EXHIBIT 10(d)
PROMOTION AGREEMENT
▇▇▇▇▇▇▇▇, INC., ▇▇▇▇▇ ▇. ▇▇▇▇▇ III
AND ▇▇▇▇▇ COMMUNICATIONS, INC.
THIS AGREEMENT is entered into by and among ▇▇▇▇▇▇▇▇, INC. (The "Company"
or "▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇ III ("▇▇▇▇▇") and ▇▇▇▇▇ COMMUNICATIONS, INC.
("▇▇▇▇▇ Communications"), effective as of June 1, 1998.
WHEREAS, the Company desires to retain ▇▇▇▇▇ Communications and ▇▇▇▇▇ to
provide certain promotional and other services and ▇▇▇▇▇ Communications and
▇▇▇▇▇ are willing to provide such services on the terms and conditions set forth
herein; and
WHEREAS, the parties hereto desire to set forth in writing their agreement
as to such promotion arrangement;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
DEFINITIONS
As used herein, the terms set forth below shall be defined as follows:
ENDORSEMENT shall include only the right to use the name, any nickname,
initials, autograph, facsimile signature, photograph, portrait, likeness, and/or
endorsement of ▇▇▇▇▇.
▇▇▇▇▇▇▇▇ APPAREL shall mean all ▇▇▇▇▇▇▇▇(R) brand sportswear apparel
contained in the Company's present and future collections (during the Term (as
defined below)).
▇▇▇▇▇▇▇▇ PRODUCTS shall mean, collectively, ▇▇▇▇▇▇▇▇ Apparel and ▇▇▇▇▇▇▇▇
hats and shoes.
DISABILITY shall mean mental or physical illness or condition rendering
▇▇▇▇▇ incapable of fulfilling the services to be provided by him under this
Agreement for a continuous period of at least 60 days.
PREMIUM PROGRAM shall mean any traffic builder or other program involving
the use of a premium to sell products or services other than ▇▇▇▇▇▇▇▇ products
and shall include any program primarily designed to attract the consumer to
purchase a product or service other than ▇▇▇▇▇▇▇▇ Products themselves.
CONTRACT YEAR shall mean a period of twelve (12) successive months
commencing on any first day of June during the Term.
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Promotion Agreement
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TERM OF RELATIONSHIP
1. GRANT AND ACCEPTANCE. The Company hereby retains ▇▇▇▇▇ Communications and
▇▇▇▇▇ to provide the below described services (the "Services") and ▇▇▇▇▇
Communications and ▇▇▇▇▇ agree to provide the Services upon the terms and
conditions herein set forth.
2. TERM. Except as otherwise provided herein, this Agreement shall commence
effective June 1, 1998, and shall continue for a term of three (3) years
expiring May 31, 2001 (the "Term").
SERVICES
▇▇▇▇▇ Communications and ▇▇▇▇▇ shall furnish the following Services:
1. ENDORSEMENT. Subject to the terms and conditions hereof, ▇▇▇▇▇
Communications grants to the Company the Endorsement throughout the world
during the Term in connection with the advertisement, promotion and sale by
the Company of ▇▇▇▇▇▇▇▇ Products except in connection with Premium
Programs.
2. ▇▇▇▇▇▇▇▇ APPAREL AND PRODUCTS. Subject to any restrictions, contractual or
otherwise, on ▇▇▇▇▇ Communications or ▇▇▇▇▇ (collectively, the
"Restrictions"), ▇▇▇▇▇ shall wear ▇▇▇▇▇▇▇▇ Products, when possible and as
reasonably appropriate, while broadcasting all professional sports
tournaments and other professional sports outings, and during any
professional sports clinics or instructions given by ▇▇▇▇▇ Communications
or ▇▇▇▇▇; provided that the Company has provided ▇▇▇▇▇, at no charge, with
sufficient amounts of ▇▇▇▇▇▇▇▇ Products in styles and sizes ▇▇▇▇▇ finds
suitable and appropriate for his use, subject to the restriction under
Paragraph 4 of Section COMPENSATION AND CONSULTING FEES.
3. LOGOS. Except as otherwise provided herein, and subject to the
Restrictions, ▇▇▇▇▇ Communications agrees that such Products may
prominently bear the Company's logo and shall not bear any other logos.
