shall commence
effective as of November 1, 1999, and shall automatically terminate on
October 31, 2011 (the "Term").
SERVICES
Couples shall furnish the following Services:
1. ENDORSEMENT. Worldwide Endorsement of the following products:
x. Xxxxxxxx(R)Apparel;
x. Xxxxxxxx(R)headwear (through advertising media);
c. A shoe line under the trademark "Xxxxxxxx," "Couples," or "Xxxx
Xxxxxxx" or a combination thereof.
Couples agrees that the Company may use the Endorsement in connection with
advertisement, promotion, and sale of Xxxxxxxx Apparel, headwear, shoes and
accessories in the Company's present and future collections.
2. GOLF TOURNAMENTS. Couples agrees to play a minimum of fifteen (15)
regularly scheduled and sanctioned U.S. and/or international competitive golf
events during each November 1 through October 31 twelve-month period through and
including October 31, 2004 and a mutually agreed schedule no less than a
reasonable tour exposure during the next seven years of this Agreement or
through and including 2011. Couples and the Company agree that Couples may in
his sole discretion elect to play fewer regularly scheduled and sanctioned golf
events during the term of this Agreement, in which event his $1,000,000 annual
cash compensation as described herein below shall be reduced proportionately.
For example, if he plays in 75% of the required events, his $1,000,000 annual
cash compensation payable under "Compensation" Paragraph 1 for that year shall
be reduced by 25%.
3. XXXXXXXX APPAREL AND PRODUCTS. Couples shall wear the Xxxxxxxx Apparel and
shoes; provided however that the shoes, in Couples' opinion shall be of a
quality and comfort level that Couples can reasonably and comfortably wear to
play on the PGA Tour, and shall also use other related products of the Company
while competing in all tournaments and other professional or personal golf
outings, and during any clinics or instruction given by Couples, with the
understanding that while participating in certain team events (i.e., Ryder Cup,
World Cup) Couples will wear a team uniform which may or may not be Xxxxxxxx
Apparel.
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4. LOGOS. Except as otherwise provided herein, Couples agrees that such
products may prominently bear the Company's logos and shall not bear any other
logos without the Company's prior written approval, which approval shall not be
unreasonably withheld. Notwithstanding the foregoing, the Company hereby agrees
that (a) Couples may wear the "Cadillac" logo on the left chest of apparel or
such other sponsor's logo in the event of the termination of Couples'
endorsement agreement with Cadillac, and (b) Couples may wear a logo other than
the Company's logo on the front panel of headwear, provided, however that such
other logo must be approved by the Company prior to such use, which approval
shall not be unreasonably withheld. Couples agrees that he will use his best
efforts to obtain the agreement of his caddy to wear the Xxxxxxxx hats while
caddying for Couples.
5. SHOE LINE. The parties agree that as a part of Couples' obligations with
respect to an Xxxxxxxx shoe line, whether a current licensee or future
licensee(s), that Couples will endorse the shoe line in advertising, print media
and Xxxxxxxx'x marketing campaigns.
6. PHOTOGRAPHY AND PROMOTION SESSIONS. Couples agrees to make himself
available if requested in advance by the Company, three days per year, at times
and places mutually convenient for Couples and the Company, but in no event at
times which adversely impact on Couples' playing schedule, for personal
appearances and/or photography sessions and other assistance to the Company in
connection with the Endorsement and preparation of advertising and promotional
materials featuring the Xxxxxxxx Apparel, headwear, shoes and accessories. The
Company agrees that any photoshoots scheduled for overseas shall be scheduled
____ months in advance and shall not require Couples to travel overseas at times
which are inconvenient to his PGA Tour schedule. Couples and the Company agree
that if Couples is not available for any or all of the scheduled photo/promotion
sessions (three per year) that Couples compensation will be reduced by One
Hundred Thousand Dollars ($100,000.00) per one (1) day session that Couples was
unable to schedule for an annual maximum of Three Hundred Thousand Dollars
($300,000.00). Couples shall have the right to review and reject in good faith
the use of any such advertising and promotional materials.
