As filed with the Securities and Exchange Commission on September 1, 1998
REGISTRATION NO. ____________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
DIVOT GOLF CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 56-1781650
(State or Other Jurisdiction (I.R.S. Employer Identification Number)
of Incorporation or Organization)
201 N. Franklin Street, Suite 200, Tampa, Florida 39602
(Address of Principal Executive Offices) (Zip Code)
DIVOT GOLF CORPORATION
1994 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
AND
1998 STOCK OPTION PLAN
(Full Title of the Plan)
JOSEPH R. CELLURA
Chairman of the Board
and Chief Executive Officer
Divot Golf Corporation
201 N. Franklin Street, Suite 200
Tampa, Florida 33602
(813) 222-0611
(Name, address and telephone number, including area code, of agent for
service)
Copy to:
Joseph W.N. Rugg
Annis, Mitchell, Cockey, Edwards & Roehn, P.A.
One Tampa City Center
Suite 2100
Tampa, Florida 33601
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE (1) PRICE (1) REGISTRATION FEE
---------------- ---------- ------------- --------- ----------------
<S> <C> <C> <C> <C>
Common Stock, Par 1,600,000 $1.36 $2,176,000 $642
Value $.001 Per shares (2)
Share
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h)(1) promulgated under the Securities Act of 1933, the
maximum aggregate offering price and the registration fee are based on a price
per share which represents the average of the high and low prices for the shares
of Divot Golf's Common Stock as reported on August 28, 1998 on the Nasdaq
SmallCap Market.
(2) This Registration Statement also relates to such indeterminate number of
additional shares of Common Stock of the Registrant as may be issuable as a
result of stock splits, stock dividends, recapitalizations, mergers,
reorganizations, combinations or exchanges of shares or other similar events.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE UPON FILING WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") IN ACCORDANCE WITH SECTION
8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, AND RULES 456 AND 462
PROMULGATED THEREUNDER.
1
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not required to be filed with the Commission.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed by Divot Golf
Corporation (the "Registrant") with the Commission are incorporated herein by
reference:
1. The Registrant's Annual Report on Form 10-KSB for the year
ended December 31, 1997 (Commission File No. 0-24812).
2. The Registrant's Quarterly Report on Form 10-QSB for the
quarterly period ended March 31, 1998 (Commission File No.
0-24812).
3. The Registrant's Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 1998 (Commission File No.
0-24812).
4. The Registrant's Quarterly Report on Form 10-QSB/A for the
quarterly period ended June 30, 1998 (Commission File No.
0-24812).
5. The Registrant's Current Reports on Forms 8-K and Forms 8-K/A
filed with the Commission on January 12, 1998 (two filings),
February 13, 1998, April 1, 1998, April 15, 1998, April 23,
1998, April 30, 1998, May 4, 1998, May 28, 1998, June 12,
1998, June 15, 1998, and June 19, 1998.
6. The Registrant's description of the securities contained on
Forms 10 filed December 13, 1993 and September 15, 1994.
7. All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since December 31, 1997.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14, and 15(d) of the Exchange Act after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents.
Any statement contained in this Registration Statement, 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 a statement contained herein or in any other subsequently
filed document which is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
The Registrant will provide without charge to each person to whom
the Prospectus constituting a part of this Registration Statement is delivered,
on the written or oral request of any such person, a copy of any or all of the
documents incorporated herein and in the Prospectus by (other than exhibits to
such documents which are not specifically incorporated by reference in such
documents). Written requests for such copies should be directed to Investor
Relations, Divot Golf Corporation, 201 N. Franklin Street, Suite 200, Tampa,
Florida 33602. Telephone requests may be directed to (813) 222-0611.
2
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
General Corporation Law of Delaware. Section 145 of the General
Corporation Law of Delaware provides that in certain circumstances a corporation
shall have the power to indemnify directors, officers, employees, and agents
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement which are reasonably incurred by the person in connection with
legal proceedings related to the corporation.
The Certificate of Incorporation of the Registrant provides that (i)
the Registrant will indemnify any director, officer, employee, or agent of the
Registrant with respect to actions, suits, or proceedings relating to the
Registrant if he acted in good faith and in a manner reasonably believed to be
in, or not opposed to, the Registrant's best interests, (ii) that any such
person subject to an action or suit that is by or in the right of the Registrant
shall be indemnified except that no indemnification shall be made if such person
shall have been adjudged to be liable for misconduct or negligence in the
performance of his duties to the Registrant, unless judicially determined
otherwise, and (iii) that indemnification shall not be deemed exclusive of any
other rights to which a person may be entitled under any bylaw, agreement, or
otherwise. This indemnification includes the right to advancement of expenses
when allowed pursuant to applicable law. The Registrant, pursuant to the
direction of the Board of Directors, may purchase and maintain insurance, in
amounts as the Board of Directors deem appropriate on behalf of those subject to
indemnification, regardless of whether or not the Registrant has the power to
indemnify the person. Article 10 states that the personal liability of directors
is eliminated to the fullest extent permitted by Delaware law.
