Document:

Exhibit 4.2

 

EXECUTION VERSION

 

	
Warrant   No. 1
    	
June 30, 2009
    

 

WARRANT TO PURCHASE COMMON STOCK

OF

MCBC HOLDINGS, INC.

 

THIS WARRANT AND THE UNDERLYING SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

THE SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER TRANSFER OF THIS WARRANT AND THE UNDERLYING SECURITIES IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION (AS MAY BE AMENDED AND IN EFFECT FROM TIME TO TIME, THE “CERTIFICATE OF INCORPORATION”) OF MCBC HOLDINGS, INC. (THE “COMPANY”) AND THE STOCKHOLDERS AGREEMENT AMONG THE COMPANY AND THE STOCKHOLDERS SIGNATORY THERETO (AS MAY BE AMENDED AND IN EFFECT FROM TIME TO TIME, THE “STOCKHOLDERS AGREEMENT”). A COPY OF THE CERTIFICATE OF INCORPORATION AND STOCKHOLDERS AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.

 

MCBC Holdings, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, MCBC Acquisition, LLC, a Delaware limited liability company (the “Initial Holder”, and together with its successors and assigns and any transferees of this Warrant, and their successors and assigns, the “Holder”), is entitled, subject to the terms and conditions set forth in this warrant (this “Warrant”), to purchase from the Company, at any time or times on or after the date hereof, but not after 5:00 P.M., New York City time on June 30, 2019 (the “Expiration Date”), 100,000 duly authorized, validly issued, fully paid, nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”), which shall be adjusted or readjusted from time to time as provided in this Warrant, at an initial purchase price per share equal to $81.60 (the “Initial Warrant Price”), which shall be adjusted or readjusted from time to time as provided in this Warrant (as adjusted, the “Warrant Price”).

 

This Warrant evidences the right to purchase an aggregate of 100,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), subject to adjustment as provided herein and therein. All capitalized terms used herein and not otherwise defined herein, either within the text in which it first appears or in Section 5.16.

 

 

Section 1.              Exercise; Exchange of Warrant

 

1.1.         Manner of Exercise; Exchange.

 

(a)           Exercise. The Holder may exercise this Warrant, in whole or in part (except as to a fractional share), at any time and from time to time during normal business hours on any Business Day on or prior to the Expiration Date, by (i) delivering to the Company a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), duly executed by the Holder, specifying the number of Warrant Shares (without giving effect to any adjustment thereto) to be issued to the Holder as a result of such exercise, (ii) delivering to the Company a joinder to the Stockholders Agreement (as defined in Section 4.2), (iii) surrendering this Warrant to the Company, properly endorsed by the Holder (or if this Warrant has been destroyed, stolen or has otherwise been misplaced, by delivering to the Company an affidavit of loss duly executed by the Holder), and (iv) by tendering payment for the shares of Common Stock designated by the Exercise Notice in lawful money of the United States in the form of cash, bank or certified check made payable to the order of the Company, or by wire transfer of immediately available funds, or by the cancellation of indebtedness of the Company owed to the Holder, or in any combination thereof, of an amount equal to the product of (A) the Initial Warrant Price and (B) the number of Warrant Shares (without giving effect to any adjustment thereof) as to which this Warrant is being exercised.

 

(b)           Net Exchange. The Holder may, in lieu of exercising or converting this Warrant pursuant to the terms of Section 1.1(a), elect to exchange this Warrant, in whole or in part (except as to a fractional share), at any time and from time to time during normal business hours on any Business Day on or prior to the Expiration Date by (i) delivering to the Company a written notice, in the form attached hereto as Exhibit B (the “Exchange Notice”), duly executed by the Holder, specifying the number of Warrant Shares (without giving effect to any adjustment thereto) to be issued to the Holder as a result of such exchange, (ii) delivering to the Company a joinder to the Stockholders Agreement and (iii) surrendering this Warrant to the Company, properly endorsed by the Holder (or if this Warrant has been destroyed, stolen or has otherwise been misplaced, by delivering to the Company an affidavit of loss duly executed by the Holder), and the Holder shall thereupon been entitled to receive the number of Warrant Shares equal to the product of (A) the number of Warrant Shares issuable upon exercise of this Warrant (or, if only a portion of this Warrant is being exercised, issuable upon the exercise of such portion) for cash, determined as provided in Section 2, and (B) a fraction, the numerator of which is the Fair Market Value per share of Common Stock at the time of such exercise minus the Warrant Price in effect at the time of such exercise, and the denominator of which is the Fair Market Value per share of Common Stock at the time of such exercise, such number of shares so issuable upon such exchange to be rounded up or down to the nearest whole number of shares of Common Stock.

 

(c)           The “exchange” of this Warrant pursuant to Section 1.1(b) is intended to qualify as a recapitalization within the meaning of Section 368(a)(1)(E) of the Code.

 

(d)           For all purposes of this Warrant (other than this Section 1.1), any reference herein to the “exercise” of this Warrant shall be deemed to include a reference to the exchange of this Warrant into Common Stock in accordance with the terms of Section 1.1(b),

 

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and any reference to an “Exercise Notice” shall be deemed to include a reference to an Exchange Notice in accordance with the terms of Section 1.1(b).

 

1.2.         When Exercise Effective. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the Business Day on which this Warrant shall have been surrendered to the Company as provided in Section 1.1, and at such time the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such exercise as provided in Section 1.3 shall be deemed to have become the Holder or Holders of record thereof.

 

1.3.         Delivery of Stock Certificates Upon Exercise. As soon as practicable after exercise of this Warrant in accordance with this Section 1, but in no event later than two (2) Business Days after such exercise, the Company shall at its expense cause to be issued in the name of and delivered to the Holder or, subject to Section 4 of this Warrant, as the Holder may direct: (a) a certificate or certificates for the number of Warrant Shares, determined as provided in Section 2 of this Warrant, to which the Holder shall be entitled upon such exercise and, (b) unless this Warrant has expired or has been exercised in full, a new Warrant (or Warrants) substantially in the form of, and on the terms in, this Warrant, for the number of Warrant Shares remaining following such exercise (without giving effect to any adjustment thereto), and shall be subject to adjustment as provided for in this Warrant as of the date hereof.

 

1.4.         Fractional Interests. The Company shall not be required to issue fractional shares of Common Stock on the exercise or conversion of Warrants. If more than one Warrant shall be presented for exercise in full or conversion at the same time by the same Holder, the number of full shares of Common Stock which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of shares of Common Stock purchasable on exercise or conversion (as applicable) of all of the Warrants so presented. If any fraction of a share of Common Stock would, except for the provisions of this Section 1.4, be issuable on the exercise or conversion of any Warrants (or specified portion thereof), the Company shall pay to the Holder an amount in cash equal to the product of (i) such fraction of a share of Common Stock and (ii) the excess of (x) the Fair Market Value of a share of Common Stock for the day the Warrant was presented for exercise pursuant to Section 1 over (y) the Exercise Price.

 

Section 2.   Adjustments to Warrant Price and Warrant Shares General. The number of Warrant Shares that the Holder shall be entitled to receive upon exercise of this Warrant shall be determined by multiplying the number of Warrant Shares which would otherwise (but for the provisions of this Section 2) be issuable upon such exercise, as designated by the Holder in the Exercise Notice, by a fraction, (i) the numerator of which shall be the Initial Warrant Price, and (ii) the denominator of which shall be Warrant Price in effect on the date of such exercise.

 

2.2.         Adjustments to Warrant Price.

 

(a)           Subdivision or Combination of Common Stock. If the Company shall at any time after the date hereof subdivide its outstanding shares of Common Stock into a greater number of shares, by any stock split, stock dividend or otherwise, (other than a subdivision upon a merger or consolidation or sale to which Section 2.2(e) applies or a stock split effected by

 

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means of a stock dividend or distribution to which Section 2.2(c)(i) applies), then the Warrant Price in effect immediately prior to such subdivision shall be proportionately reduced, and, conversely, if the Company shall at any time after the date hereof combine its outstanding shares of Common Stock into a smaller number of shares (by any reverse stock split or otherwise), then the Warrant Price in effect immediately prior to such combination shall be proportionately increased.

 

(b)           Reorganization or Reclassification. If any reorganization or reclassification of the capital stock of the Company (other than any such reclassification in connection with a merger or consolidation or sale to which Section 2.2(e) applies) shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for Common Stock, then, as a condition of such reorganization or reclassification, lawful and adequate provisions shall be made whereby the Holder shall thereupon have the right to receive, upon the basis and upon the terms and conditions specified herein and in lieu of the Warrant Shares immediately theretofore receivable upon the exercise of this Warrant in full, as the case may be, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such Common Stock immediately theretofore receivable upon such exercise of this Warrant in full had such reorganization or reclassification not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Warrant Price) shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise of such conversion rights.

 

(c)           Dividends and Distributions.

 

(i)            Stock Dividends. If the Company, at any time or from time to time after the date hereof, shall declare or make, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or make any other distribution upon any stock of the Corporation payable in Common Stock, Options or Convertible Securities, the Warrant Price in effect immediately prior to such action shall be proportionately adjusted so that the Holder of the Warrant may receive the aggregate number and kind of shares of capital stock of the Company which such Holder would have owned immediately following such action if such warrant had been exercised immediately prior to such action.

