Exhibit 10.7
GOLFSMITH INTERNATIONAL HOLDINGS,
INC.
SEVERANCE PLAN
PREAMBLE
Golfsmith International
Holdings, Inc. (the “ Company ”) desires to
have a severance pay policy for eligible employees of its
participating subsidiaries providing payments to certain terminated
employees. The Golfsmith International
Holdings, Inc. Severance Plan set forth herein (the
“Plan”) formalizes such severance pay policy as it
applies to all eligible employees of such subsidiaries. The
effective date of the Plan is January 1, 2009. The
Plan supersedes and replaces all prior severance pay plans of the
Company and its participating subsidiaries.
Section 1.
Definitions .
1.1
“ Base Salary ”
shall mean the Participant’s annual rate of base pay on the
date of his or her Involuntary Separation from Service, such amount
to exclude overtime, incentive pay, bonuses, and any other special
forms of allowance or compensation paid or payable to the
Participant, provided that a Participant whose pay depends
at least in part on commissions, his or her annual rate of base pay
for purposes of the immediately preceding sentence shall include
the amount of commissions that the Plan Administrator determines
that he or she earned from the Participating Employer during the
calendar year that immediately precedes the calendar year of the
Participant’s Involuntary Separation from Service (or, if the
Participant was employed for less than a year, such determination
shall be made on an annualized basis). For purposes of the
first sentence of this Section 1.1, a Participant’s Base
Salary shall include any elective salary deferrals under a
tax-qualified retirement plan maintained by the Company or any
Participating Employer (or any non-qualified plan designed to
mirror any such tax-qualified plan), but shall not include
(a) any employer matching or other contributions on such
Participant’s behalf to any such tax-qualified plan (or any
such mirror plan) or (b) any employer contributions on behalf
of such Participant under any cafeteria, flexible spending or other
plan subject to Section 125 of the Code, which such
Participant has elected to be distributed in cash. One month
of Base Salary shall mean the Participant’s Base Salary
divided by 12 and one week of Base Salary shall mean the
Participant’s Base Salary divided by 52. Base Salary
for purposes of the Plan shall be determined by the Plan
Administrator.
1.2
“ Cause ” shall
mean the occurrence of any of the following events:
(a)
the Participant
has misappropriated any funds or property of the Company or its
subsidiary or of a fellow employee;
(b)
the Participant has been convicted
of a felony;
(c)
the Participant has obtained
personal profit from any transaction of the Company or its
subsidiary with a third party without the prior approval of such
profit by the Company;
(d)
the Participant has been warned in
writing about poor performance and after counseling has failed to
improve his or her performance to an acceptable level;
(e)
the Participant engages in
on-the-job personal conduct below the standards the Company or a
Participating Employer may reasonably expect;
(f)
the Participant illegally possesses
or uses a drug or narcotic;
(g)
the Participant willfully destroys
property of the Company or its subsidiary;
(h)
the Participant has made any untrue
or material omission on or in support of the Participant’s
application for employment with a Participating Employer,
regardless of when discovered, and/or the Participant has falsified
business or personnel records of the Company or its subsidiary;
or
(i)
the Participant commits any act
intended to damage the reputation of the Company or its subsidiary
and/or their respective employees or which, in fact, damages the
reputation of the Company and/or any such subsidiary or
employees.
1.3
“ Code ” means
the Internal Revenue Code of 1986, as amended.
1.4
“ ERISA ” means
the Employee Retirement Income Security Act of 1974, as
amended.
1.5
“ Involuntary Separation
from Service ” means a termination of the
Participant’s services with a Participating Employer and its
affiliates that is either (a) initiated by the Participating
Employer, or (b) due to a resignation by the Participant
within two years following a nonconsensual and material reduction
in his or her base salary or a material diminution in his or her
duties or responsibilities, provided that the Participant shall
have provided written notice to the Participating Employer of the
existence of such a condition within 90 days of the initial
existence of such condition, and the Participating Employer shall
not have remedied such condition within 60 days following receipt
of such notice by the Participating Employer. Notwithstanding
the foregoing, an Involuntary Separation from Service shall not
include any termination of services due to (i) the sale of a
facility, division or subsidiary where the Participant is offered
substantially equivalent employment by the purchaser,
(ii) death of the Participant, (iii) the
Participant’s disability (as defined under the
Company’s long-term disability plan) or retirement on or
after attainment of age of 65 (in each case as determined by the
Plan Administrator (as defined in Section 5.1 of the
Plan), or (iv) termination of the Participant’s
employment by the Participating Employer due to the existence of
Cause. For purposes of this Section 1.5 ,
“affiliates” means any entity that would be aggregated
with the Participating Employer for purposes of
Section 1.409A-1(h)(3) of the Treasury
Regulations.
1.6
“ Participant ”
means each eligible employee who participates in the Plan in
accordance with Section 2 of the Plan.
1.7
“ Participating
Employer ” means any subsidiary of the Company designated
by the Plan Administrator as a Participating Employer for purposes
of the Plan.
2
1.8
“ Severance Pay ”
means the amount of severance pay payable to a Participant in
accordance with Section 4.1 of the Plan
1.9
“ Severance Period
” means, with respect to any Participant, the period of time
with respect to which Severance Pay are payable to such Participant
in accordance with Section 4.1 of the Plan.
1.10
“ Year of Service
” means continuous employment with a Participating Employer
for 12 consecutive calendar months, commencing on the date the
Participant’s employment with the Participating Employer last
commenced, and each anniversary of such date thereafter during such
period of the Participant’s employment, but including any
period of paid leave of absence, vacation, holiday or sick time,
and paid short-term disability leave occurring during such period
of continuous employment.
Section 2.
Participation .
2.1
Except as provided in
Section 2.2 of the Plan, each full-time employee of a
Participating Employer shall be eligible to participate in the
Plan. For purposes of the Plan, a full-time employee is
an employee of a Participating Employer who is regularly scheduled
to work at least 35 hours per week.
2.2
Employees covered by employment
agreements or other individual arrangements with a Participating
Employer that contain provisions relating to post-termination of
employment salary continuation or other monetary severance payments
are not eligible to participate in the Plan.
Section 3. Eligibility
for Severance Pay . Each Participant shall be entitled to
Severance Pay determined under Section 4 of the Plan upon any
Involuntary Separation from Service, provided that the
Participant executes, delivers to the Plan Administrator, and does
not revoke, a general release of claims, in a form acceptable to
the Company, in each case, within 60 days following the
Participant’s Involuntary Separation from Service.
Section 4. Severance
Pay .The amount of Severance Pay potentially payable to any
Participant under the Plan shall be determined by (i) the
position of the Participant with the Company and (ii) the
number of full Years of Service completed by the Participant
immediately prior to Participant’s Involuntary Separation
from Service as set forth in the following table:
3
|
Officer
|
|
Base Salary
|
|
Director
|
|
|
|
< 1 Year of Service
|
|
2 weeks of Base Salary
|
|
1 Years of Service
|
|
3 weeks of Base Salary
|
|
2 Years of Service
|
|
6 weeks of Base Salary
|
|
3 Years of Service
|
|
9 weeks of Base Salary
|
|
4 – 6 Years of Service
|
|
12 weeks of Base Salary
|
|
7 – 10 Years of Service
|
|
15 weeks of Base Salary
|
|
11 – 15 Years of Service
|
|
18 weeks of Base Salary
|
|
16 – 20 Years of Service
|
|
22 weeks of B
|
