As filed with the Securities and Exchange Commission
on November 5, 1999.
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 572
Wilmington, Delaware 19801
(Address of Principal Executive Offices) (Zip Code)
----------------------
1999 STOCK OPTION PLAN
FOR OUTSIDE CONSULTANTS
(Full title of the plan)
------------------------
B.H. (Barney) Adams Copy to:
Chief Executive Officer J. David Washburn, Esq.
ADAMS GOLF, INC. ARTER & HADDEN LLP
300 Delaware Avenue, Suite 572 1717 Main St., Suite 4100
Wilmington, Delaware 19801 Dallas, Texas 75201-4605
(Name and address of (214) 761-2100
agent for service)
(302) 427-5892
(Telephone number,
including area code,
of agent for service)
------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
======================================================================================
Title of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to Registered(1) Offering Price Aggregate Offering Registration
be Registered Per Share Price(2) Fee
- --------------- ------------- ---------------- ------------------ -------------
Common Stock 1,000,000 (2) $2,254,496 $626.75
$.001 par value shares
======================================================================================
(1) The securities to be registered represent shares of
Common Stock issued or reserved for issuance under the 1999 Stock
Option Plan for Outside Consultants of Adams Golf, Inc. (the
"Plan"). Pursuant to Rule 416, shares of Common Stock of the
Company issuable pursuant to the exercise of options granted or
to be granted under the Plan in order to prevent dilution
resulting from any future stock split, stock divided or similar
transaction are also being registered hereunder.
(2) Estimated pursuant to Rule 457(h) solely for the
purpose of calculating the registration fee as follows: (i) the
maximum proposed offering price at which outstanding options
under the Plan (224,800 shares of Common Stock) may be exercised
is $510,296 and (ii) the maximum proposed offering price at which
unissued options may be exercised under the Plan (775,200 shares
of Common Stock) is $1,744,200 calculated on the basis of the
closing sale price per share of Common Stock on the Nasdaq Stock
Market's National Market on November 3, 1999 ($2.25), in
accordance with Rule 457(c).
</TABLE>
=================================================================
<PAGE>
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
----------------
Item 2.Registrant Information and Employee Plan Annual
Information.*
-----------------------------------------------
* Information required by Part I to be contained in the Section
10(a) Prospectus is omitted from the Registration Statement in
accordance with Rule 428 under the Securities Act of 1933, as
amended (the "Securities Act"), and the Note to Part I of Form
S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3.Incorporation of Documents by Reference.
---------------------------------------
Adams Golf, Inc. (the "Company") hereby incorporates by
reference in this Registration Statement the following documents
previously filed or to be filed with the Securities and Exchange
Commission (the "Commission"):
(a) the Company's Annual Report on Form 10-K filed with the
Commission for the fiscal year ended December 31, 1998;
(b) the Company's Quarterly Reports filed with the
Commission on Form 10-Q for the quarter ended March 31,
1999 and June 30, 1999;
(c) the description of the Company's common stock, par
value $.001 per share (the "Common Stock"), contained
in the Company's Registration Statement on Form 8-A
(file no. 0-24583), including any amendment or report
filed for the purpose of updating such description; and
(d) all documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act, of 1934, as amended,
subsequent to the date of this Registration Statement
shall be deemed to be incorporated herein by reference
and to be a part hereof from the date of filing of such
documents until such time as there shall have been
filed a post-effective amendment that indicates that
all securities offered under the Registration Statement
have been sold or that deregisters all securities
remaining unsold at the time of the amendment.
Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Registration
Statement to the extent that the statement contained herein or in
any subsequently filed document that also is or is deemed to be
incorporated by reference herein, or
-2-
<PAGE>
in any document forming any part of the Section 10(a) Prospectus
to be delivered to participants in connection with, modifies or
supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
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, 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 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.
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
-3-
<PAGE>
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.
Article XI of the company's Bylaws further provides for the
indemnification of, and advancement of expenses to, its officers
and directors in certain circumstances.
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.
--------
(a) Exhibits.
Exhibit Description
------- -----------
4.1 1999 Stock Option Plan for Outside Consultants of
Adams Golf, Inc. (the "Plan") (filed herewith)
4.2 Form of Stock Option Agreement relating to
options granted under the Plan (filed herewith)
5.1 Opinion of Arter & Hadden LLP (filed herewith)
23.1 Consent of Arter & Hadden LLP (included in their
opinion filed as Exhibit 5.1) (filed herewith)
23.2 Consent of KPMG LLP (filed herewith)
Item 9. Undertakings.
------------
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
-4-
<PAGE>
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 of the 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 Section 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.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all 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, Texas, on November 1, 1999:
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,
as amended, this Registration Statement has been signed by the
following persons and in the capacities indicated on November 1,
1999.
Signatures Titles
- -------------------------- --------------------------------
/s/ B. H. ADAMS
- --------------------------
B. H. (Barney) Adams Chairman of the Board, Chief
Executive Officer and
President (Principal Executive Officer)
/s/ DARL P. HATFIELD
- --------------------------
Darl P. Hatfield Senior Vice President-Finance and
Administration and Chief Financial Officer
(Principal Financial and Accounting
Officer)
/s/ RICHARD H. MURTLAND
- --------------------------
Richard H. Murtland Vice President-Research and Development,
Secretary, Treasurer and Director
/s/ PAUL F. BROWN, JR.
- -------------------------
Paul F. Brown, Jr. Director
/s/ ROLAND E. CASATI
- --------------------------
Roland E. Casati Director
/s/ ROBERT F. MACNALLY
- --------------------------
Robert F. MacNally Director
/s/ MARK R. MULVOY
- --------------------------
Mark R. Mulvoy Director
/s/ STEPHEN R. PATCHIN
- --------------------------
Stephen R. Patchin Director
/s/ JOHN S. SIMPSON
- --------------------------
John S. Simpson Director
-6-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Description
-------- ----------------------------------------------------
4.1 1999 Stock Option Plan for Outside Consultants of
Adams Golf, Inc. (the "Plan") (filed herewith)
4.2 Form of Stock Option Agreement relating to options
granted under the Plan (filed herewith)
5.1 Opinion of Arter & Hadden LLP (filed herewith)
23.1 Consent of Arter & Hadden LLP (included in their
opinion filed as Exhibit 5.1) (filed herewith)
23.2 Consent of KPMG LLP (filed herewith)
ADAMS GOLF, INC.
