EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of January 1,
2000, by and between CALLAWAY GOLF COMPANY, a Delaware corporation (the
"Company"), and BRUCE PARKER ("Employee").
1. TERM. The Company hereby employs Employee and Employee hereby accepts
employment pursuant to the terms and provisions of this Agreement for the period
commencing January 1, 2000 and terminating December 31, 2003, unless this
Agreement is earlier terminated as hereinafter provided. It is agreed and
understood that Employee's employment is for a defined and limited term, as set
forth in this Agreement, and that unless such employment is earlier terminated,
upon the expiration of this Agreement Employee shall cease to be an employee of
the Company.
2. SERVICES.
(a) Employee shall serve as Ambassador. Employee's duties shall be
those assigned to him from time to time by the President of the Company, and are
expected to involve contact with, and advice concerning, the customers of the
Company. Employee shall report to the President of the Company or to such other
senior executive as the Chief Executive Officer shall designate.
(b) Employee shall be required to comply with all policies and
procedures of the Company, as such shall be adopted, modified or otherwise
established by the Company from time to time.
3. SERVICES TO BE NON-EXCLUSIVE. During the term hereof, Employee agrees
to devote his or her best efforts to the performance of Employee's duties
hereunder pursuant to the supervision and direction of the Company's Board of
Directors and its Chief Executive Officer. Employee further agrees, as a
condition to the performance by the Company of each and all of its obligations
hereunder, that so long as Employee is employed by the Company or otherwise
receiving compensation or other consideration from the Company, Employee will
not directly or indirectly render services of any nature to, otherwise become
employed by, or otherwise participate or engage in any other business that
competes with the Company or any of its affiliates without the Company's prior
written consent. Employee further agrees to execute such secrecy, non-
disclosure, patent, trademark, copyright and other proprietary rights
agreements, if any, as the Company may from time to time reasonably require.
Nothing herein contained shall be deemed to preclude Employee from providing
services to non-competing entities, consistent with the above, or from having
outside personal investments and involvement with appropriate community
activities, and from devoting a reasonable amount of time to such matters,
provided that such activities shall in no manner interfere with or derogate from
Employee's work for the Company. If Employee undertakes to provides services to
non-competing entities during the term of this Agreement, Employee shall notify
the Company, in writing, within thirty (30) days.
4. COMPENSATION.
(a) The Company agrees to pay Employee a Base Salary at the rate of
$400,000.00 per year for calendar years 2000 and 2001, and at the rate of
$300,000.00 per year for calendar years 2002 and 2003. Base Salary shall be
payable monthly.
(b) The Company agrees to pay Employee Supplemental Compensation at the
rate of $5,000.00 per day for each day Employee performs services for the
Company at the Company's request "In Service Days"). Supplemental Compensation
shall be paid monthly, with any Base Salary due, in the next month following the
month in which it is earned. It is agreed and understood that the Company shall
request, and Employee shall provide, a minimum of 120 In Service Days worth
$600,000.00 in Supplemental Compensation during the term of this Agreement (the
"Total In Service Commitment"). If, through no fault of Employee, the Company
fails to use and compensate Employee for at least 30 In Service Days in any
calendar year during the term of this Agreement, then on or before December 31
of that calendar year the Company shall pay to Employee a lump sum cash payment
equal to the difference between the total Supplemental Compensation paid in that
year and the lesser of (i) any remaining and unpaid portion of the Total In
Service Commitment and (ii) $150,000. Employee shall provide such records and
documentation, including trip reports, as the Company may reasonably request as
a condition of receiving Supplemental Compensation. Travel days shall not count
as In Service Days, and shall not earn Supplemental Compensation, except that
any day on which Employee is required by the Company to travel more than four
(4) hours in connection with the performance of his requested duties, and on
which no other services are provided by Employee, shall be treated as one half
of an In Service Day and shall earn Supplemental Compensation of $2,500.00 for
each such day.
(c) The Company shall provide Employee an opportunity to receive an
annual bonus based purely upon the Company's discretion, and without regard to
any bonus or bonuses paid by the Company to any other employee or employees.
Employee acknowledges that all bonuses are discretionary, that he or she has no
expectation of any nondiscretionary bonus, and that the Company does not
contemplate establishing any nondiscretionary bonus plan applicable to Employee.
(d) All payments to Employee from the Company or subject to applicable
state, federal and other tax laws, including any applicable withholding
provisions.