4. PHOTOGRAPHY, SPEAKING AND STORE APPEARANCES. ▇▇▇▇▇ agrees to be available
for up to four photography sessions (2 in Southern California during the
week and 2 to be at ▇▇▇▇▇'▇ site locations or tournaments), two speaking
engagements, and three store appearances each Contract Year, at times and
places mutually convenient for ▇▇▇▇▇ and the Company but in no event at
times which adversely impact on the schedules of ▇▇▇▇▇ Communications or
▇▇▇▇▇. ▇▇▇▇▇ Communications shall have the right to review and reject in
good faith the use of any advertising, promotion or other programs and
materials which include ▇▇▇▇▇ or his image. No use shall be made of any
such programs or materials hereunder unless and until the same has been
approved by ▇▇▇▇▇
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Promotion Agreement
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Communications. The Company agrees that each photography session shall not
exceed one and one-half days and each speaking engagement and store
appearance shall not exceed one-half day. The Company further understands
that failure to utilize services of ▇▇▇▇▇ pursuant to this section shall
not result in any reduction in payments to ▇▇▇▇▇ Communications hereunder,
nor may the obligations to provide Services be carried forward from one
Contract Year to another Contract year. The obligations of ▇▇▇▇▇
Communications and ▇▇▇▇▇ to provide the Services hereunder are subject to
the condition that payments to ▇▇▇▇▇ Communications are current and up to
date.
5. NEW ACCOUNTS, CELEBRITIES. ▇▇▇▇▇ agrees to assist ▇▇▇▇▇▇▇▇ in locating
potential new accounts based on his professional contacts, assist ▇▇▇▇▇▇▇▇
in gaining access to celebrities and CBS executives which ▇▇▇▇▇▇▇▇ could
provide clothes for special events and also assist in gaining access to
non-golf professionals who potentially would wear ▇▇▇▇▇▇▇▇ clothes.
6. SPECIAL EVENTS. ▇▇▇▇▇ will assist ▇▇▇▇▇▇▇▇ in creating, promoting and
participating in an event (i.e., golf tournament, cocktail reception, etc.)
----
to be associated with a major sporting event (i.e., PGA Championship,
----
Masters, etc.).
7. EMPLOYEE STATUS. ▇▇▇▇▇ will be a full time ▇▇▇▇▇▇▇▇ employee rather than
an independent contractor.
8. BOARD OF DIRECTORS. ▇▇▇▇▇ agrees to be nominated, elected to and serve on
the Board of Directors of Company in the capacity of voting director.
9. OTHER OBLIGATIONS. The Company acknowledges that ▇▇▇▇▇ Communications' and
▇▇▇▇▇'▇ obligations to CBS or any other television station or network with
which ▇▇▇▇▇ Communications or ▇▇▇▇▇ has a contract or arrangement shall
take precedence over any other commitments of ▇▇▇▇▇ Communications or ▇▇▇▇▇
under this Agreement.
INDEMNIFICATION
Neither ▇▇▇▇▇ Communications nor ▇▇▇▇▇ shall be liable for any obligations
of the Company resulting directly or indirectly from the Endorsement of ▇▇▇▇▇▇▇▇
Products. The Company shall protect, indemnify and hold harmless each of ▇▇▇▇▇
Communications and ▇▇▇▇▇ against any and all expenses, damages, claims, suits,
actions, judgments and costs whatsoever, arising out of, or in any way connected
with such Endorsement, in any advertising or promotional materials furnished by
or on behalf of the Company, actions or omissions of the Company or any claim or
action for personal injury, death or other cause of action involving alleged
defects in ▇▇▇▇▇▇▇▇ Products, including but not limited to indemnification of
reasonable legal expenses incurred in defense of all such claims. Further,
▇▇▇▇▇ Communications or ▇▇▇▇▇ shall have the
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Promotion Agreement
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right to select legal counsel to represent it or him in the event of any such
claims or legal proceedings, and the costs of such legal representation shall be
paid by the Company.
INSURANCE
The Company agrees to provide and maintain, at its own expense, advertising
and product liability insurance each with limits no less than $5,000,000 and
within thirty (30) days from the date hereof, the Company will submit to ▇▇▇▇▇
Communications a fully paid policy or certificate of insurance naming ▇▇▇▇▇
Communications and ▇▇▇▇▇ as insured parties, requiring that the insurer shall
not terminate or materially modify such without written notice to ▇▇▇▇▇
Communications at least twenty (20) days in advance thereof.
