EXHIBIT
10.3


 


TRUE TEMPER CORPORATION

2004 EQUITY INCENTIVE PLAN


 


1.                                       Purposes
of the Plan.  The purposes of the
True Temper Corporation 2004 Equity Incentive Plan are to attract and retain
the best available personnel for positions of substantial responsibility, to
provide additional incentive to Employees and Directors and to promote the
success of the Company’s business. 
Options granted under the Plan may be Incentive Stock Options or
Non-Qualified Stock Options, as determined by the Administrator at the time of
grant.  Shares of Restricted Stock,
Restricted Stock Units and Stock Appreciation Rights may also be awarded under
the Plan.  The Plan shall be effective
as of March 15, 2004 (the “Effective Date”).


 


2.                                       Definitions.  As used herein, the following definitions
shall apply:


 


(a)                                  “Administrator”
means the Board or the Committee responsible for conducting the general
administration of the Plan, as applicable, in accordance with Section 4 hereof.


 


(b)                                 “Applicable
Laws” means the requirements relating to the administration of stock option
plans under U.S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any foreign country or jurisdiction
where Options are granted or shares of Restricted Stock are awarded under the
Plan.


 


(c)                                  “Award”
means any award or benefit granted under this Plan, including without
limitation, the grant of Options, SARs and Restricted Stock awards.


 


(d)                                 “Award
Agreement” means a written agreement between the Company and a Holder
evidencing the terms and conditions of an individual Award.  The Award Agreement is subject to the terms
and conditions of the Plan.


 


(e)                                  “Board”
means the Board of Directors of the Company.


 


(f)                                    “Code”
means the Internal Revenue Code of 1986, as amended.


 


(g)                                 “Change
in Control” shall mean (i) a merger, consolidation or share exchange of the
Company with any other person or entity (other than a wholly-owned subsidiary
of the Company) other than a merger, consolidation or share exchange which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) 50% or more of
the combined voting power of voting securities of the Company or such surviving
entity outstanding immediately after such merger, consolidation or share
exchange; (ii) the sale of 50% or more of the voting securities of the Company
in a single transaction or a series of related transactions; (iii) a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of its assets; or (iv) a “person”
(as


 

















 


such term is used
in Sections 13(d) and 14(d) of the Exchange Act), other than Gilbert Global
Equity Partners and its affiliates is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of voting securities of the Company.


 


(h)                                 “Committee”
means the Compensation Committee of the Board or other committee appointed by
the Board in accordance with Section 4 hereof; provided that if no Compensation
Committee exists and no other committee has been appointed in accordance with
Section 4, then the full Board shall serve as the Committee.


 


(i)                                     “Common
Stock” means the Common Stock of the Company, par value $0.01 per share.


 


(j)                                     “Company”
means True Temper Corporation, a Delaware corporation.


 


(k)                                  “Director”
means a member of the Board.


 


(l)                                     “Effective
Date” shall have the meaning set forth in Section 1.


 


(m)                               “Employee”
means any person, including an officer or Director, who is an employee (as
defined in accordance with Section 3401(c) of the Code) of the Company or any
Parent or Subsidiary of the Company.  A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or in accordance with a then existing
employee benefit plan of the Company, its Parent, any Subsidiary, or any
successor, or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor.  For purposes of Incentive Stock Options, no
such leave may exceed ninety (90) days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract.  Neither service as a Director nor payment of a director’s fee by
the Company shall be sufficient, by itself, to constitute “employment” by the
Company.


 


(n)                                 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


(o)                                 “Fair
Market Value” means, as of any date, the value of a share of Common Stock
determined as follows:


 


(i)                                     If
the Common Stock is listed on any established stock exchange or a national
market system, including, without limitation, the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for a share of such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;


 


(ii)                                  If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean 


 


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between the high bid and low asked prices for a share
of the Common Stock on the last market trading day prior to the day of
determination; or


 


(iii)                               In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Board (but without
taking into account the lack of liquidity and minority position of the Common
Stock in respect of which Fair Market Value is being determined).


 


(p)                                 “Holder”
means a person who has been granted an Option, SAR or Restricted Stock award or
who holds Shares acquired pursuant to a Restricted Stock award or the exercise
of an Option.


 


(q)                                 “Incentive
Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and which is designated as
an Incentive Stock Option by the Administrator.


 


(r)                                    “Independent
Director” means a Director who is not an Employee of the Company.


 


(s)                                  “Non-Qualified
Stock Option” means an Option (or portion thereof) that is not designated
as an Incentive Stock Option by the Administrator, or which is designated as an
Incentive Stock Option by the Administrator but fails to qualify as an
incentive stock option within the meaning of Section 422 of the Code.


 


(t)                                    “Option”
means a stock option granted pursuant to the Plan which entitles the Holder to
purchase a number of Shares at a set exercise price established by the
Committee.  An Option may be either an
Incentive Stock Option or a Non-Qualified Stock Option.


