Document:

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                       AMENDMENT NO. 1 TO CREDIT AGREEMENT

         THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Amendment No. 1"),
dated as of June 11, 1999, is among True Temper Sports, Inc., a Delaware
corporation (the "Borrower"), the various financial institutions from time to
time parties thereto (collectively, the "Lenders"), DLJ Capital Funding, Inc.,
as syndication agent (the "Syndication Agent") for the Lenders, The First
National Bank of Chicago, as administrative agent (the "Administrative Agent")
for the Lenders, and Donaldson, Lufkin & Jenrette Securities Corporation, as
lead arranger (the "Arranger").

                              W I T N E S S E T H:

         WHEREAS, the Borrower, the Lenders, the Syndication Agent, the
Administrative Agent and the Arranger are parties to a Credit Agreement, dated
as of September 30, 1998 (as heretofore modified and supplemented and in effect
from time to time, the "Credit Agreement");

         WHEREAS, the Borrower has requested the Lenders to amend the Credit
Agreement to provide for the issuance under the Credit Agreement of Letters of
Credit in selected foreign currencies;

         WHEREAS, all Loans and Obligations shall continue to be and shall be
fully guaranteed pursuant to, and fully secured by, the Holdco Guaranty and
Pledge Agreement and the Borrower Security Agreement; and

         WHEREAS, the Borrower desires, and the Lenders are willing, on the
terms and subject to the conditions hereinafter set forth, to amend the Credit
Agreement as set forth herein;

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

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                                     PART I

                                   DEFINITIONS

         SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment No. 1, including
its preamble and recitals, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):

         "Administrative Agent" is defined in the preamble.

         "Amendment No. 1" is defined in the preamble.

         "Amendment No. 1 Effective Date" is defined in Subpart 3.1.

         "Arranger" is defined in the preamble.

         "Borrower" is defined in the preamble.

         "Credit Agreement" is defined in the first recital.

         "Lenders" is defined in the preamble.

         "Syndication Agent" is defined in the preamble.

         SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment No. 1, including its
preamble and recitals, have the meanings ascribed thereto in the Credit
Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and
each other similar reference and each reference to "this Agreement" and each
other similar reference contained in the Credit Agreement shall from and after
the Amendment No. 1 Effective Date refer to the Credit Agreement, as amended
hereby.

                                     PART II

                         AMENDMENTS TO CREDIT AGREEMENT

         Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Credit Agreement is amended in accordance with this Part II.
Except to the extent amended by this Amendment No. 1, the Credit Agreement is
and shall continue to be in full force and effect and is hereby ratified and
confirmed in all respects.

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         SUBPART 2.1. Amendments to Article I. Article I of the Credit Agreement
is amended as set forth in this Subpart 2.1.

         SUBPART 2.1.1.  Amendments to Section 1.1.

         (a) Section 1.1 of the Credit Agreement is hereby amended by inserting
the following definitions in their alphabetically appropriate places:

                  "Australian Dollars" means the lawful currency of Australia.

                  "Available Currency" means Dollars and, with the consent of
         the Administrative Agent, Foreign Currency.

                  "Dollar Equivalent" means, with respect to any Foreign
         Currency on any date of determination, the equivalent amount in Dollars
         of such Foreign Currency, determined by reference to the New York
         foreign exchange selling rates, as published in The Wall Street Journal
         on such date of determination for the immediately preceding Business
         Day, or, if such rate is not available, such equivalent amount shall be
         determined by the Administrative Agent (in accordance with its standard
         practices) by using the quoted spot rate offered to the Administrative
         Agent in the New York foreign exchange market for such Foreign Currency
         at approximately 11:00 a.m. (New York time) on such date of
         determination.

                  "Foreign Currency" means Pounds Sterling, Australian Dollars
         and Japanese Yen.

                  "Foreign Currency Letter of Credit" means a Letter of Credit
         denominated in a Foreign Currency.

                  "Foreign Guaranty" means a guaranty denominated in a Foreign
         Currency issued by a foreign branch or Affiliate of the Issuer.

                  "Japanese Yen" means the lawful currency of Japan.

                  "Pounds Sterling" means the lawful currency of the United
         Kingdom.

                  "U.S. Dollar Letter of Credit" means a Letter of Credit
         denominated in Dollars.

         (b) The following definitions appearing in Section 1.1 of the Credit
Agreement are hereby amended in their entirety to read as set forth below:

                  "Business Day" means any day which is neither a Saturday or
         Sunday nor a legal holiday on which banks are authorized or required to
         be closed in Memphis, Tennessee, New York, New York or Chicago,
         Illinois and, (i) with respect to Borrowings of, Interest

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         Periods with respect to, payments of principal and interest in respect
         of, and conversions of Base Rate Loans into, Eurodollar Loans, on which
         dealings in Dollars are carried on in the London interbank market, and
         (ii) with respect to Reimbursement Obligations in respect of Foreign
         Currency Letters of Credit, on which banks are generally open for
         business in the principal financial center of the jurisdiction of such
         Foreign Currency.

                  "Issuer" means the Administrative Agent, in its capacity as
         Issuer of Letters of Credit, any other Lender as may be designated by
         the Borrower (and consented to by the Administrative Agent and such
         Lender, such consent by the Administrative Agent not to be unreasonably
         withheld) and any foreign branch or Affiliate of the Administrative
         Agent or such Lender, in its capacity as Issuer of Letters of Credit.

                  "Letter of Credit" means (i) a standby or commercial letter of
         credit denominated in an Available Currency for the account of the
         Borrower, and (ii) a Foreign Guaranty.

                  "Letter of Credit Commitment Amount" means, on any date, with
         respect to U.S. Dollar Letters of Credit and Foreign Currency Letters
         of Credit collectively, a maximum amount (calculated, in the case of
         Foreign Currency Letters of Credit, at the Dollar Equivalent thereof on
         such date) of $10,000,000, as such amount may be reduced from time to
         time pursuant to Section 2.2.

