STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December _, 1996, among FAMILY GOLF
CENTERS, INC., a Delaware corporation, with executive offices at 000
Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("FGC") and _____________________,
with an address of ____________________________ (the "Holder").
W I T N E S E T H:
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WHEREAS, simultaneously with the execution hereof, the Cincinnati Golf
Academy, Ltd. (the "Seller") and Maineville Family Golf Centers, Inc., a
Delaware corporation (the "Purchaser") are consummating the transactions
contemplated by the Purchase Agreement, dated as of December __, 1996 (the
"Purchase Agreement"), among the Seller, certain members of Seller and
Purchaser, pursuant to which, among other things, the Purchaser is purchasing
certain assets of the Seller;
WHEREAS, as part of the consideration for the Seller's assets, the
Purchaser has agreed to grant the Seller or its designees an aggregate of up
to 10,000 Options and the Seller has designated the Holder to receive ______
of such Options;
WHEREAS, this is the Stock Option Agreement referred to in Section 2 of
the Purchase Agreement. Capitalized terms used in this Stock Option Agreement
and not otherwise defined herein shall have the respective meanings given to
them in the Purchase Agreement.
NOW, THEREFORE, it is agreed as follows:
X. XXXXX OF OPTION. FGC hereby grants to the Holder the option (the
"Option") to purchase, upon the terms and conditions hereinafter set forth, up
to an aggregate of _______ shares of Common Stock of FGC (subject to
adjustment as hereinafter provided), at the exercise price of $40.00 per share
(the "Exercise Price").
II. EXERCISE OF OPTION. Holder may exercise the option, in whole or in
part, at any time on or after the date hereof until the tenth anniversary of
the date hereof (the "Exercise Period").
III. MANNER OF EXERCISE. In the event the Holder wishes to exercise the
Option, the Holder shall send a written notice (the "Notice") to the Board of
Directors of the Company specifying: (i) the number of shares of Common Stock
the Holder will purchase pursuant to such exercise; and (ii) the place and
date for the closing of such purchase, which date shall be not less than
three, nor more than twenty, business days from the date of the delivery of
the Notice ( each a "Closing"). Each Closing shall take place at the principal
executive offices of FGC.
IV. PAYMENT AND DELIVERY OF CERTIFICATES. At each Closing, (i) the Holder
will make payment to FGC of the aggregate Exercise Price per share for the
shares of Common Stock being purchased upon exercise of any Option by bank
cashier's or certified check, and (ii) FGC shall deliver to the Holder a
certificate or certificates representing the number of shares of Common Stock
so purchased in the denominations designated by the Holder. At any such
Closing, the Holder shall deliver a letter to FGC agreeing that the Holder is
purchasing the shares of Common Stock for investment purposes and not with a
view to distribution otherwise than in compliance with the Securities Act of
1933, as amended (the "Securities Act"), and agreeing not to offer to sell,
sell or otherwise dispose of, any of such shares acquired by it pursuant to
this Agreement in violation of the Securities Act or any
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applicable state securities laws.
V. ADJUSTMENTS. In case FGC shall (i) pay a dividend in Common Stock of
FGC or make a distribution in Common Stock, (ii) subdivide its outstanding
Common Stock, (iii) combine its outstanding Common Stock into a smaller number
of shares of Common Stock, or (iv) issue by reclassification of its Common
Stock other securities of FGC, the number of shares of Common Stock
purchasable upon exercise of the Option shall be adjusted so that Holder shall
be entitled to receive the kind and number of shares or other securities of
FGC which it would have owned or would have been entitled to receive after the
happening of any of the events described above had the Option been exercised
immediately prior to the happening of such event or any record date with
respect thereto and the Exercise Price shall also be adjusted to reflect the
happening of any of the events described above.
VI. LEGEND. The Holder consents to the placement of any legend required
by applicable state securities laws and of the following legend on each
certificate representing the Common Stock:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED,
EXCHANGED OR OTHERWISE DISPOSED OF UNLESS (1) A REGISTRATION STATEMENT
UNDER SUCH ACT IS THEN IN EFFECT WITH RESPECT THEREOF, (2) A WRITTEN
OPINION FROM COUNSEL FOR THE ISSUER OR OTHER COUNSEL FOR THE HOLDER
REASONABLY ACCEPTABLE TO THE ISSUER HAS BEEN OBTAINED TO THE EFFECT THAT
NO SUCH REGISTRATION IS REQUIRED, OR (3) A "NO ACTION" LETTER OR ITS THEN
EQUIVALENT HAS BEEN ISSUED BY THE SECURITIES EXCHANGE COMMISSION TO THE
EFFECT THAT NO SUCH REGISTRATION IS REQUIRED IN CONNECTION THEREWITH."
VII. TYPE OF OPTION. This Option is not an "incentive stock option", as
defined in Section 422A of the Internal Revenue Code of 1986, as amended, and
is not being issued pursuant to any plan of FGC, including FGC's 1996 Stock
Option Plan. The Holder shall have no rights as a stockholder of FGC with
respect to shares of Common Stock covered by this
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Option until payment for such shares shall have been made in full and until
the date of the issuance of a stock certificate for such shares.