 


(u)                                 “Option
Agreement” means a written agreement between the Company and a Holder
evidencing the terms and conditions of an individual Option grant.  The Option Agreement is subject to the terms
and conditions of the Plan.


 


(v)                                 “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.


 


(w)                               “Plan”
means the True Temper Corporation 2004 Equity Incentive Plan, as amended from
time to time.


 


(x)                                   “Public
Trading Date” means the first date upon which Common Stock of the Company
is listed (or approved for listing) upon notice of issuance on any exchange or
designated (or approved for designation) upon notice of issuance as a national
market security on an interdealer quotation system.


 


(y)                                 “Restricted
Stock” means Shares acquired pursuant to the exercise of an unvested Option
in accordance with Section 10(h) below or pursuant to a Restricted Stock award
granted under Section 12 below.


 


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(z)                                   “Restricted
Stock Agreement” means a written agreement between the Company and a Holder
evidencing the terms and conditions of an individual Restricted Stock
grant.  The Restricted Stock Agreement
is subject to the terms and conditions of the Plan.


 


(aa)                            “Restricted
Stock Unit” means the, with respect to each covered unit, an unfunded right
to receive a cash payment equal in value to one Share of Common Stock pursuant
to a Restricted Stock Unit award granted under Section 12 below.


 


(bb)                          “Restricted
Stock Unit Agreement” means a written agreement between the Company and a
Holder evidencing the terms and conditions of an individual Restricted Stock
Unit grant.  The Restricted Stock Unit
Agreement is subject to the terms and conditions of the Plan and shall provide
all of the same terms and conditions of a Restricted Stock award with respect
to vesting.


 


(cc)                            “Rule
16b-3” means that certain Rule 16b-3 under the Exchange Act, as such Rule
may be amended from time to time.


 


(dd)                          “SAR
Agreement” means a written agreement between the Company and a Holder
evidencing the terms and conditions of an individual SAR grant.  The SAR Agreement is subject to the terms
and conditions of the Plan.


 


(ee)                            “Section
16(b)” means Section 16(b) of the Exchange Act.


 


(ff)                                “Securities
Act” means the Securities Act of 1933, as amended.


 


(gg)                          “Service
Provider” means an Employee or Director.


 


(hh)                          “Share”
means a share of Common Stock, as adjusted in accordance with Section 13 below.


 


(ii)                                  “Stock
Appreciation Right” or “SAR” means a stock appreciation right
granted pursuant to the Plan which, upon exercise, entitles a Holder to
receive, in cash, value equal to the excess of the Fair Market Value of a
specified number of Shares, over the exercise price for such number of Shares,
as established by the Committee.


 


(jj)                                  “Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code.


 


3.                                       Stock
Subject to the Plan.  Subject to the
provisions of Section 13 of the Plan, the shares of stock subject to Options,
SARs or Restricted Stock awards shall be Common Stock.  Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares which may be subject to
Options, SARs, Restricted Stock awards or Restricted Stock Units is 1,008,051; provided, however, that, notwithstanding
the foregoing, the maximum number of Shares that may be granted as Restricted
Stock awards or as Restricted Stock Units awards is 403,221; and, provided, further, that, notwithstanding
the foregoing, the maximum number of Shares that may be subject to Options or
SARs is 604,830.  Shares issued upon
exercise of Options or awarded as Restricted Stock may be authorized but
unissued, or reacquired Shares.  If


 


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an Option or SAR expires or becomes unexercisable without having been exercised
in full, the unpurchased Shares (the underlying Shares with respect to SARs)
which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated).  Shares which are delivered by the Holder or withheld by the
Company upon the exercise of an Option or upon the grant, sale or vesting of a
Restricted Stock award under the Plan, in payment of the exercise price thereof
or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of this Section 3.  If Shares of Restricted Stock, or Restricted
Stock Units are forfeited by the Holder to the Company such covered Shares
shall become available for future Awards under the Plan.  Notwithstanding the provisions of this
Section 3, no Shares may again be optioned, granted or awarded if such action
would cause an Incentive Stock Option to fail to qualify as an Incentive Stock
Option under Code Section 422.


 


4.                                       Administration
of the Plan.


 


(a)                                  Administrator.  The Plan shall be administered by the
Committee.  The Committee shall have the
power to delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan to the
Committee shall thereafter be to such subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. 
Notwithstanding the foregoing, however, from and after the Public
Trading Date, a Committee of the Board shall administer the Plan and the
Committee shall consist solely of two or more Independent Directors each of
whom is both an “outside director,” within the meaning of Section 162(m) of the
Code, and a “non-employee director” within the meaning of Rule 16b-3.  Within the scope of such authority, the
Board or the Committee may (i) delegate to a committee of one or more members
of the Board who are not Independent Directors the authority to grant awards
under the Plan to eligible persons who are either (A) not then “covered
employees,” within the meaning of Section 162(m) of the Code and are not
expected to be “covered employees” at the time of recognition of income
resulting from such award or (B) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code and/or (ii) delegate to a
committee of one or more members of the Board who are not “non-employee
directors,” within the meaning of Rule 16b-3, the authority to grant awards
under the Plan to eligible persons who are not then subject to Section 16 of
the Exchange Act.  The Board may abolish
the Committee at any time and revest in the Board the administration of the
Plan.  Appointment of Committee members
shall be effective upon acceptance of appointment. Committee members may resign
at any time by delivering written notice to the Board.  Vacancies in the Committee may only be
filled by the Board.


