EXHIBIT 2
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "Agreement"), dated as of May 29, 1996 is
made by and among XXXXXXXXXXX X. XXXXXXXX residing in Jackson, Wyoming
("Xxxxx"), XXXXXXX X. XXXXXX residing in Dublin, Ohio ("Xxx"), XXXXX X. XXXX
residing in Dublin, Ohio ("Xxxxx"), and XXXXXX X. XXXXXXXXX residing in Miami,
Florida ("Xxxxxx").
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Common Stock" means the shares of common stock, par value of $.01 per
share, of the Issuer.
"Holder" means each Person (other than Xxxxx) who shall be a party to this
Agreement, whether in connection with the execution and delivery of the
Agreement as of the date hereof or otherwise, so long as such Person shall
"beneficially own" (as such term is defined in Rule 13D-3 under the Securities
Exchange Act of 1934, as amended) any shares of Common Stock.
"Issuer" means FM Precision Golf Corp., a Delaware corporation.
"Permitted Transferee" means such individual's spouse or lineal
descendants, or a trust partnership, limited liability company or other entity
for the benefit of same.
"Person" means and includes an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or other
department or agency thereof.
ARTICLE II
RIGHTS AND OBLIGATIONS WITH
RESPECT TO TRANSFER
Section 2.1. GENERAL RESTRICTIONS. (a) No Holder shall, directly or
indirectly, transfer, sell, assign, pledge, hypothecate, encumber or otherwise
dispose of any Common Stock to any Person (any such act being referred to as a
"Transfer", with the term "Transferee" to mean any transferee in a Transfer),
except (i) in compliance with all applicable federal and state securities laws
and (ii) as expressly permitted by this Agreement.
(b) Notwithstanding any other provision of this Agreement to the
contrary, any Holder may at any time Transfer any or all shares of Common Stock
to one or more of his or her Permitted Transferees so long as (i) such Permitted
Transferee shall have agreed in writing to be bound (through execution of an
agreement substantially in the form of Exhibit 2.1(b) hereto) by the terms of
this Agreement applicable to Holders and (ii) the Transfer to such Permitted
Transferee is not in violation of any applicable federal or state securities
laws. Any such Transfer shall not relieve the Holder of any liability under this
Agreement whether occurring before or after such Transfer, and such Holder shall
remain liable for any breach of this Agreement or Exhibit 2.1(b) by such
Permitted Transferee.
Section 2.2. RESTRICTIVE LEGEND. For so long as this Agreement remains in
effect, each certificate representing Common Stock owned by any Holder shall
include a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED
OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS
AGREEMENT, DATED AS OF MAY 29, 1996, A COPY OF WHICH MAY BE OBTAINED
FROM THE ISSUER.
Section 2.3. RIGHTS OF FIRST REFUSAL FOR XXXX AND XXXXXX. (a) Neither Xxxxx
nor Xxxxxx (for purposes of this Section 2.3, each an "Offering Holder") will
Transfer any Common Stock other than to his or her Permitted Transferee without
first giving Xxx and Xxxxx (each an "Offeree Holder") prior notice thereof (an
"Offer Notice") and the opportunity (as hereinafter provided) to purchase all
but not less than all such Common Stock (the "Offered Stock") at a cash price
(the "Offer Price") equal to the sum of the amount of any cash plus the fair
market value of any other consideration offered by the prospective purchaser or
other transferee pursuant to a bona fide offer to purchase. The Offer Notice
shall constitute an offer (the "Offer") by an Offering Holder to sell all but
not less than all of the Offered Stock to first Xxx and, if Xxx does not accept
the Offer, then Xxxxx, at the Offer Price and shall state the identity of the
purchaser or Transferee and the terms of the proposed Transfer.
