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[IMPERIAL BANK LOGO]  

 
  EXHIBIT 10.1    
  

 
 

PROMISSORY NOTE    
  

	Principal
	 	Loan Date
	 	Maturity
	 	Loan No
	 	Call/Coll
	 	Account
	 	Officer
	 	Initials

	$5,000,000.00	 	05-30-2001	 	05-30-2002	 	 	 	 	 	 	 	408	 	 

References
in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text
length limitations. 

	 
	 	 
	 	 
	 	 
	 	 

	Borrower:	 	COASTCAST CORPORATION

3025 E. Victoria Street

Rancho Dominguez, CA 90221-5616	 	 	 	Lender:	 	Imperial Bank

Los Angeles Airport Regional Office

9920 S. La Cienega Blvd., Suite #628

Inglewood, CA 90301-4423

	 
	 	 
	 	 

	Principal Amount: $5,000,000.00	 	Initial Rate: 7.000%	 	Date of Note: May 30, 2001

    PROMISE TO PAY. COASTCAST CORPORATION ("Borrower") promises to pay to Imperial Bank ("Lender"), or order, in lawful money of the United States of America, the
principal amount of Five Million & 00/100 Dollars ($5,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall
be calculated from the date of each advance until repayment of each advance.  

    PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on May 30,
2002. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning June 30, 2001, with all subsequent interest payments to be
due on the last day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs and any late charges, then to any
unpaid interest, and any remaining amount to principal. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in writing. 

    VARIABLE INTEREST RATE. Subject to designation of a different interest rate index by Borrower as provided below, the interest rate on
this Note is subject to change from time to time based on changes in an index which is the Imperial Bank Prime Rate (the "Index"). The Prime Rate is the rate announced by Lender as its Prime Rate from
time to time. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make
loans based on other rates as well. The Index currently is 7.000%. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate equal to the
Index, resulting in an initial rate of 7.000%. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. 

    INTEREST RATE OPTIONS. On the terms and subject to the conditions set forth herein, Borrower will be able to select, from one of the
following Rate Options, an interest rate which will be applicable to a particular dollar increment of amounts outstanding, or to be disbursed, under this Note. Principal shall be payable as specified
herein in the "Payment" section, and interest shall be payable as specified for each Rate Option. The following Rate Options are available to Borrower: 

(A)  Default Option. The interest rate margin and index described in the "VARIABLE INTEREST RATE" paragraph herein (the "Default Option"). 

 

(B) LIBOR. A margin of 2.000 percentage points over LIBOR. For purposes of this Note, LIBOR shall mean London Inter-Bank Offered Rate as provided in the
LIBOR ADDENDUM TO NOTE attached hereto and made a part hereof. Interest based on this Rate Option is a floating rate and will change on and as of the date of a change in LIBOR (the "Interest Period").
Adjustments in the interest rate due to changes in the maximum nonusurious interest rate allowed (the "Highest Lawful Rate") shall be made on the effective day of any change in the Highest Lawful
Rate. Under this Rate Option, all accrued and unpaid interest shall be payable at the end of the Interest Period and, in the case of an Interest Period greater than three (3) months, at three
month (3 month) intervals after the first day of such Interest Period. 

    The
following provisions concerning Rate Options are a part of this Note: 

Selection of Rate Options. Provided Borrower is not in default under this Note, Borrower may request (a "Rate Request") that a $500,000.00 increment or
any amount in excess thereof ( an "increment") of the outstanding principal of, or amounts to be disbursed under, this Note bear interest at the selected rate. Borrower may make this Rate Request by
telephonic notice, however no later than 10:00 AM PDT three (3) business days prior to the effective date of the Rate Request to permit Lender to quote the rate requested. 

Applicable Interest Rate. Borrower's Rate Request will become effective, and interest on the increment designated will be calculated at the rate (the
"Effective Rate"), which Borrower requested, for the applicable Interest Period, subject to the following: 

(1)
Notwithstanding any Rate Request, interest shall be calculated on the basis of the Default Option if (a) Lender, in good faith, is unable to ascertain the requested Rate Option by reason of
circumstances then affecting the applicable money market or otherwise, (b) it becomes unlawful or impracticable for Lender to maintain loans based upon the requested Rate Option, or
(c) Lender, in good faith, determines that it is impracticable to maintain loans based on the requested Rate Option because of increased taxes, regulatory costs, reserve requirements, expenses
or any other costs or charges that affect such Rate Options. Upon the occurrence of any of the events described in this "Interest Rate Options" section, any increment to which a requested Rate Option
applies shall be immediately (or at the option of Lender, at the end the current Interest Period), without further action of Lender or Borrower, converted to an increment to which the Default Option
applies. 

(2)
Borrower may have no more than a total of 1 Effective Rates applicable to amounts outstanding under this Note at any given time. 

(3)
A Rate Request shall be effective as to amounts to be disbursed under this Note only if, on the effective date of the Rate Requests, such amounts are in fact disbursed to or for Borrower's account
in accordance with the provisions of this Note and any related loan documents. 

(4)
Any amounts of outstanding principal for which a Rate Request has not been made, or is otherwise not effective, shall bear interest until paid in full at the Default Option. 

(5)
Any amounts of outstanding principal bearing interest based upon a Rate Option shall bear interest at such rate until the end of the Interest Period therefor, and thereafter shall bear interest
based upon the Default Option unless a new Rate Request for a Rate Option complying with the terms hereof has been made and has become effective. 

(6)
If Borrower is in default under this Note ("Default"), then Lender shall no longer be obligated to honor any Rate Requests. 

(7)
No Interest Period shall extend beyond the maturity date of this Note. 

2

 

Notices: Authority to Act. Borrower acknowledges and agrees that the agreement of Lender herein to receive certain notices by telephone is solely for
Borrower's convenience. Lender shall be entitled to rely on the authority of the person of the person purporting to be a person authorized by Borrower to give such notice, and Lender shall have no
liability to Borrower on account of any action taken by Lender in reliance upon such telephonic notice. Borrower's obligation to repay all sums owing under the Note shall not be affected in any way or
to any extent by any failure by Lender to receive written confirmation of any telephonic notice or the receipt by Lender of a confirmation which is at variance with the terms understood by Lender to
be contained in the telephonic notice. 

    PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the
date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. In any event, even upon full prepayment of
this Note, Borrower understands that Lender is entitled to a minimum interest charge of $250.00. Other than Borrower's obligation to pay any minimum
interest charge, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in
full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay
any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Imperial Bank, 9920 S. La Cienega
Boulevard, Suite #628 Inglewood, CA 90301-4423. 

    LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the regularly
scheduled payment. 

    INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, at Lender's option, and if permitted by applicable
law, Lender may add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). Upon Borrower's
failure to pay all amounts declared due pursuant to this section, Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Note to 5.000 percentage
points over the Index. 

DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note: 

Payment Default. Borrower fails to make any payment when due under this Note. 

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower. 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's
obligations under this Note or any of the related documents. 

