AGREEMENT AS TO ASHWORTH, INC. EXECUTIVE EMPLOYMENT AGREEMENT WITH RANDALL L. HERREL, SR.
Exhibit 10.1
This Agreement is effective as of September 12, 2006 (the “Effective Date”) and pertains to
and confirms certain understandings regarding, and amends, that certain Second Amended and Restated
Executive Employment Agreement dated February 28, 2006 (the “Employment Agreement”) between
XXXXXXXX, INC. (the “Company”) and XXXXXXX X. XXXXXX, XX. (“Xxxxxx”) and Xxxxxx’x continuing
employment thereunder.
1. Employment. The Company shall continue to employ Xxxxxx as its Chief Executive
Officer, and Xxxxxx accepts such continued employment, upon the terms and conditions set forth
herein and the Employment Agreement (as modified pursuant to this Agreement). On and after the
Effective Date, Xxxxxx shall no longer serve as Chairman of the Board or President of the Company.
2. Term. Consistent with the Resignation (attached as Exhibit A hereto) which
Xxxxxx has executed and delivered concurrently with this Agreement, the term of Xxxxxx’x employment
shall continue until, and then automatically terminate, on October 17, 2006, unless earlier
terminated as provided herein (the “Remaining Term”).
3. Authority and Duties. Xxxxxx shall report directly to the Chairman of the Board
during the Remaining Term. Xxxxxx’x scope of authority and duties during the Remaining Term shall
be as determined in the discretion of the Chairman of the Board (and may be reduced from the scope
of authority and duties of Xxxxxx prior to the Effective Date), but any new or expanded duties of
Xxxxxx shall be consistent with the duties normally associated with the position of a chief
executive officer.
4. Employment Compensation During Remaining Term. Xxxxxx’x salary and employee
benefits (and executive perquisites to the extent Xxxxxx has the same) shall continue during the
Remaining Term at the same levels as were in effect immediately prior to the Effective Date.
Section 14 (Expenses) of the Employment Agreement also remains in full force and effect.
5. Severance.
A. Resignation Effective October 17, 2006 or for Constructive Discharge. If Xxxxxx’x
employment terminates on October 17, 2006 in accordance with the Resignation executed and delivered
concurrently herewith or earlier if Xxxxxx resigns for Constructive Discharge (as defined
hereinbelow), Xxxxxx shall immediately be entitled to receive severance compensation and benefits
as follows, and such severance payments and benefits shall be immediately payable upon termination
(except as may be provided in Section 16 of the Employment Agreement) notwithstanding any other
employment that Xxxxxx may find or have after such termination:
i. Cash compensation in an amount equal to Six Hundred Twenty Nine Thousand Three
Hundred Forty Nine Dollars ($629,349.00);
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ii. All stock options owned by Xxxxxx listed on Exhibit B hereto, whether
granted pursuant to the Employment Agreement or otherwise and regardless of their scheduled
vesting dates, will vest immediately upon termination of Xxxxxx’x employment, and will be
exercisable for a period of two years following the date of termination, provided that no
option may be exercised beyond its original expiration date;
iii. The following employee benefits for one year after the date of termination: (1)
medical insurance (including Exec-u-care), dental insurance, life insurance and disability
insurance, in such forms as exist on the date hereof; (2) an the automobile allowance at the
rate of $1,250.00 per month; (3) a clothing allowance at the rate of $100.00 per month; and
(4) monthly dues for the current country club of which Xxxxxx is a member (but not special
assessments). Xxxxxx shall not receive any other expense reimbursement or any other
benefits after his employment termination, including, without limitation, an office and
secretarial support; and
iv. Reimbursement for accrued but unpaid vacation and amounts reimbursable under
Section 14 (Expenses) of the Employment Agreement.
B. Termination Without Cause/Death/Disability. If Xxxxxx’x employment is terminated
without Cause (as defined hereinbelow) by the Company or by death or disability prior to October
17, 2006, Xxxxxx shall be entitled to receive severance compensation and benefits as follows:
i. Cash compensation in an amount equal to Six Hundred Eight Thousand Nine Hundred
Seventy Three Dollars ($608,973.00) plus Five Hundred Eighty Two Dollars ($582.00) per day
Xxxxxx is employed by the Company after the Effective Date (including weekends and holidays)
until the date of such termination;
ii. All stock options owned by Xxxxxx, whether granted pursuant to this Agreement or
otherwise and regardless of their scheduled vesting dates, will vest immediately upon
termination of Xxxxxx’x employment, and will be exercisable for a period of two years
following the date of termination, provided that no option may be exercised beyond its
original expiration date;
iii. The following employee benefits for one year after the date of termination: (1)
medical insurance (including Exec-u-care), dental insurance, life insurance and disability
insurance, in such forms as exist on the date hereof; (2) an the automobile allowance at the
rate of $1,250.00 per month; (3) a clothing allowance at the rate of $100.00 per month; and
(4) monthly dues for the current country club of which Xxxxxx is a member (but not special
assessments). Xxxxxx shall not receive any other expense reimbursement or any other
benefits after his employment termination, including, without limitation, an office and
secretarial support; and
iv. Reimbursement for accrued but unpaid vacation, and amounts reimbursable under
Section 14 (Expenses) of the Employment Agreement.
