As filed with the Securities and Exchange Commission on July 15, 1998.
Registration Statement 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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TEARDROP GOLF COMPANY
(Exact name of registrant as specified in its charter)
Delaware 57-1056600
- --------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1080 Lousons Road, Union, New Jersey 07083
- ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
1996 Stock Option Plan
Stock options granted to certain officers, consultants and advisors
-------------------------------------------------------------------
(Full title of the plan)
Mr. Rudy A. Slucker
Chairman, President and Chief Executive Officer
1080 Lousons Road
Union, New Jersey 07083
(Name and address of agent for service)
(908) 688-4445
(Telephone number, including area code, of agent for service)
Copy to:
Jeffrey A. Baumel, Esq.
Gibbons, Del Deo, Dolan, Griffinger & Vecchione
One Riverfront Plaza
Newark, New Jersey 07102-5497
(973) 596-4500
Calculation of Registration Fee
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities To Be Price Offering Registration
to be Registered Registered(1) Per Share(2) Price(2) Fee(2)
- --------------------------------------------------------------------------------
Common Stock, $.01
par value per share 1,248,300(3) $10.00 $12,483,000 $3,683
- --------------------------------------------------------------------------------
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended,
this registration statement also covers additional shares of Common Stock
pursuant to the anti-dilution provisions of the Plan.
(2) Estimated in accordance with Rule 457(c) solely for the purposes of
calculating the registration fee, based on the average high and low prices per
share of the Registrant's Common Stock as reported on The Nasdaq SmallCap Market
System on July 9, 1998.
(3) Includes (i) 450,000 shares subject to issuance upon the exercise of
stock options granted or to be granted under the 1996 Stock Option Plan, (ii)
500,000 shares subject to issuance upon the exercise of stock options granted to
an officer of the Company and (iii) 298,300 shares subject to issuance upon the
exercise of stock options granted to certain advisors to the company.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by TearDrop Golf Company (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated by reference in this Registration Statement:
(1) The Company's Annual Report on Form 10-KSB (File No. 000-29014)
filed April 7, 1998 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), Post-effective Amendment No. 2 to
Registration Statement on Form SB-2 (File No. 333-14647) filed April
20, 1998 under the Securities Act of 1933, as amended (the
"Securities Act"), and Quarterly Report on Form 10-QSB (File No.
000-29014) filed May 15, 1998 under the Exchange Act;
(2) The description of the Company's common stock, $.01 par value per
share (the "Common Stock"), contained in the foregoing Registration
Statement; and
(3) All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated
by reference in this Registration Statement and to be a part hereof
from the respective date of filing of such documents. Any statement
contained in a document incorporated by reference herein is modified
or superseded for all purposes to the extent that a statement
contained in this Registration Statement or in any other
subsequently filed document which is incorporated by reference
modifies or replaces such statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
-2-
<PAGE>
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the Delaware General Corporation Law permits a
corporation, by so providing in its certificate of incorporation, to eliminate
or limit director's liability to the corporation and its stockholders for
monetary damages arising out of certain alleged breaches of their fiduciary
duty. Section 102(b)(7) provides that no such limitation of liability may affect
a director's liability with respect to any of the following: (i) breaches of the
director's duty of loyalty to the corporation or its stockholders; (ii) acts or
omissions not made in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) liability for dividends paid or stock
repurchased or redeemed in violation of the Delaware General Corporation Law; or
(iv) any transaction from which the director derived an improper personal
benefit. Section 102(b)(7) does not authorize any limitation on the ability of
the corporation or its stockholders to obtain injunctive relief, specific
performance or other equitable relief against directors.
Article Seven of the Company's Certificate of Incorporation provides that
no director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except that a director shall not be relieved from liability: (a) for any breach
of the director's duty of loyalty to the Company or its stockholders; (b) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (c) under Section 174 of the General Corporation Law
of Delaware; or (d) for any transaction from which the director derived an
improper personal benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description
- ----------- -----------
4.1 1996 Stock Option Plan, as amended
4.2 The Company's Certificate of Incorporation, in
effect as of the date of this Registration
Statement (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement on
Form SB-2 (File No. 333-14647), filed October
23, 1996).
4.3 By-Laws of the Company (incorporated by
reference to Exhibit 3.4 to the Company's
Registration Statement on Form SB-2 (File No.
333-14647), filed October 23, 1996).
4.4 Form of Stock Option Agreement for Advisors.
4.5 Stock Option Agreement between the Company and
Rudy A. Slucker
-3-
<PAGE>
5.1 Opinion of Gibbons, Del Deo, Dolan, Griffinger &
Vecchione.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Rothstein, Kass & Company, P.C.
23.3 Consent of PricewaterhouseCoopers LLP
23.4 Consent of Gibbons, Del Deo, Dolan, Griffinger &
Vecchione (included in Exhibit 5.1)
Item 9. Undertakings.
The Company hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement;
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering;
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Union, State of New Jersey, on this 15th day of
July, 1998.
TEARDROP GOLF COMPANY
By: /s/ Rudy A. Slucker
-------------------------------
Rudy A. Slucker
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Rudy A. Slucker Chairman, President and July 15, 1998
- ------------------------ Chief Executive Officer
Rudy A. Slucker (Principal Executive Officer)
/s/ Joseph Cioni Vice President of Finance July 15, 1998
- ------------------------ and Chief Financial
Joseph Cioni Officer (Principal Financial
and Accounting Officer)
/s/ Fred K. Hochman
- ------------------------ Director July 15, 1998
Fred K. Hochman
/s/ Leslie E. Goodman
- ------------------------ Director July 15, 1998
Leslie E. Goodman
/s/ Bruce H. Nagel, Esq.
- ------------------------ Director July 15, 1998
Bruce H. Nagel, Esq.
