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EXHIBIT 10.2.7
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement"), dated as of March 13,
1997, is made by and between FM PRECISION GOLF CORP., a Delaware corporation
(the "Company"), and __________________ ("Stockholder").
WHEREAS, Stockholder is an Employee, Officer or Consultant of the
Company; and
WHEREAS, Stockholder has been granted a stock option (the "Stock
Option") under the Company's 1997 Stock Option Plan (the "Plan"); and
WHEREAS, the execution of an Option Agreement in the form hereof
has been duly authorized by a resolution of the Board of Directors of the
Company or the Stock Option Committee of the Board of Directors of the Company;
NOW THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. (a) Terms used herein and defined in
the Plan shall have the meanings given to them in the Plan, and (b) the
following terms, as used herein, have the following meanings:
(b) Each of the following terms is defined in the Section
opposite such term:
Term Section
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Affiliate Plan
Board of Directors Plan
Company Preamble
Company's Notice 3.3.2
Consultant Plan
Default Shares 3.3.8
Demand Registration 4.1(a)
Stockholder Preamble
Exercise Price 2.1
Fair Market Value 3.4.5
Family Members 3.2.1(b)
Management Offeree 3.3.2
Management Stockholder 3.3.2
Maximum Amount 3.3.2
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Non-Management Offeree 3.3.2
Notice of Acceptance 3.3.6
Offering Stockholder 3.3.1
Officer Plan
Permitted Transferees 3.2.1(b)
Potential Purchasers 3.3.11
Pro Rata Share 3.3.11
Rule 144 4.1(b)
Securities Act Plan
Shares Plan
Stock Option Preamble
Stockholder's Estate 3.2.1(a)
Tax Offset Payment Plan
Terminated Stockholder 3.4.1
Termination Closing 3.4.4
Termination Event 3.4.1
Termination Note 3.4.4
Termination Price 3.4.2
Termination Shares 3.4.1
Third Party Purchaser 3.3.5
Transfer 3.1
Transfer Notice 3.3.1
Transfer Offerees 3.3.6
Transfer Price 3.3.1
Transfer Shares 3.3.1
ARTICLE II
TERMS OF OPTION
The option shall have the following terms:
Section 2.1. Exercise Price. The Exercise Price shall be $1,000
per share (the "Exercise Price").
Section 2.2. Payment. Upon exercise, Stockholder shall pay the
Exercise Price by delivering to the Company funds in an amount sufficient to pay
the Exercise Price together with any applicable taxes or withholdings.
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ARTICLE III
RIGHTS AND OBLIGATIONS WITH
RESPECT TO TRANSFER
Section 3.1. No Transfer. Stockholder shall not sell, assign, pledge,
encumber, or otherwise transfer, permit or suffer to exist any transfer of
(hereinafter called simply "Transfer"), any legal or beneficial interest in the
Shares except as expressly provided in this Agreement. In addition to the
restrictions on Transfer of the Shares contained in or resulting from other
provisions of this Agreement, no Transfer of any Shares shall be made by or on
behalf of Stockholder unless the Board of Directors has determined that such
Transfer is in compliance with the terms hereof and that the applicable Shares
have been duly registered under all applicable federal and state securities laws
pursuant to a then-effective registration which contemplates the proposed
Transfer or unless the Company has received a written opinion of or, at the
option of the Company, satisfactory to its legal counsel that the proposed
Transfer so complies with the terms hereof and is exempt from such registration
under all applicable federal and state securities laws.
Section 3.2. Permitted Transferees.