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf, or made by Guarantor, or
any other guarantor, endorser, surety, or accommodation party, under this Note or the related documents in connection with the obtaining of the loan evidenced by this Note or any security document
directly or indirectly 

3

 

securing repayment of this Note is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for
any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against
Borrower. 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. 

Execution; Attachment. Any execution or attachment is levied against the Collateral, and such execution or attachment is not set aside, discharged or
stayed within thirty (30) days after the same is levied. 

Change In Zoning or Public Restriction. Any change in any zoning ordinance or regulation or any other public restriction is enacted, adopted or
implemented, that limits or defines the uses which may be made of the Collateral such that the present or intended use of the Collateral, as specified in the related documents, would be in violation
of such zoning ordinance or regulation or public restriction, as changed. 

Default Under Other Lien Documents. A default occurs under any other mortgage, deed of trust or security agreement covering all or any portion of the
Collateral. 

Judgment. Unless adequately covered by insurance in the opinion of Lender, the entry of a final judgment for the payment of money involving more than
ten thousand dollars ($10,000.00) against Borrower and the failure by Borrower to discharge the same, or cause it to be discharged, or bonded off to Lender's satisfaction, within thirty (30) days from
the date of the order, decree or process under which or pursuant to which such judgment was entered. 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor, or any other guarantor, endorser, surety, or accommodation
party of any of the indebtedness or any Guarantor, or any other guarantor, endorser, surety or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability
under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. 

Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. 

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this
Note is impaired. 

Insecurity. Lender in good faith believes itself insecure. 

Cure Provisions. In any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it may be cured (and no event of default will have occurred) if Borrower, after 

4

 

receiving written notice from Lender demanding cure of such default: (1) cures the default within ten (10) days; or (2) if the cure requires more than ten (10) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical. 

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount. 

ATTORNEY'S FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount.
This includes, subject to any limits under applicable law, Lender's attorney's fees and Lender's legal expenses and Lender's legal expenses, whether or not there is a lawsuit, including attorney's
fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all other sums
provided by law. 

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.
(Initial Here HB)

GOVERNING LAW. This Note will be governed by, construed and enforced in accordance with federal law and the laws of the State of California. This Note has been accepted by
Lender in the State of California.

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Los Angeles County, State
of California. 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge
with which Borrower pays is later dishonored. 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh
accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to change or setoff all sums owing on the debt
against any and all such accounts. 

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested orally by Borrower or as provided in this
paragraph. All oral requests shall be confirmed in writing on the day of the request. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. The following persons currently are authorized to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender's address shown
above, written notice of revocation of their authority: Hans Buehler, Chief Executive Officer of COASTCOAST CORPORATION; and Norman Fujitaki, Chief Financial Officer of
COASTCOAST CORPORATION. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of
Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer
print-outs. Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor
has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or
otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other 

5

 

loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself insecure. 

FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial statements and other related information at such frequencies and in such
detail as Lender may reasonably request. 

REFERENCE PROVISION. 1. Other than (i) non-judicial foreclosure and all matters in connection therewith regarding security interests in real or personal
property; or (ii) the appointment of a receiver, or the exercise of other provisional remedies (any and all of which may be initiated pursuant to applicable law), each controversy, dispute or claim
between the parties arising out of or relating to this document ("Agreement"), which controversy, dispute or claim is not settled in writing within thirty (30) days after the "Claim Date" (defined as
the date on which a party subject to the Agreement gives written notice to all other parties that a controversy, dispute or claim exists), will be settled by a reference proceeding in California in
accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure, or their successor Section ("CCP"), which shall constitute the exclusive remedy for the settlement of
any controversy, dispute or claim concerning this Agreement, including whether such controversy, dispute or claim is subject to the reference proceeding and except as set forth above, the parties
waive their rights to initiate any legal proceedings against each other in any court or jurisdiction other than the Superior Court in the County where the Real Property, if any, is located or Los
Angeles County if none (the "Court"). The referee shall be a retired Judge of the Court selected by mutual agreement of the parties, and if they cannot so agree within forty-five (45) days after the
Claim Date, the referee shall be promptly selected by the Presiding Judge of the Court (or his representative). The referee shall be appointed to sit as a temporary judge, with all of the powers for a
temporary judge, as authorized by law, and upon selection should take and subscribe to the oath of office as provided for in Rule 244 of the California Rules of Court (or any subsequently
enacted Rule). Each party shall have one peremptory challenge pursuant to CCP Section 170.6. The referee shall (a) be requested to set the matter for hearing within sixty (60) days after the
Claim Date
and (b) try any and all issues of law or fact and report a statement of decision upon them, if possible, within ninety (90) days of the Claim Date. Any decision rendered by the referee will be final,
binding and conclusive and judgment shall be entered pursuant to CCP Section 644 in any court in the State of California having jurisdiction. Any party may apply for a reference proceeding at
any time after thirty (30) days following notice to any other party of the nature of the controversy, dispute or claim, by filing a petition for a hearing and/or trial. All discovery permitted by this
Agreement shall be completed no later than fifteen (15) days before the first hearing date established by the referee. The referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation, legal objections raised to such discovery or unavailability of a witness due to absence or illness. No party shall be
entitled to "priority" in conducting discovery. Depositions may be taken by either party upon seven (7) days written notice, and request for production or inspection of documents shall be responded to
within ten (10) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding upon the
parties. Pending appointment of the referee as provided herein, the Superior Court is empowered to issue temporary and/or provisional remedies, as appropriate. 

2.
Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of all hearings, the order of
presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall
be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee. The party making such a request shall have the
obligation to arrange for and pay for the court reporter. The costs of the court reporter at the trial shall be borne equally by the parties. 

6

 

3. The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law
in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional
remedies and to enter equitable orders that will be binding upon the parties. The referee shall issue a single judgment at the close of the reference proceeding which shall dispose of all of the
claims of the parties that are the subject of the reference. The parties hereto expressly reserve the right to contest or appeal from the final judgment or any appealable order or appealable judgment
entered by the referee. The parties hereto expressly reserve the right to findings of fact, conclusions of law, a written statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding under this provision. 

4.
In the event that the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be
determined by the reference procedure herein described will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge of the Court, in accordance with the
California Arbitration Act, Section 1280 through Section 1294.2 of the CCP as amended from time to time. The
limitations with respect to discovery as set forth hereinabove shall apply to any such arbitration proceeding. 

CREDIT AGREEMENT. This Note is subject to the provisions of the Credit Agreement dated June 1, 2000, and all amendments thereto and replacements
therefor. 

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,
and shall inure to the benefit of Lender and its successors and assigns. 

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All
such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this
loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligation under this Note are joint and several. 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE
NOTE.  

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.  