/s/ Jeffrey Baker
- ------------------------ Director July 15, 1998
Jeffrey Baker
/s/ John Raos
- ------------------------ Director July 15, 1998
John Raos
-5-
<PAGE>
EXHIBIT INDEX
No. Description Method of Filing
4.1 1996 Stock Option Plan, as Filed with this Registration
Amended Statement
4.2 Certificate of Incorporation Filed by reference to
Exhibit 3.1 to the
Company's Registration
Statement on Form SB-2
(File No. 333-14647) filed
October 23, 1996
4.3 By-Laws Filed by reference to
Exhibit 3.4 to the
Company's Registration
Statement on Form SB-2
(File No. 333-14647) filed
October 23, 1996
4.4 Form of Stock Option Filed with this Registration
Agreement for Advisors Statement
4.5 Stock Option Agreement between Filed with this Registration
the Company and Rudy A. Slucker Statement
5.1 Opinion of Gibbons, Del Filed with this Registration
Deo, Dolan, Griffinger & Statement
Vecchione
23.1 Consent of Ernst & Young LLP Filed with this Registration
Statement
23.2 Consent of Rothstein, Kass Filed with this Registration
& Company, P.C. Statement
23.3 Consent of Filed with this Registration
PricewaterhouseCoopers LLP Statement
23.4 Consent of Gibbons, Del Included in Exhibit 5.1
Deo, Dolan, Griffinger &
Vecchione
Exhibit 4.1
TEARDROP GOLF COMPANY
1996 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the TearDrop Golf Company Stock Option Plan (the "Plan") is
to provide an additional incentive to directors, key employees, independent
contractors, agents and consultants of TearDrop Golf Company (the "Company") to
aid in attracting and retaining directors, employees, independent contractors,
agents and consultants of outstanding ability, and to align their interests with
those of shareholders.
SECTION 2. DEFINITIONS
Unless the context clearly indicates otherwise, the following terms, when
used in this Plan, shall have the meanings set forth in this Section 2.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986 and the rules and
regulations thereunder, as it or they may be amended from time to time.
(c) "Committee" shall mean the full Board, Compensation Committee of the
Board or such other committee as may be designated by the Board. If less than
the full Board, the Committee shall consist of two or more members of the Board
who are not eligible to participate in the Plan, and who otherwise are
"non-employee directors" under Rule 16b-3.
(d) "Date of Exercise" shall mean the earlier of the date on which written
notice of exercise, together with payment in full, is received at the office of
the Secretary of the Company or the date on which such notice and payment are
mailed to the Secretary of the Company at its principal office by certified or
registered mail.
(e) "Director" shall mean a member of the Board of Directors.
(f) "Employee" shall mean any employee or any officer of the Company or
any of its Subsidiaries, or any other person, who is an independent contractor,
agent or consultant of the Company or any of its Subsidiaries, and excluding any
director of the Company who is not otherwise an employee of the Company. For the
purposes of any provision of this Plan relating to Incentive Stock Options, the
term "Employee" shall be limited to mean any employee (as that term is defined
under Code Section 3401(c)) or officer of the Company or any of its
Subsidiaries, but not any person who is merely an independent contractor, agent
or consultant of the Company or any of its subsidiaries.
(g) "Fair Market Value" of the Stock means, for all purposes of the Plan
unless otherwise provided (i) the mean between the high and low sales prices of
the Stock as reported on the National Market System or Small Cap Market of the
National Association of Securities Dealers, Inc., Automated
<PAGE>
Quotation System, or any similar system of automated dissemination of quotations
of securities prices then in common use, if so quoted, or (ii) if not quoted as
described in clause (i), the mean between the high bid and low asked quotations
for the Stock as reported by a the National Quotation Bureau Incorporated or
such other source as the Committee shall determine, or (iii) if the Stock is
listed or admitted for trading on any national securities exchange, the mean
between the high and low sales price, or the closing bid price if no sale
occurred, of the Stock on the principal securities exchange on which the Stock
is listed. In the event that the method for determining the Fair Market Value of
the Stock provided for above shall either be not applicable or not be practical,
in the opinion of the Committee, then the Fair Market Value shall be determined
by such other reasonable method as the Committee, in its discretion, shall
select and apply.
(h) "Grantee" shall mean an Employee granted a Stock Option.
(i) "Granting Date" shall mean the date on which the Committee authorizes
the issuance of a Stock Option for a specified number of shares of Stock to a
specified Employee.
(j) "Incentive Stock Option" shall mean a Stock Option granted under the
Plan which is properly qualified under the provisions of Section 422 of the
Code.
(k) "Nonstatutory Stock Option" shall mean a Stock Option granted within
the Plan which is not an Incentive Stock Option or otherwise qualified under
similar tax provisions.
(l) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
or any rule in replacement thereof.
(m) "Stock" shall mean the Common Stock, par value $.01 per share, of the
Company.
(n) "Stock Option" shall mean an Incentive Stock Option or Nonstatutory
Stock Option granted pursuant to the Plan to purchase shares of Stock.
SECTION 3. SHARES OF STOCK SUBJECT TO THE PLAN
The Company shall reserve 450,000 shares of Stock for issuance upon the
exercise of Stock Options granted pursuant to this Plan. Shares delivered under
the Plan may be authorized and unissued shares or issued shares held by the
Company in its treasury. If any Stock Options expire or terminate without having
been exercised, the shares of Stock covered by such Stock Option shall become
available again for the grant of Stock Options hereunder. Similarly, if any
Stock Options are surrendered for cash pursuant to the provisions of Section 6,
the shares of Stock covered by such Stock Options shall also become available
again for the grant of Stock Options hereunder. Shares of Stock covered by Stock
Options surrendered for Stock pursuant to Section 6, however, shall not become
available again for the grant of Stock Options hereunder.
<PAGE>
SECTION 4. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Committee. Subject to the
express provisions of the Plan, the Committee shall have authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to it,
to determine the terms and provisions of Stock Option grants, and to make all
other determinations necessary or advisable for the administration of the Plan.
(b) It is intended that the Plan and any transaction hereunder meet all of
the requirements of Rule 16b-3 promulgated by the Securities and Exchange
Commission, as such rule is currently in effect or as hereafter modified or
amended, and all other applicable laws. If any provision of the Plan or any
transaction would disqualify the Plan or such transaction under, or would not
comply with, Rule 16b-3 or other applicable laws, such provision or transaction
shall be construed or deemed amended to conform to Rule 16b-3 or such other
applicable laws or otherwise shall be deemed to be null and void, in each case
to the extent permitted by law and deemed advisable by the Committee.