 


(b)                                 Powers
of the Administrator.  Subject to
the provisions of the Plan (including without limitation Section 4(c)) and the
specific duties delegated by the Board to the Committee, and subject to the
approval of any relevant authorities, the Administrator shall have the
authority in its discretion to:


 


(i)                                     Select
the Service Providers to whom Awards may be granted from time to time hereunder;


 


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(ii)                                  Determine
the number of Shares to be covered by each such Award granted hereunder;


 


(iii)                               Approve
forms of agreement for use under the Plan;


 


(iv)                              Determine
the terms and conditions of any Award granted hereunder (such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Awards may vest or be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Award or the Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine);


 


(v)                                 Prescribe,
amend and rescind rules and regulations relating to the Plan, including rules
and regulations relating to sub-plans established for the purpose of qualifying
for preferred tax treatment under foreign tax laws;


 


(vi)                              As
may be permitted by the Committee, allow holders to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or upon the grant, sale or vesting of any
Restricted Stock award that number of Shares having a Fair Market Value equal
to the minimum amount required to be withheld based on the statutory
withholding rates for federal and state tax purposes that apply to supplemental
taxable income.  The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. 
All elections by Holders to have Shares withheld for this purpose shall
be made in such form and under such conditions as the Administrator may deem
necessary or advisable; and


 


(vii)                           Construe
and interpret the terms of the Plan and Awards granted pursuant to the Plan and
to exercise such powers and perform such acts as the Administrator deems
necessary or desirable to promote the best interests of the Company which are
not in conflict with the provisions of the Plan.


 


(c)                                  Notwithstanding
Section 4(b) 604,830  Shares shall
be reserved for the granting of Options and SARs to Service Providers, as
follows:


 


(i)                                     Options
to purchase 302,415  Shares shall
be granted pursuant to the Plan with an exercise price equal to 100% of the
Fair Market Value per Share as of the date of grant and shall be subject to
performance-based vesting (the “Performance Options”).  The terms and conditions of each such Option
shall be set forth in a written Incentive Stock Option Agreement entered into
by and between the Company and the Holder, substantially in the form attached
hereto as Exhibit A. 
Notwithstanding the foregoing, where federal, state or local law or
regulations make it improper, impracticable or undesirable to grant Options, as
determined by the Administrator, the Administrator may grant SARs (the “Performance
SARs”) in lieu of Performance Options; provided such


 


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Performance SARs have substantially similar terms and
conditions as the foregoing Performance Options.


 


(ii)                                  Options
to purchase 302,415 Shares shall be granted pursuant to the Plan with an
exercise price equal to 100% of the Fair Market Value per Share as of the date
of grant and shall be subject to service-based vesting (the “Service Options”).  The terms and conditions of each such Option
shall be set forth in a written Incentive Stock Option Agreement entered into
by and between the Company and the Holder, substantially in the form attached
hereto as Exhibit B. 
Notwithstanding the foregoing, where federal, state or local law or
regulations make it improper, impracticable or undesirable to grant Options, as
determined by the Administrator, the Administrator may grant SARs (the “Service
SARs”) in lieu of Service Options; provided such Service SARs have
substantially similar terms and conditions as the foregoing Service Options.


 


(d)                                 Effect
of Administrator’s Decision.  All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Holders.


 


5.                                       Eligibility.  Non-Qualified Stock Options, SARs,
Restricted Stock Awards and Restricted Stock Awards may be granted to Service
Providers.  Incentive Stock Options may
be granted only to Employees.  If
otherwise eligible, an Employee or Director who has been granted an Option or
Restricted Stock awards may be granted additional Options or Restricted Stock.


 


6.                                       Limitations.


 


(a)                                  Each
Option shall be designated by the Administrator in the Option Agreement as
either an Incentive Stock Option or a Non-Qualified Stock Option.  However, notwithstanding such designations,
to the extent that the aggregate Fair Market Value of Shares subject to a
Holder’s Incentive Stock Options and other incentive stock options granted by
the Company, any Parent or Subsidiary, which become exercisable for the first
time during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options or other options shall be
treated as Non-Qualified Stock Options.  
For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time of grant.


