EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), is dated as of ______, 1996,
between Golden Bear Golf, Inc., a Florida corporation (the "Company"), and
Xxxxxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Company intends to undertake an initial public offering of
the Company's Class "A" Common Stock; and
WHEREAS, contingent upon the closing of the initial public offering,
the Company desires to employ the Executive in an executive capacity and the
Executive desires to accept such employment, all upon the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth in this Agreement, the Company and the Executive agree as
follows:
1. TERM OF EMPLOYMENT. The Company shall employ the Executive, and the
Executive accepts such employment, on the terms and subject to the conditions
set forth in this Agreement. The Executive shall be employed for an initial term
of five (5) years beginning as of the "Effective Date" (the "Initial Term"). The
Effective Date shall be the date of the Company's initial public offering of
Class A Common Stock. At the conclusion of the Initial Term, or any Renewal Term
(as defined below), the Executive's employment shall automatically be extended
for an additional term of two (2) years (the "Renewal Term"), unless at least
one hundred and eighty (180) days prior to expiration of the Initial Term or any
Renewal Term either the Executive or the Company gives notice to the other that
the Executive or the Company does not wish to extend the Executive's employment.
The Initial Term and any Renewal Term shall be referred to herein as the "Term".
2. SERVICES.
2.1 OFFICE AND DUTIES. During the Term, the Executive shall
serve as President and Chief Executive Officer of the Company and shall have
powers and authority commensurate with such positions and such other powers and
authority as may be assigned to him by the Company's Board of Directors or any
committee thereof from time to time.
2.2 BEST EFFORTS. During the Term, the Executive shall devote
a minimum of eighty percent (80%) of his time and energies during business hours
to the business of the Company and shall use his best efforts, skills and
abilities to promote the interests of the Company.
2.3 SERVICE FOR RELATED ENTITIES. The parties acknowledge that
during the Term of this Agreement the Executive intends to devote approximately
twenty percent (20%) of his business time and efforts on behalf of Golden Bear
International, Inc. and its affiliates. The Company acknowledges such activities
shall not violate any of the provisions of this Agreement, and the Company
waives any claims against the Executive arising from his performance of his
duties on behalf of such entities.
3. COMPENSATION.
3.1 CASH COMPENSATION. During the Term, the Executive shall
receive an initial base salary at the annual rate of $450,000 ("Base Salary"),
payable in accordance with the Company's normal payroll practices. The Base
Salary shall be subject to increase from time to time as may be determined upon
a review of the Executive's performances to be undertaken by the Compensation
Committee of the Board of Directors at least once annually ("Compensation
Committee").
3.2 INCENTIVE AWARD PAYMENTS.
(a) For each fiscal year during the Term, the Executive shall
be entitled to receive a cash award (the "Bonus") based on the Company's Annual
Pre-Tax Income relative to its Annual Pre-Tax Income as projected in the
Business Plan ("Business Plan") approved by the Company's Board of Directors
with respect to such fiscal year. For each fiscal year, "Annual Pre-Tax Income"
shall be the "Income Before Provision for Income Taxes and Extraordinary Items"
as set forth in the Company's audited Consolidated Statement of Operations. The
Compensation Committee shall set in advance of each fiscal year the formula for
determining the Bonus for such fiscal year, after the Compensation Committee
consults with the Executive and the Board of Directors approves the Business
Plan. Upon the termination of the Executive's employment for any reason, the
Executive shall be entitled to receive any Bonus earned by the Executive with
respect to the preceding fiscal year (even if the payment of such Bonus has been
deferred into the current fiscal year).
(b) If the Executive's employment with the Company shall
terminate after the commencement of, but prior to the expiration of, any fiscal
year (except for termination for Cause, as defined in Section 5.3, then the
Bonus payable to the Executive for services rendered during such fiscal year
shall be equal to the Bonus for such fiscal year determined as described above,
multiplied by a fraction, the numerator of which shall be the number of days
during such fiscal year that the Executive was an employee of the Company, and
the denominator of which shall be 360.
3.3 SUPPLEMENTAL INCENTIVE AWARD PAYMENTS. Each year during
the Term, the Compensation Committee may, but shall be under no obligation to,
establish a supplemental incentive award pool, consisting of a percentage of the
salaries of the executive officers of the Company determined by the Compensation
Committee after consulting with management of the Company, which is to be paid
out to executives of the Company provided the Company's performance meets or
exceeds annual objectives predetermined by the Compensation Committee. It is
anticipated that if such a pool is established, the objectives would consist
primarily of the Company's meeting operating income targets, but also may
consist of the Company's meeting sales targets, increasing its revenue base
and/or other factors. The Executive's payment from such an incentive award pool
relative to other Company executives is to be weighted based upon the
Executive's position in the Company and contribution towards the Company's
performance relative to the annual objectives. In the event the Compensation
Committee determines that such objectives are met for a fiscal year and that it
is
2
appropriate to establish such a pool, the Chairman of the Board shall be
entitled to allocate the incentive award pool among the Executive and other
executive officers of the Company, provided that all such awards must be
approved by the Compensation Committee, which may revise the awards at its
discretion.