BORROWER:  

COASTCAST CORPORATION
  

	By:	 	/s/ HANS H. BUEHLER   
 Authorized Signer
 

7

 
 

FIRST AMENDMENT TO
  CREDIT AGREEMENT    
  

    This First Amendment ("Amendment") amends that certain Credit Agreement dated June 1, 2000, by and between Imperial Bank  ("Bank") and Coastcast Corporation, a California Corporation ("Borrower") (the "Agreement") as follows:
 

    1.  The
following Section of the Agreement is hereby deleted from the Agreement in its entirety and is to be replaced in its entirety as follows: 

Section
4.06 Current Ratio. Maintain on a quarterly basis a minimum ratio of total current assets (excluding all amounts due from stockholders, officers
and affiliates) divided by total current liabilities (including all amounts due to stockholders, officers and affiliates) of 1.50 to 1.00. 

    2.  Except
as provided above, the Agreement remains unchanged and in full force and effect. 

    3.  This
Amendment shall be effective as of December 31, 2000, and the parties hereby confirm that the Agreement as amended is in full force and effect. 

	 Coastcast Corporation

"Borrower"	 	Imperial Bank

"Bank"
	
By:	
 	

/s/ NORMAN FUJITAKI   
 Norman Fujitaki	
 	

By:	
 	

/s/ RICHARD D. MAESTAS   
 Richard D. Maestas

First Vice President

 
 

SECOND AMENDMENT TO 
  CREDIT AGREEMENT    
  

    This Second Amendment to Credit Agreement (this "Amendment") is entered into as of May 30, 2001, by and between IMPERIAL BANK, a California banking
corporation ("Bank") and Coastcast Corporation, a California corporation ("Borrower"). 

 
 

RECITALS    
  

    WHEREAS, Borrower and Bank are parties to that certain Credit Agreement dated as of June 1, 2000, (as amended, restated, modified, supplemented or
revised from time to time, the "Agreement"); and 

    WHEREAS,
each of the parties to this Amendment desire to amend the Agreement in accordance herewith. 

 
 

AGREEMENT    
  

    NOW, THEREFORE, the parties agree as follows: 

A.  Amendments to the Agreement. 

    1.  The
date "May 31, 2001" in Section 1.01(a) of the Agreement is hereby amended to read as "May 30, 2002." 

    2.  A
new Paragraph is hereby added to the Agreement to read in its entirety as follows: "Section 1.01(c) Foreign Currency Exchange Usage and Sublimit. Subject to the
terms and conditions of this Agreement, Bank shall make available to Borrower from time to time between the date of this Agreement and May 30, 2002 (the "Revolving Line of Credit Maturity
Date"), provided that no Event of Default then has occurred and is continuing, the aggregate principal amount of up to One Million
Five Hundred Thousand Dollars ($1,500,000) (the "Foreign Currency Exchange Sublimit") for exposure on foreign currency exchange contracts ("Foreign Contracts"), with a maximum tenor of one (1) month,
on terms acceptable to Bank, provided that the aggregate amount of Foreign Contracts at any one time shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000). Bank will make advances
hereunder at such time as Borrower requests an Amount under (and as defined therein) an agreement in form and substance acceptable to Lender in its sole discretion and shall be subject to the terms
and conditions of Lender's form request and such other agreements as are required by Lender. Borrower shall pay all foreign currency exchange transaction fees and other fees that Lender notifies
Borrower it will be charged for processing Foreign Contracts for Borrower. 

    3.  A
new Paragraph is hereby added to the Agreement to read in its entirety as follows: "Section 5.05 Dividends. Payment of dividends permitted, provided that
Borrower is in compliance with all other covenants and conditions of the Agreement." 

B.  Effect of Amendment, Representations and Warranties. 

    1.  The
Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank
under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all promissory notes, guaranties, security agreements, mortgages, deeds of
trust, environmental agreements, and all other instruments, documents and agreements entered into in connection with the Agreement. 

    2.  Borrower
represents and warrants that the Representations and Warranties contained in the Agreement are true and correct as of the date of this Agreement, and that
no Event of Default has occurred and is continuing. 

 

C.  Conditions Precedent to the Effectiveness of this Amendment. 

    1.  As
a condition to the effectiveness of the Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following: 

	(a.)
	this
Amendment, duly executed by Borrower;

	(b.)
	such
other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate. 

D.  Miscellaneous Provisions. 

    1.  Unless
otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. 

    2.  This
Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. 

    IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. 

	 	 	Coastcast Corporation,

a California corporation
	

 	
 	

By:	
 	

/s/ HANS H. BUEHLER   

	 	 	Title:	 	Chairman & CEO

	 	 	IMPERIAL BANK,

a California banking corporation
	

 	
 	

By:	
 	

/s/ DONALD D. DOUTHWRIGHT   

	 	 	Title:	 	Senior Vice President/Regional Portfolio Manager

2

  

[IMPERIAL BANK LOGO]  

  
 

    LIBOR ADDENDUM
  TO NOTE    
  

    This Libor Addendum ("Addendum") is dated as of May 30, 2001, and is by and between  COASTCAST CORPORATION
("Borrower") and Imperial Bank ("Bank"). This Addendum amends and supplements the
NOTE to which it is attached (the "Note") and forms a part of and is incorporated into the Note. 

    In
the event of any inconsistency between the terms herein and the terms of the Note, the terms herein shall in all cases govern and control. All capitalized terms herein, unless
otherwise defined herein, shall have the meanings set forth in the Note. 

    1.  Advances.  

    1.1  Prime Loans.  Advances permitted pursuant to the terms of the Note or this Addendum which bear
interest in relation to Bank's Prime Rate shall be referred to herein as "Prime Loans" and each such advance shall be a "Prime Loan." Each Prime Loan shall bear interest at an annual rate equal to the
sum of 0.00% plus the Bank's Prime Rate. "Prime Rate" shall mean the rate of interest publicly announced by Bank from time to time in Inglewood,
California, as its prime rate for lending. The Prime Rate is not intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to borrowers. 

    1.2  Libor Loans.  Advances permitted pursuant to the terms of the Note or this Addendum which bear
interest in relation to the Libor Rate shall be referred to herein as "Libor Loans" and each such advance shall be a "Libor Loan." Each Libor Loan shall bear interest at the Libor Rate, as defined
below. A Libor Loan shall be in the minimum amount of Five Hundred Thousand Dollars ($500,000.00) or such greater amount which is an integral multiple
of Fifty Thousand Dollars ($50,000). No Libor Loan shall be made after the last Business Day that is at least three (3)
months prior to the Maturity Date described in the Note. 

    2.  Interest on Libor Loans.  

    2.1  Rate of Interest.  Each Libor Loan shall bear interest on the unpaid principal amount thereof from
the Loan Date through the date paid (whether by acceleration or otherwise) at a rate equal to the sum of 2.00% per annum plus the Libor Rate for the
Interest Period. 

    (a) "Loan
Date" shall mean the date on which (i) a Libor Loan is made, a Libor Loan is continued, or a Prime Loan is converted to a Libor Loan. 