 


(b)                                 Neither
the Plan, nor any Award shall confer upon a Holder any right with respect to
continuing the Holder’s employment with the Company, nor shall they interfere
in any way with the Holder’s right or the Company’s right to terminate such
employment relationship at any time, with or without cause.


 


(c)                                  No
Service Provider shall be granted, in any calendar year, Options, SARs,
Restricted Stock or Restricted Stock Units with respect to more than 50,000
Shares; provided,
however, that the foregoing limitation shall not apply prior to the
Public Trading Date and, following the Public Trading Date, the foregoing
limitation shall not apply until the earliest of: (i) the first material
modification of the Plan (including any increase in the number of shares
reserved for issuance under the Plan in


 


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accordance with Section 3); (ii) the issuance of all
of the shares of Common Stock reserved for issuance under the Plan; (iii) the
expiration of the Plan; (iv) the first meeting of stockholders at which
Directors of the Company are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the first
registration of an equity security of the Company under Section 12 of the
Exchange Act; or (v) such other date required by Section 162(m) of the Code and
the rules and regulations promulgated thereunder.  The foregoing limitation shall be adjusted proportionately in
connection with any change in the Company’s capitalization as described in
Section 13.  For purposes of this
Section 6(c), if an Option is canceled in the same calendar year it was granted
(other than in connection with a transaction described in Section 13), the
canceled Option will be counted against the limit set forth in this Section
6(c).  For this purpose, if the exercise
price of an Option is reduced, the transaction shall be treated as a
cancellation of the Option and the grant of a new Option.


 


7.                                       Term
of Plan.  The Plan shall become
effective upon the Effective Date and shall continue in effect until it is
terminated under Section 15 of the Plan. 
No Award may be granted under the Plan after the tenth (10th)
anniversary of the Effective Date.


 


8.                                       Term
of Option or SAR.  The term of each
Option or SAR shall be stated in the Award Agreement; provided, however, that the
term shall be no more than ten (10) years from the date of grant thereof.  In the case of an Incentive Stock Option
granted to a Holder who, at the time the Option is granted, owns (or is treated
as owning under Code Section 424) stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.


 


9.                                       Exercise
Price and Consideration.


 


(a)                                  The
per share exercise price for the Shares to be issued upon exercise of an Option
shall be such price as is determined by the Administrator; provided, however, that in
the case of an Incentive Stock Option (i) granted to an Employee who, at the
time of grant of such Option, owns (or is treated as owning under Code Section
424) stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share exercise
price shall be no less than one hundred ten percent (110%) of the Fair Market
Value per Share on the date of grant, and (ii) granted to any other Employee,
the per Share exercise price shall be no less than one hundred percent (100%)
of the Fair Market Value per Share on the date of grant.  Notwithstanding the foregoing, Options may
be granted in substitution of outstanding options with a per Share exercise
price other than as required above pursuant to a merger or other corporate
transaction.


 


(b)                                 The
per share exercise price for any SAR granted under this Plan shall be such
price as is determined by the Administrator; provided, however, the
exercise price shall be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.


 


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(c)                                  The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant).  Such
consideration may consist of (i) cash; (ii) check; (iii) with the consent of
the Administrator (and at such time or times as the Administrator may
prescribe), other Shares which (A) in the case of Shares acquired from the
Company, have been owned by the Holder for more than six (6) months on the date
of surrender, and (B) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which such Option shall be
exercised; (iv) after the Public Trading Date and with the consent of the
Administrator (A) surrendered Shares then issuable upon exercise of the Option
having a Fair Market Value on the date of exercise equal to the aggregate
exercise price of the Option or exercised portion thereof, or (B) delivery of a notice that the
Holder has placed a market sell order with a broker with respect to Shares then
issuable upon exercise of the Options and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price, provided, that payment of such
proceeds is then made to the Company upon settlement of such sale; or (v) with
the consent of the Administrator, any combination of the foregoing methods of
payment.


 


10.                                 Exercise
of Options and SARs.


 


(a)                                  Vesting;
Fractional Exercises.  Options and
SARs granted hereunder shall be vested and exercisable according to the terms
hereof at such times and under such conditions as determined by the
Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.


 


(b)                                 Deliveries
upon Exercise.  All or a portion of
an exercisable Option or SAR shall be deemed exercised upon delivery of all of
the following (only (i) and (iv) below apply to SARs) to the Secretary of the
Company or his or her office:


 


(i)                                     A
written or electronic notice complying with the applicable rules established by
the Administrator stating that the Option or SAR, or a portion thereof, is
exercised.  The notice shall be signed
by the Holder or other person then entitled to exercise the Option or SAR, or
such portion thereof;


 


(ii)                                  Such
representations and documents as the Administrator, in its absolute discretion,
deems necessary or advisable to effect compliance with Applicable Laws.  The Administrator may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance, including, without limitation, placing legends on share
certificates and issuing stop transfer notices to agents and registrars;


 


(iii)                               Upon
the exercise of all or a portion of an unvested Option pursuant to Section
10(h), a Restricted Stock Agreement in a form determined by the Administrator
and signed by the Holder or other person then entitled to exercise the Option
or such portion of the Option; and


 


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(iv)                              In
the event that the Option or SAR shall be exercised pursuant to Section 10(f)
by any person or persons other than the Holder, appropriate proof of the right
of such person or persons to exercise the Option or SAR.


