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CONFIDENTIAL
TREATMENT REQUESTED

CONFIDENTIAL
PORTIONS OF THIS

DOCUMENT
HAVE BEEN REDACTED

AND
HAVE BEEN SEPARATELY

FILED
WITH THE COMMISSION 

 

CONFIDENTIAL
TREATMENT

1

EXECUTIVE
EMPLOYMENT 

AGREEMENT

THIS
AGREEMENT (the
"Agreement") entered into as of the date signed by the parties below by and
between Adams Golf, Inc. and its subsidiaries with its principal place of
business at 2801 East Plano Parkway, Plano, Texas (the "Company") and Mr. Oliver
Brewer (the "Executive"); 

 

 

RECITALS

 

WHEREAS, the
Executive is and has been employed by the Company for the past three years as
its Chief Executive Officer;

 

WHEREAS, the
Company’s Board of Directors desires assurance of the continued association and
services of the Executive in order to retain his experience, skills, abilities,
background, and knowledge, and is therefore willing to engage his services on
the terms and subject to the conditions set forth below; 

 

WHEREAS, the
Executive desires and is willing to continue employment with the Company
on the terms
and subject to the conditions set forth below;

 

NOW
THEREFORE, in
consideration of the premises and mutual covenants contained herein, the parties
agree as follows: 

 

AGREEMENT

 

	1.    	POSITION
      AND DUTIES

 

During
the term of this Agreement, the Company shall employ the Executive as Chief
Executive Officer. The Executive’s duties shall be those which shall be
prescribed by the Board of Directors from time to time which shall be those
reasonably expected of a chief executive officer of a similarly capitalized
corporation and those performed by his predecessor. The Executive shall use his
best efforts to promote the best interest of the Company. The Executive shall
devote his knowledge, skill and, exclusively (other than as set forth below),
all of his professional time, attention and energies (reasonable absences for
vacations and illness excepted), to the business of the Company in order to
perform such assigned duties faithfully, competently and diligently.
Notwithstanding the foregoing, it is understood and agreed between the parties
that the Executive may (i) engage in charitable and community activities, (ii)
manage personal investments and affairs and (iii) serve on the boards of
directors of a reasonable number of other corporations or the boards of a
reasonable number of trade associations, so long as such activities and
investments do not interfere or conflict with the Executive's performance of his
responsibilities and obligations to the Company. 

 

 

CONFIDENTIAL
TREATMENT

2

 

	2.    	TERM
      OF EMPLOYMENT

 

The
Company agrees to employ the Executive and the Executive agrees to serve the
Company pursuant to the terms and conditions of this Agreement for a term of
three (3) years, commencing on January 1, 2005 and expiring on December 31,
2007, unless earlier terminated pursuant to this Agreement. Notwithstanding any
contrary clause in this Agreement, the Executive shall serve at the pleasure of
the Board of Directors and may be terminated at any time in accordance with the
provisions of this Agreement. The Executive’s termination shall not, in any way,
prejudice the Executive’s rights under this Agreement. 

 

	3.    	PLACE
      OF EMPLOYMENT 

 

The place
of employment shall be at the Company's principal office currently located in
Plano, Texas; provided, however, that the Company may from time to time require
the Executive to travel temporarily to other locations on Company business.

 

	4.    	COMPENSATION 

 

The
Executive shall receive, for all services rendered to the Company as an
employee, the following compensation. 

 

	     (a)  	
      Salary.
      The Executive shall be paid an Annual Base Salary in the amount of Four
      Hundred Thousand ($400,000) dollars or such greater amount as may be
      determined by the Board of Directors. The Executive's Annual Base Salary
      shall be payable in equal installments in accordance with the Company's
      general salary payment policies, but no less frequently than monthly.
      

 

	     (b)  	Incentive
      Compensation.
      Each calendar year, the Executive shall be eligible for two bonuses. The
      first bonus is to be paid at the end of the first half of the calendar
      year but no later than July 20 and the second bonus is to be paid at the
      end of the second half of the year but no later than January 20 of the
      following year. Each bonus shall be contingent upon the Company achieving
      its internal financial goals for the applicable half of the calendar year
      as stated by the Board of Directors, The amount of each bonus shall depend
      on whether the Company has achieved annual sales of [* *****]
      dollars in the period of the bonus. If the Company’s annual sales are
      under [*****] dollars, the bonus amount shall be One Hundred Twenty Five
      thousand ($125,000) dollars. If the Company’s annual sales are over
      [*****] dollars, the bonus amount shall be Two Hundred Thousand ($200,000)
      dollars.

 

 

[******] Confidential
Material redacted and filed separately with the Commission.

 

CONFIDENTIAL
TREATMENT

3

 

Example:
Year 1 the Company achieves [*****] in annual sales by the end of December and
also achieves its internal financial goals for both halves of the year. The
Executive’s first half of the year bonus shall be $125,000 and the second half
of the year bonus shall be $200,000. Year 2 the Company achieves it’s internal
financial goals for both halves of the year but by the end of December only
achieves [* ****] in
sales. The Executive’s first half of the year bonus for year 2 is $200,000 and
second half of the year bonus is $125,000.

 

	 	
       (c) 
	
      Equity
      Participation.
      

 

	 	
      (1)
	
      Not
      later than the end of January of each calendar year of this Agreement, the
      Executive shall be granted one percent (1%) of
      the Company’s fully diluted stock in stock options at an option strike
      price of one cent ($.01) per share. These stock options are to retain the
      Executive and shall vest one year after the date of grant;
  

 

	 	
      (2)
	
      At
      any time during the term of this agreement, if a majority of the capital
      stock of the Company is to be sold or transferred to an unaffiliated
      entity or substantially all of the assets of the Company are to be sold or
      transferred to an unaffiliated entity, all of the Executive’s potential
      stock options shall be granted and vested no later than the calendar day
      immediately preceding the sale or closing date of the sale or transfer
      transaction. 

 

	      (d) 	Long
      Term Incentive Payment .
      The Executive shall be eligible for a one time long term incentive payment
      at the conclusion of this three (3) year Agreement contingent upon the
      Company achieving a minimum cumulative EBITDA of [*****] dollars during
      the three (3) year term of this Agreement along the following payment
      structure: (For purposes of calculating EBITDA under this section, any
      insurance proceeds received by the Company and/or recovery of money and/or
      assets due to the theft of Company money by any employee(s) prior to the
      time this Agreement is executed shall not be used in calculating
      EBITDA.)

 

	 	
      (1)
	
      If
      the Company achieves a cumulative EBITDA of [*****] dollars, the Executive
      shall be granted a one time long term incentive payment of Seven Hundred
      Fifty Thousand ($750,000) dollars. 

 

	 	
      (2)
	
      Additionally,
      for every dollar in EBITDA that the Company achieves over [*****] dollars
      but under [*****] dollars, the payment shall increase by sixteen and
      7/1000 ($.167) cents capped at One Million ($1,000,000) dollars.
      

 

	 	
      (3)
	
      Additionally,
      for every dollar in EBITDA that the Company achieves over [*****] dollars,
      the payment shall increase by five ($.05)
cents.