Indemnification Agreements. The Registrant has entered into
indemnification agreements with the executive officers of the Registrant which
obligate the Registrant to contribute to the amount expended or incurred by the
executives in legal proceedings relating to the Registrant for which
indemnification is not available or permitted. The contribution shall be in a
proportionate amount as is appropriate to reflect the relative benefits received
by the parties and their relative fault which resulted in the legal proceeding.
However, no contribution shall be required if the executive's conduct is held to
be unlawful by a court having proper jurisdiction.
Director and Officer Liability Insurance. The Registrant maintains
director and officer liability insurance which covers certain liabilities and
expenses of officers and directors of the Registrant and covers the Registrant
for reimbursement of payments to directors and officers in respect of such
liabilities and expenses.
As a result of the foregoing provisions and agreements, stockholders
may be discouraged from bringing suit against a director for breach of fiduciary
duty and may reduce the likelihood of derivative litigation brought by
stockholders on behalf of the Registrant against a director.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
3
<PAGE>
ITEM 8. EXHIBITS
Exhibit No. Description
----------- ------------
4.1 Brassie Golf Corporation 1994 Stock Option and
Restricted Stock Purchase Plan
4.2
Divot Golf Corporation 1998 Stock Option Plan
5 Opinion of Annis, Mitchell, Cockey, Edwards & Roehn,
P.A.
23.1 Consent of Ernst & Young, LLP
23.2 Consent of Annis, Mitchell, Cockey, Edwards & Roehn,
P.A. (included in Exhibit 5)
24.1 Power of Attorney (included on signature page)
ITEM 9. UNDERTAKINGS.
A. The 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 to include
any additional or changed material information with respect to the plan of
distribution not previously disclosed in this Registration Statement.
2. That, for the purpose of determining any liability under
the Securities Act, 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. Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities Act and is, therefore, unenforceable.
C. 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.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Tampa, State of Florida, on September 1, 1998.
DIVOT GOLF CORPORATION
By /s/ JOSEPH R. CELLURA
-------------------------
Joseph R. Cellura
Chairman of the Board
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints Joseph R. Cellura and Clifford F. Bagnall, and each of
them, his attorney-in-fact, with power of substitution for him in any and all
capacities, to sign any amendments, supplements, subsequent registration
statements relating to the offering to which this Registration Statement
relates, or other instruments he deems necessary or appropriate, and to file the
same, with exhibits thereto, and other documents in connection therewith, with
the Commission, hereby ratifying and confirming all that said attorney-in-fact
or his substitute may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the capacities and on the date
indicated.
SIGNATURE TITLE DATE
- ------------ ----- ----
/S/ JOSEPH R. CELLURA Chairman of the Board September 1, 1998
- ---------------------
Joseph R. Cellura Chief Executive Officer
/S/ CLIFFORD F. BAGNALL Director September 1, 1998
- ------------------------
Clifford F. Bagnall Chief Operating Officer
Chief Financial Officer
/S/ JEREMIAH M. DALY Director September 1, 1998
- ----------------------
Jeremiah M. Daly President
5
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Page Number
----------- ----------- -----------
4.1 Brassie Golf Corporation (A)
1994 Stock Option and
Restricted Stock Purchase
4.2 Plan
Divot Golf Corporation 1998
Stock Option Plan
5 Opinion of Annis, Mitchell,
Cockey, Edwards & Roehn, P.A.
23.1 Consent of Ernst & Young, LLP
23.2 Consent of Annis, Mitchell,
Cockey, Edwards & Roehn,
P.A. (included in Exhibit 5)
24.1 Power of Attorney (included
on signature page)
- ----------------
(A) Incorporated by reference from the Registrant's Form 10, file
No. 024812, filed on September 15, 1994.
6
<PAGE>
EXHIBIT 4.2
7
<PAGE>
DIVOT GOLF CORPORATION
1998 STOCK OPTION PLAN
ARTICLE 1
General
1.1 Purpose. This incentive stock option and non-qualified stock option
plan (the "Plan") is established to promote the interests of DIVOT GOLF
CORPORATION (the "Corporation") and its Shareholders by enabling the
Corporation, through the granting of stock options, to attract, retain, and
reward executive and other key personnel, directors, consultants, vendors,
suppliers, and other individuals determined to be of special importance to the
Corporation and its subsidiaries, and to provide additional incentive to such
individuals to increase their stock ownership in the Corporation.
1.2 Administration.
1.2.1 The incentive stock option and non-qualified stock option
provisions of the Plan shall be administered by the Board of Directors of the
Corporation or, at the discretion of the Board of Directors by a committee
appointed by the Board of Directors (the "Committee"). The Committee shall
consist of not less than two (2) nor more than five (5) persons; provided,
however, that, in the event that the Corporation becomes subject to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 or any
statute of similar import (the "1934 Act"), the Committee shall consist solely
of those members of the Corporation's Board of Directors who are non-employee
directors (as such term is defined in Rule 16b-3 of the 1934 Act). The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors.
