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EXHIBIT 2
STOCKHOLDER AGREEMENT
AGREEMENT, dated as of May 14, 1997, among Xxxxx Xxxxxxx, an individual
residing at 0000 Xxxxx Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxx Xxxxxx, Xxxxxxx 00000,
Xxxx X. Xxxxx, an individual whose address is 0000 Xxxxx 00xx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000, DMB Property Ventures Limited Partnership, a Delaware
limited partnership having an office at 0000 Xxxxx 00xx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000, Xxxx X. Xxxxx, an individual whose address is 0000 Xxxxx
00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 and Xxxxxxx Xxxxxxxx, Trustee of
the Xxxxxxx Xxxxxxxx Trust dated April 21, 1989, as amended, whose address is
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (Messrs. Edwards,
Brown, Xxxxx and Xxxxxxxx, and DMB Property Ventures Limited Partnership
collectively referred to as the "Xxxxxxx Group"), Xxxxxxxxxxx X. Xxxxxxxx, an
individual residing at 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, RPJ/JAJ
Partners, Ltd., a Wyoming partnership having an office at Teton Pines, 0000
Xxxxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Xxxxx X. Xxxxxxxx, an individual
residing at 0000 X. Xxxxxxxx Xxxx, Xxx Xxxxxx, Xxxxxxx 00000, Xxxxxxxx Xxxxxxx &
Company, L.P., a New York limited partnership having an office at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxxx X. Xxxxxx, an individual residing at
0000 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxx 00000 (Messrs. Xxxxxxxxxxx X. Xxxxxxxx, Xxxxx
X. Xxxxxxxx and Xxxxxx, and RPJ/JAJPartners and Xxxxxxxx Xxxxxxx collectively
referred to as the "Xxxxxxxx Group" and each member of the Xxxxxxx Group and the
Xxxxxxxx Group individually referred to as a "Stockholder" and collectively as
"Stockholders"), and FM Precision Golf Corp., a Delaware corporation ("FM").
WHEREAS, FM and Royal Grip, Inc., a Nevada corporation ("RGI"), are
entering into an Agreement and Plan of Merger dated as of even date herewith
(the "Merger Agreement"), providing for the merger of a wholly-owned subsidiary
of FM with and into RGI (the "Merger") pursuant to the terms and conditions of
the Merger Agreement, and setting forth certain representations, warranties and
agreements which each of the parties thereto is making thereby in connection
with the Merger; and
WHEREAS, in connection with the Merger, each Stockholder hereto desires to
provide for the voting of the Common Stock, par value $.001 per share, of FM
(the "Common Stock"), for directors for the FM Board; and
WHEREAS, in order to induce FM and RGI to enter into the Merger Agreement
and for other good and valuable consideration, receipt of which is hereby
acknowledged, Stockholders are willing, upon the terms and subject to the
conditions hereunder set forth, to make certain agreements;
NOW, THEREFORE, the parties hereto agree as follows:
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SECTION 1. Representations of Stockholders. Each Stockholder
represents and warrants:
1.1. Such Stockholder is the sole, true, lawful and beneficial owner
of the number of shares of Common Stock (the "Shares") listed on the signature
page hereof as being owned by such Stockholder with no restrictions on such
Stockholder's voting rights or rights of disposition pertaining thereto, except
those under the Securities Act of 1933, as amended (the "1933 Act") and those
that would not in any material way limit or otherwise adversely affect the
voting rights granted by such Stockholder under this Agreement or by the proxy
to be delivered by such Stockholder pursuant hereto. At the Effective Date (as
defined in the Merger Agreement), such Stockholder will have good and valid
title to the Shares listed on the signature page hereof as being owned by such
Stockholder free and clear of any and all claims, liens, charges, encumbrances
and security interests. None of the Shares owned by such Stockholder is subject
to any voting trust or other agreement or arrangement with respect to the voting
of such shares that would in any way limit or otherwise adversely affect the
voting rights granted by such Stockholder under this Agreement. Such Stockholder
does not "beneficially own" (as such term is defined in the Securities Exchange
Act of 1934, as amended (the "1934 Act")), any shares of Common Stock other than
the Shares listed on the signature page hereof as being beneficially owned by
such Stockholder and other than any shares of Common Stock which such
Stockholder may obtain upon the exercise of RGI Options (as defined in the
Merger Agreement).