3.2.1. Any of the following transfers shall be in
compliance with this Agreement, subject to the provisions of Section 3.2.2:
(a) a Transfer of Shares upon the death of
Stockholder to Stockholder's executors, administrators or testamentary trustees
(the "Stockholder's Estate"); or
(b) a Transfer of Shares made as a gift in
compliance with the federal and all applicable state securities laws to
Stockholder's spouse or parents or to children (including adopted children) of
Stockholder or his spouse (collectively, "Family Members") or to a trust, the
beneficiaries of which include only Stockholder and Stockholder's Family
Members, and over which Stockholder has the right, power and authority to
exercise control as to investment decisions and distributions, as trustee or
otherwise, or to a company or partnership, the stockholders or limited and
general partners of which include only Stockholder and Stockholder's Family
Members. Stockholder's Estate and each Family Member, trust, company or
partnership to whom Shares may be Transferred pursuant to this Section 3.2.1 are
hereinafter sometimes referred to as "Permitted Transferees."
3.2.2. No Transfer pursuant to Section 3.2.1 shall
be permitted (and any such Transfer shall be void and of no effect) unless and
until the applicable Permitted Transferee executes and delivers to the Company
one or more appropriate instruments, in form and substance reasonably
satisfactory to the Company, confirming and acknowledging that such Permitted
Transferee has acquired and will hold such Shares subject to all of the terms,
conditions and provisions of this Agreement. Upon the execution and delivery of
such instruments to the Company, the applicable Permitted Transferee shall be
deemed a "Stockholder" for purposes of this Agreement, with the same rights,
privileges, duties and
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obligations as the transferor of such Shares. Notwithstanding anything to the
contrary contained herein, no transfer to any Permitted Transferee shall be made
if, as a result thereof, the Company would be required to register any Shares
under any applicable federal or state securities law.
Section 3.3. Right of First Refusal.
3.3.1. If the Stockholder (an "Offering
Stockholder") wishes to transfer all, but only all, of the Shares then owned by
him (the "Transfer Shares") to any person other than a Permitted Transferee for
a purchase price to be paid in cash at the closing of such transfer and has
received a written offer to so purchase such Shares executed by the proposed
transferee, such Offering Stockholder shall give a written notice (the "Transfer
Notice") to the Company specifying the identity of the proposed transferee, the
amount per Share to be received (the "Transfer Price"), and any other terms and
conditions of the proposed transfer and including a photocopy of the executed
offer. Such Transfer Notice shall include an irrevocable offer (open to
acceptance for a period of 45 days after the date such Transfer Notice is given)
to sell the Transfer Shares to the Transfer Offerees at the Transfer Price.
3.3.2. The Company shall, within 15 days of the
Transfer Notice, provide notice of receipt of the Transfer Notice (the
"Company's Notice") to (a) each person who then owns any of the shares of Common
Stock of the Company and is employed by the Company or FM Precision Golf
Manufacturing Corp. in a management capacity ("Management Stockholder"), other
than the Offering Stockholder (each such person, a "Management Offeree") and (b)
each other person who then owns any of the shares of common stock of the Company
(each such person, a "Non-Management Offeree"). Each Management Offeree shall
have the option to purchase, upon the terms set forth in the Transfer Notice,
any or all of the Transfer Shares. In order to exercise such option, a
Management Offeree must give notice of such exercise to the Company within 10
days after the date of the Company's Notice, which exercise notice must include
the maximum number of Shares he agrees to purchase under the terms of the
Transfer Notice (the "Maximum Amount"). The Company shall, within 14 days after
the date of the Company's Notice, allocate to each Management Offeree for
purchase a number of Transfer Shares. Subject to adjustment, as follows, such
allocation shall equal the lesser of such Management Offeree's Pro Rata Share or
Maximum Amount. If one or more of the Management Offerees declines to
participate in such purchase or elects to purchase less than such Management
Offeree's Pro Rata Share, then the remaining Transfer Shares shall be allocated
among Management Offerees who specified a Maximum Amount in their respective
notices of exercise in excess of their Pro Rata Shares (with rounding to avoid
fractional shares) in an amount equal to the lesser of their Pro Rata Shares
thereof or their Maximum Amounts. Such procedure shall be employed until the
entire Maximum Amount of each Management Offeree has been satisfied or all
Transfer Shares have been allocated.
3.3.3. To the extent the Management Offerees do not
elect to purchase all of the Transfer Shares, the Company shall have the right
to purchase any or all Transfer Shares which the Management Offerees have not
elected to purchase; provided that the Company must determine the number of such
Transfer Shares it will purchase within 15 days after the giving of the
Company's Notice.