3.4 STOCK OPTIONS. On the Effective Date, the Company shall
grant to the Executive options to purchase 96,000 shares of the Class A Common
Stock of the Company pursuant to the terms of the Stock Option Agreement
attached hereto as Exhibit A.
3.5 ADDITIONAL COMPENSATION. Nothing in this Agreement shall
be deemed to prohibit the Compensation Committee from granting the Executive
such increased compensation, incentive awards or other benefits as the
Compensation Committee from time to time may determine, provided that the
parties recognize and acknowledge that the Compensation Committee shall be under
no obligation to grant any such increase and shall have full discretion in
making any determination with respect thereto. The Compensation Committee shall
also determine what allowances to provide Executive, including without
limitation, auto allowance, allowance for membership in country clubs, and
allowance for increased and additional benefits, in addition to those benefits
for which Executive is eligible under Section 4.2, below; provided however, that
Executive shall receive benefits at least equal to those received by Executive
from Golden Bear International, Inc. prior to the Effective Date.
4. REIMBURSEMENT OF EXPENSES; BENEFITS.
4.1 REIMBURSEMENT OF EXPENSES. Upon submission of appropriate
documentation and in accordance with such guidelines as may be established from
time to time by the Company's Board of Directors, the Company shall reimburse
the Executive for all reasonable business expenses incurred by the Executive in
the performance of his duties under this Agreement.
4.2 EMPLOYEE BENEFIT PLANS AND PROGRAMS. During the Term, the
Executive shall also be entitled to participate in all group life insurance,
pension, medical insurance, hospitalization, disability and other similar
employee benefit plans and programs of the Company, subject to eligibility and
vesting requirements from time to time in effect, which at any time during the
Term may be offered by the Company to its executive officers generally, provided
that nothing in this Agreement shall require the Company at any time to create
or continue any such plan or program or to fix, amend or retain eligibility
requirements so as to include the Executive.
4.3 VACATIONS. The Executive shall be entitled to that amount
of paid vacation during each calendar year as is the Company's policy for
executive employees, taking into consideration the reasonable business needs of
the Company. The Executive may take vacation at such times as the Executive
elects, upon reasonable advance notice to the Company, provided that the
Executive takes no more than two consecutive weeks of vacation and provided
further that such vacation does not affect the operations and business needs of
the Company. The Executive shall be permitted to accrue vacation time in
accordance with the Company's vacation accrual policy for executive employees in
effect at the time the vacation is accrued.
3
5. TERMINATION. The Executive's employment under this
Agreement may be terminated prior to the end of any Term by the Company or
the Executive without any breach of this Agreement under the following
circumstances:
5.1 DEATH. The Executive's employment under this Agreement
shall terminate upon the Executive's death.
5.2 DISABILITY. The Company may terminate the Executive's
employment if the Executive, due to physical or mental injury or illness, is
unable to perform the Executive's duties under this Agreement for an aggregate
of 135 days out of any 270 day period.
5.3 CAUSE. The Company may terminate the Executive's
employment under this Agreement for "Cause". "Cause" shall mean the following:
(a) action by the Executive involving willful misconduct, dishonesty or gross
neglect which has a materially adverse effect on the business or reputation of
the Company; (b) Employee's conviction of a crime punishable by death or
imprisonment of one year or more under the laws of the jurisdiction in which
convicted, or of a crime involving theft, misappropriation of funds, fraud or
deception, regardless of the punishment; or (c) the refusal or repeated failure
of the Executive to discharge his duties under Section 2 in all material
respects (other than any such refusal or failure resulting from the Executive's
incapacity due to physical or mental injury or illness) where such alleged
refusal or failure is not remedied within fifteen (15) days after the date of
the Executive's receipt of a written demand from the Company to remedy such
alleged refusal or failure, which demand shall specify the nature of such
refusal or failure.
5.4 GOOD REASON. The Executive may terminate his employment
under this Agreement for "Good Reason". "Good Reason" means: (a) any removal of
the Executive from the position of President and Chief Executive Officer of the
Company; (b) a failure by the Company to pay when due all compensation provided
for in this Agreement; or (c) a material failure by the Company to comply with
any of the other material provisions of this Agreement; provided in each case
that the Company has not remedied the breach underlying such Good Reason within
fifteen (15) days after notice thereof.
