As filed with the Securities and Exchange Commission
on November 30, 1998
Registration No. 333-______
_________________________________________________________________
_________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
___________
ADAMS GOLF, INC.
(Exact name of Registrant as specified in its charter)
Delaware 75-2320087
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
___________
300 Delaware Avenue, Suite 548
Wilmington, Delaware 19801
(Address of Principal Executive Offices) (Zip Code)
__________
Adams Golf, Inc. 1998 Stock Incentive Plan
(Full title of the plan)
___________
B. H. (Barney) Adams Copy to:
Chief Executive Officer Joseph A. Hoffman
300 Delaware Avenue, Suite 548 Arter & Hadden LLP
Wilmington, Delaware 19801 1717 Main Street, Suite 4100
(Name and address of agent for service Dallas, Texas 75201
214-761-2100
302-427-5892
(Telephone number, including
area code, of agent for service)
__________
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Securities be Maximum Maximum Registration
to be Registered Offering Aggregate Fee
Registered Price Per Offering
Share (1) Price
- ---------------- ---------- --------- --------- ------------
Common Stock 1,800,000 $4.00 $7,200,000 $2,001.60
Par Value $.001
- --------------
(1) Based upon the average of the high and low sales prices of
the Common Stock on the Nasdaq Stock Market's National Market on
November 24, 1998; determined in accordance with Rules 457(c) and
(h) solely for the purpose of determining the amount of the
registration fee.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents and reports filed by Adams Golf,
Inc. (the "Company") with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) The Company's prospectus filed with the Commission
pursuant to Rule 424(b) on July 13, 1998 in connection with the
Company's Registration Statements on Form S-1 (File Nos. 333-
51715, 333-58917), including the exhibits thereto;
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 (File No. 0-24583);
(c) The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998 (File No. 0-24583); and
(d) The description of the Company's Common Stock contained
in the Company's Registration Statement on Form 8-A (file No. 000-
24583), including any amendment or report filed for the purpose
of updating such description.
All documents filed after the date of the filing of this
Registration Statement by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, 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 herein by reference and to be a part hereof
from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Article VII of the Company's Certificate of Incorporation
provides that the Company shall indemnify its directors and
officers to the fullest extent permitted by the Delaware General
Corporation Law ("DGCL").
Section 145 of the DGCL permits a corporation, under
specified circumstances, to indemnify its directors, officers,
employees or agents against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlements actually and
reasonably incurred by them in connection with any action, suit
or proceeding brought by third parties by reason of the fact that
they were or are directors, officers, employees or agents of the
corporation, if such directors, officers, employees or agents
acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. In a
derivative action (i.e., one by or in the right of the
corporation), indemnification may be made only for expenses
actually and reasonably incurred by directors, officers,
employees or agents in connection with the defense or settlement
of an action or suit, and only with respect to a matter as to
which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests
of the corporation, except that no indemnification shall be made
if such persons shall have been adjudged liable to the
corporation, unless and only to the extent that the court in
which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees
or agents are fairly and reasonably entitled to indemnity for
such expenses, despite such adjudication of liability.
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<PAGE>
Section 102(b)(7) of the DGCL permits a corporation
organized under Delaware law to eliminate or limit the personal
liability of a director to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director
subject to certain limitations. Article IX of the Certificate of
Incorporation includes the following provision:
A director of this corporation shall not be personally
liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the DGCL or (iv) for any transaction
from which the director derived an improper personal
benefit. If the DGCL is hereafter amended to authorize
corporate action further eliminating or limiting the
personal liability of directors, then the liability of a
director of the corporation shall be eliminated or limited
to the fullest extent permitted by the DGCL, as so amended.
Any repeal or modification of the foregoing provisions of
this Article IX by the stockholders of the corporation shall
not adversely affect any right or protection of a director
of the corporation existing at the time of such repeal or
modification.
Section 14 of the Plan provides for indemnification of the
Board of Directors of the Company or the members of the committee
appointed by the Board to administer the Plan as follows:
Each person who is or shall have been a member of the
Committee or of the Board shall be indemnified and held
harmless by the Corporation against and from any loss, cost,
liability or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any
claim, action, suit or proceeding to which he may be a party
or in which he may be involved by reason of any action taken
or failure to act under this Plan and against and from any
and all amounts paid by him in settlement thereof, with the
Corporation's approval, or paid by him in satisfaction of
any judgment in any such action, suit or proceeding against
him, provided he shall give the Corporation an opportunity,
at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons
may be entitled under the Corporation's Certificate of
Incorporation or Code of Regulations, as a matter of law, or
otherwise, or any power that the Corporation may have to
indemnify them or hold them harmless.
The Company has purchased directors and officers liability
insurance that provides coverage for directors and officers with
respect to certain liabilities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Adams Golf, Inc. 1998 Stock Incentive Plan (filed as
Exhibit 4.1 to the Company's Registration Statement on
Form S-1 as filed on May 4, 1998, File No. 333-51715),
incorporated herein by reference.
4.2 Forms of Stock Option Agreements to be used in
connection with the Adams Golf, Inc. 1998 Stock
Incentive Plan (filed herewith).
5.1 Opinion of Arter & Hadden LLP
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Arter & Hadden LLP (included in Exhibit 5.1)
Item 9. Undertakings.
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<PAGE>
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the
prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the registration statement; (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in the registration statement or any
material change to such information in the registration
statement; provided, however, that clauses (i) and (ii) do not
apply if the information required to be included in a post-
effective amendment by those clauses is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any securities being registered which remain
unsold at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant 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 Plano, State of Texas on this 30th day of November,
1998.
ADAMS GOLF, INC.
By: /s/ DARL P. HATFIELD
--------------------------------
Darl P. Hatfield
Senior Vice President-Finance
and Administration and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by or on behalf of
the following persons in the capacities indicated and on the
dates indicated.
Signatures Titles Date
- ---------- ------ ----
/s/ B.H. (BARNEY) ADAMS Chairman of the Board, November 30, 1998
- ------------------------ Chief Executive Officer and
B. H. (Barney) Adams President (principal
executive officer)
/s/ DARL P. HATFIELD Senior Vice November 30, 1998
- ------------------------ President-Finance and
Darl P. Hatfield Administration and Chief
Financial Officer
(principal financial and
accounting officer)
/s/ RICHARD H. MURTLAND Vice President-Research and November 30, 1998
- ------------------------ Development, Secretary,
Richard H. Murtland Treasurer and Director
/s/ PAUL F. BROWN, JR. Director November 17, 1998
- ------------------------
Paul F. Brown, Jr.