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3.3.4. Each Non-Management Offeree shall have the
option to purchase, upon the terms set forth in the Transfer Notice, any or all
of the Transfer Shares not allocated to the Management Offerees or the Company
pursuant to Sections 3.3.2 or 3.3.3. In order to exercise such option, a
Non-Management Offeree must give notice of such exercise to the Company within
10 days after the date of the Company's Notice, which exercise notice must
include a designation of the Non-Management Offeree's Maximum Amount. The
Company shall, within 20 days after the date of the Company's Notice, allocate
to each Non-Management Offeree for purchase a number of such remaining Transfer
Shares. Subject to adjustment, as follows, such allocation shall equal the
lesser of such Non-Management Offeree's Pro Rata Share or Maximum Amount. If one
or more of the Non-Management Offerees declines to participate in such purchase
or elects to purchase less than such Non-Management Offeree's Pro Rata Share,
then any remaining non-allocated Transfer Shares shall be allocated among
Non-Management Offerees who specified a Maximum Amount in their respective
notices of exercise in excess of their Pro Rata Shares (with rounding to avoid
fractional shares) in an amount equal to the lesser of their Pro Rata Shares
thereof or their Maximum Amounts. Such procedure shall be employed until the
entire Maximum Amount of each Non-Management Offeree has been satisfied or all
remaining Transfer Shares have been allocated.
3.3.5. The Company shall have the right but not the
obligation to purchase any Transfer Shares remaining unallocated after the
allocations set forth above and may assign all or any portion of such right to
any third party selected by the Board of Directors (a "Third Party Purchaser");
provided, that no transfer of Shares shall be made to a Third Party Purchaser
unless and until such Third Party Purchaser executes and delivers to the Company
one or more appropriate instruments, in form and substance reasonably
satisfactory to the Company, confirming and acknowledging that it has acquired
and will hold such Shares subject to all of the terms, conditions and provisions
of this Agreement. Upon the execution and delivery of such instruments to the
Company, such Third Party Purchaser shall be deemed a "Stockholder" for purposes
of this Agreement, with the same rights, privileges, duties and obligations as
the transferor of such Shares and a "Non-Management Offeree".
3.3.6. If the offer to sell included in any
Transfer Notice is accepted as to all the Transfer Shares by any Management
Offerees, the Company, any Non-Management Offerees or any Third Party Purchaser
(collectively, the "Transfer Offerees"), the Company, on behalf of all such
accepting Transfer Offerees shall provide the Offering Stockholder and each
accepting Transfer Offeree with written notice of such acceptance specifying the
number of the Transfer Shares as to which each Transfer Offeree is accepting the
offer (a "Notice of Acceptance") within 45 days after the date of the Transfer
Notice.
3.3.7. The closing of the purchase by the accepting
Transfer Offerees of the Transfer Shares pursuant to this Section 3 shall take
place at the principal offices of the Company on the 15th day after the Notice
of Acceptance is given. At such closing, the accepting Transfer Offerees shall
deliver a certified check or checks in the appropriate amount to the Offering
Stockholder against delivery of certificates duly endorsed in blank representing
the Transfer
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Shares so purchased. The Transfer Shares shall be delivered free and clear of
all liens, claims, charges, assessments, options, security interests and other
legal and equitable encumbrances.
