SPORT SUPPLY GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
___________________
(Effective Date of Grant)
TO: ______________________
WHEREAS, Sport Supply Group, Inc. (the "Company") wishes to
encourage _______________'s (the "Optionee") sense of
proprietorship in the Company by owning the Common Stock, par
value $.01 per share (the "Common Stock"), of the Company;
NOW, THEREFORE, in consideration of the mutual agreements
and covenants contained herein, the Company hereby grants to the
Optionee a non-qualified stock option to purchase up to a total
of 50,000 shares of the Common Stock at a price per share of
$9.00 (the "Option Price") on the terms and conditions and
subject to the restrictions as set forth in this Agreement and in
the Sport Supply Group, Inc. Stock Option Plan (the "Plan").
I. DEFINITIONS
a. Acquiring Person: An "Acquiring Person" shall mean any
person (including any "person" as such term is used in Sections
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) that, together with all Affiliates
and Associates of such person, is the beneficial owner of 10% or
more of the outstanding Common Stock. The term "Acquiring
Person" shall not include the Company, any subsidiary of the
Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or subsidiary of the
Company or any person holding Common Stock for or pursuant to the
terms of any such plan, any corporation owned, directly or
indirectly, by the shareholders of the Company in substantially
the same proportions as their ownership of stock of the Company,
Xxxxxxx Radio Corp. and its Affiliates and Associates or Xxxxxxxx
X. Xxxxxx. For the purposes of this Agreement, a person who
becomes an Acquiring Person by acquiring beneficial ownership of
10% or more of the Common Stock at any time after the date of
this Agreement shall continue to be an Acquiring Person whether
or not such person continues to be the beneficial owner of 10% or
more of the outstanding Common Stock.
b. Affiliate and Associate. "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Exchange Act
in effect on the date of this Agreement.
c. Change in Control. A "Change in Control" of the
Company shall have occurred if at any time during the term of
this Agreement any of the following events shall occur:
(i) The Company is merged, consolidated or reorganized
into or with another corporation or other legal person and as a
result of such merger, consolidation or reorganization less than
60% of the combined voting power to elect each class of directors
of the then outstanding securities of the remaining corporation
or legal person or its ultimate parent immediately after such
transaction is available to be received by all of the Company's
stockholders on a pro rata basis and is actually received in
respect of, or in exchange for, voting securities of the Company
pursuant to such transaction;
(ii) The Company sells all or substantially all of its
assets to any other corporation or other legal person and as a
result of such sale less than 60% of the combined voting power to
elect each class of directors of the then outstanding securities
of such corporation or legal person or its ultimate parent
immediately after such transaction is available to be received by
all of the Company's stockholders on a pro rata basis and is
actually received in respect of, or in exchange for, voting
securities of the Company pursuant to such sale (provided that
this provision shall not apply to a registered public offering of
securities of a subsidiary of the Company, which offering is not
part of a transaction otherwise a part of or related to a Change
in Control);
(iii) Any Acquiring Person has become the
beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of securities which when added to any
securities already owned by such person would represent in the
aggregate 20% or more of the then outstanding securities of the
Company which are entitled to vote to elect any class of
directors; or
(iv) Any occurrence that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation
14A or any successor rule or regulation promulgated under the
Exchange Act; or
(v) If at any time, the Continuing Directors then
serving on the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof; or
(vi) Such other events that cause a change in control
of the Company, as determined by the Board of Directors of the
Company in its sole discretion.
d. Continuing Director. A "Continuing Director"
shall mean a director of the Company who (i) is not an Acquiring
Person or an Affiliate or Associate thereof, or a representative
of an Acquiring Person or nominated for election by an Acquiring
Person and (ii) was either a member of the Board of Directors of
the Company on the date of this Agreement or subsequently became
a Director of the Company and whose initial election or initial
nomination for election by the Company's stockholders was
approved by a majority of the Continuing Directors then on the
Board of Directors of the Company.
II. GENERAL PROVISIONS
Subject to the other terms and provisions hereof, the shares
subject to this option shall vest annually in equal installments
on January 13, 2000 and 2001. The right to exercise this option
shall expire ten years from the Effective Date of Grant as set
forth in the upper right hand corner on page 1 of this Agreement,
except as the right to exercise this option is otherwise
qualified by the terms of the Plan or this Agreement.