/s/ ROLAND E. CASATI Director November 30, 1998
- ------------------------
Roland E. Casati
/s/ FINIS F. CONNER Director November 30, 1998
- ------------------------
Finis F. Conner
/s/ MARK R. MULVOY Director November 30, 1998
- ------------------------
Mark R. Mulvoy
/s/ STEPHEN R. PATCHIN Director November 19, 1998
- ------------------------
Stephen R. Patchin
/s/ JOHN SIMPSON Director November 30, 1998
- ------------------------
John Simpson
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<PAGE>
EXHIBIT INDEX
Exhibit Exhibit
Number
- ------- -------
4.1 Adams Golf, Inc. 1998 Stock Incentive Plan (filed as
Exhibit 4.1 to the Company's Registration Statement on
Form S-1 as filed on May 4, 1998, File No. 333-51715),
incorporated herein by reference.
4.2 Forms of Stock Option Agreements to be used in
connection with the Adams Golf, Inc. 1998 Stock
Incentive Plan (filed herewith).
5.1 Opinion of Arter & Hadden LLP
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Arter & Hadden LLP (included in Exhibit 5.1)
EXHIBIT 4.2
ADAMS GOLF, INC.
INCENTIVE STOCK OPTION AGREEMENT
UNDER
1998 STOCK INCENTIVE PLAN
NONTRANSFERABLE INCENTIVE STOCK OPTION AGREEMENT (this
"Agreement") entered into this ____ day of ___________, ____,
between ADAMS GOLF, INC., a Delaware corporation (the
"Corporation"), and ________________________________ (the
"Optionee," which term as used herein shall be deemed to include
any successor to the Optionee by will or by the laws of descent
and distribution, unless the context shall otherwise require).
Pursuant to the Corporation's 1998 Stock Incentive Plan
(the "Plan"), the Corporation, acting through its
Compensation/Plan Committee of the Board of Directors (the
"Committee"), approved the issuance to the Optionee, effective as
of the date set forth above, of an incentive stock option to
purchase up to an aggregate of ____________ shares of common
stock, par value $.001, of the Corporation (the "Common Stock"),
at the price of $____ per share (the "Option Price") which
represents not less than 100% of the fair market value of a share
of Common Stock determined in accordance with the Plan or 110% of
the fair market value of a share of Common Stock determined in
accordance with the Plan in the case of any stockholder of the
Corporation who on the date of this Agreement owns stock
representing more than 10% of the total combined voting powers of
all classes of the stock of the Corporation or its parent or its
Subsidiary (a "10% Stockholder") upon the terms and conditions
hereinafter set forth. (Capitalized terms used herein but not
defined herein shall have the meaning ascribed to them in the
Plan.)
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. OPTION; OPTION PRICE. On behalf of the
Corporation, the Committee hereby grants as of the date of this
Agreement to the Optionee the option (the "Option") to purchase,
subject to the terms and conditions of this Agreement and the
provisions of the Plan (which is incorporated by reference herein
and which in all cases shall control in the event of any conflict
with the terms, definitions and provisions of this Agreement),
_______________ shares of Common Stock of the Corporation at an
exercise price per share equal to the Option Price, which Option
is intended to qualify for federal income tax purposes as an
"incentive stock option" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). A copy
of the Plan as in effect on the date hereof has been supplied to
the Optionee, and the Optionee by executing this Agreement hereby
acknowledges receipt thereof.
2. TERM. The term (the "Option Term") of the Option
shall commence on the date of this Agreement and shall terminate
on the fifth anniversary of the date of this Agreement, unless
such Option shall theretofore have been terminated in accordance
with the terms hereof or the provisions of the Plan.
3. VESTING; CHANGE OF CONTROL; RESTRICTIONS ON
EXERCISE.
(a) Subject to the provisions of Sections 5 and 8
hereof, and unless accelerated, as set forth in the Plan or as
provided herein, the Option granted hereunder shall vest and
become exercisable for the number of shares set forth opposite
the dates noted below (the "Option Vesting Schedule").
Cumulative
Date(s) Number of Vested Shares
------- -----------------------
(b) Notwithstanding the provisions of Paragraph 3(a)
above, upon a Change in Control (as hereinafter defined):
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<PAGE>
(i) the Option shall become fully vested and
shall become immediately exercisable with respect to all
shares subject to the Option; and
(ii) upon exercise of the Option during the 60-day
period from and after the date of a Change of Control, the
Optionee may in lieu of the receipt of Common Stock upon the
exercise of the Option, elect by written notice to the
Corporation to receive an amount in cash equal to the excess
of the aggregate Value (as defined below) of the shares of
Common Stock covered by the Option or portion thereof
surrendered determined on the date the Option is exercised,
over the aggregate exercise price of the Option (such excess
is referred to herein as the "Aggregate Spread"); provided,
however, if the end of such 60-day period from and after the
date of a Change of Control is within six months of the date
of grant of the Option and the Optionee is an officer or
director of the Corporation subject to the reporting
requirements of Section 16 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Option shall be
cancelled in exchange for a cash payment to the Optionee
equal to the Aggregate Spread on the day which is six months
and one day after the date of grant of such Option. As used
in this Section 3(b)(ii), the term "Value" means the higher
of (1) the highest Fair Market Value (as defined below)
during the 60-day period from and after the date of a Change
of Control and (2) if the Change of Control is the result of
a transaction or series of transactions described in
paragraphs (i) or (iii) of the definition of Change of
Control, the highest price per share of the Common Stock
paid in such transaction or series of transactions (which in
the case of paragraph (i) shall be the highest price per
share of the Common Stock as reflected in a Schedule 13D
filed by the person having made the acquisition) and the
term "Fair Market Value" means the "Fair Market Value" of
the Common Stock on any date of reference shall be the
closing price on the business day immediately preceding such
date. For this purpose, the closing price of the Common
Stock on any business day shall be (i) if the Common Stock
is listed or admitted for trading on any United States
national securities exchange, the last reported sale price
of the Common Stock on such exchange, as reported in any
newspaper of general circulation, (ii) if actual
transactions in the Common Stock are included in the Nasdaq
National Market or are reported on a consolidated
transaction reporting system, the closing sales price of the
Common Stock on such system, (iii) if the Common Stock is
otherwise quoted on the Nasdaq system, or any similar system
of automated dissemination of quotations of securities
prices in common use, the mean between the closing high bid
and low asked quotations for such day of the Common Stock on
such system, (iv) if none of clause (i), (ii) or (iii) is
applicable, the mean between the high bid and low asked
quotations for the Common Stock as reported by the National
Daily Quotation Service if at least two securities dealers
have inserted both bid and asked quotations for the Common
Stock on at least five (5) of the ten (10) preceding days
and (v) if none of clause (i), (ii), (iii) or (iv) is
applicable, the most recent valuation price for the Common
Stock as adjusted by the Board in the exercise of its good
faith discretion.