1.2.2 The Committee shall select one of its members as chairman, and
shall hold meetings at such time and places as it may determine. The acts of a
majority of the Committee at which a quorum is present, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be
valid acts of the Committee.
1.2.3 Subject to the provisions of the Plan, the Committee shall
have full authority, in its discretion: (1) to determine the employees of the
Corporation and its subsidiaries to whom stock options shall be granted; (2) to
determine the time or times at which stock options shall be granted; (3) to
determine whether an eligible employee shall be granted an incentive stock
option, a non-qualified stock option or any combination thereof; (4) to
determine the option price of the shares subject to each stock option; (5) to
determine the time or times when each stock option becomes exercisable and the
duration of any stock option period; and (6) to interpret the Plan and the stock
options granted hereunder, and to prescribe, amend and rescind rules and
regulations with respect thereto. The interpretation and construction by the
Committee of any provision of the Plan over which it has discretionary authority
or of any option granted hereunder shall be final and conclusive.
1.2.4 No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any stock option
granted hereunder.
1.3 Eligible Individuals. A stock option may be granted to any executive
or other key employee of the Corporation or of a subsidiary (who may or may not
be an officer or member of the Board of Directors), or to any director,
consultant, vendor, supplier, or other individual determined to be of special
importance to the Corporation and its business, with the exception that
incentive stock options may only be granted under the Plan to persons who can
qualify for the benefits of incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended.
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1.4 Stock Subject to the Plan.
1.4.1 The stock subject to the stock options under the Plan shall be
shares of common capital stock of the Corporation, which shares may be, in whole
or in part, either authorized but unissued shares or issued shares held in the
treasury. The aggregate number of shares that may be issued upon the exercise of
stock options granted under the Plan shall not exceed 22,500,000 shares of
common stock [1,500,000, if Proposal SIX is approved], which limitation shall be
subject to adjustment as provided in Article 4 of the Plan.
1.4.2 If a stock option is surrendered or for any other reason
ceases to be exercisable in whole or in part, the shares of common stock that
are subject to such option, but as to which the option has not been exercised,
shall again become available for offering under the Plan.
ARTICLE 2
Terms and Conditions of Incentive Stock Options
It is intended that those options issued pursuant to this Article 2 shall
constitute incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder, or any statute or regulation of similar import. Any incentive stock
option ("ISO") granted pursuant to the Plan shall be authorized by the Committee
and shall be evidenced by certificates or agreements in such form as the
Committee from time to time shall approve, which certificates or agreements
shall comply with and be subject to the terms and conditions hereinafter
specified.
2.1 Number of Shares. Each ISO shall state the number of shares to which
it pertains.
2.2 Option Price. Each ISO shall state the option price, which price shall
be determined by the Committee in its discretion. In no event, however, shall
such price be less than 100% of the fair market value of the shares of common
stock of the Corporation (determined under Article 4 of the Plan) on the date of
the granting of the ISO; or, in the case of an individual who owns (at the time
the option is granted) more than 10% of the total combined voting power of all
classes of stock of the Corporation or of a parent or subsidiary corporation (a
"10% Shareholder"), shall such price be less than 110% of such fair market
value.
2.3 Method of Payment. Each ISO shall state the method of payment of the
ISO price upon the exercise of the ISO. The method of payment stated in the ISO
shall include payment (a) in United States dollars in cash or by check, bank
draft or money order payable to the order of the Corporation, or (b) in the
discretion of and in the manner determined by the Committee, by the delivery of
shares of common stock of the Corporation already owned by the optionee, (c) by
any other legally permissible means acceptable to the Committee at the time of
grant of the ISO, or (d) in the discretion of the Committee, through a
combination of (a), (b) and (c) of this paragraph 2.3. If the option price is
paid in whole or in part through the delivery of shares of common stock, the
decision of the Committee with respect to the fair market value of such shares
shall be final and conclusive.
2.4 Term and Exercise of Options. No ISO shall be exercisable either in
whole or in part prior to twelve (12) months from the date it is granted. An ISO
shall become fully exercisable three (3) years from the date it is granted.
Prior to becoming fully exercisable, an ISO shall become exercisable in
cumulative installments based on the number of years from the date the ISO is
granted in accordance with the following chart:
Exercisable Percentage
Number of Years from the of the Number of Shares
Date the ISO is Granted Originally Covered by Option
------------------------ ----------------------------
Less than one year 0%
1 year but less than 2 years 33-1/3%
2 years but less than 3 years 66-2/3%
3 years or more 100%
To the extent not exercised, installments shall be exercisable, in whole
or in part, in any subsequent period, but not later than the expiration date of
the option. No ISO shall be exercisable after the expiration of ten (10) years
from the date it is granted; or, in the case of a 10% Shareholder, no ISO shall
be exercisable after the expiration of five (5) years from the date it is
granted.
