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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 14, 1999
GARY PLAYER DIRECT, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 033-07811NY 91-1999113
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State or Other Jurisdiction Commission IRS Employer
of Incorporation or Organization File Number Identification No.
710 Aerovista, Suite B, San Luis Obispo, CA 93401
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Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (805)783-1011
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2811 AIRPARK DRIVE, SANTA MARIA, CALIFORNIA 93455
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Former name or former address, if changed since last report
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Item 5. Other Events.
Gary Player Direct, Inc. (the "Company") entered into a Succession Plan
and Agreement (the "Succession Plan") effective on October 14, 1999 pursuant to
which Mr. A.J. Cervantes resigned from his positions as the Company's Chairman,
President and Chief Executive Officer. Mr. Robert J. Friedland also resigned
from his membership on the Board of Directors. A copy of each of the Succession
Plan and the Press Release announcing such Succession Plan is attached to this
Current Report on Form 8-K as an exhibit and is hereby incorporated by
reference.
In connection with the resignation of Mr. Cervantes, Marc B. Player and
Pamela J. Campbell, both affiliated with The Gary Player Group of Palm Beach
Gardens, Florida, were appointed to the Company's Board of Directors as well as
Thomas P. Gallagher, of Princeton, New Jersey, who was named Chairman of the
Board.
The Company also appointed Carl L. Casareto to the positions of
Executive Vice President and Treasurer, and pursuant to such appointment, Mr.
Casareto has assumed day-to-day managerial responsibilities for the Company. The
Company additionally appointed Ms. Barbara Nunez to the positions of Controller
and Secretary of the Company. The Company is currently searching for a permanent
Chief Executive Officer and believes that it will name one within the next sixty
to ninety days. Mr. Gallagher has been appointed interim Chief Executive
Officer.
The Company has executed indemnification agreements with each of the
above-named directors and officers, which indemnification agreements have been
authorized and approved by the Company's Board of Directors and are attached to
this Current Report on Form 8-K as exhibits and are hereby incorporated by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
10.1 Succession Plan and Agreement dated October 12, 1999 by and
among Alfonso J. Cervantes, Jr. as well as any corporation,
partnership, limited liability company or any other entity
controlled by Cervantes or his Spouse including Trilogy
Capital Group, Inc., Judith Cervantes, Robert J. Friedland,
Gary Player Direct, Inc., its subsidiaries Rhino Marketing,
Inc., G.P. Direct, Inc., Digital-Golf.Com, Inc. and Gran Prix
Marketing, Inc., Thomas P. Gallagher, Gallagher, Briody &
Butler, William S. Schuler, Ritch Gaiti, Jeffrey Leach and Roy
Tashi as principal of Lava Investments Limited, Gary Player
Golf Equipment and The Gary Player Group, Gary D. Kucher, J.
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Paul Bagley, and Stone Pine Venture Lending, Llc and its
affiliated companies.
10.2 Indemnification Agreement by and between Gary Player Direct,
Inc. and Thomas P. Gallagher dated October 14, 1999.
10.3 Indemnification Agreement by and between Gary Player Direct,
Inc. and Marc B. Player dated October 14, 1999.
10.4 Indemnification Agreement by and between Gary Player Direct,
Inc. and Pamela Campbell dated October 14, 1999.
10.5 Indemnification Agreement by and between Gary Player Direct,
Inc. and Carl L. Casareto dated October 14, 1999.
10.6 Indemnification Agreement by and between Gary Player Direct,
Inc. and Barbara Nunez dated October 14, 1999.
99.1 Press Release dated October 19, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GARY PLAYER DIRECT, INC.
By: /s/ Carl Casareto
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Carl Casareto, Executive Vice President and
Treasurer (Principal Executive Officer)
Date: October 25, 1999
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Exhibit 10.1
SUCCESSION PLAN AND AGREEMENT
THIS SUCCESSION PLAN AND AGREEMENT ("Agreement") is entered into and
effective as of the 12th day of October, 1999, by and among ALFONSO J.
CERVANTES, JR. as well as any corporation, partnership, limited liability
company or any other entity controlled by Cervantes or his Spouse including
Trilogy Capital Group, Inc. ("Cervantes"), JUDITH CERVANTES ("Spouse"), ROBERT
J. FRIEDLAND ("Friedland"), GARY PLAYER DIRECT, INC. ("GPD"), its subsidiaries
RHINO MARKETING, INC., G.P. DIRECT, INC., DIGITAL-GOLF.COM, INC. AND GRAN PRIX
MARKETING, INC. (collectively, the "Subsidiaries"), THOMAS P. GALLAGHER,
GALLAGHER, BRIODY & BUTLER, WILLIAM S. SCHULER, RITCH GAITI, JEFFREY LEACH and
ROY TASHI as principal of LAVA INVESTMENTS LIMITED (the "Shareholder Group"
inclusive of Gallagher, Briody & Butler notwithstanding the fact that they are
not shareholders), GARY PLAYER GOLF EQUIPMENT and THE GARY PLAYER GROUP,
(collectively, Gary Player Golf Equipment Company and The Gary Player Group
shall be referred to as "Player"), GARY D. KUCHER ("Kucher"), J. PAUL BAGLEY
("Bagley"), and STONE PINE VENTURE LENDING, LLC and its affiliated companies
("Stone Pine").
RECITALS
A. Cervantes has been employed as an officer of GPD pursuant to a
written employment agreement between Cervantes and Golf One Industries, Inc.
dated May 31, 1998 as amended (the "Employment Agreement"), and served on its
Board of Directors.
B. On or about May 22, 1998, Golf One Industries, Inc. and Cervantes
entered into an Indemnification Agreement (the "Indemnification Agreement")
which Indemnification Agreement shall survive the execution and delivery of this
Agreement. On or about May 22, 1998, Golf One Industries, Inc. and Friedland
entered into an Indemnification Agreement (the "Friedland Indemnification
Agreement) which Friedland Indemnification Agreement shall survive the execution
and delivery of this Agreement except as provided herein.
C. On or about March 26,1999, Golf One Industries, Inc. merged with and
into Grafix Corporation and in connection therewith, Grafix Corporation changed
its name to Gary Player Direct, Inc. and the Employment Agreement was assumed by
Gary Player Direct, Inc.
D. As of the effectiveness of this Agreement, GPD has terminated
Cervantes' employment without cause.
E. A Special Meeting of the Board of Directors of GPD was held on
October 12, 1999 (the "Board Meeting") appointing Thomas P. Gallagher, Marc B.
Player and Pam Campbell to GPD's and the Subsidiaries Boards of Directors. This
Agreement was approved at the Board Meeting.
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F. Cervantes has served as a Director of Golf One Industries and GPD
since 1995 and in connection with the execution of this Agreement has agreed to
resign from the Boards of Directors of GPD and the Subsidiaries on the
effectiveness of this Agreement.
G. Robert J. Friedland has served as a Director of Golf One Industries
and GPD since July of 1996 and in connection with the execution of this
Agreement has agreed to resign from all of his offices (if any) and director
positions with GPD and the Subsidiaries on the effectiveness of this Agreement.
H. In order to effect a smooth transition for the sake of GPD, the
parties desire to enter into an amicable resolution relating to the end of the
employment relationship between GPD and Cervantes.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth below, and intending to be legally bound thereby, the parties agree as
follows:
1. Cervantes and Friedland confirm that they have conducted a Special
Meeting of the Board of Directors of GPD (the "Board Meeting") on October 12,
1999 with the minutes of said Board meeting attached as Exhibit 3.0 appointing
the new directors of GPD and the Subsidiaries, which Cervantes and Friedland
attended as their last acts as a member of GPD's and the Subsidiaries' Boards of
Directors, which actions shall be effective as of the effectiveness of this
Agreement. At the Board Meeting (i) Thomas Gallagher, Marc B. Player and Pam
Campbell were appointed to fill vacancies on the Board; (ii) the Board of
Directors appointed Gallagher as Interim Chairman of the Board; (iii) the Board
of Directors approved this Agreement, with Cervantes and Friedland abstaining;
and (iv) the Board of Directors approved the indemnification agreements for the
appointed directors and officers of GPD and the Subsidiaries.
2. Cervantes hereby resigns as a Director of GPD and the Subsidiaries
and tenders his resignations from any committees to which he was appointed as of
the effectiveness of this Agreement. This Agreement shall be deemed effective as
of the termination of the Board of Directors Meeting referenced in Section 1.0
above.
3. Friedland hereby resigns as a Director of GPD and the Subsidiaries
and tenders his resignations from any committees to which he was appointed as of
the effectiveness of this Agreement.
4. GPD represents and warrants that there is a director and officer
insurance policy in full force and effect (with all premiums paid) as of the
effective date of this Agreement with Genesis Insurance Company with a coverage
limit of $1,000,000 and a deductible limit of $50,000 non-SEC related and
$100,000 security related.
5. GPD hereby terminates Cervantes' employment without cause as of the
effectiveness of this Agreement.
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6. GPD and Cervantes mutually agree that the Indemnification Agreement
shall remain in full force and effect. In addition, Cervantes represents and
warrants that he, his Spouse and any other entity controlled by them
beneficially own, as defined in Section 13(d) of the Securities Exchange Act of
1934, such shares of common stock of the Company as set forth in Exhibit 6.0.
Exhibit 6.0 also describes the consideration paid for each of the shares set
forth on Exhibit 6.0. Cervantes and GPD agree that the Indemnification Agreement
shall not cover any claims made under this Agreement. GPD shall engage
counsel,as soon as possible following the execution of the Agreement, and upon
payment of the legal fees to issue a legal opinion to the effect that upon
issuance of the 90,000 shares set forth in Exhibit 6.0 to Cervantes (the
"Post-Agreement Shares"), such shares will be validly issued, fully paid and
non-assessable shares of GPD. The issuance of the Post-Agreement Shares shall be
conditioned upon the receipt of the legal opinion referenced above. GPD will
promptly provide to such counsel such officer certificates as is typically
required by counsel in connection with rendering such an opinion, including a
certified copy of the Board resolution (if any) authorizing the issuance of such
shares for prior services rendered by Cervantes as a director. Exhibit 6.1
contains a listing of threatened or pending litigation and is inserted for
informational purposes only.
7. Cervantes acknowledges that he has been paid all salary due and
accrued through September 30, 1999. The balance of unpaid salary through the
effective date of this Agreement shall be paid out of the first equity financing
received by GPD, but in no event no later than November 30, 1999.
8. Messrs. Gallagher, Marc B. Player, Pam Campbell and Carl L.Casareto
and GPD shall enter into Indemnification Agreements for the benefit of Messrs.
Gallagher, Player and Casareto and Ms. Campbell for serving in their roles as
directors and/or officers of GPD.
9. Except as provided below, Cervantes hereby delivers any property of
GPD, including but not limited to any cell phones, pagers or corporate credit
cards of GPD, in his possession. Cervantes hereby agrees to be taken off any and
all corporate accounts as an authorized agent or signatory and shall execute
such documents necessary to effectuate such release. Cervantes agrees that
attorneys' fees incurred by him in connection with the negotiation of this
Agreement are his sole responsibility. GPD will forward to Cervantes all of his
personal effects. Cervantes acknowledges that all files relating to the business
of GPD or about golf equipment production or internet marketing are the files of
GPD and that he has no right to any such files or the copies thereof. Upon the
effectiveness of this Agreement, Cervantes recognizes, agrees and acknowledges
that he has no further authority whatsoever to sign any contracts, agreements,
documents, checks, purchase orders or make any representations whatsoever that
he has authority to bind in any manner whatsoever GPD or the Subsidiaries to any
contracts, agreements or commitments. Cervantes agrees to cooperate with GPD to
the extent necessary in communicating the terms of this Succession Plan and
Agreement with any banks, vendors, creditors or third parties. Cervantes, at his
own cost and expense, may make copies of all business records that were either
addressed to him or authored by him and shall be entitled to have access to and
make copies of any other records of GPD and the Subsidiaries in connection with
Cervantes' review of his expense reports and in defending any actions or claims
against him including, without limitation, any claims by third party vendors or
claims by any creditors with respect to obligations which Cervantes has
guaranteed. In addition,
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Cervantes agrees to cooperate in the defense of any pending litigation against
GPD and/or the Subsidiaries with such compensation to be agreed by GPD and
Cervantes in advance including payment of any out-of-pocket expenses including
travel for attending any depositions or legal proceedings involving GPD and/or
the Subsidiaries. GPD's counsel will represent Cervantes at any depositions that
he is required to attend on behalf of GPD and/or the Subsidiaries or GPD will
assume the cost of his attorney's fees if GPD's counsel cannot represent him.
