Exhibit 10.1
EMPLOYMENT AGREEMENT
     This Employment Agreement (the “Agreement”) is effective as of
September 16, 2005 (the “Effective Date”), and is entered into by and between
Peter S. Case (“Case”) and Ashworth, Inc., a Delaware corporation (the
“Company”).
     1. Employment. As of the Effective Date, the Company hereby employs Case to
serve in the capacity of Executive Vice President, Chief Financial Officer and
Treasurer (“EVP/CFO “). The Company’s Board of Directors (the “Board”) and/or
the Company’s Chief Executive Officer (the “CEO”) may provide such additional
designations of title to Case as the Board and/or CEO, in its discretion, may
deem appropriate.
     Case agrees to perform the executive duties and functions customarily
associated with the offices of EVP/CFO and as specified from time to time by the
Board and/or the CEO. Except for legal holidays, vacations and absences due to
temporary illness, Case shall devote his time, attention and energies to the
business of the Company on a full-time basis. Case represents and warrants to
the Company that he is under no restriction, limitation or other prohibition to
perform his duties as described herein.
     2. Employment Compensation And Benefits.
     a. Base Salary. Case’s initial base salary shall be at the annual rate of
three hundred thousand dollars ($225,000). This salary level shall be reviewed
at least annually by the Board’s Compensation Committee on the basis of Case’s
performance and the Company’s financial success and progress.
     b. Annual Bonus and Stock Options. Case will be entitled to receive an
option for a minimum of 20,000 shares fiscal year 2005 granted on the date the
agreement is signed and vesting on the first anniversary of the date of grant.
Case will also be eligible to earn an annual bonus up to a maximum of 50% of
Base Salary based on the Company achieving certain financial targets. The annual
bonus will be paid following the close of final accounting records for the
previous fiscal year.
     c. Automobile Allowance. The Company shall pay Case an automobile expense
allowance of one thousand dollars ($1,000) per month to defray the cost of
business automobile expense.
     d. Vacation. Case shall be entitled to annual vacations in a manner
commensurate with his status as a key executive and in accordance with the
Company’s vacation policies in effect during the term of this Agreement.
     e. Expense Reimbursement. The Company shall reimburse Case for all
reasonable amounts actually expended by Case in the course of performing his
duties for the Company and in accordance with any Company-established guidelines
where Case tenders receipts or other documentation reasonably substantiating the
amounts as required by the Company.

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     f. Other Benefits. Except as otherwise provided in this Agreement, Case
shall be entitled to receive all of the rights, benefits and privileges of an
executive officer of the Company under any retirement, pension, profit-sharing,
group medical insurance, group dental insurance, group-term life insurance, and
disability insurance, and other employee benefit plans which may be now in
effect or hereafter adopted.
     3. Non-compete. Case agrees that during the term of this Agreement Case
will not, directly or indirectly, own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership, management,
operation, or control of any business which manufactures or sells golf-inspired
sportswear which is substantially the same as that of the Company and which is
distributed in the same channels of distribution as the then current channels of
distribution of the Company, provided, however, that if Case’s employment is
terminated for reasons which provide for severance compensation, the non-compete
term shall be extended to the period for which he receives such severance
compensation.
     4. Termination.
     a. At Will. The Company shall employ Case at will, and either Case or the
Company may terminate Case’s employment with the Company at any time and for any
reason, with or without cause.
     b. Severance Payment and Benefits. If Case’s employment is terminated
within two (2) years of the effective date of this Agreement as a result of a
Qualifying Termination, as defined below, and if Case delivers a fully executed
release and waiver of all claims against the Company in the form attached hereto
as Exhibit A, then, upon expiration of any applicable revocation period
contained in the Release Agreement, the Company shall pay or provide Case the
following severance payment and benefits:
     i. Case shall receive the equivalent of twelve (12) months of his
then-current base salary (the “Severance Payment”), which shall be payable in
equal monthly installments beginning on the first day of the first full month
following Case’s Qualifying Termination and continuing on the first day of each
month thereafter until fully paid. The Severance Payment is in lieu of any
severance payment benefits which otherwise may at that time be available under
the Company’s applicable policies; provided, however, that nothing in this
Agreement is intended to modify or supercede the Agreement re: Change In Control
entered into between Case and the Company as of September 16, 2005, and Case
shall be entitled to receive whatever additional severance pay benefits, if any,
for which he may qualify according to the terms of his Agreement re: Change In
Control with the Company.
     ii. For the twelve-month period following the Qualifying Termination of his
employment, Case shall be entitled to continue to participate in the following
executive benefit programs which had been made available to him (including his
family) before the Qualifying Termination: group medical insurance, group dental
insurance, group-term life insurance, and disability insurance. The programs
shall be continued in the same way and at the same level as immediately prior to
the Qualifying Termination. Case’s participation in each of such executive
benefit programs shall be earlier terminated or reduced, as applicable, if and
to the extent Case receives benefits as a result of concurrent coverage through
another program.
     iii. Case’s unvested stock options, as described in Paragraph 2(b) of this
Agreement, shall immediately become fully vested and exercisable. This provision