 

	      (e) 	Employee
      Benefit Plans.
      The Executive and his "dependents," as that term may be defined under the
      applicable employee benefit plan(s) of the Company, shall be included in
      all plans, programs and policies which provide benefits for Company
      employees and their dependents on a basis commensurate with the
      Executive's position and authorities, duties, powers and responsibilities.
      

 

[******] Confidential
Material redacted and filed separately with the Commission.

 

CONFIDENTIAL
TREATMENT

4

 

 

	      (f) 	Expenses.
      The Executive is authorized to incur and shall be reimbursed by the
      Company for any and all reasonable and necessary business related expenses
      including, but not limited to, a company car, a local country club
      membership, expenses for auto, business travel, entertainment, gifts and
      similar matters. The company car and local country club membership are
      subject to the compensation committee’s approval, which shall not be
      unreasonably withheld.

 

	5.    	ABSENCES

 

The
Executive shall be entitled to vacations in accordance with the Company's
vacation policy in effect from time to time and to absences because of illness
or other incapacity and shall also be entitled to such other absences as are
granted to the Company's other senior executive officers or as are approved by
the Board of Directors, which approval shall not be unreasonably withheld.

 

	6.    	TERMINATION
      

 

The
Executive's employment with the Company may be terminated only as follows:

	(a)  	
      By
      the Company Without Cause.
      The Company may at any time terminate the Executive's employment without
      Cause upon sixty-(60) days prior written notice to the Executive.
      

 

	(b)  	
      By
      the Executive Without Good Reason.
      The Executive may at any time terminate his employment for any reason upon
      sixty-(60) days written notice to the Company.

 

	(c)  	
      By
      the Company For Cause.
      The
      Company may terminate the Executive’s employment for Cause. In such event,
      the Company shall give the Executive prompt written notice (in addition to
      any notice that may be required below) specifying in reasonable detail the
      basis for such termination. For purposes of this Agreement, "Cause" shall
      mean any of the following conduct by the Executive:

 

	(1)  	
      The
      deliberate and intentional breach of any material provision of this
      Agreement, which breach the Executive shall have failed to cure within
      thirty (30) days after the Executive's receipt of written
      notice from the Company specifying the specific nature of the Executive's
      breach; or

 

 

CONFIDENTIAL
TREATMENT

5

 

 

	(2)  	
      The
      deliberate and intentional engaging by the Executive in gross misconduct
      that is materially and demonstrably harmful to the best interests,
      monetary or otherwise, of the Company; or 

 

 

	(3)
       	Conviction of a felony or conviction of any crime involving moral
      turpitude, fraud or deceit. 

 

 

	(d)  	
      By
      the Executive for Good Reason.
      The Executive may terminate his employment for Good Reason upon providing
      thirty (30) days written notice to the Company after the Executive
      reasonably becomes aware of the circumstances giving rise to such Good
      Reason. For purposes of this Agreement, "Good Reason" means any of the
      following conduct of the Company, unless the Executive shall have
      consented thereto in writing: 

 

	(1)  	Material breach of any material provision of this Agreement by the
      Company, which breach shall not have been cured by the Company within
      thirty (30) days after Company’s receipt from the Executive or his agent
      of written notice specifying in reasonable detail the nature of the
      Company's breach; or

 

	(2)  	The assignment to the Executive of any duties inconsistent in any
      material respect with the Executive's position including, but not limited
      to any diminution of the Executive's status and reporting requirements)
      authority, duties, powers or responsibilities, excluding for this purpose
      any isolated, insubstantial and inadvertent action respecting the
      Executive not taken in bad faith and which is remedied by the Company
      within thirty (30) days after receipt of written notice from the Executive
      to the Company; or

 

	(3)  	
      The
      failure of the Company to obtain the assumption in writing of its
      obligations to perform this Agreement by any successor not less than five
      days prior to a merger, consolidation or sale as contemplated in Section
      10; or 

 

	(4)  	
      A
      reduction in the Executive's total compensation. For purposes of this
      subsection, a reduction in the overall level of compensation of the
      Executive resulting from the failure to achieve corporate, business unit
      and/or individual performance goals established for purposes of incentive
      compensation for any year or other period shall not constitute a reduction
      in the overall level of compensation of the
Executive.

 

	(5)  	
      The
      relocation of the Company’s principal office to a site more than 75 miles
      from Plano, Texas.

 

CONFIDENTIAL
TREATMENT

6

 

 

	(e)  	
      Disability. In
      the event that the Executive shall be unable to perform his duties
      hereunder on a full time basis for a period of sixty (60) consecutive
      calendar days by reason of incapacity due to illness, accident, physical
      or mental disability or otherwise, then the Company may, at
      its discretion,
      terminate the Executive's employment if the Executive, within ten (10)
      days after receipt of written notice of termination is given (which may
      occur before or after the end of the entire 60 day period), shall not have
      returned to the performance of all of his duties on a full-time basis.
      

 

	(f)  	
      Death.
      The Executive's employment shall terminate upon his death.
  

 

	(g)  	
       Mutual
      Written Agreement.
      This
      Agreement and the Executive's employment with the Company may be
      terminated at any time by the mutual written agreement of the Executive
      and the Company. 

	7.      	
      COMPENSATION
      IN THE EVENT OF TERMINATION 

 

In the
event that the Executive's employment terminates prior to the expiration of this
Agreement, the Company shall pay the Executive compensation and provide the
Executive and his eligible dependents with benefits as follows: 

 

	(a)  	
      Termination
      By Company Without Cause or Termination By Executive For Good
      Reason. In
      the event that the Executive's employment is terminated by (i) the Company
      without Cause or (ii) the Executive for Good Reason, then the Company
      shall continue to pay or provide, as applicable, in accordance with the
      Company's normal payroll practices unless otherwise specified, the
      following compensation and benefits to the Executive:

 

	(1)  	
      The
      Annual Base Salary of the Executive for a period of one (1) year after
      expiration of the notice period or termination, whichever is later;
      

 

	(2)  	
      The
      retention stock options (the stock options to retain the Executive as
      opposed to the stock options based on Company performance) for which the
      Executive was potentially eligible in the calendar year of termination
      will be pro-rated for the months of service in the calendar year and will
      be granted and fully vested as of the date of
  termination;

 

	(3)  	
      A
      payment equal in amount to both semi-annual bonuses for which the
      Executive was potentially eligible in the calendar year in which the
      Executive was terminated. This payment will be made within 15 days of
      termination. The payment shall be calculated based on the potential
      semi-annual bonuses tied to the annual sales in effect at the time of
      termination and shall be paid irrespective of whether the Company achieved
      or was on track to achieve its internal financial goals for the calendar
      year and/or whether a semi-annual bonus had already been paid to the
      Executive in the calendar year of termination.

 

 

CONFIDENTIAL
TREATMENT

7

 

 

	(4)  	
      The
      long term incentive payment for which the Executive was potentially
      eligible. This payment will be made within 15 days of termination. The
      payment shall be calculated as if the Company had achieved a minimum
      cumulative EBITDA of [* *****] Confidential Material redacted
      and filed separately with the Commission****] dollars irrespective of
      whether the Company had achieved it or was on track to achieve it.
      Additionally, if on the date of termination, the Company has achieved more
      than [*****] dollars of cumulative EBITDA, then the executive shall also
      receive five ($.05) cents for every EBITDA dollar achieved over [*****]
      dollars.