3.3.8. If any Transfer Shares allocated to a Transfer Offeree are
not purchased by such Transfer Offeree at the closing provided for in Section
3.3.7 (the "Default Shares"), such Default Shares may be purchased by the
Management Offerees, up to each such Management Offeree's Pro Rata Share (with
any Default Shares any such Management Offeree elects not to purchase being
reallocated among the remaining Management Offerees in accordance with their Pro
Rata Shares until no such Management Offeree wishes to purchase any more Default
Shares or all such Default Shares have been allocated), and if the Management
Offerees do not purchase all such Default Shares, any remaining Default Shares
may be purchased by the Company and, if the Company elects not to purchase all
of them, any remaining Default Shares may be purchased by the Non-Management
Offerees, up to each Non-Management Offeree's respective Pro Rata Share (with
any Default Shares any such Non-Management Offeree elects not to purchase being
reallocated among the remaining Non-Management Offerees in accordance with their
Pro Rata Shares until no such Non-Management Offeree wishes to purchase any more
Default Shares or all such Default Shares have been allocated) and if the
Non-Management Offerees elect not to purchase all of them, the Third Party
Purchaser may purchase such Shares. Nothing contained herein shall prejudice any
person's right to maintain any cause of action or pursue any other remedies
available to it as a result of such default.
3.3.9. If the Company has not delivered a Notice of Acceptance
within 45 days after the date of the Transfer Notice, or if the closing does not
occur as provided in Sections 3.3.7 and 3.3.8, or if the Transfer Offerees are
not ready, willing and able to purchase all of the Transfer Shares at such
closing, then the Offering Stockholder shall, subject to the provisions of
Section 1 hereof, be permitted to transfer the Transfer Shares to the proposed
transferee identified in the Transfer Notice at a price not lower than the
Transfer Price and on terms no more favorable to the transferee than those
contained in the Transfer Notice; provided that any such transfer shall occur
within 90 days after the date of the Transfer Notice and that no transfer of
Shares shall be made to a proposed transferee that is not already a stockholder
of the Company unless and until such proposed transferee executes and delivers
to the Company one or more appropriate instruments, in form and substance
reasonably satisfactory to the Company, confirming and acknowledging that such
proposed transferee has acquired and will hold such Shares subject to all the
terms, conditions and provisions of this Agreement. Upon the execution and
delivery of such instruments to the Company, such transferee shall be deemed a
"Stockholder" for purposes of this Agreement, with the same rights, privileges,
duties and obligations as the transferor of such Shares. Promptly after any
transfer pursuant to this Section 3.3.9, the Offering Stockholder shall notify
the Company of the consummation thereof and shall furnish such evidence of the
completion and time of completion of such transfer and of the terms thereof as
the Company may request. If, at the end of such 90 day period, the Offering
Stockholder has not completed the transfer of the Transfer Shares, he shall no
longer be permitted to transfer such Shares pursuant to this Section 3.3.9
without again complying with Section 3 in its entirety.
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3.3.10. The rights and obligations set forth in this Section 3.2
shall not apply to a transfer of Shares pursuant to Section 3.2 hereof.
3.3.11. For purposes of this Section 3.3, as to any person, the
term "Pro Rata Share" shall mean the total number of Transfer Shares available
for allocation among a group of potential purchasers ("Potential Purchasers")
multiplied by a fraction in which the numerator is the number of shares of the
common stock of the Company owned by such person and the denominator is the
number of such shares owned by all of the Potential Purchasers, as a group.
Section 3.4. Sales on Termination of Employment.
3.4.1. Upon Stockholder's ceasing for any reason to be employed
by the Company to be an Officer of the Company or to be a Consultant to the
Company, whether due to Stockholder's death, Permanent Disability, Termination
for Cause, Involuntary Termination, Retirement or otherwise (as such, a
"Terminated Stockholder" and such cessation of employment, office or consulting
status a "Termination Event"), subject to the provisions of this Section 3.4,
the Company may purchase, and the Terminated Stockholder and the Terminated
Stockholder's Permitted Transferees shall sell, all of the Shares owned by the
Terminated Stockholder and the Terminated Stockholder's Permitted Transferees on
the date of the occurrence of such Termination Event or acquired thereafter (the
"Termination Shares") at a price per Termination Share equal to the Termination
Price.