(c) Any controversy or claim arising out of or related to this Plan shall
be determined unilaterally by and at the sole discretion of the Committee.
SECTION 5. GRANTING OF STOCK OPTIONS
(a) Directors, Key Employees, independent contractors, agents and
consultants to the Company shall be eligible to receive Stock Options under the
Plan. Only Employees shall be eligible to receive Incentive Stock Options under
the Plan.
(b) The option price of each share of Stock subject to an Incentive Stock
Option shall be at least 100% of the Fair Market Value of a share of the Stock
on the Granting Date.
(c) The option price of each share of Stock subject to a Nonstatutory
Stock Option shall be 100% of the Fair Market Value of a share of the Stock on
the Granting Date, or such other price either greater than or less than the Fair
Market Value (but in no event less than the par value of the Stock) as the
Committee shall determine appropriate to the purposes of the Plan and to the
Company's total compensation program.
(d) The Committee shall determine and designate from time to time those
persons who are to be granted Stock Options and whether the particular Stock
Options are to be Incentive Stock Options or Nonstatutory Stock Options, and
shall also specify the number of shares covered by and the option price per
share of each Stock Option. Each Stock Option granted under the Plan shall be
clearly identified as to its status as a Nonstatutory Stock Option or an
Incentive Stock Option.
(e) The aggregate Fair Market Value (determined at the time the Stock
Option is granted) of the Stock with respect to which Incentive Stock Options
are exercisable for the first time by any individual during any calendar year
(under all plans of the individual's employer corporation) shall not exceed
$100,000.
(f) A Stock Option shall be exercisable during such period or periods and
in such installments as shall be fixed by the Committee at the time the Stock
Option is granted or in any amendment thereto; but each Stock Option shall
expire not later than ten years from the Granting Date.
<PAGE>
(g) The Committee shall have the authority to grant both transferable
Stock Options and nontransferable Stock Options, and to amend outstanding
nontransferable Stock Options to provide for transferability. Each
nontransferable Stock Option intended to qualify under Rule 16b-3 or otherwise
shall provide by its terms that it is not transferable otherwise than by will or
the laws of descent and distribution or, except in the case of Incentive Stock
Options, pursuant to a "qualified domestic relations order" as defined by the
Code, and is exercisable, during the Grantee's lifetime, only by the Grantee.
Each transferable Stock Option may provide for such limitations on
transferability and exercisability as the Committee may designate at the time a
Stock Option is granted or is otherwise amended to provide for transferability.
(h) Stock Options may be granted to an Employee or Director who has
previously received Stock Options or other options whether such prior Stock
Options or other options are still outstanding, have previously been exercised
or surrendered in whole or in part, or are canceled in connection with the
issuance of new Stock Options.
(i) Notwithstanding the foregoing, the option price of an Incentive Stock
Option in the case of a Grantee who owns more than ten percent of the total
combined voting power of all classes of stock of the Company or any of its
Subsidiaries, will not be less than one-hundred-ten percent (110%) of the Fair
Market Value of the Stock at the Granting date and in the case of such a
Grantee, the Incentive Stock Option may be exercised no more than five years
after the Granting Date.
SECTION 6. EXERCISE OF STOCK OPTIONS
(a) Except as provided in Section 7, no Incentive Stock Option may be
exercised at any time unless the Grantee has been an Employee at all times
during the period beginning on the Granting Date and ending on the day 3 months
before the date of such exercise.
(b) The Grantee shall pay the option price in full on the Date of Exercise
of a Stock Option in cash, by check, or by delivery of full shares of Stock of
the Company, duly endorsed for transfer to the Company with signature
guaranteed, or by any combination thereof. Stock will be accepted at its Fair
Market Value on the Date of Exercise.
(c) Subject to the approval of the Committee, or of such person to whom
the Committee may delegate such authority ("its designee"), and subject further
to the applicable regulations of any governmental authority, the Company may
loan to the Grantee a sum equal to an amount which is not in excess of 100% of
the purchase price of the shares of Stock acquired upon exercise of a Stock
Option, such loan to be evidenced by the execution and delivery of a promissory
note. Interest shall be paid on the unpaid balance of the promissory note at
such times and at such rate as shall be determined by the Committee or its
designee. Such promissory note shall be secured by the pledge to the Company of
shares of Stock having an aggregate purchase price on the date of purchase equal
to or greater than the amount of such note. A Grantee shall have, as to such
pledged shares of Stock, all rights of ownership including the right to vote
such shares of Stock and to receive dividends paid on such shares of Stock,
subject to the security interest of the Company. Such shares of Stock shall not
be released by the Company from the pledge unless the proportionate amount of
the note secured thereby has been repaid to the Company; provided, however that
shares of Stock subject to a pledge may be used to pay all or part of the
purchase price of any other option granted hereunder or under any other stock
incentive plan of the Company under the terms of which the purchase price of an
option may be paid by the surrender of shares of Stock, subject to the terms and
conditions of this Plan relating to the surrender of shares of Stock in payment
of the exercise price of an option. In such event, that number of the newly
purchased
<PAGE>
shares of Stock equal to the shares of Stock previously pledged shall be
immediately pledged as substitute security for the pre-existing debt of the
Grantee to the Company, and thereupon shall be subject to the provisions hereof
relating to pledged shares of Stock. All notes executed hereunder shall be
payable at such times and in such amounts and shall contain such other terms as
shall be specified by the Committee or its designee or stated in the option
agreement; provided, however, that such terms shall conform to requirements
contained in any applicable regulations which are issued by any governmental
authority.