The Company further agrees to provide and maintain, at its own expense, a
policy of Directors and Officers Insurance with limits no less than
$25,000,000 and within thirty (30) days from the date hereof, the Company will
submit to ▇▇▇▇▇ Communications a fully paid policy or certificate of insurance
naming ▇▇▇▇▇ as an insured party, requiring that the insurer shall not terminate
or materially modify such without written notice to ▇▇▇▇▇ Communications at
least twenty (20) days in advance hereof.
COMPENSATION AND CONSULTING FEES
As full compensation for Services, the Company shall pay ▇▇▇▇▇
Communications the following fees:
10. CONSULTING FEE. The Company shall pay ▇▇▇▇▇ Communications an annual
consulting fee of $30,000, such fee to be paid in equal quarterly
installments of $7,500 on the 1st day of each June, September, December and
March of each Contract year.
11. ADDITIONAL FEES. If ▇▇▇▇▇ agrees to participate in more than three store
appearances in any given Contract Year, the Company shall pay ▇▇▇▇▇
Communications an additional fee of $7,500 for such additional appearance
prior to or simultaneously with such appearances.
12. REIMBURSEMENT OF EXPENSES. The Company shall reimburse ▇▇▇▇▇
Communications for expenses reasonably incurred by ▇▇▇▇▇ or ▇▇▇▇▇
Communications in connection with the Services to the Company including,
but not limited to, first-class air fare, hotel accommodations, local
transportation and meals. ▇▇▇▇▇ Communications shall furnish the Company
with an itemized statement from time to time, together with, whenever
possible, actual bills, receipts, and other evidence of expenditure. ▇▇▇▇▇
Communications shall be reimbursed within thirty (30) days after receipt by
the Company of such itemized statements and attachments.
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Promotion Agreement
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As full compensation for Services, the Company shall provide and issue to
▇▇▇▇▇ the following:
13. APPAREL. The Company shall furnish ▇▇▇▇▇, at no cost, with sufficient
▇▇▇▇▇▇▇▇ Products to be used by him in connection with the Services and for
the personal use of ▇▇▇▇▇ and his immediate family. The cost of said
Product shall not exceed $12,000 (at wholesale) during any single Contract
Year.
14. STOCK OPTIONS. a) As consideration for the rights granted and the services
to be rendered hereunder, the Company hereby grants to ▇▇▇▇▇ options (the
"Options"), to purchase shares of the common stock of the Company par value
$.001 per share (the "Share"), which are exercisable as follows:
15. The first Option to purchase 40,000 Shares upon payment of the aggregate
Option Share Price (as defined below) for the number of Shares so purchased
shall become exercisable on June 1, 1999, unless this Agreement is
terminated as provided herein prior to such date, in which case this Option
shall be canceled. Once exercisable, this Option may be exercised in full
or in any number of partial exercises or in combination with the full or
partial exercise of any other Option for a period terminating upon the
earlier to occur of (A) the fifth anniversary of the initial exercisability
date or (B) the date of termination of this Agreement, as provided herein,
if this Agreement is terminated prior to May 30, 2001.
16. The second Option to purchase up to an additional 40,000 shares upon
payment of the aggregate Option Share Price for the number of Shares so
purchased shall become exercisable on June 1, 2000, unless this Agreement
is terminated as provided herein prior to such date, in which case this
Option shall be canceled. Once exercisable, this Option may be exercised
in full or in any number of partial exercises or in combination with the
full or partial exercise of any other Option for a period terminating upon
the earlier to occur of (A) the fifth anniversary of the initial
exercisability date or (B) the date of termination of this Agreement, as
provided herein, if this Agreement is terminated prior to May 30, 2001;
17. The third Option to purchase up to an additional 40,000 shares upon payment
of the aggregate Option Share Price for the number of Shares so purchased
shall become exercisable on June 1, 2001, unless this Agreement is
terminated as provided herein prior to such date, in which case this Option
shall be canceled. Once exercisable, this Option may be exercised in full
or in any number of partial exercises or in combination with the full or
partial exercise of any other Option for a period terminating upon the
earlier to occur of (A) the fifth anniversary of the initial exercisability
date or (B) the date of termination of this Agreement, as provided herein,
if this Agreement is terminated prior to May 30, 2001;
The "Option Share Price" shall initially be $6 per Share as approved by the
Compensation Committee at its regular meeting held on December 15, 1998.
