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Exhibit 10.3
SEVERANCE AND
RELEASE AGREEMENT
This
Severance and Release Agreement (“Agreement”) is made
and entered into by and between Ashworth, Inc. (referred to as
“Employer” or “the Company”) and Peter
Holmberg (“Employee”).
WHEREAS,
it has been determined that Employee will separate his employment
with the Company;
WHEREAS,
Employee and Employer wish to modify and supersede the terms of the
Employee’s Offer Letter and/or any Amended & Restated
Employment Agreements;
WHEREAS,
the Employer wishes to provide Employee with certain benefits in
consideration of Employee’s separation and the promises and
covenants of Employee as contained herein, including the
Employee’s agreement to release all claims against the
Company;
NOW
THEREFORE, in consideration of and exchange for the promises,
covenants, and releases contained herein, the parties mutually
agree as follows:
1.
Separation Date . Employee’s separation from all
positions he holds with the Company shall be effective on
May 21, 2007 (“Separation Date”). As of the
Separation Date, the only payment and other consideration which
Employee shall receive or be entitled to receive from the Company
are those set forth in this Agreement.
2.
Effective Date . This Agreement will be effective on the
eighth day after the date on which Employee executes it, as long as
Employee has not exercised his right of revocation as described in
Paragraph 10 below (“Effective Date”).
3.
Consideration . Provided that Employee does not revoke this
Agreement as provided in Paragraph 10, the Company will
provide the following consideration to Employee:
a.
Severance Pay . The Company will provide Employee six
(6) months severance in the amount of one hundred twelve
thousand five hundred dollars ($112,500), less all required and
customary withholdings and deductions (“Severance
Pay”). The Severance Pay will be paid to Employee in one lump
sum payment following the Effective Date of this Agreement.
b.
COBRA Benefits . In accordance with federal and state COBRA
regulations, if Employee is currently enrolled in Ashworth’s
group medical coverage, Employee will be offered the opportunity to
continue that coverage at Employee’s expense. In addition to
severance pay, if Employee chooses to elect COBRA, the Company will
also pay Employee’s COBRA premiums for six (6) months in
exchange for Employee’s release of claims. After this initial
six months Employee will be responsible for COBRA premiums if
Employee continues this benefit.
c.
Auto Allowance . The Company will provide Employee six
(6) months auto allowance in the amount of six thousand
($6,000), less all required and customary withholdings and
deductions. The Auto Allowance will be paid to Employee in one lump
sum payment following the Effective Date of this Agreement.
d.
Valid Consideration . Employee agrees that the Severance Pay
shall be in the nature of a severance benefit only and its
existence shall not entitle Employee to any rights as an employee
of the Company. Employee acknowledges that he would not otherwise
be entitled to the consideration set forth in this paragraph were
it not for the covenants, promises, and releases set forth
herein.
4.
Tax Liability . Employee represents and warrants that
neither the Company nor its attorneys nor anyone affiliated with
the Company has made any representations regarding the taxability
of the Severance Payment and that Employee has not relied upon any
such representation in entering into this Agreement. Employee
further represents and warrants that he shall be solely responsible
for the payment of any and all federal, state and local taxes which
may become due, if any, as a result of the Severance Payment.
Employee shall hold the Company harmless from and indemnify it for
the payment of any taxes (including interest) or penalties, and any
costs or attorneys’ fees related to such payment, if any,
that may be asserted against it by any government agency at any
time as a result of the Severance Payment.
5.
No Vesting of Stock Options . Employee acknowledges and
agrees that any stock options granted to Employee but not vested as
of the Separation Date are forfeited. Employee further waives all
rights to unvested options under any other agreement and any
unvested options will not vest at any time in the future as a
result of Employee’s Separation on May 21, 2007.
6.
No Amounts Owing . Employee acknowledges and agrees that he
has been paid all wages due and owing to him as of the Separation
Date. Employee further acknowledges and agrees that no additional
compensation is or will be due to him from the Company.
7.
Release by Employee . Employee agrees for Employee,
Employee’s heirs, executors, administrators, successors and
assigns to forever release and discharge the Employer and its
subsidiaries, related companies, parents, successors and assigns,
officers, directors, agents, employees and former employees from
any and all claims, debts, promises, agreements, demands, causes of
action, attorneys’ fees, losses and expenses of every nature
whatsoever, known or unknown, suspected or unsuspected, filed or
unfiled, arising prior to the Effective Date of this Agreement, or
arising out of or in connection with Employee’s employment by
and separation from the Employer or any affiliate of the Employer.
This total release includes, but is not limited to, all claims
arising directly or indirectly from Employee’s employment
with the Employer and the separation of that employment; claims or
demands related to salary, bonuses, commissions, stock, stock
options, vacation pay, fringe benefits and expense reimbursements
pursuant to any federal, state or local law or cause of action,
including, but not limited to, breach of contract, breach of the
implied covenant of good faith and fair dealing, infliction of
emotional harm, wrongful discharge,
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