 


(c)                                  Conditions
to Delivery of Share Certificates. 
The Company shall not be required to issue or deliver any certificate or
certificates for Shares purchased upon the exercise of any Option or portion
thereof prior to fulfillment of all of the following conditions:


 


(i)                                     If
on the date of exercise the Common Stock is listed on a stock exchange, the
admission of such Shares to listing on all stock exchanges on which such class
of stock is then listed;


 


(ii)                                  The
completion of any registration or other qualification of such Shares under any
state or federal law, or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body which the
Administrator shall, in its absolute discretion, deem necessary or advisable;


 


(iii)                               The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its absolute discretion,
determine to be necessary or advisable;


 


(iv)                              The
lapse of such reasonable period of time following the exercise of the Option as
the Administrator may establish from time to time for reasons of administrative
convenience; and


 


(v)                                 The
receipt by the Company of full payment for such Shares, including payment of
any applicable withholding tax, which in the discretion of the Administrator
may be in the form of consideration used by the Holder to pay for such Shares
under Section 9(b).


 


(d)                                 Termination
of Relationship as a Service Provider. 
If a Holder ceases to be a Service Provider other than by reason of the
Holder’s disability or death, such Holder may exercise his or her Option or SAR
within such period of time as is specified in the Award Agreement to the extent
that the Option or SAR is vested on the date of termination (but in no event
later than the expiration of the term of the Award as set forth in the Award
Agreement).  In the absence of a
specified time in the Award Agreement, the Option or SAR shall remain
exercisable for three (3) months following the Holder’s termination.  Except as may otherwise be provided in an
Award Agreement, if, on the date of termination, the Holder is not vested as to
his or her entire Option or SAR, the Shares covered by the unvested portion of
the Award immediately cease to be issuable under the Award and shall again
become available for issuance under the Plan. 
If, after termination, the Holder does not exercise his or her Option or
SAR within the time period specified herein, the Award shall terminate, and the
Shares covered by such Award shall again become available for issuance under
the Plan.


 


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(e)                                  Disability
of Holder.  If a Holder ceases to be
a Service Provider as a result of the Holder’s disability, the Holder may
exercise his or her Option or SAR within such period of time as is specified in
the Award Agreement to the extent the Option or SAR is vested on the date of
termination (but in no event later than the expiration of the term of such
Award as set forth in the Award Agreement). 
In the absence of a specified time in the Award Agreement, the Option or
SAR shall remain exercisable for twelve (12) months following the Holder’s termination.  If such disability is not a “disability” as
such term is defined in Section 22(e)(3) of the Code, in the case of an
Incentive Stock Option such Incentive Stock Option shall automatically cease to
be treated as an Incentive Stock Option and shall be treated for tax purposes
as a Non-Qualified Stock Option from and after the day which is three (3)
months and one (1) day following such termination.  Except as may otherwise be provided in an Award Agreement, if, on
the date of termination, the Holder is not vested as to his or her entire
Option or SAR, the Shares covered by the unvested portion of the Award shall
immediately cease to be issuable under the Award and shall again become
available for issuance under the Plan. 
If, after termination, the Holder does not exercise his or her Option or
SAR within the time specified herein, the Award shall terminate, and the Shares
covered by such Award shall again become available for issuance under the Plan.


 


(f)                                    Death
of Holder.  If a Holder dies while a
Service Provider, the Option or SAR may be exercised within such period of time
as is specified in the Award Agreement (but in no event later than the
expiration of the term of such Award as set forth in the Award Agreement), by
the Holder’s estate or by a person who acquires the right to exercise the
Option or SAR by bequest or inheritance, but only to the extent that the Award
is vested on the date of death.  In the
absence of a specified time in the Award Agreement, the Option or SAR shall
remain exercisable for twelve (12) months following the Holder’s
termination.  Except as may otherwise be
provided in an Award Agreement, if, at the time of death, the Holder is not
vested as to his or her entire Option or SAR, the Shares covered by the
unvested portion of the Award shall immediately cease to be issuable under the
Award and shall again become available for issuance under the Plan.  The Option or SAR may be exercised by the
executor or administrator of the Holder’s estate or, if none, by the person(s)
entitled to exercise the Option or SAR under the Holder’s will or the laws of
descent or distribution.  If the Option
or SAR is not so exercised within the time specified herein, the Award shall
terminate, and the Shares covered by such Award shall again become available
for issuance under the Plan.