SECTION 7. TERMINATION OF EMPLOYMENT
Except as otherwise provided by the Committee at the time an Incentive
Stock Option is granted or any amendment thereto, if a Grantee ceases to be an
Employee then:
(a) if termination of employment is voluntary or involuntary without
cause, the Grantee may exercise each Stock Option held by the Grantee within
three months after such termination (but not after the expiration date of the
Stock Option) to the extent of the number of shares subject to the Stock Option
which are purchasable pursuant to its terms at the date of termination;
(b) if termination is for cause, all Stock Options held by the Grantee
shall be canceled as of the date of termination;
(c) subject to the provisions of Section 7(d), if termination is (i) by
reason of retirement at a time when the Grantee is entitled to the current
receipt of benefits under any retirement plan maintained by the Company, or (ii)
by reason of disability, each Stock Option held by the Grantee may be exercised
by the Grantee at any time (but not after the expiration date of the Stock
Option) (within one year of termination in the case of Incentive Stock Options)
to the extent of the number of shares subject to the Stock Option which were
purchasable pursuant to its terms at the date of termination;
(d) if termination is by reason of the death of the Grantee, or if the
Grantee dies after retirement or disability as referred to in Section 7(c), each
Stock Option held by the Grantee may be exercised by the Grantee's estate, or by
any person who acquires the right to exercise the Stock Option by reason of the
Grantee's death, at any time within a period of three years after death (but not
after the expiration date of the Stock Option) to the extent of the total number
of shares subject to the Stock Option which were purchasable pursuant to its
terms at the date of termination; or
(e) if the Grantee should die within three months after voluntary
termination of employment or involuntary termination without cause, as
contemplated in Section 7(a), each Stock Option held by the Grantee may be
exercised by the Grantee's estate, or by any person who acquires the right to
exercise by reason of the Grantee's death, at any time within a period of one
year after death (but not after the expiration date of the Stock Option) to the
extent of the number of shares subject to the Stock Option which were
purchasable pursuant to its terms at the date of termination.
<PAGE>
SECTION 8. ADJUSTMENTS
In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure or capitalization affecting the Stock, there shall be an appropriate
adjustment made by the Committee in the number and kind of shares that may be
granted in the aggregate and to Grantees under the Plan, the number and kind of
shares subject to each outstanding Stock Option and the option prices.
SECTION 9. GENERAL PROVISIONS
(a) Each Stock Option shall be evidenced by a written instrument
containing such terms and conditions, not inconsistent with this Plan, as the
Committee shall approve.
(b) The granting of a Stock Option in any year shall not give the Grantee
any right to similar grants in future years. The granting of a Stock Option in
any year shall not give the Grantee any right to be retained in the employ of
the Company or interfere in any way with the right of the Company to terminate
an Employee's employment at any time.
(c) The Company shall have the right to deduct from any payment or
distribution under the Plan any federal, state or local taxes of any kind
required by law to be withheld with respect to such payments or to take such
other action as may be necessary to satisfy all obligations for the payment of
such taxes. In case distributions are made in shares of Stock, the Company shall
have the right to retain the value of sufficient shares of Stock to equal the
amount of tax to be withheld for such distributions or require a recipient to
pay the Company for any such taxes required to be withheld on such terms and
conditions prescribed by the Committee.
(d) No Grantee shall have any of the rights of a shareholder by reason of
a Stock Option until it is exercised.
(e) This Plan shall be construed and enforced in accordance with the laws
of the State of Delaware (without regard to the legislative or judicial conflict
of laws rules of any state), except to the extent superseded by federal law.
SECTION 10. AMENDMENT AND TERMINATION
(a) The Plan shall terminate on October 17, 2006 and no Stock Option shall
be granted hereunder after that date, provided that the Board may terminate the
Plan at any time prior thereto.
(b) The Board may amend the Plan at any time without notice, provided
however, that the Board may not, without prior approval by the shareholders, (i)
increase the maximum number of shares of Stock for which Stock Options may be
granted, (ii) materially increase the benefits accruing to participants under
the Plan or (iii) materially modify the requirements as to eligibility for
participation in the Plan.
(c) No termination or amendment of the Plan may, without the consent of a
Grantee to whom a Stock Option shall theretofore have been granted, adversely
affect the rights of such Grantee under such Stock Option.
<PAGE>
SECTION 11. EFFECTIVE DATE AND SHAREHOLDERS' APPROVAL
The Plan shall become effective as of October 18, 1996, subject to its
approval by the affirmative votes of the holders of a majority of the securities
of the Company present, or represented, and entitled to vote thereon at the next
meeting of shareholders of the Company or any adjournment or postponement
thereof. Before such approval, Stock Options may be granted under the Plan
expressly subject to such approval.
STOCK OPTION AGREEMENT
WITH TOURING PROFESSIONAL GOLFERS
STOCK OPTION AGREEMENT dated as of _______________ between TEARDROP GOLF
COMPANY, a Delaware corporation (the "Company") and _________________
(hereinafter referred to as the "Optionee").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to the Optionee Options (the
"Options") to purchase the number of shares (the "Shares") of Common Stock of
the Company, $.01 par value per share (the "Common Stock") set forth in one or
more Option Certificates (the "Option Certificate") delivered and to be
delivered pursuant to this Agreement shall be in the form set forth in Exhibit A
attached hereto and made a part hereof, with such appropriate insertions,
omissions, substitutions and other variations as required or permitted by this
Agreement; and
NOW, THEREFORE, in consideration of the agreements herein set forth and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Optionee is hereby granted the right to purchase, at any
time during the periods set forth in the Option Certificate (the "Option
Exercise Term"), such number of Shares at an initial exercise price (subject to
adjustment as provided in Article 7 hereof) also set forth in an Option
Certificate.
2. Exercise of Options. The Options are exercisable at a price per share
of Common as set forth in an Option Certificate payable in cash or by check to
the order of the Company, or any combination of cash or check, subject to
adjustment as provided in Article 6 hereof. Upon surrender of the Option
Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price (as hereinafter defined) for the
Shares at the Company's principal executive offices, the registered holder of a
Option Certificate ("Holder") shall be entitled to receive a certificate or
certificates for the Shares so purchased. The purchase rights represented by
each Option Certificate are exercisable at the option of the Holder hereof, in
whole or in part (but not as to fractional Shares). In the case of the purchase
of less than all the Shares, the Company shall cancel said Option Certificate
upon the surrender thereof and shall execute and deliver a new Option
Certificate of like tenor for the balance of the Shares.