VIII. REPRESENTATIONS AND WARRANTIES OF FGC. FGC hereby represents and
warrants to the Holder as follows:
(a) FGC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. FGC is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on its
business or properties.
(b) FGC has all requisite corporate power and authority to own the
properties owned by it and to carry on its business as now conducted and has
taken all necessary corporate action to enter into this Agreement. FGC has all
requisite corporate power to grant the Options and to carry out and perform
its obligations under the terms of this Agreement, and all transactions
contemplated hereby.
(c) When issued and paid for in accordance with the terms of this
Agreement, the shares of Common Stock underlying the Option will be duly
authorized, validly issued, fully paid and non-assessable.
(d) Upon delivery of the shares of Common Stock to the Holder upon the
exercise of the Options, the Holder will receive good and marketable title to
such shares free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind arising by, through or under FGC,
other than any restrictions on resales imposed by federal or state securities
laws.
(e) The execution and delivery of this Agreement does not, and the
performance of this Agreement will not, with or without the giving of notice
or the lapse of time, or both, (i) violate the Certificate of Incorporation,
as amended or Amended and Restated By-Laws of FGC, (ii) conflict with or
result in a breach of any terms or provisions of, or constitute a default or
give rise to a right of acceleration or termination under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of FGC under any indenture, mortgage, loan agreement or other
instrument to which FGC is a party or by which any of its property is
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bound, or (iii) violate or require governmental, judicial or regulatory
consent under any existing applicable, law, rule, regulation, judgment, order
or decree of any governmental instrumentality or court having jurisdiction
over FGC or any of its property.
IX. REPRESENTATIONS AND WARRANTIES OF HOLDER. The Holder hereby
represents and warrants to FGC as follows:
IF HOLDER IS A CORPORATION, TRUST OR PARTNERSHIP:
(a) Holder is a corporation, trust or partnership duly formed, validly
existing and in good standing under the laws of its state of organization.
(b) Holder has all requisite power and authority to carry on its business
as it is now being conducted and has taken all necessary action to enter into
this Agreement. Holder has all requisite power to carry out and perform its
obligations under the terms of this Agreement, and all transactions
contemplated hereby.
(c) The execution and delivery of this Agreement does not, and the
performance of this Agreement will not, with or without the giving of notice
or the lapse of time, or both, (i) violate any provision of any law, rule or
regulation to which Holder is subject; (ii) violate any order, judgment or
decree applicable to Holder; or (iii) conflict with or result in a breach of
or a default under any term or condition of Holder's organizational or
operating documents or any agreement or other instrument to which Holder is a
party or by which it or its assets may be bound.
IF AN INDIVIDUAL:
(a) This Agreement has been duly executed and delivered by such Holder
and represents the binding obligation of such Holder.
X. NOTICES. All notices, demands, requests, consents or other
communications ("Notices") which either party may desire or be required to
give to the other hereunder shall be in
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writing and shall be delivered by hand, overnight express carrier, or sent by
registered or certified mail, return receipt requested, postage prepaid, in
either event, addressed to the parties at their respective addresses first
above set forth. A copy of any Notice given by Holder to FGC shall
simultaneously be given in either manner provided above to Squadron, Ellenoff,
Plesent & Xxxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxx, Esq. A copy of any Notice given by FGC or
Purchaser to Holder shall simultaneously be given in either manner provided
above to Xxxx, Xxxxxxxxxxx & Xxxxxx, 000 Xxxx 0xx Xxxxxx, 0xx xxxxx,
Xxxxxxxxxx, Xxxx 00000-0000, Attention: Xxxxx X. Xxxxxx, Esq. Notices given in
the manner aforesaid shall be deemed to have been given three (3) business
days after the day so mailed, the day after delivery to any overnight express
carrier and on the day so delivered by hand. Either party shall have
the right to change its address(es) for the receipt of Notices by giving
Notice to the other party in either manner aforesaid. Any Notice required or
permitted to be given by either party may be given by that party's attorney.
XI. MISCELLANEOUS.
(a) BINDING EFFECT. This Agreement shall be binding upon, and inure
solely to the benefit of, the parties hereto and their respective successors
and assigns, heirs, administrators, and representatives, and shall not be
enforceable by, or inure to the benefit of, any other third party.
(b) NONTRANSFERABLE. The Option granted hereunder may not be transferred,
assigned or otherwise disposed of by the Holder and any such attempt to
transfer the same shall be void ab initio.
(c) CHOICE OF LAW. This Agreement shall be construed in accordance with,
and governed by, the internal law of the State of Delaware (without reference
to its rules as to conflicts of law).
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(d) MODIFICATION. This Agreement may only be modified by a writing signed
by each of the parties hereto.
(e) HEADINGS. The section headings herein are for convenience only and
shall not affect the construction thereof. Unless otherwise indicated,
references to Sections and Articles are to Sections and Articles,
respectively, contained herein.
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts but all such separate counterparts shall constitute but one and
the same instrument; provided that, although executed in counterparts, the
executed signature pages of each such counterpart may be affixed to a single
copy of this Agreement which shall constitute an original.
IN WITNESS WHEREOF, the parties hereto have caused this Stock Option
Agreement to be executed as of the day and year first above written.
FAMILY GOLF CENTERS, INC.
By:______________________
Name:
Title:
______________________
Name:
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