5. EXPENSES AND BENEFITS.
(a) Reasonable and Necessary Expenses. In addition to the compensation
provided for in Section 4 hereof, the Company shall reimburse Employee for all
reasonable, customary, and necessary expenses incurred in the performance of
Employee's duties hereunder. Employee shall first account for such expenses by
submitting a signed statement itemizing such expenses prepared in accordance
with the policy set by the Company for reimbursement of such expenses. The
amount, nature, and extent of such expenses shall always be subject to the
control, supervision, and direction of the Company and its Chief Executive
Officer. It is agreed and understood that, wherever practical and reasonable,
Employee's air travel in the United States shall be by chartered aircraft,7 and
that Employee's
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air travel in the United States where chartered aircraft is not practical and
reasonable, and on all international trips, shall be First Class where such
service is available. Hotel and other travel accommodations shall be of a class
of service mutually agreed upon by the Company and Employee.
(b) Vacation. Employee shall not be entitled to receive any paid
vacation or similar vacation benefits during the term of this Agreement. The
Company agrees to pay Employee, in lieu of providing time off, for any vacation
benefits accrued prior to January 1, 2000, on or before January 31, 2000.
(c) Benefits. During Employee's employment with the Company pursuant to
this Agreement, the Company shall provide for Employee to:
(i) participate in the Company's health insurance and disability
insurance plans as the same may be modified from time to time;
(ii) receive, if Employee is insurable under usual underwriting
standards, term life insurance coverage on Employee's life, payable to whomever
the Employee directs, in the face amount of $550,000.00, provided that
Employee's physical condition does not prevent Employee from qualifying for such
insurance coverage under reasonable terms and conditions;
(iii) participate in the Company's 401(k) pension plan pursuant to
the terms of the plan, as the same may be modified from time to time; and
(iv) participate in the Company's Executive Deferred Compensation
Plan, as the same may be modified from time to time.
(d) Support. The Company shall make available to Employee for business
use office space and secretarial services at the Company's principal place of
business in Carlsbad, California, and shall provide, at the Company's expense,
for Employee to have the use of a computer, fax and telephone for business use
at his home.
(e) Stock Options. Pursuant to a separate stock option agreement and
subject to the approval of the Stock Option Committee of the Board of Directors
or its authorized representatives, the Company shall provide to Employee options
to purchase up to 100,000 shares of the Common Stock of the Company in accord
with the following pricing and vesting schedule ("Grant Date" means the date on
which the options are officially granted by action of the Company):
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SHARES VESTING DATE PRICE
- ------ ----------------- --------------------------------------
20,000 December 31, 2000 Base Price (the closing price
on the NYSE on Grant Date, as
reported in the Wall Street Journal)
20,000 December 31, 2001 Base Price
20,000 December 31, 2002 Base Price
40,000 December 31, 2003 Base Price
All shares of stock that are issuable upon the exercise of such options granted
to Employee shall be registered as promptly as possible with the Securities and
Exchange Commission, and shall be approved for listing on the New York Stock
Exchange upon notice of issuance. This grant of stock options shall be made at
the Company's discretion by no later than March 31, 2000. If the options are not
granted on or before March 31, 2000, then Employee shall have until April 10,
2000 to give written notice of his intention to rescind this Agreement.
(f) Medical Consulting. To the extent the Company makes the services
of. Joseph A. Capozzi, M.D., F.A.C.S., available to senior officers of the
Company, the Company shall also undertake, if Dr. Capozzi agrees, to make such
services available to Employee on the same terms and conditions.
6. REQUIRED USE OF COMPANY EQUIPMENT.
(a) It is expected and required that, during the term of this
Agreement, Employee shall promote Callaway Golf(R) golf clubs by using the
Company's current products whenever he plays golf. The Company shall provide
Employee with up to two sets of the current products of the Company, at no cost
to Employee, for his personal use ("Personal Use Sets"). Personal Use Sets may
be exchanged, in whole or in part, for more current product as reasonably
required. Personal Use Sets may not be sold or given to others by Employee.
(b) In addition to any Personal Use Sets, Employee may purchase
additional equipment from the Company for his personal use or to be used as
gifts. Employee may purchase up to one set of golf clubs, including a bag, each
year at half of the published U.S. wholesale price. Additional clubs and/or bags
may be purchased at the published U.S. wholesale price, up to a maximum of
$10,000.00 in purchases in any one year. No equipment purchased under this
policy may be resold or used for barter.
(c) When the Company launches its golf ball, it will be expected and
required that, during the term of this Agreement, Employee shall promote the
Callaway Golf golf ball by using a current model golf ball whenever he plays
golf. The Company and Employee shall agree upon a program for providing Employee
with Callaway Golf golf balls for his personal use ("Personal Use Balls").