(c) For purposes of this Agreement a Change in Control
of the Corporation shall be deemed to have occurred upon the
happening of any of the following events:
(i) the acquisition, other than from the
Corporation, by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
other than Royal Holding Company, Inc. or B.H. Adams of
beneficial ownership of thirty percent (30%) or more of
either the then outstanding shares of Common Stock of the
Corporation or the combined voting power of the then
outstanding voting securities of the Corporation entitled to
vote generally in the election of directors; provided,
however, that any acquisition by the Corporation or any
corporation or other entity, whether domestic or foreign, in
which the Corporation has or obtains, directly or
indirectly, a proprietary interest of more than fifty
percent (50%) by reason of stock ownership or otherwise
("Subsidiary"), or any employee benefit plan (or related
trust) of the Corporation or its Subsidiaries, or any
corporation with respect to which, following such
acquisition, more than fifty percent (50%) of, respectively,
the then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Common Stock and
voting securities of the Corporation immediately prior to
such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of
the then outstanding shares of Common Stock of the
Corporation or the combined voting power of the then
outstanding voting securities of the Corporation entitled to
vote generally in the election of directors, as the case may
be, shall not constitute a Change of Control;
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<PAGE>
(ii) individuals who constitute the Board of
Directors of the Corporation as of January 1, 1998 (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of the
Corporation, provided that any individual becoming a
director subsequent to such date whose election, or
nomination for election by the Corporation's stockholders,
was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office is in
connection with an actual or threatened election contest
relating to the election of the directors of the Corporation
(as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(iii) approval by the stockholders of the
Corporation of a reorganization, merger or consolidation of
the Corporation, in each case, with respect to which the
individuals and entities who were the respective beneficial
owners of the Common Stock and voting securities of the
Corporation immediately prior to such reorganization, merger
or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or
indirectly, more than sixty percent (60%) of, respectively,
the then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or a complete
liquidation or dissolution of the Corporation or of the sale
or other disposition of all or substantially all of the
assets of the Corporation.
(d) Subject to the provisions of Sections 5 and 8
hereof, shares as to which the Option becomes exercisable
pursuant to the foregoing provisions may be purchased at any time
thereafter prior to the expiration or termination of the Option.
Anything contained in this Agreement to the contrary
notwithstanding, the Option shall not be exercisable to the
extent that the aggregate Fair Market Value on the date hereof of
all stock with respect to which incentive stock options are
exercisable for the first time by the Optionee during any
calendar year (under the Plan and all other plans of the
Corporation and its Subsidiaries, if any) exceeds $100,000. Such
prohibition on exercise shall be temporary and shall not effect
subsequent exercises if the restriction set forth herein is not
violated at such time.
4. TERMINATION OF OPTION.
(a) The unexercised portion of the Option shall
automatically terminate and shall become null and void and be of
no further force or effect upon the first to occur of the
following:
(i) The expiration of the Option Term.
(ii) The expiration of three months from the date
that the Optionee retires from the Corporation and its
Subsidiaries provided that the Optionee on the date of
termination of employment has attained the age of 62 with 10
years of continuous employment with the Corporation or its
Subsidiaries; provided, however, that if the Optionee shall
die during such three month period, the expiration of the
unexercised portion of the Option shall be determined in
accordance with subparagraph (v) below. The exercisability
of the Option shall be accelerated and the Option shall
become immediately exercisable without regard to the number
of shares for which it could otherwise have been exercised
on the date the Optionee retires.
(iii) The expiration of one year from the date
that the Optionee terminates employment with the Corporation
and its Subsidiaries as a result of the Optionee's permanent
and total disability (provided that the Optionee is eligible
for benefits under the Corporation's disability plan or
successor plan upon termination of employment); provided,
however, that if the Optionee shall die during such one year
period, the expiration of the unexercised portion of the
Option shall be determined in accordance with subparagraph
(v) below. The exercisability of the Option shall be
accelerated and the Option shall become immediately
exercisable without regard to the number of shares for which
it could otherwise have been exercised on the date of
termination of employment.
(iv) The date that the Optionee terminates
employment with the Corporation and its Subsidiaries if such
termination is for reasons other than retirement, (at age 62
or older with 10 years of continuous employment with the
Corporation or its Subsidiaries), permanent and total
disability (provided
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<PAGE>
that the Optionee is eligible for benefits under the
Corporation's disability plan or successor plan upon
termination of employment) or death and further provided
that the Option is exercisable only for the number of shares
for which it could have been exercised at the time the
Optionee terminated employment with the Corporation and its
Subsidiaries.
(v) The expiration of the Option Term in the
event the Optionee dies while employed by the Corporation or
a Subsidiary or during the three month period following
retirement (at age 62 or older with 10 years of continuous
employment with the Corporation or its Subsidiaries), or
during the one year period following termination of
employment due to permanent or total disability (provided
that the Optionee is eligible for benefits under the
Corporation's disability plan or successor plan upon
termination of employment). The exercisability of all
options previously granted to a decreased Optionee shall be
accelerated and the Option shall become immediately
exercisable without regard to the number of shares for which
it otherwise could have been exercised on the date of death
of the Optionee.
(b) Anything contained herein to the contrary
notwithstanding, the Option shall not be affected by any change
of duties or position of the Optionee (including a transfer to or
from the Corporation or one of its Subsidiaries), so long as the
Optionee continues to be an officer or employee of the
Corporation or any of its Subsidiaries.
