Exhibit 10.1


 


MARTIN HANAKA

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

WITH

GOLFSMITH INTERNATIONAL HOLDINGS, INC.


 


This is an Amended and
Restated Employment Agreement (this “Employment
Agreement”), dated
as of December 28, 2009, entered into between Golfsmith International
Holdings, Inc., a Delaware corporation (the “Company”),
and Martin Hanaka (“Executive”).


 


RECITALS:


 


WHEREAS, the Company
and Executive entered into that certain written employment agreement dated June 13,
2008, pursuant to which the Company employed Executive as its Chairman and
Chief Executive Officer (the “Original Agreement”);
and


 


WHEREAS, the Company
and Executive have agreed to amend and restate the Original Agreement.


 


NOW,
THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties, intending to be legally bound, agree to amend
and restate the Original Agreement, effective December 28, 2009, as
follows:


 


AGREEMENT:


 


SECTION 1.  TERM OF EMPLOYMENT


 


(a)           Effective Date. 
Subject to the terms and conditions set forth in this Employment
Agreement, the Company agrees to employ Executive, and Executive agrees to be
employed by the Company for the five-year period starting on June 13, 2008
(such date being the “Effective Date”) and ending June 30,
2013.


 


(b)           Term. 
Subject to earlier termination pursuant to Section 5, the
initial five-year term of this Employment Agreement is subject to automatic one
year extensions starting on July 1, 2013 and on each subsequent yearly
anniversary date, unless, at least 90 days before any such subsequent
anniversary date, Executive or the Company cancels the automatic extension by
giving written notice to the other party of its election to cancel such
extension, in which case the term of Executive’s employment hereunder shall
terminate as of such anniversary date.


 


SECTION 2.  DEFINITIONS


 


“Affiliate” as used in this
Employment Agreement is defined in Rule 405 under the Federal Securities
Act of 1933, as amended.


 

















 


“Cause” means:


 


(1)           Executive’s
(i) fraud, (ii) embezzlement, or (iii) misappropriation of
material funds or other material Property (as defined in Section 6(a)),
in each case involving or against the Company or any of its Affiliates;


 


(2)           Executive’s
indictment for or conviction of any felony or any crime which involves
dishonesty or a breach of trust;


 


(3)           Executive’s
gross negligence or willful misconduct with respect to the Company or any of
its Affiliates which causes material detriment to the Company or any of its
Affiliates;


 


(4)           Executive
commits a violation of the United States’ Foreign Corrupt Practices Act of
1977, as amended, and such violation is not cured, or is not capable of being
cured, within thirty days of written notice to Executive from the Company;


 


(5)           the
debarment of Executive from engaging in contracting or sub-contracting
activities with the United States Government if such debarment is the result of
a final determination by an agency of such government that Executive knowingly
acted in a manner justifying such debarment;


 


(6)           Executive
commits a violation of the Company’s code of ethics or code of business
conduct, including but not limited to the Company’s Code of Business Conduct
and Ethics for Directors, Officers and Employees and Code of Ethics for Senior
Executive and Financial Officers, which the Board of Directors of the Company
reasonably determines makes him no longer able or fit to fulfill his
responsibilities under this Employment Agreement, and which is not cured, or is
not capable of being cured, within thirty days after written notice thereof is
given to the Executive by the Company;


 


(7)           Executive
engages in any material breach of the terms of this Employment Agreement or
fails to fulfill his duties under this Employment Agreement and such breach or
failure, as the case may be, is not cured, or is not capable of being cured,
within thirty days after written notice thereof is given to the Executive by
the Company; or


 


(8)           Executive
(i) is censured by any agency of the United States Government or (ii) fails
to satisfy any requirement of any agency of the United States Government which
the Board of Directors of the Company reasonably determines has a material and
adverse effect on his ability to fulfill his duties under this Employment
Agreement and such failure is not cured within thirty days after written notice
thereof is given to the Executive by the Company.


 


“Change of Control”  means an event described in Section 2.9(a) of
the ISP, excluding, for this purpose, any acquisition by First Atlantic
Capital, Ltd.  or Atlantic Equity
Partners III.


 


“Competing Business”
means any business which designs, distributes, sells or markets golf
equipment and golf related products, or any other business in which the Company
or any of its Affiliates is substantially engaged, (1) at any time during
the Term, or (2) for purposes of the 


 


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Restricted
Period, at any time during the one-year period immediately preceding the
termination of Executive’s employment hereunder.  Notwithstanding the foregoing, a Competing
Business shall not include (i) suppliers of the Company or any of its
Affiliates, or (ii) any entity that receives less than 25% of its revenue
from the retail sales of golf equipment or golf related products, so long as,
in the case of either clause (i) or (ii), Executive does not engage in the
design, distribution, sales or marketing of golf equipment or golf related
products.