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Promotion Agreement
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b) The Options being granted hereunder are being granted under and subject
to the terms and conditions of the ▇▇▇▇▇▇▇▇, Inc. Amended and Restated Incentive
Stock Option Plan, dated November 1, 1996, ("Amended Plan") and all Shares
issued upon the exercise of any Option shall be registered under the Securities
Act of 1933, as amended.
EXCLUSIVITY
During the Term, neither ▇▇▇▇▇ Communications nor ▇▇▇▇▇ shall enter into
any activity, employment, independent contract, or other business arrangement
which conflicts with ▇▇▇▇▇ Communications' or ▇▇▇▇▇'▇ obligations under this
Agreement or perform any service which reasonably appears to be an endorsement
of the sportswear apparel, hats and shoes of a third party without the Company's
prior written approval. ▇▇▇▇▇ Communications and ▇▇▇▇▇ expressly agree that the
Endorsement will not be granted to anyone other than the Company for use during
the Term in connection with the advertisement and promotion of sportswear
apparel, hats and shoes. Notwithstanding the foregoing ▇▇▇▇▇ shall be permitted
to wear a Lynx hat or clothing logo when performing promotional services for
Lynx and to use Lynx equipment when performing any promotional services for the
Company in which equipment will be used.
TERMINATION
This Agreement may be terminated by any party in the following
circumstances:
18. Upon mutual consent of the Company, on the one hand, and ▇▇▇▇▇
Communications and ▇▇▇▇▇, on the other hand;
19. ▇▇▇▇▇'▇ Disability or death, in which event the Agreement shall terminate
on the May 1 following such Disability or death;
20. Repeated misconduct of ▇▇▇▇▇ which subjects ▇▇▇▇▇ to continued public
ridicule causing a substantial loss of ▇▇▇▇▇'▇ positive public image;
21. ▇▇▇▇▇'▇ conviction or plea of guilty or no contest to a felony involving
moral turpitude;
22. A finding of insolvency or bankruptcy against the other party (which, in
the case of a desired termination by the Company, shall mean ▇▇▇▇▇
Communications or ▇▇▇▇▇); and
23. Failure to comply with the terms and conditions of this Agreement after
being given notice thereof and, where applicable, a reasonable opportunity
to cure the failure (which shall be 10 days in the event of a failure to
timely make a payment pursuant hereto; 30 days otherwise). In order to be
a sufficient notice hereunder, any such written notice shall specify in
detail each item of default, and shall specify in detail the action the
defaulting party is required to take in order to cure each item.
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Promotion Agreement
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Notwithstanding the foregoing, upon the occurrence of repeated intentional
failures to comply with the terms and conditions of this Agreement, which have
been noticed in accordance with the terms hereof (regardless of whether such
failures have been cured), the non-defaulting party may immediately terminate
this Agreement upon written notice to the defaulting party without affording a
further opportunity to cure.
Should ▇▇▇▇▇ Communications or ▇▇▇▇▇ disagree with the Company as to the
existence of a condition affording the Company the right to so terminate this
Agreement, ▇▇▇▇▇ Communications or ▇▇▇▇▇ shall, within thirty (30) days
following the receipt of any such notice of termination, submit the matter to
arbitration pursuant to the provisions of this Agreement.
The termination rights set forth in this section shall not constitute the
exclusive remedy of the non-defaulting party hereunder, however, and if a
default is made by either party hereunder, the other may resort to such other
remedies as said party would have been entitled to if this section had been
omitted from this Agreement. Termination under the provisions of this section
shall be without prejudice to any rights or claims which the terminating party
may otherwise have against the defaulting party.
From and after the termination of the Term all of the rights of the Company to
the use of the Endorsement shall cease absolutely and the Company shall not
thereafter use or refer to the Endorsement in advertising or promotion in any
manner whatsoever. The Company shall not advertise, promote, distribute or sell
any item whatsoever in connection with the use of any name, figure, design,
logo, trademark or trade name confusingly similar to or suggestive of the
Endorsement following the termination of the Term.