5. PROCEDURE FOR EXERCISE.
(a) Subject to the requirements of Section 8, the
Option may be exercised, from time to time, in whole or in part
(but for the purchase of a whole number of shares only), by
delivery of a written notice (the "Notice") from the Optionee to
the Secretary of the Corporation, which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Option is being exercised (the "Optioned Shares");
(iii) state the date upon which the Optionee
desires to consummate the purchase of the Optioned Shares
(which date must be prior to the termination of such Option
and no later than thirty (30) days after the date of receipt
of such Notice);
(iv) include any representations of the Optionee
required under Section 8(c); and
(v) if the Option shall be exercised pursuant to
Section 10 by any person other than the Optionee, include
evidence to the satisfaction of the Committee of the right
of such person to exercise the Option.
(b) Payment of the Option Price for the Optioned
Shares shall be made in U.S. dollars by personal check, bank
draft or money order payable to the order of the Corporation or
by wire transfer.
(c) The Corporation shall issue a stock certificate in
the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of Section 10) for the
Optioned Shares as soon as practicable after receipt of the
Notice and payment of the aggregate Option Price for such shares.
6. NO RIGHTS AS A STOCKHOLDER. The Optionee shall
have no rights as a stockholder of the Corporation with respect
to any Optioned Shares until the date the Optionee or his nominee
(which, for purposes of this Agreement, shall include any third
party agent selected by the Committee to hold such Option Shares
on behalf of the Optionee), guardian or legal representative is
the holder of record of such Optioned Shares.
7. ADJUSTMENTS. The aggregate number of shares
subject to the Option and the Option Price of the Option shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock of the Corporation
resulting from a stock split, stock dividend, combination or
exchange of shares, exchange for other
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<PAGE>
securities, reclassification, reorganization, redesignation, spin-
off, split-off, merger, consolidation, recapitalization or other
such change.
8. ADDITIONAL PROVISIONS RELATED TO EXERCISE.
(a) The Option shall be exercisable only in accordance
with this Agreement, including the provisions regarding the
period when the Option may be exercised and the number of shares
of Common Stock that may be acquired upon exercise.
(b) The Option may not be exercised as to less than
one hundred (100) shares of Common Stock at any one time unless
less than one hundred (100) shares of Common Stock remain to be
purchased upon the exercise of the Option.
(c) To exercise the Option, the Optionee shall follow
the provisions of Section 5 hereof. Upon the exercise of the
Option at a time when there is not in effect a registration
statement under the Securities Act of 1933, as amended (the
"Securities Act") relating to the shares of Common Stock issuable
upon exercise of the Option, the Committee in its discretion may,
as a condition to the exercise of the Option, require the
Optionee (i) to represent in writing that the shares of Common
Stock received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to make
such other representations and warranties as are deemed
appropriate by counsel to the Corporation. No Option may be
exercised and no shares of Common Stock shall be issued and
delivered upon the exercise of the Option unless and until the
Corporation and/or the Optionee shall have complied with all
applicable federal or state registration, listing and/or
qualification requirements and all other requirements of law or
of any regulatory agencies having jurisdiction.
(d) Stock certificates representing shares of Common
Stock acquired upon the exercise of the Option that have not been
registered under the Securities Act shall, if required by the
Committee, bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED."
(e) The exercise of each Option and the issuance of
shares in connection with the exercise of an Option shall, in all
cases, be subject to each of the following conditions: (i) the
declaration of effectiveness by the Securities and Exchange
Commission ("SEC") of a registration statement relating to a
primary offering of the Common Stock, filed by the Corporation
with the SEC under the Securities Act, (ii) the satisfaction of
withholding tax or other withholding liabilities, (iii) the
listing, registration or qualification of any to-be-issued shares
upon any securities exchange, any NASDAQ or other trading or
quotation system or under any federal or state law, (iv) the
consent or approval of any regulatory body, (v) the execution of
a lock-up agreement with one or more prospective underwriters, or
(vi) the execution of a buy-sell or shareholders agreement with
other shareholders of the Corporation. The Committee shall in
its sole discretion determine whether one or more of these
conditions is necessary or desirable to be satisfied in
connection with the exercise of an Option and prior to the
delivery or purchase of shares pursuant to the exercise of an
Option. The exercise of an Option shall not be effective unless
and until such condition(s) shall have been satisfied or the
Committee shall have waived such conditions, in its sole
discretion.
9. NO EVIDENCE OF EMPLOYMENT OR SERVICE. Nothing
contained in the Plan or this Agreement shall confer upon the
Optionee any right to be retained in the employ of or under
contract with the Corporation or a Subsidiary or interfere in any
way with the right of the Corporation or any Subsidiary (subject
to the terms of any separate agreement to the contrary) to
terminate the Optionee's employment or engagement or to increase
or decrease the Optionee's compensation at any time.
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<PAGE>
10. RESTRICTION ON TRANSFER. Except to the extent, if
any, as may be permitted by the Code and rules promulgated under
Section 16 of the Exchange Act, the Option may not be assigned or
transferred except by will or by the laws of descent and
distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee or the Optionee's guardian or legal
representative. If the Optionee dies, the Option shall
thereafter be exercisable, during the period specified in Section
4(a)(v), by his executors or administrators or by a person who
acquired the right to exercise such option by bequest or
inheritance to the full extent to which the Option was
exercisable by the Optionee at the time of his death. The Option
shall not be subject to execution, attachment or similar process.
Any attempted assignment or transfer of the Option contrary to
the provisions hereof, and the levy of any execution, attachment
or similar process upon the Option, shall be null and void and
without effect.
11. DISQUALIFYING DISPOSITIONS. If the shares of
Common Stock acquired upon the exercise of this Option are
disposed of within two (2) years following the date of this
Agreement or one (1) year following the issuance of shares of
Common Stock upon exercise of the Option pursuant to the terms of
this Agreement to the Optionee or the Optionee otherwise makes a
disposition within the meaning of Section 424(c) of the Code and
the regulations promulgated thereunder (a "Disqualifying
Disposition"), the Optionee shall, within ten (10) days after a
Disqualifying Disposition, notify the Corporation in writing of
the date, sales price or other value ascribed to or used to
measure the amount received upon disposition of the shares and
the other terms of such Disqualifying Disposition and shall
immediately deliver to the Corporation payment for any amount of
federal income tax withholding required by law with respect to
the Disqualifying Disposition.
