TERMINATION AGREEMENT
Exhibit 10.3
THIS TERMINATION AGREEMENT (this “Agreement”), entered into as of May 23, 2006, by and
among Golfsmith International Holdings, Inc., a Delaware corporation (“Holdings”),
Golfsmith International, Inc., a Delaware corporation (“International” and, together with
Holdings, the “Companies”), and First Atlantic Capital, Ltd., a Delaware corporation
(together with its affiliates, successors and assigns, the “Consultant”).
W I T N E S S E T H :
WHEREAS, the Companies and the Consultant are party to that certain Management Consulting
Agreement, dated as of October 15, 2002 (the “Management Agreement”); and
WHEREAS, in connection with Holdings’ proposed initial public offering of common stock (the
“IPO”), the Companies and the Consultant wish to terminate and discharge certain
obligations of the parties under the Management Agreement, subject to the limitations set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Article I.
Termination
1.1. Termination of Certain Provisions of the Management Agreement. In consideration
for the payment of the Termination Fee (as defined below) to the Consultant, the Companies and the
Consultant hereby agree to terminate Sections 1, 2, 3 and 4 of the Management Agreement effective
immediately upon the closing of the IPO (the “Closing”) and hereby agree that the Companies
and the Consultant shall have no further rights or obligations under such Sections following such
date.
1.2. Reimbursement of the Certain Expenses. The Companies and the Consultant hereby
agree to reimburse the Consultant, upon presentation of an itemized listing by the Consultant, for
its out-of-pocket expenses incurred in connection with meetings between representations of the
Consultant and representatives of the Companies in connection with the Consultant’s shareholding in
the Company; provided, however, that such obligation to reimburse shall terminate
following the date on which the Company first files a Form 10-K or Form 10-Q under the Securities
Exchange Act of 1933, as amended, or a registration statement under the Securities Act based on
which, the Consultant holds a number of shares of common stock of the Company that is less than
20.0% of the outstanding shares of common stock of the Company.
1.3. Termination Fee. The Companies hereby agree to pay to the Consultant $3,000,000 (the “Termination
Fee”) in consideration for the agreements set forth herein, such Termination Fee to be payable
in immediately available funds immediately following the Closing. For the avoidance of any doubt,
any fee or other amount paid to the Consultant pursuant to the Management
Agreement prior to the
Closing shall be non-refundable by the Consultant and any fee or other amount owed to the
Consultant pursuant to the Management
Agreement prior to the Closing shall remain payable and shall
be paid to the Consultant immediately following the Closing.
1.4. Other Provisions of the Management Agreement. Notwithstanding Section 1.1
hereof, Sections 5 through 13 of the Management Agreement shall remain in full force and effect and
shall not be amended or altered in any way hereby.
1.5. Termination. This Agreement shall terminate and cease to have any force or
effect in the event that the Closing does not occur before July 1, 2006.
Article II.
Miscellaneous
2.1. Entire Agreement; Amendment. This Agreement contains the entire understanding of
the parties with respect to the subject matter contained herein. This Agreement supersedes all
prior and contemporaneous agreements, arrangements, contracts, discussions, negotiations,
undertakings and understandings (whether written or oral) among the parties with respect to such
subject matter. This Agreement may be amended only by a written instrument executed by each of the
parties hereto.
2.2. Captions. Article and section captions used herein are for reference purposes
only, and shall not in any way affect the meaning or interpretation of this Agreement.
2.3. Governing Law; Waiver. This Agreement shall be and any disputed arising under
this Agreement shall be governed by and construed in accordance with the substantive laws of the
State of New York, without regard to conflicts of laws and such principles thereof, or any other
law that would make the laws of any jurisdiction other than the State of New York applicable
hereto. To the extent permitted by applicable law, the parties hereto waive any provision of law
that renders any term or provision of this Agreement invalid or unenforceable in any respect.
2.4. Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
2.5. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together will constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date
first written above.
| GOLFSMITH INTERNATIONAL HOLDINGS, INC. | ||||
| By: | /s/ Xxxxxxxx Xxxxx | |||
| Name: Xxxxxxxx Xxxxx | ||||
| Title: Senior Vice President, Chief Financial Officer and Treasurer | ||||
| GOLFSMITH INTERNATIONAL, INC. | ||||
| By: | /s/ Xxxxxxxx Xxxxx | |||
| Name: Xxxxxxxx Xxxxx | ||||
| Title: Vice President, Chief Financial Officer and Treasurer | ||||
| FIRST ATLANTIC CAPITAL, LTD. | ||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: Xxxx X. Xxxxxx | ||||
| Title: Principal | ||||