Cervantes shall be entitled to retain the personal home computer, personal fax
machine, Palm Pilot computer and laptop computer by paying GPD $1,000 for this
equipment with such payment to be made by the and offset against any unpaid
expenses or salary due and owing to Cervantes under this Agreement. GPD
acknowledges and agrees that Cervantes has previously received and may retain
certain golf clubs manufactured by GPD and the Subsidiaries.
10. Cervantes and GPD agree that any expenses incurred by Cervantes and
paid for by GPD or the Subsidiaries before the date of this Agreement (the
"Pre-Agreement Expenses") that were not reasonably in furtherance of a valid
corporate business purpose of GPD (taking into consideration Cervantes'
Employment Agreement and the then existing policies of the Board of Directors of
GPD or their Subsidiaries) will be a personal obligation of Cervantes and not an
obligation of GPD or the Subsidiaries. GPD and the Subsidiaries acknowledge that
GPD and the Subsidiaries cannot challenge the actual amount of a charge so long
as it is reasonably in furtherance of a valid business purpose of GPD. GPD and
the Subsidiaries shall have a period of ninety (90) days from and after the
effective date of this Agreement to review any Pre-Agreement Expenses. In the
event that GPD or the Subsidiaries do not challenge any Pre-Agreement Expenses
within this ninety (90) day period, neither GPD nor the Subsidiaries shall
institute any action to challenge such Pre-Agreement Expenses. In the event that
GPD or the Subsidiaries challenge Pre-Agreement Expenses, GPD and the
Subsidiaries shall notify Cervantes in writing and Cervantes shall have a period
of seven (7) days following written notice of such challenge to correct, agree
or reject any challenge in whole or in part. Once GPD and the Subsidiaries are
in receipt of Mr. Cervantes' objection, they shall have seven (7) days to review
the objection of Mr. Cervantes. In the event that Cervantes, GPD or the
Subsidiaries cannot resolve the issue of the Pre-Agreement Expenses, the two
parties shall each select an arbiter and the arbiters shall select a third
arbiter with the decision of the arbiters being binding upon GPD, the
Subsidiaries and Cervantes. In the event that the arbiters' decision is that
Cervantes was not entitled to all or any part of Pre-Agreement Expenses and
Cervantes is responsible to repay more than $2,500.00 to GPD or the
Subsidiaries, Cervantes shall have the option to execute a promissory note
agreeing to reimburse GPD or the Subsidiaries for the refundable Pre-Agreement
Expenses with such note to bear interest at 7.5% per annum and be due and
payable two (2) years from its issuance date and GPD and the Subsidiaries agree
that they shall bring no action against Cervantes with respect to the
Pre-Agreement Expenses unless there is a default under the note. GPD and the
Subsidiaries agree that this is their sole remedy against Cervantes with respect
to recovery of Pre-Agreement Expenses, and agree not to bring any action or
claim against Cervantes except for breach of the note. With respect to those
expenses that have been incurred but not yet paid as of the effective date of
this Agreement (the "Post-Agreement Expenses"), GPD, the Subsidiaries as well as
Cervantes agree that they shall be resolved by October 26, 1999 with a partial
payment being made on the date hereof of $10,000. In the event that the
Post-Agreement Expenses cannot be mutually resolved, the arbitration process
outlined above will also be utilized with GPD and the Subsidiaries obligated to
notify Cervantes by October 26, 1999
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that they object in whole or in part to the Post-Agreement Expenses identifying
those expenses to which it objects. Any expenses to which they do not object by
5:00 P.M. California time on October 26, 1999 shall be deemed accepted by GPD
and shall be paid immediately. If Cervantes desires to make a claim for the
expenses objected to by GPD, he shall notify GPD within seven (7) days of
receipt of the objection notice, in which event GPD and Cervantes will attempt
to reach a resolution of the issue. In the event that Cervantes, GPD or the
Subsidiaries cannot resolve the issue of the Post-Agreement Expenses, the
parties shall then utilize the arbitration procedure outlined above for the
Pre-Agreement Expenses. In the event that the arbiters determine that Cervantes
was entitled to all or any portion of the Post-Agreement Expenses, they shall be
paid immediately. GPD shall pay Cervantes' hotel bill from the effectiveness of
this Agreement until October 31, 1999.
11. Player hereby acknowledges that a certain License Agreement between
Player and GPD whereby GPD was granted a 20-year exclusive right to use the name
and likeness of Gary Player and ancillary marks in North America in connection
with the manufacture, marketing, distribution and exploitation of golf clubs,
accessories and apparel is in default as of the date hereof but shall be amended
and will be in full force and effect within seven (7) business days of the
effective date of this Agreement pursuant to such amendment, a copy of which
amended License Agreement will be attached hereto as Exhibit 11.0 and currently
is subject to certain claims of Player for unpaid royalties and license fees as
described on Exhibit 11.1. In addition, Player agrees and acknowledges that the
Asset Purchase Agreement entered into between GPD and Player is in default as of
the date hereof but the provisions of such Asset Purchase Agreement shall be
amended to provide, among other things, an extension of the Asset Purchase
Agreement for a period of sixty (60) days from and after the date hereof and
will be in full force and effect within seven (7) business days of the effective
date of this Agreement pursuant to such amendment and in connection with the
execution of this Agreement, which amended Asset Purchase Agreement is attached
hereto as Exhibit 11.2. Player hereby agrees to permit Pam Campbell and Marc B.
Player to serve on the Board of Directors of GPD on an interim basis or for a
full term of office if they are elected by the shareholders of GPD.
12. Cervantes and GPD agree that Cervantes' Employment Agreement is
being terminated by GPD without cause, provided, however, Cervantes agrees not
to pursue or institute any action for termination without cause or otherwise
under the Employment Agreement unless GPD or any Subsidiary institutes an action
against Cervantes (other than an action for breach of this Agreement or any
claim relating to embezzlement of GPD corporate funds or assets). In addition,
neither GPD and the Subsidiaries nor Cervantes and his Spouse, may make any
claim against the other for any matter pertaining to employment or directorship
after the second anniversary of the effective date of this Agreement (excluding
claims under the Indemnification Agreement and claims under this Agreement
including claims Cervantes may have pursuant to obligations of GPD or its
Subsidiaries guaranteed by Cervantes). In the event that one party to this
Agreement institutes an action against another party the two year limitation
referenced in the immediately preceding sentence shall not apply to the party
who has been the subject of such action or proceeding.
13. The parties hereto shall not disparage or make any statements of a
negative nature regarding any of the parties to this Agreement and shall be
supportive of GPD and its Subsidiaries in its efforts to effectuate this
Succession Plan and Agreement outlined herein. No party may issue
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a press release announcing or describing this Agreement or the succession plan
without the prior approval of GPD and Cervantes, which approval will not be
unreasonably withheld.
14. Cervantes shall advise GPD in writing whether he chooses to
exercise his COBRA rights (if any) within thirty (30) days of the date hereof.
15. The Shareholder Group, Bagley, Stone Pine, Kucher and Player hereby
release, remise and forever discharge Cervantes, his Spouse, Friedland and their
assigns of and from any and all existing manner of claims, damages, demands,
obligations, causes of action or rights of action or claims for relief whether
known or unknown at the time of the execution of this Agreement (except for any
breach of this Agreement) which the Shareholder Group, Bagley, Stone Pine,
Kucher and Player, may have, had or may come to have against Cervantes, his
Spouse or Friedland from the beginning of the world to the date of these
presents. The Shareholder Group, Bagley, Stone Pine, Kucher and Player forever
covenant and agree not to commence any legal or equitable proceeding against
Cervantes, his Spouse or Friedland in connection with Cervantes' or Friedland's
affiliation with GPD. The within releases in this Section 15 and covenant not to
sue shall also apply to any corporation (except for GPD and the Subsidiaries),
partnership, limited liability or other entity controlled by the Shareholder
Group, Bagley, Stone Pine, Kucher and Player.
16. The releases contained herein by the Shareholder Group, Bagley,
Stone Pine, Friedland, Kucher and Player shall not include any release of
Cervantes of any monies owed by Cervantes to the parties to this Agreement other
than GPD and the Subsidiaries as set forth on Exhibit 16.0.
17. GPD and the parties hereto agree and acknowledge that GPD and the
parties hereto shall not raise any objection to the sale by Cervantes of any
common stock of GPD that he legally and rightfully owns provided Cervantes
complies with all Federal and State securities laws applicable to such sales.
GPD shall instruct its counsel to handle any matters with the GPD transfer agent
in order to effectuate any such sales. Notwithstanding anything to the contained
in this Agreement to the contrary, Cervantes recognizes and acknowledges that
the Company has an extreme working capital deficit and liquidity crisis and that
the sale of all the shares on any one occasion may jeopardize GPD's ability to
raise critical capital. Accordingly, Cervantes agrees that he shall not sell,
pursuant to Rule 144 under the Securities Act of 1933, as amended, more than
50,000 shares of his common stock during any calendar month from and after the
effective date of this Agreement but all such resale restrictions shall be
terminate on June 1, 2000. Cervantes may sell more than 50,000 shares in a
private resale transaction provided such transferee or buyer agrees to legend
the sold securities restricting them from resale until April 1, 2000.
18. Cervantes agrees that for a period of three (3) years following the
date of his execution of this Agreement, he will not engage in the direct
marketing of golf equipment, accessories and apparel either personally or on
behalf of any company, individual, or entity with whom he may be associated in
any capacity as employee, partner, owner, stockholder, member, co-venturer,
principal, agent, or otherwise within the United States, Canada and any U.S.
territories without the written consent of GPD.
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19. Cervantes further agrees that, for a period of three (3) years,
Cervantes shall not solicit business, not accept either solicited or unsolicited
business, which relates to golf equipment, accessories and apparel for himself
or for any company, individual, or entity with whom he may be associated as an
employee, partner, owner, principal, agent, or other capacity, from any other
person or entity who was an existing vendor or customer as of the date of
Cervantes' execution of this Agreement without the written consent of GPD.
20. Cervantes recognizes that GPD's employees are a valuable resource
of GPD. Accordingly, Cervantes agrees that for a period of three (3) years after
the execution of this Agreement, Cervantes will not, alone or in conjunction
with others, solicit, induce or otherwise recruit any person who is as of the
date of this Agreement an employee of GPD to leave GPD's employ.
21. Cervantes understands that the provisions of paragraphs 10, 13, 17,
18, 19, 20 and 22 are material terms to this Agreement and that any breach of
these provisions would result in irreparable harm and injury to GPD. Therefore,
Cervantes agrees that a court may enjoin and restrain him from violating the
terms of paragraphs 10, 13, 17, 18, 19, 20 and 22 without the necessity of
posting a bond.
22. Cervantes recognizes that in his capacity as an officer of GPD, he
had access to Highly Confidential Business Information. "Highly Confidential
Business Information" is defined as unique and extraordinary information
obtained by Cervantes based solely on his position with GPD. Highly Confidential
Business Information is not intended to include business information that is
available in the public domain or information that was possessed by Cervantes
prior to his employment with GPD. Cervantes agrees that he will not and has not,
at any time, disclosed, reproduced, assigned or transferred to any person, firm,
corporation or other business entity, except as required by law, any Highly
Confidential Business Information concerning the business, finances, client
affairs, business plans, strategies, methods, devices, apparatus, preparations,
results from ongoing investigation by others, and present and future plans of
GPD, its subsidiaries or any company formed or funded by GPD at any time for any
reason or purpose whatsoever, without GPD's express written consent, nor shall
Cervantes make use of any such Highly Confidential Business Information for his
own purposes or for the benefit of any person, firm, corporation or other
business entity, except GPD.