1999 STOCK OPTION PLAN
FOR
OUTSIDE CONSULTANTS
Adopted Effective August 30, 1999
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE I PURPOSE OF PLAN 1
ARTICLE II EFFECTIVE DATE AND TERM OF PLAN 1
2.1 TERM OF PLAN 1
2.2 EFFECT ON STOCK OPTIONS 1
ARTICLE III SHARES SUBJECT TO PLAN 1
3.1 NUMBER OF SHARES 1
3.2 SOURCE OF SHARES 1
3.3 AVAILABILITY OF UNUSED SHARES 1
3.4 ADJUSTMENT PROVISIONS 2
3.5 RESERVATION OF SHARES 2
ARTICLE IV ADMINISTRATION OF PLAN 2
4.1 ADMINISTERING BODY 2
4.2 AUTHORITY OF ADMINISTERING BODY 3
4.3 NO LIABILITY 4
4.4 AMENDMENTS 4
4.5 OTHER COMPENSATION PLANS 4
4.6 PLAN BINDING ON SUCCESSORS 4
4.7 REFERENCES TO SUCCESSOR STATUTES, REGULATIONS
AND RULES 4
4.8 ISSUANCES FOR SERVICES 5
4.9 INVALID PROVISIONS 5
4.10 GOVERNING LAW 5
ARTICLE V GENERAL AWARD PROVISIONS 5
5.1 PARTICIPATION IN THE PLAN 5
5.2 STOCK OPTION DOCUMENTS 5
5.3 EXERCISE OF STOCK OPTIONS 5
5.4 PAYMENT FOR STOCK OPTIONS 6
5.5 NO CONTINUING SERVICE RIGHTS 6
5.6 RESTRICTIONS UNDER APPLICABLE LAWS AND REGULATIONS 7
5.7 ADDITIONAL CONDITIONS 7
5.8 NO PRIVILEGES OF STOCK OWNERSHIP 8
5.9 LIMITED ASSIGNABILITY 8
5.10 INFORMATION TO OPTIONEES 8
5.11 WITHHOLDING TAXES 9
5.12 LEGENDS ON STOCK OPTIONS AND STOCK CERTIFICATES 9
5.13 EFFECT OF TERMINATION OF ENGAGEMENT ON
STOCK OPTIONS 9
ARTICLE VI STOCK OPTIONS 10
6.1 NATURE OF STOCK OPTIONS 10
6.2 OPTION EXERCISE PRICE 10
6.3 OPTION PERIOD AND VESTING 10
ARTICLE VII REORGANIZATIONS 10
7.1 CORPORATE TRANSACTIONS NOT INVOLVING
A CHANGE IN CONTROL 10
7.2 CORPORATE TRANSACTIONS INVOLVING A CHANGE IN CONTROL 11
ARTICLE VIII DEFINITIONS 11
<PAGE>
ADAMS GOLF, INC.
1999 STOCK OPTION PLAN FOR OUTSIDE CONSULTANTS
---------------------------------------------------------------
ARTICLE I
---------
PURPOSE OF PLAN
The Company has adopted this Plan to promote the interests
of the Company and its stockholders by using investment interests
in the Company to attract, retain and motivate non-employee,
current and former tour professionals, golf instructors,
psychologists and other advisors acting as outside consultants,
to encourage and reward their contributions to the performance of
the Company and to align their interests with the interests of
the Company's stockholders. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in
Article VIII.
ARTICLE II
----------
EFFECTIVE DATE AND TERM OF PLAN
2.1 Term of Plan. This Plan became effective as of the
Effective Date and shall continue in effect until the Expiration
Date, at which time this Plan shall automatically terminate.
2.2 Effect on Stock Options. Stock Options may be granted
during the Plan Term, but no Stock Options may be granted after
the Plan Term. Notwithstanding the foregoing, each Stock Option
properly granted under this Plan during the Plan Term shall
remain in effect after termination of this Plan until such Stock
Option has been exercised, terminated or expired in accordance
with its terms and the terms of this Plan.
ARTICLE III
-----------
SHARES SUBJECT TO PLAN
3.1 Number of Shares. The maximum number of shares of
Common Stock that may be issued pursuant to Stock Options granted
under this Plan shall be 1,000,000, subject to adjustment as set
forth in Section 3.4.
3.2 Source of Shares. The Common Stock to be issued under
this Plan will be made available, at the discretion of the Board,
either from authorized but unissued shares of Common Stock or
from previously issued shares of Common Stock reacquired by the
Company, including without limitation shares purchased on the
open market.
3.3 Availability of Unused Shares. Shares of Common Stock
subject to unexercised portions of any Stock Option granted under
this Plan that expire, terminate or are canceled, and shares of
Common Stock issued pursuant to Stock Options under this Plan
that are reacquired by
<PAGE>
the Company pursuant to the terms of the Stock Options under
which such shares were issued, will again become available for
the grant of further Stock Options under this Plan.
3.4 Adjustment Provisions.
(a) If (i) the outstanding shares of Common Stock of the
Company are increased, decreased or exchanged for a different
number or kind of shares or other securities, or if additional
shares or new or different shares or other securities are
distributed in respect of such shares of Common Stock (or any
stock or securities received with respect to such Common Stock),
through merger, consolidation, sale or exchange of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split,
reverse stock split, spin-off or other distribution with respect
to such shares of Common Stock (or any stock or securities
received with respect to such Common Stock), or (ii) the value of
the outstanding shares of Common Stock of the Company is reduced
by reason of an extraordinary cash dividend, an appropriate and
proportionate adjustment may be made in (1) the maximum number
and kind of shares or securities subject to this Plan as provided
in Section 3.1, (2) the number and kind of shares or other
securities subject to then outstanding Stock Options and/or
(3) the price for each share or other unit of any other
securities subject to then outstanding Stock Options.
(b) No fractional interests will be issued under this Plan
resulting from any adjustments.
(c) To the extent any adjustments relate to stock or
securities of the Company, such adjustments shall be made by the
Administering Body, whose determination in that respect shall be
final, binding and conclusive.