 


(g)                                 Regulatory
Extension.  A Holder’s Option
Agreement may provide that if the exercise of the Option following the
termination of the Holder’s status as a Service Provider (other than upon the
Holder’s death or Disability) would be prohibited at any time solely because
the issuance of shares would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in Section 8 or (ii) the
expiration of a period of three (3) months after the termination of the
Holder’s status as a Service Provider during which the exercise of the Option
would not be in violation of such registration requirements.


 


11

















 


(h)                                 Early
Exercisability.  The Administrator
may provide in the terms of a Holder’s Option Agreement that the Holder may, at
any time before the Holder’s status as a Service Provider terminates, exercise
the Option in whole or in part prior to the full vesting of the Option; provided,
however, that subject to Section 20, Shares acquired upon exercise
of an Option which has not fully vested may be subject to any forfeiture,
transfer or other restrictions as the Administrator may determine in its sole
discretion.


 


11.                                 Transferability.


 


(a)                                  Except
as otherwise provided in Section 11(b):


 


(i)                                     No
Option granted under the Plan may be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution, unless
and until such Option has been exercised, and the shares underlying such Option
have been issued, and all restrictions applicable to such shares have lapsed;


 


(ii)                                  Except
as otherwise provided in that applicable Restricted Stock Agreement, no shares
of Restricted Stock may be sold, pledged, assigned or transferred in any manner
other than by will or the laws of descent and distribution unless and until and
all restrictions applicable to such shares of Restricted Stock (under the
Restricted Stock Agreement or any other written stockholders or similar
agreement) have lapsed;


 


(iii)                               No
SAR or Restricted Stock Unit award granted under the Plan may be sold, pledged,
assigned or transferred in any manner other than by will or the laws of descent
and distribution.


 


(iv)                              No
Option, SAR, Restricted Stock or Restricted Stock Unit award or interest or
right therein shall be liable for the debts, contracts or engagements of the
Holder or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition
is permitted by the preceding sentence; and


 


(v)                                 During
the lifetime of the Holder, only he may exercise an Option or SAR (or any
portion thereof) granted to him under the Plan; after the death of the Holder,
any exercisable portion of an Option or SAR may, prior to the time when such
portion becomes unexercisable under the Plan or the applicable Award Agreement,
be exercised by his personal representative or by any person empowered to do so
under the deceased Holder’s will or under the then applicable laws of descent
and distribution.


 


(b)                                 Notwithstanding
Section 11(a), the Administrator, in its sole discretion, may determine to
permit a Holder to transfer a Non-Qualified Stock Option to any one or


 


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more Permitted Transferees (as defined below), subject
to the following terms and conditions: (i) a Non-Qualified Stock Option
transferred to a Permitted Transferee shall not be assignable or transferable
by the Permitted Transferee other than by will or the laws of descent and
distribution; (ii) any Non-Qualified Stock Option which is transferred to a
Permitted Transferee shall continue to be subject to all the terms and
conditions of the Non-Qualified Stock Option as applicable to the original
Holder, other than the ability to further transfer the Non-Qualified Stock
Option (including any requirement that the Holder execute a stockholders or
similar agreement as a condition to exercising the Non-Qualified Stock Option);
and (iii) the Holder and the Permitted Transferee shall execute any and all
documents requested by the Administrator, including, without limitation,
documents to (A) confirm the status of the transferee as a Permitted
Transferee, (B) satisfy any requirements for an exemption for the transfer
under applicable federal and state securities laws and (C) evidence the
transfer.  For purposes of this Section
11(b), “Permitted Transferee” shall mean, with respect to a Holder, any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Holder’s household (other than a tenant
or employee), a trust in which these persons (or the Holder) control the
management of assets, and any other entity in which these persons (or the Holder)
own more than fifty percent of the voting interests, or any other transferee
specifically approved by the Administrator after taking into account any state
or federal tax or securities laws applicable to transferable Non-Qualified
Stock Options.


 


12.                                 Restricted
Stock Awards and Restricted Stock Units.


 


(a)                                  Subject
to Section 12(e), Restricted Stock awards may be issued either alone, in
addition to, or in tandem with Options granted under the Plan and/or cash
awards made outside of the Plan.  After
the Administrator determines that it will offer Restricted Stock awards under
the Plan, it shall, subject to Section 12(e), advise the offeree in writing of
the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase (or the number
of Shares to be issued subject to forfeiture if the Holder is not required to
purchase the Shares), the price, if any, to be paid, and the time within which
such person must accept such offer.  The
offer shall be accepted by execution of a Restricted Stock Agreement in the
form determined by the Administrator. 
Notwithstanding the foregoing, where federal, state or local law or
regulations make it improper, impracticable or undesirable to grant Restricted Stock
awards, as determined by the Administrator, the Administrator may grant
Restricted Stock Unit awards (which may only be settled in cash) in lieu of
Restricted Stock awards; provided such Restricted Stock Unit awards have
substantially similar terms and conditions, with respect to vesting as the
foregoing Restricted Stock.  All
references herein to Restricted Stock and Restricted Stock Agreement shall also
apply, as the context permits, to Restricted Stock Units and Restricted Stock
Unit Agreement, provided, however, at no time will a holder of Restricted Stock
Units be treated as a stockholder of the Company with respect to such
award.  Restricted Stock Unit awards
shall be settled in cash on the date, or dates, on which such awards become
vested.