1.2. The execution, delivery and performance by such Stockholder of
this Agreement does not and will not contravene or constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of such Stockholder or to a loss of any benefit of such
Stockholder under any provision of applicable law or regulation or of any
agreement, judgment, injunction, order, decree, or other instrument binding on
such Stockholder or result in the imposition of any lien on any asset of such
Stockholder.
1.3. This Agreement is the valid and binding Agreement of such
Stockholder. If this Agreement is being executed in a representative or
fiduciary capacity for such Stockholder, the person signing this Agreement for
such Stockholder has full power and authority to enter into and perform such
Agreement for such Stockholder.
SECTION 2. Composition of the Board.
2.1. The FM Board shall consist of at least nine members serving for
staggered terms of one, two and three years. The Xxxxxxxx Group shall be
entitled, but not required, to designate six members of the FM Board (the
"Xxxxxxxx Directors"), and the Xxxxxxx Group shall be entitled, but not
required, to designate three members of the FM Board (the "Xxxxxxx Directors").
At any time that the number of directors constituting the full Board shall be
increased, the director designation ratio of the Xxxxxxxx Group and the Xxxxxxx
Group hereunder shall continue unless (i) the Xxxxxxx Group no longer owns 10%
of the outstanding voting securities of FM; or (ii) the vacancy resulting from
such increase is filled by an "independent" person not affiliated with the
Xxxxxxxx Group. The Xxxxxxxx Directors shall serve for terms of one, two and
three years, respectively, after the Effective Date, and the Xxxxxxx Directors
shall serve for terms of one, two and three years, respectively, after the
Effective Date. Xxxxx
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Xxxxxxx and Xxx Xxxx shall be entitled to serve on the Executive Committee, and
the Xxxxxxx Group shall be entitled to designate one member of the FM Board to
be elected to the Compensation Committee of the FM Board. Each Stockholder
entitled to vote for the election of directors to the FM Board agrees that it
will vote all of its Shares or execute consents, as the case may be, and take
all other necessary action (including causing FM to call a special meeting of
stockholders) in order to ensure that the composition of the Board is as set
forth in this Section 2.1.
2.2. Each Stockholder agrees that if, at any time, such Stockholder
is entitled to vote for the removal of one or more directors of FM, such
Stockholder will not vote any of its Shares in favor of the removal of any
director who shall have been designated or nominated pursuant to Section 2.1
unless such removal shall be for Cause or the Group entitled to designate or
nominate such director shall have consented to such removal in writing. Removal
for "Cause" shall mean removal of a director because of such director's (i)
willful and continued failure to substantially perform his duties as a director
of FM, (ii) willful conduct which is significantly injurious to FM, monetarily
or otherwise, or (iii) conviction for, or a guilty plea to, a felony.
2.3. If, as a result of death, disability, retirement, resignation,
removal (with or without cause) or otherwise, there shall exist or occur any
vacancy on FM's Board:
2.3.1. the Group entitled under Section 2.1 to designate or
nominate such director whose death, disability, retirement, resignation, removal
(with or without cause) or otherwise resulted in such vacancy may designate
another individual (the "Nominee") to fill such capacity and serve as a director
of FM. The selection of the Nominee by such Group shall be decided by the
Stockholders of such Group by a majority vote where the number of votes each
Stockholder has is determined by the number of Shares such Stockholder has; and
2.3.2. each Stockholder then entitled to vote for the election
of the Nominee as a director of FM agrees that it will vote all of its Shares or
execute a written consent, as the case may be, in order to ensure that the
Nominee be elected to the FM Board.
2.4. This Agreement is intended to bind the Stockholders only with
respect to the specific matters set forth herein, and shall not restrict the
Stockholders from taking any other action or failing to take any other action in
his capacity as an officer or director of FM in accordance with his fiduciary
duties.
SECTION 3. Termination. The provisions of this Agreement shall only be
effective on and after the Effective Date, and shall terminate and be of no
further force and effect three years from and after the Effective Date.
SECTION 4. No Voting Trusts. Each Stockholder agrees that it will not, and
will not permit any entity under any Stockholder's control to, deposit any of
its Shares in a voting trust or subject any of his Shares to any arrangement or
agreement with respect to the voting of such Shares, other than this Agreement.