Within the limits described above, the Committee may impose additional
requirements on the exercise of ISOs, including, but without limitation, the
number of shares covered by the ISO that become eligible to be exercised in any
year and the expiration date of the option. Subject to the provisions of the
Plan and any other terms and conditions the Committee deems appropriate, the
Committee in its discretion also may accelerate the time at which an ISO may be
exercised if, under previously established exercise terms, such ISO was not
immediately exercisable in full.
9
<PAGE>
2.5 Additional Limitations on Exercise of Options. An optionee may hold
and exercise more than one ISO, but only on the terms and subject to the
restrictions hereafter set forth. The aggregate fair market value (determined as
of the time an ISO is granted) of the common stock of the Corporation with
respect to which ISOs are exercisable for the first time by any employee in any
calendar year under the Plan and under all other incentive stock option plans of
the Corporation and any parent and subsidiary corporations of the Corporation
(as those terms are defined in Section 424 of the Internal Revenue Code of 1986,
as amended) shall not exceed $100,000.
2.6 Notice of Grant of Option. Upon the granting of any ISO to an
employee, the Committee shall promptly cause such employee to be notified of the
fact that such ISO has been granted. The date on which the Committee approves
the grant of an ISO shall be considered to be the date on which such ISO is
granted.
2.7 Death or Other Termination of Employment.
2.7.1 In the event that an optionee
2.7.1.1 shall cease to be employed by the Corporation or a
subsidiary because of his discharge for dishonesty, or because he violated
any material provision of any employment or other agreement between him
and the Corporation or a subsidiary, or
2.7.1.2 shall voluntarily resign or terminate his employment
with the Corporation or a subsidiary under or followed by such
circumstances as would constitute a breach of any material provision of
any employment or other agreement between him and the Corporation or a
subsidiary, or
2.7.1.3 shall have committed an act of dishonesty not
discovered by the Corporation or a subsidiary prior to the cessation of
his employment but that would have resulted in his discharge if discovered
prior to such date, or
2.7.1.4 shall, either before or after cessation of his
employment with the Corporation or a subsidiary, without the written
consent of his employer or former employer, use (except for the benefit of
his employer or former employer) or disclose to any other person any
confidential information relating to the continuation or proposed
continuation of his employer's or former employer's business or any trade
secrets of the Corporation or a subsidiary obtained as a result of or in
connection with such employment, or
2.7.1.5 shall, either before or after the cessation of his
employment with the Corporation or a subsidiary, without the written
consent of his employer or former employer, directly or indirectly, give
advice to, or serve as an employee, director, officer, partner or trustee
of, or in any similar capacity with, or otherwise directly or indirectly
participate in the management, operation, or control of, or have any
direct or indirect financial interest in, any corporation, partnership, or
other organization that directly or indirectly competes in any respect
with the Corporation or its subsidiaries,
then forthwith from the happening of any such event, any ISO then held by him
shall terminate and become void to the extent that it then remains unexercised.
In the event that an optionee shall cease to be employed by the
Corporation or a subsidiary for any reason other than his death or one or more
of the reasons set forth in paragraphs 2.7.1.1 through 2.7.1.5, subject to the
conditions that no option shall be exercisable after the expiration of ten (10)
years from the date it is granted, or, in the case of a 10% Shareholder, five
(5) years from the date it is granted, such optionee shall have the right to
exercise the ISO at any time within three (3) months after such termination of
employment to the extent his right to exercise such ISO had accrued pursuant to
this Article 2 at the date of such termination and had not previously been
exercised; such three-month limit shall be increased to one (1) year for any
optionee who ceases to be employed by the Corporation or a subsidiary because he
is disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended) or who dies during the three-month period and the ISO may
be exercised within such extended time limit by the optionee or, in the case of
death, the personal representative of the optionee or by any person or persons
who shall have acquired the ISO directly from the optionee by bequest or
inheritance. Whether an authorized leave of absence or absence for military or
governmental service shall constitute termination of employment for purposes of
the Plan shall be determined by the Committee, whose determination shall be
final and conclusive.
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2.7.2 In the event that an optionee shall die while in the employ of
the Corporation or a parent or subsidiary corporation and shall not have fully
exercised any ISO, the ISO may be exercised, subject to the conditions that no
ISO shall be exercisable after the expiration of ten (10) years from the date it
is granted, or, in the case of a 10% Shareholder, five (5) years from the date
it is granted, to the extent that the optionee's right to exercise such ISO had
accrued pursuant to this Article 2 at the time of his death and had not
previously been exercised, at any time within one (1) year after the optionee's
death, by the personal representative of the optionee or by any person or
persons who shall have acquired the ISO directly from the optionee by bequest or
inheritance, in the case of death.
2.7.3 No ISO shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution.
2.7.4 During the lifetime of the optionee, the ISO shall be
exercisable only by him and shall not be assignable or transferable and no other
person shall acquire any rights therein.
2.8 Rights as a Shareholder. An optionee shall have no rights as a
Shareholder with respect to any shares covered by his ISO until the date of the
issuance of a stock certificate to him for such shares after exercise of the
ISO. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Article 4.