(d) The grant of Stock Options pursuant to this Plan shall
not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
3.5 Reservation of Shares. The Company will at all times
reserve and keep available such number of shares of Common Stock
as shall equal at least the number of shares of Common Stock
subject to then outstanding Stock Options issuable in shares of
Common Stock under this Plan.
ARTICLE IV
----------
ADMINISTRATION OF PLAN
4.1 Administering Body.
(a) This Plan shall be administered by the Board or by the
Consultants' Plan Committee of the Board appointed pursuant to
Section 4.1(b).
(b) (i) The Board in its sole discretion may from time to
time appoint a Consultants' Plan Committee of not less than two
Board members to administer this Plan and, subject to applicable
law, to exercise all of the powers, authority and discretion of
the Board
-2-
<PAGE>
under this Plan. The Board may from time to time increase or
decrease (but not below two) the number of members of the
Consultants' Plan Committee, remove from membership on the
Consultants' Plan Committee all or any portion of its members,
and/or appoint such person or persons as it desires to fill any
vacancy existing on the Consultants' Plan Committee, whether
caused by removal, resignation or otherwise. The Consultants'
Plan Committee may, but shall not be required to, consist of the
same members as any other committee administering a stock option
plan for the Company. The Board may disband the Consultants' Plan
Committee at any time and revest in the Board the administration
of this Plan.
(ii) The Consultants' Plan Committee shall report to
the Board the names of Eligible Persons granted Stock Options,
the number of shares of Common Stock covered by each Stock Option
and the terms and conditions of each such Stock Option.
4.2 Authority of Administering Body.
(a) Subject to the express provisions of this Plan, the
Administering Body shall have the power to interpret and construe
this Plan and any Stock Option Documents or other documents
defining the rights and obligations of the Company and Optionees
hereunder and thereunder, to determine all questions arising
hereunder and thereunder, to adopt and amend such rules and
regulations for the administration hereof and thereof as it may
deem desirable, and otherwise to carry out the terms of this Plan
and such Stock Option Documents and other documents. The
interpretation and construction by the Administering Body of any
provisions of this Plan or of any Stock Option shall be
conclusive and binding. Any action taken by, or inaction of, the
Administering Body relating to this Plan or any Stock Options
shall be within the absolute discretion of the Administering Body
and shall be conclusive and binding upon all persons. Subject
only to compliance with the express provisions hereof, the
Administering Body may act in its absolute discretion in matters
related to this Plan and any and all Stock Options.
(b) Subject to the express provisions of this Plan, the
Administering Body may from time to time in its discretion select
the Eligible Persons to whom, and the time or times at which,
Stock Options shall be granted, the number of shares of Common
Stock that make up or underlie each Stock Option, the period for
the exercise of each Stock Option, and such other terms and
conditions applicable to each individual Stock Option as the
Administering Body shall determine. The Administering Body may
grant at any time new Stock Options to an Eligible Person who has
previously received Stock Options whether such prior Stock
Options are still outstanding, have previously been exercised as
a whole or in part, or are canceled in connection with the
issuance of new Stock Options. The Administering Body may grant
Stock Options singly, in combination or in tandem with other
Stock Options, as it determines in its discretion. Any and all
terms and conditions of the Stock Options, including exercise
price, may be established by the Administering Body without
regard to existing Stock Options.
(c) Any action of the Administering Body with respect to
the administration of this Plan shall be taken pursuant to a
majority vote of the authorized number of members of the
Administering Body or by the unanimous written consent of its
members; provided, however, that (i) if the Administering Body is
the Consultants' Plan Committee and consists of two members, then
actions of the Administering Body must be unanimous and (ii) if
the
-3-
<PAGE>
Administering Body is the Board, actions taken at a meeting of
the Board shall be valid if approved by directors constituting a
majority of the required quorum for such meeting.
4.3 No Liability. No member of the Board or the
Consultants' Plan Committee or any designee thereof will be
liable for any action or inaction with respect to this Plan or
any Stock Option or any transaction arising under this Plan or
any Stock Option, except in circumstances constituting bad faith
of such member.
4.4 Amendments.
(a) The Administering Body may, insofar as permitted by
applicable law, rule or regulation, from time to time suspend or
discontinue this Plan or revise or amend it in any respect
whatsoever, and this Plan as so revised or amended will govern
all Stock Options hereunder, including those granted before such
revision or amendment; provided, however, that no such revision
or amendment shall alter, impair or diminish any rights or
obligations under any Stock Option previously granted under this
Plan, without the written consent of the Optionee. Without
limiting the generality of the foregoing, the Administering Body
is authorized to amend this Plan to comply with or take advantage
of amendments to applicable laws, rules or regulations, including
amendments to the Securities Act, Exchange Act or the IRC or any
rules or regulations promulgated thereunder. No stockholder
approval of any amendment or revision shall be required unless
such approval is required by applicable law, rule or regulation.
(b) The Administering Body may, with the written consent of
an Optionee, make such modifications in the terms and conditions
of a Stock Option as it deems advisable. Without limiting the
generality of the foregoing, the Administering Body may, in its
discretion with the written consent of Optionee, at any time and
from time to time after the grant of any Stock Option accelerate
or extend the vesting or exercise period of any Stock Option as a
whole or in part, and adjust or reduce the exercise price of
Stock Options held by such Optionee by cancellation of such Stock
Options and granting of Stock Options at lower or exercise prices
or by modification, extension or renewal of such Stock Options.
(c) Except as otherwise provided in this Plan or in the
applicable Stock Option Document, no amendment, revision,
suspension or termination of this Plan will, without the written
consent of the Optionee, alter, terminate, impair or adversely
affect any right or obligation under any Stock Option previously
granted under this Plan.
4.5 Other Compensation Plans. The adoption of this Plan
shall not affect any other stock option, incentive or other
compensation plans in effect for the Company, and this Plan shall
not preclude the Company from establishing any other forms of
incentive or other compensation for employees, directors,
advisors or consultants of the Company, whether or not approved
by stockholders.
4.6 Plan Binding on Successors. This Plan shall be binding
upon the successors and assigns of the Company.
4.7 References to Successor Statutes, Regulations and
Rules. Any reference in this Plan to a particular statute,
regulation or rule shall also refer to any successor provision of
such statute, regulation or rule.