7. INDEPENDENT CONTRACTOR. Couples shall furnish the Services as an
independent contractor and not as an employee of the Company, and nothing herein
shall be construed to constitute Couples as an employee of the Company, it being
intended that each party shall be responsible for its or his own actions.
Couples has no power or authority to act for, represent, or bind the Company in
any manner and shall not hold himself out as an employee of the Company. Couples
shall not be entitled to any benefits provided by the Company to its employees,
including, for example, workers' compensation insurance, vacation or sick pay.
Couples shall pay (when and as due) any and all taxes incurred as a result of
his compensation. Couples shall indemnify the Company for any claims,
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losses, costs, fees, liabilities, damages or injuries suffered by the Company
which arise out of Couples' breach of this section.
INDEMNIFICATION
Couples shall not be liable for any contractual obligations of the Company
resulting directly or indirectly from the aforesaid Endorsement of Xxxxxxxx
Apparel. The Company shall protect, indemnify and hold harmless Couples against
any and all claims with respect to such obligations, including indemnification
of legal expenses incurred in defense of all such claims. Further, the Company
shall furnish Couples with prompt notice of any claim or legal proceedings
initiated against Couples, which are based upon the rights furnished in the
performance or attempted performance of this Agreement. Couples shall have the
right to select legal counsel to represent him in the event of any litigation
regarding his Endorsement of Xxxxxxxx Apparel, and the Company shall pay the
costs of such legal representation.
COMPENSATION
As full compensation for the Services, the Company shall compensate Couples
as follows:
1. CASH COMPENSATION. Upon execution and delivery of this Agreement, the
Company shall pay Couples the sum of $166,667, which the parties agree
represents the unadjusted aggregate cash compensation amount payable to Couples
for the period beginning September 1, 2000 and ending October 31, 2000. Except
as otherwise adjusted as provided herein, the Company shall pay Couples annual
cash compensation of $1,000,000 on each November 1 during the Term of this
Agreement (commencing November 1, 2000, with the last payment on November 1,
2010 if the Agreement runs it full Term). The parties also agree that the
Company shall pay Couples additional annual cash compensation of $157,000 on
each November 1 during a portion of the Term of this Agreement (commencing
November 1, 1999, with the last payment date being November 1, 2004). These
latter payments are in lieu of cash compensation amounts of $250,000 which,
under prior agreements, were to commence on September 1, 2011 and continue until
Couples' death.
Both of the above-specified annual payment amounts are deemed "earned" by
Couples in monthly installments even though prepaid on November 1 of each
Agreement year. Thus, to fully "earn" each annual installment, Couples needs to
perform his obligations under this Agreement for the relevant twelve-month
period following payment and not be in material breach.
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In the event that an adjustment is made to the $1,000,000 annual payment
(as contemplated under Section 2 of "Services") or if an adjustment is needed
for "unearned" amounts because the Agreement is terminated for any reason prior
to October 31, 2011, the Company may elect in its discretion either to reduce
future payments by the appropriate and proper amount of the adjustments or to
obtain prompt reimbursement of the adjustments directly from Couples.
2. REIMBURSEMENT OF EXPENSES. The Company shall reimburse Couples for
expenses authorized by the Company and incurred by Couples in connection with
the Services to the Company. Couples shall furnish the Company with an itemized
statement from time to time, together with, whenever possible, actual bills,
receipts, and other evidence of expenditure. Couples shall be reimbursed within
thirty (30) days after receipt by the Company of such itemized statements and
attachments.
3. APPAREL. The Company shall furnish Couples with sufficient apparel and
other products to be used by him in connection with the Services and for the
personal use of Couples and his immediate family. The Company will also consider
in good faith Couples' requests for apparel and other products for his friends
and business associates.