    (b) "Interest
Period" shall mean a period of thirty (30), sixty (60) or ninety (90) days, commencing on the applicable
Loan Date, as selected by Borrower pursuant to Section 2.2; provided, however, that Borrower may not select an Interest Period that would
otherwise extend beyond the Maturity Date of the Loan. Borrower may also select a twelve (12) month Interest Period if an when Bank notifies Borrower that such Interest Period is available, as
determined by Bank in its sole discretion. During a Libor Interest Period, interest shall be payable on the last day of the Interest Period, provided that for any Interest Period longer than
3 months, interest shall be payable quarterly and on the last day of the Interest Period. 

    (c) "Libor
Rate" shall mean, for the applicable Interest Period for a Libor Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) equal to (i) the Libor Base Rate for such Interest Period divided by (ii) 1.00 minus the Reserve Requirement Rate (expressed as a decimal fraction) for such Interest Period. 

1

 

    (d) "Libor Base Rate" shall mean with respect to any Interest Period, the rate equal to the arithmetic mean (rounded upwards, if necessary, to the nearest
1/16 of 1%) of: 

    (i) the
offered rates per annum for deposits in U.S. Dollars for a period equal to such Interest Period which appears at 11:00 a.m., London time, on the Reuters Screen
LIBOR Page on the Business Day that is two (2) Business Days before the first day of such Interest Period, in each case if at least four (4) such offered rates appear on such page, or 

    (ii) if
clause (i) is inapplicable, (x) the offered rate per annum for deposits in U.S. Dollars for a period equal to such Interest Period which appears as of
11:00 a.m., London time on the Telerate Monitor on Telerate Screen 3750 on the Business Day which is two (2) Business Days before the first day of such Interest Period; or (y) if clause (x)
above is inapplicable, the arithmetic mean (rounded upwards, if necessary, to the nearest 1/16 of 1%) of the interest rates per annum offered by at least three (3) prime banks selected
by Bank at approximately 11:00 a.m. London time, on the Business Day which is two (2) Business Days before such date for deposits in U.S. Dollars to prime banks in the London interbank market, in each
case for a period equal to such Interest Period in an amount equal to the amount to which the Libor Rate applies. 

    (e) "Business
Day" means any day on which Bank is open for business in the State of California. 

    (f) "Reuters
Screen LIBOR Page" means the display designated as page LIBOR on the Reuters Monitor Money Rates Service or such other page as may replace the LIBOR page
on that service for the purpose of displaying London interbank offered rates of major banks. 

    (g) "Reserve
Requirement Rate" means, for any Interest Period, the aggregate of the rates, effective as of the Business Day which is two (2) Business Days before the
first day of the Interest Period, at which: 

    (i) reserves
(including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D against
"Eurocurrency liabilities" (as such term is used in Regulation D) by member banks of the Federal Reserve System; and 

    (ii) any
additional reserves are required to be maintained by Bank by reason of any Regulatory change against (x) any category of liabilities which includes
deposits by reference to which the Libor Rate is to be determined as provided in the definition of "Libor Base Rate;" or (y) any category of extensions of credit or other assets which include
Libor Loans. 

    (h) "Regulatory
Change" means, with respect to Bank, any change on or after the date of the Note and this Addendum in any Governmental Regulation, including the
introduction of any new Governmental Regulation or the rescission of any existing Governmental Regulation. 

    (i) "Governmental
Regulation" means any (i) United States Federal, state or foreign law or regulation (including without limitation Regulation D); and
(ii) the adoption or making of any interpretation, application, directive or request applying to a class of lenders, including Bank, of or under any United States Federal, state, or any foreign
law or regulation (whether or not having the force of law) by any court or by any governmental, central banking, monetary or taxing authority charged with the interpretation or administration of such
law or regulation. 

    2.2  Determination of Interest Rates.  Subject to the terms and conditions of the Note and this Addendum,
Borrower, at its option, may request an advance in the form of a Libor Loan, a continuation of a Libor Loan, or a conversion of a Prime Loan into a Libor Loan, only upon delivery to Bank of an
irrevocable written notice received by Bank at least three (3) Business Days prior to the requested Loan Date, specifying (i) the principal amount of such Libor Loan, (ii) the requested
Loan 

2

 

Date, and (iii) the selected Interest Period. Upon receiving such notice, Bank shall determine (which determination shall be in accordance with Section 2.1 and shall, absent manifest
error, be final, conclusive and binding upon all parties hereto) the Libor Rate applicable to such Libor Loan two (2) Business Days prior to the Loan Date, and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Borrower. If Borrower shall fail to notify Bank of its selected Interest Period for a Libor Loan (including the continuation of an existing Libor Loan
or the conversion of a Prime Loan into a Libor Loan), the Borrower shall be deemed to have selected an Interest Period of three (3) months. 

    2.3  Computation of Interest and Fees.  All computations of interest and fees payable pursuant to the
Note shall be calculated on the basis of a three hundred sixty (360) day year for the actual number of days elapsed (less the date of repayment). 

    2.4  Recordation by Bank.  Bank is hereby authorized to record the Loan Date, the applicable Interest
Period, the principal amount, and the interest rate of each Libor Loan made (or continued or converted) by Bank, and the date and amount of each payment or prepayment of principal thereof, in Bank's
records. Any such recordation shall constitute prima facie evidence of the accuracy of the information recorded;  provided that the failure to make any such
recordation shall not in any way affect the Borrower's obligations hereunder. 

    3. Conversion to Prime Loans.  

    3.1  Election by Borrower.  Subject to all the terms and conditions of this Addendum, Borrower may elect
from time to time to convert a Libor Loan to a Prime Loan by giving Bank at least three (3) Business Days' prior irrevocable notice of such election, and any such conversion of a Libor Loan shall be
made on the last day of the Interest Period with respect thereto. 

    3.2  Failure of Notice by Borrower.  If Borrower otherwise fails to give notice specifying its requests
with respect to any Libor Loans that are scheduled to become due, such failure shall be deemed, in the absence of any notice from Borrower to the contrary, to be notice of a requested advance in the
form of a Prime Loan in a principal amount equal to the amount of said Libor Loan. 

    4.  Prepayments.  

    4.1  Voluntary Prepayment by Borrower.  Subject to the terms and conditions of the Note and this
Addendum, Borrower may, upon at least three (3) Business Days' irrevocable notice to Bank as provided herein, at any time and from time to time on any Business Day prepay any Prime Loan or
Libor Loan in whole or in part, without penalty or premium, other than customary actual "Breakage Fees" and "Prepayment Costs" as defined below, resulting from prepayment of any Libor Loan prior to
the expiration of the Interest Period relating thereto. The notice of prepayment shall specify the date and amount of the prepayment, and the Loan to which the prepayment applies. Each partial
prepayment of a Libor Loan shall be in an amount not less than Fifty Thousand Dollars ($50,000) or such greater amount which is an integral multiple of  Fifty Thousand Dollars
($50,000); provided, that unless a Libor Loan is prepaid in full, no prepayment
shall be made if, after giving effect to such prepayment, the aggregate principal amount of Libor Loans having the same Interest Period shall be less than Five Hundred Thousand
Dollars ($500,000.00). Notice of prepayment having been delivered as aforesaid, the principal amount of the prepayment specified in such notice shall become due and payable on
the prepayment date set forth in such notice. All payments of principal under this Section 4 shall be accompanied by accrued but unpaid interest on the amount being prepaid through the date of
such prepayment. 

