EXHIBIT
10.2


 


SHAREHOLDERS AGREEMENT


 


This SHAREHOLDERS AGREEMENT (the “Agreement”)
is dated as of March 15, 2004, by and among True Temper Corporation, a Delaware
corporation (the “Company”), TTS Holdings LLC, a Delaware limited
liability company (“TTS Holdings”), and the Other Investors (as defined
below).


 


WHEREAS, pursuant to a Stock Purchase Agreement, dated
as of January 30, 2004, TTS Holdings acquired a majority of the capital stock
of the Company (the “Acquisition”);


 


WHEREAS, the Company and the Investors (as defined
below) desire to enter into this Agreement for the purpose of memorializing
certain rights and obligations of the Company and the Investors with respect to
the Investors’ ownership of capital stock of the Company; and


 


WHEREAS, TTS Holdings and the Other Investors own all
of the issued and outstanding shares of capital stock of the Company;


 


NOW, THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:


 


1.                                       Definitions.  As used herein, the following terms shall
have the following meanings:


 


“Affiliate” means, when used with reference to
a specified Person, any Person that, directly or indirectly, controls or is
controlled by or is under common control with the specified Person.  As used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise) of a specified Person. 
With respect to any Person who is an individual, “Affiliates” shall also
include, without limitation, any member of such individual’s Family Group.


 


“Board” means the Company’s board of directors.


 


“Business Day” means any day other than a
Saturday or Sunday and any day on which banks in the city of New York, New York
are authorized or required by law or other governmental action to close.


 


“Common Stock” means the Company’s Common
Stock, par value $0.01 per share, and any other common stock authorized by the
Company.


 


“Family Group” means, with respect to any
Person who is an individual, (i) such Person’s spouse, former spouse, ancestors
and descendants (whether natural or adopted), parents and their descendants and
any spouse of the foregoing persons (collectively, “relatives”) or (ii)
the trustee,


 

















 


fiduciary or personal representative of such Person or any trust solely
for the benefit of such Person and/or such Person’s relatives.


 


“Investor” means any of the Investors.


 


“Investors” means collectively the TTS Holdings
Investors and the Other Investors.


 


“Investor Shares” means all Stockholder Shares
issued or issuable to any Investor.


 


“Other Investors” means collectively, all
holders of Common Stock (other than TTS Holdings) who are parties or who become
parties to this Agreement and any of their Permitted Transferees.  As of the date of this Agreement, the Other
Investors are those individuals listed in Schedule I hereto.


 


“Other Investor Shares” means all Stockholder
Shares issued or issuable to any Other Investor.


 


“Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization, a
governmental entity or any department, agency or political subdivision thereof
or any other entity or organization.


 


“Public Sale” means any sale of Stockholder
Shares to the public pursuant to an offering registered under the Securities
Act or to the public pursuant to the provisions of Rule 144 (or any
similar rule or rules then in effect) under the Securities Act.


 


“Qualified Public Offering” means any offering
by the Corporation of its Common Stock to the public pursuant to an effective
registration statement under the Securities Act or any comparable statement
under any similar federal statute then in force pursuant to which the public
offering price results in aggregate gross cash proceeds to the Corporation and
the selling stockholders, if any, of at least $50,000,000 (before deduction of
underwriting discounts and expenses) and represents an implied aggregate equity
value for the fully diluted Common Stock of at least $100,000,000.


 


“SEC” means the Securities and Exchange
Commission.


 


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


 


“Stockholder Shares” means (i) all shares of
Common Stock held, directly or indirectly, by the Investors and (ii) all equity
securities issued or issuable directly or indirectly with respect to any Common
Stock referred to in clause (i) above by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation, share exchange or other reorganization.  As to any particular shares constituting
Stockholder Shares, such shares will cease to be Stockholder Shares when they
have been Transferred in a Public Sale.


 


“Subsidiary” means, with respect to any Person,
any corporation, partnership, limited liability company, association or other
business entity of which (i) if a corporation, a majority of


 


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the total voting power of shares of stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a partnership, limited liability company, association or other
business entity, a majority of the partnership or other similar ownership
interests thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more Subsidiaries of that Person or a combination
thereof.  For purposes hereof, a Person
or Persons shall be deemed to have a majority ownership interest in a partnership,
limited liability company, association or other business entity if such Person
or Persons shall be allocated a majority of partnership, limited liability
company, association or other business entity gains or losses or shall be or
control the managing director, managing member, manager or a general partner of
such partnership, limited liability company, association or other business
entity.  For purposes of this Agreement,
if the context does not otherwise indicate to which Person the term Subsidiary
is used in respect of, the term Subsidiary shall refer to a Subsidiary of the
Company


 


“Transfer” means any voluntary or involuntary,
direct or indirect sale, transfer, conveyance, assignment, pledge,
hypothecation, gift, delivery or other disposition, and “Transferred” means any
change in ownership by means of a Transfer.


 


“TTS Holdings Investor” means any of TTS
Holdings or any of its Permitted Transferees.


 


“TTS Holdings Shares” means all Stockholder
Shares issued or issuable to any TTS Holdings Investor.