 


13

















 


(b)                                 Subject
to Section 12(e), the purchase price, if any, for Shares repurchased by the
Company pursuant to such repurchase right and the rate at with such repurchase
right or forfeiture condition shall lapse shall be determined by the
Administrator in its sole discretion, and shall be set forth in the Restricted
Stock Agreement.


 


(c)                                  Subject
to Section 12(e), the Restricted Stock Agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion.


 


(d)                                 Except
as may otherwise be provided in the Restricted Stock Agreement (which prior to
a Public Trading Date shall include, without limitation, restrictions on the receipt
of dividends and voting rights), once shares of Restricted Stock have been
awarded to a Holder, the purchaser shall have rights equivalent to those of a
shareholder and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment shall be made for a dividend
or other right for which the record date is prior to the date the Restricted
Stock is awarded, except as provided in Section 13 of the Plan.


 


(e)                                  The
terms and conditions of each Restricted Stock award shall be set forth in a
written Restricted Stock Agreement entered into by and between the Company and
the Holder, substantially in the form attached hereto as Exhibit C.


 


13.                                 Adjustments
upon Changes in Capitalization, Merger or Asset Sale.


 


(a)                                  In
the event that the Board determines that any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event (including without
limitation any Change in Control), in the Board’s sole discretion, affects the
Common Stock such that an adjustment is determined by the Board to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Option, SAR or Restricted Stock award, then the Board shall, in such
manner as it may deem equitable, adjust any or all of:


 


(i)                                     The
number and kind of shares of Common Stock (or other securities or property)
with respect to which Options, SARs or Restricted Stock awards may be granted
or awarded (including, but not limited to, adjustments of the limitations in
Section 3 on the maximum number and kind of shares which may be issued and
adjustments of the maximum number of Shares that may be purchased by any Holder
in any calendar year pursuant to Section 6(c));


 


14

















 


(ii)                                  The
number and kind of shares of Common Stock (or other securities or property)
subject to outstanding Options, SARs or Restricted Stock awards; and


 


(iii)                               The
grant or exercise price with respect to any Option, SAR or Restricted Stock.


 


(b)                                 In
the event of any transaction or event described in Section 13(a), the Board, in
its sole and absolute discretion, and on such terms and conditions as it deems
appropriate, either by the terms of the Award or by action taken prior to the
occurrence of such transaction or event and either automatically or upon the
Holder’s request, is hereby authorized to take any one or more of the following
actions whenever the Board determines that such action is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to any Award
granted or issued under the Plan or facilitate such transaction or event:


 


(i)                                     To
provide for either the purchase of any such Option, SAR or Restricted Stock
award for an amount of cash equal to the amount that could have been obtained
upon the exercise of such Option or SAR, or realization of the Holder’s rights
had such Option, SAR or Restricted Stock award been currently exercisable or
payable or fully vested or the replacement of such Option, SAR or Restricted
Stock award with other rights or property selected by the Board in its sole
discretion;


 


(ii)                                  To
provide that such Option or SAR shall be exercisable as to all shares covered
thereby or to provide for the cashless or net-exercise of such Awards,
notwithstanding anything to the contrary in the Plan or the provisions of such
Award Agreement;


 


(iii)                               To
provide that such Award be assumed by the successor or survivor corporation, or
a parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation,
or a parent or subsidiary thereof, with appropriate adjustments as to the
number and kind of shares and prices;


 


(iv)                              To
make adjustments in the number and type of shares of Common Stock (or other
securities or property) subject to outstanding Awards, and/or in the terms and
conditions of (including the grant or exercise price), and the criteria
included in, outstanding Awards which may be granted in the future; and


 


(v)                                 To
provide that immediately upon the consummation of such event, such Award shall
not be exercisable and shall terminate; provided, that for a specified period
of time prior to such event, such Option, SAR or Restricted Stock award shall
be exercisable as to all Shares covered thereby, and the restrictions imposed
under an Option Agreement or Restricted Stock Agreement upon some or all Shares
may be terminated and, in the case of Restricted Stock,


 


15

















 


some or all shares of such Restricted Stock may cease
to be subject to repurchase, notwithstanding anything to the contrary in the
Plan or the provisions of such Option or Restricted Stock Agreement.


 


(c)                                  Subject
to Section 3, the Board may, in its discretion, include such further provisions
and limitations in any Award Agreement or certificate, as it may deem equitable
and in the best interests of the Company.