    4.2  Breakage Fees.  If for any reason (including voluntary or mandatory prepayment, voluntary or
mandatory conversion of a Libor Loan into a Prime Loan, or acceleration), Bank receives all or part of the principal amount of a Libor Loan prior to the last day of the Interest Period for such Loan, 

3

 

Borrower shall immediately notify Borrower's account officer at Bank and, on demand by Bank, pay Bank the Breakage Fees, defined as the amount (if any) by which (i) the additional interest
which would have been payable on the amount so received had it not been received until the last day of such Interest Period exceeds (ii) the interest which would have been recoverable by Bank
(without regard to whether Bank actually so invests said funds) by placing the amount so received on deposit in the certificate of deposit markets or the offshore currency interbank markets or United
States Treasury investment products, as the case may be, for a period starting on the date on which it was so received and ending on the last day of such Interest Period at the interest rate
determined by Bank in its reasonable discretion. Bank's determination as to such amount shall be conclusive and final, absent manifest error. 

    4.3  Prepayment Costs.  Borrower shall pay to Bank, upon the demand of Bank, such other amount or amounts
as shall be sufficient (in the sole good faith opinion of Bank) to compensate it for any loss,
costs or expense incurred by it as a result of any prepayment by Borrower (including voluntary or mandatory prepayment, voluntary or mandatory conversion of a Libor Loan into a Prime Loan, or
prepayment due to acceleration) of all or part of the principal amount of a Libor Loan prior to the last day of the Interest Period for such Loan (including without limitation any failure by Borrower
to borrow a Libor Loan on the Loan Date for such borrowing specified in the relevant notice of borrowing hereunder). Such costs shall include, without limitation, any interest or fees payable by Bank
to lenders of funds obtained by it in order to make or maintain its loans based on the London interbank eurodollar market. Bank's determination as to such costs shall be conclusive and final, absent
manifest error. 

    5.  Remedies Upon Events of Default.  

    5.1  Conversion to Prime Loans.  If any Event of Default has occurred and is continuing under the Note or
this Addendum, then in addition to all other remedies available to Bank under the Note, at the option of Bank and without demand or notice, all Libor Loans then outstanding shall be automatically
converted to Prime Loans on the last day of each respective Interest Period for each Libor Loan. 

    5.2  Indemnity.  Borrower agrees to pay and indemnify Bank for, and to hold Bank harmless from, any and
all cost, loss or expense (including without limitation any such cost, loss or expense arising from interest or fees payable by Bank to lenders of funds obtained by it in order to maintain its Libor
Loans hereunder, or in its reemployment of funds obtained in connection with the making or maintaining of Libor Loans) which Bank may sustain or incur as a consequence of any default by Borrower in
connection with or related to: (a) payment of the principal amount of or interest on Libor Loans, (b) making a borrowing or conversion of a Libor Loan after Borrower has given a notice
thereof in accordance with this Addendum, or (c) making a prepayment of a Libor Loan after Borrower has given a notice thereof in accordance with this Addendum, or any prepayment (whether
optional or mandatory) of any Libor Loan prior to the end of the applicable Interest Period for such Loan. 

    6.  Additional Provisions Regarding Libor Loans.  

    6.1  Libor Rate Taxes.  All payments of principal, interest, fees, costs, expenses and all other amounts
payable by Borrower pursuant to the Note and this Addendum shall be made free and clear of and without reduction by reason of all present and future income, stamp and other taxes or other charges
whatsoever imposed, assessed, levied or collected by any national government or any political subdivision or taxing authority thereof or any organization of which it is a member (excluding
(i) any taxes imposed on or measured by the overall net income or gross receipts of Bank by any such entity, and (ii) any taxes which would have been imposed even if no provisions for
Libor Loans had appeared in this Addendum)(collectively, "Libor Taxes"). 

4

 

    If any Libor Taxes are required to be withheld from any amounts payable to Bank, Borrower shall pay such additional amounts as may be necessary so as to yield to Bank a net amount
equal to the total amount of the payments provided for in this Addendum or under the Note which Bank would have received if such amounts had not been subject to Libor Taxes. 

    If
any Libor Taxes are payable directly by Borrower, they shall be paid by Borrower prior to the date on which penalties attach for failure to timely pay such Libor Taxes. Within
forty five (45) days after the date on which payment of any such Libor Taxes is due pursuant to applicable law, Borrower will furnish Bank the original receipt for the full payment of such
Libor Taxes or, if such is not available, evidence of such payment satisfactory in form and substance to Bank. Borrower shall indemnify and hold Bank harmless against, and will reimburse to Bank, upon
demand, any incremental taxes, interest or penalties that may become payable by Bank as a result of any failure by Borrower to pay any Libor Taxes when due. 

    6.2  Inability to Determine Fair Interest Rate.  If at any time Bank, in its sole and absolute
discretion, determines that: (i) the amount of the Libor Loans for periods equal to the corresponding Interest Periods are not available to Bank in the offshore currency interbank markets,
(ii) the Libor Rate does not accurately reflect the cost to Bank of lending the Libor Loan, or (iii) by reason of any changes arising after the date of the Note affecting the London
interbank eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in Sections 2.1 and 2.2 above, then Bank shall promptly
give notice thereof to Borrower. Upon the giving of such notice, Bank's obligation to make Libor Loans shall terminate, unless Bank and the Borrower agree in writing to a different interest rate
applicable to Libor Loans, or until such time as Bank notifies Borrower that the circumstances giving rise to Bank's notice no longer exist. While such circumstances continue to exist, (x) any
requested Libor Loan shall be treated as a request for a Prime Loan, (y) any Prime Loan that was to have been converted to a Libor Loan shall be continued as a Prime Loan, and (z) any
outstanding Libor Loan shall be converted retroactively, on the first day of the then current Interest Period with respect thereto, to a Prime Loan. 

    6.3  Illegality or Impracticability.  If (i) due to any Governmental Regulation it shall become unlawful
for Bank to continue to fund or maintain any Libor Loans, or to perform its obligations hereunder, or (ii) due to any contingency occurring after the date of the Note which has a material
adverse effect on the London interbank eurodollar market, it has become impracticable for Bank to continue to fund or maintain any Libor Loans, or to perform its obligations hereunder, then Bank shall
promptly give notice thereof to Borrower. Upon the giving of such notice, Bank's obligation to make Libor Loans shall terminate, and in such event, (x) any requested Libor Loan shall be treated
as a request for a Prime Loan, (y) any Prime Loan that was to have been converted to a Libor Loan shall be continued as a Prime Loan, and (z) any outstanding Libor Loan shall be
converted retroactively, on the first day of the then current Interest Period with respect thereto, to a Prime Loan. 