3. Issuance of Certificates. Upon the exercise of the Options, the
issuance of certificates for the Shares purchased shall be made promptly without
charge to the Holder thereof including, without limitation, any tax which may be
payable in respect of the issuance thereof, and such certificates shall (subject
to the provisions of Article 4 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that the
<PAGE>
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Option Certificates and the certificates representing the Shares shall
be executed on behalf of the Company by the manual or facsimile signature of the
present or any future Chairman or Vice Chairman of the Board of Directors or
President or Vice President of the Company under its corporate seal reproduced
thereon, attested to by the manual or facsimile signature of the present or any
future Secretary or Assistant Secretary of the Company. Option Certificates
shall be dated the date of execution by the Company upon initial issuance,
division, exchange, substitution or transfer.
Upon exercise, in part or in whole, of the Options, certificates
representing the Shares purchased (collectively, the "Option Securities"), shall
bear a legend substantially similar to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be offered or sold except (i) pursuant to
an effective registration statement under the Act, (ii) to the
extent applicable, pursuant to Rule 144 under the Act (or any
similar rule under such Act relating to the disposition of
securities), or (iii) upon the delivery by the holder to the
Company of an opinion of counsel, reasonably satisfactory to
counsel to the Company, stating that an exemption from
registration under such Act is available."
4. Restriction on Transfer of Options. The Holder of a Option Certificate,
by his acceptance thereof, covenants and agrees that the Options are being
acquired as an investment and not with a view to the distribution thereof, and
that the Options may not be sold, transferred, assigned, hypothecated or
otherwise disposed of, in whole or in part.
5. Price.
5.1. Initial and Adjusted Exercise Price. The initial exercise price of
each Option shall be the Exercise Price set forth on the Option Certificate. The
adjusted exercise price shall be the price which shall result from time to time
from any and all adjustments of the initial exercise price in accordance with
the provisions of Article 6 hereof.
5.2. Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
2
<PAGE>
6. Adjustments of Exercise Price and Number of Securities. The following
adjustments apply to the Exercise Price of the Options with respect to the
Shares and the number of Shares purchasable upon exercise of the Options. In the
event the Exercise Price per Share and/or the number of Shares so purchasable is
adjusted, then the Exercise Price of the Options shall be adjusted in the same
proportion.
6.1. Computation of Adjusted Price. In case the Company shall at any time
after the date hereof pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, then upon such dividend or distribution
the Exercise Price in effect immediately prior to such dividend or distribution
shall forthwith be reduced to a price determined by dividing:
(a) an amount equal to the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution multiplied by the
Exercise Price in effect immediately prior to such dividend or distribution, by
(b) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with
the provisions of this Section 6.1, the Common Stock issuable by way of dividend
or other distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the date following the date
fixed for the determination of stockholders entitled to receive such dividend or
other distribution.
6.2. Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
6.3. Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Article 6, the number of
Shares issuable upon the exercise of each Option shall be adjusted to the
nearest full number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Shares issuable
upon exercise of the Options immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.
6.4. Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger in which the Company is the surviving corporation
and which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or in the
case of a sale or conveyance to another corporation
3
<PAGE>
of the property of the Company as an entirety, the Board of Directors, at its
discretion, shall use its best efforts to provide for preservation of such
rights of a Holder as it deems practiable.
6.5. Determination of Outstanding Shares of Common Stock. The number of
shares of Common Stock at any one time outstanding shall include the aggregate
number of shares issued or issuable upon the exercise of options, rights,
Options and upon the conversion or exchange of convertible or exchangeable
securities.
7. Replacement of Option Certificates. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Option Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Options, if mutilated, the Company will
make and deliver a new Option Certificate of like tenor, in lieu thereof.
8. Elimination of Fractional Interests.
The Company shall not be required to issue certificates representing
fractions of Shares upon the exercise of the Options, nor shall it be required
to issue scrip or pay cash in lieu of fractional interests, it being the intent
of the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of Shares.
9. Reservation and Listing of Securities.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Options, such number of shares of Common Stock as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Options and payment of the Exercise Price therefor, all Shares
issuable upon such exercise shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any shareholder.
10. Notices to Option Holders.
Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Options and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
4
<PAGE>
(b) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; or
(d) reclassification or change of the outstanding shares of Common
Stock (other than a change in par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), consolidation of the
Company with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or a sale or
conveyance to another corporation of the property of the Company as an entirety
is proposed; or
(e) The Company or an affiliate of the Company shall propose to
issue any rights to subscribe for shares of Common Stock or any other securities
of the Company or of such affiliate to all the shareholders of the Company;
then, in any one or more of said events, the Company shall give written notice
to the Holder or Holders of such event at least five (5) business days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the shareholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, options or
Options, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to give such notice or any
defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend or distribution, or the
issuance of any convertible or exchangeable securities or subscription rights,
options or Options, or any proposed dissolution, liquidation, winding up or
sale.
11. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
(f) If to a registered Holder of the Options, to the address of such
Holder as shown on the books of the Company; or
(g) If to the Company, to its corporate headquarters or to such
other address as the Company may designate by notice to the Holders.
12. Supplements and Amendments.
5
<PAGE>
The Company and the Optionee may from time to time supplement or
amend this Agreement without the approval of any Holders of the Options and/or
Option Securities in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Optionee may deem
necessary or desirable and which the Company and the Optionee deem not to
adversely affect the interests of the Holders of Option Certificates.
13. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
14. Governing Law.
This Agreement and each Option Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of New Jersey and for
all purposes shall be construed in accordance with the laws of said State.
15. Benefits of This Agreement.
Nothing in this Agreement shall be construed to give to any person
or corporation other than the Company and the Optionee and any other registered
holder or holders of the Option Certificates any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be for the sole
and exclusive benefit of the Company and the Optionee and any other holder or
holders of the Option Certificates.
16. Counterparts.
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
TEARDROP GOLF COMPANY
By:
-----------------------------------------
Rudy A. Slucker
President and Chief Executive Officer
6
<PAGE>
OPTIONEE
--------------------------------
7
<PAGE>
EXHIBIT A
_______ Shares
THE SECURITIES ISSUABLE UPON EXERCISE OF STOCK OPTIONS ISSUED PURSUANT TO
THE STOCK OPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT
APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH
ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY
THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO
COUNSEL FOR THE COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT IS AVAILABLE.