 

	(5)  	Continuing coverage for all purposes (including eligibility, coverage,
      vesting and benefit accruals, as applicable), for the salary continuation
      period described in subsection (a)(l) above, to the extent not prohibited
      by law, for the Executive and his eligible dependents under all of the
      employee benefit plans in effect and applicable to Executive and his
      eligible dependents as of the date of his termination. In the event that
      the Executive and/or his eligible dependents, because of the Executive's
      terminated status, cannot be covered or fully covered under any or all of
      such plans, the Company shall continue to provide the Executive and/or his
      eligible dependents with the same level of such benefits and coverage in
      effect prior to termination, payable from the general assets of the
      Company if necessary. Notwithstanding the foregoing, the Executive may
      elect (by giving written notice to the Company prior to the termination of
      his employment hereunder), on a benefit by benefit basis to receive in
      lieu of continuing coverage, cash in an amount equal to the present value
      (using an 8% annual discount rate) of the projected cost to the Company of
      providing such benefit for such continuation period. The aggregate amount
      of cash to which the Executive is entitled pursuant to the preceding
      sentence shall be payable by the Company to the Executive within sixty
      (60) days after the date of the termination of Executive's employment
      hereunder;

 

The
Executive's subsequent death or disability shall in no way affect or limit the
Company's obligations under this Section. 

 

	(b)  	
      Termination
      By the Company For Cause.
      In
      the event that the Company shall terminate the Executive's employment for
      Cause, this Agreement shall terminate and the obligations of the parties
      shall be as set forth in Section 8 of this Agreement.

 

	(c)  	
      Termination
      By The Executive Without Good Reason. In
      the event that the Executive shall terminate employment hereunder other
      than for Good Reason, this Agreement shall forthwith terminate and the
      obligations of the parties shall be as set forth in Section 8 of this
      Agreement. 

 

[******] Confidential
Material redacted and filed separately with the Commission.

 

CONFIDENTIAL
TREATMENT

8

 

	(d)  	
      Disability. In
      the event that the Company elects to terminate the Executive's employment
      pursuant to Section 6(e), the Executive shall continue to receive, from
      the date of such termination for a period of one year, one hundred percent
      (100%) of the Annual Base Salary, in accordance with the payroll practices
      of the Company for senior executive officers, reduced, however, by the
      amount of any proceeds from Social Security and disability insurance
      policies provided by and at the expense of the Company. Additionally, the
      Executive shall receive a payment equal to both potential semi-annual
      bonuses in effect at the time for which the Executive was potentially
      eligible irrespective of whether company achieved its internal financial
      goals or was on track to achieve its internal financial
    goals.

 

	(e)  	
      Death.
      In
      the event of the death of the Executive during the term of this Agreement,
      (i) the Annual Base Salary to which the Executive is entitled shall be
      paid, in twelve (12) equal monthly installments following the date of
      death, to the last beneficiary designated by the Executive under the
      Company's group life insurance policy maintained by the Company or such
      other written designation expressly provided to the Company for the
      purposes hereof or, failing either such designation, to his estate. The
      parties expressly understand that this payment of salary shall be in
      addition to any insurance payments paid to Executive’s survivors and/or
      estate under any insurance policies. 

 

	(f)  	
      Mutual
      Written Consent. In
      the event that the Executive and the Company shall terminate the
      Executive's employment by mutual written agreement, the Company shall pay
      such compensation and provide such benefits, if any, as the parties may
      mutually agree upon in writing.

 

	(g)  	
      By
      the Executive due to Company failure to set internal financial goals or
      adopt stock option plan. In
      the event that the Company fails to set internal financial goals or adopt
      a stock option plan and the Executive elects to terminate his employment
      under this Agreement, the Company shall (1) pay the Executive's accrued
      salary and any other accrued benefits through the effective date of
      termination; (2) reimburse the Executive for expenses already actually
      incurred through the effective date of termination; (3) pay or otherwise
      provide for any benefits, payments or continuation or conversion rights in
      accordance with the provisions of any employee benefit plan of which the
      Executive or any of his dependents is or was a participant or as otherwise
      required by law; (4) pay the Executive and his beneficiaries any
      compensation and/or provide the Executive or his eligible dependents any
      benefits due through the effective date of termination.

 

	(h)  	
      The
      Executive shall not be required to mitigate the amount of any payment
      provided for in this Section by seeking employment or otherwise.
      

 

 

CONFIDENTIAL
TREATMENT

9

 

	
      8.
      
	
      EFFECT
      OF EXPIRATION OF AGREEMENT OR TERMINATION OF EXECUTIVE’S
      EMPLOYMENT 

 

Upon the
expiration of this Agreement by its terms or the termination of the Executive's
employment by the Company for Cause or the Executive Without Good Reason,
neither the Company nor the Executive shall have any remaining duties or
obligations except that: 

 

	    (a)	The
      Company shall: 

 

	        (1)	 Pay
      the Executive's accrued salary and any other accrued benefits through the
      effective date of such expiration or termination;

 

	        (2)	Reimburse
      the Executive for expenses already actually incurred through the effective
      date of such expiration or termination;

 

	        (3)	Pay
      or otherwise provide for any benefits, payments or continuation or
      conversion rights in accordance with the provisions of any employee
      benefit plan of which the Executive or any of his dependents is or was a
      participant or as otherwise required by law; 

 

	        (4)	Pay
      the Executive and his beneficiaries any compensation and/or provide the
      Executive or his eligible dependents any benefits due through the
      effective date of such expiration; and 

 

	        (5)	Continue
      to remain bound by the terms of Section 12 hereof.

 

	    (b)	The
      Executive shall remain bound by the terms of Section 9,11 and 13.
    

	9.      	
      COVENANTS
      AS TO CONFIDENTIAL INFORMATION AND COMPETITIVE
      CONDUCT 

 

The
Executive acknowledges and agrees as follows: (i) this Section 9 is necessary
for the protection of the legitimate business interests of the Company, (ii) the
restrictions contained in this Section 9 with regard to geographical scope,
length of term and types of restricted activities are Reasonable; and (iii) the
Executive has received adequate and valuable new consideration for entering into
this Agreement.

 

	(a)  	
      Confidentiality
      of Information and Nondisclosure.
      The
      Executive acknowledges and agrees that his employment by the Company under
      this Agreement necessarily involves proprietary information pertaining to
      the business of the Company and its related entities. Accordingly, the
      Executive agrees that at all times during the terms of this Agreement and
      at all times thereafter, he will not, directly or indirectly, without the
      express written approval of the Company, unless directed by applicable
      legal authority having jurisdiction over the Executive, disclose to or
      use, or knowingly permit to be so disclosed or used, for the benefit of
      himself, any person, corporation or other entity other than the
      Company:

 

 

CONFIDENTIAL
TREATMENT

10

 

	(1)  	
      Any
      information concerning any financial matters, customer relationships,
      competitive status, supplier matters, internal organizational matters,
      current or future plans, or other business affairs of or relating to the
      Company or its subsidiaries,

 

	(2)  	
      Any
      management, operational, trade, technical or other secrets or any other
      proprietary information or other data of the Company or its subsidiaries,
      

 

	(3)  	
      Any
      other information related to the Company or its related entities that the
      Executive should reasonably believe will be damaging to the Company or its
      related entities and which has not been published and is not generally
      known outside of the Company. 