    6.4  Governmental Regulations; Increased Costs.  Borrower shall pay to Bank, within 15 days after
demand by Bank, from time to time such amounts as Bank may determine to be necessary to compensate it for any increased costs incurred by Bank that Bank determines are attributable to its making or
maintaining of any Libor Loans to Borrower (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), in each case resulting from any Regulatory Change which: 

    (a)  imposes
a new tax or changes the basis of taxation of any amounts payable to Bank under the Note or this Addendum in respect of any Libor Loans (other than changes
which affect taxes measured by or imposed on the overall net income of Bank by the jurisdiction in which such Bank has its principal office); or 

    (b)  imposes
or modifies any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits or other
liabilities with or for the account of 

5

 

Bank (including any Libor Loans or any deposits referred to in the definition of Libor Base Rate); or 

    (c)  imposes
any other condition affecting the Note (or any of such extensions of credit or liabilities); or 

    (d)  imposes
or modifies a Governmental Regulation regarding capital adequacy which has or would have the effect of reducing the rate of return on capital of Bank or
any person or entity controlling Bank ("Parent") as a consequence of its obligations hereunder to a level below that which Bank (or its Parent) could have achieved but for such adoption, change or
compliance (taking into consideration its policies with respect to capital adequacy) by an amount deemed by Bank to be material. 

    Bank
will notify Borrower of any event occurring after the date of the Note which will entitle Bank to Additional Costs pursuant to this Section 6.4 as promptly as practicable
after it obtains knowledge thereof and determines to request such compensation. Bank will furnish Borrower with a statement setting forth the basis and amount of each request by Bank for Additional
Costs under this Section 6.4. Determinations and allocations by Bank for purposes of this Section 6.4 of the effect of any Regulatory Change on its costs of maintaining its obligations
to make Libor Loans or of making or maintaining Libor Loans or on amounts receivable by it in respect of Libor Loans, and of the additional amounts required to compensate Bank in respect of any
Additional Costs, shall be conclusive and final, absent manifest error. 

    This
Addendum is executed as of the date first written above. 

	BORROWER	 	BANK
	

 	
 	

 	
 	

IMPERIAL BANK,
	COASTCAST CORPORATION	 	a California banking corporation
	

By	
 	

/s/ Hans H. Buehler
	
 	

By	
 	

/s/ Donald D. Douthwright

	

 	
 	

 	
 	

Its	
 	

Senior Vice President
 Regional Portfolio Manager
	By	 	 	 	 	 	 
	 	 	
	 	 	 	 

6

QuickLinks

EXHIBIT 10.1

PROMISSORY NOTE

FIRST AMENDMENT TO CREDIT AGREEMENT

SECOND AMENDMENT TO CREDIT AGREEMENT

RECITALS

AGREEMENT

LIBOR ADDENDUM TO NOTEPrepared by MERRILL CORPORATION

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EXHIBIT 10.2    
  

 
 

COASTCAST CORPORATION
  2001 NON-EMPLOYEE DIRECTOR
  STOCK OPTION PLAN    
  

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	 
	 	Page

	1.	 	Purpose	 	1
	2.	 	Non-Qualified Stock Options	 	1
	3.	 	Administration	 	1
	 	 	3.1	 	Administration by Board	 	1
	 	 	3.2	 	Administration by Committee	 	1
	4.	 	Eligibility	 	1
	5.	 	Shares Subject to Options	 	2
	6.	 	Terms and Conditions of Options	 	2
	 	 	6.1	 	Grant of Options	 	2
	 	 	6.2	 	Option Price	 	3
	 	 	6.3	 	Notice and Payment	 	3
	 	 	6.4	 	Term of Option	 	4
	 	 	6.5	 	Vesting	 	4
	 	 	6.6	 	Exercise and Transfer of Option	 	4
	 	 	6.7	 	Rights as a Shareholder or Director	 	4
	 	 	6.8	 	No Fractional Shares	 	4
	 	 	6.9	 	Exercisability in the Event of Death	 	4
	 	 	6.10	 	Recapitalization or Reorganization of Company	 	5
	 	 	6.11	 	Modification, Extension, and Renewal of Options	 	5
	 	 	6.12	 	Other Provisions	 	5
	7.	 	Termination or Amendment of Plan	 	5
	8.	 	Indemnification	 	5
	9.	 	Covenants of The Company	 	6
	 	 	9.1	 	Available Shares	 	6
	 	 	9.2	 	Approvals	 	6
	10.	 	Effective Date of Amendment and Term of Plan	 	6

  

 
 

COASTCAST CORPORATION
  2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN    
  

    1.  Purpose. The purpose of this Coastcast Corporation 2001 Non-Employee Director Stock Option Plan (the
"Plan") is to increase the proprietary and vested interest of the non-employee directors of Coastcast Corporation (the "Company") in the growth and performance of the Company by granting
such directors options to purchase shares of common stock of the Company, to encourage them to continue their services to the Company, and to attract individuals of outstanding ability to serve on the
Board of Directors of the Company. 

    2.  Non-Qualified Stock Options. The options granted under the Plan (each an "option") will be options not
specifically authorized or qualified for favorable tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended, and any successor statutes ("Code")
("non-qualified stock options"). 

    3.  Administration. 

    3.1 Administration by Board. The Plan shall be administered by the Board of Directors of the Company ("Board"). Subject
to the provisions of the Plan, the Board shall have authority to construe and interpret the Plan, to promulgate, amend, and rescind rules and regulations relating to its administration, and to make
all of the determinations necessary or advisable for administration of the Plan; provided, however, that the Board shall have no discretion with respect to the selection of directors to receive
options under the Plan, the number of shares of stock subject to any such options, or the purchase price thereof. The interpretation and construction by the Board of any provision of the Plan, or of
any agreement executed pursuant to the Plan, shall be final and binding upon all parties. No member of the Board shall be liable for any action or determination undertaken or made in good faith with
respect to the Plan or any agreement executed pursuant to the Plan. 

    3.2 Administration by Committee. The Board may, in its sole discretion, delegate any or all of its administrative duties
to a committee (the "Committee") of not fewer than two (2) members of the Board, all of the members of which Committee shall be persons who, in the opinion of counsel to the Company, are
"non-employee directors" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934. If administration is delegated to a Committee, the Committee shall
have, in connection with administration of the Plan, the powers otherwise possessed by the Board, 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 revest in the Board the administration of the Plan. From time to time, the Board may increase or decrease (to not less than two members)
the size of the Committee, and add additional members to, or remove members from, the Committee. The Committee shall act pursuant to a majority vote, or the written consent of a majority of its
members, and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the provisions of the Plan and the directions of the Board, the Committee may
establish and follow such rules and regulations for the conduct of its business as it may deem advisable. No member of the Committee shall be liable for any action or determination undertaken or made
in good faith with respect to the Plan or any agreement executed pursuant to the Plan. 