4. SIGNING BONUS. As consideration for entering into this Agreement and in
addition to any other compensation due to Couples under this Agreement, Xxxxxxxx
shall pay Couples the sum of $500,000. The "Signing Bonus" shall be paid in five
(5) equal annual installments of $100,000 each payable on the 5th day of January
2001, 2002, 2003, 2004 and 2005; provided however, that to fully "earn" each
annual installment of the Signing Bonus, Couples must have performed his
obligations under this Agreement up to the date of the relevant installment due
date and not be in material breach.
5. WAIVER AND MUTUAL RELEASE. As consideration for entering into this
Agreement, Couples hereby waives any guarantees or contingencies as to options
previously granted, and the parties each mutually release each other from any
and all claims or lawsuits they may have against each other which arise out of
or are based on any event occurring prior to the date of signing this Agreement.
6. SHOE LINE. The Company agrees that upon licensing the Xxxxxxxx Shoe Line,
Couples will endorse the shoes through all forms of marketing media and in
exchange for said endorsement Xxxxxxxx will assist Couples in negotiating
compensation based on a percentage of net sales.
7. TIME OF THE ESSENCE. The Company and Couples acknowledge that time is of
the essence in the payment of all amounts hereunder. For the purpose of this
Agreement, all payments not received within thirty (30) days of the date due
shall be deemed "past due." Such past due payments shall bear interest at a
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rate of two percent (2%) per month or the maximum rate permissible by law,
whichever is less. The imposition of interest provided for in this paragraph
shall be in addition to any other funds payable under this Agreement or
otherwise. Accordingly, neither party shall be precluded from exercising any
other remedies, whether at law or in equity, to enforce the terms of this
Agreement.
DISABILITY
In the event Couples shall become disabled and unable to compete on the PGA
Tour as required herein during the Term of this Agreement, the Company shall pay
Couples disability compensation as follows:
a. In the event Couples is temporarily disabled, such that he is unable
to play in the number of tournaments required in this Agreement, the
$1,000,000 annual cash compensation, in the Company's sole discretion,
shall be reduced proportionately, e.g., if he plays in 75% of the
required events, his $1,000,000 annual cash compensation for that year
shall be reduced by 25%.
b. In the event Couples is permanently disabled, the annual cash
compensation shall be reduced by one-half (1/2).
Couples will purchase disability insurance payable to Couples from an
insurer and on terms which are mutually acceptable to Couples and the Company.
The parties understand that said policy will have an exclusion for injuries to
Couples' back. Should Couples become disabled due to his back problem, (which is
an exclusion to the policy) the Company `s payments in regard to this Agreement
will remain in effect. Upon receipt of proof of payment of the disability
insurance premium, the Company will pay Couples additional cash compensation in
the amount of the disability insurance premium. The Company's obligations
pursuant to this Section shall be reduced in whole or in part by the amount of
any insurance proceeds received by Couples from the disability insurance.
Couples' failure to obtain a policy shall relieve the Company of its obligations
to make any disability or premium payments under this "Disability" Section.
COVENANT NOT TO COMPETE
During the Term of this Agreement, Couples shall not enter into any
activity, employment, independent contract, or other business arrangement, which
conflicts or competes with the Company's apparel and shoe business or Couples'
obligations under this Agreement. Couples shall submit to the Company for its
approval or disapproval any contemplated activity, employment, independent
contract, or other business arrangement, which may conflict or
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compete with the Company's business or Couples' obligations under this Agreement
prior to entering into such arrangement.
CONFIDENTIALITY/NONDISCLOSURE
Couples recognizes and acknowledges that the business of the Company
involves certain confidential and proprietary information which must be
protected in order to ensure the success and survival of the Company. Couples
agrees that he will not disclose such proprietary information or any part
thereof to any third party except for purposes within Couples' scope of duties
and responsibilities hereunder or as specifically authorized or agreed to in
writing by the Company. In the event of actual or threatened breach of this
provision, the Company, in addition to any other remedies afforded in equity or
law, shall be entitled to injunctive relief restraining Couples from breaching
this provision. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages, costs, and attorney fees. Couples
agrees that this provision shall continue perpetually and shall survive the
termination of this Agreement.