 


“Date
of Termination”  means the date
that Executive’s employment with the Company terminates.


 


“Disability”  means a condition which
renders Executive unable (as determined by the Board of Directors of the
Company in good faith after consultation with a health care provider selected
by the Board of Directors of the Company after good faith consultation with
Executive or his legal representative) to regularly perform his duties
hereunder by reason of illness or injury for a period of more than six
consecutive months.


 


“Earned
Bonus”  means the
Annual Bonus, determined based on the actual performance of the Company for the
full fiscal year in which Executive’s employment terminates, that Executive
would have earned for such fiscal year had he remained employed for the entire
year, prorated based on the ratio of the number of days during such year that
Executive was employed to 365.  Such
Earned Bonus will be determined and paid to Executive (or his estate, if
applicable) in accordance with Section 4(b), if he is entitled to
such Earned Bonus under Section 5(b), Section 5(d) or Section 5(e),
as if no such termination had occurred.


 


“Good
Reason”  means (i) a
material and continuing failure to pay to Executive compensation or benefits
(as described in Section 4) that have been earned, if any, by
Executive, (ii) a material reduction in Executive’s compensation or
benefits (as described in Section 4), (iii) a material
reduction, without Executive’s written consent, in Executive’s title, position
or duties, or (iv) any breach by the Company of this Employment Agreement
which is material; provided, however, that
the occurrence of any event described in this sentence may only constitute Good
Reason if (a) Executive gives the Company written notice of his intention
to terminate his employment for Good Reason and, in reasonable detail, of the
event constituting grounds for such termination within sixty (60) days of the
occurrence of such event and (b) the relevant circumstances or conditions
are not remedied by the Company within thirty (30) days after receipt by the
Company of such written notice from Executive.


 


“ISP”  means the Golfsmith
International Holdings, Inc. 2006 Incentive Compensation Plan, in each
case as amended from time to time.


 


“Release”  means a full and final
general release agreement executed by Executive releasing the Company, its
affiliated companies, its predecessors, successors and assigns, and each of
their officers, directors, agents, and employees from any and all claims, with
the exception of the Company’s breach of its post-employment obligations
arising under this Employment Agreement.


 


“Restricted
Period”  means the two
(2)-year period following the Date of Termination.


 


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“Term” means the
five-year period following the Effective Date and any and all subsequent full
or partial one-year extensions thereto until terminated pursuant to the
provisions of this Employment Agreement.


 


SECTION 3.  TITLE, POWERS AND DUTIES


 


(a)           Title. 
Executive shall be the Chairman and Chief Executive Officer of the
Company.


 


(b)           Powers and Duties. 
Executive in fulfilling his duties shall have such powers as are
normally and customarily associated with a president and chief executive
officer in a company of similar size and operating in a similar industry,
including the power to hire and fire employees and executives of the Company reporting
to Executive and such other powers as authorized by the Board of Directors of
the Company.


 


Executive, as a condition to
his employment under this Employment Agreement, represents and warrants that he
can assume and fulfill the duties described in this Employment Agreement
without any risk of violating any non-compete or other restrictive covenant or
other agreement to which he is a party.


 


(c)           Reporting Relationship.  Executive shall report to the Board of
Directors of the Company.


 


(d)           Full Time Basis. 
Executive shall serve the Company faithfully and to the best of his
ability and will devote his full business time, energy, experience and talents
to the business of the Company and its Affiliates.


 


(e)           Geographic Area. 
Executive shall perform his duties principally in the Austin, Texas
metropolitan area and shall be required to travel outside of that area as
necessary or appropriate to the performance of his duties hereunder.


 


SECTION 4.  COMPENSATION AND BENEFITS


 


(a)           Annual Base Salary. 
Executive’s base salary shall be $600,000 per year through December 31,
2009 and $700,000 per year thereafter. 
Notwithstanding this provision, Executive’s Base Salary may be reviewed
and increased at the discretion of the Board of Directors of the Company or any
committee of the Board of Directors of the Company duly authorized to take such
action.  Executive’s base salary shall be
payable in accordance with the Company’s standard payroll practices and
policies for executives and shall be subject to such withholdings as required
by law or as otherwise permissible under such practices or policies.


 


(b)           One Time Bonus. 
The Company shall pay Executive a one-time bonus of $150,000 on December 29,
2009 to cover any and all costs of relocation.