    4.  Eligibility. Each director of the Company shall be eligible to receive an option under the Plan at any time only if
such director (i) is not then an employee of the Company or any of its subsidiaries, (ii) has not, within three (3) years immediately preceding such time, received any stock
option, stock bonus, stock appreciation right, or other similar stock award from the Company or any of its subsidiaries, other than options granted to such director under this Plan or the 1995 Amended
and Restated Non-Employee Director Stock Option Plan, and (iii) does not then beneficially own more than ten percent (10%) of the outstanding stock of the Company (an "Eligible
Director"). Only 

1

 

Eligible Directors may receive options under the Plan. A director of the Company shall not be deemed to be an employee of the Company or any of its subsidiaries solely by reason of the existence of an
agreement between such director and the Company or any subsidiary thereof pursuant to which the director provides services as a consultant to the Company or its subsidiaries on a regular or occasional
basis for compensation. 

    5.  Shares Subject to Options. The stock available for grant of options under the Plan shall be shares of the Company's
authorized but unissued, or reacquired, common stock. The aggregate number of shares which may be issued pursuant to exercise of options granted under the Plan shall not exceed 200,000 shares of
common stock, as such common stock shall be constituted as of April 19, 2001. In the event that any outstanding option under the Plan for any reason expires or is terminated, the shares of
common stock allocable to the unexercised portion of the option shall again be available for options under the Plan as if no option had been granted with respect to such shares. 

    6.  Terms and Conditions of Options. Options granted under the Plan shall be evidenced by agreements in such form and
containing such provisions which are consistent with the Plan as the Board or Committee shall from time to time approve. All grants of options to Eligible Directors shall be automatic and
non-discretionary and shall be made strictly in accordance with the following provisions. 

    6.1 Grant of Options. Options to purchase shares of common stock of the Company shall be granted automatically to each
Eligible Director as follows: 

    (a) An
option to purchase 30,000 shares of common stock of the Company (the "Initial Option") shall be granted automatically to each Eligible Director (other than Edwin
A. Levy, Lee E. Mikles, and Paul A. Novelly) on the later of the date on which this Plan is approved by the shareholders of the Company (provided such person is still an Eligible Director on such
date) or the date on which such director first becomes an Eligible Director (the "Initial Option Date"). Thereafter, an option to purchase an additional 10,000 shares of common stock of the Company
shall be granted automatically to each director who receives an Initial Option on the third anniversary of the Initial Option Date and on each subsequent anniversary of such date if such director is
still an Eligible Director on such anniversary. 

    (b) An
option to purchase 10,000 shares of common stock of the Company shall be granted automatically to each of Edwin A. Levy, Lee E. Mikles, and Paul A. Novelly on
the date on which this Plan is approved by the shareholders of the Company (provided such individual is an Eligible Director on such date), and an option to purchase an additional 10,000 shares of
common stock of the Company shall be granted automatically to each such director on each anniversary of the date on which shareholders approve the Plan if such director is still an Eligible Director
on such anniversary. 

    (c) Anything
set forth in the Plan to the contrary notwithstanding, no option or options shall be granted at any time to purchase an aggregate number of shares of
common stock of the Company which exceeds the total number of shares of such common stock which are then available for issuance under the Plan minus the total number of shares of such common stock
subject to options which have been granted previously and are then outstanding under the Plan; and options which are granted as of the same date to purchase less shares than otherwise provided in
subparagraph 6.1 (a) or (b) because of the foregoing limitation in this subparagraph (c) shall cover equal numbers of shares; provided, however, if there are insufficient shares
available for issuance under the Plan at a time when an option under subparagraph 6.1 (a) or (b) is to be granted, the portion of the option not granted shall be automatically granted at
the time shares become available for issuance under the Plan (with the options which were deferred the longest being granted first and if there is more than one 

2

 

option which was deferred on the same date, then any available shares shall be allocated pro rata among such options). 

    6.2 Option Price. The purchase price per share of the shares subject to any option shall be 100% of the fair market
value per share of common stock of the Company on the date the option is granted. For purposes of the Plan, the "fair market value" per share of common stock of the Company at any date shall be
(a) if the common stock is listed on an established stock exchange or exchanges, the last reported sale price per share on the last trading day immediately preceding such date on the principal
exchange on which it is traded, or if no sale was made on such day on such principal exchange, at the
closing reported bid price per share on such day on such exchange, (b) if the common stock is not then listed on an exchange, the last reported sale price per share on the last trading day
immediately preceding such date reported by NASDAQ, or if sales are not reported by NASDAQ or no sale was made on such day, the average of the closing bid and asked prices per share for the common
stock in the over-the-counter market as quoted on NASDAQ on such day, or (c) if the common stock is not then listed on an exchange or quoted on NASDAQ, an amount
determined in good faith by the Board or the Committee. 

    6.3 Notice and Payment. Any exercisable portion of an option may be exercised only by: 

    (a) delivery
of a written notice to the Company, prior to the time when such option becomes unexercisable under Section 6.4, stating the number of shares being
purchased and complying with all applicable rules established by the Board or the Committee; 

    (b) the
optionee electing to make payment of the exercise price by one of the following alternatives: (i) payment in full of the exercise price of such option by
cash or check for an amount equal to the aggregate option exercise price for the number of shares being purchased, (ii) provided at the time the Company's common stock is publicly traded on an
established stock exchange or reported by NASDAQ, delivery of a copy of instructions to a broker directing such broker to sell the common stock for which such option is exercised, and to remit to the
Company the aggregate exercise price of such options (a "cashless exercise"),(iii) tendering shares of the Company's common stock owned by the optionee, free and clear of any liens,
encumbrances, claims or security interests, with a fair market value (as determined pursuant to Section 6.2) on the date of delivery equal to the aggregate purchase price of the shares with
respect to which such option or portion thereof is being exercised (a "stock-for-stock exercise") or (iv) any combination of the payment methods set forth in
subparagraphs 6.3(b)(i), (ii) or (iii). Payment in full of the exercise price per share need not accompany the written notice of exercise provided that the notice of exercise directs that the
certificate or certificates for the shares of common stock for which the option is exercised be delivered to a licensed broker acceptable to the Company as the agent for the individual exercising the
option and, at the time such certificate or certificates are delivered, the broker tenders to the Company cash (or cash equivalents acceptable to the Company) equal to the exercise price per share for
the shares of common stock purchased pursuant to the exercise of the option plus the amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with
respect to the exercise of the option; 

    (c) payment
of the amount of tax required to be withheld (if any) by the Company or any parent or subsidiary corporation as a result of the exercise of an option in any
combination of the payment methods set forth in subparagraph 6.3(b); and 

    (d) delivery
of a written notice to the Company requesting that the Company direct the transfer agent to issue to the Optionee (or to his designee) a certificate for
the number of shares of common stock for which the Option was exercised or, in the case of a cashless exercise, for any shares that were not sold in the cashless exercise. 