 


“Unaffiliated Third Party” means any Person
who, immediately prior to the contemplated transaction, (i) is not a Person who
directly or indirectly owns in excess of 5% of the outstanding shares of Common
Stock on a fully-diluted basis (a “5% Owner”), (ii) is not controlling,
controlled by or under common control with any such 5% Owner and (iii) is not
the spouse or descendent (by birth or adoption) of any such 5% Owner or a trust
for the benefit of such 5% Owner and/or such other Persons.  As used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean possession, directly or indirectly, of power to
significantly direct management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise) of a specified Person.


 


2.                                       Voting
Agreement; Board of Directors.


 


(a)                                  To
the extent permitted by law, each Investor hereby agrees to vote all of the
Investor Shares owned or held of record by such Investor at any annual meeting
or special meeting of the stockholders of the Company in favor of, or take all
actions by written consent in lieu of any such meeting as may be necessary to
cause the election as members of the Board:


 


(i)                                     those
individuals designated by the TTS Holdings Investors (the “TTS Holdings
Directors”); and


 


(ii)                                  Scott
C. Hennessy, for so long as he shall hold the office of Chief Executive Officer
of the Company.


 


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(b)                                 To
the extent permitted by law, each Investor will vote all of Investor Shares
owned or held of record by such Investor and take all necessary or desirable
actions (in his or her capacity as a stockholder of the Company) as are
reasonably requested by the TTS Holdings Investors to prevent the removal,
without cause, of the TTS Holdings Directors without the prior written consent
of the TTS Holdings Investors.


 


3.                                       Conflicting
Agreements.  Each Investor
represents that such Investor has not granted and is not a party to any proxy,
voting trust or other agreement which is inconsistent with or conflicts with
the provisions of this Agreement, and no holder of Stockholder Shares shall
grant any proxy or become party to any voting trust or other agreement which is
inconsistent with or conflicts with the provisions of this Agreement.


 


4.                                       Restrictions
on Transfer of Investor Shares.


 


(a)                                  General
Restrictions.  Subject to Section
4(d) and Section 6 hereof, an Other Investor may Transfer Other
Investor Shares only (A) in Public Sales, (B) if such Other Investor has
complied with the terms and requirements of Sections 4(b), to the extent
applicable, or if such Other Investor is exercising a tag-along right granted
to such Other Investor pursuant to Section 4(c), subject to the
requirements of Section 4(d)(ii), or (C) pursuant to the terms of Section
5.


 


(b)                                 Right
of First Offer Granted to the Company and the TTS Holdings Investors.  Subject to Section 4(d)(i) (all terms
defined in this Section 4(b) shall be for purposes of this Section
4(b) only):


 


(i)                                     If
at any time any Other Investor (a “Selling Holder”) proposes to Transfer
any Other Investor Shares (other than pursuant to a Public Sale, pursuant to
the terms of Section 5, or if such Selling Holder is exercising a
tag-along right granted to such Selling Holder pursuant to Section 4(c)),
then such Selling Holder will, not fewer than twenty-five (25) Business Days
prior to making such Transfer, give notice 
(the “Transfer Notice”) to the TTS Holdings Investors and to the
Company specifying (x) the Stockholder Shares proposed to be Transferred (the “Offered
Shares”), and (y) the price (the “Offered Price”) and the other
terms and conditions upon which such Selling Holder proposes to Transfer such
Offered Shares, and (z) if known at the time the Transfer Notice is given, the
proposed Transferee(s).


 


(ii)                                  Subject
to the provisions of Section 4(b)(v), the Transfer Notice will
constitute an irrevocable offer  (for
the time periods set forth in items (iii) and (iv) below, but subject to clause
(v) below) to Transfer any of the Offered Shares to the Company and the TTS
Holdings Investors at the Offered Price and on the terms specified in the
Transfer Notice (the “Offer to Sell”), except that if the proposed
Transfer is to be wholly or partly for consideration other than cash, then the
Offer to Sell will constitute an offer to Transfer the Offered Shares to the
Company and the TTS Holdings Investors for a cash purchase price equal to the
amount of cash (if any) specified in the Transfer Notice, plus the fair market
value determined in the good faith judgment of the Board, at the date of the
Transfer Notice, of such non-cash consideration.


 


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(iii)                               The
Company will have ten (10) Business Days after its receipt of the Transfer
Notice (the “Company Exercise Period”) during which to notify the
Selling Holder and the TTS Holdings Investors in writing of its election to
purchase all or any portion of the Offered Shares (an “Acceptance Notice”).


 


(iv)                              If
the Company has not elected to purchase all of the Offered Shares, the TTS
Holdings Investors will have ten (10) Business Days after their receipt of the
Transfer Notice (the “TTS Holdings Exercise Period”) during which to
notify the Selling Holder and the Company in writing of their election to
purchase all or a portion of the Offered Shares which the Company has not
elected to purchase (such shares, the “TTS Holdings Offered Shares”)  (such written notice, also an “Acceptance
Notice”).  Any TTS Holdings Investor
who delivers an Acceptance Notice shall be referred to herein as a “Purchasing
TTS Holdings Investor”.  If the
Purchasing TTS Holdings Investors elect to purchase in the aggregate more than
the TTS Holdings Offered Shares, then the TTS Holdings Offered Shares shall be
sold among the Purchasing TTS Holdings Investors pro rata based upon the number of Stockholder Shares then
owned by such Purchasing TTS Holdings Investors or in such other manner as the
Purchasing TTS Holdings Investors may agree.