-4-
<PAGE>
4.8 Issuances for Services. Options to Eligible Persons
shall be granted only in exchange for bona fide services rendered
by such Eligible Persons, and such services must not be in
connection with the offer and sale of securities in a capital-
raising transaction.
4.9 Invalid Provisions. In the event that any provision of
this Plan is found to be invalid or otherwise unenforceable under
any applicable law, such invalidity or unenforceability shall not
be construed as rendering any other provisions contained herein
invalid or unenforceable, and all such other provisions shall be
given full force and effect to the same extent as though the
invalid and unenforceable provision were not contained herein.
4.10 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of
Delaware, without giving effect to the principles of the
conflicts of laws thereof.
ARTICLE V
---------
GENERAL AWARD PROVISIONS
5.1 Participation in the Plan.
(a) A person shall be eligible to receive grants of Stock
Options under this Plan if, at the time of the grant of the Stock
Option, such person is an Eligible Person.
(b) Notwithstanding anything to the contrary herein, the
Administering Body may, in order to fulfill the purposes of this
Plan, modify grants of Stock Options to Recipients who are
foreign nationals to recognize differences in applicable law, tax
policy or local custom.
5.2 Stock Option Documents.
(a) Each Stock Option granted under this Plan shall be
evidenced by an agreement duly executed on behalf of the Company
and by the Recipient or, in the Administering Body's discretion,
a confirming memorandum issued by the Company to the Recipient,
setting forth such terms and conditions applicable to the Stock
Option as the Administering Body may in its discretion determine.
Stock Option Documents may but need not be identical and shall
comply with and be subject to the terms and conditions of this
Plan, a copy of which shall be provided to each Recipient and
incorporated by reference into each Stock Option Document. Any
Stock Option Document may contain such other terms, provisions
and conditions not inconsistent with this Plan as may be
determined by the Administering Body.
(b) In case of any conflict between this Plan and any Stock
Option Document, this Plan shall control.
5.3 Exercise of Stock Options. No Stock Option shall be
exercisable except in respect of whole shares, and fractional
share interests shall be disregarded. Not less than 100 shares
of Common Stock (or such other amount as is set forth in the
applicable Stock Option Documents) may be purchased at one time
and Stock Options must be exercised in multiples of 100 unless
the number purchased is the total number at the time available
for purchase under the terms of the Stock Option. A Stock Option
shall be deemed to be exercised when the Secretary or other
designated official of the Company receives written notice of
such exercise from the
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<PAGE>
Optionee, together with payment of the exercise price made in
accordance with Section 5.4 and any amounts required under
Section 5.11. Notwithstanding any other provision of this Plan,
the Administering Body may impose, by rule and/or in Stock Option
Documents, such conditions upon the exercise of Stock Options
(including without limitation conditions limiting the time of
exercise to specified periods) as may be required to satisfy
applicable regulatory requirements.
5.4 Payment For Stock Options.
(a) The exercise price or other payment for a Stock Option
shall be payable upon the exercise of a Stock Option pursuant to
a Stock Option granted hereunder by delivery of legal tender of
the United States or payment of such other consideration as the
Administering Body may from time to time deem acceptable in any
particular instance.
(b) In the discretion of the Administering Body, Stock
Options may be exercised by matured capital stock of the Company
(i.e., owned longer than six months) delivered in transfer to the
Company by or on behalf of the person exercising the Stock Option
and duly endorsed in blank or accompanied by stock powers duly
endorsed in blank, with signatures guaranteed in accordance with
the Exchange Act if required by the Administering Body (valued at
Fair Market Value as of the exercise date), or such other
consideration as the Administering Body may from time to time in
the exercise of its discretion deem acceptable in any particular
instance; provided, however, that the Administering Body may, in
the exercise of its discretion, (i) allow exercise of Stock
Options in a broker-assisted or similar transaction in which the
exercise price is not received by the Company until promptly
after exercise, and/or (ii) allow the Company to loan the
exercise price to the Optionee, if the exercise will be followed
by a prompt sale of some or all of the underlying shares and a
portion of the sale proceeds is dedicated to full payment of the
exercise price and amounts required pursuant to Section 5.11.
5.5 No Continuing Service Rights. Nothing contained in
this Plan (or in Stock Option Documents or in any other documents
related to this Plan or to Stock Options granted hereunder) shall
confer upon any Recipient any right to continue providing
services to the Company or any Affiliated Entity or constitute
any contract or agreement of engagement, or interfere in any way
with the right of the Company or any Affiliated Entity to
terminate the engagement of such Recipient, with or without
cause, subject to any contract rights between the parties.
Except as expressly provided in this Plan or in any statement
evidencing the grant of Stock Options pursuant to this Plan, the
Company shall have the right to deal with each Recipient in the
same manner as if this Plan and any such statement evidencing the
grant of Stock Options pursuant to this Plan did not exist,
including without limitation with respect to all matters related
to the conditions of the engagement of the Recipient. Any
questions as to whether and when there has been a termination of
a Recipient's engagement, the reason (if any) for such
termination, and/or the consequences thereof under the terms of
this Plan or any statement evidencing the grant of Stock Options
pursuant to this Plan shall be determined by the Administering
Body, and the Administering Body's determination thereof shall be
final and binding.
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<PAGE>
5.6 Restrictions Under Applicable Laws and
Regulations.
(a) All Stock Options granted under this Plan shall be
subject to the requirement that, if at any time the Company shall
determine, in its discretion, that the listing, registration or
qualification of the shares subject to Stock Options granted
under this Plan upon any securities exchange or under any
federal, state or foreign law, or the consent or approval of any
government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Stock
Options or the issuance, if any, or purchase of shares in
connection therewith, such Stock Options may not be exercised as
a whole or in part unless and until such listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.
During the term of this Plan, the Company will use its reasonable
efforts to seek to obtain from the appropriate regulatory
agencies any requisite qualifications, consents, approvals or
authorizations in order to issue and sell such number of shares
of its Common Stock as shall be sufficient to satisfy the
requirements of this Plan. The inability of the Company to
obtain from any such regulatory agency having jurisdiction
thereof the qualifications, consents, approvals or authorizations
deemed by the Company to be necessary for the lawful issuance and
sale of any shares of its Common Stock hereunder shall relieve
the Company of any liability in respect of the nonissuance or
sale of such stock as to which such requisite authorization shall
not have been obtained.