 

(ii)           Other Dividends and Distributions. If the Company at any time or from time to time after the date hereof makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in debt securities or other property of the Company (including, without limitation, cash, other than cash dividends or cash distributions payable out of capital surplus or regular quarterly cash dividends distributed to all holders of Common Stock, in each instance, in an amount not to exceed $5,000,000 per calendar year (with a carryover or accumulation from the prior year permitted for unused amounts in the prior calendar year (for avoidance of doubt, the amount for any calendar year would not exceed $10,000,000)), then with the consent of the holders of at least 66 2/3% of the Warrant Shares issuable upon exercise of all outstanding Warrants (the “Consenting Warrant Holders”), the Warrant Price shall be reduced to an amount equal to the

 

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difference between (A) the Warrant Price immediately prior to such dividend or distribution and (B) the lesser of (x) the Fair Market Value of such debt securities or other property that are distributed, as determined in good faith by the Board of Directors of the Company (the “Board of Directors”) or (y) an amount determined by the Consenting Warrant Holders.

 

(d)           Issuances. Except as provided in Section 2.2(d)(v) and except in the case of an event described in Section 2.2(a), if at any time after the date hereof the Company issues or sells, or is, in accordance with this Section 2.2(d), deemed to have issued or sold, any shares of Common Stock for a consideration per share less than the then Fair Market Value of such shares of Common Stock, then, upon such issuance or sale (or deemed issuance or sale), the then current Warrant Price shall be reduced to the price determined multiplying such Warrant Price by a fraction, (A) the numerator of which shall be (1) the number of shares of Common Stock Deemed Outstanding immediately prior to such issuance or sale plus (2) the number of shares of Common Stock which the aggregate consideration received or to be received by the Company for the total number of additional shares of Common Stock so issued would purchase at such Warrant Price; and (B) the denominator of which shall be the number of shares of Common Stock Deemed Outstanding immediately prior to such issuance or sale plus the number of such additional shares of Common Stock so issued.

 

For purposes of this Section 2.2(d), the following shall also be applicable:

 

(i)            Issuance of Options. If the Company, at any time after the date hereof, in any manner, grants any warrants or other rights to subscribe for or to purchase, or any options to purchase: (A) shares of Common Stock or (B) any security convertible into or exercisable or exchangeable for Common Stock (such warrants, rights or options being called “Options” and such convertible or exercisable or exchangeable stock or securities being called “Convertible Securities”), in each case for consideration per share (determined as provided in this paragraph and in Section 2.2(d)(iv)) less than the then Fair Market Value of a share of Common Stock, whether or not such Options are immediately exercisable, then the total maximum number of shares of Common Stock issuable upon the exercise of such Options, or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon exercise of such Options, shall be deemed to have been issued as of the date of granting of such Options, at a price per share equal to the amount determined by dividing (A) the total amount, if any, received or receivable by the Company as consideration for the issuance of such Options, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus, in the case of such Options that relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable upon the issuance or sale of such Convertible Securities and upon the conversion or exchange of Convertible Securities, by (B) the total maximum number of shares of Common Stock deemed to have been so issued. Except as otherwise provided in Section 2.2(d)(iii), no adjustment of the Warrant Price shall be made upon the actual issuance of such Common Stock or of such Convertible Securities upon exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

 

(ii)           Issuance of Convertible Securities. If the Company, at any time after the date hereof, in any manner, issues or sells any Convertible Securities for consideration per share (determined as provided in this paragraph and in Section 2.2(d)(iv)) less than the then

 

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current Fair Market Value of such shares of Common Stock, whether or not the right to exchange or convert any such Convertible Securities is immediately exercisable, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall be deemed to have been issued as of the date of the issuance or sale of such Convertible Securities, at a price per share equal to the amount determined by dividing (A) the total amount, if any, received or receivable by the Company as consideration for the issuance or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (B) the total maximum number of shares of Common Stock deemed to have been so issued; provided, however, that (1) except as otherwise provided in Section 2.2(d)(iii), no adjustment of the Warrant Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities and (2) if any such issuance or sale of such Convertible Securities is made upon exercise of any Options to purchase any such Convertible Securities, no further adjustment of the Warrant Price shall be made by reason of such issuance or sale.

 

(iii)          Change in Option Price or Conversion Rate. If a change occurs in (A) the maximum number of shares of Common Stock issuable in connection with any Option referred to in Section 2.2(d)(i) or any Convertible Securities referred to in Section 2.2(d)(i) or (ii), (B) the purchase price provided for in any Option referred to in Section 2.2(d)(i), (C) the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities referred to in Section 2.2(d)(i) or (ii), or (D) the rate at which Convertible Securities referred to in Section 2.2(d)(i) or (ii) are convertible into or exchangeable for Common Stock (in each case, other than in connection with an event described in Section 2.2(d)(vi)), then the Warrant Price in effect at the time of such event shall be readjusted to the Warrant Price that would have been in effect at such time had such Options or Convertible Securities that remain outstanding provided for such changed maximum number of shares, purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. Upon the termination of any such Option or any such right to convert or exchange such Convertible Securities, the Warrant Price then in effect hereunder shall be increased to the Warrant Price that would have been in effect at the time of such termination had such Option or Convertible Securities, to the extent outstanding immediately prior to such termination (i.e., to the extent that fewer than the number of shares of Common Stock deemed to have been issued in connection with such Option or Convertible Securities were actually issued), never been issued or been issued at such higher price, as the case may be.

 

(iv)          Consideration for Stock. In case any shares of Common Stock are issued or sold, or deemed issued or sold, for cash, the consideration received therefor shall be deemed to be the amount received or to be received by the Company therefor (determined with respect to deemed issuances and sales in connection with Options and Convertible Securities in accordance with clause (A) of Section 2.2(d)(i)) determined in the manner set forth below in this Section 2.2(d)(iv). If any shares of Common Stock are issued or sold, or deemed issued or sold, for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be deemed to be the Fair Market Value of such consideration received or to be received by the Company (determined with respect to deemed issuances and sales in connection with Options and Convertible Securities in accordance with clause (A) of Section 2.2(d)(i)) as determined in good faith by the Board of Directors. If any Options are

 

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issued in connection with the issuance and sale of other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued for such consideration as determined in good faith by the Board of Directors.

 

(v)           Common Stock Deemed Outstanding. The term “Common Stock Deemed Outstanding” shall mean the sum of (A) the number of shares of Common Stock outstanding on the date of determination, plus (B) all shares of Common Stock issuable upon conversion or exchange of Options, Warrants and Convertible Securities outstanding immediately prior to the date of determination shall be deemed to be outstanding, and (C) the number of shares of Common Stock deemed issuable upon conversion or exchange of such outstanding convertible securities shall be determined without giving effect to any adjustments to the conversion or exchange price or conversion or exchange rate of such convertible securities resulting from the issuance of additional shares of Common Stock that is the subject of this calculation.

 

(vi)          Certain Issues of Common Stock Excepted. Notwithstanding anything herein to the contrary, no adjustment to the Warrant Price shall be made in the case of an issuance from and after the date hereof of (A) shares of Common Stock upon exercise of this Warrant; (B) shares of Common Stock or options or other rights therefor to directors, officers, employees or consultants of the Company in connection with their service as directors of the Company, their employment by the Company or their retention as consultants by the Company, in each case authorized by the Board of Directors and issued pursuant to the Company’s equity incentive plan; provided, however, that the Warrant Price shall be adjusted in the case of an issuance of shares of Common Stock or options or other rights therefor, in each case, for consideration per share less than the then Fair Market Value of a share of Common Stock to partners or employees of, or Persons providing consulting or advisory services exclusively to, Wayzata Investment Partners, LLC; (C) shares of Common Stock issued or issuable by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Sections 2.2(a) through 2.2(c) above and (D) shares of Common Stock, Convertible Securities or Options or other rights therefor in connection with bona fide, arms’ length bank financings, corporate partnering transactions, equipment leases or acquisitions of businesses or intellectual property rights on terms approved by the Board of Directors; provided that such transactions are primarily for purposes other than equity financing.

 

(e)           Adjustment for Merger or Consolidation, etc.

 

(i)            Subject to Section 2.3, in connection with any merger or consolidation of the Company with or into another corporation (or other legal entity), or any sale of all or substantially all of the assets of the Company to another corporation (or other legal entity or person), this Warrant shall thereafter be exercisable (or shall be converted into a security that shall be exercisable) for the kind and amount of shares of stock or other securities or property to which a Holder of the number of shares of Common Stock of the Company deliverable upon the exercise of this Warrant in full would have been entitled upon such merger, consolidation, or asset sale (and any distribution of assets to stockholders following such asset sale); and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions in Section 2.2 set forth with respect

 

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to the rights and interests thereafter of the Holder, to the end that the provisions set forth in Section 2.2 (including provisions with respect to changes in and other adjustments of the Warrant Price) shall thereafter be applicable, as nearly as possible, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of this Warrant. Notwithstanding anything to the contrary contained herein, each Holder shall have the right to elect to exercise the Warrant immediately prior to or simultaneously with the consummation of such merger, consolidation, or asset sale in accordance with the provisions of Section 1, if applicable, instead of giving effect to the provisions contained in this Section 2.2(e) with respect to the Warrants held by such Holders.