(b) The Offer may be accepted within 45 days of receipt by the Offeree
Holders of the Offer Notice and, if accepted, such acceptance shall constitute
the binding agreement of Xxx or Xxxxx to purchase the Offered Stock by the later
of (i) the date 30 days after such acceptance or (ii) the date by which the
prospective purchaser or Transferee would have been obligated to purchase the
Offered Stock. If the Offer is not accepted or the Offered Stock is not
purchased as contemplated above, the Offering Holder may Transfer the Offered
Stock to such prospective purchaser or Transferee at a price not less than the
Offer Price and on substantially the same terms as described in the Offer
Notice. If the Transfer to such prospective purchaser or Transferee is not
consummated as contemplated above within 30 days after the expiration of the
45-day offer period or earlier irrevocable rejection of the Offer or failure to
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purchase the Offered Stock after acceptance of the Offer, no Transfer may be
made by the Offering Holder without again complying with this Section 2.3.
Notwithstanding the foregoing, if the purchase and sale of the Offered Stock is
subject to any prior regulatory approval, the time periods specified above
within which such purchase and sale must be consummated shall be extended until
the expiration of five business days after all such approvals shall have been
received.
(c) If the consideration offered by the prospective purchaser or
Transferee includes non-cash consideration, the Offeree Holder and Offering
Holder shall negotiate in good faith with a view to agreeing upon the fair
market value of such non-cash consideration. If, despite such good faith
negotiations, the Offering Holder and Offeree Holder are unable to agree on such
fair market value within 15 days following receipt by the Offeree Holder of the
Offer Notice, each of the Offering Holder and the Offeree Holder shall, at its
own expense, retain an investment banking firm of national reputation to
determine such fair market value. If such two investment banking firms do not
make substantially similar determinations and neither determination is
acceptable to both the Offering Holder and the Offeree Holder, then such
investment banking firms shall, at the equally shared expense of the Offering
Holder and the Offeree Holder, retain a third investment banking firm of
national reputation to select between the two determinations, which selection
shall be binding upon each party. If a determination under this subsection (c)
is required, the deadline for acceptance provided for in this Section 2.3 shall
be postponed until the fifth business day after the date of such determination.
Section 2.4. RIGHTS OF FIRST REFUSAL FOR XXX. (a) Xxx will not Transfer any
Common Stock other than to his Permitted Transferee without first giving Xxxxx
xxxxx notice thereof (an "Offer Notice") and the opportunity (as hereinafter
provided) to purchase all but not less than all such Common Stock (the "Offered
Stock") at a cash price (the "Offer Price") equal to the sum of the amount of
any cash plus the fair market value of any other consideration offered by the
prospective purchaser or other transferee pursuant to a bona fide offer to
purchase. The Offer Notice shall constitute an offer (the "Offer") by Xxx to
sell all but not less than all of the Offered Stock to Xxxxx, at the Offer Price
and shall state the identity of the purchaser or Transferee and the terms of the
proposed Transfer.
(b) The Offer may be accepted within 45 days of receipt by Xxxxx of
the Offer Notice and, if accepted, such acceptance shall constitute the binding
agreement of Xxxxx to purchase the Offered Stock by the later of (i) the date 30
days after such acceptance or (ii) the date by which the prospective purchaser
or Transferee would have been obligated to purchase the Offered Stock. If the
Offer is not accepted or the Offered Stock is not purchased as contemplated
above, Xxx xxx Transfer the Offered Stock to such prospective purchaser or
Transferee at a price not less than the Offer Price and on substantially the
same terms as described in the Offer Notice. If the Transfer to such prospective
purchaser or Transferee is not consummated as contemplated above within 30 days
after the expiration of the 45-day offer period or earlier irrevocable rejection
of the Offer or failure to purchase the Offered Stock after acceptance of the
Offer, no Transfer may be made by Xxx without again complying with this Section
2.4. Notwithstanding the foregoing, if the purchase and sale of the Offered
Stock is subject to any prior regulatory approval, the time periods specified
above within which such purchase and sale must be consummated shall be extended
until the expiration of five business days after all such approvals shall have
been received.