 

The
Executive acknowledges that all of the foregoing constitutes confidential and/or
proprietary information of the Company, which is the exclusive property of the
Company. Excluded from this confidential and/or proprietary information of the
Company shall be (i) information known by or generally available to the public
through no breach by the Executive of this Agreement and which the public may
use without any direct or indirect obligation to the Company and (ii)
information that documentary evidence demonstrates was independently developed
by the Executive.

 

	      (b) 	Restrictive
      Covenant.
      During
      the term of, and for a period of one (1) year (the "Restrictive Period")
      after the termination of the Executive's employment other than by the
      Company Without Cause or by the Executive With Good Reason, the Executive
      shall not render, directly or indirectly, services to (as an employee,
      consultant, consultant, independent contractor or in any other capacity)
      any person, firm, corporation, association or other entity which conducts
      the same or similar business as the Company or its subsidiaries at the
      date of the Executive's termination of employment within the states in
      which the Company or any of its subsidiaries is then doing business at the
      date of the Executive's termination of employment hereunder without the
      prior written consent of the Board of Directors which may be withheld at
      its sole discretion. In the event that this Agreement expires after
      termination and is not renewed by the parties, the Restrictive Period
      shall not extend beyond the termination of employment.. In the event the
      Executive violates any of the provisions contained in this Section, the
      Restrictive Period shall be increased by the period of time in which the
      Executive was in violation as determined by an Arbitrator or Court of
      competent jurisdiction. The Executive further agrees that at no time
      during the Restrictive period will the Executive attempt to directly or
      indirectly solicit or hire employees of the Company or its subsidiaries or
      induce any of them to terminate their employment with the Company or any
      of the subsidiaries. 

 

 

CONFIDENTIAL
TREATMENT

11

 

	     (c) 	Company
      Remedies.
      The Executive acknowledges and agrees that any breach of this Agreement by
      him will result in immediate and irreparable harm to the Company and that
      the Company cannot be reasonably or adequately compensated by damages in
      an action at law. In the event of a breach by the Executive of the
      provisions of this Section 9 as determined by an Arbitrator or a Court of
      competent jurisdiction, the Company shall be entitled, to the extent
      permitted by law, immediately to cease paying or providing the Executive
      or his dependents any compensation or benefits provided pursuant to
      Section 4, Section 6 or Section 7 of this Agreement as liquidated damages,
      and also to obtain immediate injunctive relief restraining the Executive
      from conduct in breach of the covenants contained in this Section 9.
      Nothing herein shall be construed as prohibiting the Company from pursuing
      any other remedies available to it for such breach, including the recovery
      of damages from the Executive. 

 

	10.    	AGREEMENT
      SURVIVES MERGER OR DISSOLUTION

 

This
Agreement shall not be terminated by the Company's voluntary or involuntary
dissolution or by any merger in which the Company is not the surviving or
resulting corporation, or on any transfer of all or substantially all of the
Company's assets. In the event of any such merger or transfer of assets, the
provisions of this Agreement shall be binding on and inure to the benefit of the
surviving business entity or the business entity to which such assets shall be
transferred and to the Executive and his heirs. 

 

	11.    	OWNERSHIP
      OF INTANGIBLES 

 

All
processes, inventions, patents, copyrights, trademarks, and other intangible
rights that may be conceived or developed by Executive, either alone or with
others, during the term of Executive's employment, whether or not conceived or
developed during Executive's working hours, and with respect to which the
equipment, supplies, facilities, or trade secret information of the Company was
used, or that relate at the time of conception or reduction to practice of the
invention to the business of the Company or to the Company's actual or
demonstrably anticipated research and development, or that result from any work
performed by Executive for the Company, shall be the sole property of the
Company. Executive shall execute all documents, including patent applications
and assignments, required by the Company to establish the Company's rights under
this Section. 

	12.    	INDEMNIFICATION
      BY THE COMPANY 

 

The
Company shall, to the maximum extent permitted by law, indemnify and hold the
Executive harmless against expenses, including reasonable attorney's fees
judgements, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding arising by reason of the Executive's
employment by the Company. The Company shall advance to the Executive any
expense incurred in defending any such proceeding to the maximum extent
permitted by law. 

 

 

CONFIDENTIAL
TREATMENT

12

 

	
      13.    
	
      DISCLOSURE
      OF CUSTOMER INFORMATION AND SOLICITATION OF OTHER EMPLOYEES PROHIBITED
      

 

In the
course of his employment, the Executive will have access to confidential records
and data pertaining to the Company's customers and to the relationship between
these customers and the Company's account executives. Such information is
considered secret and is disclosed to the Executive in confidence. During his
employment by the Company and for one (1) year after termination of that
employment, the Executive shall not directly or indirectly disclose or use any
such information, except as required in the course of his employment by the
Company. 

 

	14.    	RESOLUTION
      OF DIFFERENCES OVER BREACHES OF
AGREEMENT

 

Except as
otherwise provided herein, in the event of any controversy, dispute or claim
arising out of, or relating to, this Agreement, or the breach thereof, or
arising out of any other matter relating to the Executive’s employment with the
Company, the parties may seek recourse only for temporary or preliminary
injunctive relief to the courts having jurisdiction thereof and if any relief
other than injunctive relief is sought, the Company and the Executive agree that
such underlying controversy, dispute or claim shall be settled by arbitration
conducted in accordance with this Section 14 and the Commercial Arbitration
Rules of thc American Arbitration Association ("AAA"). The matter shall be heard
and decided, and awards rendered by a panel of three (3) arbitrators (the"
Arbitration Panel"). the Company and the Executive shall each select one
arbitrator from the AAA National Panel of Commercial Arbitrators (the
"Commercial Panel") and AAA shall select a third arbitrator from the Commercial
Panel. The award rendered by the Arbitration Panel shall be final and binding as
between the parties hereto and their heirs, executors, administrators,
successors and assigns, and judgment on the award may be entered by any court
having jurisdiction thereof. Except as provided in Section 12 hereof, each party
shall bear sole responsibility for all expenses and costs incurred by such party
in connection with the resolution of any controversy, dispute or claim in
accordance with this Section 14; provided, however, the Executive may recover
his costs and attorneys’ fees in recovering compensation, stock and/or benefits
to which he is entitled under this Agreement.

 

	15.    	WAIVER

 

The
waiver by a party hereto of any breach by the other party hereto of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach by a party hereto. 

 

 

CONFIDENTIAL
TREATMENT

13

 

	16.    	NON
      RELIANCE 

 

Each
party to this Agreement represents, warrants and acknowledges that in entering
into this Agreement that it has not relied upon any act, representation, or
warranty by any other party thereto, or by any of their representatives or
attorneys, except as may be expressly contained in this Agreement. Each party
further represents and warrants that it has thoroughly discussed all aspects of
this Agreement with his or its attorneys, that he/it has had a reasonable time
to review this Agreement, that he/it fully understands the provisions of this
Agreement and the effect thereof and that he/it is entering into this Agreement
voluntarily and of his/its own free will. 

 

	17.    	CONSTRUCTION
      OF AGREEMENT

 

	        (a) 	Governing
      Law.
      This
      Agreement shall be governed by and construed under the laws of the state
      of Texas.

