REDACTED
COPY
CONFIDENTIAL TREATMENT
REQUESTED
CONFIDENTIAL PORTIONS OF
THIS
DOCUMENT HAVE BEEN
REDACTED
AND HAVE BEEN
SEPARATELY
FILED WITH THE
COMMISSION
ENDORSEMENT
AGREEMENT
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
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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The Term of
this Agreement shall be for a period of [ *
****
] years and [*****] months
commencing the 1st day of September 2004 and terminating the
[*****] day of [*****].
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As used in this Agreement, the following terms
shall be defined as set forth below:
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A.
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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 .
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B.
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“
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.
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C.
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“
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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[
***** ] Confidential Material redacted and filed
separately with the Commission.
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2.
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Sufficient
[*****] to maintain total minimum of [ ***** ]
ADAMS GOLF [*****] (includes [*****])[*****] at
all times
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4.
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[*****] (
CONSULTANT may continue to place the [*****] logo
on the [*****] consistent with historical practice.)
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D.
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“ CONTRACT TERRITORY ” shall
mean the entire world.
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3.
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CONSULTANT’S
ENDORSEMENT
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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.
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EXCLUSIVITY OF
ENDORSEMENT
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During the term
of this Agreement, unless otherwise authorized at the sole
discretion of ADAMS GOLF in writing,
CONSULTANT shall not:
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A.
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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 ;
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B.
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sponsor or
endorse PRODUCT made or sold by any other
manufacturer or seller; or
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C.
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serve as a
CONSULTANT or advisor of any other manufacturer or
seller of PRODUCT .
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D.
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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 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.
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[
***** ] Confidential Material redacted and filed
separately with the Commission.
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E.
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Notwithstanding
paragraphs 4A, 4B and 4C above, CONSULTANT shall
not be required to wear ADAMS GOLF [*****] in
[*****] ads.
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5.
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EXCLUSIVE USE OF PRODUCT
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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.)
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6.
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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.
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7.
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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.
[
***** ] Confidential Material redacted and filed
separately with the Commission.
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MINIMUM NUMBER OF TOURNAMENTS AND POTENTIAL
REPAYMENT OF BASE COMPENSATION
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A.
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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:
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The agreed upon repayment amount per event per
calendar year:
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B.
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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.
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C.
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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.
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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.
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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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A.
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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.
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B.
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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 appearances for ADAMS
GOLF
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