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(c) If the consideration offered by the prospective purchaser or
Transferee includes non-cash consideration, Xxx and Xxxxx shall negotiate in
good faith with a view to agreeing upon the fair market value of such non-cash
consideration. If, despite such good faith negotiations, Xxx and Xxxxx are
unable to agree on such fair market value within 15 days following receipt by
Xxxxx of the Offer Notice, each of Xxx and Xxxxx shall, at his own expense,
retain an investment banking firm of national reputation to determine such fair
market value. If such two investment banking firms do not make substantially
similar determinations and neither determination is acceptable to both Xxx and
Xxxxx, then such investment banking firms shall, at the equally shared expense
of Xxx and Xxxxx, retain a third investment banking firm of national reputation
to select between the two determinations, which selection shall be binding upon
each party. If a determination under this subsection (c) is required, the
deadline for acceptance provided for in this Section 2.4 shall be postponed
until the fifth business day after the date of such determination.
ARTICLE III
OPTION ON DEATH OR INCAPACITY
3.1. GRANT OF OPTION. Upon the death or mental incapacity of Xxx, Xxxxx
shall have an option to purchase all of the shares of Common Stock then owned by
the Holders on the following terms and conditions:
(a) Within 45 days of the appointment of a representative of the
estate of Xxx or of a guardian of the person of Xxx, Xxxxx shall send a notice
(the "Option Notice") to the Holders of his intent to exercise the option herein
granted. Such notice shall set forth the xxxxx Xxxxx believes is the fair market
price for the Common Stock owned by the Holders.
(b) The Holders and Xxxxx shall negotiate in good faith with a view to
agreeing upon the fair market value of such Common Stock. If, despite such good
faith negotiations, the Holders and Xxxxx are unable to agree on such fair
market value within 15 days following receipt by the Holders of the Option
Notice, the Holders, on the one hand, and Xxxxx, on the other, shall, at his and
their own expense, retain an investment banking firm of national reputation to
determine such fair market value. If such two investment banking firms do not
make substantially similar determinations and neither determination is
acceptable to a majority of the Holders (by ownership of Common Stock) and
Xxxxx, then such investment banking firms shall, at the equally shared expense
of the Holders and Xxxxx (50% to Xxxxx and 50% to the Holders ratably to their
percentage stock ownership), retain a third investment banking firm of national
reputation to select between the two determinations, which selection shall be
binding upon each party.
(c) Within 10 days following the agreement or determination of the
fair market value of the Common Stock, a closing shall take place at a place and
time mutually agreeable to the parties (or in the absence of such agreement, on
the 10th day following such determination at the offices of the Issuer at 10:00
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a.m. local time) at which time Xxxxx shall pay the purchase price in cash or by
certified or bank cashier's check against receipt of the certificates
representing the Common Stock free and clear of all liens and encumbrances, with
signatures appropriately guaranteed under the then rules and regulations
generally applicable to the transfer of stock certificates.
ARTICLE IV
MISCELLANEOUS
Section 4.1. HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not control or affect the meaning or construction of
any provisions hereof.
Section 4.2. ENTIRE AGREEMENT; AMENDMENTS; NO WAIVERS. (a) This Agreement
embodies the entire agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements with respect thereto. This
Agreement may be amended but only in a writing signed by each of the parties and
by the addition of Transferees through execution of an agreement substantially
in the form attached as Exhibit 2.1(b). Any provision hereof may be waived but
only in a writing signed by the party against which such waiver is sought to be
enforced.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 4.3. NOTICES. Any notice, request, instruction or other document to
be given hereunder by any party hereto to another party hereto shall be in
writing (including telecopies or similar writing) and shall be given to such
party at its address or telecopier number set forth on its signature page or, in
the case of a Transfer, to the address, or telecopier number of the party
executing the written agreement pursuant to Section 2.1 hereof, or to such other
address as the party to whom notice is to be given may provide in a written
notice to the party giving such notice, a copy of which written notice shall be
on file with the Secretary of the Issuer. Each such notice, request or other
communication shall be effective (a) if given by telecopy, when such telecopy is
transmitted to the telex or telecopy number specified in its signature page and
the appropriate answerback or confirmation, as the case may be, is received, (b)
if given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid addressed as aforesaid or (c) if given by any
other means, when delivered at the address set forth on its signature page.
Section 4.4. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to conflicts of law principles.