 

(ii)           The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof the successor (if other than the Company) resulting from such consolidation or merger or the person purchasing such assets shall assume by written instrument executed and delivered to the Holder, the obligation to deliver to the Holder such shares, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to receive upon the exercise of this Warrant (or the security into which such Warrant is to be converted in connection with the consummation of such transaction) to the extent that such Warrant remains outstanding after such transaction. In any event, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the extent such assumption occurs by operation of law.

 

2.3.         Redemption of Warrants.Notwithstanding anything in this Warrant to the contrary and subject to Section 2.3(c) below, this Warrant is subject to redemption at the Company’s option at any time prior to the Expiration Date, in whole or from time to time in part, during the 30 day period beginning on the effective date of any Subject Transaction, at the Redemption Price.The Redemption Price shall be paid as follows:

 

(i)            In cash, in the event that the Subject Transaction with respect to which the Company asserts the right to exercise its option to redeem this Warrant is an all cash transaction; or

 

(ii)           In stock or other securities, in the event that the Subject Transaction with respect to which the Company asserts the right to exercise its option to redeem this Warrant is a non-cash transaction; or

 

(iii)          In both cash and stock or other securities, in appropriate proportions, in the event that the Subject Transaction with respect to which the Company asserts the right to exercise its option to redeem this Warrant is a transaction involving consideration to the Company or its stockholders in the form of both cash and securities.

 

For the avoidance of doubt, in any redemption transaction under this Section 2.3 the Redemption Price received by the Holder shall consist of the same kind of consideration and in the same proportion of kinds of consideration as the other holders of Common Stock.

 

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(c)           In the event that a Subject Transaction with respect to which the Company asserts the right to exercise its option to redeem this Warrant is a transaction including consideration to the Company or its stockholders other than in the form of cash, such non-cash consideration shall have the value determined in good faith by the Board of Directors (which determination shall be conclusive).

 

(d)           In the event that the Subject Transaction with respect to which the Company has the right to exercise its option to redeem this Warrant is an all cash transaction and the Fair Market Value per share of Common Stock is less than the Warrant Price of the Warrant, then this Warrant shall not be redeemed by the Company and it shall immediately be cancelled on the effective date of the Subject Transaction.

 

2.4.         Notice of Redemption and Selection.At least ten (10) days but not more than twenty (20) days before a Redemption Date, the Company shall cause to be mailed a notice of redemption by first class mail to each Holder of this Warrant to be redeemed, at such Holder’s last address as it appears in this Warrant. The notice shall identify this Warrant to be redeemed and shall state:

 

(i)            the Redemption Date;

 

(ii)           the Redemption Price;

 

(iii)          in the event that this Warrant is to be redeemed in part only, the portion thereof to be redeemed and that, on and after the Redemption Date, upon surrender of such Warrant, a new Warrant in number equal to the unredeemed portion thereof will be issued; and

 

(iv)          that this Warrant must be surrendered to the Company to collect the Redemption Price.

 

(b)           Once notice of redemption is mailed, this Warrant shall become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Company, such Warrant shall be paid at the Redemption Price.

 

(c)           Notwithstanding the foregoing, if the Subject Transaction is not consummated, then any notices mailed under this Section 2.4 shall be deemed void, no redemption shall take place and this Warrant shall remain outstanding.For purposes of Sections 2.3 and 2.4, capitalized terms used but not otherwise defined in this Warrant shall have the meanings set forth below: “Net Exercise Value” of a Warrant on any date shall be the positive

difference, if any, on such date between the Fair Market Value per share of Common Stock and the Warrant Price of the Warrant

 

(ii)           “Redemption Date” when used with respect to redemption of this Warrant shall mean the date fixed for such redemption by or pursuant to this Warrant.

 

(iii)          “Redemption Price” of a Warrant which the Company has elected to redeem pursuant to Section 2.3 shall be: (X) $0.01 per Warrant, if on the effective date of the Subject Transaction with respect to which the Company asserts the right to

 

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exercise its option to redeem the Warrant, the Fair Market Value per share of Common Stock is less than the Warrant Price of this Warrant, or (Y) the greater of (A) $0.01 per Warrant or (B) the Net Exercise Value of this Warrant, if on the effective date of the Subject Transaction with respect to which the Company asserts the right to exercise its option to redeem this Warrant the Fair Market Value per share of Common Stock is greater than this Warrant Price of this Warrant

 

(iv)          “Subject Transaction” shall mean any one of the following transactions (other than in transactions, directly or indirectly, with a Person or entity that is controlled by an Affiliate of the Company): (i) the sale of all or substantially all of the Company’s assets, (ii) the sale of all or substantially all of the Company’s then outstanding Common Stock, or (iii) a merger or consolidation by the Company with or into another corporation in which the holders of the common stock of the Company immediately prior to the merger are not holders, directly or indirectly, of at least 50% of the common stock of the surviving corporation immediately after the merger.

 

Section 3.      Covenants of the Company

 

3.1.         The Company covenants and agrees with the Holder, that, so long as this Warrant or any Warrant Shares shall be outstanding:

 

(a)           the Company will deliver to the Holder:

 

(i)            Quarterly Financial Statements. Within forty-five (45) days after the end of each of the first three fiscal quarters for the Company and its consolidated subsidiaries, unaudited quarterly financial statements for the quarterly period then ended and the comparable period in the prior year (excluding notes thereto and narratives), and the Holder may furnish such information to its stockholders, members and/or partners.

 

(ii)           Annual Financial Statements. Within one hundred twenty (120) days after the end of each fiscal year, audited financial statements for the Company and its consolidated subsidiaries for such year (including notes thereto but excluding narratives), together with a copy of the audit report of the Company’s independent public accountants, and the Holder may furnish such information to its stockholders, members and/or partners.

 

(iii)          Other Information. If requested by the Stockholders under the Stockholders Agreement, the Company shall provide the Holder with the information required by Rule 144A(d)(4) under the Securities Act of 1933, as amended (the “Securities Act”), and the Holder may furnish such information to its stockholders, members and/or partners; provided, however, that in no event shall (y) any financial information required to be furnished pursuant to this Warrant be required to include any information required by, or to be prepared or approved in accordance with, or otherwise be subject to, any provision of Section 404 of the Sarbanes-Oxley Act of 2002 or any rules, regulations, or accounting guidance adopted pursuant or related to that section or (z) any financial information be required to be furnished to any competitor of the Company.

 

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(b)           all shares of Common Stock that may be issued upon the exercise of the rights represented by this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable;

 

(c)           during the period within which this Warrant may be exercised, it will at all times have authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of rights represented by this Warrant;

 

(d)           it shall not, transfer any of its assets, nor shall it permit any of its subsidiaries to transfer any of their assets, to any stockholder of the Company or any Affiliate of any stockholder of the Company, and the Company shall not permit any of its subsidiaries to issue any equity securities (or securities convertible into equity securities or any other rights to acquire equity securities) except to the Company; and

 

(e)           it shall not, by amendment to its certificate of incorporation (whether by way of merger, operation of law, or otherwise) or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, agreement or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company and shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment as if the Holder was a stockholder of the Company entitled to the benefit of fiduciary duties afforded to stockholders under Delaware law. Any successor to the Company shall agree in writing, as a condition to such succession, to carry out and observe the obligations of the Company hereunder with respect to this Warrant.

 

Section 4.      Restrictions on Transfer

 

4.1.         Transfers. Prior to a Qualified Public Offering this Warrant may only be transferred by the Holder to an Affiliate of the Holder and/or to any of the Holder’s beneficial owners. Subject to the preceding sentence, this Warrant may be subdivided and transferred in multiple parts. In the event this Warrant in subdivided and transferred in part to one or more persons or entities, each such transferee shall be deemed to be a Holder hereunder (and together, each such Holder, together with the Initial Holder, are referred to herein collectively as the “Holders”) and shall be deemed to hold a Warrant exercisable for such number of Warrant Shares as shall be specified in the instrument of transfer (and together, each such Warrant, together with this Warrant, are referred to herein collectively as the “Warrants”).

 

42.          Transfer Restriction. Notwithstanding anything to the contrary set forth in this Warrant, in no event shall any holder of Warrants have the right to transfer any Warrants or any Warrant Shares or other securities exercised or exercisable thereunder if, as a result of such transfer, any class of equity securities would (assuming the exercise of all outstanding Warrants, Options and Convertible Securities) be held of record by more than four hundred fifty (450) persons or otherwise in circumstances that the Board of Directors determines in good faith could require the Company to file reports under the Securities Exchange Act of 1934, as amended, if it is not otherwise subject to such requirements. Furthermore, in no event shall any Holder have the right to transfer any Warrants or any Warrant Shares exercised or exercisable thereunder,

 

11

 

unless (i)(x) such transfer is pursuant to an effective registration statement under the Securities Act and has been registered under all applicable state securities or “blue sky” laws or (y) unless waived by the Company in writing, such Holder shall have furnished the Company with an opinion of counsel, which opinion of counsel shall be reasonably satisfactory to the Company, to the effect that no such registration is required because of the availability of an exemption from registration under the Securities Act and all applicable state securities or “blue sky” laws.