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only applies to stock options Case has been granted pursuant to this Agreement,
and does not apply to options provided from any other source or Ashworth.
     c. Qualifying Termination. Case’s termination shall be considered a
“Qualifying Termination” unless:
     i. Case voluntarily terminates his employment with the Company and its
affiliated companies. Case, however, shall not be considered to have voluntarily
terminated his employment with the Company and its affiliated companies if he
elects to terminate his employment because his overall compensation plan is
reduced or adversely modified in any material respect or his authority or duties
are materially changed. For such purposes, Case’s authority or duties shall be
considered to have been “materially changed” if, without Case’s express and
voluntary written consent, there is any substantial diminution or adverse
modification in his title, status, overall position, or responsibilities.
     ii. The termination is on account of Case’s death or Disability. For such
purposes, “Disability” shall mean a physical or mental incapacity as a result of
which Case becomes unable to continue the performance of his responsibilities
for the Company and its affiliated companies for a period of three (3) months.
     iii. Case is involuntarily terminated for “Cause.” For this purpose,
“Cause” shall mean:
     1. Case’s willful and deliberate refusal to comply with a lawful,
instruction of the CEO or Board of Directors, which refusal is not remedied by
Case within a reasonable period of time after his receipt of written notice from
the Company identifying the refusal, so long as the instruction is consistent
with the scope and responsibilities of Case’s position;
     2. Case’s act or acts of personal dishonesty;
     3. Case’s conviction of a felony;
     4. Case’s violation of the Company’s policies and/or code of conduct;
     5. Case’s violation of any confidentiality or non-competition agreement
with the Company or any Affiliate of the Company; or
     6. The willful engaging by Case in misconduct which is injurious to the
Company.
     d. Return of Materials. In the event of any termination of Case’s
employment for any reason whatsoever, Case shall promptly deliver to the Company
all Company property, including, but not limited to, documents, data, and other
information pertaining to Confidential Information, as defined below. Case shall
not take with him any documents or other information, or any reproduction,
summary or excerpt thereof, electronic or otherwise, containing or pertaining to
any Confidential Information.
     5. Nondisclosure of Confidential Information. Case acknowledges that during
the term of his employment with the Company, he will have access to and become
acquainted with information of a confidential, proprietary or secret nature
which is or may be either applicable to, or related in any way to, the present
or future business of the Company, the research and