3.4.2. As used in this Agreement, the term "Termination Price"
shall mean (a) in the event of the Terminated Stockholder's death, Permanent
Disability, Retirement or Involuntary Termination, the Fair Market Value of the
Termination Shares on the date of the Termination Event, (b) in the event of the
Terminated Stockholder's Termination for Cause arising from the Terminated
Stockholder's conviction for fraud, embezzlement or any felony involving moral
turpitude, the lower of the original purchase price or the Fair Market Value of
the Termination Shares on the date of the occurrence of the Termination Event;
and (c) in the event of the Terminated Stockholder's Termination for Cause
(other than as provided in Section 3.4.2(b)) or termination for any other reason
not otherwise provided for herein, (i) the Fair Market Value of the Termination
Shares that are "Protected Shares" on the date of the occurrence of the
Termination Event (with 20% of the Shares subject to the Stock Option becoming
"Protected Shares" on each of the first through the fifth anniversaries of the
date hereof) and (ii) the lower of the original purchase price or the Fair
Market Value of the Termination Shares that are not Protected Shares on the date
of the occurrence of the Termination Event.
3.4.3. The Company shall notify the Terminated Stockholder
whether it will or will not exercise its option to purchase as set forth in
Section 3.4.1 within 45 days of the Termination Event, after which such option
will lapse if not exercised.
3.4.4. The closing of any purchase by the Company of Termination
Shares (the "Termination Closing") pursuant to this Section 3.4 shall take place
at the principal offices of the Company on the date chosen by the Company, which
date shall not, except as otherwise provided in this Section 3.4, be more than
60 days after the occurrence of the Termination Event.
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At the Termination Closing, the Company shall deliver to the Terminated
Stockholder and such Terminated Stockholder's Permitted Transferees against
delivery of duly endorsed certificates representing such Termination Shares,
free and clear of all encumbrances, a certified or bank cashier's check or
checks in the amount of the Termination Price. Notwithstanding anything to the
contrary contained in this Section 3.4.4, if, and only if, and to the extent
that the payment for Termination Shares with cash would (a) violate any law,
statute, order, writ, injunction, decree, rule, regulation, policy or guideline
promulgated, or judgment or order entered, by any federal, state, local or
foreign court or governmental authority applicable to the Company or any of its
subsidiaries, or (b) constitute or cause a breach or default (immediately or
with notice or lapse of time or both) of any loan, credit or warrant agreement
or debt instrument or warrant to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or any of their
respective assets is bound, the Company shall be permitted to pay for the
Termination Shares by delivery of a subordinated note of the Company with a
fixed interest rate equal to the interest rate the Company is charged by its
Bank at the time this current obligation comes into existence, in the form
annexed hereto as Exhibit D (a "Termination Note").
3.4.5. The fair market value of Shares ("Fair Market Value")
shall be determined as follows:
(a) If a public trading market for the Shares exists, the
Fair Market Value per Share shall be the average of the daily closing price for
the Shares for the 20 consecutive trading days prior to the date of
determination of the Fair Market Value of Shares, as reported on the primary
national securities exchange on which the Shares are listed or, if they are not
so listed, in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System, Inc. ("NASDAQ"),
or a comparable inter-dealer quotation system, or if the Shares are not listed
or quoted on NASDAQ or a comparable inter-dealer quotation system, the average
of the closing bid and asking prices for the Shares for the 20 consecutive
trading days prior to the date of determination as furnished by two members of
the National Association of Securities Dealers, Inc. selected by the Board of
Directors.