 

4.3.         Restrictive Legend. The Warrant Shares issuable upon exercise thereof, are subject to certain restrictions on transfer as set forth in the Stockholders Agreement dated as of June 30, 2009, by and among the Company and the stockholders party thereto (as the same may be amended from time to time, the “Stockholders Agreement”). Each certificate representing shares of Common Stock issued upon exercise of this Warrant shall be stamped or otherwise imprinted with a legend in substantially the form as follows:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OR TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A CERTAIN STOCKHOLDERS AGREEMENT, DATED AS OF JUNE 30, 2009, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. A COMPLETE AND CORRECT COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE TO ANY STOCKHOLDER OF THE COMPANY AND ANY REGISTERED HOLDER OF THIS WARRANT.

 

THE SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER TRANSFER OF THE SECURITIES IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION (AS MAY BE AMENDED AND IN EFFECT FROM TIME TO TIME, THE “CERTIFICATE OF INCORPORATION”) OF THE COMPANY. A COPY OF THE CERTIFICATE OF INCORPORATION MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.

 

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Section 5.      Miscellaneous

 

5.1.         Notice of Adjustments.

 

(a)           In each case of any adjustment or readjustment in the Warrant Price and the Warrant Shares issuable upon exercise of this Warrant, the Company shall promptly thereafter compute such adjustment or readjustment in accordance with the terms of this Warrant and provide written report thereof certified by the Chief Financial Officer of the Company to the Holders stating the number of Warrant Shares and the Warrant Price, after giving effect to such adjustment or readjustment, and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

 

(b)           The Company shall, within (10) days of receipt of a written request by the Holder or Holders holding Warrants representing at least 66 2/3% of the Warrant Shares issuable upon exercise of all outstanding Warrants, cause independent certified public accountants of recognized national standing, which my be the regular auditors of the Company, selected by the Company to verify such computations reported pursuant to Section 5.1(a), other than any computation that pursuant to the provisions of this Warrant are to be determined reasonably and in good faith by the Board of Directors. The Company shall promptly prepare, and remit to the Holders, a copy of such independent accountant’s report setting forth such adjustment or readjustment, showing in reasonable detail the method of calculation thereof and the facts upon which such adjustment or readjustment is based, including a statement of:

 

(i)            the consideration received or to be received by the Company for any shares of Common Stock, Options, or Convertible Securities issued or sold or deemed to have been issued;

 

(ii)           the Common Stock Deemed Outstanding; and

 

(iii)          the Warrant Price in effect immediately prior to such issuance or sale and as adjusted or readjusted.

 

Such report shall be conclusive evidence (absent manifest error) of the correctness of the matters set forth therein.

 

(c)           The Company shall also keep copies of all such reports generated pursuant to this Section 5.1 at its principal offices and will cause the same to be available for inspection at such offices during normal business hours by the Holders any prospective transferee of a holder.

 

5,2.         Notice of Certain Events. In case at any time:

 

(a)           the Company shall pay any dividend upon, or make any distribution in respect of, its stock;

 

(b)           the Company shall propose to register any of its equity securities under the Securities Act in connection with a public offering;

 

(c)           there shall be any proposed any capital reorganization, or reclassification of the capital stock, of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets or stock to, another person or entity, including, without limitation, a Subject Transaction;

 

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(d)               any Qualified Public Offering or other public offering; or

 

(e)               there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;

 

then, in any one or more of said cases, the Company shall give notice to the Holders of the date on which (i) the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights, or (ii) such public offering, reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall be given not less than ten (10) days prior to the record date or the date on which the transfer books of the Company are to be closed in respect thereto in the case of an action specified in clause (a) and at least twenty (20) days prior to the action in question in the case of an action specified in clauses (b) through (e).

 

5.3.         Abandonment. Notwithstanding anything contained herein, at any time during the term of this Warrant, upon delivery of written notice from the Consenting Warrant Holders to the Company, some or all of the Warrant may be abandoned and deemed to be cancelled by the Company.

 

5.4.         Notice. Any notice that is required or provided to be given under this Warrant shall be deemed to have been sufficiently given and received for all purposes when delivered in writing by hand, telecopy, telex or other method of facsimile, or five (5) days after being sent by certified or registered mail, postage and charges prepaid, return receipt requested, or two (2) days after being sent by overnight delivery providing receipt of delivery, to the following addresses: if to the Company MCBC Holdings, Inc., 100 Cherokee Cove Drive, Facsimile: (423) 884-6797, or at any other address designated by the Company, to Holder; if to Holder, MCBC Acquisition LLC, c/o Charlesbank Capital Partners, 200 Clarendon Street, 54th Floor, Boston, MA 02116, Attn: Tami Nason, General Counsel, Facsimile: (617) 619-5402, or at any other address designated by Holder to the Company in writing.

 

5.5.         No Change in Warrant Terms on Adjustment. Irrespective of any adjustment in the Warrant Price or the number of shares of Common Stock, this Warrant, whether theretofore or thereafter issued or reissued, may continue to express the same price and number of shares of Common Stock as are stated herein and the Warrant Price and such number of Common Stock shares specified herein shall be deemed to have been so adjusted.

 

5.6.         Issuance and Transfer Taxes. The issuance of certificates for shares of Common Stock upon any exercise of this Warrant shall be made without charge to Holder for any issuance tax in respect thereto; provided, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of Holder or upon any transfer of this Warrant.

 

5.7.         Exchange of Warrant. This Warrant is exchangeable at no cost to the Holder upon the surrender hereof by Holder at such office or agency of the Company, for a new warrant of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares that may be subscribed for and purchased hereunder from time to time after giving effect to all the provisions hereof, each of such new warrants to represent the right to subscribe for and

 

14

 

purchase such number of shares as shall be designated by said Holder hereof at the time of such surrender.

 

5.8.         Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall at no cost to the Holder, on such terms as to indemnity of otherwise as it may in its discretion impose (which shall not include the posting of any bond), issue a new warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. Any such new warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

5.9.         Governing Law. This Warrant shall be deemed to be a contract made under, and shall be construed in accordance with, the laws of the State of New York, without giving effect to conflict of laws principles thereof.

 

5.10.       Section Headings; Construction. The descriptive headings in this Warrant have been inserted for convenience only and shall not be deemed to limit or otherwise affect the construction of any provision thereof or hereof. The parties have participated jointly in the negotiation and drafting of this Warrant and the other agreements, documents and instruments executed and delivered in connection herewith with counsel sophisticated in investment transactions. In the event an ambiguity or question of intent or interpretation arises, this Warrant shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Warrant and the agreements, documents and instruments executed and delivered in connection herewith.

 

5.11.       Consent to Jurisdiction. This Agreement shall be deemed to be a contract made under, and shall be construed in accordance with, the laws of the State of New York, without giving effect to conflict of laws principles thereof. Each of the parties hereto hereby consents to the exclusive jurisdiction of the federal and state courts located in the State of New York for any claim, suit or proceeding arising under this Agreement and/or the transactions contemplated hereby, each party hereto hereby further consents to personal jurisdiction, service of process and venue in any such New York federal or state court.

 

5.12.       Remedies; Severability. Notwithstanding Section 5.11, it is specifically understood and agreed that any breach of the provisions of this Warrant by any person subject hereto will result in irreparable injury to the other parties hereto, that the remedy at law alone will be an inadequate remedy for such breach, and that, in addition to any other remedies which they may have, such other parties may enforce their respective rights by actions for specific performance (to the extent permitted by law). Whenever possible, each provision of this Warrant shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be deemed prohibited or invalid under such applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, and such prohibition or invalidity shall not invalidate the remainder of such provision or the other provisions of this Warrant.

 

15

 

5.13.       Integration. This Warrant, including the exhibits referred to herein, constitute the entire agreement and supersede all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.

 

5.14.       No Rights or Liabilities as Stockholder. Except as expressly set forth herein, nothing contained in this Warrant shall be construed as conferring upon Holder any rights as a stockholder of the Company or as imposing any obligation on Holder to purchase any securities or as imposing any liabilities on Holder as a stockholder of the Company, whether such obligation or liabilities are asserted by the Company or creditors of the Company.

 

5.15.       Waivers and Consents; Amendments.

 

(a)           For the purposes of this Warrant and all documents executed pursuant hereto, no course of dealing between or among any of the parties hereto and no delay on the part of any party hereto in exercising any rights hereunder or thereunder shall operate as a waiver of the rights hereof or thereof. No covenant or provision hereof may be waived otherwise than by a written instrument signed by the party or parties so waiving such covenant or other provision contemplated herein.

 

(b)           No amendment to this Warrant may be made without the written consent of the Company and the Holder or Holders holding Warrants representing at least a majority of the Warrant Shares issuable upon exercise of all outstanding Warrants.