(b) The Company shall be under no obligation to register or
qualify the issuance of Stock Options or underlying shares under
the Securities Act or applicable state securities laws. Unless
the issuance of Stock Options and underlying shares have been
registered under the Securities Act and qualified or registered
under applicable state securities laws, the Company shall be
under no obligation to issue any Stock Options or underlying
shares of Common Stock covered by any Stock Options unless the
Stock Options and underlying shares may be issued pursuant to
applicable exemptions from such registration or qualification
requirements. In connection with any such exempt issuance, the
Administering Body may require the Optionee to provide a written
representation and undertaking to the Company, satisfactory in
form and scope to the Company and upon which the Company may
reasonably rely, that such Optionee is acquiring such Stock
Options and underlying shares for such Optionee's own account as
an investment and not with a view to, or for sale in connection
with, the distribution of any such shares of stock, and that such
person will make no transfer of the same except in compliance
with any rules and regulations in force at the time of such
transfer under the Securities Act and other applicable law, and
that if shares of stock are issued without such registration, a
legend to this effect (together with any other legends deemed
appropriate by the Administering Body) may be endorsed upon the
securities so issued. The Company may also order its transfer
agent to stop transfers of such shares. The Administering Body
may also require the Optionee to provide the Company such
information and other documents as the Administering Body may
request in order to satisfy the Administering Body as to the
investment sophistication and experience of the Optionee and as
to any other conditions for compliance with any such exemptions
from registration or qualification.
5.7 Additional Conditions. Any Stock Option may also be
subject to such other provisions (whether or not applicable to
any other Stock Option or Optionee) as the Administering Body
determines appropriate including without limitation provisions to
assist the Optionee in financing the purchase of Common Stock
through the exercise of Stock Options, provisions for the
forfeiture of or restrictions on resale or other disposition of
shares of Common Stock acquired under any form of benefit,
provisions giving the Company the right to repurchase
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<PAGE>
shares of Common Stock acquired under any form of benefit in the
event the Optionee elects to dispose of such shares or upon such
other terms as therein specified, and provisions to comply with
federal and state securities laws and federal and state income
tax withholding requirements.
5.8 No Privileges of Stock Ownership. Except as otherwise
set forth herein, an Optionee shall have no rights as a
stockholder with respect to any shares issuable or issued in
connection with the Stock Option until the date of the receipt by
the Company of all amounts payable in connection with exercise of
the Stock Option and performance by the Optionee of all
obligations thereunder. Status as an Eligible Person shall not
be construed as a commitment that any Stock Option will be
granted under this Plan to an Eligible Person or to Eligible
Persons generally. No person shall have any right, title or
interest in any fund or in any specific asset (including shares
of capital stock) of the Company by reason of any Stock Option
granted hereunder. Neither this Plan (or any documents related
hereto) nor any action taken pursuant hereto (or thereto) shall
be construed to create a trust of any kind or a fiduciary
relationship between the Company and any Person. To the extent
that any Person acquires a right to receive Stock Options
hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Company.
5.9 Limited Assignability. No Stock Option granted under
this Plan shall be assignable or transferable except (a) by will
or by the laws of descent and distribution, or (b) subject to the
final sentence of this Section 5.9, upon dissolution of marriage
pursuant to a qualified domestic relations order or, in the
discretion of the Administering Body and under circumstances that
would not adversely affect the interests of the Company, pursuant
to a nominal transfer that does not result in a change in
beneficial ownership; provided, however, that the Administering
Body may in the applicable Stock Option Document evidencing Stock
Options granted hereunder or at any time thereafter provide that
Stock Options granted hereunder may be transferred without
consideration by the Recipient, subject to such rules as the
Administering Body may adopt to preserve the purposes of the
Plan, to one or more Permitted Transferees; provided further,
that the Recipient gives the Administering Body advance written
notice describing the terms and conditions of the proposed
transfer and the Administering Body notifies the Recipient in
writing that such transfer would comply with the requirements of
the Plan and any applicable Stock Option Document. The terms of
any Stock Option transferred to Permitted Transferees in
accordance with the immediately preceding sentence shall apply to
the Permitted Transferee, except that (a) Permitted Transferees
shall not be entitled to transfer any Stock Options, other than
by will or the laws of descent and distribution; and (b)
Permitted Transferees shall not be entitled to exercise any
transferred Stock Options unless there shall be in effect a
registration statement on an appropriate form covering the shares
of Common Stock to be acquired pursuant to the exercise of such
Stock Option if the Administering Body determines that such a
registration statement is necessary or appropriate. During the
lifetime of an Optionee, Stock Options shall be exercisable only
by the Optionee or such person's guardian or legal
representative.
5.10 Information to Optionees.
(a) The Administering Body in its sole discretion shall
determine what, if any, financial and other information shall be
provided to Optionees and when such financial and other
information shall be provided after giving consideration to
applicable federal and state laws,
-8-
<PAGE>
rules and regulations, including without limitation applicable
federal and state securities laws, rules and regulations.
(b) The furnishing of financial and other information that
is confidential to the Company shall be subject to the Optionee's
agreement that the Optionee shall maintain the confidentiality of
such financial and other information, shall not disclose such
information to third parties, and shall not use the information
for any purpose other than evaluating an investment in the
Company's securities under this Plan. The Administering Body may
impose other restrictions on the access to and use of such
confidential information and may require an Optionee to
acknowledge the Optionee's obligations under this Section 5.10(b)
(which acknowledgment shall not be a condition to the Optionee's
obligations under this Section 5.10(b)).
5.11 Withholding Taxes. Whenever the granting, vesting or
exercise of any Stock Option granted under this Plan, or the
transfer of any shares issued upon exercise of any Stock Option,
gives rise to tax or tax withholding liabilities or obligations,
the Administering Body shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy
any federal, state and local withholding tax requirements prior
to issuance of such shares. The Administering Body may, in the
exercise of its discretion, allow satisfaction of tax withholding
requirements by accepting delivery of stock of the Company (or by
withholding a portion of the stock otherwise issuable in
connection with Stock Options).