 


(v)                                 In
the event that following the expiration of the Company Exercise Period and the
TTS Holdings Exercise Period the Company and the TTS Holdings Investors have
elected to purchase some but not all of the Offered Shares, the Selling Holder,
within ten (10) Business Days after the expiration of the TTS Holdings Exercise
Period may elect to cancel the Transfer Notice in which case the offer to
Transfer Offered Shares to the Company and the TTS Holdings Investors at the
Offered Price shall be void and of no force and effect.  Assuming that the Selling Holder does not
cancel the Transfer Notice in accordance with the preceding sentence, upon the
delivery of the Acceptance Notice(s), the Company and/or the Purchasing TTS
Holdings Investor(s), as the case may be, and the Selling Holder shall be
firmly bound to consummate the purchase and sale of the applicable Offered
Shares in accordance with the Transfer Notice, the Acceptance Notice(s) and the
terms hereof.  Subject to the provisions
hereof, within thirty (30) days after the Selling Holder’s receipt of the
last Acceptance Notice, the Company and/or the Purchasing TTS Holdings
Investor(s), as the case may be, shall purchase and the Selling Holder shall
sell the applicable Offered Shares at a mutually agreeable time and place (the
“Offered Shares Closing”).


 


(vi)                              At
the Offered Shares Closing, the Selling Holder shall deliver to the Company
and/or the Purchasing TTS Holdings Investor(s), as the case may be,
certificates representing the Offered Shares (which Offered Shares shall be
free and clear of any liens or encumbrances) to be purchased by the Company
and/or the Purchasing TTS Holdings Investor(s), as the case may be, and the
Company and/or the Purchasing TTS Holdings Investor(s), as the case may be,
shall deliver to the Selling Holder the applicable purchase price for such
Offered Shares by wire transfer of immediately available funds to an account(s)
designated by such Selling Holder.


 


(vii)                           If the
Company and the TTS Holdings Investors collectively do not elect to purchase
all of the Offered Shares in accordance with Section 4(b)(iii) and 4(b)(iv),


 


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then, provided the Selling Holder also has complied
with the provisions of Section 4(c), if applicable, and no Transferee is
an Affiliate of the Selling Holder, the Selling Holder may Transfer any or all
of such Offered Shares (unless reduced pursuant to the exercise of rights
granted to other Investors in Section 4(c)), at a price which is not
less than the price specified in the Transfer Notice and on other terms and
conditions which are not materially more favorable in the aggregate to any
Transferee thereof than those specified in the Transfer Notice, to any
Person(s) (whether or not identified as a potential Transferee in the Transfer
Notice), but only to the extent that a binding purchase and sale agreement has
been executed between such Selling Holder and such Transferee within one
hundred twenty (120) days after expiration of the TTS Holdings Exercise Period.  Any Stockholder Shares not Transferred
pursuant to such an agreement entered into within such 120-day period will be
subject to the provisions of this Section 4(b) upon subsequent
Transfer.


 


(viii)                        The
provisions of this Section 4(b) shall terminate upon the consummation of
a Qualified Public Offering.


 


(c)                                  Tag
Along Rights.


 


(i)                                     Tag
Along Rights in the event of certain Transfers by the TTS Holdings Investors.  Subject to Section 4(d)(i), at least
ten (10) Business Days prior to the Transfer by any of the TTS Holdings
Investors (collectively, the “TTS Holdings Transferring Stockholder”) of
any TTS Holdings Shares to a Person that is not an Affiliate of any TTS
Holdings Investor (other than pursuant to a Public Sale or pursuant to the
terms of Section 5), the TTS Holdings Transferring Stockholder shall
deliver a written notice (the “TTS Holdings Sale Notice”) to the Other
Investors (collectively, the “Tagging Investors”) and to the Company,
specifying in reasonable detail the identity of the prospective transferee(s),
the class and the number of the Stockholder Shares to be Transferred, and the
other material terms and conditions of such contemplated Transfer.  Any of the Tagging Investors may elect to
participate in such contemplated Transfer by delivering written notice to the
TTS Holdings Transferring Stockholder within ten (10) Business Days after its
receipt of the TTS Holdings Sale Notice. 
If any of the Tagging Investors elects to participate in such Transfer,
each of the Tagging Investors shall be entitled to sell in such contemplated
Transfer, at the same price and on the same terms, up to a number of each class
of Stockholder Shares to be Transferred equal to the product of (I) a
fraction, the numerator of which is the number of Stockholder Shares held by
such Tagging Investor and the denominator of which is the aggregate number of
Stockholder Shares owned by the TTS Holdings Transferring Stockholder and all
Tagging Investors immediately prior to such Transfer, multiplied by (II) the
total number of Stockholder Shares to be sold in connection with such
Transfer.  Each Investor who is
Transferring any Stockholder Shares pursuant to this Section 4(c)(i)
shall pay its pro  rata share (based on the number of Stockholder
Shares to be sold) of the expenses incurred by the Investors in connection with
such Transfer and shall take all necessary and desirable actions as reasonably
directed by the TTS Holdings Transferring Stockholder in connection with the
consummation of such Transfer, including without limitation executing the
applicable purchase agreement.  The TTS
Holdings Transferring Stockholder shall cause all applicable transferee(s) to
execute a joinder to this Agreement with respect to all