 

5.16.       Assignment. This Agreement shall not be assignable by the Company, other than pursuant to a merger or consolidation transaction, without the written consent of Holders holding Warrants representing at least 66 2/3% of the Warrant Shares issuable upon exercise of all outstanding Warrants. For the avoidance of doubt, neither this provision nor any other provision of this Warrant is intended to, nor shall such provisions, give the Holders any consent rights over a Subject Transaction or any other transaction involving the Company.

 

5.17.       Certain Definitions. The following terms as used in this Warrant shall have the following meanings:

 

(a)           An “Affiliate” means any person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the first mentioned person. A person shall be deemed to control another person if such first person possesses directly or indirectly the power to direct, or cause the direction of, the management and policies of the second person, whether through the ownership of voting securities, by contract or otherwise.

 

(b)           “Business Day” means any day other than a Saturday or a Sunday or a day on which commercial banking institutions in New York City, New York are authorized or obligated by law or executive order to be closed. Any reference to “days” (unless Business Days are specified) shall mean calendar days.

 

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

 

16

 

(d)           “Fair Market Value” means either (i) the Market Price, if any, of a share of Common Stock or (ii) if no Market Price exists, the value (which shall not take into effect any illiquidity or any minority discounts) of a share of Common Stock as determined in good faith by the Board of Directors.

 

(e)           “Market Price” of any security means the value determined in accordance with the following provisions:

 

(i)            if such security is listed on a national securities exchange registered under the Exchange Act, a price equal to the average of the closing sales prices for such security on such exchange for each day during the twenty (20) consecutive trading days immediately preceding the date in question; and

 

(ii)           not so listed, and such security is quoted on NASDAQ, a price equal to the average of the closing bid and asked prices for such security quoted on such system each day during the twenty (20) consecutive trading days immediately preceding the date in question..

 

(f)            “Qualified Public Offering” shall have the meaning set forth in the Stockholders Agreement.

 

5.18.       Other Definitional Provisions.

 

(a)           Except as otherwise specified herein, all references herein:

 

(i)            to any person other than the Company, shall be deemed to include such person’s successors and assigns;

 

(ii)           to the Company shall be deemed to include the Company’s successors; and

 

(iii)          to any applicable law defined or referred to herein, shall be deemed references to such applicable law as the same may have been or may be amended or supplemented from time to time.

 

(b)           When used in this Warrant, the words “herein”, “hereof and “hereunder”, and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words “Section” and “Exhibit” shall refer to Sections of, and Exhibits to, this Warrant unless otherwise specified.

 

(c)           Whenever the context so requires the neuter gender includes the masculine or feminine, and the singular number includes the plural, and vice versa.

 

17

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer as of the date first written above.

 

 

	
 
    	
 
    	
MCBC   HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ John Dorton
    
	
 
    	
 
    	
 
    	
Name:
    	
John Dorton
    
	
 
    	
 
    	
 
    	
Title:
    	
President and   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Thomas King
    	
 
    	
 
    
	
 
    	
Name:   Thomas King
    	
 
    	
 
    
	
 
    	
Title: Chief   Financial Officer
    	
 
    	
 
    
							

 

[Signature Page to Warrant]

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer as of the date first written above.

 

 

	
 
    	
 
    	
MCBC HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ John Dorton
    
	
 
    	
 
    	
 
    	
Name:
    	
John Dorton
    
	
 
    	
 
    	
 
    	
Title:
    	
President and   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Thomas King
    	
 
    	
 
    
	
 
    	
Name:   Thomas King
    	
 
    	
 
    
	
 
    	
Title: Chief   Financial Officer
    	
 
    	
 
    
							

 

[Signature Page to Warrant]

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer as of the date first written above.

 

 

	
 
    	
 
    	
MCBC   HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ John Dorton
    
	
 
    	
 
    	
 
    	
Name:
    	
John Dorton
    
	
 
    	
 
    	
 
    	
Title:
    	
President and   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Thomas King
    	
 
    	
 
    
	
 
    	
Name:   Thomas King
    	
 
    	
 
    
	
 
    	
Title: Chief   Financial Officer
    	
 
    	
 
    
							

 

[Signature Page to Warrant]

 

 

EXHIBIT A

FORM OF EXERCISE NOTICE

 

[To be executed only upon exercise of this Warrant pursuant to Section 1.1(a)]

 

To MCBC Holdings, Inc.

 

The undersigned registered Holder of the within Warrant hereby irrevocably exercises such Warrant for, and purchases thereunder,        (1) shares of the Common Stock and herewith makes payment of $       therefor, and requests that the certificates for such shares be issued in the name of, and delivered to                          , whose address is                                                                .

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Signature must conform   in all respects to name of Holder as specified on the face of Warrant)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Street Address)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(City)
    	
(State)
    	
(Zip Code)
    
	
 
    	
 
    	
 
    
						

 

(1)              Insert here the number of shares called for on the face of this Warrant (or, in the case of a partial exercise, the portion thereof as to which this Warrant is being exercised), in either case without making any adjustment for Additional Shares of Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of this Warrant, may be delivered upon exercise. In the case of a partial exercise, a new Warrant or Warrants will be issued and delivered in accordance with the terms of the Warrant, representing the unexercised portion of the Warrant, to the Holder surrendering the Warrant.

 

 

EXHIBIT B

FORM OF EXCHANGE NOTICE

 

[To be executed only upon net exchange of this Warrant pursuant to Section 1.1(b)]

 

To MCBC Holdings, Inc.

 

The undersigned registered Holder of the within Warrant hereby irrevocably exchanges such Warrant with respect to        (2) shares of the Common Stock which such Holder would be entitled to receive upon the exercise hereof, and requests that the certificates for such shares be issued in the name of, and delivered to                                         , whose address is                      .

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Signature must conform   in all respects to name of Holder as specified on the face of Warrant
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Street Address)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(City)
    	
(State)
    	
(Zip Code)
    
	
 
    	
 
    	
 
    
						

 

(2)              Insert here the number of shares called for on the face of this Warrant (or, in the case of a partial exercise, the portion thereof as to which this Warrant is being exercised),in either case without making any adjustment for Additional Shares of Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of this Warrant, may be delivered upon exercise. In the case of a partial exercise, a new Warrant or Warrants will be issued and delivered in accordance with the terms of the Warrant, representing the unexercised portion of the Warrant, to the Holder surrendering the Warrant.Exhibit 10.2

 

MCBC HOLDINGS, INC.

2010 EQUITY INCENTIVE PLAN

 

1.             Purposes.

 

(a)           Eligible Award Recipients. The persons eligible to receive Awards are the Employees, Directors and Consultants of MCBC Holdings, Inc., a Delaware corporation (the “Company”), and its Affiliates.

 

(b)           Available Awards. The purpose of the Plan is to provide a means by which eligible Employees, Directors and Consultants may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) rights to purchase Common Stock, (iv) Stock Appreciation Rights (“SARs”), (v) Restricted Stock, (vii) Restricted Stock Units, (vii) Performance Shares, and (viii) Performance Units.

 

(c)           General Purpose. The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to receive Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

 

2.             Definitions.

 

(a)           “Affiliate” means any parent or subsidiary of the Company; provided, that, with respect to Incentive Stock Options, the term shall only mean “parent corporation” and “subsidiary corporation” as defined in Sections 424(e) and 424(f) of the Code and with respect to any “stock right” within the meaning of Section 409A of the Code, such affiliate must qualify as a “service recipient” within the meaning of Section 409A of the Code and in applying Section 1563(a)(1), (2) and (3) of the Code for purposes of determining a controlled group of corporations under Section 414(b) of the Code and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c) of the Code, the language “at least 50 percent” is used instead of “at least 80 percent;” and further, provided, that, for purposes of the Plan and any Awards, Wayzata Opportunities Fund II, L.P., Wayzata Recovery Fund, LLC, Wayzata Opportunities Fund Offshore II, L.P., Wayland Distressed Opportunities Fund I-C, LLC and any other funds managed by Wayzata Investment Partners LLC shall not be deemed an Affiliate of the Company.

 

(b)           “Award” means any award granted under the Plan.

 

(c)           “Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Award. Each Award Agreement shall be subject to the terms and conditions of the Plan and need not be identical.

 

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

 

1

 

(e)           “Cause” means, (i) the Participant’s failure to substantially perform the duties set forth in the Plan or any agreement with the Company (other than any such failure resulting from the Participant’s Disability); (ii) the Participant’s failure to carry out, or comply with, in any respect any lawful directive of the Board; (iii) the Participant’s commission at any time of any act or omission that results in, or may reasonably be expected to result in, a conviction, plea of no contest, plea of nolo contendere, or imposition of unajudicated probation for any felony or crime involving moral turpitude; (iv) the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s premises or while performing the Participant’s duties and responsibilities; (v) the Participant’s commission at any time of any act of fraud, embezzlement, misappropriation, misconduct, conversion of assets of the Company, or breach of fiduciary duty against the Company (or any predecessor thereto or successor thereof); (vi) the Participant’s breach of any agreement with the Company (including without limitation, any breach of the restrictive covenants of any agreement); (vii) the Participant’s neglect of the duties or services the Participant is to provide to the Company and/or the Participant’s negligent acts or omissions or intentional conduct, any of which results in harm to the Company; or (viii) the Participant’s willful misconduct or violation of Company policy. The Board or Committee, in its sole and absolute discretion, shall determine all matters and questions relating to whether a Participant has been discharged for Cause.