(d) The availability of Personal Use Sets and Personal Use Balls for
Employee shall be subject to the commercial and business needs of the Company,
including the needs of its sales departments. The Company, at its option, may
provide "demo", blemished,
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or refurbished product. At the end of this Agreement, any remaining Personal Use
Sets or Personal Use Balls shall be returned to the Company.
7. NONCOMPETITION.
(a) Other Business. To the fullest extent permitted by law, Employee
agrees that, while employed by the Company or otherwise receiving compensation
or other consideration from the Company (including any Special Severance),
Employee will not, directly or indirectly (whether as agent, consultant, holder
of a beneficial interest, creditor, or in any other capacity), engage in any
business or venture which engages directly or indirectly in competition with the
business of the Company or any of its affiliates, or have any interest in any
person, firm, corporation, or venture which engages directly or indirectly in
competition with the business of the Company or any of its affiliates. For
purposes of this section, the ownership of interests in a broadly based mutual
fund shall not constitute ownership of the stocks held by the fund.
(b) Other Employees. Except as may be required in the performance of his
or her duties hereunder, Employee shall not cause or induce, or attempt to cause
or induce, any person now or hereafter employed by the Company or any of its
affiliates to terminate such employment, nor shall Employee directly or
indirectly employ any person who is now or hereafter employed by the Company or
any of its affiliates for a period of one (1) year from the date Employee ceases
to be employed by the Company.
(c) Suppliers. While employed by the Company or otherwise receiving
compensation or other consideration from the Company (including any Special
Severance), and for one (1) year thereafter, Employee shall not cause or induce,
or attempt to cause or induce, any person or firm supplying goods, services or
credit to the Company or any of its affiliates to diminish or cease furnishing
such goods, services or credit.
(d) Conflict of Interest. Employee shall not engage in any conduct or
enterprise that shall constitute an actual or apparent conflict of interest with
respect to Employee's duties and obligations to the Company.
(e) Non-Interference. While employed by the Company or otherwise
receiving compensation or other consideration from the Company (including any
Special Severance), and for one (1) year thereafter, Employee shall not in any
way undertake to harm, injure or disparage the Company, its officers, directors,
employees, agents, affiliates, vendors, products, or customers, or their
successors, or in any other way exhibit an attitude of hostility toward them.
Employee understands that it is the policy of the Company that only the Chief
Executive Officer, the Vice President of Press, Public and Media Relations and
their specific designees may speak to the press or media about the Company or
its business, and agrees not to interfere with the Company's press and public
relations by violating this policy.
8. TERMINATION.
(a) Termination by the Company for Substantial Cause. Employee's
employment under this Agreement may be terminated immediately by the Company for
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substantial cause at any time. In the event of a termination by the Company for
substantial cause, Employee shall be entitled to receive (i) any compensation
accrued and unpaid as of the date of termination; and (ii) no other severance.
"Substantial cause" shall mean for purposes of this subsection failure by
Employee to substantially perform his or her duties, breach of this Agreement,
or misconduct, including but not limited to, dishonesty, theft, use or
possession of illegal drugs during work, and/or felony criminal conduct.
Notwithstanding the foregoing, if the Company elects, in its sole discretion, it
may pay Employee additional severance equal to Employee's Base Salary at the
same rate and on the same schedule as in effect at the time of termination for a
period of time no longer than the remainder of the term of this Agreement. If
the Company so elects to pay Special Severance, then Employee shall remain
obligated to the Company pursuant to Sections 3, 7, 10, 12, 13, 15, 18, 19, 20
and 21 for the duration of such payments.
(b) Termination by Employee for Substantial Cause. Employee's employment
under this Agreement may be terminated immediately by Employee for substantial
cause at any time. In the event of a termination by Employee for substantial
cause, Employee shall be entitled to receive (i) any compensation accrued and
unpaid as of the date of termination; and (ii) the immediate vesting of all
unvested stock options held by Employee that would have vested had Employee
remained employed pursuant to this Agreement for a period of time equal to the
remainder of the term of this Agreement. In addition to the foregoing, and
subject to the provisions of Section 20, Employee shall be entitled to Special
Severance equal to (i) severance payments equal to Employee's former Base Salary
at the same rate and on the same schedule as in effect at the time of
termination for a period of time equal to the remainder of the term of this
Agreement; (ii) the payment of premiums owed for COBRA insurance benefits for a
period of time equal to the lesser of the remainder of the term of this
Agreement or the maximum time allowable under COBRA (currently eighteen (18)
months); (iii) a lump sum payment equal to the difference between the total
Supplemental Compensation paid Employee pursuant to this Agreement and
$600,000.00; and (iv) no other severance. "Substantial cause" shall mean for
purposes of this subsection a material breach of this Agreement by the Company.