 

	        (b) 	Severability.
      In
      the event that anyone or more of the provisions of this Agreement shall be
      held to be invalid, illegal or unenforceable, the validity, legality or
      enforceability of the remaining provisions shall not in any way be
      affected or impaired thereby. 

 

	        (c)  	
      Headings.
      The descriptive headings of the several paragraphs of this Agreement are
      inserted for convenience or reference only and shall not constitute a part
      of this Agreement. 

 

	18.     	
      ENTIRE
      AGREEMENT AND INTEGRATION 

 

This
Agreement contains the entire agreement between the parties and supersedes all
prior oral and written agreements, understandings, commitments, and practices
between the parties, including all prior employment agreements, whether or not
fully performed by the Executive before the date of this Agreement. No
amendments to this Agreement may be made except by a writing signed by both
parties. 

 

	19.    	NOTICES

 

Any
notice to the Company required or permitted under this Agreement shall be given
In writing to the Company, either by personal service or by registered or
certified mail, postage prepaid, addressed to the legal department of the
Company at its then principal place of business. Any such notice to the
Executive shall be given in a like manner and, if mailed, shall be addressed to
his home address then shown in the Company's files. For the purpose of
determining compliance with any time limit in this Agreement, a notice shall be
deemed to have been duly given (a) on the date of service, if served personally
on the party to whom notice is to be given, or (b) on the third business day
after mailing, if mailed to the party to whom the notice is to be given in the
manner provided in this section.

 

 

CONFIDENTIAL
TREATMENT

14

 

	20.    	
      SEVERABILITY
      

If any
provision of this Agreement is held invalid or unenforceable, the remainder of
this Agreement shall nevertheless remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances. 

 

	21.    	EXECUTION
      

 

Executed
by the parties on February 19, 2005. 

 

	 The Company	 	 	 
	 	 	 	 
	/s/ Byron H. Adams	 	 	
	
      

    	 	 	
	By: Byron H. Adams	 	 	
	Chairman of the Board of Directors of Adams Golf,
      Inc.	 	 	 

 

	 The
      Executive	 	 	 
	 	 	 	 
	/s/ Oliver
      G. Brewer	 	 	
	
      

    	 	 	
	By: Oliver G. Brewer
      III	 	 	
	Chief Executive Officer of Adams Golf,
    Inc	 	 	 

 

 

CONFIDENTIAL
TREATMENT

15Unassociated Document

REDACTED
COPY

CONFIDENTIAL
TREATMENT REQUESTED

CONFIDENTIAL
PORTIONS OF THIS

DOCUMENT
HAVE BEEN REDACTED

AND
HAVE BEEN SEPARATELY

FILED
WITH THE COMMISSION

 

1

ENDORSEMENT
AGREEMENT

 

This
Agreement is entered into on January 13, 2005 between professional golfer,
TOM
WATSON,
(hereinafter referred to as “CONSULTANT”) and
ADAMS
GOLF,
LTD.
(hereinafter referred to as “ADAMS
GOLF”).

WITNESSETH

WHEREAS,
ADAMS
GOLF desires
to obtain the right to use the name, likeness and ENDORSEMENT of
CONSULTANT in
connection with the advertisement and promotion of ADAMS
GOLF’S PRODUCT;

NOW
THEREFORE, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

CONTRACT
PERIOD

	1.    	TERM
      OF CONTRACT

	
      
	
      The
      Term of this Agreement shall be for a period of [* ****]
      years and [*****] months commencing the 1st day of September 2004 and
      terminating the [*****] day of [*****]. 

	2.    	
      DEFINITIONS 

As used
in this Agreement, the following terms shall be defined as set forth
below:

		     A.	CONSULTANT’S
      “ENDORSEMENT”
      means the right to use the CONSULTANT’S
      name, fame, nickname, autograph, voice, facsimile, signature, photograph,
      likeness, and image in connection with the marketing, advertising,
      promotion and sale of ADAMS
      GOLF’S PRODUCT.

	B.  	
      “PRODUCT”
      shall mean all golf clubs including, but not limited to, metal woods,
      drivers, fairway woods, irons, iron-woods, utility clubs, wedges, and
      putters, bags, and headwear.

 

	C.  	
      “MANDATORY
      PRODUCTS”
      shall
      mean the following ADAMS
      GOLF PRODUCTS
      that CONSULTANT
      must exclusively play/use in all Champions/Senior Professional Golf
      Association (SPGA) and Professional Golf Association (PGA) events at all
      times:

 

[***** ] Confidential
Material redacted and filed separately with the Commission.

 

2

 

	1.  	
      [*****]
      

	2.  	
      Sufficient
      [*****] to maintain total minimum of [*****]
      ADAMS
      GOLF
      [*****] (includes [*****])[*****] at all
times

	3.  	
      [*****]

	4.  	
      [*****]
      (CONSULTANT
      may continue to place the [*****] logo on the [*****] consistent with
      historical practice.)

	D.  	
       “CONTRACT
      TERRITORY”
      shall mean the entire world.

CONSULTANT’S
OBLIGATIONS

	3.    	CONSULTANT’S
      ENDORSEMENT

CONSULTANT hereby
gives and grants to ADAMS
GOLF the
exclusive right and license to use CONSULTANT’S ENDORSEMENT in
connection with the manufacture, sale, distribution, advertising and promotion
of PRODUCT
in the
CONTRACT
TERRITORY.

 

	
      4.
	
      EXCLUSIVITY
      OF ENDORSEMENT

 

	
      
	
      During
      the term of this Agreement, unless otherwise authorized at the sole
      discretion of ADAMS
      GOLF in
      writing, CONSULTANT
      shall not:

 

	A.  	
      give
      the right to use or permit the use of CONSULTANT’S
      name, facsimile signature, nickname, voice or likeness to any other
      manufacturer or seller of PRODUCT;
      

	B.  	
      sponsor
      or endorse PRODUCT
      made or sold by any other manufacturer or seller;
or

	C.  	
      serve
      as a CONSULTANT or
      advisor of any other manufacturer or seller of PRODUCT.
      

	D.  	
      Notwithstanding
      paragraphs 4A, 4B and 4C above, CONSULTANT
      shall be entitled to endorse and play the [*****]. The parties expressly
      agree that CONSULTANT
      may
      permit [*****] the use of CONSULTANT’S
      name and/or likeness in [*****] print and/or television advertisement
      provided that this is executed in a manner consistent with [*****] past
      [*****] advertising practice using similarly situated professional golfers
      with competing golf club endorsement agreements that include [*****]. If
      [*****] use of CONSULTANT
      varies from past practice of utilizing similarly situated professionals,
      CONSULTANT
      will take action to remedy the situation [*****]. If CONSULTANT
      participates directly in any [*****] sponsored photo shoots for
      advertising or PR, CONSULTANT
      shall wear his ADAMS
      GOLF
      [*****]. The parties further expressly agree that CONSULTANT’S
      endorsement of the [*****] shall not include the right to place a [*****]
      logo on his ADAMS
      GOLF
      [*****] or the ADAMS
      GOLF
      [*****]. If CONSULTANT’S
      relationship
      with [*****] terminates during this Agreement, CONSULTANT
      shall be permitted to replace the [*****] endorsement with another [*****]
      endorsement under the same terms and conditions expressed
      herein.