TEARDROP GOLF COMPANY
Stock Option Certificate
TearDrop Golf Company (the "Company"), a Delaware Corporation, hereby
grants to the person named below an option to purchase shares of Common Stock,
par value $.01 per share, of the Company (the "Option") under and subject to the
Stock Option Agreement between the Company and ______________ (the "Agreement")
exercisable on the following terms and conditions and those set forth in
connection with this certificate:
Name of Optionee:
---------------------------------------------------------
Address:
---------------------------------------------------------
---------------------------------------------------------
Social Security No.:
---------------------------------------------------------
Number of Shares:
---------------------------------------------------------
Option Price:
---------------------------------------------------------
Date of Grant:
---------------------------------------------------------
Exercisability Schedule
-----------------------
Exercise Period
---------------
Number of Shares Subject to Option Commencement Expiration Date
---------------------------------- ------------ ---------------
Date
----
The Option shall not be treated as an Incentive Stock Option under section
422 of the Internal Revenue Code of 1986, as amended. By acceptance of this
Option, the Optionee agrees to the terms and conditions hereof.
<PAGE>
TEARDROP GOLF COMPANY
Stock Option Terms And Conditions
1. Agreement Incorporated by Reference. This Option is issued pursuant to
the terms of the Stock Option Agreement (the "Agreemenet) between TearDrop Golf
Company, a Delaware corporation (the "Company) and Rudy A. Slucker. Capitalized
terms used and not otherwise defined in this certificate have the meanings given
to them in the Agreement. This certificate does not set forth all of the terms
and conditions of the Agreement, which are incorporated herein by reference.
2. Option Price. The price to be paid for each share of Common Stock
issued upon exercise of the whole or any part of this Option is the Option Price
set forth on the face of this certificate.
3. Exercisability Schedule. This Option may be exercised at any time and
from time to time for the number of shares and in accordance with the Agreement.
This Option may not be exercised as to any shares after the Expiration Date.
4. Method of Exercise. To exercise this Option, the Optionholder shall
deliver written notice of exercise to the President of the Company specifying
the number of shares with respect to which the Option is being exercised
accompanied by payment of the Option Price for such shares in cash or by
certified check. Promptly following such notice, the Company will deliver to the
Optionee a certificate representing the number of shares with respect to which
the Option is being exercised.
5. Rights as a Stockholder. The Optionee shall not have any rights as a
stockholder of the Company in respect of shares as to which the Option shall not
have been exercised and payment made as provided above.
6. Recapitalization, Mergers, Etc. As provided in the Agreement, in the
event of certain corporate transactions affecting the Company's outstanding
Common Stock, the number and kind of shares subject to this Option and the
exercise price hereunder Committee shall be adjusted.
7. Compliance with Securities Laws. It shall be a condition to the
Optionee's right to purchase shares of Common Stock hereunder that the Company
may, in its discretion, require (a) in the opinion of counsel for the Company,
the proposed purchase shall be exempt from registration under that Act and the
Optionee shall have made such undertakings and agreements with the Company as
the Company may reasonably require, and (b) that such other steps, if any, as
counsel for the Company shall consider necessary to comply with any law
applicable to the issue of such shares by the Company shall have been taken by
the Company or the Optionee, or both. The certificates representing the shares
purchased under this Option may contain such legends as counsel for the Company
shall consider necessary to comply with any applicable law.
8. Payment of Taxes. The Optionee shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
with respect to the exercise of this Option.
<PAGE>
TEARDROP GOLF COMPANY
By:
-----------------------------------------
Rudy A. Slucker
President and Chief Executive Officer
ACCEPTED:
- -----------------------------------------
<PAGE>
EXHIBIT B
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Option Certificate, to purchase _________ Shares of Common
Stock and herewith tenders in payment for such securities, cash or a certified
or official bank check payable to the order of TearDrop Golf Company in the
amount of $_____________, all in accordance with the terms of that Stock Option
Agreement dated as of ____________. The undersigned requests that a certificate
for such securities be registered in the name of _________________________,
whose address is _________________________________.
Date: Signature:________________________________ *
_________________________________
(Insert Social Security or Other
Identifying Number of Holder)
* Signature must conform in all respects
to name of holder as specified on the
face of the Option Certificate.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of October 21, 1996 between TEARDROP GOLF
COMPANY, a Delaware corporation (the "Company") and RUDY A. SLUCKER (hereinafter
referred to as the "Optionee").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue stock options (the "Options") to
Optionee to purchase 250,000 shares (the "Shares") of Common Stock of the
Company, $.01 par value per share (the "Common Stock"); and
NOW, THEREFORE, in consideration of the agreements herein set forth and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Optionee is hereby granted the right to purchase, at any
time from October 21, 1996 until October 20, 2001 at 5:00 p.m., New York time
(the "Option Exercise Term"), 250,000 Shares at an initial exercise price
(subject to adjustment as provided in Article 7 hereof) of $4.50 per Share.
2. Option Certificate. An option certificate (the "Option Certificate")
shall be delivered to Optionee pursuant to this Agreement in the form set forth
in Exhibit A attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement
3. Exercise of Options. The Options are exercisable at a price of $4.50
per share of Common Stock payable in cash or by certified check to the order of
the Company, subject to adjustment as provided in Article 7 hereof. Upon
surrender of the Option Certificate with the Form of Election, attached hereto
as Exhibit B, duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Shares at the Company's principal executive
offices, the registered holder of the Option Certificate ("Holder") shall be
entitled to receive a certificate or certificates for the Shares so purchased.
The purchase rights represented by each Option Certificate are exercisable at
the option of the Holder hereof, in whole or in part (but not as to fractional
Shares). In the case of the purchase of less than all the Shares, the Company
shall cancel said Option Certificate upon the surrender thereof and shall
execute and deliver a new Option Certificate of like tenor for the balance of
the Shares.