(c) Termination Due to Permanent Disability. Subject to all applicable
laws, Employee's employment under this Agreement may be terminated immediately
by the Company in the event Employee becomes permanently disabled. Permanent
disability shall be defined as Employee's failure to perform or being unable to
perform all or substantially all of Employee's duties under this Agreement for a
continuous period of more than six (6) months on account of any physical or
mental disability, either as mutually agreed to by the parties or as reflected
in the opinions of three qualified physicians, one of which has been selected by
the Company, one of which has been selected by Employee, and one of which has
been selected by the two other physicians jointly. In the event of a termination
by the Company due to Employee's permanent disability, Employee shall be
entitled to (i) any compensation accrued and unpaid as of the date of
termination; (ii) severance payments equal to Employee's Base Salary at the same
rate and on the same schedule as in effect at the time of termination for a
period of time equal to the lesser of the remainder of the term of this
Agreement or six (6) months from the date of termination; (iii) the immediate
vesting of outstanding but unvested stock options held by Employee as of such
termination date in a prorated amount based upon the number of days in the
option vesting period that elapsed prior to Employee's termination;
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(iv) the payment of premiums owed for COBRA insurance benefits for a period of
time equal to the lesser of the remainder of the term of this Agreement or the
maximum time allowable under COBRA (currently eighteen (18) months); and (vi) no
other severance. The Company shall be entitled to take, as an offset against any
amounts due pursuant to subsections (i) and (ii) above, any amounts received by
Employee pursuant to disability or other insurance, or similar sources, provided
by the Company.
(d) Termination Due to Death. Employee's employment under this
Agreement shall be terminated immediately by the Company in the event of
Employee's death. In the event of a termination due to Employee's death,
Employee's estate shall be entitled to (i) any compensation accrued and unpaid
as of the date of death; (ii) severance payments equal to Employee's Base Salary
at the same rate and on the same schedule as in effect at the time of death for
a period of time equal to the lesser of the remainder of the term of this
Agreement or six (6) months from the date of death; (iii) the immediate vesting
of outstanding but unvested stock options held by Employee as of the date of
death in a prorated amount based upon the number of days in the option vesting
period that elapsed prior to Employee's death; and (iv) no other severance.
(e) Termination at End of Term. Upon the expiration of this Agreement
at the end of its term on December 31, 2003, Employee shall cease to be employed
by the Company in any capacity. There shall be no severance or other payment due
Employee at such time, except that Employee shall be paid any accrued an unpaid
amounts otherwise due under this Agreement for Base Salary, Supplemental
Compensation, and/or reimbursable expenses.
(f) Any severance payments shall be subject to usual and customary
employee payroll practices and all applicable withholding requirements. Except
for such severance pay and other amounts specifically provided pursuant to this
Section 8, Employee shall not be entitled to any further compensation, bonus,
damages, restitution, relocation benefits, or other severance benefits upon
termination of employment. The amounts payable to Employee pursuant to this
Section 8 shall not be treated as damages, but as severance compensation to
which Employee is entitled by reason of termination of employment under the
applicable circumstances. The Company shall not be entitled to set off against
the amounts payable to Employee hereunder any amounts earned by Employee in
other employment after termination of his or her employment with the Company
pursuant to this Agreement, or any amounts which might have been earned by
Employee in other employment had Employee sought such other employment. The
provisions of this Section 8 shall not limit Employee's rights under or pursuant
to any other agreement or understanding with the Company regarding any pension,
profit sharing, insurance or other employee benefit plan of the Company to which
Employee is entitled pursuant to the terms of such plan.
(g) Termination By Mutual Agreement of the Parties. Employee's
employment pursuant to this Agreement may be terminated at any time upon the
mutual agreement in writing of the parties. Any such termination of employment
shall have the consequences specified in such agreement.
9. PRE-TERMINATION RIGHTS. The Company shall have the right, at its
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option, to require Employee to vacate his or her office or otherwise remain off
the Company's premises and to cease any and all activities on the Company's
behalf without such action constituting a termination of employment or a breach
of this Agreement.
10. SURRENDER OF EQUIPMENT, BOOKS AND RECORDS. Employee understands and
agrees that all equipment, books, records, customer lists and documents
connected with the business of the Company and/or its affiliates are the
property of and belong to the Company. Under no circumstances shall Employee
remove from the Company's facilities any of the Company's and/or its affiliates'
equipment, books, records, documents, lists or any copies of the same without
the Company's permission, nor shall Employee make any copies of the Company's
and/or its affiliates' books, records, documents or lists for use outside the
Company's office except as specifically authorized by the Company. Employee
shall return to the Company and/or its affiliates all equipment, books, records,
documents and customer lists belonging to the Company and/or its affiliates upon
termination of Employee's employment with the Company.