 


(c)           Annual Bonus.  During the Term, Executive shall be eligible
to receive an annual performance-based cash bonus (“Annual
Bonus”).  The
target Annual Bonus that Executive may earn is a minimum of 75% of Executive’s
then-current Annual Base Salary, based on the Company’s attainment of such
annual earnings before interest, depreciation, income tax, and 


 


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amortization (“EBITDA”) goals as are
established by the Board of Directors of the Company and communicated to
Executive on an annual basis.  Any Annual
Bonus shall be paid in a single lump sum between February 1 and December 31
of the Company’s fiscal year immediately following the fiscal year to which
such Annual Bonus relates.


 


(d)                                 Employee
Benefit Plans.  Executive
shall be eligible to participate, on terms no less favorable to Executive than
the terms for participation of any other senior executive of the Company, in
the employee benefit plans, programs and policies maintained by the Company in
accordance with the terms and conditions to participate in such plans, programs
and policies as in effect from time to time. 
The employee benefit plans described in this paragraph shall include (if
and for as long as the Company sponsors such plans):


 


(1)           401(k) retirement
savings plan;


 


(2)           disability
plan;


 


(3)           health
plan; and


 


(4)           ISP.


 


(e)                                  Stock Options.  Executive shall receive stock options to
purchase 1,000,000 shares of common stock of the Company, provided, however, that such options to
purchase an amount of shares equal to 800,000 shares shall only be exercisable
if the shareholders of the Company approve an increase in the number of shares
available under the ISP at least equal to such amount of shares.  The exercise price of such options shall be
the fair market value at the closing of the market of such common stock on the
grant date of such options.  Such options
shall become exercisable in equal annual installments on each of the first five
anniversaries of the grant date of such options, provided, however, that such options shall become fully
exercisable in the event of a Change of Control.  Such options shall be subject to the terms
and conditions set forth in the ISP and the applicable option agreement granted
to Executive under the ISP.


 


(f)                                    Vacation.  Executive shall have the right to four weeks
of vacation during each successive one year period in the Term, which vacation
time shall be taken at such time or times in each such one year period so as
not to materially and adversely interfere with the performance of his duties under
this Employment Agreement.  Executive in
addition shall have the right to the same holidays as other employees of the
Company.


 


(g)                                 Expense
Reimbursements.  Executive
shall have the right to reasonable expense reimbursements consistent with the
Company’s practice immediately prior to the execution of this Employment
Agreement.


 


(h)                                 Residence and
Transportation Expenses.


 


(1)           Until
February 28, 2010, while Executive maintains his permanent residence in
Fort Lauderdale, Florida, the Company will pay or reimburse: (A) reasonable
residential rental and living expenses (including meals) incurred by Executive
during the Term for his temporary residence in the Austin, Texas, metropolitan
area, and 


 


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(B) reasonable airfare incurred by Executive during the Term for
commuting up to once per week between Austin, TX and Fort Lauderdale, FL,
subject to the Company’s receipt of such appropriate documentation as the
Company may reasonably require and compliance with the Company’s expense
reimbursement policy.  The Company will
also pay or reimburse reasonable airfare incurred by Executive during the Term
for business purposes.  For purposes of
the preceding sentences, (i) the amount of such expenses eligible for such payment
or reimbursement provided during one calendar year shall not affect the amount
of such expenses eligible for such payment or reimbursement in any other
calendar year, (ii) any such payment or reimbursement of an eligible
expense shall be made on or before the last day of the calendar year following
the calendar year in which such expense was incurred, (iii) no such
payment or reimbursement may be liquidated or exchanged for another benefit,
and (iv) all such payments or reimbursements shall be treated as separate
payments for purpose of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”).  To the extent any amounts payable
or reimbursed under this Section 4(g) are taxable to
Executive, the Company shall pay Executive an additional cash sum to place
Executive in the same after-tax position Executive would have occupied absent
the taxes attributable to such amounts; provided, however, that
any such payment shall be made by the end of the calendar year next following
the calendar year in which Executive remits such taxes.


 


(2)           Executive
shall establish his principal residence in the Austin, TX, metropolitan area by
June 30, 2010.  If this condition
has not been met by December 31, 2010, the Company reserves the right to
adjust the Executive’s compensation accordingly; and such adjustment would not
be deemed “Good Reason,” under this Agreement.


 


(i)                                     Indemnification.  With respect to Executive’s acts or failures
to act during his employment in his capacity as a director, officer, employee
or agent of the Company, Executive shall be entitled to indemnification from
the Company, and to liability insurance coverage (if any), on the same basis as
other directors and officers of the Company.