5.12 Legends on Stock Options and Stock Certificates. Each
Stock Option Document and each certificate representing shares
acquired upon exercise of Stock Options shall be endorsed with
all legends, if any, required by applicable federal and state
securities and other laws to be placed on the Stock Option
Document and/or the certificate. The determination of which
legends, if any, shall be placed upon Stock Option Documents or
the certificates shall be made by the Administering Body in its
sole discretion and such decision shall be final and binding.
5.13 Effect of Termination of Engagement on Stock Options.
(a) Termination. Subject to Section 5.13(b), and except as
otherwise provided in a written agreement between the Company and
the Optionee which may be entered into at any time before or
after termination of engagement of the Recipient, in the event of
termination of Recipient's engagement, the Optionee's Stock
Options, whether or not vested, shall expire and become
unexercisable as of the earlier of (A) the date such Stock
Options would expire in accordance with their terms had the
Recipient remained engaged by the Company and (B) (i) six (6)
months after Recipient's engagement is terminated as a result of
death or Permanent Disability and (ii) sixty (60) days after
Recipient's engagement is terminated for any other reason.
(b) Alteration of Vesting and Exercise Periods.
Notwithstanding anything to the contrary in Section 5.13(a), the
Administering Body may in its discretion designate shorter or
longer periods to exercise Stock Options following a Recipient's
termination of engagement; provided, however, that any shorter
periods determined by the Administering Body shall be effective
only if provided for in the instrument that evidences the grant
to the Optionee of such
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<PAGE>
Stock Options or if such shorter period is agreed to in writing
by the Optionee. Notwithstanding anything to the contrary
herein, Stock Options shall be exercisable by an Optionee
following such Optionee's termination of engagement only to the
extent that installments thereof had become exercisable on or
prior to the date of such termination; and provided, further,
that the Administering Body may, in its discretion, elect to
accelerate the vesting of all or any portion of any Stock Options
that had not become exercisable on or prior to the date of such
termination.
ARTICLE VI
----------
STOCK OPTIONS
6.1 Nature of Stock Options. Stock Options shall be Non-
qualified Stock Options.
6.2 Option Exercise Price. The exercise price for each
Stock Option shall be determined by the Administering Body as of
the date such Stock Option is granted. The exercise price shall
be no less than the Fair Market Value of the Common Stock subject
to the Option. The Administering Body may, with the consent of
the Optionee, amend the terms of any Stock Option to provide that
the exercise price of the shares remaining subject to the Stock
Option shall be reestablished at a price not less than 100% of
the Fair Market Value of the Common Stock on the effective date
of the amendment. No modification of any other term or provision
of any Stock Option that is amended in accordance with the
foregoing shall be required, although the Administering Body may,
in its discretion, make such further modifications of any such
Stock Option as are not inconsistent with this Plan.
6.3 Option Period and Vesting. Stock Options granted
hereunder shall vest and may be exercised as determined by the
Administering Body, except that exercise of such Stock Options
after termination of the Recipient's engagement by the Company
shall be subject to Section 5.13. Each Stock Option granted
hereunder and all rights or obligations thereunder shall expire
on such date as shall be determined by the Administering Body,
but not later than 10 years after the date the Stock Option is
granted and shall be subject to earlier termination as provided
herein or in the Stock Option Document. The Administering Body
may, in its discretion at any time and from time to time after
the grant of a Stock Option, accelerate vesting of such Option as
a whole or in part by increasing the number of shares then
purchasable, provided that the total number of shares subject to
such Stock Option may not be increased. Except as otherwise
provided herein, a Stock Option shall become exercisable, as a
whole or in part, on the date or dates specified by the
Administering Body and thereafter shall remain exercisable until
the expiration or earlier termination of the Stock Option.
ARTICLE VII
-----------
REORGANIZATIONS
7.1 Corporate Transactions Not Involving a Change in
Control. If the Company shall consummate any Reorganization not
involving a Change in Control in which holders of shares of
Common Stock are entitled to receive in respect of such shares
any securities, cash or other consideration (including without
limitation a different number of shares of Common Stock), each
Stock Option outstanding under this Plan shall thereafter be
exercisable, in accordance with this Plan, only for the kind and
amount of securities, cash and/or other consideration receivable
upon such Reorganization by a holder of the same number of shares
of
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<PAGE>
Common Stock as are subject to that Stock Option immediately
prior to such Reorganization, and any adjustments will be made to
the terms of the Stock Option in the sole discretion of the
Administering Body as it may deem appropriate to give effect to
the Reorganization.
7.2 Corporate Transactions Involving a Change in Control.
As of the effective time and date of any Change in Control, this
Plan and any then outstanding Stock Options (whether or not
vested) shall automatically terminate unless (a) provision is
made in writing in connection with such transaction for the
continuance of this Plan and for the assumption of such Stock
Options, or for the substitution for such Stock Options of new
awards covering the securities of a successor entity or an
affiliate thereof, with appropriate adjustments as to the number
and kind of securities and exercise prices, in which event this
Plan and such outstanding Stock Options shall continue or be
replaced, as the case may be, in the manner and under the terms
so provided; or (b) the Board otherwise has provided or shall
provide in writing for such adjustments as it deems appropriate
in the terms and conditions of the then-outstanding Stock Options
(whether or not vested), including without limitation (i)
accelerating the vesting of outstanding Stock Options and/or (ii)
providing for the cancellation of Stock Options and their
automatic conversion into the right to receive the securities,
cash and/or other consideration that a holder of the shares
underlying such Stock Options would have been entitled to receive
upon consummation of such Change in Control had such shares been
issued and outstanding immediately prior to the effective date
and time of the Change in Control (net of the appropriate option
exercise prices). If, pursuant to the foregoing provisions of
this Section 7.2, this Plan and the Stock Options shall terminate
by reason of the occurrence of a Change in Control without
provision for any of the actions described in clause (a) or (b)
hereof, then any Optionee holding outstanding Stock Options shall
have the right, at such time immediately prior to the
consummation of the Change in Control as the Board shall
designate, to exercise the Optionee's Stock Options to the full
extent not theretofore exercised, including any installments
which have not yet become vested.
ARTICLE VIII
------------
DEFINITIONS
Capitalized terms used in this Plan and not otherwise
defined shall have the meanings set forth below:
"Administering Body" shall mean the Board as long as no
Consultants' Plan Committee has been appointed and is in effect
and shall mean the Consultants' Plan Committee as long as the
Consultants' Plan Committee is appointed and in effect.