4. Issuance of Certificates. Upon the exercise of the Options, the
issuance of certificates for the Shares purchased shall be made forthwith (and
in any event within three business days thereafter) without charge to the Holder
thereof including, and such certificates shall (subject to the provisions of
Article 5 hereof) be issued in the name of, or in such names as may be directed
by, the Holder thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance
<PAGE>
and delivery of any such certificates and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Option Certificate and the certificates representing the Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman or Vice Chairman of the Board of Directors
or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the
present or any future Secretary or Assistant Secretary of the Company.
Upon exercise, in part or in whole, of the Options, certificates
representing the Shares purchased (collectively, the "Option Securities"), shall
bear a legend substantially similar to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
and may not be offered or sold except (i) pursuant to an effective
registration statement under the Act, (ii) to the extent applicable,
pursuant to Rule 144 under the Act (or any similar rule under such
Act relating to the disposition of securities), or (iii) upon the
delivery by the holder to the Company of an opinion of counsel,
reasonably satisfactory to counsel to the Company, stating that an
exemption from registration under such Act is available."
5. Restriction on Transfer of Options. The Holder of the Option
Certificate, by its acceptance thereof, covenants and agrees that the Options
are being acquired as an investment and not with a view to the distribution
thereof.
6. Price.
6.1. Initial and Adjusted Exercise Price. The initial exercise price
of each Option shall be $4.50 per Share. The adjusted exercise price shall be
the price which shall result from time to time from any and all adjustments of
the initial exercise price in accordance with the provisions of Article 7
hereof.
6.2. Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
7. Adjustments of Exercise Price and Number of Securities. The following
adjustments apply to the Exercise Price of the Options with respect to the
Shares and the number of Shares purchasable upon exercise of the Options. In the
event the Exercise Price per Share and/or the number of Shares so purchasable is
adjusted, then the Exercise Price of the Options shall be adjusted in the same
proportion.
2
<PAGE>
7.1. Computation of Adjusted Price. In case the Company shall at any
time after the date hereof pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, then upon such dividend or distribution
the Exercise Price in effect immediately prior to such dividend or distribution
shall forthwith be reduced to a price determined by dividing:
(a) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution multiplied
by the Exercise Price in effect immediately prior to such dividend or
distribution, by
(b) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance
with the provisions of this Section 7.1, the Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the date following
the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution.
7.2. Subdivision and Combination. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
7.3. Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Article 7, the number of
Shares issuable upon the exercise of each Option shall be adjusted to the
nearest full number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Shares issuable
upon exercise of the Options immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.
7.4. Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger in which the Company is the surviving corporation
and which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or in the
case of a sale or conveyance to another corporation of the property of the
Company as an entirety, the Holder shall thereafter have the right to purchase
the kind and number of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holder were the owners of the Shares immediately prior to
any such events, at a price equal to the product of (x) the number of shares of
Common Stock issuable upon exercise of the Holder's Options and (y) the Exercise
Price in effect immediately prior to the record date for such reclassification,
change, consolidation, merger, sale or conveyance as if such Holder had
exercised the Options.
3
<PAGE>
7.5. Determination of Outstanding Shares of Common Stock. The number
of shares of Common Stock at any one time outstanding shall include the
aggregate number of shares issued or issuable upon the exercise of options,
rights and upon the conversion or exchange of convertible or exchangeable
securities.
8. Replacement of Option Certificates. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Option Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Option, if mutilated, the Company will
make and deliver a new Option Certificate of like tenor, in lieu thereof.
9. Elimination of Fractional Interests.
The Company shall not be required to issue certificates representing
fractions of Shares upon the exercise of the Option, nor shall it be required to
issue scrip or pay cash in lieu of fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of Shares.
10. Reservation of Securities.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Option, such number of shares of Common Stock as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Options and payment of the Exercise Price therefor, all Shares
issuable upon such exercise shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any shareholder.
11. Rights of Option Holder.
Nothing contained in this Agreement shall be construed as conferring
upon the Holder the right to vote or to consent or to receive notice as a
shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company.
12. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
(a) If to Optionee, to the address of the Optionee as shown on the
books of the Company; or
4
<PAGE>
(b) If to the Company, to the address of the Company's principal
executive officers or such address as the Company may designate.
13. Supplements and Amendments.
The Company and the Optionee may from time to time supplement or
amend this Option Agreement without the approval of any Holder of the Option
Certificate in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Optionee may deem
necessary or desirable and which the Company and the Optionee deem not to
adversely affect the interests of the Holder of the Option Certificate.
14. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Optionee inure to the benefit of their respective
successors and assigns hereunder.
15. Governing Law.
This Agreement and each Option Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for all
purposes shall be construed in accordance with the laws of said State.
16. Counterparts.
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and such counterparts shall together constitute but one and the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
TEARDROP GOLF COMPANY
By: /s/ Fred Hochman
------------------------------
Name: Fred Hochman
Title:
OPTIONEE
/s/ Rudy A. Slucker
-------------------
Rudy A. Slucker
6
<PAGE>
EXHIBIT A
__________ Shares
THE SECURITIES ISSUABLE UPON EXERCISE OF STOCK OPTIONS ISSUED PURSUANT TO
THE STOCK OPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT
APPLICABLE, PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH
ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY
THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO
COUNSEL FOR THE COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT IS AVAILABLE.
TEARDROP GOLF COMPANY
Stock Option Certificate
TearDrop Golf Company (the "Company"), a Delaware Corporation, hereby
grants to the person named below an option to purchase shares of Common Stock,
par value $.01 per share, of the Company (the "Option") under and subject to the
Stock Option Agreement between the Company and ______________ (the "Agreement")
exercisable on the following terms and conditions and those set forth in
connection with this certificate:
Name of Optionee:
---------------------------------------------------------
Address:
---------------------------------------------------------
---------------------------------------------------------
Social Security No.:
---------------------------------------------------------
Number of Shares:
---------------------------------------------------------
Option Price:
---------------------------------------------------------
Date of Grant:
---------------------------------------------------------
Exercisability Schedule
-----------------------
Exercise Period
---------------
Number of Shares Subject to Option Commencement Expiration Date
---------------------------------- ------------ ---------------
Date
----
The Option shall not be treated as an Incentive Stock Option under section
422 of the Internal Revenue Code of 1986, as amended. By acceptance of this
Option, the Optionee agrees to the terms and conditions hereof.
