REDACTED COPY
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CONFIDENTIAL TREATMENT REQUESTED
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CONFIDENTIAL PORTIONS OF THIS
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DOCUMENT HAVE BEEN REDACTED
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AND HAVE BEEN SEPARATELY
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FILED WITH THE COMMISSION
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ENDORSEMENT AGREEMENT
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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
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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
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1. TERM OF
CONTRACT
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The Term
of this Agreement shall be for a period of 5 years
and 4
months commencing the 1st day of September 2004 and
terminating the 31st day of December 2009.
2. DEFINITIONS
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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:
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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
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[*****]
Confidential Material redacted and filed separately
with the Commission.
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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.
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
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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
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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.
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[*****]
Confidential Material redacted and filed separately
with the Commission.
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8. MINIMUM
NUMBER OF TOURNAMENTS AND POTENTIAL REPAYMENT OF
BASE
COMPENSATION
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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
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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.
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[*****]
Confidential Material redacted and filed separately
with the Commission.
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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 app