 

(f)            “Change in Control” means a “change in control event” as defined in Treasury Regulations Section 1.409A-3(i)(5) and any interpretative guidance promulgated under Section 409A of the Code.

 

(g)           “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto. Reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.

 

(h)           “Committee” means the Board, unless and until another committee of one or more members of the Board is appointed by the Board in accordance with Section 3(c).

 

(i)            “Common Stock” means the common stock of the Company, no par value per share.

 

(j)            “Company” means MCBC Holdings, Inc., a Delaware corporation.

 

(k)           “Consultant” means any person, including an advisor, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate.

 

(l)            “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated (other than pursuant to a leave approved by the Company which specifically provides that such leave shall not result in a termination of Continuous Service). The Participant’s Continuous Service shall not be deemed to have terminated or been interrupted merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such

 

2

 

service, provided that there is no interruption or termination of the Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption or termination of Continuous Service. The Committee, in its sole and absolute discretion, may determine whether Continuous Service shall be considered interrupted or terminated.

 

(m)          “Covered Employee” means any key Employee who is or may become a “Covered Employee,” as defined in Section 162(m) of the Code, or any successor statute, and who is designated, either as an individual Employee or class of Employees, by the Committee within the shorter of (i) ninety (90) days after the beginning of the Performance Period, or (ii) after twenty-five percent (25%) of the Performance Period has elapsed, as a “Covered Employee” under this Plan for such applicable Performance Period.

 

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

 

(o)           “Disability” means the failure of any Participant to perform his duties due to physical or mental incapacity, as determined by the Committee.

 

(p)           “Effective Date” means February 12, 2010.

 

(q)           “Employee” means any person employed by the Company or an Affiliate.

 

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

 

(s)            “Fair Market Value” per share as of a particular date shall mean the last reported sale price (on the day immediately preceding such date) of the Common Stock on the New York Stock Exchange or any other national automated quotation system or securities exchange upon which price quotations for the Company’s Common Stock are regularly available (“Exchange”); provided, however, that prior to an Initial Public Offering, Fair Market Value per share shall mean, as of any date, the fair market value on such date as determined in good faith by the Board in compliance with Section 409A of the Code.

 

(t)            “Grant Price” means the price established at the time of grant of a Stock Appreciation Right, used to determine whether there is any payment due upon the exercise of the Stock Appreciation Right.

 

(u)           “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

 

(v)           “Initial Public Offering” means the consummation of the first public offering of the Company’s Common Stock pursuant to a registration statement (other than on Form S-8 or successor forms) filed with, and declared effective by, the SEC.

 

(w)          “Non-Employee Director” means a Director who meets the criteria to qualify as a “non-employee director” within the meaning of Rule 16b-3, and an “outside director” within the meaning of Section 162(m) of the Code, and who also meets the criteria of any applicable Exchange.

 

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(x)           “Nonstatutory Stock Option” means an Option that is not intended to qualify as an Incentive Stock Option.

 

(y)           “Officer” means (i) before an Initial Public Offering, any person designated by the Company as an officer and (ii) on and after an Initial Public Offering, a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

 

(z)           “Option” means an Incentive Stock Option or a Nonstatutory Stock Option.

 

(aa)         “Option Agreement” means a written agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan and need not be identical.

 

(bb)         “Optionee” means a person holding an Option granted pursuant to the Plan.

 

(cc)         “Participant” means a person holding an Award granted pursuant to the Plan.

 

(dd)         “Performance Goal” means those goals determined by the Committee applicable to any performance-based award under the Plan which may be based on any one or a combination of the following performance criteria: revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”), funds from operations, funds from operations per share, operating income, pre or after tax income, cash available for distribution, cash available for distribution per share, net earnings, earnings per share, return on equity, return on assets, share price performance, improvements in the Company’s attainment of expense levels, and implementing or completion of critical projects, exit value per share, or improvement in cashflow (before or after tax). A Performance Goal may be measured over a Performance Period on a periodic, annual, cumulative or average basis and may be established on a corporate-wide basis or established with respect to one or more operating units, divisions, subsidiaries, acquired businesses, minority investments, partnerships or joint ventures. Unless otherwise determined by the Committee by no later than the earlier of the date that is ninety (90) days after the commencement of the Performance Period or the day prior to the date on which twenty-five percent (25%) of the Performance Period has elapsed, the Performance Goals will be determined by not accounting for a change in GAAP during a Performance Period.

 

(ee)         “Performance Period” means the period of time during which the Performance Goals must be met in order to determine the degree of payout and/or vesting with respect to an Award.

 

(ff)          “Performance Share” means Common Stock granted pursuant to Section 9 of this Plan.

 

(gg)         “Performance Unit” means an Award granted pursuant to a Participant pursuant to Section 9 of this Plan, except no Common Stock is actually awarded to the Participant on the date of grant.

 

(hh)         “Plan” means the MCBC Holdings, Inc. 2009 Equity Incentive Plan, as amended from time to time.

 

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(ii)           “Restricted Stock” means Common Stock granted pursuant to Section 7 of this Plan, prior to the lapse of any restrictions thereon.

 

(jj)           “Restricted Stock Unit” means an Award granted to a Participant pursuant to Section 7 of this Plan, except no Common Stock is actually awarded to the Participant on the date of grant.

 

(kk)         “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

 

(ll)           “SEC” means the Securities and Exchange Commission.

 

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

 

(nn)         “Stockholders’ Agreement” means the Stockholders’ Agreement dated June 30, 2009 by and between the Company and the persons on the signature pages thereof, as amended from time to time.

 

(oo)         “Stock Appreciation Right” or “SAR” means a right to receive the excess of the Fair Market Value of a share of Common Stock over the Grant Price.

 

(pp)         “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

 

3.             Administration.

 

(a)           Administration. The Plan shall be administered by the Committee.

 

(b)           Powers of Committee. The Committee shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(i)            To determine from time to time which of the persons eligible under the Plan shall be granted Awards; when and how each Award shall be granted; what type or combination of types of Award shall be granted; the terms and provisions of each Award Agreement and each Option Agreement; the provisions of each Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to an Award; and the number of shares of Common Stock with respect to which an Award shall be granted to each such person.

 

(ii)           To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

 

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(iii)         Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan.

 

(c)         Delegation to Committee.

 

(i)            General. The entire Board may comprise the Committee or the Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. Furthermore, unless one or more Committees has been appointed by the Board, any reference to the Committee in the Plan shall mean the Board. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including 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 Board shall thereafter be to the Committee or 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. The Board may abolish the Committee at any time and re-vest in the Board all powers relating to the administration of the Plan.

 

(ii)           Committee Composition when Common Stock is Publicly Traded. At such time as the Common Stock is publicly traded, in the discretion of the Board, the Committee may consist solely of two or more Non-Employee Directors. Within the scope of such authority, the Board or the Committee may: (1) delegate to a committee of one or more members of the Board who are not “outside directors” within the meaning of Section 162(m) of the Code the authority to grant Awards to eligible persons who are either (a) not then Covered Employees 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; or (2) 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 to eligible persons who are not then subject to Section 16 of the Exchange Act.

 

(d)           Effect of Committee’s Decision. All determinations, interpretations and constructions made by the Committee in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. Members of the Committee and any officer or employee of the Company or any Affiliate acting at the direction of, or on behalf of, the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the maximum extent permitted by law, be fully indemnified by the Company with respect to any such action or determination.

 

4.             Shares Subject to the Plan.

 

Subject to the provisions of Section 13 hereof, the Common Stock that may be issued pursuant to Awards shall not exceed in the aggregate two hundred thousand (200,000) shares of Common Stock; provided, that, no more than two hundred thousand (200,000) shares shall be subject to Incentive Stock Options. If any Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Award shall revert to and again become available for issuance

 

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under the Plan. The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

 

5.             Eligibility.

 

(a)           Eligibility for Specific Awards. Awards may be granted to Employees, Directors and Consultants; provided, that, only Employees may be granted Incentive Stock Options.

 

(b)           Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

 

(c)           Section 162(m) Limitation. Subject to the provisions of Section 13 of this Plan, no Employee shall be eligible to be granted Awards covering, in the aggregate, more than one hundred thousand (100,000) shares of Common Stock during any calendar year. This Section 5(c) shall not apply prior to an Initial Public Offering and, following an Initial Public Offering, this Section 5(c) shall not apply until (i) the earliest of: (1) the first material modification of the Plan (including any increase in the number of shares of Common Stock reserved for issuance under the Plan in accordance with Section 4); (2) the issuance of all of the shares of Common Stock reserved for issuance under the Plan; (3) the expiration of the Plan; or (4) the first meeting of stockholders at which Directors are to be elected that occurs after the close of the third (3rd) calendar year following the calendar year in which the first registration of an equity security under Section 12 of the Exchange Act occurred; or (ii) such other date required by Section 162(m) of the Code.

