SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report: June 25, 1997
ASHWORTH, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-18553 84-1052000
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
2791 Loker Avenue West, Carlsbad, CA 92008
(Address of principal executive offices)
760/438-6610
(Registrant's telephone number)
Item 5. On June 25, 1997, John Ashworth signed a multi-year consulting
agreement with the Registrant whereby he resigned as senior executive vice
president and elected to terminate his employee relationship with the
Registrant. Mr. Ashworth will continue to serve as a consultant on an on-going
basis and to serve on the Registrant's board of directors. Pursuant
to the consulting agreement, Mr. Ashworth will continue to work with the
Registrant's chief executive officer and creative staff to visualize and
identify Company direction and evolve brand image.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibits:
Exhibit 10 Personal Services Agreement and Acknowledgment of
Termination of Executive Employment between Ashworth,
Inc., and John L. Ashworth dated June 25, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: June 25, 1997 ASHWORTH, INC.
By: /s/ Randall L. Herrel, Sr.
Randall L. Herrel, Sr., President and
Chief Executive Officer
ASHWORTH, INC. AND JOHN L. ASHWORTH
PERSONAL SERVICES AGREEMENT and
ACKNOWLEDGMENT OF TERMINATION OF EXECUTIVE EMPLOYMENT
THIS AGREEMENT effective June 26, 1997, is made and entered into by
and between ASHWORTH, INC. (the Company) and JOHN L. ASHWORTH (Ashworth).
WHEREAS, the Company and Ashworth wish to terminate Ashworth's
employment by the Company effective June 25, 1997, pursuant to the terms
and conditions of the Executive Employment Agreement between the Company
and Ashworth dated January 1, 1995, a copy of which is attached hereto as
Exhibit A (the 1995 Agreement); and
WHEREAS, the Company and Ashworth wish, instead, to enter into a
personal services agreement effective June 26, 1997;
NOW, THEREFORE, the parties hereto acknowledge and agree as follows:
1. Termination and Resignation. Ashworth and the Company hereby
mutually agree that Ashworth's employment as senior executive vice
president is terminated pursuant to the terms and conditions of the
1995 Agreement effective June 25, 1997. Ashworth hereby resigns as
an officer of the Company effective June 25, 1997.
2. Retention. Ashworth is hereby retained as a consultant
effective June 26, 1997, pursuant to the terms and conditions set
forth below, which terms and conditions supersede the employment
terms and conditions of the 1995 Agreement.
3. Term. The agreement for Ashworth's personal services as a
consultant shall become effective on June 26, 1997, and continue for
a term of five years, provided, however, that either party may
terminate the terms and conditions related to Ashworth's personal
services as a consultant at any time upon thirty days' written
notice.
4. Services. Upon reasonable request of the Company's Chief
Executive Officer, Ashworth shall work with the Company's chief
executive officer and creative staff to visualize and identify
Company direction and evolve brand image, attend PGA & Magic shows
and annual sales meetings, and meet with key customers, provided,
however, that Ashworth shall not be required to provide such services
for more than 80 days in any 12-month period during the term of this
agreement. To the extent required in order for Ashworth to provide
the requested services, the Company will provide the hardware and
technical links from Ashworth's home office to the Company.
5. Compensation. The Company shall pay Ashworth $1,000 for each
day he agrees to and does provides services to the Company, as more
fully described below. If Ashworth is elected or appointed a director
or officer of the Company during the term of this Agreement, Ashworth
shall serve in such capacity or capacities without further
compensation; but nothing herein shall be construed as requiring the
Company, or anyone else, to cause the election or appointment of
Ashworth as such director or officer.
6. Health and Hospital Insurance. The Company shall continue to
provide Ashworth with health and hospital insurance through June 30,
1998, pursuant to the terms of the 1995 Agreement.
7. Life Insurance. The Company shall maintain life insurance in
the amount of $2,000,000, through June 30, 1998, pursuant to the
terms of the 1995 Agreement. Upon expiration of this Agreement, and
at Ashworth's election, the ownership of such life insurance shall
be transferable to Ashworth upon his payment to the Company of one-half of
the then cash value, if any, of such insurance.
8. Stock Options. All options held by Ashworth shall become
immediately exercisable for a period of five years pursuant to the
terms of the 1995 Agreement.
9. Expenses. Ashworth is authorized to incur reasonable expenses
for promoting and conducting the business of the Company, including
expenses for entertainment, travel and similar items, provided such
expenses are preapproved by the Company's Chief Executive Officer.
The Company will reimburse Ashworth for all such expenses upon the
presentation by Ashworth, from time to time, of an itemized account
of such expenditures.
10. Proprietary Interests of Company. Recognizing and
acknowledging that nothing in this Agreement prevents Ashworth from
providing services to other companies which are not in direct
competition with the Company, Ashworth acknowledges and agrees that
all of the terms and conditions of Section 12 of the 1995 Agreement
are applicable, and Ashworth hereby affirms that he will comply with
such terms and conditions.