 


SECTION 5.  TERMINATION OF EMPLOYMENT


 


(a)                                  General.  The Board of Directors of the Company shall
have the right to terminate Executive’s employment at any time with or without
Cause, and Executive shall have the right to terminate his employment at any
time with or without Good Reason.  Except
as otherwise provided in this Employment Agreement, Executive’s participation
in and entitlement to all fringe benefits or employee benefit plans or programs
shall cease upon the Date of Termination; however, nothing in this Employment
Agreement is intended to waive or abridge any right or benefit which was vested
under the terms and conditions of the applicable plan or program on or before
the Date of Termination.


 


(b)                                 Termination by
Board of Directors without Cause, by cancellation, or by Executive for Good
Reason, or Change of Control.


 


(i)            If, prior to the occurrence of a Change of Control, (A) the
Board of Directors of the Company terminates Executive’s employment without
Cause or cancels an 


 


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automatic extension of this Employment
Agreement under Section 1(b), or (B) Executive resigns for
Good Reason, in exchange for Executive executing, delivering and not revoking a
Release (such Release to be delivered on or before the end of the fifty (50)
day period following the Date of Termination), shall pay Executive: (1) his
earned but unpaid base salary and earned but unpaid Annual Bonus for any
completed fiscal year; (2) his Earned Bonus (payable in accordance with Section 4(b));
and (3) 200% of an amount equal to his then-current total Annual Base
Salary, payable, commencing no later than sixty (60) days following the Date of
Termination, in equal installments in accordance with the Company’s payroll
procedures during the twenty-four month period immediately following commencement
of such installment payments.  This
obligation shall remain in effect even if Executive accepts other employment.


 


(ii)           If, on or following the occurrence of a Change of Control,
(A) the Board of Directors of the Company terminates Executive’s employment
without Cause or cancels an automatic extension of this Employment Agreement
under Section 1(b), or (B) if Executive resigns under any
circumstances, the Company, in exchange for Executive executing, delivering and
not revoking a Release (such Release to be delivered on or before the end of
the fifty (50) day period following the Date of Termination), shall pay
Executive: (1) his earned but unpaid base salary and earned but unpaid
Annual Bonus for any completed fiscal year; (2) his Earned Bonus (payable
in accordance with Section 4(b)); and (3) 200% of an amount
equal to the sum of his then-current total Annual Base Salary plus his
then-current target Annual Bonus (as described in Section 4(b)),
payable, commencing no later than sixty (60) days following the Date of
Termination, in equal installments in accordance with the Company’s payroll
procedures during the twenty-four month period immediately following
commencement of such installment payments. 
This obligation shall remain in effect even if Executive accepts other
employment.  For the avoidance of doubt,
if Executive is entitled to payment under this Section 5(b)(ii), he
shall not be entitled to payment under Section 5(b)(i).


 


(iii)          In case of a termination or resignation described in Section 5(b)(i) or
5(b)(ii), the Company shall additionally make any COBRA continuation
coverage premium payments (not only for Executive, but for Executive’s
dependents), for the two year period following the Date of Termination or, if
earlier, until Executive is eligible to be covered under another substantially
equivalent medical insurance plan by a subsequent employer; provided, however, that the applicable
period of “continuation coverage” for purposes of COBRA shall be deemed to
commence on the Date of Termination.


 


(iv)          Notwithstanding the provisions of this Section 5(b) or
those of Section 5(d) or 5(e), if the Release has not
been executed and delivered as described in this Section 5(b), or Section 5(d) or
5(e), as applicable, and become irrevocable within the statutory
revocation period, no amounts or benefits under this Section 5(b),
or Section 5(d) or 5(e), as applicable, shall be or
become payable.


 


(v)           Notwithstanding the foregoing provisions of this Section 5(b) or
those of Section 5(d), to the extent required in order to comply
with Section 409A of the Code, cash amounts that would otherwise be
payable under this Section 5(b) or Section 5(d) during
the six-month period immediately following the Date of Termination shall
instead be paid, with interest on any delayed payment at the applicable federal
rate provided for in Section 7872(f)(2)(A) of the Code, on the first
business day after the date that is six (6) months following the Executive’s



 


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“separation from service” within the meaning
of Section 409A of the Code.  In
addition, for purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)),
each payment that Executive may be eligible to receive under this Employment
Agreement shall be treated as a separate and distinct payment and shall not
collectively be treated as a single payment.