2.9 Modification, Extension, and Renewal of Options. Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
extend or renew outstanding ISOs granted under the Plan, or accept the surrender
of outstanding ISOs (to the extent not theretofore exercised) and authorize the
granting of new options in substitution therefor (to the extent not theretofore
exercised). The Committee shall not, however, modify any outstanding ISOs so as
to specify a lower option price or accept the surrender of outstanding ISOs and
authorize the granting of new options in substitution therefor specifying a
lower option price. Notwithstanding the foregoing, however, no modification of
an ISO shall, without the consent of the optionee, alter or impair any of the
rights or obligations under any ISO theretofore granted under the Plan.
2.10 Listing and Registration of Shares. Each ISO shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the shares
covered thereby upon any securities exchange or under any state or federal laws,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such ISO or
the issuance or purchase of shares thereunder, such ISO may not be exercised
unless and until such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee. Notwithstanding anything in the Plan to the contrary, if the
provisions of this paragraph 2.10 become operative, and if, as a result thereof,
the exercise of an ISO is delayed, then and in that event, the term of the ISO
shall not be affected.
2.11 Other Provisions. The ISO certificates or agreements authorized under
the Plan shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the ISO, as the Committee shall deem
advisable. Any such certificate or agreement shall contain such limitations and
restrictions upon the exercise of the ISO as shall be necessary in order that
such ISO will be an incentive stock option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended, or to conform to any change in the
law.
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<PAGE>
ARTICLE 3
Terms and Conditions of Non-qualified Stock Options
Any non-qualified stock option ("NSO") granted pursuant to the Plan shall
be authorized by the Committee and shall be evidenced by certificates or
agreements in such form as the Committee from time to time shall approve, which
certificates or agreements shall comply with and be subject to the terms and
conditions hereinafter specified.
3.1 Number of Shares. Each NSO shall state the number of shares to which
it pertains.
3.2 Option Price. Each NSO shall state the option price, which price shall
be determined by the Committee in its discretion. In no event, however, shall
such price be less than 100% of the fair market value of the shares of common
stock of the Corporation (determined under Article 4 of the Plan) on the date of
the granting of the NSO.
3.3 Method of Payment. Each NSO shall state the method of payment of the
NSO price upon the exercise of the NSO. The method of payment stated in the NSO
shall include payment (a) in United States dollars in cash or by check, bank
draft or money order payable to the order of the Corporation, or (b) in the
discretion of and in the manner determined by the Committee, by the delivery of
shares of common stock of the Corporation already owned by the optionee, (c) by
any other legally permissible means acceptable to the Committee at the time of
the grant of the NSO, or (d) in the discretion of the Committee, through a
combination of (a), (b) and (c) of this paragraph 3.3. If the option price is
paid in whole or in part through the delivery of shares of common stock, the
decision of the Committee with respect to the fair market value of such shares
shall be final and conclusive.
3.4 Term and Exercise of Options. No NSO shall be exercisable either in
whole or in part prior to twelve (12) months from the date it is granted. An NSO
shall become fully exercisable three (3) years from the date it is granted.
Prior to becoming fully exercisable, an NSO shall become exercisable in
cumulative installments based on the number of years from the date the NSO is
granted in accordance with the following chart:
Exercisable Percentage
Number of Years from the of the Number of Shares
Date the NSO is Granted Originally Covered by Option
------------------------ -------------------------
Less than one year 0%
1 year but less than 2 years 33-1/3%
2 years but less than 3 years 66-2/3%
3 years or more 100%
To the extent not exercised, installments shall be exercisable, in whole
or in part, in any subsequent period, but not later than the expiration date of
the option. No NSO shall be exercisable after the expiration of ten (10) years
from the date it is granted.
Within the limits described above, the Committee may impose additional
requirements on the exercise of NSOs, including, but without limitation, the
number of shares covered by the NSO that become eligible to be exercised in any
year and the expiration date of the option. Subject to the provisions of the
Plan and any other terms and conditions the Committee deems appropriate, the
Committee in its discretion also may accelerate the time at which an NSO may be
exercised if, under previously established exercise terms, such NSO was not
immediately exercisable in full.
3.5 Notice of Grant of Option. Upon the granting of any NSO, the Committee
shall promptly cause such optionee to be notified of the fact that such NSO has
been granted. The date on which the Committee approves the grant of an NSO shall
be considered to be the date on which such NSO is granted.