11. Goodwill and Reputation of the Company and Ashworth. Ashworth
shall at all times conduct himself in such manner as to preserve and
protect the reputation and goodwill of the Company. The Company
shall at all times conduct its affairs in such manner as to preserve
and protect the goodwill and reputation of Ashworth.
12. Noncompete. The Company and Ashworth acknowledge and
agree that, effective with the termination of Ashworth's
employment, all of the terms and conditions of Section 13 of
the 1995 Agreement are applicable, and the Company and Ashworth
hereby affirm their compliance with such terms and conditions;
provided, however, (1) upon request by Ashworth, the Company
shall prepay, up to a maximum of $262,500, in the second year
of the noncompete period the then present value of the payment
due the second year; and (2) upon request by Ashworth at any
time from and after the second year of the noncompete period,
the Company may consent to prepay, up to a maximum of $262,500
in any year of the noncompete period, the then present value of
any future payments due during the third through tenth years at
a discounted rate of eight percent (8%), such consent not to be
unreasonably withheld. Such prepayments shall not relieve
Ashworth of his obligations under the noncompete provisions of
the 1995 Agreement. Notwithstanding the foregoing, at any time
after the third anniversary of the date of this Agreement,
Ashworth may deliver written notice to the Company (the
"Election Notice") that Ashworth no longer desires to receive
payments under the terms of Section 13 of the 1995 Agreement.
In such event Ashworth shall elect to (1) reimburse the Company
for any advance annual installments attributable to the
terminated noncompete period or (2) extend the noncompete
period through the date for which Ashworth received
compensation, based upon the compensation agreed upon under
Section 13 of the 1995 Agreement.
13. No Corporate Opportunity. The Company acknowledges that the
Company's board of directors has been presented with and has waived
any corporate opportunity associated with the development of
Archerfield golf course project in Scotland. The Company also
acknowledges and agrees that Ashworth's participation in any manner
in the Archerfield golf course project will not be a violation of the
noncompete provisions described herein.
14. Notices. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and delivered in
person or sent by registered or certified mail to Ashworth's
residence in the case of Ashworth or to its principal office in the
case of the Company.
15. Waiver. The waiver of any provision of this Agreement shall
not operate or be construed as a waiver of any other provision of
this Agreement. No waiver shall be valid unless in writing and
executed by the party to be charged therewith.
16. Severability/Modification. In the event that any clause or
provision of this Agreement shall be determined to be invalid,
illegal or unenforceable, such clause or provision may be severed or
modified to the extent necessary, and, as severed and/or modified,
this Agreement shall remain in full force and effect.
17. Assignment. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company. Ashworth
acknowledges that the services to be rendered under this Agreement
are unique and personal. Accordingly, Ashworth may not assign his
rights and obligations under this Agreement.
18. Entire Agreement. This instrument contains the entire
agreement concerning the employment arrangement between the parties
and shall, as of the effective date hereof, supersede all other such
agreements between the parties. It may not be amended except by an
agreement in writing signed by both parties.
19. Governing Law and Jurisdiction. This Agreement shall be
interpreted, construed, and enforced under the laws of the State of
California. The courts and authorities of the State of California
shall have sole jurisdiction and venue over all controversies which
may arise with respect to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the date
and year indicated below, effective the date indicated above.
THE COMPANY:
ASHWORTH, INC.
Date: By: /s/ Gerald W. Montiel
Gerald W. Montiel, Chairman
Ashworth:
Date: /s/ John L. Ashworth
John L. Ashworth
<PAGE>
EXHIBIT A
<TABLE>
<CAPTIONS>
Outstanding Options held by John L. Ashworth
Options Options Option
Grant Date Type Granted Outstanding Price
<S> <C> <C> <C> <C>
12/19/1992 Non Qualified 35,000 35,000 $6.0000
03/06/1993 Non Qualified 110,000 110,000 $8.0000
10/02/1993 Non Qualified 138,236 138,236 $8.5000
10/02/1993 Incentive Stock 11,764 11,764 $8.5000
06/17/1994 Incentive Stock 11,764 11,764 $8.5000
06/17/1994 Non Qualified 28,236 28,236 $8.5000
01/22/1996 Incentive Stock 1 1 $6.5000
01/22/1996 Non Qualified 124,999 124,999 $6.5000
01/22/1996 Incentive Stock 16,665 16,665 $6.0000
01/22/1996 Non Qualified 43,335 43,335 $6.0000
01/22/1996 Incentive Stock 16,666 16,666 $6.0000
01/22/1996 Non Qualified 83,334 83,334 $6.0000
01/22/1996 Non Qualified 100,000 100,000 $6.0000
02/06/1997 Non Qualified 4,922 4,922 $5.7500
</TABLE>
