EXHIBIT 10.3
AMENDMENT TO
EXECUTIVE OFFICER EMPLOYMENT AGREEMENT
This Amendment to Executive Officer Employment Agreement (this
"Amendment") is made effective as of April 1, 1999 by and between Callaway Golf
Company, a California corporation (the "Company") and Steven McCracken
("Employee").
A. The Company and Employee are parties to that certain Executive
Officer Employment Agreement entered into as of January 1, 1997 (the
"Agreement").
B. The Company and Employee desire to amend the Agreement pursuant to
Section 16 of the Agreement, in the manner set forth herein.
C. The Company is prepared to grant, and Employee is prepared to
receive, an increase in compensation as consideration for such amendment.
NOW, THEREFORE, in consideration of the foregoing and other
consideration, the value and sufficiency of which are hereby acknowledged, the
Company and Employee hereby agree as follows:
1. Paragraph 4(a) of the Agreement is hereby amended to read as follows:
(a) a base salary at the rate of $450,000.00 per year; and
2. Paragraph 5(b) of the Agreement is amended to read as follows:
(b) Vacation. Employee shall receive four (4) weeks paid vacation
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for each twelve (12) month period of employment with the Company. The
vacation may be taken any time during the year subject to prior approval by
the Company, such approval not to be unreasonably withheld. Any unused time
will accrue from year to year. The maximum vacation time Employee may
accrue shall be three times Employee's annual vacation benefit. The Company
reserves the right to pay Employee for unused, accrued vacation benefits in
lieu of providing time off.
3. Paragraph 7 of the Agreement is amended to read as follows:
7. NONCOMPETITION.
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(a) Other Business. To the fullest extent permitted by law,
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Employee agrees that, while employed by the Company or otherwise receiving
compensation or other consideration from the Company,
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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
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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, and for one (1)
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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. While employed by the Company, Employee
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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, and for one
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(1) year thereafter, Employee shall not in any way undertake to harm or
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.
4. Paragraph 10 of the Agreement is amended to read as follows:
10. SURRENDER OF EQUIPMENT, BOOKS AND RECORDS. Employee
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understands and agrees that all equipment,
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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.
5. Paragraph 12 of the Agreement is amended to read as follows:
12. TRADE SECRETS AND CONFIDENTIAL INFORMATION.
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(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
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information, and is known by Employee) and who is not required to refrain
from disclosing such information to others.
(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.
6. Paragraph 13 of the Agreement is amended to read as follows:
13. ASSIGNMENT OF RIGHTS.
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(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.
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(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.
(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
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termination or expiration of this Agreement, and shall be binding upon
Employee in perpetuity.
7. But for the amendments contained herein, and any other written amendments
properly executed by the parties, the Agreement shall otherwise remain
unchanged.
IN WITNESS WHEREOF, the Company and Employee have caused this
Amendment to be executed effective as of the date set forth above.
EMPLOYEE COMPANY
Callaway Golf Company,
a California corporation
/s/ By: /s/
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Steven McCracken Name: Ely Callaway
Title: Chairman and CEO
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