                  "Letter of Credit Outstandings" means, on any date, an amount
         equal to the sum (without duplication) of

                           (a) the then aggregate amount which is undrawn and
                  available under all issued and outstanding U.S. Dollar Letters
                  of Credit (whether or not the conditions to drawing thereunder
                  could be satisfied on such date);

         plus

                           (b) the Dollar Equivalent of the then aggregate
                  amount which is undrawn and available under all issued and
                  outstanding Foreign Currency Letters of Credit (whether or not
                  the conditions to drawing thereunder could be satisfied on
                  such date);

         plus

                           (c) the then aggregate amount of all unpaid and
                  outstanding Reimbursement Obligations (calculated, in the case
                  of Foreign Currency Letters of Credit, at the Dollar
                  Equivalent thereof on such date) in respect of such U.S.
                  Dollar Letters of Credit and Foreign Currency Letters of
                  Credit.

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         SUBPART 2.2. Amendments to Article II. Article II of the Credit
Agreement is hereby amended as set forth in this Subpart 2.2.

         SUBPART 2.2.1. Amendment to Section 2.1. Clause (b) of Section 2.1 of
the Credit Agreement is hereby amended in its entirety to read as set forth
below:

                  "(b) the Issuer agrees that it will issue Letters of Credit
         pursuant to Section 2.1.3, and each other Lender that has a Revolving
         Loan Commitment severally agrees that it will purchase participation
         interests in such Letters of Credit, or, in the case of Foreign
         Guaranties, purchase participation interests or deem Disbursements to
         be Revolving Loans, pursuant to Section 2.6.1. Any term or provision of
         this Agreement or any other Loan Document (including this Article II or
         Article III hereof) to the contrary notwithstanding, (i) each Foreign
         Currency Letter of Credit and each Foreign Guaranty shall be issued,
         and all Reimbursement Obligations in respect of such Foreign Currency
         Letter of Credit shall be paid, in the applicable Foreign Currency;
         (ii) all participation, reimbursement and other interests and
         obligations of the Lenders (other than the Issuer) with respect to each
         Foreign Currency Letter of Credit and each Foreign Guaranty shall be
         calculated and paid in the Dollar Equivalent of such Foreign Currency;
         and (iii) each Issuer of a Foreign Currency Letter of Credit or a
         Foreign Guaranty shall be a "Qualified Business Unit", as defined in
         Section 989(a) of the Code, which maintains an office in the
         jurisdiction in which the requested Foreign Currency Letter of Credit
         or Foreign Guaranty is to be issued."

         SUBPART 2.2.2. Amendment to Section 2.1.3. Section 2.1.3 of the Credit
Agreement is hereby amended in its entirety to read as set forth below:

                  "SECTION 2.1.3. Letter of Credit Commitment. Subject to
         compliance by the Borrower with the terms of Sections 2.1.5, 5.1 and
         5.2, from time to time on any Business Day occurring after the Closing
         Date but prior to the Revolving Loan Commitment Termination Date, the
         Issuer will (i) issue one or more Letters of Credit denominated in the
         relevant Available Currency for the account of the Borrower in the
         Stated Amount requested by the Borrower on such day, or (ii) extend the
         Stated Expiry Date of an existing Letter of Credit previously issued
         hereunder to a date not later than the earlier of (x) the sixth
         anniversary of the Closing Date and (y) one year from the date of such
         extension, subject to the proviso in the penultimate sentence of
         Section 2.6."

         SUBPART 2.2.3. Amendment to Section 2.1.5. Section 2.1.5 of the Credit
Agreement is hereby amended in its entirety to read as set forth below:

                  "SECTION 2.1.5. Issuer Not Required to Issue Letters of
         Credit. (a) No Issuer shall be required to issue any Letter of Credit
         if, after giving effect thereto, (i) the aggregate amount of all Letter
         of Credit Outstandings would exceed the Letter of Credit Commitment
         Amount or (ii) the sum of the aggregate amount of all Letter of Credit

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         Outstandings plus the aggregate principal amount of all Revolving Loans
         and Swing Line Loans then outstanding would exceed the Revolving Loan
         Commitment Amount.

                  (b) No Issuer shall be permitted or required to issue any
         Foreign Currency Letter of Credit or Foreign Guaranty if the
         Administrative Agent has not consented to the issuance pursuant to
         Section 2.6 or such Issuer is not a "Qualified Business Unit", as
         defined in Section 989(a) of the Code, which maintains an office in the
         jurisdiction in which the requested Foreign Currency Letter of Credit
         or Foreign Guaranty is to be issued.

                  (c) No Issuer shall be required to issue any Foreign Guaranty
         if any Lender that has a Revolving Loan Commitment is prohibited by law
         from participating in such Foreign Guaranty."

         SUBPART 2.2.4. Amendment to Section 2.6. Section 2.6 of the Credit
Agreement is hereby amended in its entirety to read as set forth below:

                  "SECTION 2.6. Issuance Procedures. (a) By delivering to the
         Administrative Agent an Issuance Request on or before 12:00 noon,
         Chicago time, on a Business Day, the Borrower may, from time to time
         irrevocably request, on not less than three nor more than ten Business
         Days' notice (or such shorter or longer notice as may be acceptable to
         the Issuer), in the case of an initial issuance of a Letter of Credit,
         and not less than three nor more than ten Business Days' notice (unless
         a shorter or longer notice period is acceptable to the Issuer) prior to
         the then existing Stated Expiry Date of a Letter of Credit, in the case
         of a request for the extension of the Stated Expiry Date of a Letter of
         Credit, that the Issuer issue, or extend the Stated Expiry Date of, as
         the case may be, an irrevocable Letter of Credit on behalf of the
         Borrower denominated in the applicable Available Currency (whether
         issued for the account of or on behalf of the Borrower or any of its
         Subsidiaries) in such form as may be requested by the Borrower and
         approved by the Issuer, for the purposes described in clause (b) of
         Section 7.1.9. Notwithstanding anything to the contrary contained
         herein or in any separate application for any Letter of Credit, the
         Borrower hereby acknowledges and agrees that it shall be obligated to
         reimburse the Issuer upon each Disbursement paid under a Letter of
         Credit, and it shall be deemed to be the obligor for purposes of each
         such Letter of Credit issued hereunder (whether the account party on
         such Letter of Credit is the Borrower or a Subsidiary of the Borrower).

