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Exhibit 10.2
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 Gary
Schneiderman (“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 continue to pay Employee
his base salary less all required and customary withholdings and
deductions for nine (9) months (“Severance
Payment”). The payments will be made by direct deposit to
Employee’s account on a biweekly basis in accordance with
normal Company paydays for the period of June 2007 through
February 2008. The compensation described in this paragraph
shall be in the nature of a severance benefit only and its
existence shall not entitle Employee to any rights as an employee
of Employer during the severance period including, but not limited
to, employee bonuses, vacation pay, sick leave, 401(k) matching,
vesting of stock options (other than those specifically referred to
herein at Paragraph 5) and worker’s compensation
coverage. Employee acknowledges that he would not otherwise be
entitled to the consideration set forth in this paragraph were it
not for his covenants, promises, and releases set forth herein.
b.
COBRA and Other Benefits . In accordance with federal and
state COBRA regulations, if currently enrolled in Ashworth’s
group medical coverage Employee will be offered the opportunity to
continue that coverage at Employee’s own expense. In addition
to the severance pay, if Employee chooses to elect COBRA, Ashworth
will pay Employee’s COBRA premiums for twelve
(12) months beginning June 2007 and ending May 2008
in exchange for Employee’s release of claims. After this
twelve month period Employee will be responsible for the COBRA
premiums if he continues this benefit. Additionally,
Employee’s dental insurance, life insurance, disability
benefits and Exec-u-care coverage will remain in effect for twelve
(12) months through May 2008 and the Company will pay all
premiums related to such benefits.
c.
Auto Allowance . The Company will continue to pay
Employee’s auto allowance for nine months in the amount of
$461.54 per pay period, less all required and customary
withholdings and deductions. The final payment will be made on the
last pay date in February 2008.
d.
Country Club Fees and Waiver of Reimbursement . The Company
will continue to pay Employee’s country club fees for nine
months in the amount of $290.77 per pay period, less all required
and customary withholdings and deductions. The final payment will
be made on the last pay date in February 2008. In addition,
the Company agrees to waive the requirement that Employee reimburse
the Company the Club Membership cost in the amount of $45,000.00 as
outlined in Employee’s Amended & Restated Employment
Agreement. Any debt Employee owes the Company related to the Club
Membership cost is forgiven.
e.
Valid Consideration . Employee agrees that the Severance Pay
and other benefits 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.
Vesting of Stock Options . The Company agrees to accelerate
the 20,000 outstanding stock options granted to Employee that have
not yet vested. The Company and Employee agree that these options
are considered vested as of May 21, 2007. Employee’s
ability to exercise these and any other vested options remains
governed by the terms of the Equity Incentive Plan.
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’ fe
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