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development or investigation of the Company, or the business of any customer of
the Company (“Confidential Information”). For example, Confidential Information
includes, but is not limited to, devices, secret inventions, processes and
compilations of information, records, specifications, designs, plans, proposals,
software, codes, marketing and sales programs, financial projections, cost
summaries, pricing formula, and all concepts or ideas, materials or information
related to the business, products or sales of the Company and its customers and
vendors. Case shall not disclose any of Confidential Information, directly or
indirectly, or use them in any way, either during the term of this Agreement or
at any time thereafter, except as required in the course of employment with the
Company. Case also agrees to comply with the Company’s policies and regulations,
as established from time to time for the protection of its Confidential
Information, including, for example, executing the Company’s standard
confidentiality agreements. This section shall survive termination of this
Agreement.
     6. Non-Solicitation. Case agrees that so long as he is employed by the
Company and for a period of two (2) years after termination of his employment
for any reason, he shall not (a) directly or indirectly solicit, induce or
attempt to solicit or induce any Company employee to discontinue his or her
employment with the Company; (b) usurp any opportunity of the Company of which
Case became aware during his tenure at the Company or which is made available to
him on the basis of the belief that Case is still employed by the Company; or
(c) directly or indirectly solicit or induce or attempt to influence any person
or business that is an account, customer or client of the Company to restrict or
cancel the business of any such account, customer or client with the Company.
This section shall survive termination of this Agreement.
     7. Successors.
     a. This Agreement is personal to Case, and without the prior written
consent of the Company shall not be assignable by Case other than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by Case’s legal representatives.
     b. 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.
     8. Governing Law. This Agreement is made and entered into in the State of
California, and the internal laws of California shall govern its validity and
interpretation in the performance by the parties hereto of their respective
duties and obligations hereunder.
     9. Modifications. This Agreement may be amended or modified only by an
instrument in writing executed by all of the parties hereto.
     10. Entire Agreement. Except as otherwise set forth herein, this Agreement,
together with the exhibits attached hereto, supersedes any and all prior written
or oral agreements between Case and the Company, and contains the entire
understanding of the parties hereto with respect to the terms and conditions of
Case’s employment with the Company; provided, however, that this Agreement is
not intended to supercede the Agreement re: Change In Control between Case and
the Company, which they entered into as of September 16, 2005, or any agreements
which Case may previously have entered into regarding the protection of trade
secrets and confidential information.
     11. Dispute Resolution. Case and the Company will utilize a system of
binding arbitration to resolve all disputes that may arise out of the employment
context. Both the Company and Case agree that any claim, dispute, and/or
controversy that either Case may

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have against the Company (or its owners, directors, officers, managers,
employees, agents, and parties affiliated with its employee benefit and health
plans) or the Company may have against Case, arising from, related to, or having
any relationship or connection whatsoever with Case’s seeking employment with,
employment by, or other association with the Company, shall be submitted to and
determined exclusively by binding arbitration under the Federal Arbitration Act,
in conformity with the procedures of the California Arbitration Act (Cal. Code
Civ. Proc. sec 1280 et seq., including section 1283.05 and all of the Act’s
other mandatory and permissive rights to discovery). Included within the scope
of this Agreement are all disputes, whether based on tort, contract, statute
(including, but not limited to, any claims or discrimination and harassment,
whether they be based on the California Fair Employment and Housing Act, Title
VII of the Civil Rights Act of 1964, as amended, or any other state or federal
law or regulation), equitable law, or otherwise. However, nothing herein shall
prevent Executive from filing and pursuing proceedings before the California
Department of Fair Employment and Housing, or the United States Equal Employment
Opportunity Commission (although if Case chooses to pursue a claim following the
exhaustion of such administrative remedies, that claim would be subject to the
provisions of this Agreement). In addition to any other requirements imposed by
law, the arbitrator selected shall be a retired California Superior Court Judge
and shall be subject to disqualification on the same grounds as would apply to a
judge of such court. To the extent applicable in civil actions in California
courts, the following shall apply and be observed: all rules of pleading
(including the right of demurrer), all rules of evidence, and all rights to
resolution of the dispute by means of motions for summary judgment, judgment on
the pleadings, and judgment under Code of Civil Procedure Section 631.8.
Resolution of the dispute shall be based solely upon the law governing the
claims and defenses pleaded, and the arbitrator may not invoke any basis
(including but not limited to, notions of “just cause”) other than such
controlling law. The arbitrator shall have the immunity of a judicial officer
from civil liability when acting in the capacity of an arbitrator, which
immunity supplements any other existing immunity. Likewise, all communications
during or in connection with the arbitration proceedings are privileged in
accordance with Cal. Civil Code Section 47(b). As reasonably required to allow
full use and benefit of this agreement’s modification to the Act’s procedures,
the arbitrator shall extend the times set by the Act for the giving of notices
and setting of hearings. Awards shall include the arbitrator’s written reasoned
opinion. Notwithstanding the foregoing, the parties acknowledge and agree that
this provision shall not preclude either party from requesting temporary and/or
preliminary injunctive relief to enforce Paragraphs 3, 5 or 6 of this Agreement
until such time as an arbitrator can assume jurisdiction and render a decision
over any such claims or requests.
     12. Notices. Any notice or communications required or permitted to be given
to the parties hereto shall be delivered personally or be sent by United States
registered or certified mail, postage prepaid and return receipt requested, and
addressed or delivered as follows, or at such other addresses the party
addressed may have substituted by notice pursuant to this Section:

         
 