 


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Stockholder Shares Transferred pursuant to this Section
4(c)(i).  Any Transfer made by a TTS
Holdings Transferring Stockholder pursuant to this Section 4(c)(i) or
pursuant to Section 4(c)(ii) shall satisfy the following conditions, (i)
upon the consummation of such Transfer, each Investor participating in such
Transfer will be entitled to receive the same form and amount (on a
share-for-share basis) of consideration, with respect to each share of Common
Stock sold in such Transfer and (ii) if any holder of Common Stock is given the
option as to the form and amount of consideration to be received in connection
with such Transfer, then each holder of Common Stock shall be given the same
option.  In connection with any Transfer
made pursuant to this Section 4(c) each Other Investor shall be entitled
to receive, and the Company and/or the TTS Holdings Transferring Stockholder
shall deliver all information relating to the Company and its Subsidiaries as
such Other Investor shall reasonably request. 
The TTS Holdings Transferring Stockholder shall deliver to each Other
Investor a copy of the acquisition agreement (and related documents) relating
to any Transfer subject to this Section 4(c) in a reasonably timely
manner to allow for adequate review by each of the Other Investors and shall
include in the disclosure schedules attached thereto any information reasonably
requested to be included therein by such Other Investor.  The right of the Investors to participate in
a Transfer pursuant to this Section 4(c) shall not be contingent upon
such Investor providing any indemnity in connection with any such Transfer,
unless the TTS Holdings Transferring Stockholder and all other sellers provide
such an indemnity, and in the event that all sellers are required to provide an
indemnity in connection with such Transfer, all parties hereto agree that no
Investor shall be liable for more than the lesser of (A) its pro  rata
shares of any such indemnification payments (based upon the total consideration
received by such Investor divided by the total consideration received by all
sellers in such Transfer) and (B) the net proceeds actually received by such
Investor as consideration for its shares of capital stock of the Company in
such Transfer.


 


(ii)                                  The
provisions of Sections 4(c)(i) shall terminate upon the consummation of
a Qualified Public Offering.


 


(d)                                 Permitted
Transfers.


 


(i)                                     The
restrictions contained in Sections 4(a), 4(b) and 4(c)
shall not apply with respect to any Transfer of Stockholder Shares by any
Investor (A) in the case of an individual Investor, pursuant to applicable
laws of descent and distribution or to any member of such Investor’s Family
Group, (B) in the case of a non-individual Investor, to its employees or
Affiliates, or (C) in the case of TTS Holdings, to its members or any
subsequent transfer by such member to its securityholders in connection with a
distribution by TTS Holdings of Stockholder Shares held by it; provided,
in each case, that any such transferee shall have complied with the
requirements of Section 4(d)(ii).


 


(ii)                                  Prior
to any proposed transferee’s acquisition from any Investor of Stockholder
Shares pursuant to a Transfer that is not prohibited by this Agreement, such
proposed transferee must agree to take such Stockholder Shares subject to and
to be fully bound by the terms of this Agreement applicable to such Stockholder
Shares by executing a joinder to this Agreement substantially in the form
attached hereto as Exhibit A and delivering such executed joinder to the
Secretary of the Company prior to the


 


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effectiveness of such Transfer (unless such Transfer
is pursuant to applicable laws of descent and distribution, in which case, such
executed joinder shall be delivered to the Secretary of the Company as soon as
reasonably possible after such Transfer). 
All transferees acquiring Stockholder Shares and executing a joinder in
compliance with this Section 4(d)(ii) are collectively referred to
herein as “Permitted Transferees”.


 


(e)                                  Certain
Events Deemed Transfers.  If (i) any
Transfer of a majority interest in the residual equity securities of an
Investor owning Stockholder Shares occurs other than a Transfer to an Affiliate
of the transferring Investor, or (ii) any Investor Transfers Stockholder Shares
to an Affiliate and an event occurs which causes such Affiliate to cease to be
an Affiliate of such Investor, such event or Transfer shall be deemed a
Transfer of Stockholder Shares subject to all of the restrictions on Transfers
of Stockholder Shares set forth in this Agreement, including without
limitation, this Section 4.