5.5 NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Company or by the Executive (other than termination pursuant
to Section 5.1 above) shall be communicated by written notice of termination to
the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon, and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination.
5.6 DATE OF TERMINATION. The "Date of Termination" shall mean:
(i) if the Executive's employment is terminated by his death, the date of death,
(ii) if the Executive's employment is terminated pursuant to Section 5.2 above,
30 days after Notice of Termination is given (provided that the Executive shall
not have returned to the performance of his duties on a full time basis during
such 30 day period), and (iii) if the Executive's employment is terminated for
any reason, the date on which a Notice of Termination is given.
4
5.7 SUSPENSION OF EMPLOYMENT. In the event the Executive is
arrested for any crime of the nature specified in Section 5.3(b) hereof, the
Company may elect to suspend the Executive from his duties hereunder until such
charges have been dropped or adjudicated in a manner which results in other than
a guilty verdict, whichever is earlier. During the period of suspension, the
Executive shall not receive any compensation unless the Company determines that
the continuation of the Executive's compensation is appropriate. The election by
the Company to suspend the Executive under this Section 5.7 shall not limit the
right of the Company to otherwise terminate the Executive for Cause under
Section 5.3 (provided that the Executive's actions constitute Cause for purposes
of Section 5.3).
6. PAYMENTS TO EXECUTIVE DURING DISABILITY AND AFTER TERMINATION.
6.1 COMPENSATION DURING DISABILITY. During any period that the
Executive fails to perform his duties hereunder as a result of incapacity due to
physical or mental injury or illness, the Executive shall continue to receive
the Base Salary, incentive compensation and benefits to which he is entitled
under this Agreement until his employment is termination pursuant to Section 5.2
hereof; provided that payments so made to the Executive during such period shall
be reduced to the extent of any amounts paid to the Executive under any
disability benefit plan of the Company.
6.2 COMPENSATION UPON TERMINATION FOR DEATH OR DISABILITY. If
the Executive's employment is terminated by his death under Section 5.1 or
disability under Section 5.2, the Company shall pay to the Executive, his spouse
or his estate, as applicable: (i) the incentive compensation to which he is
entitled under this Agreement through the Date of Termination; (ii) the
Executive's Base Salary as in effect on the Date of Termination, for a period of
two years following the Date of Termination, and (iii) the cost of health
insurance benefits for the Executive and his family for a period of 18 months
following the Date of Termination.
6.3 PAYMENTS AFTER TERMINATION FOR CAUSE. If the Executive's
employment is terminated under Section 5.3 for Cause, the Executive shall
receive: (i) the incentive compensation to which he is entitled under this
Agreement through the Date of Termination; and (ii) his Base Salary through the
Date of Termination in accordance with the terms of this Agreement and
thereafter Executive shall not be entitled to receive any further compensation
or benefits whatsoever.
6.4 PAYMENTS AFTER WRONGFUL TERMINATION.
(a) If: (i) the Company terminates the
Executive's employment other than because of the Executive's death, Disability,
or for Cause; or (ii) the Company elects to terminate the Executive's employment
as of the end of the Initial Term or any Renewal Term; or (iii) if the Executive
shall terminate the Executive's employment for Good Reason pursuant to Section
5.4 (any such termination being referred to as a "Wrongful Termination"), then
the Company shall pay to the Executive for a period equal to the greater of the
remainder of the current term or twenty-four (24) months: 1) the Base Salary, in
effect on the Date of Termination; and 2) an amount equal to the average annual
Bonus, if any, received by Executive prior to termination. In addition, Company
shall pay to Executive (i) the incentive compensation to which he is entitled
under this Agreement through the Date of Termination and (ii) the cost of
5
health insurance benefits for the Executive and his family for a period of
18 months.
(b) Notwithstanding the terms of Section 6.5(a)
above, if a Wrongful Termination occurs within a period of one year after a
Change of Control (as defined below), the Executive shall be entitled within 30
days after such termination to a lump sum payment equal to the greater of
(i) the Base Salary and Bonuses, if any (in each case, determined as of the
Date of Termination), through the remainder of the current Term, or (ii) 24
months of the Base Salary, and Bonuses in an amount equal to the average annual
Bonus, if any, received by Executive prior to the Date of Termination. In
addition, Company shall pay to Executive the cost of health insurance benefits
for the Executive and his family for a period of 18 months.