                  (b) Upon receipt of an Issuance Request which requests the
         issuance of a Foreign Currency Letter of Credit, the Administrative
         Agent shall promptly notify the Borrower either that the requested
         currency is acceptable to the Administrative Agent, in which case such
         Foreign Currency Letter of Credit shall be issued, or that the
         requested currency is not acceptable to the Administrative Agent (in
         its reasonable determination), in which case such Foreign Currency
         Letter of Credit shall not be issued.

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                  (c) Upon receipt of an Issuance Request which requests the
         issuance of a Foreign Guaranty, the Administrative Agent shall promptly
         notify the Borrower (i) that the requested currency is acceptable to
         the Administrative Agent and no Lender that has a Revolving Loan
         Commitment is prohibited by law from participating in such Foreign
         Guaranty, in which case such Foreign Guaranty shall be issued, or (ii)
         that the requested currency is acceptable to the Administrative Agent
         and, although one or more Lenders that have a Revolving Loan Commitment
         are prohibited by law from participating in such Foreign Guaranty, the
         Issuer has determined (in its sole and absolute discretion) to issue
         such Foreign Guaranty, or (iii) that the requested currency is not
         acceptable to the Administrative Agent (in its reasonable
         determination), in which case such Foreign Guaranty shall not be
         issued, or (iv) that any Lender that has a Revolving Loan Commitment is
         prohibited by law from participating in such Foreign Guaranty and, as a
         result, the Issuer has determined (in its sole and absolute discretion)
         not to issue such Foreign Guaranty.

                  (d) Upon receipt of an Issuance Request, and following any
         determination required by this Section 2.6, the Administrative Agent
         shall promptly notify the Issuer and each Lender thereof. Each Letter
         of Credit shall by its terms be stated to expire on a date (its "Stated
         Expiry Date") no later than the earlier to occur of (i) the Revolving
         Loan Commitment Termination Date or (ii) one year from the date of its
         issuance; provided, notwithstanding the terms of clause (ii) above,
         that a Letter of Credit may, if required by the beneficiary thereof,
         contain "evergreen" provisions pursuant to which the Stated Expiry Date
         shall be automatically extended (in each case, to the date no later
         than the earlier to occur of (x) the Revolving Loan Commitment
         Termination Date or (y) one year from the date of such automatic
         extension), unless notice to the contrary shall have been given to the
         beneficiary by the Issuer or the account party more than a specified
         period prior to the then existing Stated Expiry Date. The Issuer will
         make available to the beneficiary thereof the original of each Letter
         of Credit which it issues hereunder."

         SUBPART 2.2.5. Amendment to Section 2.6.1. Section 2.6.1 of the Credit
Agreement is hereby amended in its entirety to read as set forth below:

                  "SECTION 2.6.1. Other Lenders' Participation. (a) Upon the
         issuance of each U.S. Dollar Letter of Credit or Foreign Currency
         Letter of Credit issued by the Issuer pursuant hereto, and without
         further action, each Lender (other than the Issuer) that has a
         Revolving Loan Commitment shall be deemed to have irrevocably purchased
         from the Issuer, to the extent of its Percentage in respect of
         Revolving Loans, and the Issuer shall be deemed to have irrevocably
         granted and sold to such Lender a participation interest in such U.S.
         Dollar Letter of Credit or Foreign Currency Letter of Credit, as the
         case may be (including the Contingent Liability and any Reimbursement
         Obligation and all rights with respect thereto).

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<PAGE>   8
                  (b) Upon the issuance of each Foreign Guaranty issued by the
         Issuer pursuant hereto, each Lender (other than the Issuer) that has a
         Revolving Loan Commitment shall, unless prohibited by law, be deemed to
         have irrevocably purchased from the Issuer, to the extent of its
         Percentage in respect of Revolving Loans, and the Issuer shall be
         deemed to have irrevocably granted and sold to such Lender a
         participation interest in such Foreign Guaranty (including the
         Contingent Liability and any Reimbursement Obligation and all rights
         with respect thereto). If any Lender that has a Revolving Loan
         Commitment is prohibited by law from participating in such Foreign
         Guaranty, such Lender shall (i) promptly notify the Administrative
         Agent in writing that it is prohibited by law from participating in
         such Foreign Guaranty, and (ii) deem each Disbursement under such
         Foreign Guaranty, without further action, to be a Revolving Loan and,
         to the extent that the Borrower does not reimburse the Administrative
         Agent for such Disbursement pursuant to Section 2.6.2, such Lender, on
         or before 12:00 noon, Chicago time, on the Business Day following the
         Disbursement Due Date (unless such Disbursement is converted into a
         Base Rate Loan on the Disbursement Due Date), shall deposit with the
         Administrative Agent same day funds in an amount equal to the Dollar
         Equivalent of such Lender's Percentage of such Disbursement. Each
         Lender's obligation under this Section 2.6.1(b) shall be absolute and
         unconditional under any and all circumstances and irrespective of any
         Default or Event of Default under this Agreement or any other Loan
         Document.

