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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 19, 2005
Adams Golf, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-24583 75-2320087
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
300 Delaware Avenue, Suite 572
Wilmington, Delaware 19801
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (302) 427-5892
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12(b) under the
Exchange Act (17 CFR 240.14a-12(b))
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement
On February 19 2005, we entered into an employment contract with
Mr. Oliver G. "Chip" Brewer III, our President and Chief Executive
Officer. The term of this employment agreement runs from January 1,
2005 through December 31, 2007, unless earlier terminated. Mr. Brewer
will receive an annual base salary of at least $ 400,000 during the term
of the agreement and is eligible for semi-annual performance bonuses
each in an amount equal to up to one-half of Mr. Brewer's annual base
salary then in effect.
EQUITY PARTICIPATION. The employment agreement also provides for
retention awards of options to purchase our common stock, subject to
proper authorization from our Board of Directors and compliance with all
applicable laws and regulations. No later than the end of January of
each calendar year during the term of the agreement, Mr. Brewer will be
granted one percent of our company's fully diluted stock in stock
options at an option strike price of $0.01 per share. The options vest
one year after the date of the grant. If we sell or transfer a majority
of our capital stock or substantially all of our company assets to an
unaffiliated entity, all of Mr. Brewer's potential stock options shall
be granted and vested no later than the calendar day immediately
preceding the sale or closing date of the transaction.
LONG TERM INCENTIVE PAYMENT. The agreement provides that Mr.
Brewer is eligible for a one-time long term incentive payment at the
conclusion of the agreement. The amount of the payment is contingent
upon achievement of a minimum performance goal and may be increased if
certain additional performance criteria are met or exceeded.
The agreement may be terminated without cause either by us (a
"termination without cause") or by Mr. Brewer (a "termination without
good reason") upon delivery of 60 days written notice, or by the mutual
agreement of Mr. Brewer and us. We can terminate "for cause" if Mr.
Brewer (a) deliberately and intentionally breaches any material
provision of the agreement without curing such a breach within 30 days
of written notice of the breach; (b) deliberately and intentionally
engages in gross misconduct that is materially harmful to our best
interests; or (c) is convicted of a felony or crime involving moral
turpitude, fraud or deceit. Mr. Brewer can terminate "for good reason"
upon delivery of 30 days written notice if we (a) materially breach any
material provision of the agreement without curing such breach within 30
days of written notice of the breach; (b) assign Mr. Brewer any duties
inconsistent in any material respect with his position or diminish Mr.
Brewer's status and reporting requirements, his authority, duties,
powers or responsibilities, other than an isolated incident which is
remedied within 30 days notice from Mr. Brewer; (c) fail to obtain a
written agreement to assume the obligations of this agreement five days
before a merger, consolidation or sale of all or substantially all of
our assets; (d) reduce Mr. Brewer's total compensation, other than as
the result of Mr. Brewer's failure to meet certain performance based
goals established for purposes of determining incentive based
compensation; or (e) relocate our principal offices to a location more
than 75 miles from Plano, Texas. The agreement shall terminate by its
terms upon Mr. Brewer's disability, if he is unable to perform his
duties on a full time basis for a period of 60 days, or upon his death.
In the event that either we terminate the employment agreement
without cause or Mr. Brewer terminates for good reason, then Mr. Brewer
will be entitled to (a) his annual base salary for a period of one year
after the later of the date of termination or the expiration of the
notice period; (b) all retention based stock options that Mr. Brewer was
potentially eligible to receive during the calendar year in which the
termination occurred, pro rated, with such options being vested at the
time of termination; (c) a payment equal to both semi-annual bonuses for
which Mr. Brewer was potentially eligible in the calendar year of
termination, paid as if we achieved our internal financial goals for
that period; and (d) the long term incentive payment for which Mr.
Brewer was potentially eligible, paid as if certain performance criteria
for that period had been achieved.
Mr. Brewer may also terminate the agreement in the event of our
failure to set certain internal financial goals. In the event that
(i) we fail to set internal financial goals; (ii) Mr. Brewer becomes
disabled or upon his death; (iii) the agreement is terminated by mutual
agreement; (iv) we terminate Mr. Brewer's employment with cause; or (v)
that Mr. Brewer terminates his employment without good reason, Mr.
Brewer will be entitled to receive his accrued salary and benefits
through the date of termination, reimbursements for expenses actually
incurred and benefits under any benefit and indemnification plans for
Mr. Brewer or his dependants through the date of termination and any
continuing coverage as required by law.
If necessary, we will negotiate with Mr. Brewer an amendment to the
employment agreement in order to avoid adverse tax consequences to Mr.
Brewer under Section 409A of the Internal Revenue Code.
SIGNATURE
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.
ADAMS GOLF, INC.
Date: February 24, 2005 By: /s/ ERIC LOGAN
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Eric Logan
Chief Financial Officer