23. PROVIDED NEITHER GPD NOR ANY SUBSIDIARY INSTITUTES AN ACTION
AGAINST CERVANTES AND/OR HIS SPOUSE OTHER THAN FOR BREACH OF THIS AGREEMENT OR
ANY CLAIM FOR EMBEZZLEMENT OF GPD CORPORATE FUNDS OR ASSETS, pursuant to the
Older Worker Benefits Protection Act ("OWBPA"), Cervantes acknowledges that he
waives his rights or claims only in exchange for consideration over and above
any other benefits and payments to which he is otherwise entitled. The parties
acknowledge that Cervantes has not been given at least twenty-one (21) days
within which to consider this Agreement ("21-day consideration period").
PROVIDED NEITHER GPD NOR ANY SUBSIDIARY INSTITUTES AN ACTION AGAINST CERVANTES
AND/OR HIS SPOUSE OTHER THAN FOR BREACH OF THIS AGREEMENT OR ANY CLAIM FOR
EMBEZZLEMENT OF GPD CORPORATE FUNDS OR ASSETS, by signing this Agreement
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before the 21-day consideration period has expired, however, Cervantes certifies
that by his own interest he freely, expressly and knowingly waives the 21-day
consideration period required under OWBPA.
24. Cervantes, and his Spouse, hereby for themselves, their marital
community (if any), heirs, personal representatives and assigns, forever
releases and discharges Player, Stone Pine, Bagley, Kucher, Friedland, the
Shareholder Group and each of their successors, assigns, agents, affiliates,
employees, attorneys, consultants, personal representatives, partners, officers,
directors (excluding GPD and any Subsidiary) and each and every other person
that is or might be liable, directly or indirectly, of and from any and all
existing manner of claims, demands, causes of action and other claims for
damages or relief, whether known or unknown at the time of the execution of this
Agreement (except for any breach of this Agreement) from the beginning of the
World to the date of these presents. Cervantes and his Spouse, hereby for
themselves, their heirs, personal representatives and assigns forever covenant
and agree not to commence for any reason whatsoever any legal or equitable
proceeding against the Shareholder Group, Friedland, Stone Pine, Bagley, Kucher,
Player and each of their successors, assigns agents, affiliates, employees,
attorneys, consultants, partners, officers and directors (excluding GPD and any
Subsidiary). It is the expressed understanding of the parties hereto that in
consideration for the execution of this Agreement, Cervantes and his Spouse
agree that they shall never commence as a shareholder, or otherwise, an action
against Player, Stone Pine, Bagley, Kucher, Friedland and the Shareholder Group.
The within releases in this Section 24 and covenant not to sue shall also apply
to any corporation, partnership, limited liability company or other entity
controlled by Cervantes and his Spouse.
25. PROVIDED NEITHER GPD NOR ANY SUBSIDIARY INSTITUTES AN ACTION
AGAINST CERVANTES AND/OR HIS SPOUSE OTHER THAN FOR BREACH OF THIS AGREEMENT OR
ANY CLAIM FOR EMBEZZLEMENT OF GPD CORPORATE FUNDS OR ASSETS, Cervantes will not
commence a claim, lawsuit, or other cause of action against GPD or the
Subsidiaries arising under Title VII of the Civil Rights Acts of 1964, as
amended; the Age Discrimination in Employment Act; the Americans with
Disabilities Act; the Family and Medical Leave Act; the Employee Retirement
Income Security Act ("ERISA") and any applicable state law equivalent of the
foregoing federal statutes; or any other applicable federal, state or local
statute.
26. On the effectiveness of this Agreement, GPD shall forgive the
principal plus interest of a certain loan made to Trilogy in the amount of
$142,160.00 in March of 1996 that was made in lieu of fees payable to Trilogy
for services rendered in connection with GPD's formation and the acquisition of
Rhino Marketing, Inc. and financing activities. In addition, Mr. Cervantes
hereby tenders 5,000 shares of his common stock that served as collateral for
the loan for cancellation.
27. Notwithstanding any provisions to the contrary contained in this
Agreement, the parties acknowledge that Cervantes is a guarantor on certain
corporate obligations set forth on Exhibit 27 attached hereto on behalf of GPD
and the Subsidiaries (the "Guaranteed Obligations"). GPD hereby indemnifies and
holds Cervantes harmless from any loss, liability, cost or expense (including
attorneys fees) in connection with any action, lawsuit, proceeding or claim made
against Cervantes for payment of the Guaranteed Obligations or enforcement of
the guarantees. In the event
8
<PAGE> 9
that Cervantes is required to satisfy Guaranteed Obligations, he shall be
subrogated to the rights of these creditors and shall not be precluded from
commencing an action against GPD or the Subsidiaries, but not the other parties
hereto, to reimburse him for any payments that he has made in connection with
said corporate obligations of GPD and the Subsidiaries. Essentially Cervantes
shall be subrogated to the rights of these creditors with respect to any claims
against GPD and the Subsidiaries that he has in fact paid. In the event that GPD
settles Guaranteed Obligations for less than the full amount of the stated
claim, that has been guaranteed by Cervantes, GPD shall obtain a release in
favor of Cervantes and the cancellation of his guarantee.
28. Exhibit 28 identifies shares of common stock of GPD which the Board
of Directors of GPD has authorized to be issued prior to the date hereof, for
which the consideration therefor has been received by GPD, but which
certificates have not been issued. Cervantes and GPD represent and warrant that
these shares have been duly authorized by the Board of Directors. The
Shareholder Group agrees that it has no objection to the issuance of the shares
to Cervantes and Friedland as set forth on Exhibit 28.0 conditioned upon the
issuance of the legal opinion described herein.
29. In connection with the negotiation, preparation and execution of
this Agreement during the past forty-five (45) days, GPD shall pay the legal
fees of Gallagher, Briody & Butler plus disbursements. GPD acknowledges and
represents that GPD has not been represented by the law firm of Gallagher,
Briody & Butler or Thomas P. Gallagher but has, in fact, been represented by
Saphier, Rein & Walden. GPD shall pay all legal fees and disbursements of
Saphier, Rein & Walden for its representation of GPD in connection with the
negotiation, preparation and execution of this Agreement. This is in addition to
other legal fees owed by GPD to Saphier, Rein & Walden.
30. All notices, demands or requests required or permitted by this
Agreement shall be in writing and unless otherwise specified in the written
notice by the respective parties or any of them, shall be sent to the parties at
their respective addresses set forth in Exhibit 30.0.
31. Each such notice, demand or request shall be sent by personal
delivery, or by United States Mail registered or certified mail, return receipt
requested, or by Federal Express or other similar overnight delivery service,
postage prepaid or via fax, to its addressee at its address as set forth on
Exhibit 30.0. Each such notice, demand or request (i) if deposited in the U.S.
Mail as provided above shall be deemed to have been received by its addressee on
the third (3rd) business day after the day of mailing, (ii) if so deposited with
Federal Express or another similar overnight delivery service in accordance with
such service's requirements for delivery on the next business day, shall be
deemed to have been received by its addressee on the next business day after the
day of deposit, and (iii) if sent by fax, shall be deemed to have been received
by its addressee on the next business day after being sent by fax. Any notice to
a party hereto shall be deemed valid if sent to the address set forth in Exhibit
30 unless written notice is sent confirming a new address for a party hereto.
32. Friedland, his heirs, personal representatives and assigns, forever
releases and discharges Cervantes, his Spouse, Player, Stone Pine, Bagley,
Kucher, the Shareholder Group, and each of the successors, assigns, agents,
affiliates, employees, attorneys, consultants, personal representatives,
partners, officers, directors and each and every other person that is or might
be
9
<PAGE> 10
liable, directly or indirectly, of and from any and all existing manner of
claims, demands, causes of action and other claims for damages or relief,
whether known or unknown at the time of the execution of this Agreement, (except
for any breach of this Agreement) from the beginning of the World to date of
these presents. Friedland, as well as his heirs, personal representatives and
assigns forever covenants and agrees not to commence for any reason whatsoever
any legal or equitable proceeding against Cervantes, his Spouse, the Shareholder
Group, Stone Pine, Bagley, Kucher, Player, and each of their successors, assigns
agents, affiliates, employees, attorneys, consultants, partners, officers and
directors. It is the expressed understanding of the parties hereto that in
consideration for the execution of this Agreement, Friedland agrees that he
shall never commence as a shareholder, or otherwise, an action against
Cervantes, his Spouse, Player, Stone Pine, Bagley, Kucher or the Shareholder
Group. The within release in this Section 32 and covenant not to sue shall also
apply to any corporation, partnership, limited liability company or other entity
controlled by Friedland. In addition, GPD agrees that it shall issue the shares
set forth on Exhibit 28.0 to Friedland as well as reimburse him $15,000.00 for
amounts that he has paid on behalf of GPD as well as unpaid directors fees which
shall be paid within sixty (60) days of the effectiveness of this Agreement. The
Friedland Indemnification Agreement shall remain in full force and effect after
the effective date of this Agreement but will not cover any claims made under
this Agreement.
33. This Agreement shall become effective upon and only upon its
execution and delivery by each party hereto. This Agreement represents the
complete understanding among the parties hereto as to the subject matter hereof,
and supersedes all prior negotiations, representations, guaranties, warranties,
promises, statements or agreements, either written or oral, among them as to the
same. This Agreement may be amended by and only by an instrument executed and
delivered by each party hereto. No party hereto shall be deemed to have waived
the exercise of any right which it holds hereunder unless such waiver is made
expressly and in writing (and no delay or omission by any party hereto in
exercising any such right shall be deemed a waiver of its future exercise). No
such waiver made as to any instance involving the exercise of any such right
shall be deemed a waiver as to any other such instance, or any other such right.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns hereunder.
34. No determination by any court, governmental body or otherwise that
any provision of this Agreement or any amendment hereof is invalid or
unenforceable in any instance shall affect the validity or enforceability of (a)
any other such provision, or (b) such provision in any circumstance not
controlled by such determination. Each such provision shall be valid and
enforceable to the fullest extent allowed by, and shall be construed wherever
possible as being consistent with, applicable law except as provided herein.
35. This Agreement is governed by and shall be construed under Delaware
law and contains the entire agreement of the parties. If any provision of this
Agreement is held to be invalid, void, or unenforceable for any reason, the
remaining provisions of this Agreement shall continue in full force and effect
without being impaired in any manner.
10
<PAGE> 11
36. This Agreement may be signed in counterparts and may be signed by
facsimile. Once all of the counterpart signatures are affixed to this document,
whether by original signature or by facsimile, it shall be deemed effective for
all purposes.
37. Cervantes and his Spouse as well as Friedland, the Shareholder
Group, Kucher, Player, Bagley and Stone Pine acknowledges and agrees that the
facts in respect to which any release is given pursuant to this Agreement may
turn out to be other than or different than expected, and expressly, knowingly
and voluntarily waives any and all benefits and rights granted pursuant to
Section 1542 of the Civil Code of the State of California with which section it
is familiar and which section reads as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known to him, must
have materially affected his settlement with the debtor."
38. Each party hereto understands and realizes that there may exist at
this time claims herein released, the nature of which has not yet been
discovered. It is expressly understood and agreed that the possibility that such
claims exist has been explicitly taken into account in determining the
consideration to be given for any releases contained herein and that a portion
of that consideration, having been bargained for in full knowledge of the
possibility of such unknown claims, was given in exchange for the releases
contained herein.
39. Each party hereto represents and warrants that no claim or right
that is released or dismissed under this Agreement has been transferred,
hypothecated, assigned or given away by that party prior to the date of this
Agreement.
40. Each of the parties represents, warrants and agrees as follows:
(a) Such party has received independent legal advice from
attorneys of its choice with respect to the advisability of
making this settlement and of entering into this Agreement.
Prior to the execution of this Agreement, the attorneys for
each party reviewed this Agreement at length and had an
opportunity to make any desired changes and, accordingly, this
Agreement shall not be construed adversely to the draftsmen
thereof.