ASSIGNMENT
This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. ▇▇▇▇▇ Communications and
▇▇▇▇▇ acknowledge that the Services to be rendered by ▇▇▇▇▇ Communications and
▇▇▇▇▇ are unique and personal. Accordingly, except as otherwise expressly
provided below, neither ▇▇▇▇▇ Communications nor ▇▇▇▇▇ shall assign any of their
respective rights or delegate any of their respective duties or obligations
under this Agreement without the written consent of the Company. Nothing herein
shall prevent ▇▇▇▇▇ Communications from assigning the monetary benefits of this
Agreement as it may so desire. Further, inasmuch as it is recognized that ▇▇▇▇▇
Communications is the representative of ▇▇▇▇▇, ▇▇▇▇▇ Communications may at any
time assign this Agreement to ▇▇▇▇▇ and, in such event, ▇▇▇▇▇ Communications
shall have no further obligation or liability in connection herewith and ▇▇▇▇▇
Communications' position vis-a'-vis the Company in connection herewith shall be
in all respects the same as if ▇▇▇▇▇ Communications had signed this Agreement as
agent rather than as a principal from the beginning. The rights granted the
Company hereunder shall be used only by it and shall not, without the prior
written consent of ▇▇▇▇▇ Communications or ▇▇▇▇▇, be transferred or assigned to
any other. In the event of the merger or consolidation of the Company with any
other entity, ▇▇▇▇▇ Communications shall have the right to terminate the
Agreement by so notifying the Company in writing on or before sixty (60) days
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Promotion Agreement
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after ▇▇▇▇▇ Communications has received notice of such merger or consolidation
if and only if, by virtue of such merger or consolidation ▇▇▇▇▇ Communications
or ▇▇▇▇▇ would be in default under or violating any provisions of any agreement
to which he or it is subject entered into prior to June 1, 1994.
ARBITRATION
Unless otherwise mutually agreed to in writing by the Company, ▇▇▇▇▇
Communications and ▇▇▇▇▇, any controversy or claim arising out of or related to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association or any
successor. Each of the Company, on the one hand, and ▇▇▇▇▇ Communications and
▇▇▇▇▇, on the other hand, shall select one arbitrator and the two so selected
shall select a third. Failing the selection of an arbitrator by either party or
by the two so selected, the claim or controversy shall be settled by the
American Arbitration Association upon the application of either party. Judgment
upon any award of a majority of the arbitrators filed in a court of competent
jurisdiction shall be binding.
MISCELLANEOUS
24. NOTICES. Any and all notices required pursuant to this Agreement shall be
deemed given if in writing and delivered in person, sent by certified or
registered mail, return receipt requested, or set by telefax at or to the
addresses and telefax numbers set forth below or such other addresses and
telefax numbers as the parties may direct by notice given as herein
provided:
▇▇▇▇▇▇▇▇, Inc.
Attention: President and Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ III
▇▇▇▇▇ Communications, Inc.
c/o International Merchandising Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
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Promotion Agreement
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25. GOVERNING LAW. This Agreement and its formation, operation and performance
shall be governed, construed, performed, and enforced in accordance with
the laws of the State of California.
26. JURISDICTION AND VENUE. For the purposes of any dispute arising hereunder,
jurisdiction and venue shall lie in the appropriate court in California.
27. ATTORNEY FEES AND EXPENSES. In any legal action or alternative dispute
resolution instituted to interpret or enforce the terms and/or conditions
of this Agreement, the prevailing party shall be entitled to recover
reasonable attorney fees and expenses.
28. WAIVER. A waiver by either party of any provision of this Agreement shall
not be deemed a waiver of any other portion of this Agreement. Failure to
require performance of any provision of this Agreement shall not be deemed
a continuing waiver of that provision or any other provision of this
Agreement.
29. SEVERABILITY. In the event that any provision or any portion of any
provision of this Agreement shall be held invalid, illegal or
unenforceable, the remainder of this Agreement shall remain valid,
enforceable, the remainder of this Agreement shall remain valid,
enforceable, and in effect.
30. CAPTION REFERENCES. All items headings and captions are for reference
purposes only and do not in any way modify or limit the provisions set
forth thereunder.
31. ENTIRE AGREEMENT. This Agreement contains the entire understandings and
agreement of the parties and supersedes any prior understandings and/or
agreement of the parties. This Agreement may not be modified or amended
without the written consent of all parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date indicated below, effective the date first above mentioned.
THE COMPANY:
▇▇▇▇▇▇▇▇, INC.
a Delaware corporation
Date: December 16, 1998 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
President & Chief Executive Officer
▇▇▇▇▇ COMMUNICATIONS, INC.
Date: December 16, 1998 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ III
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▇▇▇▇▇ ▇. ▇▇▇▇▇ III
President
Date: December 16, 1998 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ III
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▇▇▇▇▇ ▇. ▇▇▇▇▇ III