12. NOTICES. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered, (ii) sent by nationally-
recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Optionee, to the address set forth on
the signature page hereto; and
if to the Corporation, to:
Adams Golf, Inc.
300 Delaware Avenue, Suite 548
Wilmington, Delaware 19801
Attention: Secretary
with a copy to:
Adams Golf Management Corp.
2801 E. Plano Parkway
Plano, Texas 75225
Attention: President
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, (ii)
on the first Business Day (as hereinafter defined) after
dispatch, if sent by nationally-recognized overnight courier and
(iii) on the third Business Day following the date on which the
piece of mail containing such communication is posted, if sent by
mail. As used herein, "Business Day" means a day that is not a
Saturday, Sunday or a day on which banking institutions in the
city to which the notice or communication is to be sent are not
required to be open.
13. NO WAIVER. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
14. OPTIONEE UNDERTAKING. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Corporation or its counsel may in their
reasonable judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions
imposed on the Optionee pursuant to the express provisions of
this Agreement.
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<PAGE>
15. MODIFICATION OF RIGHTS. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
16. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Delaware applicable to contracts made and to be wholly performed
therein.
17. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
18. ENTIRE AGREEMENT. This Agreement and the Plan
constitute the entire agreement between the parties with respect
to the subject matter hereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
ADAMS GOLF, INC.
By:___________________________
Name:_________________________
Title:________________________
OPTIONEE:
_____________________________
Name:________________________
Address:_____________________
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<PAGE>
Ladies/Gentlemen:
I hereby exercise my Incentive Stock Option to purchase _________
shares of Common Stock of ADAMS GOLF, INC. at the option price of
$____ per share as provided in the Incentive Stock Option
Agreement dated the ___ day of ________________.
I acknowledge that I previously received a copy of the 1998 Stock
Incentive Plan and executed an Incentive Stock Option Agreement,
and I have carefully reviewed both documents.
I have considered the federal tax implications of my option. I
hereby tender my personal check, bank draft or money order
payable to ADAMS GOLF, INC. in the amount of $___________ or, I
have wire transferred $___________ to ADAMS GOLF, INC., which
transfer shall be subject to confirmation of receipt of funds by
the Corporation. [If payment is to be made by wire transfer, the
Optionee should contact the Corporation's Chief Financial Officer
or Controller in advance to obtain wiring instructions.]
______________________________
Employee
______________________________
Date
-9-
<PAGE>
ADAMS GOLF, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
UNDER
1998 STOCK INCENTIVE PLAN
NONTRANSFERABLE NONQUALIFIED STOCK OPTION AGREEMENT
(this "Agreement") entered into this ____ day of ___________,
____, between ADAMS GOLF, INC., a Delaware corporation (the
"Corporation"), and ________________________________ (the
"Optionee," which term as used herein shall be deemed to include
any successor to the Optionee by will or by the laws of descent
and distribution, unless the context shall otherwise require).
Pursuant to the Corporation's 1998 Stock Incentive Plan
(the "Plan"), the Corporation, acting through its
Compensation/Plan Committee of the Board of Directors (the
"Committee"), approved the issuance to the Optionee, effective as
of the date set forth above, of a nonqualified stock option to
purchase up to an aggregate of ____________ shares of common
stock, par value $.001, of the Corporation (the "Common Stock"),
at the price of $____ per share (the "Option Price") which
represents not less than 100% of the fair market value of a share
of Common Stock determined in accordance with the Plan, upon the
terms and conditions hereinafter set forth. (Capitalized terms
used herein but not defined herein shall have the meaning
ascribed to them in the Plan).
NOW, THEREFORE, in consideration of the mutual premises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. OPTION; OPTION PRICE. On behalf of the
Corporation, the Committee hereby grants as of the date of this
Agreement to the Optionee the option (the "Option") to purchase,
subject to the terms and conditions of this Agreement and the
provisions of the Plan (which is incorporated by reference herein
and which in all cases shall control in the event of any conflict
with the terms, definitions and provisions of this Agreement),
_______________ shares of Common Stock of the Corporation at an
exercise price per share equal to the Option Price. A copy of
the Plan as in effect on the date hereof has been supplied to the
Optionee, and the Optionee by executing this Agreement hereby
acknowledges receipt thereof.
2. TERM. The term (the "Option Term") of the Option
shall commence on the date of this Agreement and shall terminate
on the fifth anniversary of the date of this Agreement, unless
such Option shall theretofore have been terminated in accordance
with the terms hereof or the provisions of the Plan.
3. VESTING; CHANGE OF CONTROL; RESTRICTIONS ON
EXERCISE.
(a) Subject to the provisions of Sections 5 and 8
hereof, and unless accelerated, as set forth in the Plan or as
provided herein, the Option granted hereunder shall vest and
become exercisable for the number of shares set forth opposite
the dates noted below (the "Option Vesting Schedule").
Cumulative
Date(s) Number of Vested Shares
------- -----------------------
(b) Notwithstanding the provisions of Paragraph 3(a)
above, upon a Change in Control (as hereinafter defined):
(i) the Option shall become fully vested and
shall become immediately exercisable with respect to all
shares subject to the Option; and
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<PAGE>
(ii) upon exercise of the Option during the 60-day
period from and after the date of a Change of Control, the
Optionee may in lieu of the receipt of Common Stock upon the
exercise of the Option, elect by written notice to the
Corporation to receive an amount in cash equal to the excess
of the aggregate Value (as defined below) of the shares of
Common Stock covered by the Option or portion thereof
surrendered determined on the date the Option is exercised,
over the aggregate exercise price of the Option (such excess
is referred to herein as the "Aggregate Spread"); provided,
however, if the end of such 60-day period from and after the
date of a Change of Control is within six months of the date
of grant of the Option and the Optionee is an officer or
director of the Corporation subject to the reporting
requirements of Section 16 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Option shall be
cancelled in exchange for a cash payment to the Optionee
equal to the Aggregate Spread on the day which is six months
and one day after the date of grant of such Option. As used
in this Section 3(b)(ii), the term "Value" means the higher
of (1) the highest Fair Market Value (as defined below)
during the 60-day period from and after the date of a Change
of Control and (2) if the Change of Control is the result of
a transaction or series of transactions described in
paragraphs (i) or (iii) of the definition of Change of
Control, the highest price per share of the Common Stock
paid in such transaction or series of transactions (which in
the case of paragraph (i) shall be the highest price per
share of the Common Stock as reflected in a Schedule 13D
filed by the person having made the acquisition) and the
term "Fair Market Value" means the "Fair Market Value" of
the Common Stock on any date of reference shall be the
closing price on the business day immediately preceding such
date. For this purpose, the closing price of the Common
Stock on any business day shall be (i) if the Common Stock
is listed or admitted for trading on any United States
national securities exchange, the last reported sale price
of the Common Stock on such exchange, as reported in any
newspaper of general circulation, (ii) if actual
transactions in the Common Stock are included in the Nasdaq
National Market or are reported on a consolidated
transaction reporting system, the closing sales price of the
Common Stock on such system, (iii) if the Common Stock is
otherwise quoted on the Nasdaq system, or any similar system
of automated dissemination of quotations of securities
prices in common use, the mean between the closing high bid
and low asked quotations for such day of the Common Stock on
such system, (iv) if none of clause (i), (ii) or (iii) is
applicable, the mean between the high bid and low asked
quotations for the Common Stock as reported by the National
Daily Quotation Service if at least two securities dealers
have inserted both bid and asked quotations for the Common
Stock on at least five (5) of the ten (10) preceding days
and (v) if none of clause (i), (ii), (iii) or (iv) is
applicable, the most recent valuation price for the Common
Stock as adjusted by the Board in the exercise of its good
faith discretion.