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Section 4.5. SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
Section 4.6. SUCCESSORS, ASSIGNS, TRANSFEREES. (a) The provisions of this
Agreement shall be binding upon and accrue to the benefit of the parties hereto
and their respective heirs, successors and permitted assigns. Neither this
Agreement nor any provisions hereof shall be construed so as to confer any right
or benefit upon any Person other than the parties to this Agreement and their
respective successors and permitted assigns.
(b) This Agreement shall not be assignable or otherwise transferable
by any party hereto, except that any Person acquiring shares of Common Stock who
is required by the terms of this Agreement to become a party hereto shall
execute and deliver to the other parties hereto an agreement to be bound
(substantially in the form of Exhibit 2.1(b)) by this Agreement and shall
thenceforth be a "Holder", and any Holder who ceases to beneficially own any
Shares shall cease to be bound by the terms hereof.
Section 4.7. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts, each of which shall be an original with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Section 4.8. FEES AND EXPENSES. All fees and expenses incurred by any party
hereto in connection with the preparation of this Agreement and the transactions
contemplated hereby and all matters related thereto shall be borne by the party
incurring such fees or expenses.
Section 4.9. RECAPITALIZATION, ETC. If any capital stock or other
securities are issued in respect of, or in exchange or substitution for, any
Common Stock by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Common Stock or any other change in capital
structure of the Issuer, appropriate adjustments shall be made with respect to
the relevant provisions of this Agreement so as to fairly and equitably
preserve, as far as practicable, the original rights and obligations of the
parties hereto under this Agreement.
Section 4.10. REMEDIES. The parties hereby acknowledge that money damages
would not be adequate compensation for the damages that a party would suffer by
reason of a failure of any other party to perform any of the obligations of this
Agreement. Therefore, each party hereto agrees that specific performance is the
only appropriate remedy under this Agreement and hereby waives the claim or
defense that any other party has an adequate remedy at law.
Section 4.11. TERMINATION. This Agreement shall terminate, and the rights
and obligations created hereunder shall no longer be of any force or effect on
and after any public offering of equity securities of the Issuer, or any
successor thereto, pursuant to an effective registration statement under the
Securities Act of 1933 other than pursuant to a registration statement on Form
S-4 or Form S-8 or any successor or similar form.
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/s/ Xxxxxxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxxxxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxx 0
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
/s/ Xxxxx X. Xxxx
----------------------------------------
Xxxxx X. Xxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxxx
0000 X. Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Exhibit 2.1(b)
FORM OF AGREEMENT TO BE BOUND
[DATE]
To the Parties to the
Stockholders Agreement
dated as of May __, 1996
Dear Sirs:
Reference is made to the Stockholders Agreement dated as of May __, 1996
(the "Stockholders Agreement"), by and among XXXXXXXXXXX X. XXXXXXXX residing in
Jackson, Wyoming ("Xxxxx"), XXXXXXX X. XXXXXX residing in Dublin, Ohio ("Xxx"),
XXXXX X. XXXX residing in Dublin, Ohio ("Xxxxx"), and XXXXXX X. XXXXXXXXX
residing in Miami, Florida ("Xxxxxx"). Capitalized terms not defined herein have
the meanings assigned to them in the Stockholders Agreement.
In consideration of the covenants and agreements contained in the
Stockholders Agreement and the transfer of the common stock, par value $.01 per
share, of the Issuer (the "Common Stock") to the undersigned by _________ (the
"Transferor"), the undersigned hereby confirms and agrees to be bound by all of
the provisions thereof.
[The undersigned acknowledges that it is a condition to such transfer that
the undersigned confirms and agrees, that at any time that the undersigned is
not a Permitted Transferee of the Transferor, the undersigned will, prior to
such time, transfer the Common Stock to the Transferor or a Person which then
qualifies as a Permitted Transferee of the Transferor.]+
This letter shall be construed and enforced in accordance with the laws of
the State of Delaware.
Very truly yours,
----------------------------------------
[Transferee]
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+ Include in the case of a Transfer to a Permitted Transferee.