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    Any
certificate(s) for shares of outstanding common stock of the Company used to pay the exercise price shall be accompanied by stock power(s) duly endorsed in blank by the registered
holder of the certificate(s) (with the signature thereon guaranteed). In the event the certificate(s) tendered by the optionee in such payment cover more shares than are required for such payment, the
certificate(s) shall also be accompanied by instructions from the optionee to the Company's transfer agent with respect to disposition of the balance of the shares covered thereby. 

    6.4 Term of Option. No option granted under the Plan shall be exercisable after the expiration of the earlier of
(i) ten years following the date the option is granted or (ii) one year following the date the optionee ceases to be a director of the Company for any reason. 

    6.5 Vesting. An option shall become exercisable as to one-third of the shares subject to the option on each
anniversary of the date the option is granted if the director to whom the option is granted is still a director of the Company on such anniversary; provided, however, each Initial Option issued to a
director who became an Eligible Director prior to the date on which shareholders of the Company approve this Plan shall become exercisable as to one-third of the shares subject to the
Initial Option on each anniversary of the date on which such director became an Eligible Director if such director is still a director of the Company on such anniversary; and provided further,
however, if an option is not granted because there are insufficient shares available for issuance under this Plan, then if and when such option is later granted, such option shall become exercisable
as to one-third of the shares subject to the option on each anniversary of the date the option would have been automatically granted if there were sufficient shares available for issuance
under this Plan if the director to whom the option is granted is still a director of the Company on such anniversary. 

    6.6 Exercise and Transfer of Option. 

    (a) An
option shall not be transferable except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the
Code, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder (a "QDRO"), and shall be exercisable during the lifetime of the person to whom the option
is granted only by such person or by his guardian or legal representative or any transferee pursuant to a QDRO. 

    (b) Notwithstanding
anything to the contrary contained herein, an option may not be exercised unless the shares issuable upon exercise of such option are then
registered under the Securities Act of 1933, as amended (the "Securities Act") or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt
from the registration requirements of the Securities Act. 

    6.7 Rights as a Shareholder or Director. An optionee or transferee of an option shall have no rights as a shareholder of
the Company with respect to any shares covered by any option until the date of issuance of a share certificate for such shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether cash, securities, or other property) or distribution or other rights for which the record date is prior to the date such share certificate is issued, except as provided in Section 6.10.
Nothing in the Plan or in any option agreement shall confer upon any director any right to continue as a director of the Company or any of its subsidiaries, to be nominated to serve as a director, or
to receive any particular rate of compensation. 

    6.8 No Fractional Shares. In no event shall the Company be required to issue fractional shares upon the exercise of an
option. 

    6.9 Exercisability in the Event of Death. In the event of the death of an optionee, any option (or unexercised portion
thereof) held by the optionee, to the extent exercisable by him or her on 

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the date of death, may be exercised by the optionee's personal representatives, heirs, or legatees subject to the provisions of Sections 6.4 through 6.6 hereof. 

    6.10 Recapitalization or Reorganization of Company. Except as otherwise provided herein, appropriate and proportionate
adjustments shall be made in the number and class of shares subject to the Plan and to the option rights granted under the Plan, and the exercise price of such option rights, in the event of a stock
dividend (but only on common stock), stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, separation, or like change in the capital structure of the Company. In
the event of a liquidation of the Company, or a merger, reorganization, or consolidation of the Company with any other corporation in which the Company is not the surviving corporation or the Company
becomes a subsidiary of another corporation, any unexercised options theretofore granted under the Plan shall be deemed cancelled unless the surviving corporation in any such merger, reorganization,
or consolidation elects to assume the options under the Plan or to use substitute options in place thereof; provided, however, that, notwithstanding the foregoing, if such options would otherwise be
cancelled in accordance with the foregoing, the optionee shall have the right, exercisable during a ten-day period ending on the fifth day prior to such liquidation, merger, or
consolidation, to fully exercise the optionee's option in whole or in part without regard to any installment exercise provisions otherwise provided by Section 6.5. 

    6.11 Modification, Extension, and Renewal of Options. Subject to the terms and conditions and within the limitations of
the Plan, the Board or Committee may modify, extend, or renew outstanding options granted under the Plan, accept the surrender of outstanding options (to the extent not theretofore exercised), and
authorize the granting of new options in substitution therefor (to the extent not theretofore exercised). Notwithstanding the foregoing, no modification of an option shall (i) without the
consent of the optionee, alter or impair any rights of the optionee under the option, (ii) adversely affect the qualification of the Plan or any other stock-related plan of the Company under
Rule 16b-3 under the Securities Exchange Act of 1934 or any successor provision, or (iii) except as provided in Section 6.10, change the exercise price, increase the
number of shares to which the option relates, or extend the term of the option. 

    6.12 Other Provisions. Each option may contain such other terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Board or Committee. 

    7.  Termination or Amendment of Plan. The Board may at any time terminate or amend the Plan; provided that, without
approval of the shareholders of the Company, there shall be, except by operation of the provisions of Section 6.10, no increase in the total number of shares covered by the Plan, no increase in
the total number of shares subject to any option granted under the Plan, no change in the class of directors eligible to receive options granted under the Plan, no material increase in the benefits
accruing to participants under the Plan, no reduction in the exercise price of options granted under the Plan, and no extension of the latest date upon which options may be exercised; and provided
further that, without the consent of the optionee, no amendment may adversely affect any then outstanding option or any unexercised portion thereof held by the optionee. 

    8.  Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the
Committee, the members of the Board or the Committee administering the Plan shall be indemnified by the Company against reasonable expenses, including attorney's fees, actually and necessarily
incurred in connection with the defense of any action, suit, or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any option granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any action, suit, or proceeding, except in relation to matters as to which it shall be adjudged in such 

5

 

action, suit, or proceeding that such member is liable for negligence or misconduct in the performance of his duties, provided that within 60 days after institution of any such action, suit, or
proceeding, the member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. 

    9.  Covenants of The Company. 

    9.1 Available Shares. During the terms of the options granted under the Plan, the Company shall keep available at all
times the number of shares of stock required to satisfy such options. 

    9.2 Approvals. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the
Plan such authority as may be required to issue and sell shares of stock upon exercise of the options granted under the Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the Plan or any stock issued or issuable pursuant to any such option. If 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 stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell stock upon exercise of such options. 

    10. Effective Date of Amendment and Term of Plan. The Plan shall become effective on the date hereof, subject to
approval of the Plan by the shareholders of the Company. If such approval does not occur by September 30, 2001, the Plan will not become effective. Unless sooner terminated by the Board in its
sole discretion, the Plan will expire on December 31, 2010. 

Dated:
April 19, 2001 

	
COASTCAST CORPORATION	
 	

 
	

By:	
 	

/s/ HANS BUEHLER   
 Hans Buehler,
 Chief Executive Officer	
 	

 
	

By:	
 	

/s/ NORMAN FUJITAKI   
 Norman Fujitaki,
 Secretary	
 	

 

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EXHIBIT 10.2

COASTCAST CORPORATION 2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

TABLE OF CONTENTS

COASTCAST CORPORATION 2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

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