(b) Such party has made such investigation of the facts
pertaining to this Agreement, and of all other matters related
thereto, as such party deems necessary.
(c) This Agreement has been carefully read by, the contents
hereof are known and understood by, and it is signed
voluntarily by, each person executing this Agreement.
11
<PAGE> 12
(d) Each person executing this Agreement on behalf of a party
warrants and represents that he is fully authorized to do so
and that his signature on this Agreement shall bind said party
to the terms and provisions of this Agreement.
(e) This Agreement is intended to be final and binding and to
be effective as a full and final accord and satisfaction of
any and all disputes between the parties except as noted
herein. Each party is relying upon the said finality of this
Agreement as a material factor inducing said party's decision
to settle said disputes.
(f) None of the claims settled hereby have been transferred or
assigned to a third party.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
12
<PAGE> 13
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement on the date indicated below.
GARY PLAYER DIRECT, INC. GARY PLAYER GROUP, INC.
By:/s/ Carl L. Casareto By:/s/ Marc Player
-------------------------------- ---------------------------------
Title: Carl L. Casareto, Title: C.E.O.
Executive Vice President
Dated: 10/12/99 Dated: October 13, 1999
------------- ---------------------
RHINO MARKETING, INC. GRAN PRIX MARKETING, INC.
By:/s/ Carl L. Casareto By:/s/ Carl L. Casareto
-------------------------------- ---------------------------------
Title: Carl L. Casareto, President Title: Carl L. Casareto, President
Dated: 10/12/99 Dated: 10/12/99
------------- -------------
GARY PLAYER GOLF EQUIPMENT G.P. DIRECT, INC.
By:/s/ Marc Player By:/s/ Carl L. Casareto
-------------------------------- ---------------------------------
Title: C.E.O. Title: Carl L. Casareto, President
Dated: October 13, 1999 Dated: 10/12/99
--------------------- -------------
DIGITAL-GOLF.COM, INC. TRILOGY CAPITAL GROUP, INC.
By:/s/ Carl L. Casareto By:/s/ Alfonso J. Cervantes, Jr.
-------------------------------- ---------------------------------
Title: Carl L. Casareto, President Title: President
Dated: 10/12/99 Dated: 10/13/99
------------- -------------
/s/ Alfonso J. Cervantes, Jr. /s/ Robert J. Friedland
- ----------------------------------- ------------------------------------
ALFONSO J. CERVANTES, JR. ROBERT J. FRIEDLAND
Dated: 10/13/99 Dated: 10/12/99
------------- -------------
/s/ Judith Cervantes
- -----------------------------------
JUDITH CERVANTES
Dated: 10/13/99
-------------
13
<PAGE> 14
/s/ Thomas P. Gallagher /s/ William S. Schuler
- ----------------------------------- ------------------------------------
THOMAS P. GALLAGHER, ESQ. WILLIAM S. SCHULER
Dated: 10/12/99 Dated: 10/13/99
------------- -------------
GALLAGHER, BRIODY & BUTLER /s/ Jeffrey Leach
------------------------------------
JEFFREY LEACH
Dated: 10/11/99
-------------
By:/s/ Thomas P. Gallagher
- -----------------------------------
THOMAS P. GALLAGHER
Title: Partner STONE PINE VENTURE LENDING,
Dated: 10/12/99 LLC, and its Affiliates
-------------
/s/ Ritch Gaiti By:/s/ James Paul Bagley
- ----------------------------------- ------------------------------------
RITCH GAITI J. PAUL BAGLEY, Individually and
Dated: 10/9/99 on behalf of Stone Pine Venture
------------- Lending, LLC
Dated: 10/9/99
-------------
LAVA INVESTMENTS LIMITED
/s/ Gary D. Kucher
------------------------------------
GARY D. KUCHER
Dated: 10/10/99
-------------
By:/s/ Roy Tashi
- -----------------------------------
ROY TASHI
Dated: 8 October 1999
-------------------
14
<PAGE> 15
EXHIBIT 3.0
MINUTES OF THE BOARD OF DIRECTORS APPOINTING
NEW DIRECTORS, APPROVAL OF AGREEMENT AND
APPROVAL OF INDEMNIFICATION AGREEMENTS
15
<PAGE> 16
EXHIBIT 6.0
STOCK OWNERSHIP OF CERVANTES AND DESCRIPTION
OF CONSIDERATION
<TABLE>
<CAPTION>
ISSUED AND OUTSTANDING
Description Date Issued No. of Shares
----------- ----------- -------------
<S> <C> <C> <C>
Founders shares Inception of Company 202,283
Employee Compensation February 22, 1999 80,000
-------
Subtotal - Exchanged at Merger 282,283
TO BE ISSUED
Directors Compensation October 2, 1999 40,000
Compensation re: personal
Guarantee of company debt October 2, 1999 50,000
-------
Total 372,283
TO BE CANCELLED 5,000
Net Shares of Cervantes 367,283
=======
</TABLE>
16
<PAGE> 17
EXHIBIT 6.1
PENDING OR THREATENED LITIGATION CLAIMS
1. Ahuja, Monte
2. Bergman, Murphy, Trebek
3. Bridge Lenders (Defaults)
4. California District Attorney's Office
5. California State Labor Board
6. Cancellieri, Jack
7. Cardservice International
8. Comstream International
9. Cozier, Cliff
10. Digital Telecommunications
11. Direct Media
12. Eaton Corporation
13. EDD - State of California
14. Frontier Telecommunications
15. Fugro West
16. Garcia, Diana
17. GMAC
18. Graffaloy, LP
19. Guerin, Bruce
20. Higgins Family Limited Partnership
21. Holiday Inn
22. IRS
23. Krausman, Kent
24. NEC
25. Nissho Iwai and Affiliates
26. Numerous Unsecured Creditors
27. Packacquisition Corporation
28. Pollet and Woodbury
29. Sparks, Dana
30. Stephenson
31. Towbes
32. Toyota Credit
33. UPS
34. Michael Woodward
35. Henry Muir
17
<PAGE> 18
36. Poor Richards Press
37. Viking Freight
38. Marshall & Stevens
39. Larry Harris
40. Office Depot
41. Williams
42. State of California - Department of Justice
43. Prime Time Sports TV
44. Spalding and EvenFlo Companies
* For Information Purposes Only
18
<PAGE> 19
EXHIBIT 11.0
AMENDED LICENSE AGREEMENT BETWEEN PLAYER AND GPD
[TO BE DELIVERED POST-AGREEMENT]
19
<PAGE> 20
EXHIBIT 11.1
OUTSTANDING CLAIMS FOR UNPAID ROYALTIES
AND LICENSE FEES OF PLAYER OWING FROM GPD
The total amount outstanding as of September 30, 1999 as requested by Player is
$474,225.59 plus $50,000.00 of expenses payable to Marc B. Player.
20
<PAGE> 21
EXHIBIT 11.2
AMENDED ASSET PURCHASE AGREEMENT OF PLAYER AND GPD
[TO BE DELIVERED POST-AGREEMENT]
21
<PAGE> 22
EXHIBIT 16.0
MONIES OWING TO THE SHAREHOLDER GROUP
BY CERVANTES
1. Jeffrey Leach is owed $20,000.00 plus interest.
22
<PAGE> 23
EXHIBIT 27
OBLIGATIONS THAT CERVANTES HAS GUARANTEED
ON BEHALF OF GPD
1. Bergman, Murphy, Trebek-loans
2. Capital Fund Leasing, LLC-loan
3. Cardservice International, Inc.-merchant account
4. Richard Casey-bridge loan
5. Michael Freilich, MD-bridge loan
6. Tom Imming-bridge loan
7. Mid-America Agency-bridge loan
8. Andrew and Sally Pollet-loan
9. Lava Investments, Roy Tashi-loan
23
<PAGE> 24
EXHIBIT 28
SHARES TO BE ISSUED BY GPD PRIOR TO
CERVANTES RESIGNATION
<TABLE>
<CAPTION>
NUMBER
------
OF
--
SHAREHOLDER SHARES
----------- ------
<C> <S> <C>
1. Ace Investors, LLC 25,000
c/o Norman A. Kunin
154 Abbey Road
Santa Maria, CA 93455
2. Alfonso J. Cervantes, Jr. 90,000
2100 N. Broadway, #234
Santa Maria, CA 93454
3. Andrew Furukawa 3,500*
1213 Cobblestone Lane
Santa Maria, CA 93454
4. Brian H. McPhearson 3,500*
c/o Gary Player Direct, Inc.
710 Aerovista Lane, Suite B
San Luis Obispo, CA 93401
5. Charles Motley 3,500*
c/o Gary Player Direct, Inc.
710 Aerovista Lane, Suite B
San Luis Obispo, CA 93401
6. Chris Avila 3,500*
c/o Gary Player Direct, Inc.
710 Aerovista Lane, Suite B
San Luis Obispo, CA 93401
7. Eric Hall 1,000
c/o Gary Player Direct, Inc.
710 Aerovista Lane, Suite B
San Luis Obispo, CA 93401
</TABLE>
24
<PAGE> 25
<TABLE>
<C> <S> <C>
8. Hollander Family Trust 10,000
1610 Valley Meadow Place
Encino, CA 91436
9. Hyman Harris Irrevocable Trust 10,000
4140 Aleman Drive
Tarzana, CA 91356
10. James Zawacki 500
3635 Foothill Road
Santa Barbara, CA 93105
11. Jerome Hollander 10,000
1610 Valley Meadow Place
Encino, CA 91436
12. John Martin Kealy 150,000
c/o The Brinton Group
Liberty Square
287 Silom Road
Bangrak 10500
Bangkok, Thailand
13. Kenneth J. Richland IRA 20,000
18757 Hatteras Street, Suite 21
Tarzana, CA 91356
14. Kent Krausman 30,000
6260 S. University Blvd.
Littleton, CO 80121
15. Larry Van Kirk 2,000
c/o Gary Player Direct, Inc.
710 Aerovista Lane, Suite B
San Luis Obispo, CA 93401
16. Michael I. Freilich 25,000
8737 Beverly Blvd.
Los Angeles, CA 90048
17. Mid-America Agency, Inc. 40,000
52 Maryland Plaza
St Louis, MO 63180
</TABLE>
25
<PAGE> 26
<TABLE>
<C> <S> <C>
18. Monte Stern 20,000
4219 Valley Meadow Road
Encino, CA 91436
19. Nick Chamberlain 3,500*
c/o Gary Player Direct, Inc.
710 Aerovista Lane, Suite B
San Luis Obispo, CA 93401
20. Patrick Beck 3,500*
Highway #1, I-134
Oceano, CA 93455
21. Richard Casey 25,000
232 N. Kingshighway
St. Louis, MO 63108
22. Robert J. Friedland 80,000
380 S. San Rafael Avenue
Pasadena, CA 91105
23. Robert Weingarten 5,000
5439 Lock Hurst Drive
Woodland Hills, CA 91367
24. Roger Armstrong 2,000*
c/o Gary Player Direct, Inc.
710 Aerovista Lane, Suite B
San Luis Obispo, CA 93401
25. Sheldon I. Silver 3,000
3670 Reina Court
Calabasas, CA 91302
26. Thomas P. Gallagher 60,000
c/o Gallagher, Briody & Butler
212 Carnegie Center, Suite 402
Princeton, NJ 08540
27. Thomas P. Gallagher 43,710
c/o Gallagher, Briody & Butler
212 Carnegie Center, Suite 402
Princeton, NJ 08540
</TABLE>
26
<PAGE> 27
<TABLE>
<C> <S> <C>
28. Ritch Gaiti 16,000
559 Provinceline Road
Hopewell, NJ 08525
29. Ritch Gaiti 11,365
559 Provinceline Road
Hopewell, NJ 08525
30. William Schuler 24,000
Schuler Associates
41 Tamarack Circle
Skillman, NJ 08558
31. William Schuler 17,484
Schuler Associates
41 Tamarack Circle
Skillman, NJ 08558
32. Tamara Toohey 3,500*
3860 S. Higuera, B-21
San Luis Obispo, CA 93401
33. Tom Imming 5,000
3120 San Fernado Road
Atascadero, CA 93420
34. Roy Tashi/Lava Investments 20,000
Level 50, 101 Collins Street
Melbourne, Victoria 3000
Australia
35. Cliff Cozier 50,000
Cozier & Associates, P.C.