 


(vi)          Notwithstanding the foregoing provisions of this Section 5(b) or
those of Sections 5(d) or 5(e), the continued health
coverage available to Executive and, if applicable, to Executive’s dependents,
pursuant to the Company’s payment of COBRA continuation coverage premiums,
shall be provided by the Company in a manner such that Executive will not be
taxable on any reimbursements to or on behalf of Executive and, if applicable,
to or on behalf of Executive’s dependents. 
In addition, such health coverage shall be provided at no cost to
Executive; provided, however, that if the Company
reasonably determines, based on the advice of its legal counsel, that Executive
must be taxed on the Company’s actual cost of providing such health coverage to
Executive (the “Coverage
Cost”) to avoid causing Executive to be taxed on the
reimbursements relating to such health coverage, the Company and Executive
agree that the Company will deliver timely to Executive appropriate tax
information returns to cause Executive to include the Coverage Cost in
Executive’s income.  If the health
coverage provided to Executive under Section 5 of this Employment
Agreement is subject to the provisions of Section 409A of the Code at any
relevant time, (A) payment or reimbursement of health expenses shall be
made on or before December 31 of the year following the year in which such
expenses are incurred, (B) Executive’s right to payment or reimbursement
of such expenses shall not be subject to liquidation or exchange for any other
benefit, and (C) the amount of expenses eligible for payment or
reimbursement during any calendar year shall not affect the amount of expenses
eligible for payment or reimbursement in any other calendar year, except as may
be required to comply with limitations included in the arrangement under which
such health coverage is provided.


 


(c)           Termination by the Board of Directors for Cause or by
Executive without Good  Reason. 
If the Board of Directors of the Company terminates Executive’s
employment for Cause or Executive resigns without Good Reason other than on or
following the occurrence of a Change of Control, the Company’s only obligation
to Executive under this Employment Agreement shall be to pay Executive: (i) his
earned but unpaid base salary up to the Date of Termination; and (ii) his
earned but unpaid Annual Bonus for any completed fiscal year, and Executive
shall have no right to any Earned Bonus or any bonus payment prorated for a
partial year in which such termination occurs. 
The Company shall only be obligated to make such payments and provide
such benefits under any employee benefit plan, program or policy in which
Executive was a participant as are explicitly required to be paid to Executive
by the terms of any such benefit plan, program or policy following the Date of
Termination.  For the avoidance of doubt,
if Executive is entitled to payment under this Section 5(c), he
shall not be entitled to payment under Section 5(b).


 


(d)           Termination for Disability.  The Board of Directors of the Company shall
have the right to terminate Executive’s employment on or after the date
Executive has a Disability, and such a termination shall not be treated as a
termination without Cause under this Employment Agreement.  If Executive’s employment is terminated on
account of a Disability, the Company, in exchange for Executive executing,
delivering and not revoking a Release (such


 


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Release to be delivered on or before the end of the
fifty (50) day period following the Date of Termination), shall pay Executive,
shall:


 


(1)                                  pay Executive
his base salary through the last day of the month containing his Date of
Termination (payable in a lump-sum within sixty (60) days following the Date of
Termination);


 


(2)                                  pay Executive
his earned but unpaid Annual Bonus for any completed fiscal year (payable in a
lump-sum within sixty (60) days following the Date of Termination);


 


(3)                                  pay Executive
his Earned Bonus for the fiscal year in which the Date of Termination occurs
(payable in accordance with Section 4(b));


 


(4)                                  pay or cause
the payment of benefits to which Executive is entitled under the terms of the
disability plan of the Company covering the Executive at the time of such
Disability;


 


(5)                                  make such
payments and provide such benefits as otherwise called for under the terms of
the ISP and each other employee benefit plan, program and policy in which
Executive was a participant; and


 


(6)                                  make any COBRA
continuation coverage premium payments (not only for Executive, but also for
Executive’s dependents), for the one year period following the Date of
Termination or, if earlier, until Executive is eligible to be covered under
another substantially equivalent medical insurance plan by a subsequent
employer; provided, however, that
the applicable period of “continuation coverage” for purposes of COBRA shall be
deemed to commence on the Date of Termination.


 


(e)                                  Death.  If Executive’s employment terminates as a
result of his death, the Company, in exchange for the legal representative of
Executive’s estate executing, delivering and not revoking a Release (such
Release to be delivered on or before the end of the fifty (50) day period
following the Date of Termination), shall:


 


(1)                                  pay Executive’s
estate Executive’s base salary through the last day of the month containing the
Date of Termination (payable in a lump sum within sixty (60) days following the
Date of Termination);


 


(2)                                  pay Executive’s
estate Executive’s earned but unpaid Annual Bonus for any completed fiscal year
(payable in a lump sum within sixty (60) days following the Date of
Termination);


 


(3)                                  pay Executive’s
estate Executive’s his Earned Bonus, when actually determined, for the year in
which Executive’s death occurs (payable in accordance with Section 4(b)),


 


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(4)                                  make such
payments and provide such benefits as otherwise called for under the terms of
the each employee benefit plan, program and policy in which Executive was a
participant; and


 


(5)                                  make any COBRA
continuation coverage premium payments for Executive’s dependents, for the one
year period following Executive’s death or, if earlier, until such dependents
are eligible to be covered under another substantially equivalent medical
insurance plan; provided, however, that
the applicable period of “continuation coverage” for purposes of COBRA shall be
deemed to commence on the Date of Termination.


