CONFIDENTIAL TREATMENT REQUESTED.

 

 

CONFIDENTIAL PORTIONA OF THIS

 

DOCUMENT HAVE BEEN REDACTED

 

AND HAVE BEEN SEPARATELY

 

FILED WITH THE COMMISSION

 

 

 

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FIRST AMENDMENT TO GOLF CONSULTANT AGREEMENT

 

 

RECITALS

 

A.

WHEREAS, Adams Golf, Inc. (ADAMS) and Thomas S. Watson (CONSULTANT) entered into
a written golf consultant agreement dated August 30, 1999.

 

B.

WHEREAS, the parties entered into an addendum to the golf consultant agreement
dated August 13, 2002.

 

C.

WHEREAS, the parties desire to settle their differences concerning their
material rights and obligations arising out of the golf consultant agreement and
addendum by entering into this First Amendment to Golf Consultant Agreement.

 

 

AGREEMENT

 

COMPENSATION

 

1.

         For the final two years of the agreement, CONSULTANT shall receive a
retainer of [XXXXX]    ([XXXXX]) per year payable as follows:

 

 

 

A.

For the contract year commencing September 1, 2002 through August 31, 2003,
CONSULTANT shall receive the entire [XXXXX] ([XXXXX]) upon entering into this
amended agreement.

 

 

 

B.

For the final contract year commencing September 1, 2003 through August 31,
2004, CONSULTANT shall receive [XXXXX] ([XXXXX]) on September 1, 2003 and
[XXXXX] ([XXXXX]) on March 1, 2004.

 

2.

In addition, if CONSULTANT wins any of the major tournaments of the PGA or SPGA
tours, he shall receive a win bonus of [XXXXX] ([XXXXX]) dollars per win. For
the purposes of this agreement, Major tournaments of the PGA tour shall be the
Masters, U.S. Open, British Open and PGA Championship and major tournaments of
the SPGA tour shall be the USGA Senior Open, Senior PGA, Tradition and Ford
Seniors.

 

3.

In addition ADAMS grants CONSULTANT options to purchase [XXXXX] ([XXXXX]) 
shares of Adams Golf Inc.'s stock at [XXXXX] ([XXXXX]) per share. The options
shall vest in six months. All stock options must be executed within five years
of the termination of this agreement. The options will be provided pursuant to
the Adams Golf Inc.'s 2002 Equity Incentive Plan and subject to the terms of a
written stock option agreement that shall be provided to CONSULTANT concurrently
with this amendment.

 

___________________________ 

 

 

 [XXXXX] - Confidential Material redacted and filed separately with the
Commmission

 

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4.

Notwithstanding any other paragraph in the original agreement or the addendum to
the contrary, the compensation amounts above shall be the total compensation to
which CONSULTANT is entitled. The royalty payment rights concerning ADAMS' irons
as provided in the original agreement are expressly eliminated.

 

5.

ADAMS grants CONSULTANT a security interest in its inventory and accounts
receivable, second in position to GE Capital, to secure payment under this
agreement. It is expressly understood that ADAMS has entered into a financing
arrangement with GE Capital which does and shall continue to have first priority
over ADAMS inventory and accounts receivables. ADAMS also shall have the right
to replace the GE Capital financing arrangement with a similar financing
arrangement, which under all circumstances shall have priority over CONSULTANT'S
security interest. The security interest granted CONSULTANT shall attach upon
execution of this amendment. As long as permitted by GE Capital, ADAMS and
CONSULTANT shall use best efforts to execute a Financing Statement in the state
of Texas to perfect the security interest created by this amendment.

 

ENDORSEMENT RIGHTS

 

6.

Notwithstanding any contrary paragraphs in the original agreement including, but
not limited to, paragraphs 3.2 and 3.3, CONSULTANT shall be entitled to endorse
the [XXXXX]    golf ball and have the name "[XXXXX]" on his Adams headwear and
golf bag in a location and size consistent with CONSULTANT'S historical practice
prior to this first amendment.

 

7.

CONSULTANT shall be entitled to add an additional third-party endorsement to his
Adams Golf bag, so long as the endorsement is not of a company that manufactures
golf clubs or a brand under which golf clubs are sold. The location and size of
the endorsement is subject to the approval of ADAMS, which shall not be
unreasonably withheld.

 

PERSONAL APPEARANCES

 

8.

CONSULTANT's [XXXXX] personal appearance days per contract year, required by
paragraph 3.11 of the original agreement, are eliminated.

 

OTHER PROVISIONS

 

9.

ADAMS has alleged that CONSULTANT breeched the original agreement. By entering
into this First Amendment, ADAMS hereby declares the alleged breech cured and
further releases CONSULTANT from any claims ADAMS had or may have relative to
the alleged breech of the original agreement.

 

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10.

All other provisions of the original Agreement of August 30, 1999 not modified
hereby shall remain in full force and effect.

   

   

   

   

   

 

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           IN WITNESS WHEREOF, parties hereto have caused this Agreement to be
executed as of the date(s) set forth below.

   

CONSULTANT

           
   
   
  Date:            9/30/02            By:   /s/ David Enenbach, as agent for Tom
Watson  

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Tom Watson  

        COMPANY NAME CORPORATION  
   
   
  Date:            9/30/02            By:   /s/ Chip Brewer  

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Chip Brewer   Chief Executive Officer of Adams Golf, Inc.

 

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