 


(d)                                 The
existence of the Plan, any Award Agreement and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to
or affect the Common Stock or the rights thereof or which are convertible into
or exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.


 


14.                                 Time
of Granting Awards.  The date of
grant of an Option, SAR or Restricted Stock awards shall, for all purposes, be
the date on which the Administrator makes the determination granting such
Award, or such other date as is determined by the Administrator.  Notice of the determination shall be given
to each Employee to whom an Award is so granted within a reasonable time after
the date of such grant.


 


15.                                 Amendment
and Termination of the Plan.


 


(a)                                  Amendment
and Termination.  The Board may at
any time wholly or partially amend, alter, suspend or terminate the Plan.  However, without approval of the Company’s
stockholders given within twelve (12) months before or after the action by the
Board, no action of the Board may, except as provided in Section 13, increase
the limits imposed in Section 3 on the maximum number of Shares which may be
issued under the Plan or extend the term of the Plan under Section 7.


 


(b)                                 Stockholder
Approval.  The Board shall obtain
stockholder approval of any Plan amendment to the extent necessary and
desirable to comply with Applicable Laws.


 


(c)                                  Effect
of Amendment or Termination.  No
amendment, alteration, suspension or termination of the Plan shall impair the
rights of any Holder, unless mutually agreed otherwise between the Holder and
the Administrator, which agreement must be in writing and signed by the Holder
and the Company.  Termination of the
Plan shall not affect the Administrator’s ability to exercise the powers
granted to it hereunder with respect to Awards granted under the Plan prior to
the date of such termination.


 


16.                                 Stockholder
Approval.  On or prior to the
Effective Date the Plan has been submitted for the approval of the Company’s
stockholders and approved by such stockholders.


 


16

















 


17.                                 Inability
to Obtain Authority.  The inability
of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.


 


18.                                 Reservation
of Shares.  The Company, during the
term of this Plan, shall at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.


 


19.                                 Information
to Holders and Purchasers.  To the
extent required by any Applicable Laws, the Company shall provide to each
Holder and to each individual who acquires Shares pursuant to the Plan, not
less frequently than annually during the period such Holder or purchaser has
one or more Awards outstanding, and, in the case of an individual who acquires
Shares pursuant to the Plan, during the period such individual owns such
Shares, copies of annual financial statements.


 


20.                                 Repurchase
Provisions.  The Administrator in
its discretion may provide that the Company may repurchase Shares acquired upon
exercise of an Option or pursuant to a Restricted Stock award upon a Holder’s
termination as a Service Provider; provided, that any such repurchase right
shall be set forth in the applicable Option Agreement or Restricted Stock
Agreement or in another agreement referred to in such Award Agreement.


 


21.                                 Investment
Intent.  The Company may require a
Plan participant, as a condition of exercising or acquiring stock under any
Option or Restricted Stock award, (i) to give written assurances satisfactory
to the Company as to the participant’s knowledge and experience in financial
and business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising
the Option or purchasing Restricted Stock; and (ii) to give written assurances
satisfactory to the Company stating that the participant is acquiring the stock
subject to the Option or Restricted Stock award for the participant’s own
account and not with any present intention of selling or otherwise distributing
the stock.  The foregoing requirements,
and any assurances given pursuant to such requirements, shall be inoperative if
(A) the issuance of the shares upon the exercise or acquisition of stock under
the applicable Option or Restricted Stock award has been registered under a
then currently effective registration statement under the Securities Act or (B)
as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws.  The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.


 


22.                                 Governing
Law.  The validity and
enforceability of this Plan shall be governed by and construed in accordance
with the laws of the State of New York without regard to otherwise governing
principles of conflicts of law.


 


17

















 


23.                                 Shareholders
Agreement.  The Administrator may
provide in any Option Agreement or Restricted Stock award that, as a condition
precedent to the award of such Option or Restricted Stock award under the Plan,
or the exercise or delivery of certificates for Shares issued pursuant thereto,
the Holder (or the Holder’s successor, as applicable) is required to enter into
or become a party to a Shareholders Agreement, Subscription Agreement and/or a
Voting Trust Agreement in such form(s) as the Administrator may determine from
time to time (such agreement or agreements, together, the “Shareholders
Agreement”); provided, however, that the terms and conditions of such
Shareholders Agreement shall be made available to the Holder on or prior to the
date of the grant of such Option or award of such Restricted Stock .


 


18

















 


* * * * * * *


 


I hereby certify that the
Plan was duly adopted by the Board of Directors of True Temper Corporation on
the Effective Date.


 


Executed at
                         ,
                         
on this
             
day of
[                         ],
2004.


 


	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


* * * * * * *


 


I hereby certify that the
foregoing Plan was approved by the stockholders of True Temper Corporation on
[                        ],
2004.


 


Executed at
                         ,
                         
on this
             
day of
[                         ],
2004.


 


	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  



 


19