                  (c) Each Lender (other than the Issuer) shall, to the extent
         of its Percentage in respect of Revolving Loans, be responsible for
         reimbursing promptly (and in any event within one Business Day) the
         Issuer for Reimbursement Obligations which have not been reimbursed by
         the Borrower in accordance with Section 2.6.3. In addition, such Lender
         shall, to the extent of its Percentage in respect of Revolving Loans,
         be entitled to promptly receive a ratable portion of the Letter of
         Credit fees payable pursuant to Section 3.3.3 with respect to each
         Letter of Credit and of interest payable pursuant to Section 2.6.2 with
         respect to any Reimbursement Obligation. To the extent that any Lender
         has reimbursed the Issuer for a Disbursement as required by this
         Section, such Lender shall be entitled to receive its ratable portion
         of any amounts subsequently received (from the Borrower or otherwise)
         in respect of such Disbursement."

         SUBPART 2.2.6. Amendment to Section 2.6.2. Section 2.6.2 of the Credit
Agreement is hereby amended by deleting the proviso at the end thereof and
inserting in lieu thereof the following proviso:

         "provided, however, that, if no Default shall have then occurred and be
         continuing, unless the Borrower has notified the Administrative Agent
         no later than one Business Day prior to the Disbursement Due Date that
         it will reimburse the Issuer for the applicable Disbursement, then the
         amount of the Disbursement, or, if the Disbursement was in a Foreign
         Currency, the Dollar Equivalent of the amount of the Disbursement,
         shall be deemed to be a Borrowing of Revolving Loans constituting Base
         Rate Loans and

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<PAGE>   9
         following the giving of notice thereof by the Administrative Agent to
         the Lenders, each Lender with a Revolving Loan Commitment (other than
         the Issuer) will deliver to the Issuer on the Disbursement Due Date
         immediately available funds in an amount equal to such Lender's
         Percentage of such Borrowing. Each conversion of Disbursement amounts
         into Revolving Loans shall constitute a representation and warranty by
         the Borrower that on the date of the making of such Revolving Loans all
         of the statements set forth in Section 5.2.1 are true and correct."

         SUBPART 2.3. Amendments to Article III. Article III of the Credit
Agreement is hereby amended as set forth in this Subpart 2.3.

         SUBPART 2.3.1. Amendment to Section 3.3.3. Section 3.3.3 of the Credit
Agreement is hereby amended in its entirety to read as set forth below:

                  "SECTION 3.3.3. Letter of Credit Fees. The Borrower agrees to
         pay to the Administrative Agent, for the pro rata account of the Issuer
         and each other Lender that has a Percentage of the Revolving Loan
         Commitment Amount of greater than zero, a Letter of Credit fee for each
         day on which there shall be any Letters of Credit outstanding, at a
         rate per annum equal to (i) with respect to each standby Letter of
         Credit and each Foreign Guaranty, the then Applicable Margin for
         Revolving Loans maintained as Eurodollar Loans, multiplied by the
         Stated Amount of each such Letter of Credit, and (ii) with respect to
         each documentary Letter of Credit, 1.25% per annum multiplied by the
         Stated Amount of each such Letter of Credit, such fees to be payable in
         the currency in which such Letter of Credit is denominated by the
         Borrower quarterly in arrears on each Quarterly Payment Date and on the
         Revolving Loan Commitment Termination Date for any period then ending
         for which such fees shall not theretofore have been paid. The Borrower
         further agrees to pay to the Issuer for its own account, quarterly in
         arrears on each Quarterly Payment Date, a fronting fee equal to 1/4 of
         1% per annum, multiplied by the Stated Amount of the applicable Letter
         of Credit payable in the currency in which such Letter of Credit is
         denominated. In addition, customary issuance costs, fees and expenses
         shall be payable to the Issuer for its own account."

         SUBPART 2.4. Amendment to Article X. Article X of the Credit Agreement
is hereby amended as set forth in this Subpart 2.4.

         SUBPART 2.4.1. New Section 10.16. A new Section 10.16 is hereby added
to the end of Article X of the Credit Agreement to read in its entirety as set
forth below:

                  "SECTION 10.16. Judgment Currency. (a) If, for the purpose of
         obtaining judgment in any court, it is necessary to convert a sum due
         hereunder, under any Note or under any other Loan Document in another
         currency into Dollars or into a Foreign Currency, as the case may be,
         the parties hereto agree, to the fullest extent that they may
         effectively do so, that the rate of exchange used shall be that at
         which, in accordance with

                                      -9-
<PAGE>   10
         normal banking procedures, the applicable Secured Party could purchase
         such other currency with Dollars or with such Foreign Currency, as the
         case may be, in New York City, at the close of business on the Business
         Day immediately preceding the day on which final judgment is given,
         together with any premiums and costs of exchange payable in connection
         with such purchase.

                  (b) The obligation of the Borrower in respect of any sum due
         from it to any Agent, any Lender or any other Secured Party hereunder,
         under any Note or under any other Loan Document shall, notwithstanding
         any judgment in a currency other than Dollars or a Foreign Currency, as
         the case may be, be discharged only to the extent that on the Business
         Day next succeeding receipt by such Agent, such Lender or such other
         Secured Party of any sum adjudged to be so due in such other currency,
         such Agent, such Lender or such other Secured Party may, in accordance
         with normal banking procedures, purchase Dollars or such Foreign
         Currency, as the case may be, with such other currency. If the Dollars
         or such Foreign Currency so purchased are less than the sum originally
         due to such Agent, such Lender or such other Secured Party in Dollars
         or in such Foreign Currency, the Borrower agrees, as a separate
         obligation and notwithstanding any such judgment, to indemnify such
         Agent, such Lender or such other Secured Party against such loss."

         SUBPART 2.5. Amendment to Issuance Request. The Issuance Request
attached as Exhibit B-2 to the Credit Agreement shall be amended in its entirety
to read as set forth on Annex I hereto.

                                    PART III

                           CONDITIONS TO EFFECTIVENESS

         SUBPART 3.1. Effective Date. This Amendment No. 1 shall become
effective as of the date (the "Amendment No. 1 Effective Date") when all of the
conditions set forth in this Subpart 3.1 shall have been satisfied.