 


SECTION 6.  COVENANTS BY EXECUTIVE


 


(a)                                  Company
Property.  Executive
upon the Date of Termination or, if earlier, upon the Company’s request shall
promptly return all Property which had been entrusted or made available to
Executive by the Company, where the term “Property” means all records, files,
memoranda, reports, price lists, customer lists, drawings, plans, sketches,
keys, codes, computer hardware and software and other property of any kind or
description prepared, used or possessed by Executive during Executive’s
employment by the Company (and any duplicates of any such Property) together
with any and all information, ideas, concepts, discoveries, and inventions and
the like (including, but not limited to, Confidential Information as defined in
Section 6(c)) conceived, made, developed or acquired at any time by
Executive individually or, with others during Executive’s employment which
relate to the Company, its business or its products or services.


 


(b)                                 Trade Secrets.  Executive agrees that Executive shall hold in
a fiduciary capacity for the benefit of the Company and its Affiliates and
shall not directly or indirectly use or disclose any Trade Secret that
Executive may have acquired during the Term of Executive’s employment by the
Company, its Affiliates or any of their predecessors for so long as such
information remains a Trade Secret, where the term “Trade Secret” means
information, including, but not limited to, technical or non-technical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique,
a drawing or a process that (i) derives economic value, actual or
potential, from not being generally known to, and not being generally readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use and (ii) is the subject of reasonable efforts
by the Company and any of its Affiliates to maintain its secrecy.  This Section 6(b) is
intended to provide rights to the Company and its Affiliates which are in
addition to, not in lieu of, those rights the Company and its Affiliates have
under the common law or applicable statutes for the protection of trade
secrets.


 


(c)                                  Confidential
Information.  Executive
while employed by the Company or its Affiliates and at all times thereafter
shall hold in a fiduciary capacity for the benefit of the Company and its
Affiliates, and shall not directly or indirectly use or disclose, any
Confidential Information that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive is authorized
to have access to such information) during the Term of, and in the course of,
or as a result of Executive’s employment by the Company or its Affiliates or
their predecessors without the prior written consent of the Board of Directors
of the Company unless and except to the extent that such disclosure is (i) made
in the ordinary 


 


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course of Executive’s
performance of his duties under this Employment Agreement or (ii) required
by any subpoena or other legal process (in which event Executive will give the
Company prompt notice of such subpoena or other legal process in order to
permit the Company to seek appropriate protective orders).  For the purposes of this Employment Agreement,
the term “Confidential
Information” means any secret, confidential or
proprietary information possessed by or entrusted to the Company or any of its
Affiliates, including, without limitation, trade secrets, customer or supplier
lists, details of client or consultant contracts, current and anticipated
customer requirements, pricing policies, price lists, market studies, business
plans, operational methods, marketing plans or strategies, product development
techniques or flaws, computer software programs (including object code and
source code), data and documentation data, base technologies, systems,
structures and architectures, inventions and ideas, past current and planned
research and development, compilations, devices, methods, techniques,
processes, financial information and data, business acquisition plans and new
personnel acquisition plans (not otherwise included as a Trade Secret under
this Employment Agreement) that has not become generally available to the
public other than through disclosure by Executive, and the term “Confidential
Information” may include, but not be limited to, future business plans,
licensing strategies, advertising campaigns, information regarding customers or
suppliers, executives and independent contractors and the terms and conditions
of this Employment Agreement.  The
Confidential Information as described above may be in any form, including, but
not limited to, any intangible form such as unrecorded knowledge, information,
ideas, concepts, mental impressions, or may be embodied in equipment or other
tangible form, such as a document, drawings, photographs, computer code,
software or other printed or electronic media. 
Notwithstanding the provisions of this Section 6(c) to
the contrary, Executive shall be permitted to furnish this Employment Agreement
to a subsequent employer or prospective employer.