A Change of Control will occur: (i) on the date of the
acquisition by any person, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934, as amended),
excluding the Company, any of its subsidiaries or any holder of the Company's
Class B Common Stock, par value $.01 per share, of twenty-five percent (25%) or
more of the then outstanding voting securities entitled to vote generally in the
election of directors; (ii) on the date of any sale of the Company's or any of
its subsidiaries' assets which required approval of the Company's shareholders
under the Florida Business Corporation Act; or (iii) on the date of any
consolidation or merger to which the Company is a party or any stock exchange or
similar transaction as a result of which the holders of the Company's
outstanding voting securities immediately prior to such transaction do not
continue to own voting securities in the new or surviving entity entitling them
to elect its Board of Directors.
7. CONFIDENTIALITY; INTELLECTUAL PROPERTY; NONCOMPETITION.
7.1 CONFIDENTIALITY. The Executive shall not, during the Term
or any time after the Term, use or divulge to any person any Confidential
Information (as defined below) relating to the Company or any of its
subsidiaries which may have come to the Executive's knowledge at any time during
the Executive's term of employment with the Company or during the time that
Executive was employed by Company's predecessor in interest, Golden Bear
International, Inc. "Confidential Information" shall mean any information not
generally available to the public concerning the Company or any of its
subsidiaries, including, but not limited to, methods of operation, methods of
doing business, sales, files, forms, lists and names of and the needs and
requirements of customers and suppliers, the nature and content of any
contracts, and any inventions, techniques, methods, products, devices, trade
secrets, copyrights, patents, other rights to and in all knowledge, information
and materials proprietary to the Company (including business plans and financial
information), which relate to or are used in connection with any business or
activity carried on by the Company or any of its subsidiaries. At or prior to
the termination of the Executive's employment with the Company, the Executive
shall deliver to the Company (i) all property of the Company in the possession
or under the control of the Executive and (ii) all written or printed material
and all other property (including, but not limited to, computerized data) in the
possession or under the control of the Executive relating to Confidential
Information.
7.2 OWNERSHIP OF CERTAIN INTELLECTUAL PROPERTY. The Executive
hereby sells, transfers and assigns to the Company or to any person or entity
designated by the Company, the Executive's entire, right, title and interest in
and to all inventions,
6
ideas, disclosures, intellectual property rights and improvements, whether
patented or unpatented, and copyrightable material made or conceived by the
Executive, solely or jointly, during the term of the Executive's employment,
which relate to methods, apparatus, designs, ideas, products, processes, items
or devices, sold, leased, used or under consideration or development by the
Company or which otherwise relate or pertain to the businesses, functions or
operations of the Company. The Executive shall communicate promptly and disclose
to the Company, in such form as the Executive may be requested to do so by the
Company's Board of Directors, all information, details and data pertaining to
these matters and shall execute and deliver to the Company such formal transfers
and assignments and such other papers and documents as may be requested of the
Executive to permit the Company or any person or entity designated by the
Company to file and prosecute the patent applications and as to copyrightable
material to obtain copyright thereof. The Executive irrevocably appoints the
Company's designee as the Executive's attorney-in-fact for the purpose of
carrying out the terms of this Section 7.2, and acknowledges that this
appointment is irrevocable and coupled with an interest.
7.3 NONCOMPETITION. During the Term and for a period of one
(1) year after the voluntary resignation of the Executive as an employee of the
Company or the termination by the Company of any such employment or engagement
for Cause pursuant to Section 5.3 or upon the expiration of the Term of this
Agreement, the Executive shall not engage or have an interest, anywhere in the
United States of America or any other geographic area where the Company or any
of its subsidiaries do business or in which its products are marketed, alone or
in association with others, as principal, officer, agent, employee, consultant,
independent contractor, director, partner or stockholder, or through the
investment of capital, lending of money or property, rendering of services or
otherwise, in any business competitive with the business engaged in by the
Company or any of its subsidiaries; provided, that the foregoing shall not be
construed to prohibit the Executive from owning, in the aggregate, less than 5%
of any class of securities listed on a national securities exchange or traded
publicly on the over-the-counter market. During the same period, the Executive
shall not, and shall not knowingly or intentionally permit, cause or authorize
any of his employees, agents or others under his control to, directly or
indirectly, on behalf of himself or any other Person, to recruit or otherwise
solicit or induce any person who is an employee of, or otherwise engaged by, the
Company, any subsidiary of the Company or any such successor to terminate his or
her employment or other relationship with the Company, any subsidiary of the
Company or such successor. The Executive shall not at any time, directly or
indirectly, use or purport to authorize any Person to use any name, xxxx, logo,
trade dress or other identifying words or images which are the same as or
confusingly similar to those used at any time by the Company or any subsidiary
of the Company in connection with any product or service, whether or not such
use would be in a business competitive with that of the Company or any
subsidiary of the Company.