3.6 Death or Other Termination of Employment.
3.6.1 In the event that an optionee was an employee of the
Corporation or any subsidiary at the time of the grant of any NSO to him, and
thereafter the optionee
3.6.1.1 shall cease to be employed by the Corporation or a
subsidiary because of his discharge for dishonesty, or because he violated
any material provision of any employment or other agreement between him
and the Corporation or a subsidiary, or
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3.6.1.2 shall voluntarily resign or terminate his employment
with the Corporation or a subsidiary under or followed by such
circumstances as would constitute a breach of any material provision of
any employment or other agreement between him and the Corporation or a
subsidiary, or
3.6.1.3 shall have committed an act of dishonesty not
discovered by the Corporation or a subsidiary prior to the cessation of
his employment but that would have resulted in his discharge if discovered
prior to such date, or
3.6.1.4 shall, either before or after cessation of his
employment with the Corporation or a subsidiary, without the written
consent of his employer or former employer, use (except for the benefit of
his employer or former employer) or disclose to any other person any
confidential information relating to the continuation or proposed
continuation of his employer's or former employer's business or any trade
secrets of the Corporation or a subsidiary obtained as a result of or in
connection with such employment, or
3.6.1.5 shall, either before or after the cessation of his
employment with the Corporation or a subsidiary, without the written
consent of his employer or former employer, directly or indirectly, give
advice to, or serve as an employee, director, officer, partner or trustee
of, or in any similar capacity with, or otherwise directly or indirectly
participate in the management, operation, or control of, or have any
direct or indirect financial interest in, any corporation, partnership, or
other organization that directly or indirectly competes in any respect
with the Corporation or its subsidiaries,
then forthwith from the happening of any such event, any NSO then held by him
shall terminate and become void to the extent that it then remains unexercised.
In the event that an optionee shall cease to be employed by the
Corporation or a subsidiary for any reason other than his death or one or more
of the reasons set forth in paragraphs 3.6.1.1 through 3.6.1.5, subject to the
condition that no option shall be exercisable after the expiration of ten (10)
years from the date it is granted, such optionee shall have the right to
exercise the NSO at any time within three (3) months after such termination of
employment to the extent his right to exercise such NSO had accrued pursuant to
this Article 3 at the date of such termination and had not previously been
exercised; such three-month limit shall be increased to one (1) year for any
optionee who ceases to be employed by the Corporation or a subsidiary because he
is disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended) or who dies during the three-month period and the NSO may
be exercised within such extended time limit by the optionee or, in the case of
death, the personal representative of the optionee or by any person or persons
who shall have acquired the NSO directly from the optionee by bequest or
inheritance. Whether an authorized leave of absence or absence for military or
governmental service shall constitute termination of employment for purposes of
the Plan shall be determined by the Committee, whose determination shall be
final and conclusive.
3.6.2 In the event that an optionee shall die while in the employ of
the Corporation or a parent or subsidiary corporation and shall not have fully
exercised any NSO, the NSO may be exercised, subject to the condition that no
NSO shall be exercisable after the expiration of ten (10) years from the date it
is granted, to the extent that the optionee's right to exercise such NSO had
accrued pursuant to this Article 3 at the time of his death and had not
previously been exercised, at any time within one (1) year after the optionee's
death, by the personal representative of the optionee or by any person or
persons who shall have acquired the NSO directly from the optionee by bequest or
inheritance, in the case of death.
3.6.3 No NSO shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution.
3.6.4 During the lifetime of the optionee, the NSO shall be
exercisable only by him and shall not be assignable or transferable and no other
person shall acquire any rights therein.
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3.7 Optionees Who Are Not Employees.
3.7.1 In the event that an optionee was not an employee of the
Corporation or any subsidiary at the time of the grant of any NSO to him, and
thereafter the optionee
3.7.1.1 shall voluntarily terminate his business relationship
with the Corporation or a subsidiary under or followed by such
circumstances as would constitute a breach of any material provision of
any contract or other agreement between him and the Corporation or a
subsidiary, or
3.7.1.2 shall have committed an act of dishonesty or other
breach of fiduciary responsibility against the Corporation or a
subsidiary, whether discovered during or after the termination or
cessation of his business relationship with the Corporation or a
subsidiary, or
3.7.1.3 shall, either before or after cessation of his
business relationship with the Corporation or a subsidiary, without the
written consent of the Corporation, use (except for the benefit of the
Corporation) or disclose to any other person any confidential information
relating to the continuation or proposed continuation of the Corporation's
or any subsidiary's business or any trade secrets of the Corporation or a
subsidiary obtained as a result of or in connection with such business
relationship, or
3.7.1.4 shall, either before or after the cessation of his
business relationship with the Corporation or a subsidiary, without the
written consent of the Corporation, directly or indirectly, give advice
to, or serve as an employee, director, officer, partner or trustee of, or
in any similar capacity with, or otherwise directly or indirectly
participate in the management, operation, or control of, or have any
direct or indirect financial interest in, any corporation, partnership, or
other organization that directly or indirectly competes in any respect
with the Corporation or its subsidiaries,
then forthwith from the happening of any such event, any NSO then held by him
shall terminate and become void to the extent that it then remains unexercised.
In the event that an optionee's business relationship with the Corporation
or a subsidiary shall cease for any reason other than his death or one or more
of the reasons set forth in paragraphs 3.7.1.1 through 3.7.1.4, subject to the
condition that no option shall be exercisable after the expiration of ten (10)
years from the date it is granted, such optionee shall have the right to
exercise the NSO at any time within three (3) months after such termination of
employment to the extent his right to exercise such NSO had accrued pursuant to
this Article 3 at the date of such termination and had not previously been
exercised; such three-month limit shall be increased to one (1) year for any
optionee whose business relationship with the Corporation or a subsidiary ceases
because he is disabled (within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended) or who dies during the three-month period and
the NSO may be exercised within such extended time limit by the optionee or, in
the case of death, the personal representative of the optionee or by any person
or persons who shall have acquired the NSO directly from the optionee by bequest
or inheritance.