7430 E. Caley Avenue, Suite 100
Englewood, CO 80111
36. Robert Rein, Esq. 50,000
Saphier, Rein & Walden
1901 Avenue of the Stars
Suite 1060
Los Angeles, CA 90067
</TABLE>
* Note: Conditioned upon nine months continuous employment.
27
<PAGE> 28
EXHIBIT 30.0
ADDRESSES OF ALL PARTIES
Alfonso J. Cervantes, Jr. Gallagher, Briody & Butler
2100 North Broadway 212 Carnegie Center, Suite 402
#234 Princeton, NJ 08540
Santa Maria, CA 93454
Robert J. Friedland William S. Schuler
380 S. San Rafael Avenue Schuler Associates
Pasadena, CA 91105 41 Tamarack Circle
Skillman, NJ 08558
Gary Player Direct, Inc. Ritch Gaiti
710 Aerovista, Suite B 559 Provinceline Road
San Luis Obispo, CA 93401 Hopewell, NJ 08525
Rhino Marketing, Inc. Jeffrey Leach
710 Aerovista, Suite B Stone Pine Investment Banking
San Luis Obispo, CA 93401 31 South Street, Suite 201
Morristown, NJ 07960
G. P. Direct, Inc. Roy Tashi
710 Aerovista, Suite B Lava Investments Limited
San Luis Obispo, CA 93401 Level 50, 101 Collins Street
Melbourne, Victoria 3000
Australia
Gran Prix Marketing, Inc. Gary Player Golf Equipment Company
710 Aerovista, Suite B 3930 RCA Boulevard, Suite 3001
San Luis Obispo, CA 93401 Palm Beach Gardens, FL 33410
Thomas P. Gallagher The Gary Player Group
Gallagher, Briody & Butler 3930 RCA Boulevard, Suite 3001
212 Carnegie Center, Suite 402 Palm Beach Gardens, FL 33410
Princeton, NJ 08540
28
<PAGE> 29
Gary K. Kucher Digital-Golf.com, Inc.
Investors Capital Enterprises 710 Aerovista, Suite B
10660 Wilshire Blvd., Suite 1504 San Luis Obispo, CA 93401
Los Angeles, CA 90024
Stone Pine Venture Lending, LLC J. Paul Bagley
410 17th Street, Suite 400 410 17th Street, Suite 400
Denver, CO 80202 Denver, CO 80202
29
<PAGE> 1
Exhibit 10.2
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT ("Agreement") is made as of this 14th
day of October, 1999, by and between GARY PLAYER DIRECT, INC., a Delaware
corporation located at 710 Aerovista, Suite B, San Luis Obispo, California 93401
(the "Company"), and THOMAS P. GALLAGHER ("Indemnitee").
RECITALS
A. The Company and Indemnitee recognize the increasing difficulty in
obtaining suitable liability insurance for directors, officers, employees and
agents, the significant increases in the cost of such insurance and the general
reductions in the coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, and agents to expensive litigation risk at the same time that the
availability and coverage of liability insurance has been severely limited.
C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employers and agents of the Company may not be willing to continue to
serve as directors, officers, employees and agents without additional
protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and agents of the Company and to indemnify its directors, officers,
employees and agents so as to provide them with the maximum protection permitted
by law.
E. The Company, through its Board of Directors, approved this Agreement
on the 12th day of October, 1999.
AGREEMENT
The Company and Indemnitee hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve and continue to serve
the Company, at the Company's will (or under separate written agreement approved
by the Board of Directors of the Company, if such agreement exists), in the
capacity Indemnitee currently serves the Company, as long as Indemnitee is duly
appointed or elected and qualified in accordance with the applicable provisions
of the By-Laws of the Company or any subsidiary of the Company or (subject to
any employment agreement between Indemnitee and the Company) until such time as
Indemnitee tenders a written resignation or is removed in accordance with the
By-Laws; provided, however, that nothing contained in this Agreement is intended
to or shall create any right (express or implied) to continued employment by
Indemnitee.
<PAGE> 2
2. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while a
director, officer, employee or agent, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, and expenses of investigations), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company) actually
and reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee's conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact the Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while a director, officer,
employee or agent, or by reason of the fact that Indemnitee is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) and, to the fullest extent permitted by law, amounts
paid in settlement, in each case to the extent actually and reasonably incurred
by Indemnitee in connection with the defense or settlement of such action or
suit (i) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company and
its stockholders unless and only to the extent that the court in which such
action or suit is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine; (ii) if Indemnitee is a director, to the extent that the action
or contemplated action seeks monetary damages for breach of Indemnitee's duties
to the Company and its stockholders in circumstances under which Indemnitee's
personal liability therefor has been
2
<PAGE> 3
eliminated as a result of the provisions of Section 102(b)(7) of the Delaware
General Corporation Law; or (iii) if Indemnitee is an agent other than a
director, to the extent that, were Indemnitee a director, Indemnitee would have
the right to be indemnified under Section 2(b)(ii), above; and in the case of
Sections 2(b)(ii) and 2(b)(iii) above, indemnification shall include, to the
extent not prohibited by law, indemnification against all judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such action, suit or proceeding.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 2(a) or (b) or in defense of
any claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) actually and reasonably incurred by Indemnitee in
connection therewith.
(d) INDEMNIFICATION FOR SERVING AS A WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's status as a director, officer, employee or agent of the
Company, a witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, Indemnitee shall be indemnified against
expenses actually and reasonably incurred by Indemnitee in connection therewith.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil, criminal, administrative or
investigative action, suit or proceeding referenced in Sections 2(a) or (b)
hereof (but not amounts actually paid in settlement of any such action, suit or
proceeding). Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized hereby.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his right to indemnified under this Agreement, give the
Company notice, in accordance with Section 14 hereof, of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the appropriate officer of
the Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) PROCEDURE. Any indemnification and advances provided for
in Section 2 and this Section 3 shall be made no later than thirty (30) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or By-Laws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees)
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of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee. Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the intention of the parties that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a
notice of a claim pursuant to Section 3(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceedings
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ separate counsel in any such proceeding at
Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NON-EXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the Company's By-Laws or by statute. In the event
of any change in any applicable law, statute or rule which narrows the right of
a Delaware corporation
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to indemnify a member of its board of directors or its officers, employees or
agents, such change, to the extent not otherwise required by such law, statute
or rule to be applied to this Agreement, shall have no effect on this Agreement
or the parties' rights and obligations hereunder.
(b) NON-EXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation, By-Laws, any
agreement, any vote of stockholders or disinterested Directors, the Delaware
General Corporation Law or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he may have ceased to serve in such capacity at the time of any action,
suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees and/or agents
under this Agreement or otherwise. Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Company's right
under public policy to indemnify Indemnitee.
7. LIABILITY INSURANCE. If the Company does not maintain a policy or
policies of officers and directors liability insurance with a reputable
insurance company or companies, upon written request of Indemnities, the Company
shall, from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain such a policy or policies of
insurance. Officers and directors liability insurance would cover, among other
things, coverage for losses from wrongful acts and/or to ensure the Company's
performance of its obligations under this Agreement. The Company shall not be
obligated to make such determination more than once in any 12-month period based
on written requests from Indemnities and any other persons with similar rights.
Among other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all such
policies of liability insurance, Indemnitee shall be named as an insured in such
a manner as to provide Indemnitee the same rights and benefits as are accorded
to the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of the
Company but is an officer; or of the Company's employees, if Indemnitee is not a
director or officer but is an employee; or of the Company's agents, if
Indemnitee is not a director, officer or employee but is an agent.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance if the Company determines in good faith that such
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insurance is not reasonably available, if the premium costs for such insurance
are disproportionate to the amount of coverage provided, if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or otherwise as required under Section 145
of the Delaware General Corporation Law, but such indemnification or advancement
of expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any
expenses incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(c) INSURED CLAIMS. To indemnity Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise tax or penalties, and amounts paid in settlement) which have
been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance or other policy of insurance
maintained by the Company;
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee or securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute;
(e) UNLAWFUL CLAIMS. To indemnify Indemnitee in any manner
which is contrary to public policy or which a court of competent jurisdiction
has finally determined to be unlawful;
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(f) FAILURE TO SETTLE PROCEEDING. To indemnify Indemnitee for
liabilities in excess of the total amount at which settlement reasonably could
have been made, or for any cost and/or expenses incurred by Indemnitee following
the time such settlement reasonably could have been effected, if Indemnitee
shall have unreasonably delayed, refused or failed to enter into a settlement or
any action, suit or proceeding (or investigation or appeal thereof) recommended
in good faith, in writing, by the Company; or
(g) BREACH OF EMPLOYMENT AGREEMENT. To indemnify Indemnitee
for any breach by Indemnitee of any employment agreement between Indemnitee and
the Company or any of its subsidiaries.
10. CONSTRUCTION OF CERTAIN PHRASES.
For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
and/or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company or
any subsidiary of the Company which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interest of the
Company" as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEY'S FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that
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each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines the each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of New Jersey,
or in Federal courts located in such State.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware.
17. CALIFORNIA LAW. To the extent that the Company is subject to the
provisions of Section 317 of the California General Corporation Law pursuant to
Section 2115 of the California General Corporation Law, nothing in this
Agreement shall be deemed to require the Company to take any action which would
cause it to be in violation of Section 317 of the California General Corporation
Law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GARY PLAYER DIRECT, INC., a Delaware
Corporation.
By: /s/ Carl L. Casareto
---------------------------------------
Name: Carl L. Casareto
Title: Executive Vice President
Address: 710 Aerovista, Suite B
San Luis Obispo, California 93401
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Thomas P. Gallagher
- -------------------------------
THOMAS P. GALLAGHER
Address: Gallagher, Briody & Butler
212 Carnegie Center, Suite 402
Princeton, New Jersey 08540
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<PAGE> 1
Exhibit 10.3
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT ("Agreement") is made as of this 14th
day of October, 1999, by and between GARY PLAYER DIRECT, INC., a Delaware
corporation located at 710 Aerovista, Suite B, San Luis Obispo, California 93401
(the "Company"), and MARC B. PLAYER ("Indemnitee").
RECITALS
A. The Company and Indemnitee recognize the increasing difficulty in
obtaining suitable liability insurance for directors, officers, employees and
agents, the significant increases in the cost of such insurance and the general
reductions in the coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, and agents to expensive litigation risk at the same time that the
availability and coverage of liability insurance has been severely limited.
C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employers and agents of the Company may not be willing to continue to
serve as directors, officers, employees and agents without additional
protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and agents of the Company and to indemnify its directors, officers,
employees and agents so as to provide them with the maximum protection permitted
by law.
E. The Company, through its Board of Directors, approved this Agreement
on the 12th day of October, 1999.
AGREEMENT
The Company and Indemnitee hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve and continue to serve
the Company, at the Company's will (or under separate written agreement approved
by the Board of Directors of the Company, if such agreement exists), in the
capacity Indemnitee currently serves the Company, as long as Indemnitee is duly
appointed or elected and qualified in accordance with the applicable provisions
of the By-Laws of the Company or any subsidiary of the Company or (subject to
any employment agreement between Indemnitee and the Company) until such time as
Indemnitee tenders a written resignation or is removed in accordance with the
By-Laws; provided, however, that nothing contained in this Agreement is intended
to or shall create any right (express or implied) to continued employment by
Indemnitee.