(b) In the absence of any such quotations, or if no public
trading market for the Shares exists, the Board of Directors shall determine the
Fair Market Value in the exercise of its good faith judgment, or if the Board of
Directors is unable to determine the Fair Market Value of any Shares, or if at
least 100 Shares are in issue and the Terminated Stockholder or Permitted
Transferee whose Shares are being acquired at Fair Market Value disagrees with
the Board of Directors' determination of Fair Market Value by written notice
delivered to the Company within five business days after the Board of Directors'
determination thereof is communicated to the Terminated Stockholder or Permitted
Transferee, which notice specifies such person's determination of the Fair
Market Value of the Termination Shares, then the Company shall request its
auditors to select a nationally recognized appraisal, accounting or investment
banking firm which has not had a material relationship with the Company, the
Terminated Stockholder, the applicable Permitted Transferee or any of the other
Management Stockholders within the preceding two years, which shall determine
the Fair Market Value of such Shares. Such firm's determination of such Fair
Market Value shall be final, binding and conclusive on the Company, the
Terminated Stockholder and such Permitted Transferee. If the
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Board of Directors is unable to determine the Fair Market Value, all costs and
fees of such firm shall be borne by the Company. If the Terminated Stockholder
or Permitted Transferee disagreed with the Board of Directors' determination of
such value, the party whose determination of such value differed from the Fair
Market Value determined by such firm by the greatest amount shall bear all costs
and fees of such firm. To the extent that a Terminated Stockholder or Permitted
Transferee is required to bear such costs and fees, the Company may, at its
option, itself pay such costs and fees and offset the amount so paid against
amounts otherwise due and owing from Company or any of its Affiliates to such
person.
3.4.6. For purposes of this Section 3, the following terms shall be
defined as follows:
(a) "Permanent Disability" shall mean the inability of the
Terminated Stockholder to perform his duties and responsibilities to the Company
or any of its Subsidiaries by reason of a physical or mental disability or
infirmity (i) for a continuous period of 90 days or (ii) at such earlier time as
the Terminated Stockholder submits medical evidence satisfactory to the Company
that the Terminated Stockholder has a physical or mental disability or infirmity
that will likely prevent him from substantially performing his duties and
responsibilities for 90 days or longer. The date of such Permanent Disability
shall be on the last day of such 90 day period or the day on which the
Terminated Stockholder submits such evidence, as the case may be.
(b) "Termination for Cause" shall mean the termination of the
employment, office or consulting status of the Terminated Stockholder by action
of the Company if the Company delivers to the Terminated Stockholder within 15
business days after such termination, a notice of termination for cause
specifying in reasonable detail the occurrence of one or more of the following
events prior to the date on which the Terminated Stockholder was removed:
(i) a judgment of conviction is entered against the
Terminated Stockholder for fraud, embezzlement or any felony involving moral
turpitude; or
(ii) the Terminated Stockholder has (A) willfully and
continuously failed to perform his duties to the Company or any of its
Subsidiaries in any material respect, or (B) failed in any material respect to
follow specific directions of the Board of Directors in the performance of his
duties; or
(iii) the Terminated Stockholder has demonstrated
willful misconduct in the performance of his duties to the Company or any of its
Subsidiaries in any material respect.
(c) "Involuntary Termination" shall mean the termination of
the employment, office or consulting status of the Terminated Stockholder by
action of the Company not constituting Termination for Cause.
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(d) "Retirement" shall mean the automatic termination of the
employment of the Terminated Stockholder upon his reaching the mandatory
retirement age for employees of the Company as established by the Company from
time to time.
Section 3.5. Drag-Along. Anything contained herein to the contrary
notwithstanding, if the Board of Directors approves a transaction pursuant to
which a person or persons will acquire all of the Shares or substantially all of
the assets of the Company, or, as the result of a merger or consolidation, all
of the Shares will be exchanged for equity in the resulting entity or any other
consideration, Stockholder agrees to sell all of his Shares to such person or to
vote his Shares in favor of such sale, merger or consolidation, upon the terms
and conditions for the transaction approved by the Board of Directors. The
Company agrees that, as a condition precedent to the consummation of such
transaction, all Termination Notes plus accrued interest shall be paid in full
or purchased at face value.
Section 3.6. Transfers to Competitors. Notwithstanding any other
provision of this Agreement, Stockholder shall not transfer any Shares to any
person determined by the Board of Directors to be engaged in any activity or
business in competition with any business currently or at the time of the
proposed transfer carried on by the Company or any of its Affiliates.
ARTICLE IV
INVESTMENT INTENT
Section 4.1. Investment Intent.