3.7.2 In the event that an optionee shall die during his business
relationship with the Corporation or a subsidiary and shall not have fully
exercised any NSO, the NSO may be exercised, subject to the condition that no
NSO shall be exercisable after the expiration of ten (10) years from the date it
is granted, to the extent that the optionee's right to exercise such NSO had
accrued pursuant to this Article 3 at the time of his death and had not
previously been exercised, at any time within one (1) year after the optionee's
death, by the personal representative of the optionee or by any person or
persons who shall have acquired the NSO directly from the optionee by bequest or
inheritance, in the case of death.
3.7.3 No NSO shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution.
3.7.4 During the lifetime of the optionee, the NSO shall be
exercisable only by him and shall not be assignable or transferable and no other
person shall acquire any rights therein.
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3.8 Rights as a Shareholder. An optionee shall have no rights as a
Shareholder with respect to any shares covered by his NSO until the date of the
issuance of a stock certificate to him for such shares after exercise of the
NSO. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Article 4.
3.9 Modification, Extension, and Renewal of Options. Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
extend, or renew outstanding NSOs granted under the Plan, or accept the
surrender of outstanding NSOs (to the extent not theretofore exercised) and
authorize the granting of new options in substitution therefor (to the extent
not theretofore exercised). The Committee shall not, however, modify any
outstanding NSOs so as to specify a lower option price or accept the surrender
of outstanding NSOs and authorize the granting of new options in substitution
therefor specifying a lower option price. Notwithstanding the foregoing,
however, no modification of an NSO shall, without the consent of the optionee,
alter or impair any of the rights or obligations under any NSO theretofore
granted under the Plan.
3.10 Listing and Registration of Shares. Each NSO shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the shares
covered thereby upon any securities exchange or under any state or federal laws,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such NSO or
the issuance or purchase of shares thereunder, such NSO may not be exercised
unless and until such listing, registration, qualification, consent, or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee. Notwithstanding anything in the Plan to the contrary, if the
provisions of this paragraph 3.10 become operative, and if, as a result thereof,
the exercise of an NSO is delayed, then and in that event, the term of the NSO
shall not be affected.
3.11 Other Provisions. The NSO certificates or agreements authorized under
the Plan shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the NSO, as the Committee shall deem
advisable.
ARTICLE 4
Miscellaneous
4.1 Stock Adjustments.
4.1.1 In the event of any increase or decrease in the number of
issued shares of common stock of the Corporation resulting from a stock split or
other division or consolidation of shares or the payment of a stock dividend
(but only on the common stock) or any other increase or decrease in the number
of such shares effected without any receipt of consideration by the Corporation,
then, in any such event, the number of shares of common stock that remain
available under the Plan, the number of shares of common stock covered by each
outstanding option, and the purchase price per share of common stock covered by
each outstanding option shall be proportionately and appropriately adjusted for
any such increase or decrease.
4.1.2 Subject to any required action by the Shareholders, if any
change occurs in the shares of common stock of the Corporation by reason of any
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or of any similar change affecting the shares of common
stock of the Corporation, then, in any such event, the number and type of shares
covered by each outstanding option, and the purchase price per share of common
stock covered by each outstanding option, shall be proportionately and
appropriately adjusted for any such change. A dissolution or liquidation of the
Corporation shall cause each outstanding option to terminate.
4.1.3 In the event of a change in the common stock of the
Corporation as presently constituted that is limited to a change of all of its
authorized shares with par value into the same number of shares with a different
par value or without par value, the shares resulting from any change shall be
deemed to be shares of common stock within the meaning of the Plan.
4.1.4 To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be made by, and in the
discretion of, the Committee, whose determination in that respect shall be
final, binding and conclusive; provided, however, that any ISO granted pursuant
to this Plan shall not be adjusted in a manner that causes such ISO to fail to
continue to qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended.
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4.1.5 Except as hereinabove expressly provided in this paragraph
4.1, an optionee shall have no rights by reason of any division or consolidation
of shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in number of shares of stock of any class or by
reason of any dissolution, liquidation, merger or consolidation, or spin-off of
assets or stock of another corporation; and any issuance by the Corporation of
shares of stock of any class, securities convertible into shares of stock of any
class or warrants or options for shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number or
price of shares of common stock subject to the option.
4.1.6 The grant of any option pursuant to the Plan shall not affect
in any way the right or power of the Corporation to make adjustments,
reclassification, reorganizations or changes of its capital or business
structure or to merge or to consolidate, or to dissolve, to liquidate, to sell,
or to transfer all or any part of its business or assets.