<PAGE> 2
2. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while a
director, officer, employee or agent, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, and expenses of investigations), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company) actually
and reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee's conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact the Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while a director, officer,
employee or agent, or by reason of the fact that Indemnitee is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) and, to the fullest extent permitted by law, amounts
paid in settlement, in each case to the extent actually and reasonably incurred
by Indemnitee in connection with the defense or settlement of such action or
suit (i) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company and
its stockholders unless and only to the extent that the court in which such
action or suit is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine; (ii) if Indemnitee is a director, to the extent that the action
or contemplated action seeks monetary damages for breach of Indemnitee's duties
to the Company and its stockholders in circumstances under which Indemnitee's
personal liability therefor has been
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eliminated as a result of the provisions of Section 102(b)(7) of the Delaware
General Corporation Law; or (iii) if Indemnitee is an agent other than a
director, to the extent that, were Indemnitee a director, Indemnitee would have
the right to be indemnified under Section 2(b)(ii), above; and in the case of
Sections 2(b)(ii) and 2(b)(iii) above, indemnification shall include, to the
extent not prohibited by law, indemnification against all judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such action, suit or proceeding.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 2(a) or (b) or in defense of
any claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) actually and reasonably incurred by Indemnitee in
connection therewith.
(d) INDEMNIFICATION FOR SERVING AS A WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's status as a director, officer, employee or agent of the
Company, a witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, Indemnitee shall be indemnified against
expenses actually and reasonably incurred by Indemnitee in connection therewith.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil, criminal, administrative or
investigative action, suit or proceeding referenced in Sections 2(a) or (b)
hereof (but not amounts actually paid in settlement of any such action, suit or
proceeding). Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized hereby.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his right to indemnified under this Agreement, give the
Company notice, in accordance with Section 14 hereof, of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the appropriate officer of
the Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) PROCEDURE. Any indemnification and advances provided for
in Section 2 and this Section 3 shall be made no later than thirty (30) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or By-Laws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees)
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of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee. Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the intention of the parties that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a
notice of a claim pursuant to Section 3(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceedings
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ separate counsel in any such proceeding at
Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NON-EXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the Company's By-Laws or by statute. In the event
of any change in any applicable law, statute or rule which narrows the right of
a Delaware corporation
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to indemnify a member of its board of directors or its officers, employees or
agents, such change, to the extent not otherwise required by such law, statute
or rule to be applied to this Agreement, shall have no effect on this Agreement
or the parties' rights and obligations hereunder.
(b) NON-EXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation, By-Laws, any
agreement, any vote of stockholders or disinterested Directors, the Delaware
General Corporation Law or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he may have ceased to serve in such capacity at the time of any action,
suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees and/or agents
under this Agreement or otherwise. Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Company's right
under public policy to indemnify Indemnitee.
7. LIABILITY INSURANCE. If the Company does not maintain a policy or
policies of officers and directors liability insurance with a reputable
insurance company or companies, upon written request of Indemnities, the Company
shall, from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain such a policy or policies of
insurance. Officers and directors liability insurance would cover, among other
things, coverage for losses from wrongful acts and/or to ensure the Company's
performance of its obligations under this Agreement. The Company shall not be
obligated to make such determination more than once in any 12-month period based
on written requests from Indemnities and any other persons with similar rights.
Among other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all such
policies of liability insurance, Indemnitee shall be named as an insured in such
a manner as to provide Indemnitee the same rights and benefits as are accorded
to the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of the
Company but is an officer; or of the Company's employees, if Indemnitee is not a
director or officer but is an employee; or of the Company's agents, if
Indemnitee is not a director, officer or employee but is an agent.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance if the Company determines in good faith that such
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<PAGE> 6
insurance is not reasonably available, if the premium costs for such insurance
are disproportionate to the amount of coverage provided, if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or otherwise as required under Section 145
of the Delaware General Corporation Law, but such indemnification or advancement
of expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any
expenses incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(c) INSURED CLAIMS. To indemnity Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise tax or penalties, and amounts paid in settlement) which have
been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance or other policy of insurance
maintained by the Company;
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee or securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute;
(e) UNLAWFUL CLAIMS. To indemnify Indemnitee in any manner
which is contrary to public policy or which a court of competent jurisdiction
has finally determined to be unlawful;
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(f) FAILURE TO SETTLE PROCEEDING. To indemnify Indemnitee for
liabilities in excess of the total amount at which settlement reasonably could
have been made, or for any cost and/or expenses incurred by Indemnitee following
the time such settlement reasonably could have been effected, if Indemnitee
shall have unreasonably delayed, refused or failed to enter into a settlement or
any action, suit or proceeding (or investigation or appeal thereof) recommended
in good faith, in writing, by the Company; or
(g) BREACH OF EMPLOYMENT AGREEMENT. To indemnify Indemnitee
for any breach by Indemnitee of any employment agreement between Indemnitee and
the Company or any of its subsidiaries.
10. CONSTRUCTION OF CERTAIN PHRASES.
For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
and/or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company or
any subsidiary of the Company which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interest of the
Company" as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEY'S FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that
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each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines the each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of New Jersey,
or in Federal courts located in such State.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware.
17. CALIFORNIA LAW. To the extent that the Company is subject to the
provisions of Section 317 of the California General Corporation Law pursuant to
Section 2115 of the California General Corporation Law, nothing in this
Agreement shall be deemed to require the Company to take any action which would
cause it to be in violation of Section 317 of the California General Corporation
Law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GARY PLAYER DIRECT, INC., a Delaware
Corporation.
By: /s/ Carl L. Casareto
-------------------------------------------
Name: Carl L. Casareto
Title: Executive Vice President
Address: 710 Aerovista, Suite B
San Luis Obispo, California 93401
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Marc B. Player
- ------------------------
MARC B. PLAYER
Address: Gary Player Group, Inc.
3930 RCA Boulevard, Suite 3001
Palm Beach Gardens, Florida 33410
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<PAGE> 1
Exhibit 10.4
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT ("Agreement") is made as of this 14th
day of October, 1999, by and between GARY PLAYER DIRECT, INC., a Delaware
corporation located at 710 Aerovista, Suite B, San Luis Obispo, California 93401
(the "Company"), and PAMELA CAMPBELL ("Indemnitee").
RECITALS
A. The Company and Indemnitee recognize the increasing difficulty in
obtaining suitable liability insurance for directors, officers, employees and
agents, the significant increases in the cost of such insurance and the general
reductions in the coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, and agents to expensive litigation risk at the same time that the
availability and coverage of liability insurance has been severely limited.
C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employers and agents of the Company may not be willing to continue to
serve as directors, officers, employees and agents without additional
protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and agents of the Company and to indemnify its directors, officers,
employees and agents so as to provide them with the maximum protection permitted
by law.
E. The Company, through its Board of Directors, approved this Agreement
on the 12th day of October, 1999.
AGREEMENT
The Company and Indemnitee hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve and continue to serve
the Company, at the Company's will (or under separate written agreement approved
by the Board of Directors of the Company, if such agreement exists), in the
capacity Indemnitee currently serves the Company, as long as Indemnitee is duly
appointed or elected and qualified in accordance with the applicable provisions
of the By-Laws of the Company or any subsidiary of the Company or (subject to
any employment agreement between Indemnitee and the Company) until such time as
Indemnitee tenders a written resignation or is removed in accordance with the
By-Laws; provided, however, that nothing contained in this Agreement is intended
to or shall create any right (express or implied) to continued employment by
Indemnitee.
<PAGE> 2
2. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while a
director, officer, employee or agent, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, and expenses of investigations), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company) actually
and reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee's conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact the Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while a director, officer,
employee or agent, or by reason of the fact that Indemnitee is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) and, to the fullest extent permitted by law, amounts
paid in settlement, in each case to the extent actually and reasonably incurred
by Indemnitee in connection with the defense or settlement of such action or
suit (i) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company and
its stockholders unless and only to the extent that the court in which such
action or suit is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine; (ii) if Indemnitee is a director, to the extent that the action
or contemplated action seeks monetary damages for breach of Indemnitee's duties
to the Company and its stockholders in circumstances under which Indemnitee's
personal liability therefor has been
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eliminated as a result of the provisions of Section 102(b)(7) of the Delaware
General Corporation Law; or (iii) if Indemnitee is an agent other than a
director, to the extent that, were Indemnitee a director, Indemnitee would have
the right to be indemnified under Section 2(b)(ii), above; and in the case of
Sections 2(b)(ii) and 2(b)(iii) above, indemnification shall include, to the
extent not prohibited by law, indemnification against all judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such action, suit or proceeding.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 2(a) or (b) or in defense of
any claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) actually and reasonably incurred by Indemnitee in
connection therewith.
(d) INDEMNIFICATION FOR SERVING AS A WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's status as a director, officer, employee or agent of the
Company, a witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, Indemnitee shall be indemnified against
expenses actually and reasonably incurred by Indemnitee in connection therewith.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil, criminal, administrative or
investigative action, suit or proceeding referenced in Sections 2(a) or (b)
hereof (but not amounts actually paid in settlement of any such action, suit or
proceeding). Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized hereby.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his right to indemnified under this Agreement, give the
Company notice, in accordance with Section 14 hereof, of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the appropriate officer of
the Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) PROCEDURE. Any indemnification and advances provided for
in Section 2 and this Section 3 shall be made no later than thirty (30) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or By-Laws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees)
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<PAGE> 4
of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee. Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the intention of the parties that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a
notice of a claim pursuant to Section 3(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceedings
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ separate counsel in any such proceeding at
Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NON-EXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the Company's By-Laws or by statute. In the event
of any change in any applicable law, statute or rule which narrows the right of
a Delaware corporation
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<PAGE> 5
to indemnify a member of its board of directors or its officers, employees or
agents, such change, to the extent not otherwise required by such law, statute
or rule to be applied to this Agreement, shall have no effect on this Agreement
or the parties' rights and obligations hereunder.
(b) NON-EXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation, By-Laws, any
agreement, any vote of stockholders or disinterested Directors, the Delaware
General Corporation Law or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he may have ceased to serve in such capacity at the time of any action,
suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees and/or agents
under this Agreement or otherwise. Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Company's right
under public policy to indemnify Indemnitee.
7. LIABILITY INSURANCE. If the Company does not maintain a policy or
policies of officers and directors liability insurance with a reputable
insurance company or companies, upon written request of Indemnities, the Company
shall, from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain such a policy or policies of
insurance. Officers and directors liability insurance would cover, among other
things, coverage for losses from wrongful acts and/or to ensure the Company's
performance of its obligations under this Agreement. The Company shall not be
obligated to make such determination more than once in any 12-month period based
on written requests from Indemnities and any other persons with similar rights.
Among other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all such
policies of liability insurance, Indemnitee shall be named as an insured in such
a manner as to provide Indemnitee the same rights and benefits as are accorded
to the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of the
Company but is an officer; or of the Company's employees, if Indemnitee is not a
director or officer but is an employee; or of the Company's agents, if
Indemnitee is not a director, officer or employee but is an agent.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance if the Company determines in good faith that such
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insurance is not reasonably available, if the premium costs for such insurance
are disproportionate to the amount of coverage provided, if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or otherwise as required under Section 145
of the Delaware General Corporation Law, but such indemnification or advancement
of expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any
expenses incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(c) INSURED CLAIMS. To indemnity Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise tax or penalties, and amounts paid in settlement) which have
been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance or other policy of insurance
maintained by the Company;
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee or securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute;
(e) UNLAWFUL CLAIMS. To indemnify Indemnitee in any manner
which is contrary to public policy or which a court of competent jurisdiction
has finally determined to be unlawful;
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(f) FAILURE TO SETTLE PROCEEDING. To indemnify Indemnitee for
liabilities in excess of the total amount at which settlement reasonably could
have been made, or for any cost and/or expenses incurred by Indemnitee following
the time such settlement reasonably could have been effected, if Indemnitee
shall have unreasonably delayed, refused or failed to enter into a settlement or
any action, suit or proceeding (or investigation or appeal thereof) recommended
in good faith, in writing, by the Company; or
(g) BREACH OF EMPLOYMENT AGREEMENT. To indemnify Indemnitee
for any breach by Indemnitee of any employment agreement between Indemnitee and
the Company or any of its subsidiaries.
10. CONSTRUCTION OF CERTAIN PHRASES.
For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
and/or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company or
any subsidiary of the Company which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interest of the
Company" as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEY'S FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that
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each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines the each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of New Jersey,
or in Federal courts located in such State.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware.
