Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(c) Appointment of Certain Officers
On September 29, 2008, the Board of Directors of Golfsmith International
Holdings, Inc. (the "Company") appointed Sue E. Gove as Executive Vice President
and Chief Operating Officer. Ms. Gove, age 50, has been an independent
consultant since April 2006, serving clients in specialty retail and private
equity. She has been a member of the Board of Directors of AutoZone, Inc. since
2005 and also serves on its audit committee and nominating and governance
committee. She served in various positions at Zale Corporation for over
20 years, most recently as Executive Vice President and Chief Operating Officer
of Zale Corporation from 2002 to March 2006 and a director of Zale Corporation
from 2004 to 2006. She was Executive Vice President, Chief Financial Officer of
Zale Corporation from 1998 to 2002 and remained in the position of Chief
Financial Officer until 2003. Ms. Gove holds a BBA degree in Accounting from the
University of Texas at Austin. She also serves on the McCombs School of Business
Advisory Council.
Ms. Gove's employment agreement, entered into on September 29, 2008, extends for
three years, with automatic successive one-year extensions unless terminated by
either party. As provided in the employment agreement, Ms. Gove will receive
(i) a minimum base salary of $400,000 per year; (ii) the potential to earn an
annual bonus of up to 75 percent of her then-current base salary based on the
Company's attainment of such financial targets as are established by the Board
of Directors of the Company; (iii) the grant of a stock option to purchase
200,000 shares of common stock of the Company at an exercise price equal to the
closing price of the Company's stock on the date of grant (which is the date of
the employment agreement) vesting in five equal annual installments; (iv)
payment of or reimbursement for reasonable residential rental and living
expenses incurred for Ms. Gove's temporary residence in the Austin, Texas
metropolitan area and reasonable airfare incurred for business purposes and
commuting up to once per week between Austin, Texas and her primary residence in
Dallas, Texas for up to one year until her relocation to the Austin area; and
(v) other benefits, such as participation in the 401(k) retirement savings plan,
health and disability insurance, as well as four weeks paid vacation,
reimbursement of business expenses and indemnification and liability insurance
on the same basis as other officers of the Company. On May 15, 2009, if she
continues to be employed by the Company, Ms. Gove's will receive: (vi) an
increase of $50,000 to annual base salary for a total of $450,000 per year;
(vii) a $50,000 retention bonus as defined in the agreement; and (viii) a grant
of a stock option to purchase 100,000 shares of common stock of the Company at
an exercise price of the Company's stock on that date.
The employment agreement further provides that, if, prior to a "change of
control," the Company's Board of Directors terminates Ms. Gove's employment
without "cause" or cancels an automatic extension of her employment term, or
Ms. Gove resigns for "good reason", as those terms are defined in the employment
agreement, Ms. Gove will be entitled to receive (i) her earned but unpaid base
salary and earned but unpaid annual bonus for any completed fiscal year;
(ii) her prorated annual bonus for the fiscal year in which her employment is
terminated; and (iii) severance payments totaling 50 percent, 100 percent or
200 percent of an amount equal to her then-current base salary, depending on the
date of termination, payable in equal installments in accordance with customary
payroll procedures during a 6-month, 12-month or 24-month period, respectively,
commencing no later than 60 days following the date her employment is
terminated, or until she accepts other employment, whichever is sooner. If, on
or following the occurrence of a "change of control," the Company's Board of
Directors terminates Ms. Gove's employment without "cause" or cancels an
automatic extension of her employment term, or Ms. Gove resigns for "good
reason", Ms. Gove will be entitled to receive (i) her earned but unpaid base
salary and earned but unpaid annual bonus for any completed fiscal year;
(ii) her prorated annual bonus for the fiscal year in which her
employment is terminated; and (iii) an amount equal to 200 percent of her then
current total annual base salary, payable in equal installments in accordance
with customary payroll procedures during a 24-month period, commencing no later
than 60 days following the date her employment is terminated, or until she
accepts other employment, whichever is sooner. In each such case Ms. Gove is
entitled to Company-paid health care continuation coverage premiums for herself
and her dependents for up to two years following such termination of employment,
depending on the date of termination, or until she accepts other employment,
whichever is sooner. If Ms. Gove's employment is terminated following a "change
of control", the stock option shall become fully exercisable. In the event of
death or disability, Ms. Gove (or her beneficiary) will be entitled to receive a
prorated annual bonus for the fiscal year in which her employment is terminated
and Company-paid health care continuation coverage premiums for Ms. Gove and her
dependents for one year following such termination of employment. To receive
these severance and post-termination benefits, Ms. Gove or her legal
representative is required to execute a general release of claims against the
Company and its affiliates.
Ms. Gove's employment agreement also contains restrictive covenants which
generally prohibit Ms. Gove from (i) disclosing the Company's trade secrets and
confidential information; or (ii) during her employment term and for the
two-year period following termination of employment (a) soliciting on behalf of
a competing business the Company's customers, (b) soliciting the Company's
employees or (c) engaging in any competing business.
The full text of Ms. Gove's employment agreement and notice of option grant is
attached as Exhibits 10.3 and 10.4.
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