 

(d)           Consultants.

 

(i)            Prior to an Initial Public Offering, a Consultant shall not be eligible for the grant of an Award if, at the time of grant, either the offer or the sale of the Company’s securities to such Consultant is not exempt under Rule 701 of the Securities Act (“Rule 701”) because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by Rule 701, unless the Company determines that such grant need not comply with the requirements of Rule 701 and will satisfy another exemption under the Securities Act as well as comply with the securities laws of all other relevant jurisdictions.

 

(ii)           From and after an Initial Public Offering, a Consultant shall not be eligible for the grant of an Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to register either the offer or the sale of the Company’s securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require registration under the Securities Act in

 

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order to comply with the requirements of the Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all other relevant jurisdictions.

 

(iii)         Rule 701 and Form S-8 generally are available to consultants and advisors only if: (i) they are natural persons; (ii) they provide bona fide services to the issuer, its parent, its majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s parent; and (iii) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the issuer’s securities.

 

6.             Option Provisions.

 

Each Option shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

 

(a)           Term. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no Option shall be exercisable after the expiration of ten (10) years from the date it was granted.

 

(b)           Exercise Price. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise price of each Option shall be established by the Committee; provided, that, the exercise price shall be no less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted.

 

(c)           Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash or by check at the time the Option is exercised, or (ii) at the sole discretion of the Committee: (1) by delivery or attestation of ownership of shares of Common Stock having a Fair Market Value equal to the aggregate exercise price at the time of exercise or (2) in any other form of legal consideration that may be acceptable to the Committee, including, without limitation, a “cashless” exercise program established with a broker following an Initial Public Offering. Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock (or attestation of ownership thereof) acquired, directly or indirectly, from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).

 

(d)           Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be

 

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exercisable during the lifetime of the Optionee only by the Optionee. Notwithstanding the foregoing, the Optionee may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option.

 

(e)           Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionee only by the Optionee. Notwithstanding the foregoing, the Optionee may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death or incapacity of the Optionee, shall thereafter be entitled to exercise the Option.

 

(f)            Vesting. The total number of shares of Common Stock subject to an Option may, but need not, vest and become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board or Committee may deem appropriate. The vesting provisions of individual Options may vary. Unless otherwise provided in the Award Agreement, the Option will become vested and exercisable in the following manner: twenty-five percent (25%) of the shares subject to the Option will vest on September 30, 2010, and with an additional twenty-five percent (25%) of the shares subject to the Option vesting each September 30th in 2011, 2012 and 2013. The provisions of this Section 6(f) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. No Option may be exercised for a fraction of a share of Common Stock.

 

(g)           Termination of Continuous Service. Unless otherwise provided in an Option Agreement, in the event an Optionee’s Continuous Service terminates (other than upon the Optionee’s death or Disability), the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date which is thirty (30) days following the termination of the Optionee’s Continuous Service, or (ii) the expiration of the term of the Option as set forth in the Option Agreement; provided, however, that if the termination of Continuous Service is by the Company for Cause, or if the Optionee voluntarily terminates his Continuous Service for any reason, then all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionee does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate.

 

(h)           Extension of Termination Date. An Optionee’s Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee’s Continuous Service (other than upon the Optionee’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock 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 6(a); or (ii) the expiration of a period of thirty (30) days after the termination of the Optionee’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements; provided,

 

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however, that this Section 6(h) shall not apply if the Optionee’s Continuous Service is terminated by the Company for Cause or if the Optionee voluntarily terminates his Continuous Service for any reason.

 

(i)            Disability of Optionee. Unless otherwise provided in an Option Agreement, in the event that an Optionee’s Continuous Service terminates as a result of the Optionee’s Disability, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of: (i) the date which is twelve (12) months following the date of such termination; or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate.

 

(j)            Death of Optionee. Unless otherwise provided in an Option Agreement, in the event an Optionee’s Continuous Service terminates as a result of the Optionee’s death, then the Option may be exercised (to the extent the Optionee was entitled to exercise such Option as of the date of death) by the Optionee’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionee’s death, but only within the period ending on the earlier of: (i) the date which is twelve (12) months following the date of death: or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate.

 

(k)           Right of Repurchase. The Option Agreement may, but need not, include a provision whereby the Company may elect, prior to an Initial Public Offering, to repurchase all or any part of the vested shares of Common Stock acquired by the Optionee pursuant to the exercise of the Option. The Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option Agreement.

 

(l)            Right of First Refusal. The Option Agreement may, but need not, include a provision whereby the Company may elect, prior to an Initial Public Offering, to exercise a right of first refusal following receipt of notice from the Optionee of the intent to transfer all or any part of the shares of Common Stock received upon the exercise of the Option.

 

7.             Restricted Stock and Restricted Stock Unit Awards/Stock Purchases.

 

(a)           Restricted Stock and Restricted Stock Units.

 

(i)            The Committee may from time to time award Restricted Stock and Restricted Stock Units under the Plan to eligible Participants, subject to such conditions, restrictions and contingencies as the Committee shall determine. Shares of Restricted Stock may not be sold, assigned, transferred or otherwise disposed of, or pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose, until such shares have vested (the “Restricted Period”) and thereafter only in compliance with the Stockholders’ Agreement. The Committee may define the Restricted Period in terms of the

 

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passage of time or in any other manner it deems appropriate. The Committee may alter or waive at any time any term or condition of Restricted Stock or Restricted Stock Units that is not mandatory under the Plan. Unless otherwise determined by the Committee or provided for in an Award Agreement, upon termination of a Participant’s Continuous Service with the Company for any reason prior to the end of the Restricted Period, the Restricted Stock or Restricted Stock Units for which the Restricted Period has not lapsed shall be forfeited and the Participant shall have no right with respect to the Award. Except as restricted under the terms of the Plan and any Award Agreement, any Participant awarded Restricted Stock shall have all the rights of a stockholder including, without limitation, the right to receive dividends and to vote the Restricted Stock. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. If a share certificate is issued in respect of Restricted Stock, the certificate shall be registered in the name of the Participant, but shall be held by the Company for the account of the Participant until the end of the Restricted Period.

 

(ii)           All or part of Awards of Restricted Stock and Restricted Stock Units may also be granted as Awards of Performance Shares and Performance Units under Section 9.

 

(b)           Stock Purchases. The Committee may authorize eligible individuals to purchase Common Stock at a price above, equal to or below the Fair Market Value of the shares at the time of grant. Any such offer may be subject to the conditions and terms the Committee may impose, including the requirement that the individuals agree to be bound by the terms of the Stockholders’ Agreement as a condition to the purchase. The Company may make loans available to eligible individuals in connection with the purchase of shares of Common Stock, as the Committee, in its discretion, may determine. The terms and conditions of any such loans shall be determined by the Committee, in its sole discretion.

 

8.             Stock Appreciation Rights.

 

The Committee shall have the authority to award SARs. Subject to the following conditions, SARs may be granted in tandem with another Award, in addition to another Award, or freestanding and unrelated to another Award. A SAR granted in addition to another Award may be granted either at the same time as such other Award or at a later time.

 

(a)           Grant Price. The Grant Price of a SAR shall be determined by the Committee; provided, however, that the Grant Price shall not be less than 100% of the Fair Market Value on the date of grant.

 

(b)           Other Terms and Conditions. The Committee may impose such conditions or restrictions on the exercise of any SAR as it shall deem appropriate.

 

(c)           Term. The term of a SAR granted under the Plan shall be determined by the Committee, in its sole discretion, provided, however, no SAR shall be exercisable later than the tenth (10th) anniversary date of its grant.

 

9.             Performance Shares and Performance Units.

 

The Committee shall have authority to grant Performance Shares and Performance Units which shall vest upon the achievement of Performance Goals.

 

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(a)           Terms and Conditions. Subject to the terms of the Plan, the Committee shall establish at the time a Performance Share or Performance Unit Award is granted the Performance Period (which shall not be less than one year), the Performance Goals pursuant to which a Participant may earn and be entitled to a payment under such Performance Share or Performance Unit Award, and the schedule or schedules setting forth the portion of the Performance Share or Performance Unit Award which will be earned or forfeited based on the degree of achievement, or lack thereof, of the Performance Goals at the end of the relevant Performance Period. During any Performance Period, the Committee shall have authority to adjust the Performance Goals in such manner as the Committee, in its sole discretion, deems appropriate with respect to such Performance Period, provided, however, to the extent such adjustment affects Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility. Only a Committee comprising two or more “outside directors” (as defined pursuant to Code Section 162(m)) may grant Awards to Covered Employees.

 

(b)           Payment of Awards. Performance Share and Performance Unit compensation payments may be paid in a lump sum, in cash, shares of Common Stock, or in any combination thereof, following the close of the Performance Period. No payment may be made hereunder to a Covered Employee until the Committee certifies that the Performance Goals have been met.

 

10.          Covenants of the Company.

 

(a)           Availability of Shares. During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.

 

(b)           Securities Law Compliance. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise of the Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act or any state securities laws the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Awards unless and until such authority is obtained.