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SECTION 5. No Proxy Solicitations. No Stockholder will, nor permit any
entity under its control to, (a) solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation l4A under the 1934 Act),
in opposition to or competition with the provisions of Section 2.1; (b) initiate
a stockholders' vote or action by consent of FM stockholders in opposition to or
in competition with the provisions of Section 2.1; or (c) become a member of a
"group" (as such term is used in Section 13(d) of the 0000 Xxx) with respect to
any voting securities of FM for the purpose of opposing or competing with the
provisions of Section 2.1.
SECTION 6. Transfer and Encumbrance. Each Stockholder agrees not to
transfer, sell or offer to transfer or sell any of the Shares beneficially owned
by such Stockholder to an "Affiliate" (as hereinafter defined) for a period of
three years, unless such "Affiliate" agrees to be bound by the terms hereof, and
signs an agreement in the form of Exhibit 6 hereof to such effect. "Affiliate"
means any person, firm or corporation directly or indirectly controlling,
controlled by, or under common control with, such person, firm or corporation.
For purposes of this definition, "control" (including, with correlative meaning,
the terms "controlling", "controlled by" and "under common control with"), as
applied to any person, firm or corporation, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, firm or corporation, whether through the ownership of
voting securities, by contract or otherwise. "Affiliate" includes any spouse,
child or parent of a Stockholder. All certificates representing the Shares or
New Shares shall be endorsed on the reverse side thereof substantially as
follows:
BY THE TERMS OF A STOCKHOLDER AGREEMENT, CERTAIN RESTRICTIONS HAVE BEEN
PLACED UPON THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE AND
SUCH SHARES ARE SUBJECT TO CERTAIN VOTING AGREEMENTS. THE COMPANY WILL
FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER OF THIS CERTIFICATE WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS OR REGISTERED OFFICE.
SECTION 7. Additional Purchases. Each Stockholder agrees that it will not
purchase or otherwise acquire beneficial ownership of any shares of Common Stock
after the execution of this Agreement ("New Shares") nor will such Stockholder
acquire the right to vote or share in the voting of any shares of Common Stock,
other than the Shares, unless such Stockholder delivers to FM immediately after
such purchase or acquisition a written notice given to FM setting forth the
total number of New Shares. Each Stockholder also agrees that any New Shares
acquired or purchased by such Stockholder shall be subject to the terms of this
Agreement to the same extent as if they constituted Shares.
SECTION 8. Specific Performance. Each Stockholder hereto acknowledges that
it will be impossible to measure in money the damage to the other Stockholders
if a Stockholder hereto fails to comply with any of the obligations imposed by
this Agreement, that every such obligation is material and that, in the event of
any such failure, the other Stockholders will not have an adequate remedy at law
or in damages, and accordingly, each Stockholder hereto agrees
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that the issuance of an injunction or other equitable remedy is the appropriate
remedy for any such failure.
SECTION 9. Successors and Assigns. This Agreement and all obligations of
the Stockholders hereunder shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns and shall not
be assignable without the written consent of all the other parties hereto.
SECTION 10. Entire Agreement. This Agreement supersedes all prior
agreements among the parties hereto with respect to the subject matter hereof
and contains the entire agreement among the parties with respect to the subject
matter hereof. This Agreement may not be amended, supplemented or discharged,
and no provision hereof may be modified or waived, except expressly by an
instrument in writing signed by all the parties hereto. No waiver of any
provision hereof by any party shall be deemed a waiver by any other party nor
shall any such waiver be deemed a continuing waiver of any matter by such party.
SECTION 11. Miscellaneous.
11.1. The parties, being concerned that either party may obtain some
advantage by having the law of the jurisdiction of its principal place of
business apply, and agreeing in concept to have this Agreement subject to the
laws of a neutral jurisdiction, whose laws are perceived as being fair in
general to the business community at large, have determined and agreed as
follows: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS. EACH OF THE PARTIES AGREES THAT ANY LEGAL ACTION BETWEEN
THE PARTIES RELATING TO THE ENTRY INTO OR PERFORMANCE OF THIS AGREEMENT, OR THE
INTERPRETATION OR ENFORCEMENT OF TERMS HEREOF, SHALL BE BROUGHT IN A FEDERAL OR
STATE COURT LOCATED IN NEW CASTLE COUNTY, DELAWARE, HAVING JURISDICTION OF THE
SUBJECT MATTER THEREOF, AND EACH PARTY IRREVOCABLY CONSENTS TO PERSONAL
JURISDICTION IN ANY SUCH FEDERAL OR STATE COURT, WAIVES ANY RIGHT TO OBJECT TO
SUCH VENUE OR TO ASSERT THE DEFENSE OF FORUM NON-CONVENIENS, AND AGREES THAT
SERVICE OF PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL ADDRESSED TO SUCH