11. GENERAL RELATIONSHIP. Employee shall be considered an employee of the
Company within the meaning of all federal, state and local laws and regulations,
including, but not limited to, laws and regulations governing unemployment
insurance, workers' compensation, industrial accident, labor and taxes.
12. TRADE SECRETS AND CONFIDENTIAL INFORMATION.
(a) As used in this Agreement, the term "Trade Secrets and
Confidential Information" means information, whether written or oral, not
generally available to the public, regardless of whether it is suitable to be
patented, copyrighted and/or trademarked, which is received from the Company
and/or its affiliates, either directly or indirectly, including but not limited
to (i) concepts, ideas, plans and strategies involved in the Company's and/or
its affiliates' products, (ii) the processes, formulae and techniques disclosed
by the Company and/or its affiliates to Employee or observed by Employee, (iii)
the designs, inventions and innovations and related plans, strategies and
applications which Employee develops during the Term of this Agreement in
connection with the work performed by Employee for the Company and/or its
affiliates; and (iv) third party information which the Company and/or its
affiliates has/have agreed to keep confidential.
(b) Notwithstanding the provisions of subsection 12(a), the term
"Trade Secrets and Confidential Information" does not include (i) information
which, at the time of disclosure or observation, had been previously published
or otherwise publicly disclosed; (ii) information which is published (or
otherwise publicly disclosed) after disclosure or observation, unless such
publication is a breach of this Agreement or is otherwise a violation of
contractual, legal or fiduciary duties owed to the Company, which violation is
known to Employee; or (iii) information which, subsequent to disclosure or
observation, is obtained by Employee from a third person who is lawfully in
possession of such information (which information is not acquired in violation
of any contractual, legal, or fiduciary obligation owed to the Company with
respect to such information, and is known by Employee) and who is not required
to refrain from disclosing such information to others.
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(c) While employed by the Company, Employee will have access to and
become familiar with various Trade Secrets and Confidential Information.
Employee acknowledges that the Trade Secrets and Confidential Information are
owned and shall continue to be owned solely by the Company and/or its
affiliates. Employee agrees that Employee will not, at any time, whether during
or subsequent to Employee's employment by the Company and/or its affiliates, use
or disclose Trade Secrets and Confidential Information for any competitive
purpose or divulge the same to any person other than the Company or persons with
respect to whom the Company has given its written consent, unless Employee is
compelled to disclose it by governmental process. In the event Employee believes
that Employee is legally required to disclose any Trade Secrets or Confidential
Information, Employee shall give reasonable notice to the Company prior to
disclosing such information and shall assist the Company in taking such legally
permissible steps as are reasonable and necessary to protect the Trade Secrets
or Confidential Information, including, but not limited to, execution by the
receiving party of a non-disclosure agreement in a form acceptable to the
Company.
(d) The provisions of this Section 12 shall survive the termination or
expiration of this Agreement, and shall be binding upon Employee in perpetuity.
13. ASSIGNMENT OF RIGHTS.
(a) As used in this Agreement, "Designs, Inventions and Innovations,"
whether or not they have been patented, trademarked, or copyrighted, include,
but are not limited to designs, inventions, innovations, ideas, improvements,
processes, sources of and uses for materials, apparatus, plans, systems and
computer programs relating to the design, manufacture, use, marketing,
distribution and management of the Company's and/or its affiliates' products.
(b) As a material part of the terms and understandings of this
Agreement, Employee agrees to assign to the Company all Designs, Inventions and
Innovations developed, conceived and/or reduced to practice by Employee, alone
or with anyone else, in connection with the work performed by Employee for the
Company during Employee's employment with the Company, regardless of whether
they are suitable to be patented, trademarked and/or copyrighted.
(c) Employee agrees to disclose in writing to the President and CEO of
the Company any Design, Invention or Innovation relating to the business of the
Company and/or its affiliates, which Employee develops, conceives and/or reduces
to practice in connection with any work performed by Employee for the Company,
either alone or with anyone else, while employed by the Company and/or within
twelve (12) months of the termination of employment. Employee shall disclose all
Designs, Inventions and Innovations to the Company, even if Employee does not
believe that he or she is required under this Agreement, or pursuant to
California Labor Code Section 2870, to assign his or her interest in such
Design, Invention or Innovation to the Company. If the Company and Employee
disagree as to whether or not a Design, Invention or Innovation is included
within the terms of this Agreement, it will be the responsibility of Employee to
prove that it is not included.