 

[***** ] Confidential
Material redacted and filed separately with the Commission.

 

3

 

	E.  	
      Notwithstanding
      paragraphs 4A, 4B and 4C above, CONSULTANT
      shall not be required to wear ADAMS
      GOLF
      [*****] in [*****] ads.

	5.    	EXCLUSIVE
      USE OF PRODUCT

During
the term of this Agreement, CONSULTANT shall
exclusively play/use the MANDATORY
PRODUCT. (It is
expressly understood by the parties that CONSULTANT may play
[* ****] clubs in
the bag other than ADAMS
GOLF clubs
including, but not limited to, a putter by a manufacturer other than
ADAMS
GOLF but may
not endorse those clubs and/or putter.)

	6.     	CONSULTANT’S
      ENDORSEMENT OF NON-COMPETITIVE
PRODUCT

If
CONSULTANT
endorses
or promotes a non-competitive product and in that endorsement or promotion
CONSULTANT
wears,
plays, uses, holds or is in any way associated with a product that would
constitute PRODUCT
as
defined under this Agreement, CONSULTANT shall
use objectively reasonable best efforts to ensure that PRODUCT is an
ADAMS
GOLF PRODUCT and it
shall not be altered or changed in appearance in the endorsement in any manner
whatsoever without the express written consent of ADAMS
GOLF. When
endorsing a non-competitive product, under no circumstances shall CONSULTANT wear,
play, use, hold or in any way be associated with an ADAMS
GOLF
competitor’s Product. 

	7.    	CONSULTANT’S
      SATISFACTION OF MANDATORY PRODUCT

It is
particularly and expressly understood and agreed that if CONSULTANT shall
find in his sincere best reasonable judgment that the MANDATORY
PRODUCT so
supplied is not suitable for his use in tournament competition, then he shall
promptly notify ADAMS
GOLF in
writing of such fact and the reasons therefor. Thereafter, ADAMS
GOLF shall
have a period of thirty (30) days to either, at ADAMS
GOLF’S sole
discretion, supply CONSULTANT with
MANDATORY
PRODUCT that is
acceptable to him or terminate the agreement. It is agreed that if the contract
is terminated pursuant to this paragraph, the compensation due CONSULTANT shall be
prorated from the date this Agreement is terminated. Proration of compensation
shall be determined on the same repayment schedule as provide in paragraph 8A
below.

 

[***** ] Confidential
Material redacted and filed separately with the Commission.

 

4

 

	
      8.
	
      MINIMUM
      NUMBER OF TOURNAMENTS AND POTENTIAL REPAYMENT OF BASE
      COMPENSATION

	     A. 	In
      each and every calendar year of this Agreement, CONSULTANT
      shall achieve a satisfactory record of play in a minimum of [* ****] professional
      golf association events on the SPGA and/or PGA tour (which shall include
      both the PGA and SPGA Tour Skins Games). If for any reason, CONSULTANT
      should achieve a satisfactory record of play in less than [*****] SPGA
      and/or PGA tour events in a calendar year, he shall repay ADAMS
      GOLF an
      amount per event for each event under [*****] achieved in the given
      calendar year as follows: 

The agreed upon repayment amount per event per calendar
year:

1.  Year 1.
$[*****]

2.  Year 2
$[*****]

3.  Year 3
$[*****]

4.  Year 4
$[*****]

5.  Year 5
$[*****]

	B.  	
      Payment
      shall be made to ADAMS
      GOLF
      within one month following the end of the calendar year. For example, if
      in the calendar year 2005 CONSULTANT
      achieves a satisfactory record of play in [*****] events, he shall repay
      ADAMS
      GOLF [*****]
      dollars no later than January 31, 2006. 

	C.  	
      In
      the event that CONSULTANT is
      prevented from competing for reasons outside his control, the parties
      agree to a good faith attempt to resolve the issues. If a resolution can
      not be reached, ADAMS
      GOLF
      may, at its sole discretion, demand prorated repayment pursuant to the
      repayment schedule in paragraph 8A above.

	
      9.      
	
      PRODUCT
      DESIGN

 

During
the term of this Agreement, CONSULTANT shall
use best efforts to cooperate with ADAMS
GOLF in giving
advice, suggestions and recommendations concerning the acceptability and
playability of current ADAMS
GOLF lines,
the development of new ADAMS
GOLF lines,
and information about significant golf PRODUCT and golf
market trends, and meet as reasonably requested with ADAMS
GOLF’S
Design/Testing Teams.

 

	
      10.    
	
      PROMOTION
      OF PRODUCT

	
            
	
      During
      the term of this Agreement, CONSULTANT
      shall use best efforts to wear the headwear and display ADAMS
      GOLF’S brand
      name and to demonstrate, discuss and emphasize the newest features of
      ADAMS
      GOLF PRODUCT at
      every opportunity including but not limited to all Senior PGA tour events
      and promotional and advertising events in which CONSULTANT
      takes part.

 

[***** ] Confidential
Material redacted and filed separately with the Commission.

 

5

 

	
      11.    
	
      PROMOTIONAL
      APPEARANCES

	A.  	
      During
      the term of this Agreement, CONSULTANT
      shall use best efforts to be available for such press interviews, radio or
      TV appearances arranged for CONSULTANT by
      ADAMS
      GOLF which
      are compatible with CONSULTANT’S
      own practice, play and personal time requirements. CONSULTANT
      will be required to be available after a tournament for selected
      interviews, either the Sunday afternoon or Monday morning following the
      tournament. In all such interviews and appearances, CONSULTANT
      will use his best efforts to make reference to the ADAMS
      GOLF PRODUCT and
      wear [*****] and display ADAMS
      GOLF’S
      brand name.

	B.  	
      During
      the term of this Agreement, CONSULTANT
      shall make himself available on not more than [*****]
      days for television and radio commercials, photo shoots, modeling and
      promotional appearances compatible with CONSULTANT’S
      own practice, play and personal time requirements. Said activities shall
      be directly related to the promotion of ADAMS
      GOLF PRODUCT.
      ADAMS
      GOLF shall
      reimburse CONSULTANT
      for reasonable travel expenses for CONSULTANT
      when making special appearances for ADAMS
      GOLF
      pursuant to this paragraph but ADAMS
      GOLF
      shall not pay CONSULTANT
      session fees, residual payments or the like for television appearances.
      Travel expenses shall include jet fuel or first-class round-trip airfare
      and lodging, meals and local
transportation.

	12.    	
      BEHAVIOR

During
the term of this Agreement, CONSULTANT will
conduct himself at all times with due regard to public morals and conventions.
If the value of CONSULTANT’S ENDORSEMENT is
materially reduced or impaired because CONSULTANT:

	A.  	
      committed
      or shall commit any public act that involves moral turpitude,
    

	B.  	
      commits
      or violates any material foreign, U.S., federal, or other applicable state
      or local law, 

	C.  	
      commits
      any act which brings him into public disrepute, contempt, scandal or
      ridicule, or which insults or offends the community,

	D.  	
      makes
      any statements in derogation, in any material respect, of ADAMS
      GOLF or
      any of its affiliates or any of their respective PRODUCT or
      services and such statement is made to the general public or becomes a
      matter of public knowledge,

then at
any time after the occurrence of such act, thing or statement, ADAMS
GOLF shall
have the right, in addition to its other legal and equitable remedies, to
immediately terminate this Agreement, by giving written notice to CONSULTANT.
ADAMS
GOLF must
exercise its right of termination within ninety (90) days of its senior
management becoming aware of the conduct giving rise to the right of
termination.