(c) For purposes of this Agreement a Change in Control
of the Corporation shall be deemed to have occurred upon the
happening of any of the following events:
(i) the acquisition, other than from the
Corporation, by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
other than Royal Holding Company, Inc. or B. H. Adams of
beneficial ownership of thirty percent (30%) or more of
either the then outstanding shares of Common Stock of the
Corporation or the combined voting power of the then
outstanding voting securities of the Corporation entitled to
vote generally in the election of directors; provided,
however, that any acquisition by the Corporation or any
corporation or other entity, whether domestic or foreign, in
which the Corporation has or obtains, directly or
indirectly, a proprietary interest of more than fifty
percent (50%) by reason of stock ownership or otherwise
("Subsidiary"), or any employee benefit plan (or related
trust) of the Corporation or its Subsidiaries, or any
corporation with respect to which, following such
acquisition, more than fifty percent (50%) of, respectively,
the then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Common Stock and
voting securities of the Corporation immediately prior to
such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of
the then outstanding shares of Common Stock of the
Corporation or the combined voting power of the then
outstanding voting securities of the Corporation entitled to
vote generally in the election of directors, as the case may
be, shall not constitute a Change of Control;
(ii) individuals who constitute the Board of
Directors of the Corporation as of January 1, 1998 (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of the
Corporation, provided that any individual becoming a
director subsequent to such date
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<PAGE>
whose election, or nomination for election by the
Corporation's stockholders, was approved by a vote of at
least a majority of the directors then comprising the
Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual
or threatened election contest relating to the election of
the directors of the Corporation (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act); or
(iii) approval by the stockholders of the
Corporation of a reorganization, merger or consolidation of
the Corporation, in each case, with respect to which the
individuals and entities who were the respective beneficial
owners of the Common Stock and voting securities of the
Corporation immediately prior to such reorganization, merger
or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or
indirectly, more than sixty percent (60%) of, respectively,
the then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or a complete
liquidation or dissolution of the Corporation or of the sale
or other disposition of all or substantially all of the
assets of the Corporation.
(d) Subject to the provisions of Sections 5 and 8
hereof, shares as to which the Option becomes exercisable
pursuant to the foregoing provisions may be purchased at any time
thereafter prior to the expiration or termination of the Option.
4. TERMINATION OF OPTION.
(a) The unexercised portion of the Option shall
automatically terminate and shall become null and void and be of
no further force or effect upon the first to occur of the
following:
(i) The expiration of the Option Term.
(ii) The expiration of three months from the date
that the Optionee retires from the Corporation and its
Subsidiaries provided that the Optionee on the date of
termination of employment has attained the age of 62 with 10
years of continuous employment with the Corporation or its
Subsidiaries; provided, however, that if the Optionee shall
die during such three month period, the expiration of the
unexercised portion of the Option shall be determined in
accordance with subparagraph (v) below. The exercisability
of the Option shall be accelerated and the Option shall
become immediately exercisable without regard to the number
of shares for which it could otherwise have been exercised
on the date the Optionee retires.
(iii) The expiration of one year from the date
that the Optionee terminates employment with the Corporation
and its Subsidiaries as a result of the Optionee's permanent
and total disability (provided that the Optionee is eligible
for benefits under the Corporation's disability plan or
successor plan upon termination of employment); provided,
however, that if the Optionee shall die during such one year
period, the expiration of the unexercised portion of the
Option shall be determined in accordance with subparagraph
(v) below. The exercisability of the Option shall be
accelerated and the Option shall become immediately
exercisable without regard to the number of shares for which
it could otherwise have been exercised on the date of
termination of employment.
(iv) The date that the Optionee terminates
employment with the Corporation and its Subsidiaries if such
termination is for reasons other than retirement, (at age 62
or older with 10 years of continuous employment with the
Corporation or its Subsidiaries), permanent and total
disability (provided that the Optionee is eligible for
benefits under the Corporation's disability plan or
successor plan upon termination of employment) or death and
further provided that the Option is exercisable only for the
number of shares for which it could have been exercised at
the time the Optionee terminated employment with the
Corporation and its Subsidiaries.
(v) The expiration of the Option Term in the
event the Optionee dies while employed by the Corporation or
a Subsidiary or during the three month period following
retirement (at age
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<PAGE>
62 or older with 10 years of continuous employment with the
Corporation or its Subsidiaries), or during the one year
period following termination of employment due to permanent
or total disability (provided that the Optionee is eligible
for benefits under the Corporation's disability plan or
successor plan upon termination of employment). The
exercisability of all options previously granted to a
decreased Optionee shall be accelerated and the Option shall
become immediately exercisable without regard to the number
of shares for which it otherwise could have been exercised
on the date of death of the Optionee.
(b) Anything contained herein to the contrary
notwithstanding, the Option shall not be affected by any change
of duties or position of the Optionee (including a transfer to or
from the Corporation or one of its Subsidiaries), so long as the
Optionee continues to be an officer or employee of the
Corporation or any of its Subsidiaries.
