ADAMS GOLF, INC.
1999 STOCK OPTION PLAN
FOR
OUTSIDE CONSULTANTS
Adopted Effective August 30, 1999
TABLE OF CONTENTS
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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
ADAMS GOLF, INC.
1999 STOCK OPTION PLAN FOR OUTSIDE CONSULTANTS
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ARTICLE I
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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
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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
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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
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
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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
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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
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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.
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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
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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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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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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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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,
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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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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
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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
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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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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
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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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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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"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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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.
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