 


(d)                                 Non-solicitation
of Customers or Employees. 
Executive (i) while employed by the Company or any of its
Affiliates, shall not, on Executive’s own behalf or on behalf of any person,
firm, partnership, association, corporation or business organization, entity or
enterprise (other than the Company or one of its Affiliates), solicit or
attempt to solicit on behalf of a Competing Business customers of the Company
or any of its Affiliates, or induce or attempt to induce any such customers or
suppliers of the Company or any of its Affiliates to cease or reduce business
with the Company or any of its Affiliates, or knowingly interfere with the
relationship between any such customer, supplier or any other business relation
and the Company or any such Affiliate, and (ii) during the Restricted
Period shall not, on Executive’s own behalf or on behalf of any person, firm,
partnership, association, corporation or business organization, entity or
enterprise, solicit or attempt to solicit on behalf of a Competing Business
customers of the Company or any of its Affiliates with whom Executive had
contact or made contact within the course of Executive’s employment by the
Company or an Affiliate within the twenty-four month period immediately
preceding the beginning of the Restricted Period, or induce or attempt to
induce any such customers or suppliers of the Company or any of its Affiliates
to cease or reduce business with the Company or any of its Affiliates, or
knowingly interfere with any relationship between any such customer, supplier
or any other business relation and the Company or any such Affiliate.


 


Executive (i) while
employed by the Company or any of its Affiliates shall not, either directly or
indirectly, except in the interest of the Company or any of its Affiliates,
call on, solicit or attempt to induce any other officer, employee or
independent contractor of the Company or 


 


11

















 


any
of its Affiliates to terminate his or her employment or relationship with the
Company or any such Affiliate and shall not assist any other person or entity
in such a solicitation (regardless of whether any such officer, employee or
independent contractor would commit a breach of contract by terminating his or
her employment), and (ii) during the Restricted Period, shall not, either
directly or indirectly, call on, solicit or attempt to induce any person who is
or, during the twelve month period immediately preceding the beginning of the
Restricted Period, was an officer, employee or independent contractor of the
Company or any of its Affiliates to terminate his or her employment or
relationship with the Company or any of its Affiliates and shall not assist any
other person or entity in such a solicitation (regardless of whether any such
officer, employee or independent contractor would commit a breach of contract
by terminating his or her employment). 
Notwithstanding the foregoing, nothing herein shall prohibit any person
from independently contacting Executive about employment during the Restricted
Period provided that Executive does not solicit or initiate such contact.


 


(e)                                  Non-competition
Obligation.  Executive,
while employed by the Company or any of its Affiliates and thereafter during
the Restricted Period will not, for himself or on behalf of any other person,
partnership, company or corporation, directly or indirectly, acquire any
financial or beneficial interest in (except as provided in the next sentence),
be employed by, or own, manage, operate or control, or become a director,
officer, partner, employee, agent or consultant of, any entity which is engaged
in, or otherwise engage in, a Competing Business.  Notwithstanding the preceding sentence, Executive
will not be prohibited from owning less than two percent (2%) of any publicly
traded corporation, whether or not such corporation is in a Competing Business.


 


(f)                                    Nondisparagement.  During the Term and at all times thereafter,
Executive shall not disparage or defame to third parties the Company or any of
its Affiliates or their respective officers or directors, or their respective
employees or owners who were such employees or owners during the Term, or,
during the Term and the Restricted Period only, their respective customers who
were such customers during the Term. 
During the Term and at all times thereafter, the Company and its
Affiliates and their respective officers and directors shall not disparage or
defame Executive to third parties. 
Nothing contained in this Section 6(f) shall preclude
Executive or the Company or any of the Company’s Affiliates from enforcing his
or their respective rights under this Employment Agreement.


 


(g)                                 Reasonable and
Continuing Obligations. 
Executive agrees that Executive’s obligations under this Section 6
are obligations which will continue beyond the date Executive’s employment
terminates and that such obligations are reasonable, fair and equitable in
scope, terms and duration, are necessary to protect the Company’s legitimate
business interests and are a material inducement to the Company to enter into
this Employment.  Agreement.


 


(h)                                 Remedy for
Breach.  Executive agrees that the
remedies at law of the Company for any actual or threatened breach by Executive
of the covenants in this Section 6 would be inadequate and that the
Company shall be entitled to (i) cease or withhold payment to Executive of
any severance payments or benefits described in Section 5 for which
he otherwise qualifies under Section 5, and/or (ii) specific
performance of the covenants in this Section 6, including entry of
a temporary restraining order in state or federal court, preliminary and
permanent injunctive relief against activities in violation of this Section 6,
or both, or other appropriate 


 


12

















 


judicial remedy, writ or
order, in addition to any damages and legal expenses which the Company may be
legally entitled to recover.  The Company
agrees to give Executive, and, if known, Executive’s attorney, notice of any
legal proceeding, including any application for a temporary restraining order,
relating to an attempt to enforce the covenants in this Section 6
against Executive.  Executive
acknowledges and agrees that the covenants in this Section 6 shall
be construed as agreements independent of any other provision of this
Employment Agreement or any other agreement between the Company and Executive,
and that the existence of any claim or cause of action by Executive against the
Company, whether predicated upon this Employment Agreement or any other
agreement, shall not constitute a defense to the enforcement by the Company of
such covenants.