         SUBPART 3.1.1. Execution of Counterparts. The Administrative Agent
shall have received counterparts of this Amendment No. 1 duly executed by the
Borrower, the Administrative Agent, the Issuer and the Required Lenders (or
evidence thereof satisfactory to the Administrative Agent). The delivery of an
executed counterpart hereof by the Borrower shall constitute a representation
and warranty by the Borrower that, on the Amendment No. 1 Effective Date, after
giving effect to this Amendment No. 1, all statements set forth in Section 5.2.1
of the Credit Agreement, as amended by Amendment No. 1, are true and correct as
of such date, except to the extent that such statement expressly relates to an
earlier date (in which case such statement shall be true and correct on and as
of such earlier date).

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<PAGE>   11
         SUBPART 3.1.2. Affirmation and Consent. The Administrative Agent shall
have received executed counterparts of the Affirmation and Consent to Amendment
No. 1 to Credit Agreement, dated the Amendment No. 1 Effective Date,
substantially in the form of Annex II hereto, duly executed and delivered by the
parties thereto.

         SUBPART 3III.1.3. Payment of Fees and Expenses. The Borrower hereby
agrees to pay and reimburse the Administrative Agent for all its reasonable fees
and expenses incurred in connection with the negotiation, preparation, execution
and delivery of this Amendment No. 1 and related documents, including all
reasonable fees and disbursements of counsel to the Administrative Agent.

         SUBPART 3.1.4. Legal Details, etc. The Administrative Agent and its
counsel shall have received all information, and such counterpart originals or
such certified or other copies of such materials, as the Administrative Agent or
its counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment No. 1 shall be reasonably
satisfactory to the Administrative Agent and its counsel. All documents executed
or submitted pursuant hereto or in connection herewith shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel.

         SUBPART 3.2. Limitation. Except as expressly provided hereby, all of
the representations, warranties, terms, covenants and conditions of the Credit
Agreement and each other Loan Document shall remain unamended and unwaived and
shall continue to be, and shall remain, in full force and effect in accordance
with their respective terms. The amendments, modifications and consents set
forth herein shall be limited precisely as provided for herein, and shall not be
deemed to be a waiver of, amendment of, consent to or modification of any other
term or provision of the Credit Agreement or of any term or provision of any
other Loan Document or other instrument referred to therein or herein, or of any
transaction or further or future action on the part of the Borrower or any other
Person which would require the consent of the Administrative Agent, the Issuer
or any of the Lenders under the Credit Agreement or any such other Loan Document
or instrument.

                                     PART IV

                                  MISCELLANEOUS

         SUBPART 4.1. Cross-References. References in this Amendment No. 1 to
any Part or Subpart are, unless otherwise specified, to such Part or Subpart of
this Amendment No. 1. References in this Amendment No. 1 to any Article or
Section are, unless otherwise specified, to such Article or Section of the
Credit Agreement.

         SUBPART 4.2. Loan Document Pursuant to Credit Agreement. This Amendment
No. 1 is a Loan Document executed pursuant to the Credit Agreement and shall
(unless otherwise

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<PAGE>   12
expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement, as amended
hereby, including Article X thereof.

         SUBPART 4.3. Counterparts, etc. This Amendment No. 1 may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
Agreement.

         SUBPART 4.4. Governing Law. THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         SUBPART 4.5. Successors and Assigns. This Amendment No. 1 shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

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<PAGE>   13
         IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be executed by their respective officers hereunto duly authorized as of the
day and year first above written.

                         TRUE TEMPER SPORTS, INC.

                         By:____________________________
                              Title:

                         THE FIRST NATIONAL BANK OF CHICAGO,
                            as Administrative Agent, Issuer and as a Lender

                         By:____________________________
                              Title:

                         DLJ CAPITAL FUNDING, INC.,
                            as Syndication Agent and as a Lender

                         By:____________________________
                              Title:

                         DONALDSON, LUFKIN & JENRETTE
                         SECURITIES CORPORATION,
                            as Arranger

                         By:____________________________
                              Title:

<PAGE>   14
                         SUMMIT BANK,
                             as a Lender

                         By:____________________________
                               Title:

                         THE PROVIDENT BANK,
                             as a Lender

                         By:____________________________
                               Title:

                         VAN KAMPEN AMERICAN CAPITAL
                         PRIME RATE INCOME TRUST,
                             as a Lender

                         By:____________________________
                               Title:

                         VAN KAMPEN AMERICAN CAPITAL
                         SENIOR FLOATING RATE FUND,
                             as a Lender

                         By:____________________________
                               Title:

                         KZH HIGHLAND-2 LLC,
                             as a Lender

                         By:____________________________
                               Title:

<PAGE>   15
                                                                         ANNEX I

                                                                     EXHIBIT B-2

                                ISSUANCE REQUEST

The First National Bank of Chicago,
  as Administrative Agent
One First National Plaza
Chicago, IL 60670-0286

Attention:  Dawn Sodaro

    Re:      Credit Agreement, dated as of September 30, 1998 (as amended,
             supplemented, amended and restated or otherwise modified from time
             to time, the "Credit Agreement"), among True Temper Sports, Inc., a
             Delaware corporation (the "Borrower"), the various financial
             institutions as are or may from time to time thereafter become
             parties thereto (the "Lenders"), DLJ Capital Funding, Inc., as the
             Syndication Agent, and The First National Bank of Chicago, as the
             Administrative Agent.

Ladies and Gentlemen:

     This Issuance Request is delivered to you pursuant to Section 2.6 of the
Credit Agreement. Unless otherwise defined herein, terms used herein have the
meanings assigned to them in the Credit Agreement.

