EXHIBIT 10.53
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Callaway
Golf Company
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Recipient: George Fellows
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Cash Unit Grant Agreement
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Effective
Grant Date: September
3, 2008
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Number of
Cash Units: 1,000,000
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Plan: 2004 Incentive Plan
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CALLAWAY GOLF COMPANY, a Delaware
corporation (the “ Company ”), has elected to
grant to you, the Recipient named above, a Cash Unit award subject
to the restrictions and on the terms and conditions set forth
below, in consideration for your services to the Company. Terms not
otherwise defined in this Cash Unit Grant Agreement (“
Agreement ”) will have the meanings ascribed to them
in the Plan identified above (the “ Plan
”).
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1.
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Governing
Plan . The Recipient
hereby acknowledges receipt of a copy of the Plan and a prospectus
for the Plan (the “ Plan Prospectus ”). This
Cash Unit award is subject in all respects to the applicable
provisions of the Plan, which are incorporated herein by this
reference. In the case of any conflict between the provisions of
the Plan and this Agreement, the provisions of the Plan will
control.
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2.
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Grant of
Cash Unit . Effective
as of the Effective Grant Date identified above, the Company has
granted and issued to the Recipient the number of Cash Units
identified above (the “ CUs ”), representing an
unfunded, unsecured promise of the Company to deliver in the future
one dollar ($1.00) per Cash Unit granted, subject to the claims of
the Company’s creditors and the terms, conditions and
restrictions set forth in this Agreement. Nothing contained in this
Agreement, and no action taken pursuant to its provisions, will
create or be construed to create a trust of any kind or a fiduciary
relationship between Recipient and the Company or any other
person.
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3.
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Restrictions on the CU
. The CU is subject to the following
restrictions:
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(a)
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No
Transfer . The CU and
the cash payment right it represents may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of or
encumbered until the cash payment is actually made to the Recipient
when the restrictions set forth in paragraph 4 expire, and
any additional requirements or restrictions contained in this
Agreement have been satisfied, terminated or waived by the Company
in writing.
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(b)
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Cancellation of Unvested Portion of
CU . In the event
Recipient ceases to provide “Continuous Service” (as
defined below) for any reason before the restrictions set forth in
paragraph 4 expire, this award shall be cancelled with
respect to any then unvested portion and no additional portion
shall vest or become payable; provided, however , that the
Board of Directors or a designated Board committee (the “
Board ”) may, in its discretion, determine not to
cancel and void all or part of such unvested award, in which case
the Board may impose whatever conditions it considers appropriate
with respect to such portion of the unvested award.
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For purposes of this Agreement,
“ Continuous Service ” means that the
Recipient’s service with the Company or its
“parent” or “subsidiary” as such terms are
defined in Rule 405 of the Securities Act (each an “
Affiliate ” and together “ Affiliates
”), whether as an employee, director or consultant, is not
interrupted or terminated. The Board shall have the authority to
determine the time or times at which “parent” or
“subsidiary” status is determined within the foregoing
definition of Affiliate. A change in the capacity in which the
Recipient renders service to the Company or an Affiliate as an
employee, consultant or director or a change in the entity for
which the Recipient renders such service, provided that there is no
interruption or termination of the Recipient’s service with
the
Company or an Affiliate, shall not
terminate a Recipient’s Continuous Service. For example, a
change in status from a director of the Company to a consultant of
a subsidiary or to an employee shall not constitute an interruption
of Continuous Service. To the extent permitted by law, the Board,
in its sole discretion, may determine whether Continuous Service
shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any
other personal leave. Notwithstanding the foregoing, a leave of
absence shall be treated as Continuous Service for purposes of
vesting in the CU only to such extent as may be provided in the
Company’s leave of absence policy, in the written terms of
any leave of absence agreement or policy applicable to the
Recipient, or as otherwise required by law.
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4.