 

11.          Use of Proceeds from Stock.

 

Proceeds from the sale of Common Stock pursuant to Awards shall constitute general funds of the Company.

 

12.          Miscellaneous.

 

(a)           Acceleration of Exercisability and Vesting. The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.

 

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(b)           Stockholder Rights. Subject to Section 7 of this Plan, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until such Participant has satisfied all requirements for exercise of the Award pursuant to its terms.

 

(c)           No Employment or other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate: (i) the employment of an Employee with or without notice and with or without Cause; (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate; or (iii) the service of a Director pursuant to the Bylaws of the Company or the Bylaws or Operating Agreement of an Affiliate, as applicable, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

 

(d)           Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.

 

(e)           Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any 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 Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Award has been registered under a then currently effective registration statement under the Securities Act or (2) 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 Common Stock.

 

(f)            Withholding Obligations. To the extent provided by the terms of an Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common

 

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Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company owned and unencumbered shares of Common Stock not acquired from the Company.

 

13.        Adjustments Upon Changes in Stock.

 

(a)           Capitalization Adjustments. In the event of 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 or stock 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 (an “Event”), and in the Committee’s opinion, such event affects the Common Stock such that an adjustment is determined by the Committee 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 an Award, then the Committee shall, in such manner as it may deem equitable, including, without limitation, adjust any or all of the following: (i) the number and kind of shares of Common Stock (or other securities or property) with respect to which Awards may be granted or awarded; (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards; and (iii) the grant or exercise price with respect to any Award. Any such adjustments made to an Incentive Stock Option shall be made in accordance with Section 424(a) of the Code and any adjustment to any other Award that is subject to Section 409A of the Code shall be made in accordance with Section 409A of the Code unless otherwise determined by the Committee in its sole discretion. The Committee determination under this Section 13(a) shall be final, binding and conclusive.

 

(b)           Termination of Awards. Unless otherwise provided in an Award Agreement, upon the occurrence of an Event or similar corporate event or transaction in which outstanding Awards are not to be assumed or otherwise continued following such an Event or similar corporate event or transaction, the Committee may, in its discretion, terminate any outstanding Award without a Participant’s consent and (i) provide for the purchase of any such Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award or realization of the Participant’s rights had such Award been currently exercisable or payable or fully vested or the replacement of such Award with other rights or property selected by the Committee in its sole discretion and/or (ii) provide that such Award shall be exercisable (whether or not vested) as to all shares covered thereby for at least ten (10) days prior to such Event, or similar corporate event or transaction.

 

(c)           Change in Control. Except to the extent otherwise provided in a Participant’s Award Agreement, notwithstanding any other provision of the Plan to the contrary, in the event of a Change in Control and as of the date such Change in Control is determined to have occurred:

 

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(i)            Any Options and SARs outstanding as of the date of the Change in Control, and which are not then exercisable and vested, shall become fully exercisable and vested.

 

(ii)           The restrictions applicable to any Restricted Stock or Restricted Stock Unit Award as of the date of the Change in Control which is not performance based shall lapse and such Restricted Stock or Restricted Stock Unit shall become free of all restrictions and become fully vested and transferable.

 

(iii)         As of the date of the Change in Control, the restrictions applicable to any Performance Share or Performance Unit Award shall become free of all restrictions and become fully vested and transferable.

 

In addition to the Committee’s authority conferred by the Plan, in order to maintain the Participants’ rights in the event of any Change in Control, the Board, as constituted before such Change in Control, is hereby authorized, and has sole discretion, as to any Award, either at the time such Award is made hereunder or any time thereafter, to take any one or more of the following actions: (i) provide for the purchase of any such Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award or realization of the Participant’s rights had such Award been currently exercisable or payable; (ii) make such adjustment to any such Award then outstanding as the Board deems appropriate to reflect such Change in Control; or (iii) cause any such Award then outstanding to be assumed, or new rights substituted therefor, by the acquiring or surviving corporation after such Change in Control. The Board may, in its discretion, include such further provisions and limitations in any Award Agreement, as it may deem equitable and in the best interests of the Company.

 

(d)           Future Transactions. The existence of the Plan, the 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. In addition, the Committee may amend this Section 13 to comply with Revised FAS 123 in a manner which will avoid increases in compensation expenses.

 

14.          Amendment of the Plan and Awards.

 

(a)           Amendment of Plan. Subject to this Section 14, the Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 13 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy any applicable law or any requirements of a national automated quotation system or securities exchange.

 

15

 

(b)           Stockholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

 

(c)           Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith.

 

(d)           No Impairment of Rights. The rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.

 

(e)           Amendment of Awards. The Board at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that unless otherwise provided in any Award Agreement, the rights under any Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing. Notwithstanding the foregoing sentence, any amendments made under Section 13 of the Plan shall not be deemed to impair Participant rights under any Award.

 

15.          Termination or Suspension of the Plan.

 

(a)           Plan Term. The Committee may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the Effective Date. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

(b)           No Impairment of Rights. Unless otherwise provided in any Award Agreement, suspension or termination of the Plan shall not impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the Participant.

 

16.          Effective Date of Plan.

 

The Plan shall become effective as of the Effective Date, but no Award shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.

 

17.          Choice of Law.

 

The law of the State of Tennessee shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of law rules.

 

16

 

18.          Other Agreements.

 

Notwithstanding the above, the Committee may require, as a condition to the grant of and/or the receipt of Common Stock under an Award, that the Participant execute lock-up, stockholder or other agreements, including the Stockholders’ Agreement, as it may determine in its sole and absolute discretion.

 

19.          Section 409A of the Code.

 

To the extent applicable, this Plan is intended to comply with Section 409A of the Code and the Committee shall interpret and administer the Plan in accordance therewith. In addition, any provision in this Plan document that is determined to violate the requirements of Section 409A shall be void and without effect.

 

* * *

 

As adopted by the Shareholders of MCBC Holdings, Inc. by unanimous Written Consent dated February 10, 2010 and by unanimous vote of the Board of Directors of MCBC Holdings, Inc. at a regular meeting of the Board on February 12, 2010.

 

 

	
 
    	
By:
    	
/s/ John R.   Dorton
    
	
 
    	
 
    	
John R. Dorton,   President & CEO
    

 

17

 

MCBC Holdings, Inc.

2010 Equity Incentive Compensation Plan

 

Stock Options to be Granted

 

The incentive stock options (ISOs) to be granted to the Participants pursuant to the 2010 Equity Incentive Compensation Plan of MCBC Holdings, Inc. for shares of Common Stock in MCBC Holdings, Inc. are to be granted in two tranches, with both tranches being granted simultaneously. The difference between the two tranches is not the time of issuance or the vesting schedule, but rather the Exercise Price (strike price) for each tranche.

 

The Tranche 1 Options will have an Exercise Price of $22.00, whereas the Exercise Price for the Tranche 2 Options will be $83.00.

 

All of the Options (Tranche 1 and Tranche 2) are to have a vesting schedule such that 25% of the Options shall vest at the time of each of the following vesting dates: September 30, 2010, September 30, 2011, September 30, 2012 and September 30, 2013.

 

There are a total of eleven (11) individuals who are to be granted Options. A total of 119,049 Tranche 1 Options are to be granted, and a total of 71,427 Tranche 2 Options are to be granted. The Participants who are to be granted Options and the number of Tranche 1 and Tranche 2 Options to be granted to each Participant are as follows:

 

	
 
    	
 
    	
Tranche 1
    	
 
    	
Tranche 2
    	
 
    
	
Participant
    	
 
    	
Stock Options
    	
 
    	
Stock Options
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
John R. Dorton*
    	
 
    	
58,036
    	
 
    	
34,821
    	
 
    
	
Scott A.   Crutchfield*
    	
 
    	
28,869
    	
 
    	
17,321
    	
 
    
	
Craig S. Davis
    	
 
    	
11,310
    	
 
    	
6,786
    	
 
    
	
Scott Wood
    	
 
    	
4,167
    	
 
    	
2,500
    	
 
    
	
Ritchie Anderson
    	
 
    	
4,167
    	
 
    	
2,500
    	
 
    
	
Ian P. Birdsall*
    	
 
    	
3,274
    	
 
    	
1,964
    	
 
    
	
Timothy M. Oxley
    	
 
    	
2,202
    	
 
    	
1,321
    	
 
    
	
Parker Stair
    	
 
    	
2,143
    	
 
    	
1,286
    	
 
    
	
Matt McDevitt
    	
 
    	
1,905
    	
 
    	
1,143
    	
 
    
	
David A.   Kirkland
    	
 
    	
1,786
    	
 
    	
1,071
    	
 
    
	
Greg Stanley
    	
 
    	
1,190
    	
 
    	
714
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   Options Granted:
    	
 
    	
119,049
    	
 
    	
71,427
    	
 
    

 

*These individuals already have a Non-Competition Agreement in place with MasterCraft Boat Company, LLC (“MasterCraft”) that also applies to MasterCraft’s affiliates. Dorton and Crutchfield have non-competition provisions in their Employment Agreements with MasterCraft, and Birdsall has a non-competition provision in his company’s Consulting Services Agreement with MasterCraft that applies to his company and to Birdsall individually.

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