17. CALIFORNIA LAW. To the extent that the Company is subject to the
provisions of Section 317 of the California General Corporation Law pursuant to
Section 2115 of the California General Corporation Law, nothing in this
Agreement shall be deemed to require the Company to take any action which would
cause it to be in violation of Section 317 of the California General Corporation
Law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GARY PLAYER DIRECT, INC., a Delaware
Corporation.
By: /s/ Carl L. Casareto
-------------------------------------------
Name: Carl L. Casareto
Title: Executive Vice President
Address: 710 Aerovista, Suite B
San Luis Obispo, California 93401
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Pamela Campbell
- -----------------------
PAMELA CAMPBELL
Address: Gary Player Group, Inc.
3930 RCA Boulevard, Suite 3001
Palm Beach Gardens, Florida 33410
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Exhibit 10.5
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT ("Agreement") is made as of this 14th
day of October, 1999, by and between GARY PLAYER DIRECT, INC., a Delaware
corporation located at 710 Aerovista, Suite B, San Luis Obispo, California 93401
(the "Company"), and CARL L. CASARETO ("Indemnitee").
RECITALS
A. The Company and Indemnitee recognize the increasing difficulty in
obtaining suitable liability insurance for directors, officers, employees and
agents, the significant increases in the cost of such insurance and the general
reductions in the coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, and agents to expensive litigation risk at the same time that the
availability and coverage of liability insurance has been severely limited.
C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employers and agents of the Company may not be willing to continue to
serve as directors, officers, employees and agents without additional
protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and agents of the Company and to indemnify its directors, officers,
employees and agents so as to provide them with the maximum protection permitted
by law.
E. The Company, through its Board of Directors, approved this Agreement
on the 12th day of October, 1999.
AGREEMENT
The Company and Indemnitee hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve and continue to serve
the Company, at the Company's will (or under separate written agreement approved
by the Board of Directors of the Company, if such agreement exists), in the
capacity Indemnitee currently serves the Company, as long as Indemnitee is duly
appointed or elected and qualified in accordance with the applicable provisions
of the By-Laws of the Company or any subsidiary of the Company or (subject to
any employment agreement between Indemnitee and the Company) until such time as
Indemnitee tenders a written resignation or is removed in accordance with the
By-Laws; provided, however, that nothing contained in this Agreement is intended
to or shall create any right (express or implied) to continued employment by
Indemnitee.
<PAGE> 2
2. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while a
director, officer, employee or agent, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, and expenses of investigations), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company) actually
and reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee's conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact the Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while a director, officer,
employee or agent, or by reason of the fact that Indemnitee is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) and, to the fullest extent permitted by law, amounts
paid in settlement, in each case to the extent actually and reasonably incurred
by Indemnitee in connection with the defense or settlement of such action or
suit (i) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company and
its stockholders unless and only to the extent that the court in which such
action or suit is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine; (ii) if Indemnitee is a director, to the extent that the action
or contemplated action seeks monetary damages for breach of Indemnitee's duties
to the Company and its stockholders in circumstances under which Indemnitee's
personal liability therefor has been
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eliminated as a result of the provisions of Section 102(b)(7) of the Delaware
General Corporation Law; or (iii) if Indemnitee is an agent other than a
director, to the extent that, were Indemnitee a director, Indemnitee would have
the right to be indemnified under Section 2(b)(ii), above; and in the case of
Sections 2(b)(ii) and 2(b)(iii) above, indemnification shall include, to the
extent not prohibited by law, indemnification against all judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such action, suit or proceeding.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 2(a) or (b) or in defense of
any claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) actually and reasonably incurred by Indemnitee in
connection therewith.
(d) INDEMNIFICATION FOR SERVING AS A WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's status as a director, officer, employee or agent of the
Company, a witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, Indemnitee shall be indemnified against
expenses actually and reasonably incurred by Indemnitee in connection therewith.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil, criminal, administrative or
investigative action, suit or proceeding referenced in Sections 2(a) or (b)
hereof (but not amounts actually paid in settlement of any such action, suit or
proceeding). Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized hereby.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his right to indemnified under this Agreement, give the
Company notice, in accordance with Section 14 hereof, of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the appropriate officer of
the Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) PROCEDURE. Any indemnification and advances provided for
in Section 2 and this Section 3 shall be made no later than thirty (30) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or By-Laws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees)
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<PAGE> 4
of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee. Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the intention of the parties that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a
notice of a claim pursuant to Section 3(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceedings
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ separate counsel in any such proceeding at
Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NON-EXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the Company's By-Laws or by statute. In the event
of any change in any applicable law, statute or rule which narrows the right of
a Delaware corporation
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to indemnify a member of its board of directors or its officers, employees or
agents, such change, to the extent not otherwise required by such law, statute
or rule to be applied to this Agreement, shall have no effect on this Agreement
or the parties' rights and obligations hereunder.
(b) NON-EXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation, By-Laws, any
agreement, any vote of stockholders or disinterested Directors, the Delaware
General Corporation Law or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he may have ceased to serve in such capacity at the time of any action,
suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees and/or agents
under this Agreement or otherwise. Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Company's right
under public policy to indemnify Indemnitee.
7. LIABILITY INSURANCE. If the Company does not maintain a policy or
policies of officers and directors liability insurance with a reputable
insurance company or companies, upon written request of Indemnities, the Company
shall, from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain such a policy or policies of
insurance. Officers and directors liability insurance would cover, among other
things, coverage for losses from wrongful acts and/or to ensure the Company's
performance of its obligations under this Agreement. The Company shall not be
obligated to make such determination more than once in any 12-month period based
on written requests from Indemnities and any other persons with similar rights.
Among other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all such
policies of liability insurance, Indemnitee shall be named as an insured in such
a manner as to provide Indemnitee the same rights and benefits as are accorded
to the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of the
Company but is an officer; or of the Company's employees, if Indemnitee is not a
director or officer but is an employee; or of the Company's agents, if
Indemnitee is not a director, officer or employee but is an agent.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance if the Company determines in good faith that such
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insurance is not reasonably available, if the premium costs for such insurance
are disproportionate to the amount of coverage provided, if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or otherwise as required under Section 145
of the Delaware General Corporation Law, but such indemnification or advancement
of expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any
expenses incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(c) INSURED CLAIMS. To indemnity Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise tax or penalties, and amounts paid in settlement) which have
been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance or other policy of insurance
maintained by the Company;
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee or securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute;
(e) UNLAWFUL CLAIMS. To indemnify Indemnitee in any manner
which is contrary to public policy or which a court of competent jurisdiction
has finally determined to be unlawful;
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(f) FAILURE TO SETTLE PROCEEDING. To indemnify Indemnitee for
liabilities in excess of the total amount at which settlement reasonably could
have been made, or for any cost and/or expenses incurred by Indemnitee following
the time such settlement reasonably could have been effected, if Indemnitee
shall have unreasonably delayed, refused or failed to enter into a settlement or
any action, suit or proceeding (or investigation or appeal thereof) recommended
in good faith, in writing, by the Company; or
(g) BREACH OF EMPLOYMENT AGREEMENT. To indemnify Indemnitee
for any breach by Indemnitee of any employment agreement between Indemnitee and
the Company or any of its subsidiaries.
10. CONSTRUCTION OF CERTAIN PHRASES.
For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
and/or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company or
any subsidiary of the Company which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interest of the
Company" as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEY'S FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that
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each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines the each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of New Jersey,
or in Federal courts located in such State.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware.
17. CALIFORNIA LAW. To the extent that the Company is subject to the
provisions of Section 317 of the California General Corporation Law pursuant to
Section 2115 of the California General Corporation Law, nothing in this
Agreement shall be deemed to require the Company to take any action which would
cause it to be in violation of Section 317 of the California General Corporation
Law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GARY PLAYER DIRECT, INC., a Delaware
Corporation.
By: /s/ Thomas P. Gallagher
-------------------------------------------
Name: Thomas P. Gallagher
Title: President and CEO
Address: 710 Aerovista, Suite B
San Luis Obispo, California 93401
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Carl L. Casareto
- -----------------------
CARL L. CASARETO
Address: Gary Player Direct
710 Aerovista, Suite B
San Luis Obispo, California 93401
9
<PAGE> 1
Exhibit 10.6
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT ("Agreement") is made as of this 14th
day of October, 1999, by and between GARY PLAYER DIRECT, INC., a Delaware
corporation located at 710 Aerovista, Suite B, San Luis Obispo, California 93401
(the "Company"), and BARBARA NUNEZ ("Indemnitee").
RECITALS
A. The Company and Indemnitee recognize the increasing difficulty in
obtaining suitable liability insurance for directors, officers, employees and
agents, the significant increases in the cost of such insurance and the general
reductions in the coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, and agents to expensive litigation risk at the same time that the
availability and coverage of liability insurance has been severely limited.
C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employers and agents of the Company may not be willing to continue to
serve as directors, officers, employees and agents without additional
protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and agents of the Company and to indemnify its directors, officers,
employees and agents so as to provide them with the maximum protection permitted
by law.
E. The Company, through its Board of Directors, approved this Agreement
on the 12th day of October, 1999.
AGREEMENT
The Company and Indemnitee hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve and continue to serve
the Company, at the Company's will (or under separate written agreement approved
by the Board of Directors of the Company, if such agreement exists), in the
capacity Indemnitee currently serves the Company, as long as Indemnitee is duly
appointed or elected and qualified in accordance with the applicable provisions
of the By-Laws of the Company or any subsidiary of the Company or (subject to
any employment agreement between Indemnitee and the Company) until such time as
Indemnitee tenders a written resignation or is removed in accordance with the
By-Laws; provided, however, that nothing contained in this Agreement is intended
to or shall create any right (express or implied) to continued employment by
Indemnitee.
<PAGE> 2
2. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while a
director, officer, employee or agent, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, and expenses of investigations), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company) actually
and reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee's conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact the Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while a director, officer,
employee or agent, or by reason of the fact that Indemnitee is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) and, to the fullest extent permitted by law, amounts
paid in settlement, in each case to the extent actually and reasonably incurred
by Indemnitee in connection with the defense or settlement of such action or
suit (i) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company and
its stockholders unless and only to the extent that the court in which such
action or suit is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine; (ii) if Indemnitee is a director, to the extent that the action
or contemplated action seeks monetary damages for breach of Indemnitee's duties
to the Company and its stockholders in circumstances under which Indemnitee's
personal liability therefor has been
2
<PAGE> 3
eliminated as a result of the provisions of Section 102(b)(7) of the Delaware
General Corporation Law; or (iii) if Indemnitee is an agent other than a
director, to the extent that, were Indemnitee a director, Indemnitee would have
the right to be indemnified under Section 2(b)(ii), above; and in the case of
Sections 2(b)(ii) and 2(b)(iii) above, indemnification shall include, to the
extent not prohibited by law, indemnification against all judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such action, suit or proceeding.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 2(a) or (b) or in defense of
any claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, and
expenses of investigations) actually and reasonably incurred by Indemnitee in
connection therewith.
(d) INDEMNIFICATION FOR SERVING AS A WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's status as a director, officer, employee or agent of the
Company, a witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, Indemnitee shall be indemnified against
expenses actually and reasonably incurred by Indemnitee in connection therewith.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil, criminal, administrative or
investigative action, suit or proceeding referenced in Sections 2(a) or (b)
hereof (but not amounts actually paid in settlement of any such action, suit or
proceeding). Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized hereby.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his right to indemnified under this Agreement, give the
Company notice, in accordance with Section 14 hereof, of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the appropriate officer of
the Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) PROCEDURE. Any indemnification and advances provided for
in Section 2 and this Section 3 shall be made no later than thirty (30) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or By-Laws providing for indemnification, is not
paid in full by the Company within thirty (30) days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees)
3
<PAGE> 4
of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee. Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the intention of the parties that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a
notice of a claim pursuant to Section 3(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceedings
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ separate counsel in any such proceeding at
Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NON-EXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the Company's By-Laws or by statute. In the event
of any change in any applicable law, statute or rule which narrows the right of
a Delaware corporation
4
<PAGE> 5
to indemnify a member of its board of directors or its officers, employees or
agents, such change, to the extent not otherwise required by such law, statute
or rule to be applied to this Agreement, shall have no effect on this Agreement
or the parties' rights and obligations hereunder.