TERMINATION
1. This Agreement may be terminated by either party in the following
circumstances:
a. Upon mutual consent of the Company and Couples;
b. Couples' death;
c. Couples' repeated or continuing misconduct of a very serious
nature which subjects Couples to continued public ridicule
causing the loss of positive public image, provided, however, the
Company shall give Couples' notice of such misconduct and Couples
shall have thirty (30) days in which to correct and cure such
misconduct.
d. Couples' conviction or plea of guilty or no contest to a felony
involving moral turpitude;
e. Institution of insolvency or bankruptcy proceedings by or against
the Company;
f. Failure to comply with the terms and conditions of this Agreement
after being given notice thereof and, where applicable, a
reasonable opportunity to cure the failure.
ASSIGNMENT
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Couples acknowledges that the Services to be rendered by him are unique and
personal. Accordingly, Couples shall not assign any of his rights or delegate
any of his duties or obligations under this Agreement without the express
written consent of the Company, except that Couples shall have the right to
assign the financial benefits due him hereunder to another business or corporate
entity, and the Company hereby consents to such assignment. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of the Company.
ARBITRATION
Unless otherwise mutually agreed to in writing by the Company and Couples,
any controversy or claim arising out of or related to this Agreement, or the
breach thereof, shall be settled by arbitration in accordance with the Rules of
the American Arbitration Association or any successor. Each party hereto shall
select one arbitrator and the two so selected shall select a third. Failing the
selection of an arbitrator by either party or by the two so selected, the claim
or controversy shall be settled by the American Arbitration Association upon the
application of either party. Judgment upon an award of a majority of the
arbitrators filed in a court of competent jurisdiction shall be binding. The
parties hereby incorporate the provisions of Section 1283.05 of the California
Code of Civil Procedure.
MISCELLANEOUS
A. NOTICES. Any and all notices required pursuant to this Agreement shall
be deemed given if in writing and delivered in person, sent by
certified or registered mail, return receipt requested, or sent by
telefax numbers set forth below or such other addresses and telefax
numbers as the parties may direct by notice given as herein provided:
XXXXXXXX, INC.
Attention: President & Chief Executive Officer
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
XXXX XXXXXXX
c/o Players Group, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
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Telefax: (000) 000-0000
B. GOVERNING LAW. This Agreement and its formation, operation, and
performance shall be governed, construed, performed, and enforced in accordance
with the internal laws of the State of California.
C. JURISDICTION AND VENUE. For the purpose of any dispute arising
hereunder, jurisdiction and venue shall lie in the appropriate court or
arbitration in California.
D. ATTORNEY FEES AND EXPENSES. In any legal action or alternative dispute
resolution instituted to interpret or enforce the terms and/or conditions of
this Agreement, the prevailing party shall be entitled to recover reasonable
attorney fees and expenses.
E. WAIVER. A waiver by either party of any provision of this Agreement
shall not be deemed a waiver of any other portion of this Agreement. Failure to
require performance of any provision of this Agreement shall not be deemed a
continuing waiver of that provision or any other provision of this Agreement.
F. SEVERABILITY. In the event that any provision or any portion of any
provision of this Agreement shall be held invalid, illegal or unenforceable, the
remainder of this Agreement shall remain valid, enforceable, and in effect.
G. CAPTION REFERENCES. All item headings and captions are for reference
purposes only and do not in any way modify or limit the provisions set forth
thereunder.
H. ENTIRE AGREEMENT. This Agreement contains the entire understanding and
agreement of the parties and supersedes any prior understandings and/or
agreements of the parties. This Agreement may not be modified or amended without
the written consent of both Couples and the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date indicated below, effective the date first above mentioned.
COMPANY
XXXXXXXX, INC.,
a Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxx, Xx.
President & Chief Executive Officer
COUPLES
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
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