This option is not transferable otherwise than by will or
the laws of descent and distribution, or as specifically provided
below. Optionee may transfer this option to (i) the spouse,
children or grandchildren of the Optionee ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of
such Immediate Family Members, (iii) a partnership or other
entity in which such Immediate Family Members are the only
partners, or (iv) to other persons or entities deemed appropriate
by the Company's Stock Option Committee. This option may be
exercised during the lifetime of the Optionee only by the
Optionee or by his guardian or legal representative or his
transferee as permitted hereunder. This option is not liable for
or subject to, in whole or in part, the debts, contracts,
liabilities or torts of the Optionee nor shall it be subject to
garnishment, attachment, execution, levy or other legal or
equitable process.
This option shall be subject to the provisions of the Plan,
which is a part of the Form S-8 Prospectus (the "Prospectus")
covering the shares granted under this option, and is incorporated
in its entirety by express reference herein. A copy
of the Prospectus, as well as a copy of the Company's annual
report to security holders containing the information required by
Rule 14a-3(b) under the Exchange Act for its latest fiscal year,
has been provided to the Optionee by the Company, and the
Optionee hereby acknowledges receipt of same. Additional copies
of these documents are available from the Company upon request.
All defined terms contained herein shall have the meaning
provided in the Plan except to the extent otherwise provided
herein.
Except as otherwise provided herein, the option granted
hereunder shall terminate six (6) months after the date the
Optionee ceases to be an employee of the Company (the
"Termination Date") or until the option by its terms expires,
whichever first occurs. Notwithstanding the foregoing, in the
event the termination results from the Optionee's death or
disability, the option, to the extent it was exercisable on the
Termination Date shall be exercisable for twelve months from the
Termination Date or until the option by its terms expires,
whichever first occurs. After the Optionee's death, this option
shall be exercisable only by the Optionee's transferee as
permitted hereunder or by the executor or administrator of the
Optionee's estate, or if the Optionee's estate is not in
administration, by the Optionee's transferee as permitted
hereunder or by the person or persons to whom the Optionee's
rights shall have passed by the Optionee's will or under the laws
of descent and distribution of the state where the Optionee was
domiciled at the date of death. The Company may suspend for a
reasonable period or periods the time during which this option
may be exercised if, in the opinion of the Company, such
suspension is required to enable the Company to remain in
compliance with regulatory requirements relating to the issuance
of shares of Common Stock subject to this option.
Notwithstanding the provisions set forth herein, in the
event (i) of a Change in Control, (ii) Optionee is terminated
other than for Cause (as defined in that certain Employment
Agreement by and between the Company and the Optionee dated as of
January 14, 1998, the "Employment Agreement") or (iii) of a
Constructive Discharge (as defined in the Employment Agreement)
of Optionee, then from and after the date of the Change in
Control, the Constructive Discharge or the termination without
Cause, whichever is applicable, all of the Options hereunder
shall vest in full and become immediately exercisable and shall
remain exercisable until the option expires by its terms.
Notwithstanding the provisions set forth herein, the
Optionee may elect for a period of 180 days following a Change in
Control to surrender to the Company for cancellation all or any
part of the unexercised portion of this option. In consideration
of such surrender and cancellation, the Optionee shall be
entitled to receive for each share of Common Stock as to which
the surrendered portion of the Option relates an amount in cash
equal to the difference between the Option Price per share under
this option and the highest closing sales price per share (as
reported on the principal stock exchange on which the Common
Stock is traded) of Common Stock during the 360 calendar day
period prior to Optionee's election pursuant to this paragraph.
III. EXERCISE OF OPTION
This option may be exercised only by written notice (the
"Exercise Notice") by the Optionee to the Company at its
principal executive office. The Exercise Notice shall be deemed
given when deposited in the U. S. mails, postage prepaid,
addressed to the Company at its principal executive office, or if
given other than by deposit in the U.S. mails, when delivered in
person to an executive officer of the Company at that office. The
date of exercise of the Option (the "Exercise Date") shall be the
date of the postmark if the notice is mailed or the date received
if the notice is delivered other than by mail. The Exercise
Notice shall state the number of shares in respect of which the
option is being exercised and, if the shares for which the option
is being exercised are to be evidenced by more than one stock
certificate, the denominations in which the stock certificates
are to be issued. The Exercise Notice shall be signed by the
Optionee and shall include the complete address of such person,
together with such person's social security number.