(b) NON-EXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation, By-Laws, any
agreement, any vote of stockholders or disinterested Directors, the Delaware
General Corporation Law or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he may have ceased to serve in such capacity at the time of any action,
suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees and/or agents
under this Agreement or otherwise. Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Company's right
under public policy to indemnify Indemnitee.
7. LIABILITY INSURANCE. If the Company does not maintain a policy or
policies of officers and directors liability insurance with a reputable
insurance company or companies, upon written request of Indemnities, the Company
shall, from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain such a policy or policies of
insurance. Officers and directors liability insurance would cover, among other
things, coverage for losses from wrongful acts and/or to ensure the Company's
performance of its obligations under this Agreement. The Company shall not be
obligated to make such determination more than once in any 12-month period based
on written requests from Indemnities and any other persons with similar rights.
Among other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage. In all such
policies of liability insurance, Indemnitee shall be named as an insured in such
a manner as to provide Indemnitee the same rights and benefits as are accorded
to the most favorably insured of the Company's directors, if Indemnitee is a
director; or of the Company's officers, if Indemnitee is not a director of the
Company but is an officer; or of the Company's employees, if Indemnitee is not a
director or officer but is an employee; or of the Company's agents, if
Indemnitee is not a director, officer or employee but is an agent.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance if the Company determines in good faith that such
5
<PAGE> 6
insurance is not reasonably available, if the premium costs for such insurance
are disproportionate to the amount of coverage provided, if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or otherwise as required under Section 145
of the Delaware General Corporation Law, but such indemnification or advancement
of expenses may be provided by the Company in specific cases if the Board of
Directors has approved the initiation or bringing of such suit;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any
expenses incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(c) INSURED CLAIMS. To indemnity Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise tax or penalties, and amounts paid in settlement) which have
been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance or other policy of insurance
maintained by the Company;
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee or securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute;
(e) UNLAWFUL CLAIMS. To indemnify Indemnitee in any manner
which is contrary to public policy or which a court of competent jurisdiction
has finally determined to be unlawful;
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<PAGE> 7
(f) FAILURE TO SETTLE PROCEEDING. To indemnify Indemnitee for
liabilities in excess of the total amount at which settlement reasonably could
have been made, or for any cost and/or expenses incurred by Indemnitee following
the time such settlement reasonably could have been effected, if Indemnitee
shall have unreasonably delayed, refused or failed to enter into a settlement or
any action, suit or proceeding (or investigation or appeal thereof) recommended
in good faith, in writing, by the Company; or
(g) BREACH OF EMPLOYMENT AGREEMENT. To indemnify Indemnitee
for any breach by Indemnitee of any employment agreement between Indemnitee and
the Company or any of its subsidiaries.
10. CONSTRUCTION OF CERTAIN PHRASES.
For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
and/or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company or
any subsidiary of the Company which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner "not opposed to the best interest of the
Company" as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEY'S FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that
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<PAGE> 8
each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines the each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of New Jersey
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of New Jersey,
or in Federal courts located in such State.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware.
17. CALIFORNIA LAW. To the extent that the Company is subject to the
provisions of Section 317 of the California General Corporation Law pursuant to
Section 2115 of the California General Corporation Law, nothing in this
Agreement shall be deemed to require the Company to take any action which would
cause it to be in violation of Section 317 of the California General Corporation
Law.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GARY PLAYER DIRECT, INC., a Delaware
Corporation.
By: /s/ Thomas P. Gallagher
-------------------------------------------
Name: Thomas P. Gallagher
Title: President and CEO
Address: 710 Aerovista, Suite B
San Luis Obispo, California 93401
AGREED TO AND ACCEPTED:
INDEMNITEE:
/s/ Barbara Nunez
- ----------------------
BARBARA NUNEZ
Address: Gary Player Direct, Inc.
710 Aerovista, Suite B
San Luis Obispo, California 93401
9
<PAGE> 1
Exhibit 99.1
CONTACTS:
AT THE COMPANY AT THE GARY PLAYER GROUP
- -------------- ------------------------
Carl Casareto, Executive Vice President Marc B. Player, Chief Executive Officer
Gary Player Direct, Inc. Palm Beach Gardens, FL 33410
San Luis Obispo, CA 93401 561-624-0301 (Ext. 102)
805-783-1011
FOR IMMEDIATE RELEASE
- ---------------------
OCTOBER 19, 1999
GARY PLAYER DIRECT IMPLEMENTS MANAGEMENT
SUCCESSION PLAN; MARC PLAYER, GALLAGHER AND
CAMPBELL APPOINTED TO BOARD
San Luis Obispo, California (P.R. NEWSWIRE) - October 19, 1999 --- Gary
Player Direct, Inc. (OTCBB: GPLYE), Tuesday announced that the Company had
entered into a Succession Plan and Agreement effective on October 14, 1999
pursuant to which Marc B. Player and Pamela J. Campbell, both affiliated with
The Gary Player Group of Palm Beach Gardens, Florida, have been appointed to the
Board of Directors of Gary Player Direct, Inc. and will hold two of three
positions on the Board of Directors. Thomas P. Gallagher, of Princeton, New
Jersey, was named Chairman of the Board.
In connection with these developments, Mr. A.J. Cervantes resigned from
his positions as Chairman, President and Chief Executive Officer. Mr. Robert J.
Friedland also resigned from his membership on the Board of Directors. The
Company also announced that Carl L. Casareto has been appointed to the positions
of Executive Vice President and Treasurer. Mr. Casareto has assumed day-to-day
responsibilities for the Company. The Company stated that it believes that it
will name a permanent Chief Executive Officer within the next sixty to ninety
days.
Commenting on today's developments, Gary Player stated that, "I am very
enthusiastic about our new management team and I believe that they bring the
talent, experience and reputation that can make Gary Player Direct one of the
premium Internet-driven golf companies in the world." Also, in connection with
today's announcements, the Company confirmed its intention to close on the
acquisition of the assets of the Gary Player Golf Equipment division of The Gary
Player Group ("GPG"). The Company believes that completing the acquisition will
allow it to market and sell an expanded array of golf equipment and accessories
worldwide. The assets of the golf equipment operations of GPG include
principally two licenses which together would give the Company the perpetual,
worldwide, exclusive right to use the name and likeness of Gary Player, the
professional golfer, and ancillary marks, including Black Knight(tm) and the
Gary Player logo, in connection with the manufacture, marketing and distribution
of golf clubs, accessories and apparel for an annual license fee and a royalty
based on net receipts. As part of this acquisition, the Company will also
acquire existing sub-licenses based on the Player licenses, certain inventory
and accounts receivable.
<PAGE> 2
In commenting on his appointment today, Marc Player stated, "I am
pleased to be part of the new team at Gary Player Direct. I believe this new
team can provide the leadership necessary to overcome historic operating
difficulties and build on the solid base of premium Gary Player products that
the Company has developed. I intend to become very involved in the operations of
the Company as we restructure the debt of the Company and integrate Gary Player
Direct with the golf equipment division of The Gary Player Group. There are a
number of projects that I intend to focus on including reviewing a number of
potential acquisitions. We are committed to making Gary Player Direct a viable
enterprise that brings exciting products to market and returns value to our
shareholders. The next six months are critical for the Company and we sincerely
need and appreciate the continued support of our suppliers, customers and
shareholders. I am confident if we keep our focus on our customers we can
capitalize on the reputation and achievements of Gary Player Worldwide."
Cervantes noted that "The Player Group brings to the Company
significant experience and resources which can support the completion of the
Company's reorganization and e-commerce strategy and ultimately shareholder
value."
Marc Player has served as a Chief Executive Officer and a Director of
The Gary Player Group, Inc., a company that manages a number of businesses
including the Gary Player Golf Equipment Division, Gary Player Golf Academies,
Gary Player Enterprises, a licensing and endorsement company of The Gary Player
Group for non-golf related matters, and Gary Player Design, which has designed
over 150 internationally acclaimed golf courses worldwide. Mr. Player has also
served as President of Sports International, a company he formed in 1986. Sports
International served as the exclusive representative in South Africa of
International Management Group, one of the foremost sports management firms in
the world. Sports International was acquired by International Management Group
in 1991. Pamela J. Campbell is currently the Controller of The Gary Player
Group, a position she has held since 1985. She has also assisted in all aspects
of the administration of The Gary Player Group as well as Sports International.
Thomas P. Gallagher, together with several individuals invested $1.0
million in the Company in May of 1998. Mr. Gallagher is a partner in the law
firm of Gallagher, Briody & Butler in Princeton, New Jersey, recently appointed
as the Company's corporate counsel, and concentrates in securities and general
corporate law including mergers and acquisitions. Mr. Gallagher is a member of
the Board of Directors of Angel Productions, Inc., a privately-held
entertainment production enterprise that produces programming for cable,
broadcast and internet television and theatrical productions. Mr. Gallagher
advises numerous ventures in the sports management, casino gaming and
telecommunications field and also advises a number of E-commerce start-ups.
Mr. Casareto, in commenting on his appointments today as Executive Vice
President and Treasurer stated that, "While I recognize that the Company has
serious financial difficulties facing it, I am gratified by the support that
Gary Player and Marc Player have shown to the Company especially Marc's decision
to join the Board of Directors of the Company and take a more active role. Mr.
Casareto further commented that, "During the next 30 to 60 days I intend to
focus on several major concerns regarding the Company's operations, including
satisfaction of in excess of $1.0 million in tax obligations and in excess of
$1.0 million in customer refunds as well as settling
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significant pending litigation matters that have arisen as a result of the
Company's working capital deficit. We are going to work to cure existing
defaults in our licenses with The Gary Player Group and conclude the acquisition
of the assets of the golf equipment operations of The Gary Player Group as soon
as financing is available and we can correct our operational difficulties. We
also intend to work closely with our credit card processing company over the
next several weeks in order to resolve outstanding obligations with them."
The Company also reiterated its goal of resolving certain quality and
customer issues that have arisen as a result of the Company's continuing working
capital deficit. The Company has also reported that Mr. Casareto will oversee
the preparation and filing of all past due SEC reports so that the Company can
come into compliance with its reporting requirements. Recently, the NASD
notified the Company's market makers that the Company's shares would be delisted
from the OTC Bulletin Board on or about October 20, 1999 if the Company was not
current in its reporting obligations. The Company also corrected certain
information regarding the Company's NASD Bulletin Board listing status that
appeared in a recent article in SmartMoney.com. The Company stated that it has
not received any extensions from the OTC Bulletin Board to come into compliance
with the requirements for continued listing and is obligated to be in compliance
by October 20, 1999. The Company also confirmed that it is reviewing all of its
financing options in light of the significant payables and overdue obligations
in an effort to work with vendors, customers and other creditors to restructure
its debt in a manner that will allow the Company to move forward with aggressive
marketing and sales efforts. There can be no assurance that the Company will be
successful in its efforts to restructure its debt and maintain its customer
confidence and resolve the several other matters to be addressed by the new
management team.
Gary Player Direct is an international golf company with the strategic
plan of establishing itself as a premier manufacturer and distributor of premium
men and women's golf equipment, apparel and accessories principally under the
Gary Player brand name through e-commerce, direct response television, direct
mail sales and international licensing. These products will also be featured in
the coming months on www.garyplayerdirect.com, the Company's new Internet site,
which will incorporate full e-commerce capabilities, as well as news,
information and golf instruction for golfers of all ages and skills.
The statements in this press release relating to matters that are not
historical are forward-looking statements which involve risks and uncertainties
including, without limitation, economic and competitive conditions in the
markets served by the Company affecting the demand for the Company's products,
product pricing, market acceptance, access to distribution channels,
availability of new financing, ability to cure license defaults, ability to
timely file past due SEC reports and eliminate the risk of delisting noted
above, and other risks detailed from time-to-time in the Company's Securities
and Exchange Commission filings and press releases. These risks could cause
actual results to differ materially from those anticipated or described herein.
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