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(d) Pursuant to California Labor Code Section 2870, the obligation to
assign as provided in this Agreement does not apply to any Design, Invention or
Innovation to the extent such obligation would conflict with any state or
federal law. The obligation to assign as provided in this Agreement does not
apply to any Design, Invention or Innovation that Employee developed entirely on
Employee's own time without using the Company's equipment, supplies, facilities
or Trade Secrets and Confidential Information except those Designs, Inventions
or Innovations that either:
(i) Relate at the time of conception or reduction to practice to
the Company's and/or its affiliates' business, or actual or demonstrably
anticipated research of the Company and/or its affiliates; or
(ii) Result from any work performed by Employee for the Company
and/or its affiliates.
(e) Employee agrees that any Design, Invention and/or Innovation which
is required under the provisions of this Agreement to be assigned to the Company
shall be the sole and exclusive property of the Company. Upon the Company 's
request, at no expense to Employee, Employee shall execute any and all proper
applications for patents, copyrights and/or trademarks, assignments to the
Company, and all other applicable documents, and will give testimony when and
where requested to perfect the title and/or patents (both within and without the
United States) in all Designs, Inventions and Innovations belonging to the
Company.
(f) The provisions of this Section 13 shall survive the termination or
expiration of this Agreement, and shall be binding upon Employee in perpetuity.
14. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and the successors and assigns of the Company.
Employee shall have no right to assign his rights, benefits, duties, obligations
or other interests in this Agreement, it being understood that this Agreement is
personal to Employee.
15. ATTORNEYS' FEES AND COSTS. If any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute
or default in connection with any of its provisions, the successful or
prevailing party shall be entitled to recover reasonable attorneys' fees
incurred in such action or proceeding as provided in Section 18(f).
16. ENTIRE UNDERSTANDING. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof,
and no other representations, warranties or agreements whatsoever as to that
subject matter have been made by Employee or the Company. This Agreement shall
not be modified, amended or terminated except by another instrument in writing
executed by the parties hereto. This Agreement replaces and supersedes any and
all prior understandings or agreements between Employee and the Company
regarding employment.
17. NOTICES. Any notice, request, demand, or other communication required
or
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permitted hereunder, shall be deemed properly given when actually received or
within five (5) days of mailing by certified or registered mail, postage
prepaid, to:
Employee: Bruce Parker
348 Horizon Drive
Encinitas, California 92024
Company: Callaway Golf Company
2285 Rutherford Road
Carlsbad, California 92008-8815
Attn: Steven C. McCracken
Executive Vice President, Chief Legal Officer
or to such other address as Employee or the Company may from time to time
furnish, in writing, to the other.
18. IRREVOCABLE ARBITRATION OF DISPUTES.
(a) EMPLOYEE AND THE COMPANY AGREE THAT ANY DISPUTE, CONTROVERSY OR
CLAIM ARISING HEREUNDER OR IN ANY WAY RELATED TO THIS AGREEMENT, ITS
INTERPRETATION, ENFORCEABILITY, OR APPLICABILITY, OR RELATING TO EMPLOYEE'S
EMPLOYMENT, OR THE TERMINATION THEREOF, THAT CANNOT BE RESOLVED BY MUTUAL
AGREEMENT OF THE PARTIES SHALL BE SUBMITTED TO BINDING ARBITRATION. THIS
INCLUDES, BUT IS NOT LIMITED TO, ALLEGED VIOLATIONS OF FEDERAL, STATE AND/OR
LOCAL STATUTES, CLAIMS BASED ON ANY PURPORTED BREACH OF DUTY ARISING IN CONTRACT
OR TORT, INCLUDING BREACH OF CONTRACT, BREACH OF THE COVENANT OF GOOD FAITH AND
FAIR DEALING, VIOLATION OF PUBLIC POLICY, VIOLATION OF ANY STATUTORY,
CONTRACTUAL OR COMMON LAW RIGHTS, BUT EXCLUDING WORKERS' COMPENSATION,
UNEMPLOYMENT MATTERS, OR ANY MATTER FALLING WITHIN THE JURISDICTION OF THE STATE
LABOR COMMISSIONER. THE PARTIES AGREE THAT ARBITRATION IS THE PARTIES' ONLY
RECOURSE FOR SUCH CLAIMS AND HEREBY WAIVE THE RIGHT TO PURSUE SUCH CLAIMS IN ANY
OTHER FORUM, UNLESS OTHERWISE PROVIDED BY LAW. ANY COURT ACTION INVOLVING A
DISPUTE WHICH IS NOT SUBJECT TO ARBITRATION SHALL BE STAYED PENDING ARBITRATION
OF ARBITRABLE DISPUTES; PROVIDED, HOWEVER, THAT THE PARTIES SHALL HAVE THE RIGHT
TO SEEK PROVISIONAL RELIEF IN AN ANCILLARY COURT ACTION IN CONNECTION WITH AN
ARBITRABLE DISPUTE.