 


5.                                       Approved
Sale.


 


(a)                                  If
the holders of a majority of the voting Stockholder Shares then outstanding,
voting together as if a single class, (the “Approving Stockholders”)
approve a sale of all or substantially all of the Company’s assets determined
on a consolidated basis or a sale of all (or, for accounting, tax or other
reasons, substantially all) of the Company’s outstanding capital stock (other
than capital stock which is not Common Stock or convertible into Common Stock)
(whether by merger, recapitalization, consolidation, share exchange,
reorganization, combination or otherwise) to an Unaffiliated Third Party or
group of Unaffiliated Third Parties (each such sale, an “Approved Sale”),
then each holder of Stockholder Shares will vote for, consent to and raise no
objections against such Approved Sale subject to the terms set forth
below.  In connection with any Investors
exercising their rights under this Section 5(a), such Investors shall
send a written notice at least ten (10) Business Days prior to any Approved
Sale to all other Investors setting forth the principal terms of the proposed
Approved Sale.  If the Approved Sale is
structured as (i) a merger, share exchange or consolidation, each holder of
Stockholder Shares will waive any dissenters’ rights, appraisal rights or
similar rights in connection with such merger, share exchange or consolidation
or (ii) a sale of stock, each holder of Stockholder Shares will agree to sell
all of its Stockholder Shares and rights to acquire Stockholder Shares on the
same terms and conditions as applicable to all of the Stockholder Shares held
by the Approving Stockholders.  Each
holder of Stockholder Shares will take all reasonably necessary or desirable
actions in connection with the consummation of the Approved Sale as reasonably
requested by the Investors approving such Approved Sale including without
limitation (but subject to Section 5(c)) executing any applicable
purchase agreement.


 


(b)                                 Each
Investor will bear its pro  rata share (based upon the number of
Stockholder Shares sold) of the costs of any sale of Stockholder Shares
pursuant to an Approved Sale to the extent such costs are incurred for the
benefit of all holders of Stockholder Shares and are not otherwise paid by the
Company or the acquiring party.  Costs
incurred by any Investor on their own behalf will not be considered costs of
the transaction hereunder.


 


(c)                                  The
obligations of the Investors with respect to any Approved Sale are subject to
the satisfaction of the following conditions: 
(i) in connection with the consummation of such Approved Sale, each
Investor will be entitled to receive the same form and amount (on a share-


 


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for-share basis) of consideration, with respect to each share of Common
Stock sold in such Approved Sale, (ii) if any holder of Common Stock is given
the option as to the form and amount of consideration to be received in
connection with such Approved Sale, then each holder of Common Stock shall be
given the same option, (iii) if TTS Holdings or any Affiliate of TTS Holdings
owns directly or indirectly more than 5% of any class of capital stock of any
of the Third Parties involved in such Approved Sale, then such Approved Sale
shall have been approved by the holders of a majority of the Stockholder Shares
of the Company held, directly or indirectly, by persons who do not own more
than 5% of any class of capital stock of any such Third Party and the Board
shall have received a fairness opinion from a nationally recognized investment
banking firm with respect to the terms of such Approved Sale, and (iv) no
Investor shall be required to provide an indemnity in connection with any
Approved Sale, unless all sellers in such Approved Sale provide such an
indemnity, and in the event that all sellers are required to provide an
indemnity in connection with the Approved Sale, all parties hereto agree that
no Investor shall be liable for more than the lesser of (A) its pro  rata
share of such indemnification payments (based upon the total consideration
received by such holder divided by the total consideration received by all
sellers in such Approved Sale) and (B) the net proceeds actually received by
such holder as consideration for its shares of proceeds actually received by
such holder as a consideration for its shares of capital stock of the Company
in such Approved Sale.  In connection
with any Approved Sale, each Investor shall be entitled to receive, and the
Company shall deliver all information relating to the Company and its
Subsidiaries as such Investor shall reasonably request.  The Company shall deliver to each Investor a
copy of the acquisition agreement (and related documents) relating to any
Approved Sale in a reasonably timely manner to allow for adequate review by the
Investors and shall include in the disclosure schedules attached thereto any
information reasonably requested to be included therein by such Investor.  Notwithstanding anything contained herein to
the contrary, the term “consideration” as used in this subsection (c) shall not
include any management, advisory, closing, legal or similar fees received by
any Investor or any Affiliate of any Investor in connection with an Approved
Sale.


 


(d)                                 The
provisions of this Section 5 will terminate upon the occurrence of the
consummation of a Qualified Public Offering.


 


6.                                       Legend;
Additional Restriction on Transfer.


 


(a)                                  Each
certificate or instrument evidencing Stockholder Shares and each certificate or
instrument issued in exchange for or upon the Transfer of any Stockholder
Shares (if such securities remain Stockholder Shares (as defined herein) after
such Transfer) shall be stamped or otherwise imprinted with a legend in
substantially the following form:


 


“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. 
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS


 


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SUBJECT TO A SHAREHOLDERS AGREEMENT DATED AS OF MARCH
15, 2004, AS MAY BE AMENDED FROM TIME TO TIME, BY AND AMONG THE ISSUER AND
CERTAIN OF THE ISSUER’S STOCKHOLDERS.  A
COPY OF SUCH SHAREHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”


 


The legend set forth
above regarding the Shareholders Agreement shall be removed from the
certificates evidencing any securities which cease to be Stockholder
Shares.  Upon the request of any holder
of Stockholder Shares, the Company shall remove the Securities Act legend set
forth above from the certificate or certificates for such Stockholder Shares; provided,
that such Stockholder Shares are eligible for sale pursuant to Rule 144(k) (or
any similar rule or rules then in effect) under the Securities Act.