C. Termination For Cause/Earlier Resignation for Other than Constructive Discharge.
In the event that Xxxxxx’x employment is terminated prior to
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October 17, 2006 as a result of (i) a termination for Cause by the Company, or (ii) Xxxxxx’x
earlier resignation for any reason other than Constructive Discharge (as defined hereinbelow),
Xxxxxx’x entitlement (if any) to severance compensation and benefits shall be in accordance with
and governed by the relevant provisions of the Employment Agreement and without any regard
whatsoever to the provisions of Sections 5(A) or 5(B) of this Agreement. Paragraph 15(e) of the
Employment Agreement (regarding Resignation in the Event of Change of Circumstances) and the
definition of a Change in Duties, Compensation or Benefits contained in Exhibit A thereto are
hereby deleted in their entirety, it being the intent of the parties that the provisions herein
regarding Constructive Discharge replace such provisions in their entirety.
D. Satisfaction of Severance Obligations. Notwithstanding anything to the contrary in
the Employment Agreement, the parties specifically acknowledge and agree that if the Company is
obligated to provide severance compensation and post-termination benefits to Xxxxxx pursuant to
Section 5(A) or Section 5(B) above, the provisions of Section 5(A) or 5(B) of this Agreement, as
relevant, shall constitute the entirety of the Company’s obligations to make severance payments and
provide post-termination benefits, and no separate or additional severance compensation or
post-termination benefits shall be payable or due under the terms of the Employment Agreement or
otherwise; provided, however, that this Section shall in no way limit any and all
of Xxxxxx’x right or the Company’s obligations to defend and indemnify Xxxxxx against a claim
arising out of or relating to Xxxxxx’x service as an employee or Director of the Company.
E.
Definitions.
A “termination without Cause” shall be deemed to have occurred if Xxxxxx is terminated for any
reason other than his (i) fraud, (ii) misappropriation of or intentional material damage to the
property or business of the Company (including its subsidiaries), (iii) conviction of a felony or
(iv) the willful and deliberate refusal of Xxxxxx to comply with a lawful, written instruction of
the Chairman of the Board, which refusal is not remedied by Xxxxxx within a reasonable period of
time after his receipt of written notice from the Company identifying the refusal.
A “Constructive Discharge” shall exist only if both of the following conditions are met:
x. Xxxxxx is assigned material new or additional responsibilities not consistent with
the position of a chief executive officer; and
ii. The Chairman of the Xxxxxxxx Board of Directors ceases to be one of the following
persons: Xxxxx Xxxxx, Xxxxx X’Xxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxxxxxx or another person
acceptable to Xxxxxx.
6. Section 409A Compliance. Section 16 of the Employment
Agreement shall remain in full force and effect.
7. Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and delivered in person or sent by registered or certified mail to
Xxxxxx’x residence in the case of Xxxxxx or to its principal office in the case of the Company.
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8. Arbitration. Any dispute arising out of this Agreement shall be resolved by
binding arbitration at San Diego, California pursuant to the rules of the American Arbitration
Association. In any such proceeding, the prevailing party shall be entitled to an award of its
reasonable attorneys fees and expenses.
9. Waiver. The waiver of any provision of this Agreement shall not operate or be
construed as a waiver of any other provision of this Agreement. No waiver shall be valid unless in
writing and executed by the party to be charged therewith.
10. Severability/Modification. In the event that any clause or provision of this
Agreement shall be determined to be invalid, illegal or unenforceable, such clause or provision may
be severed or modified to the extent necessary, and, as severed and/or modified, this Agreement
shall remain in full force and effect.
11. 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.
Xxxxxx acknowledges that the services to be rendered under this Agreement are unique and personal.
Accordingly, Xxxxxx may not assign his rights and obligations under this Agreement.
12. Amendment. This instrument may not be amended except by an agreement in writing
signed by both parties.
13. Change in Control Agreement. Nothing contained herein shall have any effect on
the Amended and Restated Agreement re Change in Control dated as of February 28, 2006 by and
between Xxxxxx and the Company, and the parties hereto acknowledge that such agreement is in full
effect and binding on the parties thereto.