This option may be exercised either by tendering cash in the
amount of the Option Price or by tendering shares of Common Stock
(which may include shares previously acquired upon exercise of
options granted under the Plan). The Exercise Notice shall be
accompanied by payment of the aggregate Option Price of the
shares purchased by cash or check payable to the order of the
Company or by delivery of shares of Common Stock owned by the
Optionee, in form satisfactory to the Company, tendered in full
or partial payment of the Option Price. If shares of Common
Stock are used to pay part or all of the Option Price, the value
of such shares for purposes of exercising this option shall be
the Fair Market Value of the Common Stock on the Exercise Date.
This Option may also be exercised by having shares of Common
Stock having a Fair Market Value on the Exercise Date equal to
the aggregate Option Price withheld by the Company.
In addition to the foregoing, any option granted under this
Agreement may be exercised by a broker-dealer acting on behalf of
the Optionee if (i) the broker-dealer has received from the
Optionee or the Company a fully- and duly-endorsed agreement
evidencing such option, together with instructions signed by the
Optionee requesting the Company to deliver the shares of Common
Stock subject to such option to the broker-dealer on behalf of
the Optionee and specifying the account into which such shares
should be deposited, (ii) adequate provision has been made with
respect to the payment of any withholding taxes due upon such
exercise, and (iii) the broker-dealer and the Optionee have
otherwise complied with Section 220.3(e)(4) of Regulation T, 12
CFR Part 220, or any successor provision.
The certificates for shares of Common Stock as to which
this option shall have been so exercised shall be registered in the
name of the Optionee and shall be delivered to the Optionee at
the address specified in the Exercise Notice. In the case of the
exercise of the option by an Optionee who is employed by the
Company or a Subsidiary on the Exercise Date, the Optionee in
exercising such option shall make payment or other arrangements
(including, but not limited to, requesting that the Company
withhold shares of Common Stock that were to be issued to the
Optionee upon such exercise) satisfactory to the Company for
withholding federal and state taxes, if applicable, with respect
to the shares acquired upon exercise of the option. In the case
of options exercised when the Optionee is no longer employed by
the Company or a Subsidiary, such option exercise shall be valid
only if accompanied by payment or other arrangement satisfactory
to the Company with respect to the Company's obligations, if any,
to withhold federal and state taxes with respect to the exercise
of the option. In the event the person exercising the option is
a transferee of the Optionee, the Exercise Notice shall be
accompanied by appropriate proof of the right of such transferee
to exercise this Option.
Subject to the limitation expressed herein, this Option may
be exercised with respect to all or a part of the shares of
Common Stock subject to it.
Neither the Optionee nor any person claiming under or
through the Optionee shall be or have any rights or privileges of
a stockholder of the Company in respect of any of the shares
issuable upon the exercise of the option, unless and until
certificates representing such shares shall have been issued (as
evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company).
IV. GOVERNING LAW
This Agreement has been executed in, and shall be deemed to
be performable in, Dallas, Dallas County, Texas. For these and
other reasons, the parties agree that this Agreement shall be
governed by and construed in accordance with the laws of the
State of Texas. The parties further agree that the courts of the
State of Texas, and any courts whose jurisdiction is derivative
on the jurisdiction of the courts of the State of Texas, shall
have personal jurisdiction over all parties to this Agreement.
V. ENTIRE AGREEMENT
Except for the Plan, this Agreement constitutes the entire
agreement between the parties pertaining to the subject matter
contained in it and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties.
No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by the party to be charged
therewith. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver
constitute a continuing waiver.
VI. DUPLICATE ORIGINALS
Both the Company and the Optionee, each of which shall
retain one duplicate original, shall execute duplicate originals
of this document.
SPORT SUPPLY GROUP, INC.
By: ________________________
Xxxxxxxx X. Xxxxxx
Chief Executive Officer
ACCEPTED:
________________________