 

[***** ] Confidential
Material redacted and filed separately with the
Commission.

 

6

 

	13.   	FREEDOM
      TO CONTRACT

	
      
	
      CONSULTANT
      represents and warrants that CONSULTANT is
      free of all prior undertakings and obligations which would prevent or tend
      to impair either the full performance of CONSULTANT’S
      obligations hereunder or ADAMS
      GOLF’S
      full enjoyment of the rights and privileges granted to it by CONSULTANT.

	
      14.
	
      INDEMNITY

	
      
	
      CONSULTANT
      agrees to protect, indemnify and hold ADAMS
      GOLF harmless
      from any and all liability, claims, causes of action, suits, damages and
      expenses (including reasonable attorneys’ fees and expenses) for which it
      becomes liable or is compelled to pay by reason of a breach of any
      covenant or representation by CONSULTANT
      in
      this Agreement.

	15.  	ABSENCE
      OF AGENCY

CONSULTANT shall
not and will not have the right or authority to bind ADAMS
GOLF by any
representation or in any other respect whatsoever or to incur any obligation or
liability in the name of or on behalf of ADAMS
GOLF.

	
      16.
	
      MEMBERSHIPS

CONSULTANT warrants
and represents that during the term of this Agreement he is a member in good
standing of SAG, AFTRA or any other organization having jurisdiction over
CONSULTANT’S services
hereunder. This Agreement is subject to all of the terms and conditions of the
collective bargaining agreements with SAG, AFTRA, or any other union agreements
or codes having jurisdiction over CONSULTANT’S services
hereunder. Any and all payments required to be made to SAG or AFTRA or any other
organization having jurisdiction over CONSULTANT’S services
hereunder, shall be the sole responsibility of CONSULTANT.

ADAMS
GOLF’S OBLIGATIONS

	17.    	SUPPLY
      OF PRODUCT

	A.  	
      During
      the term of this Agreement, ADAMS
      GOLF
      shall provide CONSULTANT
      with sufficient quantities of such MANDATORY
      PRODUCTS
      for CONSULTANT’S
      use as CONSULTANT
      may reasonably need to fulfill his obligations under this agreement.
      ADAMS
      GOLF
      shall pay all charges in connection with the delivery of MANDATORY
      PRODUCTS to
      CONSULTANT.

	B.  	
      In
      addition to paragraph 17A above, ADAMS
      GOLF
      shall provide CONSULTANT
      with [*****] sets of clubs for CONSULTANT’S
      family and friends each calendar year of this
Agreement.

 

[***** ] Confidential
Material redacted and filed separately with the
Commission.

 

7

 

	18.   	BASE
      COMPENSATION 

For the
entire term of this Agreement, from September 1, 2004 through 
[*****] ADAMS
GOLF shall
pay CONSULTANT a base
compensation of [*****] dollars. The base compensation shall be paid
[*****].

	19.    	PERFORMANCE
      BONUSES AND TOTAL COMPENSATION
LIMITATION

	 	
      A.
	
      In
      addition to his base compensation, CONSULTANT
      shall also be entitled to bonuses based on performance in particular PGA
      and SPGA events and year-end standing as
follows:

	 	
      
	
      1.
      
	
      If
      CONSULTANT
      wins a PGA Tour Major (consisting of the Masters, US Open, PGA and British
      Open) or the Champion’s Tour (SPGA) US Open, CONSULTANT
      shall receive a bonus of $ [*****].

	 	
      
	
      2.
      
	
      If
      CONSULTANT
      wins a Champions/Seniors Tour (SPGA) major other than the US Open (which
      shall for the purposes of this agreement consist of the Senior PGA, Senior
      British, the Tradition and the Ford Seniors) CONSULTANT
      shall receive a bonus of $ [*****].

	
      
	
      
	
      3.
	
      If
      CONSULTANT
      finishes in the top [*****] on the official year end money list of the
      Champion’s Tour (SPGA), CONSULTANT
      shall also be entitled to a year end performance bonus according to the
      following schedule:

	a.  	
      2005
      $
      [*****]

	b.  	
      2006$
      [*****]

	c.  	
      2007$
      [*****]

	d.  	
      2008$
      [*****]

	e.  	
      2009$
      [*****]

	B.  	
      Notwithstanding
      paragraph A and its subparts above, the maximum total annual bonuses shall
      in no case exceed the following schedule:

	1.  	
      2005
      $
      [*****]

	2.  	
      2006$
      [*****]

	3.  	
      2007$
      [*****]

	4.  	
      2008$
      [*****]

	5.  	
      2009$
      [*****]

(For
example, if in the calendar year [*****]CONSULTANT wins
every PGA tour major and finishes in the top [*****] on the official year end
money list of the Champion’s Tour (SPGA), CONSULTANT’S total
bonuses shall be [*****] dollars.

 

[***** ] Confidential
Material redacted and filed separately with the Commission.

 

8

 

	     C. 	In
      the event of ADAMS
      GOLF’S
      insolvency or bankruptcy, it is expressly agreed to by the parties that
      CONSULTANT
      shall not be obligated to repay any money so long as CONSULTANT
      continues to fully perform his obligations under this Agreement.
  

 

	20.   	APPROVAL
      OF ADVERTISING 

	
      
	
      Prior
      to publishing or placing any advertising or promotional material which
      uses CONSULTANT’S
      name, facsimile signature, nickname, voice or likeness, ADAMS
      GOLF shall
      submit the same to CONSULTANT,
      or CONSULTANT’S
      designee, for approval, which approval shall not be unreasonably withheld
      or delayed. If CONSULTANT
      disapproves, the reasons therefore shall be given to ADAMS
      GOLF in
      writing within three (3) business days or shall be deemed approved.
      ADAMS
      GOLF
      agrees to protect, indemnify and hold CONSULTANT
      harmless from and against any and all expenses, damages, claims, suits,
      actions, judgments and costs whatsoever, arising out of, or in any way
      connected with, any advertising material furnished by, or on behalf of,
      the company. 

	21.   	INDEMNITY

	 	
      
	
      ADAMS
      GOLF agrees
      to defend, indemnify and hold harmless CONSULTANT
      from any and all liability, claims, causes of action, suits, damages and
      expenses (including reasonable attorneys’ fees and expenses) for which he
      becomes liable or is compelled to pay by reason of or arising out of any
      claim or action for personal injury, death or otherwise involving alleged
      defects in ADAMS
      GOLF’S PRODUCT,
      provided that ADAMS
      GOLF is
      promptly given notice in writing and is given complete authority and
      information required for the defense, and ADAMS
      GOLF shall
      pay all damages or costs awarded therein against CONSULTANT
      and any other cost incurred by CONSULTANT in
      defense of any suit, but shall not be responsible for any cost, expense or
      compromise incurred or made by CONSULTANT
      without
      ADAMS GOLF’S
      prior written consent.