7.4 REMEDIES. The restrictions set forth in this Section 7 are
considered by the parties to be reasonable for the purposes of protecting the
value of the business and goodwill of the Company. The Executive acknowledges
that the Company would be irreparably harmed and that monetary damages would not
provide an adequate remedy in the event of a breach of the provisions of this
Section 7.
7
Accordingly, the Executive agrees that, in addition to any other remedies
available to the Company, the Company shall be entitled to injunctive and other
equitable relief, (without any bond or security being required to be posted) to
secure the enforcement of these provisions, and shall be entitled to receive
reimbursement from the Executive for all attorneys' fees and expenses incurred
by the Company in enforcing these provisions. If the Executive breaches the
covenant set forth in Section 7.3, the running of the noncompete period
described therein (but not his obligations) shall be tolled for so long as such
breach continues. It is the desire and intent of the parties that the provisions
of Section 7 be enforced to the fullest extent permissible under the laws and
public policies of each jurisdiction in which enforcement is sought. If any
provisions of Section 7 relating to the time period, scope of activities or
geographic area of restrictions are declared by a court of competent
jurisdiction to exceed the maximum permissible time period, scope of activities
or geographic area, the maximum time period, scope of activities or geographic
area, as the case may be, shall be reduced to the maximum which such court deems
enforceable. If any provisions of Section 7 other than those described in the
preceding sentence are adjudicated to be invalid or unenforceable, the invalid
or unenforceable provisions shall be deemed amended (with respect only to the
jurisdiction in which such adjudication is made) in such manner as to render
them enforceable and to effectuate as nearly as possible the original intentions
and agreement of the parties.
8. NOTICES. All notices or other communications which any party to this
Agreement may desire or be required to give under this Agreement shall be deemed
to have been given the first business day after being delivered to a nationally
recognized overnight courier for next business day delivery to the address of
such party set forth below or such other address as either party may from time
to time give notice to the other in the aforesaid manner:
If to the Company: Golden Bear Golf, Inc.
00000 X.X. Xxxxxxx Xx. 0
Xxxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: _________________________
If to the Executive: Xxxxxxx X. Xxxxxxxxx
__________________________________________
__________________________________________
Attn: __________________________
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT. This Agreement and all agreements and
documents referred to in this Agreement are intended to and do constitute the
entire agreement between the parties and supersede all prior oral or written
agreements or understandings of the parties with regard to the subject matter of
this Agreement. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement, have been made by
either party which are not expressly set forth in this Agreement.
8
9.2 NO ORAL MODIFICATIONS. No interpretation,
change, termination or waiver of any provision of this Agreement shall be
binding upon a party unless in writing and executed by the party or parties to
be bound thereby.
9.3 NO ASSIGNMENT. Neither this Agreement nor any
rights or obligations under this Agreement may be assigned or delegated by the
parties to this Agreement, except for any assignment by the Company occurring by
operation of law.
9.4 BINDING EFFECT. This Agreement shall be binding
upon the parties and their respective successors and shall inure to the benefit
of the parties and their respective successors.
9.5 GOVERNING LAW. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Florida without giving effect to any conflict of laws provision
thereof.
9.6 PREVAILING PARTIES. In the event of a dispute regarding
any of the terms of this Agreement, the party prevailing in such dispute shall
be paid its legal costs, including reasonable attorneys' fees, incurred in
connection with the enforcement or interpretation of this Agreement, in
litigation and in preparation for litigation, and at trial and in connection
with any appellate action.
9.7 SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
9.8 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which,
together, will constitute one and the same agreement. Any telecopied version of
a manually executed signature page delivered by one party to the other shall be
deemed a manually executed and delivered original.
9.9 NO WAIVER. Any waiver by either party of any
provision of this Agreement shall not be construed as a continuing waiver
thereof or a waiver of any other provision of this Agreement.
9.10 HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
9.11 REMEDIES. Neither the termination of this Agreement, the
provision of a specific remedy, nor any other provision of this Agreement shall
be construed to prohibit any party from pursuing any remedy available at law or
in equity for the breach or violation of the provisions of this Agreement.
9.12 SURVIVAL. The terms of Sections 3, 6, 7, and 9 of this
Agreement shall survive the expiration or termination of this Agreement.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement on
the date set forth above.
GOLDEN BEAR GOLF, INC.:
9
By: ________________________
Name: _____________________
Title: _______________________
EXECUTIVE:
By: _______________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
10