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Lapse of
Restrictions . The
restrictions imposed under paragraph 3 above will lapse and
expire, and the CU will vest, in accordance with the
following:
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(a)
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Vesting
Schedule . Subject to
earlier cancellation, and subject to the accelerated vesting
provisions, if any, set forth in any agreement between Recipient
and the Company or its Affiliate, as the same may be amended,
modified, extended or renewed from time to time, the restrictions
imposed under paragraph 3 will lapse and be removed in
accordance with the vesting schedule set forth below (the
“Vesting Schedule”):
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Number of Units
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Date Restrictions
Lapse
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1,000,000
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December 15, 2011
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The Board, however, may, in its
discretion, accelerate the Vesting Schedule (in which case, the
Board may impose whatever conditions it considers appropriate on
the accelerated portion). In addition, the restrictions imposed
under paragraph 3 will automatically lapse and be removed
immediately prior to any Change in Control, if the Recipient is
providing Continuous Service to the Company or its Affiliate at
that time, provided , however, that the Board, in its sole
discretion, may provide that such restrictions do not automatically
lapse immediately prior to any such Change in Control, and instead
provide that the CUs shall continue under the same terms and
conditions or shall continue under the same terms and conditions
under a similar award with reference to the Cash metrics of a
successor company that may be issued in exchange or settlement of
such CUs in connection with a Change in Control. Notwithstanding
the foregoing, if the Board elects to provide that such
restrictions do not lapse in connection with a Change in Control
and Recipient’s Continuous Service is terminated for any
reason within one year following such Change in Control, then such
restrictions shall lapse and be removed immediately upon such
termination of Continuous Service. For purposes hereof,
“Change in Control” shall have the meaning set forth in
Exhibit A attached hereto.
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(b)
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Effect of
Vesting . Unless
deferred under a deferred compensation plan sponsored by the
Company, effective as of the date the CU vests, the Company shall
deliver to the Recipient a cash payment of one dollar ($1.00) per
vested Cash Unit.
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(c)
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Payment of
Taxes . Recipient
authorizes the Company and/or its Affiliate to withhold all
applicable tax-related items legally payable by Recipient from his
or her wages or other cash compensation paid to Recipient by the
Company and/or its Affiliate and from the cash payment contemplated
by this Agreement in connection with the vesting of the CU. The
Company shall reduce the cash payment by the amount of cash
sufficient to cover all withholding taxes applicable to the cash
payment. Recipient acknowledges that the ultimate liability for all
tax-related items legally due by Recipient is and
remains
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Recipient’s responsibility
and that Company and/or Recipient’s employer (1) make no
representations or undertakings regarding the treatment of any
tax-related items in connection with any aspect of the CU grant,
including the grant, vesting or payment of the CU, and (2) do
not commit to structure the terms of the grant or any aspect of the
CU to reduce or eliminate Recipient’s liability for
tax-related items.
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5.
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Nature of
Grant . In accepting
the grant, Recipient acknowledges that:
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(a)
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the Plan is
established voluntarily by the Company, it is discretionary in
nature and it may be modified, amended, suspended or terminated by
the Company at any time, unless otherwise provided in the Plan and
this Agreement;
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(b)
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the grant of
the CU is voluntary and occasional and does not create any
contractual or other right to receive future grants of CUs, or
benefits in lieu of CUs, even if CUs have been granted repeatedly
in the past, and all decisions with respect to future CU grants, if
any, will be at the sole discretion of the Company;
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(c)
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Recipient’s participation in the Plan
shall not create a right to Continued Service with the Company or
an Affiliate and shall not interfere with the ability the Company
or an Affiliate to terminate Recipient’s service relationship
at any time with or without cause;
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(d)
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Recipient is
voluntarily participating in the Plan;
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(e)
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the CU is an
extraordinary benefit and is not part of normal or expected
compensation or salary for any purposes, including, but not limited
to, calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments and in no event
should be considered as compensation for, or relating in any way
to, past services for the Company or an Affiliate; and
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(f)
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in
consideration of the grant of the CU, no claim or entitlement to
compensation or damages shall arise from termination of the CU or
diminution in value of the CU resulting from termination of
Recipient’s Continuous Service by the Company or an
Aff
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