PARTY AT ITS ADDRESS SET FORTH IN, OR DETERMINED IN ACCORDANCE WITH, SECTION
11.5 HEREOF.
11.2. If any provision of this Agreement or the application of any
such provision to any person or circumstances shall be held invalid by a court
of competent jurisdiction, the remainder of this Agreement, including the
remainder of the provision held invalid, or the application of such provision to
persons or circumstances other than those as to which it is held invalid, shall
not be affected.
11.3. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
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11.4. All Section headings herein are for convenience of reference
only and are not part of this Agreement and no construction or inference shall
be derived therefrom.
11.5. Any notices or other communications required or permitted by
this Agreement shall be in writing and shall be delivered either by personal
delivery, by nationally recognized overnight courier service, by facsimile, by
first class mail or by registered or certified mail, return receipt requested,
addressed to the party at the address appearing below the signature of such
party, or to such other address as any party shall have previously designated to
the others by written notice given in the manner hereinabove set forth. Notices
shall be deemed given one day after being sent, if sent by overnight courier;
when delivered and receipted for, if hand delivered; when received, if sent by
facsimile or other electronic means or by first class mail; or when receipted
for (or upon the date of attempted delivery where delivery is refused or
unclaimed), if sent by certified or registered mail, return receipt requested.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
FM PRECISION GOLF CORP.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxxxx X. Xxxxxxxx, President
P.O. Box 25182
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
STOCKHOLDERS:
Signature of Stockholder: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
0000 Xxxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Shares owned: 1,133,605
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Signature of Stockholder: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Shares owned: 789
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Signature of Stockholder: DMB PROPERTY VENTURES
LIMITED PARTNERSHIP
By: DMB GP, Inc., General Partner
By: /s/ Xxxx X. Xxxxx
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Its President
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Shares owned: 414,771
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Signature of Stockholder: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Shares owned: 789
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Signature of Stockholder: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Trustee of the
Xxxxxxx Xxxxxxxx Trust dated April
21, 1989, as amended
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Shares owned: 4,494
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Signature of Stockholder: /s/ Xxxxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Shares owned:
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Signature of Stockholder: RPJ/JAJ PARTNERS, LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, General Partner
0000 Xxxxx Xxxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Shares owned:
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Signature of Stockholder: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
0000 X. Xxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxx 00000
Shares owned:
Signature of Stockholder: XXXXXXXX XXXXXXX & COMPANY, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Managing General
Partner
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Shares owned:
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Signature of Stockholder: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxx 00000
Shares owned:
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EXHIBIT 2
FORM OF AGREEMENT TO BE BOUND
[DATE]
Royal Precision, Inc.
Dear Sirs:
Reference is made to the Stockholder Agreement dated as of April __, 1997
(the "Agreement"), among Xxxxx Xxxxxxx, Xxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxxxxx
Xxxxxxxx, Trustee of the Xxxxxxx Xxxxxxxx Trust dated April 21, 1989, as
amended, DMB Property Ventures Limited Partnership, Xxxxxxxxxxx X. Xxxxxxxx,
RPJ/JAJ Partners, Ltd., Xxxxx X. Xxxxxxxx, Xxxxxxxx Xxxxxxx & Company, L.P.,
Xxxxxxx X. Xxxxxx and FM Precision Golf Corp., now known as Royal Precision,
Inc. (the "Company"). Capitalized terms not defined herein have the meanings
assigned to them in the Agreement.
In consideration of the covenants and agreements contained in the
Agreement and the transfer of the common stock, par value $.001 per share, of
the Company (the "Shares") to the undersigned by a Stockholder, the undersigned
hereby confirms and agrees to be bound by all of the provisions thereof.
[The undersigned acknowledges that it is a condition to an effective
pledge of the Shares under the Agreement that the pledgee agree, and the
undersigned hereby confirms and agrees, that upon foreclosure of such pledge,
the undersigned will take the Shares subject to all of the restrictions
applicable to the pledgor under the Agreement.]**
This letter shall be construed and enforced in accordance with the laws of
the State of Delaware.
Very truly yours,
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[Transferee]
** Include in the case of a pledge
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