(b) ANY DEMAND FOR ARBITRATION SHALL BE IN WRITING AND MUST BE
COMMUNICATED TO THE OTHER PARTY WITHIN ONE (1) YEAR AFTER THE DISCOVERY OF THE
ALLEGED CLAIM OR CAUSE OF ACTION BY THE AGGRIEVED PARTY, OR, IF LATER, WITHIN
THE TIME PERIOD STATED IN THE APPLICABLE STATUTE OF LIMITATIONS.
(c) THE ARBITRATION SHALL BE CONDUCTED PURSUANT TO THE PROCEDURAL
RULES STATED IN THE NATIONAL RULES FOR RESOLUTION OF EMPLOYMENT DISPUTES OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA"). THE ARBITRATION SHALL BE CONDUCTED IN
ORANGE COUNTY BY A FORMER OR RETIRED JUDGE OR ATTORNEY WITH AT LEAST 10 YEARS
EXPERIENCE IN EMPLOYMENT-RELATED DISPUTES, OR A NON-ATTORNEY WITH LIKE
EXPERIENCE IN THE AREA OF DISPUTE, WHO SHALL HAVE THE POWER TO HEAR MOTIONS,
CONTROL DISCOVERY, CONDUCT HEARINGS AND OTHERWISE DO ALL THAT IS NECESSARY TO
RESOLVE THE MATTER. THE PARTIES MUST MUTUALLY AGREE ON THE ARBITRATOR.
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IF THE PARTIES CANNOT AGREE ON THE ARBITRATOR AFTER THEIR BEST EFFORTS, AN
ARBITRATOR FROM THE AMERICAN ARBITRATION ASSOCIATION WILL BE SELECTED PURSUANT
TO THE AMERICAN ARBITRATION ASSOCIATION NATIONAL RULES FOR RESOLUTION OF
EMPLOYMENT DISPUTES.
(d) THE ARBITRATION AWARD SHALL BE FINAL AND BINDING, AND MAY BE
ENTERED AS A JUDGMENT IN ANY COURT HAVING COMPETENT JURISDICTION. IT IS
EXPRESSLY UNDERSTOOD THAT THE PARTIES HAVE CHOSEN ARBITRATION TO AVOID THE
BURDENS, COSTS AND PUBLICITY OF A COURT PROCEEDING, AND THE ARBITRATOR IS
EXPECTED TO HANDLE ALL ASPECTS OF THE MATTER, INCLUDING DISCOVERY AND ANY
HEARINGS, IN SUCH A WAY AS TO MINIMIZE THE EXPENSE, TIME, BURDEN AND PUBLICITY
OF THE PROCESS, WHILE ASSURING A FAIR AND JUST RESULT. IN PARTICULAR, THE
PARTIES EXPECT THAT THE ARBITRATOR WILL LIMIT DISCOVERY BY CONTROLLING THE
AMOUNT OF DISCOVERY THAT MAY BE TAKEN (E.G., THE NUMBER OF DEPOSITIONS OR
INTERROGATORIES) AND BY RESTRICTING THE SCOPE OF DISCOVERY TO ONLY THOSE MATTERS
CLEARLY RELEVANT TO THE DISPUTE. HOWEVER, AT A MINIMUM, EACH PARTY WILL BE
ENTITLED TO ONE DEPOSITION.
(e) THE PARTIES UNDERSTAND AND AGREE THAT THE ARBITRATOR HAS NO
AUTHORITY TO AWARD PUNITIVE DAMAGES.
(f) THE PREVAILING PARTY SHALL BE ENTITLED TO AN AWARD BY THE
ARBITRATOR OF REASONABLE ATTORNEYS' FEES AND OTHER COSTS REASONABLY INCURRED IN
CONNECTION WITH THE ARBITRATION, INCLUDING WITNESS FEES AND EXPERT WITNESS FEES,
UNLESS THE ARBITRATOR FOR GOOD CAUSE DETERMINES OTHERWISE.
(g) THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION OR
TERMINATION OF THE AGREEMENT, AND SHALL BE BINDING UPON THE PARTIES.
THE PARTIES HAVE READ PARAGRAPH 18 AND IRREVOCABLY AGREE TO ARBITRATE ANY
DISPUTE IDENTIFIED ABOVE.