"Affiliated Entity" means any Parent Corporation or
Subsidiary Corporation.
"Board" means the Board of Directors of the Company.
"Change in Control" means the following and shall be deemed
to occur if any of the following events occur:
(a) The acquisition, other than from the Company, by any
Person other than Royal Holding Company, Inc. or B.H. Adams of
beneficial ownership of thirty percent (30%) or more of either
the then
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<PAGE>
outstanding shares of Common Stock or the combined voting power
of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; provided,
however, that any acquisition by the Company or any of its
Subsidiaries, or any employee benefit plan (or related trust) of
the Company 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 Company 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 Company or the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, as the
case may be, shall not constitute a Change in Control;
(b) Individuals who, as of August 30, 1999, constitute the
Board as of the date thereof (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board,
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
(c) 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.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par
value $.001 per share, as constituted on the Effective Date of
this Plan, and as thereafter adjusted as a result of any one or
more events requiring adjustment of outstanding Stock Options
under Section 3.4 above.
"Company" means Adams Golf, Inc., a Delaware corporation.
"Consultants' Plan Committee" means the committee appointed
by the Board to administer this Plan pursuant to Section 4.1.
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<PAGE>
"Effective Date" means August 30, 1999, which is the date
this Plan was adopted by the Board.
"Eligible Person" shall include only natural persons that
are non-employee, current or former tour professionals, golf
instructors, psychologists or other advisors acting as outside
consultants to the Company or any Affiliated Entity.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" means the tenth anniversary of the
Effective Date, specifically August 30, 2009.
"Fair Market Value" of a share of the Company's capital
stock as of a particular date shall be: (a) if the stock is
listed on an established stock exchange or exchanges (including
for this purpose, The Nasdaq National Market), the average of the
highest and lowest sale prices of the stock quoted for such date
as reported in the transactions index of each such exchange, as
published in The Wall Street Journal and determined by the
Administering Body, or, if no sale price was quoted in any such
index for such date, then as of the next preceding date on which
such a sale price was quoted; or (b) if the stock is not then
listed on an exchange or the Nasdaq National Market, the average
of the closing bid and asked prices per share for the stock in
the over-the-counter market as quoted on The Nasdaq Small Cap
Market on such date (in the case of (a) or (b), subject to
adjustment as and if necessary and appropriate to set an exercise
price not less than 100% of the Fair Market Value of the stock on
the date an option is granted); or (c) if the stock is not then
listed on an exchange or quoted in the over-the-counter market,
an amount determined in good faith by the Administering Body;
provided, however, that (i) when appropriate, the Administering
Body, in determining Fair Market Value of capital stock of the
Company, may take into account such other factors as it may deem
appropriate under the circumstances and (ii) if the stock is
traded on The Nasdaq Small Cap Market and both sales prices and
bid and asked prices are quoted or available, the Administering
Body may elect to determine Fair Market Value under either clause
(i) or (ii) above.
"Immediate Family" means the Recipient's spouse, children or
grandchildren (including adopted and stepchildren and
grandchildren).
"IRC" means the Internal Revenue Code of 1986, as amended.
"Non-qualified Stock Option" means a Stock Option that is
not an incentive stock option under Section 422 of the IRC, or
any successor statute thereto.
"Optionee" means a Recipient or the Recipient's successor in
interest.
"Parent Corporation" means any "parent corporation" as
defined in Section 424(e) of the IRC.
"Permanent Disability" shall mean that the Recipient becomes
physically or mentally incapacitated or disabled so that the
Recipient is unable to perform substantially the same services as
the Recipient performed prior to incurring such incapacity or
disability (the Company, at its option and expense, being
entitled to retain a physician to confirm the existence
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<PAGE>
of such incapacity or disability, and the determination of such
physician to be binding upon the Company and the Recipient), and
such incapacity or disability continues for a period of three
consecutive months or six months in any 12-month period or such
other period(s) as may be determined by the Consultants' Plan
Committee with respect to any Stock Option.
"Person" means any person, entity or group, within the
meaning of Section 13(d) or 14(d) of the Exchange Act, but
excluding (a) the Company and its subsidiaries, (b) any employee
stock ownership or other employee benefit plan maintained by the
Company that is qualified under the Employee Retirement Income
Security Act of 1974, as amended, and (c) an underwriter or
underwriting syndicate that has acquired the Company's securities
solely in connection with a public offering thereof.
"Permitted Transferee" means (a) the Recipient's Immediate
Family; (b) a trust solely for the benefit of the Recipient
and/or his or her Immediate Family; or (c) a partnership or
limited liability company the partners or stockholders of which
are limited to the Recipient and members of his or her Immediate
Family.
"Plan" means this 1999 Stock Option Plan for Outside
Consultants of the Company.
"Plan Term" means the period during which this Plan remains
in effect (commencing on the Effective Date and ending on the
Expiration Date).
"Recipient" means a person who has received a Stock Option
under this Plan.
"Reorganization" means any merger, consolidation or other
reorganization.
"Securities Act" means the Securities Act of 1933, as
amended.
"Stock Option" means a right to purchase stock of the
Company granted under Article VI of this Plan to an Eligible
Person.
"Stock Option Document" means the agreement or confirming
memorandum setting forth the terms and conditions of Stock
Options.
"Subsidiary Corporation" means any "subsidiary corporation"
as defined in Section 424(f) of the IRC.
-14-
STOCK OPTION AGREEMENT
UNDER
1999 STOCK OPTION PLAN FOR OUTSIDE CONSULTANTS
OF
ADAMS GOLF, INC.
STOCK OPTION AGREEMENT (this "Agreement") entered into this
____ day of ___________, ____, between ADAMS GOLF, INC., a
Delaware corporation (the "Corporation"), and
________________________________, an Eligible Person (as that
term is defined by the Corporation's 1999 Stock Option Plan for
Outside Consultants (the "Plan")) (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, as provided in the
Plan).