TERMINATION

	22.   	FAILURE
      TO PLAY 

Notwithstanding
any other paragraph of this Agreement, in the event that CONSULTANT dies or
is unable to play tour golf at all, ADAMS
GOLF may
terminate this Agreement on thirty (30) days’ written notice. Upon such
termination, CONSULTANT and/or
CONSULTANT’S
estate
shall be required to repay ADAMS
GOLF for that
period of the Agreement not performed by CONSULTANT. The
repayment amount shall be calculated in the same way as repayment is calculated
under paragraph 8A. 

 

9

 

	
      23.   
	TERMINATION
      FOR CAUSE 

Notwithstanding
any other paragraph of this Agreement, if either party commits any material
breach of this Agreement, the other party may terminate for cause upon giving
fifteen (15) days written notice of such cause and provided the breach is not
rectified within such fifteen (15) day period. Upon such termination,
CONSULTANT
shall be
required to repay ADAMS
GOLF for that
period of the Agreement not performed by CONSULTANT. The
repayment amount shall be calculated in the same way as repayment is calculated
under paragraph 8A. 

	24.   	
      ADAMS
      GOLF’S RIGHTS UPON TERMINATION

	A.  	
      In
      the event of termination of this Agreement, ADAMS
      GOLF
      shall cease using the name and/or likeness of CONSULTANT in
      advertising within [*****] days.

	B.  	
      In
      the event of termination of this Agreement, ADAMS
      GOLF
      shall cease using the name and/or likeness of CONSULTANT on
      Product within [*****]
      months after termination of this Agreement.

MISCELLANEOUS
PROVISIONS

	
      24.
	
      SIGNIFICANCE
      OF HEADINGS

Section
headings contained herein are solely for the purpose of aiding in speedy
location of subject matter and are not in any sense to be given weight in the
construction of this Agreement. Accordingly, in case of any question with
respect to the construction of this Agreement, it is to be construed as though
such section headings had been omitted.

	
      25.
	
      APPLICABLE
      LAW

This
Agreement shall be governed and construed according to the laws of the State of
Kansas. 

	
      26.
	
      ENTIRE
      AGREEMENT

The
provisions of this Agreement are intended by the parties as a complete,
conclusive and final expression of their agreement concerning the subject matter
hereof, which Agreement supersedes all prior agreements concerning the subject
matter, and no other statement, representation, agreement or understanding, oral
or written, made prior to or at the execution hereof, shall vary or modify the
written terms hereof. No amendments, modifications or releases from any
provision hereof shall be effective unless in writing and signed by both
parties.

	
      27.
	
      WAIVER

Unless
otherwise mutually agreed in writing, no departure from, waiver of, or omission
to require compliance with any of the terms hereof by either party shall be
deemed to authorize any prior or subsequent departure or waiver, or obligate
either party to continue any departure or waiver.

 

[***** ] Confidential
Material redacted and filed separately with the
Commission.

 

10

 

	
      28.
	
      EXECUTION
      AND DELIVERY REQUIRED

This
instrument shall not be considered to be an agreement or contract nor shall it
create any obligation whatsoever on the part of CONSULTANT or
ADAMS
GOLF unless
and until it has been signed by CONSULTANT, or a
duly authorized representative, and by duly authorized representatives of
ADAMS
GOLF and
delivery has been made of a fully signed original to both parties.

	
      29.
	
      SEVERABILITY

Any
provision or part of this Agreement prohibited by applicable law shall be
ineffective to the extent of such prohibition without invalidating the remaining
provisions or parts hereof.

	
      30.
	
      RELATIONSHIP 

Both
parties agree that this Agreement does not constitute and shall not be construed
as a constituting of a partnership or joint venture between ADAMS
GOLF and
CONSULTANT. Neither
party shall have any right to obligate or bind the other party in any manner
whatsoever, and nothing herein contained shall give or is intended to give any
rights of any kind to any third person.

	
      31.
	
      ASSIGNMENT
      AND CHANGE OF CONTROL 

Neither
ADAMS
GOLF nor
CONSULTANT shall
have the right to grant sublicenses hereunder or to assign, alienate or
otherwise transfer any of its rights or obligations hereunder. 

	
      32.
	
      CONFIDENTIALITY

Both
parties understand
that the contents of this Agreement, including, but not limited to, all amounts
paid or to be paid and
any additional consideration, are extremely confidential, and that disclosure of
same to any third party could be detrimental to the interests of one or both
parties. Therefore, both parties agree not to disclose the terms of this
Agreement, without the permission of the other party, to any third party other
than to CONSULTANT’S
business, legal and financial advisors, and with respect to all such advisors,
CONSULTANT shall
take all reasonable steps to ensure such confidentiality to ADAMS
GOLF.
Furthermore, CONSULTANT
recognizes that during the course of performing his duties hereunder he may
become aware of proprietary, confidential information concerning ADAMS
GOLF, its
PRODUCT,
methods, processes, billing practices, financial condition, etc., or information
ADAMS
GOLF designates
as confidential (collectively “Confidential Information”). CONSULTANT agrees
that he will maintain in confidence and not disclose to any third party at any
time any such Confidential Information and shall not use any such information to
the detriment of ADAMS
GOLF or for
any purpose not contemplated by the Agreement.

 

 

11

 

	33.   	ARBITRATION
      

	
      
	
      In
      the event a dispute arises under this Agreement which cannot be resolved,
      such dispute shall be submitted to arbitration and resolved by a panel of
      three arbitrators (who shall be lawyers), in a decision required by a
      majority of the arbitrators. If the parties cannot agree upon the panel of
      three arbitrators, then each party may pick an arbitrator and the two
      chosen arbitrators shall choose upon the three-arbitrator panel. The
      arbitration shall be conducted in accordance with the Arbitration Rules of
      the American Arbitration Association. Venue shall be Kansas. The award or
      decision rendered by the arbitration panel shall be final, binding and
      conclusive and judgment may be entered upon such award by any court of
      competent jurisdiction.

	
      34.
	
      NOTICE

Every
written notice or written report which may be served upon CONSULTANT,
according to the terms of this Agreement, may be served by enclosing it in a
postpaid envelope addressed to:

Mr. Tom
Watson

C/O
Assured Management Company

1901 W.
47th Place,
Suite 200

Westwood,
Kansas 66205

or at
such other address as is given in writing to ADAMS
GOLF by
CONSULTANT.

Every
written notice which may be served upon ADAMS
GOLF,
according to the terms of this Agreement, shall be served by enclosing it in a
postpaid envelope addressed to:

Attention
Legal Department

ADAMS
GOLF, LTD.

2801 East
Plano Parkway

Plano,
Texas 75074

or at
such other address as is given in writing by ADAMS
GOLF to
CONSULTANT.

12

 

IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
set forth above.

 

 

	APPROVED FOR CONSULTANT	 	 	 
	 	 	 	 
	 	 	 	 
	By: /s/
      Tom Watson	 	 	Date:
      January 13, 2005
	
      

      Tom Watson	 	 	
      

      
		 	 	

 

 

	APPROVED FOR ADAMS GOLF, LTD.	 	 	 
	 	 	 	 
	 	 	 	 
	By: /s/ Oliver G. “Chip” Brewer III	 	 	Date: January 13, 2005
	
      

      Oliver G. (“Chip”) Brewer III	 	 	
      

       
	
       

      
      CEO, ADAMS GOLF

	 	 	

 

 

13

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