______ (Employee) ______ (Company)
19. MISCELLANEOUS.
(a) Headings. The headings of the several sections and paragraphs of
this Agreement are inserted solely for the convenience of reference and are not
a part of and are not intended to govern, limit or aid in the construction of
any term or provision hereof.
(b) Waiver. Failure of either party at any time to require performance
by the other of any provision of this Agreement shall in no way affect that
party's rights thereafter to enforce the same, nor shall the waiver by either
party of any breach of any provision hereof be held to be a waiver of any
succeeding breach of any provision or a waiver of the provision itself.
(c) Applicable Law. This Agreement shall constitute a contract under
the internal laws of the State of California and shall be governed and construed
in accordance with
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the laws of said state as to both interpretation and performance.
(d) Severability. In the event any provision or provisions of this
Agreement is or are held invalid, the remaining provisions of this Agreement
shall not be affected thereby.
(e) Advertising Waiver. Employee agrees to permit the Company and/or
its affiliates, and persons or other organizations authorized by the Company
and/or its affiliates, to use, publish and distribute advertising or sales
promotional literature concerning the products of the Company and/or its
affiliates, or the machinery and equipment used in the manufacture thereof, in
which Employee's name and/or pictures of Employee taken in the course of
Employee's provision of services to the Company and/or its affiliates, appear.
Employee hereby waives and releases any claim or right Employee may otherwise
have arising out of such use, publication or distribution.
(f) Counterparts. This Agreement may be executed in one or more
counterparts which, when fully executed by the parties, shall be treated as one
agreement.
20. CONDITIONS ON SPECIAL SEVERANCE. Notwithstanding anything else to the
contrary, it is expressly understood that any obligation of the Company to pay
Special Severance pursuant to this Agreement shall be subject to:
(a) Employee's continued compliance with the terms and conditions of
Sections 3, 7, 10, 12, 13, 15, 18, 19 and 21;
(b) Employee must not, directly or indirectly (whether as agent,
consultant, holder of a beneficial interest, creditor, or in any other
capacity), engage in any business which engages directly or indirectly in
competition with the businesses of the Company or any of its affiliates, or have
any interest, direct or indirect, in any person, firm, corporation, or venture
which directly or indirectly competes with the businesses of the Company or any
of its affiliates. For purposes of this section, the ownership of interests in a
broadly based mutual fund shall not constitute ownership of the stocks held by
the fund; and
(c) Employee must not, directly, indirectly, or in any other way,
disparage the Company, its officers or employees, vendors, customers, products
or activities, or otherwise interfere with the Company's press, public and media
relations.
21. SUPERSEDES OLD EXECUTIVE OFFICER EMPLOYMENT AGREEMENT. Employee and
the Company recognize that prior to the effective date of this Agreement they
were parties to a certain Executive Officer Employment Agreement effective
January 1, 1997 (the "Old Officer Employment Agreement"). It is the intent of
the parties that as of the effective date of this Agreement, this Agreement
shall replace and supersede the Old Officer Employment Agreement entirely, that
the Old Officer Employment Agreement shall no longer be of any force or effect
except as to Sections 7, 12, 13, 15 and 18 thereof, and that to the extent there
is any conflict between the Old Officer Employment Agreement and this Agreement,
this Agreement shall control and all agreements shall be construed so as to give
the maximum force and effect to the provisions of this Agreement. It is
specifically understood that as of January 1, 2000, Employee shall no longer
serve as an officer or director
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of the Company or any affiliate of the Company, and that the Company is
authorized to take all necessary and appropriate steps to implement such
intentions.
22. INDEMNIFICATION.
(a) Actions by Employee prior to December 31, 1999. The Company shall,
to the maximum extent and in the manner permitted by the General Corporation Law
of Delaware and the Bylaws of the Company, as the same now exist or may
hereafter be amended, indemnify Employee against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any threatened, pending or completed action, suit,
or proceeding in which Employee was or is a party or is threatened to be made a
party by reason of the fact that Employee is or was a director or officer of the
Company.
(b) Actions by Employee on or after January 1, 2000. The Company
shall, to the maximum extent and in the manner permitted by the General
Corporation Law of Delaware and the Bylaws of the Company, as the same now exist
or may hereafter be amended, indemnify Employee against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit, or proceeding in which Employee was or is a party or is threatened
to be made a party by reason of the fact that Employee is or was an employee or
agent of the Company.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
effective the date first written above.
EMPLOYEE COMPANY
Callaway Golf Company,
a Delaware corporation
/s/ Bruce Parker By: /s/ Charles Yash
- ---------------------------- ------------------------------
Bruce Parker Charles Yash, President
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