4.2 Fair Market Value of Stock. For purposes of this Plan, the "fair
market value of the shares of the common stock of the Corporation" shall mean
the closing price, on the date of grant of any ISO or NSO (or, if there is no
closing price, then the closing bid price), of the Corporation's common stock as
reported on the Composite Tape, or if not reported thereon, then such price as
reported in the trading reports of the principal securities exchange in the
United States on which such stock is listed, or if such stock is not listed on a
securities exchange in the United States, the mean between the dealer closing
"bid" and "ask" prices on the over-the-counter market as reported by the
National Association of Security Dealers Automated Quotation System (NASDAQ), or
NASDAQ's successor, or if not reported on NASDAQ, the fair market value of such
stock as determined by the Committee in good faith and based on all relevant
factors.
4.2 Term of the Plan. The ISOs and NSOs may be granted pursuant to the
provisions of the Plan from time to time within a period of ten (10) years from
the date the Plan is adopted by the Board of Directors of the Corporation, or
the date the Plan is approved by the Shareholders, whichever is earlier.
4.3 Amendment of the Plan. The Board of Directors of the Corporation may,
insofar as permitted by law, from time to time, with respect to any shares at
the time not subject to stock options, suspend, discontinue or terminate the
Plan or revise or amend it in any respect whatsoever, except that, without
approval of the Shareholders, no such revision or amendment shall change the
number of shares subject to the Plan, change the designation of the class of
employees eligible to receive stock options, decrease the price at which stock
options may be granted or remove the administration of the Plan from the
Committee. Furthermore, the Plan may not, without the approval of the
Shareholders, be amended in any manner that will cause stock options issued
under it to fail to meet (a) when appropriate, the requirements of incentive
stock options as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, or (b) the requirements of Rule 16b-3 of the 1934 Act.
4.4 Application of Funds. The proceeds received by the Corporation from
the sale of common stock pursuant to stock options will be used for general
corporate purposes.
4.5 No Obligation to Exercise. The granting of any stock option under the
Plan shall impose no obligation upon any optionee to exercise such stock option.
4.6 No Implied Rights to Employees or Others. The existence of the Plan,
and the granting of options under the Plan, shall in no way give any employee or
other optionee the right to continued employment or to any continued business
dealings, give any employee or any other optionee the right to receive any
options or any additional options under the Plan, or otherwise provide any
employee or other optionee any rights not specifically set forth in the Plan or
in any options granted under the Plan.
4.7 Approval of Shareholders. The Plan shall not take effect until
approved by the holders of a majority of the outstanding shares of common stock
of the Corporation, which approval must occur within the period beginning twelve
(12) months before and ending twelve (12) months after the date the Plan is
adopted by the Board of Directors.
Date Plan Approved by the Board of Directors: April 29, 1998
Date Plan Approved by Shareholders: June 2, 1998
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EXHIBIT 5
[LETTERHEAD OF ANNIS, MITCHELL, COCKEY, EDWARDS & ROEHN, P.A.]
September 1, 1998
Divot Golf Corporation
201 N. Franklin Street
Suite 200
Tampa, Florida 33601
Re: REGISTRATION STATEMENT ON FORM S-8 REGARDING DIVOT GOLF CORPORATION
1994 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN AND 1998 STOCK OPTION
PLAN
Gentlemen:
We have served as counsel for DIVOT GOLF CORPORATION, a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933, as amended, of an aggregate of 1,600,000 shares (the "Shares") of the
Company's authorized Common Stock, par value $.001 per share, to be issued to
participants of the above-referenced plans (the "Plans"), pursuant to the
Company's Registration Statement on Form S-8 relating thereto (the "Registration
Statement"). This opinion is furnished to you pursuant to the requirements of
Form S-8.
In connection with this opinion, we have examined and are familiar with
originals or copies (certified or otherwise identified to our satisfaction) of
such documents, corporate records, and other instruments relating to the
incorporation of the Company and to the authorization and issuance of the Shares
as we have deemed necessary and appropriate.
Based upon the foregoing, and having regard for such legal considerations we
have deemed relevant, it is our opinion that:
1. The Shares have been duly authorized.
2. Upon issuance, sale, and delivery of the Shares as contemplated
in the Registration Statement and the Plans, the Shares will be
legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement
Very truly yours,
ANNIS, MITCHELL, COCKEY, EDWARDS & ROEHN, P.A.
By: /S/ JOSEPH W. N. RUGG
----------------------
Joseph W.N. Rugg
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EXHIBIT 23.1
Consent of Ernst & Young LLP,
Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No._________) pertaining to the Divot Golf Corporation 1994 Stock Option and
Restricted Stock Purchase Plan and 1998 Stock Option Plan of our report dated
January 12, 1998, with respect to the consolidated financial statements and
schedules of Divot Golf Corporation included in its Annual Report (Form 10-KSB)
for the year ended December 31, 1997, and of our report dated May 1, 1998, with
respect to the financial statements of Miller Golf, Inc. included in its Current
Report on Form 8-K filed April 23,1998 (as amended on Form 8-K/A filed on June
19, 1998), both filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Raleigh, North Carolina
August 27, 1998
18