  Ashworth, Inc.   Peter S. Case
 
  2765 Loker Avenue West   1140 La Mirada St.
 
  Carlsbad, California 92010   Escondido, CA 92026
 
  Attn: President    

     13. Captions. The captions of this Agreement are inserted for convenience
and do not constitute a part hereof.
     14. Severability. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity,

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illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein and there shall be
deemed substituted for such invalid, illegal or unenforceable provision such
other provision as will most nearly accomplish the intent of the parties to the
extent permitted by the applicable law. In case this Agreement, or any one or
more of the provisions hereof, shall be held to be invalid, illegal or
unenforceable within any governmental jurisdiction or subdivision thereof, this
Agreement or any such provision thereof shall not as a consequence thereof be
deemed to be invalid, illegal or unenforceable in any other governmental
jurisdiction or subdivision thereof.
     15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one in the same Agreement.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered effective as of the day and year first written above
in Carlsbad, California.

                  ASHWORTH, INC.    
 
           
 
  By:   /s/ Randall L. Herrel, Sr.   10/18/05              
 
      Randall L. Herrel, Sr.   Date     Title: CEO and President    
 
                PETER S. CASE    
 
           
 
  By:   /s/ Peter S. Case   10/18/05              
 
      Peter S. Case   Date

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EXHIBIT A — RELEASE AGREEMENT
     I, Peter S. Case, hereby enter into this Release Agreement (this
“Agreement”), pursuant to Paragraph 4(b) of my Employment Agreement with
Ashworth, Inc., a Delaware corporation (the “Company”), in consideration for
which the Company shall make the Severance Payment as described in my Employment
Agreement entered into effective as of September 16, 2005.
     1. The date of my Qualifying Termination is                     , and I
have received a final paycheck for all wages due, including all accrued
vacation, through that date. Other than the Severance Payment as described in my
Employment Agreement and whatever additional severance pay benefits, if any, for
which I may qualify according to the terms of my Agreement re: Change in Control
with the Company, the foregoing payments are the only amounts which I am
entitled to receive from the Company, and I hereby waive all other payments or
claims for payments.
     2. As consideration for the Severance Payment as described in my Employment
Agreement, I hereby release the Company, its successors, affiliates, directors,
employees and agents from any and all claims or lawsuits (including but not
limited to any and all claims or demands relating to salary, wages, bonuses,
commissions, stock, stock options, vacation pay, fringe benefits, expense
reimbursements, any and all tort claims, contract claims (express or implied),
wrongful termination claims, public policy claims, whistleblower claims, implied
covenant of good faith and fair dealing claims, retaliation claims, personal
injury claims, emotional distress claims, invasion of privacy claims, defamation
claims, fraud claims, attorneys’ fees claims, all claims arising under any
federal, state or other governmental statue, law, regulation or ordinance
including, but not limited to, Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act, the Family and Medical Leave Act,
the California Fair Employment & Housing Act, the California Labor Code, the Age
Discrimination in Employment Act of 1967 (“ADEA”), the Older Workers’ Benefit
Protection Act (“OWBPA”)) which I may have based either on my employment, my
termination, or any other event occurring prior to the date of this Agreement.
This Release is intended to settle any and all claims that I may have against
the Company. Accordingly, I waive any and all rights conferred under
Section 1542 of the California Civil Code, which provides: “A general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release which if known by him must
have materially affected his settlement with the debtor.”
     3. I acknowledge and understand my continuing obligation (a) to maintain
the confidentiality of the Company’s trade secrets, confidential and proprietary
information and (b) not to solicit the Company’s customers or employees, as set
forth in Paragraphs 3, 5 and 6 of my Employment Agreement. I also warrant and
represent that I have returned all Company materials as required in Paragraph
4(d) of my Employment Agreement.
     4. I acknowledge that I fully understand my right to discuss this Agreement
with an attorney, and I have carefully read and fully understand this entire
Agreement, and I am entering into this Agreement voluntarily.
     5. I understand that I shall have twenty-one (21) days from the date of
receipt of this Agreement to consider this Agreement, I shall have seven
(7) days following the signing of this Agreement to revoke it in writing, and
this Agreement shall not be effective or enforceable until this revocation
period has expired.

              Dated:        PETER S. CASE            
 
           
 
      By:                 
 
            Dated:        ASHWORTH, INC.
 
                       
 
           
 
      By:                 
 
           
 
      Title:               

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