     The Borrower hereby requests that on ________ __, ____ (the "Date of
Issuance") _______________ (the "Issuer") [issue a [U.S. Dollar Letter of
Credit][Foreign Currency Letter of Credit][Foreign Guaranty] in the initial
Stated Amount of _______________* with a Stated Expiry Date (as defined therein)
of ________ __, ____] [extend the Stated Expiry Date (as defined under
Irrevocable Standby Letter of Credit No.__, issued on ________ __, ____, in the
initial Stated Amount of ______________*) to a revised Stated Expiry Date (as
defined therein) of ________ __, ____] and containing the further terms and
conditions set forth in the attached Letter of Credit application.
     The beneficiary of the requested Letter of Credit will be _______________,
and such Letter of Credit will be in support of
________________________________.

--------
*        Insert amount in appropriate currency.

<PAGE>   16
     The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Credit Agreement, each of the delivery of this Issuance Request and the
[issuance][extension] of the Letter of Credit requested hereby constitutes a
representation and warranty by the Borrower that, on such date of [issuance]
[extension] all statements set forth in Section 5.2.1 are true and correct.

     The Borrower agrees that if, prior to the time of the [issuance]
[extension] of the Letter of Credit requested hereby, any matter certified to
herein by it will not be true and correct at such time as if then made, it will
immediately so notify the Administrative Agent. Except to the extent, if any,
that prior to the time of the issuance or extension requested hereby the
Administrative Agent shall receive written notice to the contrary from the
Borrower, each matter certified to herein shall be deemed to be so certified at
the date of such issuance or extension.

     IN WITNESS WHEREOF, the Borrower has caused this request to be executed and
delivered by its Authorized Officer this ____ day of ________, ____.

                         TRUE TEMPER SPORTS, INC.

                         By:____________________________
                         Title:

<PAGE>   17
                                                                        ANNEX II

                             AFFIRMATION AND CONSENT

                                           June 11, 1999

The Lenders (as defined below) and
The First National Bank of Chicago,
  as Administrative Agent for the Lenders
One First National Plaza
Chicago, Illinois 60670-0286

Attention: Dawn Sodaro

                            True Temper Sports, Inc.

Gentlemen and Ladies:

         This affirmation and consent is delivered to the Administrative Agent
and the Lenders pursuant to Subpart 3.1.2 of Amendment No. 1 to Credit
Agreement, dated as of the date hereof ("Amendment No. 1"), among True Temper
Sports, Inc., a Delaware corporation (the "Borrower"), the financial
institutions parties thereto (collectively, the "Lenders"), DLJ Capital Funding,
Inc. ("DLJ"), as syndication agent (the "Syndication Agent") for the Lenders,
The First National Bank of Chicago ("First Chicago"), as administrative agent
(the "Administrative Agent") for the Lenders and Donaldson, Lufkin & Jenrette
Securities Corporation, as Lead Arranger (the "Arranger"). Reference is also
made to the Credit Agreement, dated as of September 30, 1998 (as amended or
otherwise modified through the date hereof, the "Credit Agreement"), among the
Borrower, the Lenders, the Agents and the Arranger. Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.

         By its signature below, the undersigned hereby acknowledges and
consents to Amendment No. 1 and the Credit Agreement as amended thereby. The
undersigned hereby reaffirms as of the Amendment No. 1 Effective Date (as
defined in Amendment No. 1), its covenants and agreements contained in each Loan
Document to which it is a party, including, in each case, as such covenants and
agreements may be modified by Amendment No. 1. The undersigned hereby further
certifies that, as of the date hereof (both before and after giving effect to
the effectiveness of Amendment No. 1), its representations and warranties
contained in the Loan Documents to which it is a party are true and correct with
the same effect as if made on the

<PAGE>   18
date hereof, except to the extent any thereof refer or pertain solely to a date
prior to the date hereof. The undersigned further confirms that each Loan
Document to which it is a party is and shall continue to be in full force and
effect and the same are hereby ratified and confirmed in all respects, except
that upon the occurrence of the Amendment No. 1 Effective Date, all references
in such Loan Documents to the "Credit Agreement", "Loan Documents",
"thereunder", "thereof", or words of like import shall mean the Credit Agreement
and the Loan Documents, as the case may be, as in effect, as amended by
Amendment No. 1.

                                       -2-
<PAGE>   19
      IN WITNESS WHEREOF, the party hereto has executed and delivered this
Affirmation and Consent as of the date first above written.

                             TRUE TEMPER CORPORATION

                             By:___________________________
                                Title:<PAGE>   1
                                                                    Exhibit 10.6

                             TRUE TEMPER CORPORATION

                             1998 STOCK OPTION PLAN

<PAGE>   2

                             TRUE TEMPER CORPORATION
                             1998 STOCK OPTION PLAN

                                    1 ARTICLE

                                 PURPOSE OF PLAN

     The 1998 Stock Option Plan (the "Plan") of True Temper Corporation (the
"Company"), adopted by the Board of Directors and shareholders of the Company
effective September 30, 1998, is intended to advance the best interests of the
Company by providing executives and other key employees of the Company or any
Subsidiary (as defined below) who have substantial responsibility for the
management and growth of the Company or any Subsidiary with additional
incentives by allowing such employees to acquire an ownership interest in the
Company.  The Plan is a compensatory benefit plan within the meaning of Rule
701 under the Securities Act of 1933, as amended (the "Securities Act") and,
unless and until the Common Stock (as defined below) is publicly traded, the
issuance of stock purchase options ("Options") and Common Stock pursuant to the
Plan is intended to qualify for the exemption from registration under the
Securities Act provided by Rule 701.

                                    1 ARTICLE

                                   DEFINITIONS

     For purposes of the Plan the following terms have the indicated meanings:

     "Authorization Date" has the meaning ascribed thereto in Section 5.9(a)
hereof.

     "Affiliate" means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person.  For
purposes of this definition, "control" (including the terms "controlled by" and
"under common control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect
a majority of the board of directors or similar body governing the affairs of
such Person.