 


(b)                                 Unless
waived by the Company, no Investor may Transfer any Stockholder Shares (except
pursuant to an effective registration statement under the Securities Act)
without first delivering to the Company an opinion of counsel reasonably
acceptable in form and substance to the Company (which counsel will be
reasonably acceptable to the Company) that registration under the Securities
Act is not required in connection with such Transfer.


 


7.                                       Transfers
in Violation of Agreement; Additional Shares.


 


(a)                                  Any
Transfer or attempted Transfer of any Stockholder Shares in violation of any
provision of this Agreement shall be null and void, and the Company shall not
record such Transfer on its books or treat any purported transferee of such
Stockholder Shares as the owner of such securities for any purpose.


 


(b)                                 Prior
to the issuance of any shares of Common Stock to a Person who is not then an
Investor, the Company shall cause the Person to whom the shares of Common Stock
are to be issued to enter into a joinder to this Agreement substantially in the
form attached hereto as Exhibit A.


 


8.                                       Preemptive
Rights.


 


(a)                                  If
at any time prior to the consummation of a Qualified Public Offering the
Company wishes to issue any Common Stock or any options, warrants or other
rights to acquire Common Stock or any notes or other securities convertible or
exchangeable into Common Stock (all such Common Stock and other rights and
securities, collectively, the “Equity Equivalents”) to any Person or
Persons, the Company shall promptly deliver a notice of intention to sell (the
“Company’s Notice of Intention to Sell”) to each Investor setting forth
a description and the number of the Equity Equivalents proposed to be issued
and the proposed purchase price and terms of sale.  Upon receipt of the Company’s Notice of Intention to Sell, each
Investor shall have the right to elect to purchase, at the price and on the
terms stated in the Company’s Notice of Intention to Sell, a number of the
Equity Equivalents equal to the product of (i) such Investor’s proportionate
ownership of the outstanding shares of Common Stock (calculated on a
fully-diluted basis assuming all holders of then outstanding warrants, options
and convertible securities of the Company which are in the money had converted
such convertible securities or


 


10

















 


exercised such warrants or options immediately prior to the taking of
the record of the holders of Common Stock for the purpose of determining
whether they are entitled to receive such offer) held by all Persons multiplied
by (ii) the number of Equity Equivalents proposed to be issued (as described in
the applicable Company’s Notice of Intention to Sell).  Such election shall be made by the electing
Investor by written notice to the Company within ten (10) days after receipt by
such Investor of the Company’s Notice of Intention to Sell (the “Acceptance
Period”).


 


(b)                                 To
the extent an effective election to purchase has not been received from an
Investor pursuant to subsection (a) above in respect of the Equity Equivalents
proposed to be issued pursuant to the applicable Company’s Notice of Intention
to Sell, the Company may, at its election, during a period of one hundred and
twenty (120) days following the expiration of the applicable Acceptance Period,
issue and sell the remaining Equity Equivalents to be issued and sold to any
Person at a price and upon terms not more favorable to such Person than those
stated in the applicable Company’s Notice of Intention to Sell.  In the event the Company has not sold any
Equity Equivalents covered by a Company’s Notice of Intention to Sell, or
entered into a binding agreement to sell such Equity Equivalents, within such
one hundred and twenty (120) day period, the Company shall not thereafter issue
or sell such Equity Equivalents, without first offering such Equity Equivalents
to each Investor in the manner provided in this Section 8.


 


(c)                                  If
an Investor gives the Company notice, pursuant to the provisions of this Section
8, that such Investor desires to purchase any Equity Equivalents, payment
therefor shall be by check or wire transfer of immediately available funds,
against delivery of the securities (which securities shall be issued free and
clear of any liens or encumbrances) at the executive offices of the Company at
the closing date fixed by the Company for the sale of all such Equity
Equivalents.  In the event that any
proposed sale is for a consideration other than cash, such Investors may pay
cash in lieu of all (but not part) of such other consideration, in the amount
determined reasonably and in good faith by the Board to represent the fair
value of such consideration other than cash.


 


(d)                                 The
preemptive rights contained in this Section 8 shall not apply to
(i) the issuance of shares or units of Equity Equivalents as a stock
dividend or upon any subdivision, split or combination of the outstanding shares
of Common Stock; (ii) the issuance of Equity Equivalents upon conversion,
exchange or redemption of any outstanding convertible or exchangeable
securities; (iii) the issuance of Equity Equivalents upon exercise of any
then outstanding options or warrants; (iv) the issuance of Equity
Equivalents to any employee, consultant or director of the Company or any of
its subsidiaries in his or her capacity as such; (v) the issuance of Equity
Equivalents for aggregate consideration of less than $5,000,000; (vi) the
issuance of Equity Equivalents to equipment lessors or financial institutions
in connection with commercial credit arrangements, equipment or other
financings; or (vii) the issuance of Equity Equivalents in connection with a
bona fide acquisition of another business entity, products or technologies by
the Company, or pursuant to a strategic partnership.


 


(e)                                  The
provisions of this Section 8 shall terminate upon the consummation of a
Qualified Public Offering.