 


(i)                                     Scope of
Covenants.  The Company
and Executive further acknowledge that the time, scope, geographic area and
other provisions of this Section 6 have been specifically
negotiated by sophisticated parties and agree that they consider the
restrictions and covenants contained in this Section 6 to be
reasonable and necessary for the protection of the interests of the Company and
its Affiliates, but if any such restriction or covenant shall be held by any
court of competent jurisdiction to be void but would be valid if deleted in
part or reduced in application, such restriction or covenant shall apply with
such deletion or modification as may be necessary to make it valid and
enforceable.


 


SECTION 7.  MISCELLANEOUS


 


(a)                                  Notices.  Notices and all other communications shall be
in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered or certified mail.  Notices to the Company shall be sent to the
following address or a more recent address provided in writing by the Company
to Executive:


 


GOLFSMITH
INTERNATIONAL HOLDINGS, INC.

11000 North IH 35


Austin,
TX 78753


Attention:  Chair, Compensation Committee


Facsimile:  (512) 821-4829


 


Notices and communications
to Executive shall be sent to the following address or a more recent address
provided in writing by Executive to the Chair of the Board of Directors of the
Company:


 


Martin Hanaka

1627 Southeast 7th Street 

Fort Lauderdale, FL 33316


 


(b)                                 No Waiver.  No failure by either the Company or Executive
at any time to give notice of any breach by the other of, or to require
compliance with, any condition or provision of this Employment Agreement shall
be deemed a waiver of any provisions or conditions of this Employment
Agreement.


 


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(c)                                  Withholding
Taxes.  All amounts payable hereunder
shall be subject to the withholding of all applicable taxes and deductions
required by any applicable law.


 


(d)                                 Texas Law.  This Employment Agreement shall be governed
by Texas law without reference to the choice of law principles thereof.  Any litigation that may be brought by either
the Company or Executive involving the enforcement of this Employment Agreement
or any rights, duties, or obligations under this Employment Agreement, shall be
brought exclusively in a Texas state court or United States District Court in
Texas.


 


(e)                                  Assignment.  This Employment Agreement shall be binding
upon and inure to the benefit of the Company and any successor in interest to
the Company or any segment of such business. 
The Company may assign this Employment Agreement to any affiliate or
successor that acquires all or substantially all of the assets and business of
the Company or a majority of the voting interests of the Company, and no such
assignment shall be treated as a termination of Executive’s employment under
this Employment Agreement.  Executive’s
rights and obligations under this Employment Agreement are personal and shall
not be assigned or transferred.


 


(f)                                    Other
Agreements.  Upon the
date of execution hereof, this Employment Agreement replaces and merges any and
all previous agreements and understandings regarding all the terms and
conditions of Executive’s employment, or other service provider, relationship
with the Company, and this Employment Agreement constitutes the entire
agreement between the Company and Executive with respect to such terms and
conditions.


 


(g)                                 Amendment.  No amendment to this Employment Agreement
shall be effective unless it is in writing and signed by the Company and by
Executive.


 


(h)                                 Invalidity.  If any part of this Employment Agreement is
held by a court of competent jurisdiction to be invalid or otherwise
unenforceable, the remaining part shall be unaffected and shall continue in
full force and effect, and the invalid or otherwise unenforceable part shall be
deemed not to be part of this Employment Agreement.


 


(i)                                     Litigation.  In the event that either party to this
Employment Agreement institutes litigation against the other party to enforce
his or its respective rights under this Employment Agreement, each party shall
pay its own costs and expenses incurred in connection with such litigation.


 


IN WITNESS
WHEREOF, the Company and Executive have executed this Employment Agreement in
multiple originals to be effective as of December 28, 2009.


 


 


	
  GOLFSMITH INTERNATIONAL

  	
   

  	
  EXECUTIVE

  
	
  HOLDINGS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert Allen

  	
   

  	
  /s/ Martin Hanaka

  
	
  Name: Robert Allen

  	
   

  	
  Name: Martin Hanaka

  
	
  Title: Chairman,
  Compensation Committee

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  Date: December 28,
  2009

  	
   

  	
  Date: December 28,
  2009

  
				



 


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