14. Governing Law and Jurisdiction. This Agreement shall be interpreted, construed,
and enforced under the laws of the State of California. The courts and authorities of the State of
California shall have sole jurisdiction and venue for purposes of enforcing the arbitration
agreement above.
15. Authorization to Sign. The undersigned represents that he is properly authorized
to legally bind Xxxxxxxx, Inc., to this Agreement and to sign this Agreement on behalf of Xxxxxxxx,
Inc.
[Remainder of page left blank intentionally, signatures on following page]
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IN WITNESS WHEREOF, the parties have executed this Agreement the date and year indicated
above.
| “COMPANY” XXXXXXXX, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Chairman of the Board | |||
| “XXXXXX” XXXXXXX X. XXXXXX, XX. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx, Xx. | |||
| Xxxxxxx X. Xxxxxx, Xx. | ||||
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EXHIBIT A
Date:
|
September 12, 2006 | |
To:
|
Board of Directors | |
| Xxxxxxxx, Inc. | ||
From:
|
Xxxxxxx X. Xxxxxx, Xx. | |
Subject:
|
Resignation |
This letter is to confirm my resignation as a Director and Chief Executive Officer of Xxxxxxxx,
Inc. (the“Company”), effective as of October 17, 2006, together with all other
employment and trustee positions held with Xxxxxxxx, Inc. and any of its subsidiaries or with their
respective employee plans.
This letter is also to confirm that my resignation is not a result of any material disagreement
with the Company as to the Company’s operations, policies or practices.
/s/ Xxxxxxx X. Xxxxxx, Xx. |
||
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EXHIBIT B
Optionee Statement
|
Xxxxxxxx, Inc. |
Exercisable as of 8/31/2006
Xxxxxxx X. Xxxxxx Xx
| Date | ||||||||||||||||||||||||||
| Grant | Expiration | Grant | Granted or | Grant | Transferred | |||||||||||||||||||||
| Date | Date | Plan ID | Type | Transferred To | Price | Out | Outstanding | Exercisable | ||||||||||||||||||
10/2/1996 |
12/31/2003 | 3 | Incentive | 16,666 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
10/2/1996 |
12/31/2003 | 3 | Non-Qualified | 33,334 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
10/2/1996 |
12/31/2005 | 3 | Incentive | 16,666 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
10/2/1996 |
12/31/2004 | 3 | Non-Qualified | 83,334 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
10/2/1996 |
12/31/2004 | 3 | Incentive | 16,666 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
10/2/1996 |
6/14/2003 | 3 | Non-Qualified | 33,334 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
10/2/1996 |
6/14/2003 | 3 | Incentive | 16,666 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
10/2/1996 |
12/31/2005 | 3 | Non-Qualified | 83,334 | $ | 6.0000 | 0 | 0 | current | |||||||||||||||||
2/6/1997 |
7/31/2002 | 3 | Non-Qualified | 6,094 | $ | 5.7500 | 0 | 0 | current | |||||||||||||||||
2/25/1997 |
12/31/2004 | 3 | Non-Qualified | 100,000 | $ | 6.5000 | 0 | 0 | current | |||||||||||||||||
11/11/1997 |
11/10/2003 | 3 | Incentive | 204 | $ | 10.1875 | 0 | 0 | current | |||||||||||||||||
11/11/1997 |
11/10/2003 | 3 | Non-Qualified | 19,796 | $ | 10.1875 | 0 | 0 | current | |||||||||||||||||
11/11/1997 |
11/10/2004 | 3 | Non-Qualified | 20,000 | $ | 10.1875 | 0 | 0 | current | |||||||||||||||||
11/11/1997 |
11/10/2005 | 3 | Non-Qualified | 20,000 | $ | 10.1875 | 0 | 0 | current | |||||||||||||||||
12/11/2000 |
12/11/2010 | 2KEIP | Non-Qualified | 40,865 | $ | 6.8750 | 40,865 | 40,865 | current | |||||||||||||||||
12/11/2000 |
12/11/2010 | 2KEIP | Incentive | 43,635 | $ | 6.8750 | 43,635 | 43,685 | current | |||||||||||||||||
12/22/2003 |
12/22/2013 | 2KEIP | Incentive | 17,713 | $ | 8.0900 | 17,713 | 17,713 | current | |||||||||||||||||
12/21/2004 |
12/21/2014 | 2KEIP | Non-Qualified | 25,980 | $ | 10.7500 | 25,980 | 25,980 | current | |||||||||||||||||
12/21/2004 |
12/21/2014 | 2KEIP | Incentive | 19,020 | $ | 10.7500 | 19,020 | 19,020 | current | |||||||||||||||||
Optionee Totals |
613,307 | 147,213 | 147,213 | |||||||||||||||||||||||
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