 


11

















 


9.                                       Piggyback
Restrictions.


 


(a)                                  Right
to Piggyback.  Whenever the Company
proposes to register any of its Common Stock under the Securities Act for its
own account or for the account of any holder of Common Stock other than
pursuant to a registration statement on Form S-8 or S-4 or any similar or
successor form (a “Piggyback Registration”), the Company will give
prompt written notice to all of the Other Investors of its intention to effect
such a registration and of such Other Investors’ rights under this Section
9(a).  Upon the written request of
any Other Investor, the Company shall include in such registration (subject to
the provisions of this Agreement) all shares of Common Stock requested to be
registered pursuant to this Section 9(a), subject to Section 9(b)
below, with respect to which the Company has received written requests for
inclusion therein within 20 days after the receipt of the Company’s notice; provided
that any such Other Investor may withdraw his request for inclusion at any time
prior to executing the underwriting agreement or, if none, prior to the
applicable registration statement becoming effective.


 


(b)                                 Priority
on Registrations.  If a Piggyback
Registration is in part an underwritten primary registration on behalf of the
Company and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the Company and without adversely
affecting the marketability of the offering, then the Company will include in
such registration (i) first, the securities the Company proposes to sell, (ii)
second, the shares of Common Stock requested to be included in such
registration pursuant to this Section 9, pro  rata from
among the holders of such shares of Common Stock according to the number of
shares of Common Stock requested by them to be so included, and (iii) third,
any other securities requested to be included in such registration, in such
manner as the Company may determine.


 


(c)                                  Registration
Expenses.  The Company will pay all
expenses incident to any Piggyback Registration whether or not such Piggyback
Registration has become effective including, but not limited to, all
registration and filing fees, fees and expenses of compliance with securities
or blue sky laws, printing and distributing expenses, messenger and delivery
expenses, fees and expenses of custodians, internal expenses (including all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the NASD automated
quotation system, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company.


 


(d)                                 Holdback
Agreement.  Each Investor hereby
agrees not to effect any sale or distribution of equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, during the seven days prior to and the 180-day period
beginning on the effective date of any underwritten Piggyback Registration
(except as part of such underwritten registration), unless the underwriters
managing such underwritten registration otherwise agree (which agreement shall
be equally applicable to all holders of Registrable Securities); provided,
that any period during which Other Investors are precluded


 


12

















 


from selling or distributing equity securities of the Company shall in
no event exceed the period, if any, during which the TTS Holdings Investors are
precluded from selling or distributing equity securities of the Company.


 


10.                                 Termination
of Prior Agreement.  The Investors
and the Company acknowledge and agree that the Amended and Restated
Shareholders Agreement, dated March 27, 2000, by and among the Company, certain
of the Investors and certain other parties, shall be terminated in accordance
with its terms upon consummation of the Acquisition.


 


11.                                 Amendment
and Waiver.  No modification,
amendment or waiver of any provision of this Agreement shall be effective
against the Company or the Investors unless such modification, amendment or
waiver is approved in writing by, respectively, the Company or the holders of
at least a majority of the Stockholder Shares; provided, that no
modification, amendment or waiver shall be effective without the consent of an
Investor to the extent that such amendment would adversely affect the rights or
obligations of such Investor hereunder. 
The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.  Each Investor shall remain a party to this
Agreement only so long as such person is the holder of record of Stockholder
Shares.


 


12.                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.


 


13.                                 Entire
Agreement.  Except as otherwise
expressly set forth herein, this document embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.


 


14.                                 Termination.  This Agreement will automatically terminate
and be of no further force or effect immediately after the consummation of an
Approved Sale.


 


15.                                 Successors
and Assigns.  Except as otherwise
provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its successors and assigns and the Investors and
any subsequent holders of Stockholder Shares and the respective successors,
heirs and permitted assigns of each of them, so long as they hold Stockholder
Shares.


 


16.                                 Counterparts.  This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.


 


13

















 


17.                                 Remedies.  The parties hereto shall be entitled to
enforce their rights under this Agreement specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. 
The parties hereto agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and that
the Company and any Investor may in his, hers, or its sole discretion apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief (without posting a bond or other security) in order to
enforce or prevent any violation of the provisions of this Agreement.


 


18.                                 Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered if
delivered personally, sent via a nationally recognized overnight courier, or
sent via facsimile to the recipient, or if sent by certified or registered
mail, return receipt requested, will be deemed to have been given two (2)
Business Days thereafter.  Such notices,
demands and other communications will be sent to the address indicated below:


 


To the Company:


 


True Temper Corporation

8275 Tournament Drive, Suite 200

Memphis, TN  38125

Attention:                                         President

Telecopy No.:                     (901)
746-2162


 


With a copy, which shall not constitute notice, to:


 


TTS Holdings LLC

c/o Gilbert Global Equity Capital, L.L.C.

590 Madison Ave., 40th Floor

New York, New York  10022 

Attention:  Jeffrey W. Johnson 

Telecopy No.:                     (212)
702-7980


 


Mayer, Brown, Rowe & Maw LLP

1675 Broadway 

New York, New York  10019

Attention:  Thomas M. Vitale, Esq.

Telecopy No.:                     (212)
262-1910


 


To TTS Holdings:


 


True Temper Sports LLC

c/o Gilbert Global Equity Capital, L.L.C.