Pursuant to the Plan, the Administering Body approved the
issuance to the Optionee, effective as of the date set forth
above, of a Non-qualified 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
Administering Body 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
______ 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; 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").
<PAGE>
Cumulative
Date(s) Number of Vested Shares
(b) If the Corporation shall consummate any merger,
consolidation or other reorganization not involving a Change in
Control (a "Reorganization") in which holders of shares of Common
Stock are entitled to receive in respect of such shares any
securities, cash or other consideration (including, without
limitation, a different number of shares of Common Stock), the
Option shall thereafter be exercisable, in accordance with the
Plan and this Agreement, only for the kind and amount of
securities, cash and/or other consideration receivable upon such
Reorganization by a holder of the same number of shares of Common
Stock as are subject to the Option immediately prior to such
Reorganization, and any adjustments will be made to the terms of
the Option in the sole discretion of the Administering Body as it
may deem appropriate to give effect to the Reorganization.
(c) 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
and without notice terminate and become null and void at the time
of the earliest to occur of:
(i) six (6) months after the Optionee's engagement with the
Corporation is terminated as a result of death or Permanent
Disability;
(ii) sixty (60) days after the Optionee's engagement with the
Corporation is terminated for any reason other than death or
Permanent Disability;
(iii) the expiration date of the term of the Option; or
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, a form of which has been attached as Annex A
hereto (the "Notice"), from the Optionee to the Secretary of the
Corporation, which Notice shall:
(i) state that the Optionee elects to exercise the Option;
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<PAGE>
(ii) state the number of vested 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 9 by
any person other than the Optionee, include evidence to the
satisfaction of the Administering Body 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 9) 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 Administering Body 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.
(a) If at any time while the Option is outstanding, (1) there
shall be any increase or decrease in the number of issued and
outstanding shares of Common Stock through the declaration of a
stock dividend, stock split, combination of shares or through any
recapitalization resulting in a stock split-up, spin-off,
combination or exchange of shares of Common Stock or (2) the
value of the outstanding shares of Common Stock is reduced by
reason of an extraordinary cash dividend, then and in each such
event appropriate adjustment shall be made in the number of
shares and the exercise price per share covered by the Option, so
that the same proportion of the Corporation's issued and
outstanding shares of Common Stock shall remain subject to
purchase at the same aggregate exercise price.
(b) Except as otherwise expressly provided herein, the issuance
by the Corporation of shares of its capital stock of any class,
or securities convertible into shares of capital stock of any
class, either in connection with a direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Corporation
convertible into such shares
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<PAGE>
or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of or
exercise price of shares of Common Stock covered by the Option.
(c) Without limiting the generality of the foregoing, the
existence of the Option shall not affect in any manner the right
or power of the Corporation to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or
other changes in the Corporation's capital structure or its
business; (ii) any merger or consolidation of the Corporation;
(iii) any issue by the Corporation of debt securities, or
preferred or preference stock that would rank above the shares of
Common Stock covered by the Option; (iv) the dissolution or
liquidation of the Corporation; (v) any sale, transfer or
assignment of all or any part of the assets or business of the
Corporation; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
8. Additional Provisions Related to Exercise.
(a) The Option shall be exercisable only in accordance with this
Agreement and the terms of the Plan, 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 Administering Body 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
Administering Body, bear an appropriate legend which may, at the
discretion of the Administering Body, take the following form:
"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
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<PAGE>
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) compliance with
the terms of the Plan and this Agreement, (ii) the satisfaction
of withholding tax or other withholding liabilities, (iii) as
necessary, the listing, registration or qualification of any to-
be-issued shares upon any securities exchange, The Nasdaq Stock
Market or other trading or quotation system or under any federal
or state law and (iv) the consent or approval of any regulatory
body. The Administering Body 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 Administering Body shall have waived such
conditions, in its sole discretion.
9. Restriction on Transfer. 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 IRC, 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)(i), 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. If the
Optionee becomes inflicted with a Permanent Disability, the
Option shall thereafter be exercisable, during the period
specified in Section 4(a)(i), by his legal representatives to the
full extent to which the Option was exercisable by the Optionee
at the time of his Permanent Disability. 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.
10. 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 572
Wilmington, Delaware 19801
Attention: Secretary
with a copy to:
Adams Golf, Ltd.
c/o Adams Golf GP Corp.
2801 E. Plano Parkway
Plano, Texas 75074
Attention: President
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<PAGE>
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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
ADAMS GOLF, INC.
By:________________________________
Name:______________________________
Title:_____________________________
OPTIONEE:
__________________________________
Name:_____________________________
Address:__________________________
__________________________
__________________________
Annexes
Annex A - Form of Exercise Notice
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<PAGE>
ANNEX A
EXERCISE NOTICE
Ladies/Gentlemen:
I hereby exercise my Stock Option to purchase _________ shares of
Common Stock of ADAMS GOLF, INC. at the option price of $____ per
share as provided in the Stock Option Agreement dated the ___ day
of ________________.
I acknowledge that I previously received a copy of the 1999 Stock
Option Plan for Outside Consultants of Adams Golf, Inc. and
executed a Stock Option Agreement, and I have carefully reviewed
both documents.
I have considered the tax implications of my option and the
exercise thereof. 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.]
______________________________
Optionee
______________________________
Date
ARTER & HADDEN LLP
1717 Main Street, Suite 4100
Dallas, Texas 75201
Tel: 214.761.2100
Fax: 214.741.7139
November 5, 1999
Board of Directors
Adams Golf, Inc.
300 Delaware Avenue, Suite 572
Wilmington, Delaware 19801
Re: Adams Golf, Inc.
Registration Statement on Form S-8
1999 Stock Option Plan for Outside Consultants
Gentlemen:
We have acted as counsel to Adams Golf, Inc., a Delaware
corporation (the "Company"), in connection with the preparation
and filing of the Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and
Exchange Commission on or about November 4, 1999, under the
Securities Act of 1933, as amended (the "Securities Act"),
relating to 1,000,000 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 1999 Stock Option Plan for
Outside Consultants of Adams Golf, Inc. (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
<PAGE>
Adams Golf, Inc.
November 5, 1999
Page 2
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.
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
ARTER & HADDEN LLP
Independent Auditors' Consent
The Board of Directors
Adams Golf, Inc. and subsidiaries
We consent to the use of our report incorporated herein by
reference.
/s/KPMG LLP
Dallas, Texas
November 3, 1999