(a) Stockholder represents and warrants that he is acquiring
the Shares for investment, solely for his own account and not with a view to, or
for resale in connection with, the distribution or other disposition thereof,
except for such distribution and dispositions as are effected in compliance with
the Securities Act and the rules and regulations thereunder and all applicable
state securities or "blue-sky" laws. Stockholder agrees and acknowledges that he
will not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of any part of his Shares, or solicit any
offers to purchase, otherwise acquire or take a pledge of any part of his
Shares, unless such offer, transfer, sale, assignment, pledge, hypothecation or
other disposition or solicitation is either (i) pursuant to an effective
registration statement under the Securities Act and registered under any
applicable state securities or "blue-sky" laws, or (ii) effected only after the
Company has been furnished with an opinion of counsel, which opinion and counsel
shall be reasonably satisfactory to the Company, stating that no such
registration is required because of the availability of an exemption from
registration in effect thereunder and under applicable state securities or
"blue-sky" laws.
(b) Stockholder acknowledges and represents and warrants that
he has been advised that (i) the issuance of his Shares has not been registered
under the Securities Act or any state securities or "blue-sky" laws; (ii) his
Shares must be held indefinitely and Stockholder must continue to bear the
economic risk of his investment in the Company unless the Transfer of his
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Shares is subsequently registered under the Securities Act and any applicable
state securities or "blue-sky" laws or an exemption from such registration is
available; (iii) it is not anticipated that there will be any public market for
the Shares; (iv) Rule 144 promulgated under the Securities Act ("Rule 144") is
not currently available with respect to sales of securities of the Company, and
the Company has made no covenant to make such Rule 144 available; and (v) a
restrictive legend in the form heretofore set forth shall be placed on any
certificate representing the Shares.
(c) Stockholder represents and warrants that (i) he is aware of the
merits and risks of an investment in the Company as contemplated by this
Agreement; (ii) he has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of this investment
in the Company as contemplated by this Agreement; (iii) he understands that the
Shares are a speculative investment that involves a high degree of risk of loss
of his investment therein, that there are substantial restrictions on the
transferability of the Shares and that for an indefinite period after the date
hereof, there will be no public market for the Shares, and accordingly it may
not be possible to liquidate his investment in the Company in case of emergency,
if at all; and (iv) he is familiar with the business of the Company and
understands and has evaluated all the risk factors related to an investment in
the Company.
ARTICLE V
MISCELLANEOUS
Section 5.1. Legends. The certificates evidencing the Shares shall bear
the following legends in conspicuous type:
THE TRANSFER OF THESE SHARES IS SUBJECT TO THE
TERMS OF AN OPTION AGREEMENT BETWEEN THE COMPANY
AND THE HOLDER OF THIS CERTIFICATE DATED MARCH 13,
1997. EXCEPT AS PROVIDED IN THE OPTION AGREEMENT,
THESE SHARES MAY NOT BE GIVEN, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED. THE COMPANY WILL
MAIL TO THE STOCKHOLDER A COPY OF SUCH AGREEMENT
WITHOUT CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF
WRITTEN REQUEST THEREFOR.
Section 5.2. No Right of Employment. Neither this Agreement nor
any exercise of any rights granted pursuant hereto shall create, or be construed
or deemed to create, any right of employment in favor of Stockholder or any
other person by the Company or any of its Subsidiaries.
Section 5.3. Recapitalizations, Exchanges, Etc. The provisions of
this Agreement shall apply, to the fullest extent set forth herein with respect
to the Shares, to any and all shares of capital stock of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) that may be issued in respect of, in exchange for, or in
substitution of, Shares and shall be appropriately adjusted for any stock
dividends, splits, reverse
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splits, combinations, recapitalizations and the like occurring after the date
hereof. Subject only to the provisions of the preceding sentence, nothing
contained in this Agreement shall prohibit or restrict the Company from taking
any corporate action, including, without limitation, declaring any dividend
(whether in cash or stock) or engaging in any corporate transaction of any kind,
including, without limitation, any merger, consolidation, liquidation or sale of
assets.