590 Madison Ave., 40th Floor

New York, New York  10022 

Attention:  Jeffrey W. Johnson 

Telecopy No.:                     (212)
702-7980


 


14

















 


With a copy, which shall not constitute notice, to:


 


Mayer, Brown, Rowe & Maw LLP

1675 Broadway 

New York, New York  10019

Attention:  Thomas M. Vitale, Esq.

Telecopy No.:                     (212)
262-1910


 


If to any Other Investor
to the address set forth opposite such Person’s name on Schedule I
attached hereto or, in any such case, such other address or to the attention of
such other person as the recipient party shall have specified by prior written
notice to the sending party.


 


19.                                 Governing
Law.  The corporate law of the State
of Delaware will govern all questions concerning the relative rights of the
Company and its stockholders.  All other
questions concerning the construction, validity and interpretation of this
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.


 


20.                                 Descriptive
Headings.  The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
part of this Agreement.


 


*  * 
*  *  *


 


15

















 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.


 


 


	
   

  	
  TRUE TEMPER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Fred H. Geyer

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  TTS HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ RICHARD
  W. GAENZLE, JR.

  	
   

  
	
   

  	
   

  	
  Name:  Richard W. Gaenzle, Jr.

  
	
   

  	
   

  	
  Title:  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ SCOTT HENNESSY

  	
   

  
	
   

  	
  Scott Hennessy

  
	
   

  	
   

  
	
   

  	
    /s/ STEPHEN M. BROWN

  	
   

  
	
   

  	
  Stephen M. Brown

  
	
   

  	
   

  
	
   

  	
    /s/ FRED H. GEYER

  	
   

  
	
   

  	
  Fred H. Geyer

  
	
   

  	
   

  
	
   

  	
    /s/ ADRIAN H. MCCALL

  	
   

  
	
   

  	
  Adrian H. McCall

  
	
   

  	
   

  
	
   

  	
    /s/ GRAEME P. HORWOOD

  	
   

  
	
   

  	
  Graeme P. Horwood

  



 

















 


	
   

  	
    /s/ 
  LARRY GENE PIERCE

  	
   

  
	
   

  	
  Larry Gene Pierce

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    /s/ RIC C. ANDERSEN

  	
   

  
	
   

  	
  Ric C. Andersen

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    /s/ JASON A. JENNE

  	
   

  
	
   

  	
  Jason A. Jenne

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    /s/ DAVID N. HALFORD

  	
   

  
	
   

  	
  David N. Hallford

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    /s/ NEAL C. HAAS

  	
   

  
	
   

  	
  Neal C. Haas

  	
   

  



 

















 


EXHIBIT A


 


FORM OF JOINDER TO

SHAREHOLDERS AGREEMENT


 


This JOINDER TO SHAREHOLDERS AGREEMENT (the “Joinder”)
dated as of       ,
      by and among True Temper Corporation, a Delaware
corporation (the “Company”), and certain stockholders of the Company
(the “Agreement”), is made and entered into as of
                       
by and between the Company and
                           
(“Holder”).  Capitalized terms
used herein but not otherwise defined shall have the meanings set forth in the
Agreement.


 


WHEREAS, Holder has acquired certain Stockholder
Shares and the Agreement and the Company require Holder, as a holder of such
Stockholder Shares, to become a party to the Agreement, and Holder agrees to do
so in accordance with the terms hereof.


 


NOW, THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Joinder hereby agree as follows:


 


21.                                 Agreement
to be Bound.  Holder hereby agrees
that upon execution of this Joinder, it shall become a party to the Agreement
and shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement as though an original party thereto and shall be
deemed a [TTS Holdings Investor/Other
Investor] and an Investor for all purposes thereof.  In addition, Holder hereby agrees that all
Common Stock held by Holder shall be deemed [TTS
Holdings/Other Investors] Shares and Stockholder Shares for all
purposes of the Agreement.


 


22.                                 Successors
and Assigns.  Except as otherwise
provided herein, this Joinder shall bind and inure to the benefit of and be
enforceable by the Company and its successors, heirs and assigns and Holder and
any subsequent holders of Stockholder Shares and the respective successors,
heirs and permitted assigns of each of them, so long as they hold any
Stockholder Shares.


 


23.                                 Counterparts.  This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.


 


24.                                 Notices.  For purposes of Section 18 of the
Agreement, all notices, demands or other communications to the Holder shall be
directed to:


 


[Name]

[Address]

[Facsimile Number]


 


25.                                 Governing
Law.  The corporate law of
the State of Delaware shall govern all issues concerning the relative rights of
the Company and its stockholders.  All
other questions concerning the construction, validity and interpretation of
this Joinder shall be


 


16

















 


governed by and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.


 


26.                                 Descriptive
Headings.  The descriptive headings
of this Joinder are inserted for convenience only and do not constitute a part
of this Joinder.


 


*  * 
*  *  *


 


A-2

















 


IN WITNESS WHEREOF, the parties hereto have executed
this Joinder as of the date first above written.


 


	
   

  	
  TRUE TEMPER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [HOLDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-3