5. PROCEDURE FOR EXERCISE.
(a) Subject to the requirements of Section 8, the
Option may be exercised, from time to time, in whole or in part
(but for the purchase of a whole number of shares only), by
delivery of a written notice (the "Notice") from the Optionee to
the Secretary of the Corporation, which Notice shall:
(i) state that the Optionee elects to exercise
the Option;
(ii) state the number of shares with respect to
which the Option is being exercised (the "Optioned Shares");
(iii) state the date upon which the Optionee
desires to consummate the purchase of the Optioned Shares
(which date must be prior to the termination of such Option
and no later than thirty (30) days after the date of receipt
of such Notice);
(iv) include any representations of the Optionee
required under Section 8(c); and
(v) if the Option shall be exercised pursuant to
Section 10 by any person other than the Optionee, include
evidence to the satisfaction of the Committee of the right
of such person to exercise the Option.
(b) Payment of the Option Price for the Optioned
Shares shall be made in U.S. dollars by personal check, bank
draft or money order payable to the order of the Corporation or
by wire transfer.
(c) The Corporation shall issue a stock certificate in
the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of Section 10) for the
Optioned Shares as soon as practicable after receipt of the
Notice and payment of the aggregate Option Price for such shares.
6. NO RIGHTS AS A STOCKHOLDER. The Optionee shall
have no rights as a stockholder of the Corporation with respect
to any Optioned Shares until the date the Optionee or his nominee
(which, for purposes of this Agreement, shall include any third
party agent selected by the Committee to hold such Option Shares
on behalf of the Optionee), guardian or legal representative is
the holder of record of such Optioned Shares.
7. ADJUSTMENTS. The aggregate number of shares
subject to the Option and the Option Price of the Option shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock of the Corporation
resulting from a stock split, stock dividend, combination or
exchange of shares, exchange for other securities,
reclassification, reorganization, redesignation, spinoff, split-
off, merger, consolidation, recapitalization or other such
change.
8. ADDITIONAL PROVISIONS RELATED TO EXERCISE.
(a) The Option shall be exercisable only in accordance
with this Agreement, including the provisions regarding the
period when the Option may be exercised and the number of shares
of Common Stock that may be acquired upon exercise.
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<PAGE>
(b) The Option may not be exercised as to less than
one hundred (100) shares of Common Stock at any one time unless
less than one hundred (100) shares of Common Stock remain to be
purchased upon the exercise of the Option.
(c) To exercise the Option, the Optionee shall follow
the provisions of Section 5 hereof. Upon the exercise of the
Option at a time when there is not in effect a registration
statement under the Securities Act of 1933, as amended (the
"Securities Act") relating to the shares of Common Stock issuable
upon exercise of the Option, the Committee in its discretion may,
as a condition to the exercise of the Option, require the
Optionee (i) to represent in writing that the shares of Common
Stock received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to make
such other representations and warranties as are deemed
appropriate by counsel to the Corporation. No Option may be
exercised and no shares of Common Stock shall be issued and
delivered upon the exercise of the Option unless and until the
Corporation and/or the Optionee shall have complied with all
applicable federal or state registration, listing and/or
qualification requirements and all other requirements of law or
of any regulatory agencies having jurisdiction.
(d) Stock certificates representing shares of Common
Stock acquired upon the exercise of the Option that have not been
registered under the Securities Act shall, if required by the
Committee, bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED."
(e) The exercise of each Option and the issuance of
shares in connection with the exercise of an Option shall, in all
cases, be subject to each of the following conditions: (i) the
declaration of effectiveness by the Securities and Exchange
Commission ("SEC") of a registration statement relating to a
primary offering of the Common Stock, filed by the Corporation
with the SEC under the Securities Act, (ii) the satisfaction of
withholding tax or other withholding liabilities, (iii) the
listing, registration or qualification of any to-be-issued shares
upon any securities exchange, any NASDAQ or other trading or
quotation system or under any federal or state law, (iv) the
consent or approval of any regulatory body, (v) the execution of
a lock-up agreement with one or more prospective underwriters, or
(vi) the execution of a buy-sell or shareholders agreement with
other shareholders of the Corporation. The Committee shall in
its sole discretion determine whether one or more of these
conditions is necessary or desirable to be satisfied in
connection with the exercise of an Option and prior to the
delivery or purchase of shares pursuant to the exercise of an
Option. The exercise of an Option shall not be effective unless
and until such condition(s) shall have been satisfied or the
Committee shall have waived such conditions, in its sole
discretion.
9. NO EVIDENCE OF EMPLOYMENT OR SERVICE. Nothing
contained in the Plan or this Agreement shall confer upon the
Optionee any right to be retained in the employ of or under
contract with the Corporation or a Subsidiary or interfere in any
way with the right of the Corporation or any Subsidiary (subject
to the terms of any separate agreement to the contrary) to
terminate the Optionee's employment or engagement or to increase
or decrease the Optionee's compensation at any time.
10. RESTRICTION ON TRANSFER. Except to the extent, if
any, as may be permitted by the Code and rules promulgated under
Section 16 of the Exchange Act, the Option may not be assigned or
transferred except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order
as defined in the Code, and may be exercised during the lifetime
of the Optionee only by the Optionee or the Optionee's guardian
or legal representative or assignee pursuant to a qualified
domestic relations order. If the Optionee dies, the Option shall
thereafter be exercisable, during the period specified in Section
4(a)(v), by his executors or administrators or by a person who
acquired the right to exercise such option by bequest or
inheritance to the full extent to which the Option was
exercisable by the Optionee at the time of his death. The Option
shall not be subject to execution, attachment or similar process.
Any attempted assignment or transfer of the Option contrary to
the provisions
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<PAGE>
hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without
effect.
11. NOTICES. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered, (ii) sent by nationally-
recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Optionee, to the address set forth on
the signature page hereto; and
if to the Corporation, to:
Adams Golf, Inc.
300 Delaware Avenue, Suite 548
Wilmington, Delaware 19801
Attention: Secretary
with a copy to:
Adams Golf, Ltd.
c/o Adams Golf GP Corp.
2801 E. Plano Parkway
Plano, Texas 75225
Attention: President
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, (ii)
on the first Business Day (as hereinafter defined) after
dispatch, if sent by nationally-recognized overnight courier and
(iii) on the third Business Day following the date on which the
piece of mail containing such communication is posted, if sent by
mail. As used herein, "Business Day" means a day that is not a
Saturday, Sunday or a day on which banking institutions in the
city to which the notice or communication is to be sent are not
required to be open.
