1
Exhibit 11
ROYAL PRECISION, INC.
00000 XXXXX XXXXXX XXXX
XXXXX 0
XXXXXXX, XXXXXXX 00000
As of January 28, 1999
Mr. Xxxxx Xxxxxxx
0000 Xxxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Dear Xx. Xxxxxxx:
Reference is made to that certain Stockholder Agreement, dated as of
May 12, 1997 (the "Stockholder Agreement"), among you, Xxxx X. Xxxxx, DMB
Property Ventures Limited Partnership, Xxxx X. Xxxxx, and Xxxxxxx Xxxxxxxx,
Trustee of the Xxxxxxx Xxxxxxxx Trust dated April 21, 1989, as amended,
Xxxxxxxxxxx X. Xxxxxxxx, RPJ/JAJ Partners, Ltd., Xxxxx X. Xxxxxxxx, Xxxxxxxx
Xxxxxxx & Company, L.P., Xxxxxxx X. Xxxxxx, and Royal Precision, Inc. (f/k/a FM
Precision Golf Corp.), a Delaware corporation ("RP"), and to that certain
proposed Amendment No. 1 (the "Amendment") to the Stockholders Agreement by and
among you, Xxxx X. Xxxxx, DMB Property Ventures Limited Partnership, Xxxx X.
Xxxxx, and Xxxxxxx Xxxxxxxx, Trustee of the Xxxxxxx Xxxxxxxx Trust dated April
21, 1989, as amended, Xxxxxxxxxxx X. Xxxxxxxx, the Xxxxxxx X. Xxxxxxxx and Xxxxx
X. Xxxxxxxx Charitable Remainder Trust #3, Xxxxx X. Xxxxxxxx, Xxxxxxxx Xxxxxxx &
Company, L.P., Xxxxxxx X. Xxxxxx, and RP.
RP is contemplating entering into an Agreement and Plan of Merger (the
"Merger Agreement") by and among RP, Coyote Sports, Inc. ("CSI") and RP
Acquisition Corp. ("Sub") pursuant to which Sub will be merged with and into RP
(the "Merger") and Sub will become a wholly-owned subsidiary of CSI and each
outstanding share of common stock, par value $.001 per share, of RP ("Common
Stock") will be converted into a number of outstanding shares of CSI Preferred
Stock, as specified in the Merger Agreement. As a condition to entering into the
Merger Agreement, CSI has required that certain stockholders of RP who are
parties to the Stockholders Agreement enter into Voting Agreements (the "Voting
Agreements") pursuant to which such stockholders will agree to vote their shares
of Common Stock in favor of the adoption and approval of the Merger Agreement
and the approval of the Merger and against certain transactions which might
delay, impede or oppose the Merger and, concurrently therewith, grant to CSI a
proxy to vote such shares in favor of the adoption and approval of the Merger
Agreement and the approval of the Merger and against certain transactions which
might delay, impede or oppose the Merger. Section 4 of the Stockholder Agreement
prohibits the parties thereto from entering into certain Voting Agreements. In
order to clarify the rights of the parties to the Stockholder Agreement, the
parties to the Stockholder Agreement have agreed to enter into the Amendment.
You are currently the holder of options to purchase 62,550 shares of Common
Stock, which such options have exercise prices ranging from $5.50 to $6.60 per
share (the "Xxxxxxx Options"). In addition, certain parties associated with you
(the "Related Parties") are the holders of the following options to purchase
shares of Common Stock: Everen Securities Inc. (together with its employees,
including but not limited to Xxxxxxxx X. Xxxx): 7,500 shares, at an exercise
price of $13.00 per share; and Xxxxxx Xxxx III: 108,033 shares, at exercise
prices of $5.50 to $6.00 per share (the "Related Party Options" and, together
with the Xxxxxxx Options, the "Options"). In order to induce you to enter into
the Amendment, RP hereby agrees that, subject to the cancellation of the
Options, RP will issue to you and your Related Parties an equivalent number of
new options under the Royal Precision, Inc. Stock Option Plan (the "New
Options"), which such New Options will (x) be immediately vested, (y) have an
exercise price of $3.19 per share of Common Stock, (z) expire on the fifth
anniversary of this letter agreement.
This letter shall be governed by, and construed in accordance with, the
laws of the State of New York, applicable to agreements made and to be performed
therein. The parties hereto expressly agree that the Related Parties are made
express third-party beneficiaries hereof and may rely on this letter agreement
as additional signatories thereto.
This letter may be executed in one or more counterparts, each
of which shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
114
2
If the foregoing correctly sets forth our mutual agreement,
please so indicate by signing the enclosed copy of this letter and returning it
to us.
ROYAL PRECISION, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board
Accepted and Agreed this __ day of
January, 1999:
/s/ Xxxxx Xxxxxxx
------------------
Xxxxx Xxxxxxx
115