                                        2

<PAGE>   3

     "Board" means the Board of Directors of the Company.

     "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.

     "Committee" means the Compensation Committee or such other committee of
the Board as the Board may designate to administer the Plan or, if for any
reason the Board has not designated such a committee, the Board.  The
Committee, if other than the Board, shall be composed of two or more directors
as appointed from time to time by the Board.

     "Common Stock" means the Common Stock, $0.01 par value per share, of the
Company.

     "Election Notice" has the meaning ascribed thereto in Section 5.9(b)
hereof.

     "Fair Market Value" The term "Fair Market Value" of each share of Common
Stock shall mean the average of the closing prices of the sales of Common Stock
on all securities exchanges on which the Common Stock may at the time be
listed, or, if there have been no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices on all such exchanges at the
end of such day, or, if on any day the Common Stock is not so listed, the
average of the representative bid and asked prices quoted in the NASDAQ System
as of 4:00 PM, Eastern Time, or, if on any day the Common Stock is not quoted
in the NASDAQ System, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the National
Quotation Bureau Incorporated, or any similar successor organization, in each
such case averaged over a period of 21 days consisting of the day as of which
the Fair Market Value is being determined and the 20 consecutive trading days
prior to such day.  If at any time the Common Stock is not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the Fair Market Value shall be the fair value of the Common Stock
determined in good faith by the Board of Directors based on such factors as it
determines, whether on its own or in consultation with its advisors, to be
relevant to determining the valuation of the Common Stock (but in any event,
without taking into account the lack of liquidity and minority position of the
Common Stock subject to repurchase).

     "Measurement Date" means the date on which any taxable income resulting
from the exercise of an Option is determined under applicable federal income
tax law.

     "Option Agreement" has the meaning set forth in Section 6.1 hereof.

     "Option Shares" shall mean (i) all shares of Common Stock issued or
issuable upon the exercise of an Option and (ii) all shares of Common Stock
issued with respect to the Common Stock referred to in clause (i) above by way
of stock dividend or stock split or in connection with any conversion, merger,
consolidation or recapitalization or other reorganization affecting the Common
Stock.  Unless provided otherwise herein or in the Participant's Option

                                       3

<PAGE>   4

Agreement, Option Shares will continue to be Option Shares in the hands of any
holder other than the Participant (except for the Company), and each such
transferee thereof will succeed to the rights and obligations of a holder of
Option Shares hereunder.

     "Options" has the meaning set forth in the preamble hereof.

     "Participant" means any executive or other key employee of the Company or
any Subsidiary who has been selected to participate in the Plan by the
Committee or the Board.

     "Permitted Transferee" means those persons to whom the Participant is
authorized (1) pursuant to Section 5.9, to transfer Option Shares, or (2)
pursuant to Section 6.3, to transfer Options.

     "Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity.

     "Plan" has the meaning set forth in the preamble hereof.

     "Qualified Initial Public Offering" means an initial public offering of
shares of the Common Stock underwritten by an investment banking firm or firms
of national reputation (i) providing aggregate gross proceeds (before deducting
underwriting discounts, commissions and expenses) to the Company of at least
$50,000,000 and (ii) at a public offering price that represents an aggregate
valuation of the fully-diluted Common Stock immediately prior to such offering
of at least $100,000,000.

     "Repurchase Notice" has the meaning ascribed thereto in Section 5.8(b)
hereof.

     "Repurchase Option" has the meaning ascribed thereto in Section 5.8(a)
hereof.

     "Right of First Refusal" has the meaning ascribed thereto in Section
5.9(b) hereof.

     "Sale Notice" has the meaning ascribed thereto in Section 5.9(a) hereof.

     "Sale of the Company" means the sale of the Company to any Third Party or
Third Parties  pursuant to which such party or parties acquire (i) capital
stock of the Company possessing the voting power under normal circumstances to
elect a majority of the Board (whether by merger, consolidation or sale or
transfer of the Company's capital stock) or (ii) all or substantially all of
the Company's assets determined on a consolidated basis.

     "Securities Act" has the meaning ascribed thereto in Article 1 hereof.

                                       4

<PAGE>   5

     "Shareholders Agreement" means the Shareholders Agreement dated as of
September 30, 1998 by and among the Company, True Temper Sports LLC, Emhart
Industries, Inc. and other holders of the Company's capital stock.

     "Subsidiary" means any subsidiary corporation (as such term is defined in
Section 424(f) of the Code) of the Company.

     "Termination Date" shall mean the date upon which such Participant's
employment with the Company and all of its Subsidiaries terminated.

     "Third Party" means any Person which is not an Affiliate of the Company.

     "Withholding Amount" has the meaning ascribed thereto in Section 5.4(a)
hereof.

                                    1 ARTICLE

                                 ADMINISTRATION

     The Plan shall be administered by the Committee.  Subject to the
limitations of the Plan, the Committee shall have the sole and complete
authority to:  (i) select Participants, (ii) grant Options to Participants in
such forms and amounts as it shall determine, (iii) impose such limitations,
restrictions and conditions upon such Options as it shall deem appropriate,
(iv) interpret the Plan and adopt, amend and rescind administrative guidelines
and other rules and regulations relating to the Plan, (v) correct any defect or
omission or reconcile any inconsistency in the Plan or in any Options granted
under the Plan and (vi) make all other determinations and take all other
actions necessary or advisable for the implementation and administration of the
Plan.  The Committee's determinations on matters within its authority shall be
conclusive and binding upon the Participants, the Company and all other
persons.  All expenses associated with the administration of the Plan shall be
borne by the Company.  The Committee may, as approved by the Board and to the
extent permissible by law, delegate any of its authority hereunder to such
persons or entities as it deems appropriate.