<PAGE>
TEARDROP GOLF COMPANY
Stock Option Terms And Conditions
1. Agreement Incorporated by Reference. This Option is issued pursuant to
the terms of the Stock Option Agreement (the "Agreemenet) between TearDrop Golf
Company, a Delaware corporation (the "Company) and Rudy A. Slucker. Capitalized
terms used and not otherwise defined in this certificate have the meanings given
to them in the Agreement. This certificate does not set forth all of the terms
and conditions of the Agreement, which are incorporated herein by reference.
2. Option Price. The price to be paid for each share of Common Stock
issued upon exercise of the whole or any part of this Option is the Option Price
set forth on the face of this certificate.
3. Exercisability Schedule. This Option may be exercised at any time and
from time to time for the number of shares and in accordance with the Agreement.
This Option may not be exercised as to any shares after the Expiration Date.
4. Method of Exercise. To exercise this Option, the Optionholder shall
deliver written notice of exercise to the President of the Company specifying
the number of shares with respect to which the Option is being exercised
accompanied by payment of the Option Price for such shares in cash or by
certified check. Promptly following such notice, the Company will deliver to the
Optionee a certificate representing the number of shares with respect to which
the Option is being exercised.
5. Rights as a Stockholder. The Optionee shall not have any rights as a
stockholder of the Company in respect of shares as to which the Option shall not
have been exercised and payment made as provided above.
6. Recapitalization, Mergers, Etc. As provided in the Agreement, in the
event of certain corporate transactions affecting the Company's outstanding
Common Stock, the number and kind of shares subject to this Option and the
exercise price hereunder Committee shall be adjusted.
7. Compliance with Securities Laws. It shall be a condition to the
Optionee's right to purchase shares of Common Stock hereunder that the Company
may, in its discretion, require (a) in the opinion of counsel for the Company,
the proposed purchase shall be exempt from registration under that Act and the
Optionee shall have made such undertakings and agreements with the Company as
the Company may reasonably require, and (b) that such other steps, if any, as
counsel for the Company shall consider necessary to comply with any law
applicable to the issue of such shares by the Company shall have been taken by
the Company or the Optionee, or both. The certificates representing the shares
purchased under this Option may contain such legends as counsel for the Company
shall consider necessary to comply with any applicable law.
8. Payment of Taxes. The Optionee shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
with respect to the exercise of this Option.
<PAGE>
TEARDROP GOLF COMPANY
By: /s/ Fred Hochman
------------------------
ACCEPTED:
/s/ Rudy A. Slucker
- -------------------------------
<PAGE>
EXHIBIT B
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Option Certificate, to purchase _________ Shares of Common
Stock and herewith tenders in payment for such securities, cash or a certified
or official bank check payable to the order of TearDrop Golf Company in the
amount of $_____________, all in accordance with the terms of that Stock Option
Agreement dated as of ____________. The undersigned requests that a certificate
for such securities be registered in the name of _________________________,
whose address is _________________________________.
Date: Signature:
-------------------------------*
--------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
* Signature must conform in all respects to
name of holder as specified on the face of
the Option Certificate.
Exhibit 5.1
[LETTERHEAD OF GIBBONS, DEL DEO, DOLAN, GRIFFINGER & VECCHIONE]
July 15, 1998
TearDrop Golf Company
1080 Lousons Road
Union, New Jersey 07083
Re: TearDrop Golf Company
Gentlemen:
We have acted as counsel to TearDrop Golf Company (the "Company") in
connection with all proceedings relating to the authorization and proposed
issuance and sale by you of shares of common stock, $.01 par value per share
("Common Stock") upon the exercise of stock options granted pursuant to 1996
Stock Option Plan, as amended (the "1996 Plan"), and under stock option
agreements between the Company and Rudy A. Slucker and certain advisors of the
Company (the "Additional Options") as described in the Registration Statement on
Form S-8 (the "Registration Statement"), filed by you with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act").
Based upon our examination of such documents and proceedings as we
have deemed necessary and pertinent, we are of the opinion that:
1. Tear Drop Golf Company (the "Company") is a corporation duly organized
and existing under the laws of the State of Delaware;
2. The 1996 Plan has been duly authorized and approved by the Board of
Directors and the stockholders of the Company;
3. The shares of Common Stock reserved by the Board of Directors of the
Company for issuance upon the exercise of stock options granted under the 1996
Plan have been duly authorized;
4. The shares of Common Stock reserved by the Board of Directors for
issuance upon the exercise of the Additional Options have been duly authorized.
5. When the shares of Common Stock are issued upon the due exercise of
stock options granted in accordance with the 1996 Plan and upon exercise of the
Additional Options, such shares of Common Stock will be duly and validly issued
and outstanding and will be fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Gibbons, Del Deo, Dolan, Griffinger & Vecchione
GIBBONS, DEL DEO, DOLAN,
GRIFFINGER & VECCHIONE
A Professional Corporation
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1996 Stock Option Plan of TearDrop Golf Company of
our report dated March 31, 1998, with respect to the financial statements of
TearDrop Golf Company included in its Annual Report (Form 10-KSB) for the year
ended December 31, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Chicago, Illinois
July 13, 1998
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of TearDrop Golf Company on Form S-8 (1996 Stock Option Plan) of our report
dated January 31, 1997, on our audit of the statements of operations,
stockholders' equity, and cash flows of TearDrop Golf Company for the year ended
December 31, 1996.
/s/ Rothstein, Kass & Company, P.C.
Roseland, New Jersey
July 15, 1998
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 8, 1998, relating to the
combined financial statements of Tommy Armour Golf Company as of September 30,
1997 and 1996 and for the three years ended September 30, 1997, appearing on
page F-23 of TearDrop Golf Company's Annual Report on Form 10-KSB for the year
ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Chicago, Illinois
July 13, 1998