Section 5.4. Availability of Equitable Remedies. Stockholder and
the Company acknowledge that a breach of the provisions of this Agreement could
not be adequately compensated by money damages. Accordingly, either party hereto
or beneficiary hereof shall be entitled, in addition to any other right or
remedy available to it, to an injunction restraining such breach or threatened
breach and to specific performance of any such provision of this Agreement, and
in either case no bond or security shall be required in connection therewith.
Section 5.5. Waiver. No purported waiver by either party of any
default by the other party of any term or provision contained herein shall be
deemed to be a waiver of such term or provision unless the waiver is in writing
and signed by the waiving party. No such waiver shall in any event be deemed a
waiver of any subsequent default under the same or any other term or provision
contained herein.
Section 5.6. Entire Agreement. This Agreement and the Exhibits
attached hereto set forth the entire understanding between the parties
concerning the subject matter of this Agreement and incorporate all prior
negotiations and understandings. There are no covenants, promises, agreements,
conditions or understandings, either oral or written, between them relating to
the subject matter of this Agreement other than those set forth herein. No
representation or warranty has been made by or on behalf of any party to this
Agreement (or any officer, director, employee or agent thereof) to induce the
other party to enter into this Agreement or to abide by or consummate any
transactions contemplated by any terms of this Agreement, except representations
and warranties, if any, expressly set forth herein. No alteration, amendment,
change or addition to this Agreement shall be binding upon either party unless
in writing and signed by the party to be charged.
Section 5.7. No Partnership. Nothing contained in this Agreement
shall be deemed or construed by the parties hereto or by any third person to
create the relationship of principal and agent or of partnership or of joint
venture.
Section 5.8. Successors. Each and all of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and except as otherwise specifically provided in this Agreement, their
respective heirs, legal representatives, successors and assigns, provided,
however, that neither this Agreement nor any rights herein granted may be
assigned, transferred or encumbered by either party.
Section 5.9. Notices. Any consent, waiver, notice, demand,
request or other instrument required or permitted to be given under this
Agreement shall be in writing and be deemed to have been properly given when
delivered in person or sent by certified or registered United States
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mail, return receipt requested, postage prepaid, addressed, if to Stockholder,
to his address set forth under his signature hereto; and
If to the Company:
FM Precision Golf Corp.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attn.: President
with copies to:
Xxxxxxx X. Xxxxxx, Esq. Xxxxxxxxxxx X. Xxxxxxxx
0000 X. Xxxxx Xxxxxx, Xxxxx X 0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000 Jackson, Wyoming 83001
Either party may change its address for notices by notice in the manner set
forth above.
Section 5.10. Captions. The captions and section numbers appearing
in this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions of
this Agreement.
Section 5.11. Partial Invalidity. If any term or provision of this
Agreement, or the application thereof to any person, firm, corporation or
circumstance, shall be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to persons, firms,
corporations or circumstances other than those as to which it is held invalid,
shall be unaffected thereby and each term or provision of this Agreement shall
be valid and be enforced to the fullest extent permitted by law.
Section 5.12. Governing Law. This Agreement shall be governed and
construed by the provisions hereof and in accordance with the laws of the State
of Delaware applicable to agreements to be performed in the State of Delaware.
Section 5.13. Counterparts. This Agreement may be executed in
counterparts, each of which when executed by the parties hereto shall be deemed
an original and all of which together shall be deemed the same Agreement.
Section 5.14. Arbitration. Any controversy or claim arising out of
or relating to this Agreement or the breach of any term or provision hereof,
shall be settled by arbitration in the City of Torrington, State of Connecticut,
in accordance with the Rules of the American Arbitration Association and
judgment upon the award rendered by the Arbitrator(s) may be entered in any
Court having jurisdiction thereof. The Arbitrator(s) sitting in any controversy
shall have no power to alter or modify any express provision of this Agreement,
or to make any award which by the terms effects any such alteration or
modification.
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The parties hereto have caused this Agreement to be executed as
of the day and year first above written.
FM PRECISION GOLF CORP.
By:
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Xxxxxxxxxxx X. Xxxxxxxx, President
STOCKHOLDER
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Address:
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