12. NO WAIVER. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
13. OPTIONEE UNDERTAKING. The Optionee hereby agrees
to take whatever additional actions and execute whatever
additional documents the Corporation or its counsel may in their
reasonable judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions
imposed on the Optionee pursuant to the express provisions of
this Agreement.
14. MODIFICATION OF RIGHTS. The rights of the
Optionee are subject to modification and termination in certain
events as provided in this Agreement and the Plan.
15. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Delaware applicable to contracts made and to be wholly performed
therein.
16. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
17. ENTIRE AGREEMENT. This Agreement and the Plan
constitute the entire agreement between the parties with respect
to the subject matter hereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto.
-6-
<PAGE>
ADAMS GOLF, INC.
By:____________________________
Name:__________________________
Title:_________________________
OPTIONEE:
_______________________________
Name:__________________________
Address:_______________________
-7-
<PAGE>
Ladies/Gentlemen:
I hereby exercise my Nonqualified Stock Option to purchase
_________ shares of Common Stock of ADAMS GOLF, INC. at the
option price of $____ per share as provided in the Nonqualified
Stock Option Agreement dated the ___ day of ________________.
I acknowledge that I previously received a copy of the 1998 Stock
Incentive Plan and executed a Nonqualified Stock Option
Agreement, and I have carefully reviewed both documents.
I have considered the federal tax implications of my option. I
hereby tender my personal check, bank draft or money order
payable to ADAMS GOLF, INC. in the amount of $____________ or, I
have wire transferred $_______________ to ADAMS GOLF, INC., which
transfer shall be subject to the confirmation of receipt of funds
by the Corporation. [If payment is to be made by wire transfer,
the Optionee should contact the Corporation's Chief Financial
Officer or Controller in advance to obtain wiring instructions.]
______________________________
Employee
______________________________
Date
-8-
EXHIBIT 5.1
ARTER & HADDEN LLP
1717 Main Street, Suite 4100
Dallas, Texas 75201
Tel: 214.761.2100
Fax: 214.741.7139
November 30, 1998
Adams Golf, Inc.
300 Delaware Avenue, Suite 548
Wilmington, Delaware 19801
Re: Adams Golf, Inc.
Registration Statement on Form S-8
Adams Golf, Inc. 1998 Stock Incentive Plan
Gentlemen:
We have acted as counsel to Adams Golf, Inc., a Delaware
corporation (the "Company"), in connection with the preparation
of the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange
Commission on or about November 30, 1998, under the Securities
Act of 1933, as amended (the "Securities Act"), relating to
1,800,000 shares of the $0.001 par value common stock (the
"Common Stock") of the Company that will be issued on the
exercise of stock options (collectively, the "Options") granted
or that may be granted under the Adams Golf, Inc. 1998 Stock
Incentive Plan (the "Plan").
You have requested the opinion of this firm with respect to
certain legal aspects of the Registration Statement. In
connection therewith, we have examined and relied upon the
original, or copies identified to our satisfaction, of (1) the
Certificate of Incorporation and the Bylaws of the Company, as
both have been amended; (2) minutes and records of the corporate
proceedings of the Company with respect to the establishment and
approval of the Plan, the granting of the Options under the Plan,
the issuance of shares of Common Stock pursuant to the Plan and
related matters; (3) the Registration Statement and exhibits
thereto, including the Plan and the Form of Stock Option
Agreement listed as exhibits to the Registration Statement; and
(4) such other documents and instruments as we have deemed
necessary for the expression of the opinions herein contained.
In making the foregoing examinations, we have assumed the
genuineness of all signatures and the authenticity of all
documents submitted to us as originals, and the conformity to
original documents of all documents submitted to us as certified
or photostatic copies. As to various questions of fact material
to this opinion, and as to the content and form of the
Certificate of Incorporation, the Bylaws, minutes, records,
resolutions and other documents or writings of the Company, we
have relied, to the extent we deem reasonably appropriate, upon
representations or certificates of officers or directors of the
Company and upon documents, records and instruments furnished to
us by the Company, without independent check or verification of
their accuracy.
Based upon our examination, consideration of, and reliance
on the documents and other matters described above, and subject
to the comments and exceptions noted below, we are of the opinion
that, assuming (i) the outstanding Options were duly granted and
the Options to be granted in the future will be duly granted in
accordance with the terms of the Plan, (ii) the Company maintains
an adequate number of authorized but unissued shares and/or
treasury shares of Common Stock available for issuance to those
persons who exercise Options granted under the Plan, (iii) the
exercise of Options is in accordance with the provisions thereof
and in accordance with the provisions of the Plan, and (iv) the
consideration for the shares of Common Stock issuable upon the
exercise of such Options is actually received by the Company as
provided in the Plan and the particular Option and such
consideration exceeds the par value of such shares, then the
shares of Common Stock issued pursuant to the exercise of the
Options will be validly issued, fully paid and nonassessable.
<PAGE>
We bring to your attention the fact that this legal opinion
is an expression of professional judgment and not a guaranty of
result. This opinion is rendered as of the date hereof, and we
undertake no, and hereby disclaim any, obligation to advise you
of any changes in or new developments that might affect any
matters or opinions set forth herein.
This opinion is limited in all respects to the General
Corporation Law of the State of Delaware as in effect on the date
hereof; however, we are not members of the Bar of the State of
Delaware and our knowledge of its General Corporation Law is
derived from a reading of the most recent compilation of that
statute available to us without consideration of any judicial or
administrative interpretations thereof.
We hereby consent to the filing of this opinion as Exhibit
5.1 to the Registration Statement and to references to our firm
included in or made a part of the Registration Statement. In
giving this consent, we do not admit that we come within the
category of person whose consent is required under Section 7 of
the Securities Act or the Rules and Regulations of the Securities
and Exchange Commission thereunder. This opinion may not be
relied upon by any person other than the addressee identified
above.
Very truly yours,
/s/ ARTER & HADDEN LLP
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Adams Golf, Inc.
We consent to the use of our report incorporated herein by
reference.
/s/ KPMG PEAT MARWICK LLP
Dallas, Texas
November 30, 1998