                                       5

<PAGE>   6

                                    1 ARTICLE

                         LIMITATION ON AGGREGATE SHARES

     The number of shares of Common Stock with respect to which Options may be
granted under the Plan shall not exceed, in the aggregate, 1,020,679 shares,
subject to adjustment in accordance with Section 6.4.  To the extent any
Options expire unexercised or are canceled, terminated or forfeited in any
manner without the issuance of Common Stock thereunder, such shares shall again
be available under the Plan.  The shares of Common Stock available under the
Plan may consist of authorized and unissued shares, treasury shares or a
combination thereof, as the Committee shall determine.

                                    1 ARTICLE

                                     AWARDS

1.1 GRANT OF OPTIONS.  The Committee may grant Options to Participants from
time to time in accordance with this Article V.  Options granted under the Plan
may be nonqualified stock options or "incentive stock options" within the
meaning of Section 422 of the Code or any successor provision as specified by
the Committee; provided, however, that no incentive stock option may be granted
to any Participant who, at the time of grant, owns stock of the Company (or any
Subsidiary) representing more than 10% of the total combined voting power of
all classes of stock of the Company (or any Subsidiary), unless such incentive
stock option shall at the time of grant (a) have a termination date not later
than the fifth anniversary of the issuance date and (b) have an exercise price
per share equal to at least 110% of the Fair Market Value of a share of Common
Stock on the date of grant.  The exercise price per share of Common Stock under
each Option shall be determined by the Committee or the Board at the time of
grant; provided, however, that the exercise price per share of Common Stock
under each incentive stock option shall be fixed by the Committee at the time
of grant of the Option and shall equal at least 100% of the Fair Market Value
of a share of Common Stock on the date of grant, but not less than the par
value per share (as adjusted pursuant to Section 6.4).  Subject to Section 5.6,
Options shall be exercisable at such time or times as the Committee shall
determine; provided, however, that any option intended to be an incentive stock
option shall be treated as an incentive stock option only to the extent that
the aggregate Fair Market Value of the Common Stock (determined as of the date
of Option grant) with respect to which incentive stock options (but not
nonqualified options) are exercisable for the first time by any Participant
during any calendar year (under all stock option plans of the Company and its
Subsidiaries) does not exceed $100,000.  The Committee shall determine the term
of each Option, which term shall not exceed ten years from the date of grant of
the Option.

                                       6

<PAGE>   7

1.1 EXERCISE PROCEDURE.  Options shall be exercisable, to the extent they are
vested, by written notice to the Company (to the attention of the Company's
Secretary) accompanied by payment in full of the applicable exercise price.
Payment of such exercise price may be made (i) in cash (including check, bank
draft, money order or wire transfer of immediately available funds), (ii) if
approved by the Committee prior to exercise (or in the case of an incentive
stock option, if approved by the Committee in the Option Agreement) by delivery
of a full recourse promissory note of the Participant bearing interest at a
rate not less than the applicable federal rate determined pursuant to Section
1274 of the Code, (iii) in shares of Common Stock valued at their Fair Market
Value as of the date of exercise as provided in Section 5.3 below provided the
Participant has held such Common Stock at least six months prior to exercise of
the Option, or (iv) in a combination of the foregoing.
1.2
1.3 EXCHANGE OF PREVIOUSLY ACQUIRED STOCK.  The Committee, in its discretion
and subject to such conditions as the Committee may determine, may permit the
exercise price for the shares being acquired upon the exercise of an Option to
be paid, in full or in part, by the delivery to the Company of Common Stock.
Any Common Stock so delivered shall be treated as the payment of cash equal to
the aggregate Fair Market Value on the date of delivery of such Common Stock.
In the case of incentive stock options, the Committee shall specify in the
Option Agreement whether the option holder may satisfy the exercise price with
respect to shares of Common Stock purchased upon exercise of such Option by
delivering to the Company shares of previously acquired Common Stock.
1.4
1.5 WITHHOLDING TAX REQUIREMENTS.
1.6
(a) AMOUNT OF WITHHOLDING.  It shall be a condition of the exercise of any
Option  that the Participant exercising the Option make appropriate payment or
other provision acceptable to the Company with respect to any withholding tax
requirement arising from such exercise.  The amount of withholding tax
required, if any, with respect to any Option exercise (the "Withholding
Amount") shall be determined by the Treasurer or other appropriate officer of
the Company, and the Participant shall furnish such information and make such
representations as such officer requires to make such determination.
(b)
(c) WITHHOLDING PROCEDURE.  If the Company determines that withholding tax is
required with respect to any Option exercise, the Company shall notify the
Participant of the Withholding Amount, and the Participant shall pay to the
Company an amount not less than the Withholding Amount.  In lieu of making such
payment, the Participant may elect to pay the Withholding Amount by either (i)
delivering to the Company a number of shares of Common Stock having an
aggregate Fair Market Value as of the Measurement Date not less than the
Withholding Amount or (ii) directing the Company to withhold (and not to
deliver or issue to the Participant) a number of shares of Common Stock,
otherwise issuable upon the exercise of an Option, having an aggregate Fair
Market Value as of the Measurement Date not less than the Withholding Amount.
In addition, if the Committee approves, a Participant may elect pursuant to the
prior sentence to deliver or direct the withholding of shares of Common Stock
having an aggregate Fair Market

                                       7

<PAGE>   8

Value in excess of the minimum Withholding Amount but not in excess of the
Participant's applicable highest marginal combined federal income and state
income tax rate, as estimated in good faith by such Participant.  Any
fractional share interests resulting from the delivery or withholding of shares
of Common Stock to meet withholding tax requirements shall be settled in cash.
All amounts paid to or withheld by the Company and the value of all shares of
Common Stock delivered to or withheld by the Company pursuant to this Section
5.4 shall be deposited in accordance with applicable law by the Company as
withholding tax for the Participant's account.  If the Treasurer or other
appropriate officer of the Company determines that no withholding tax is
required with respect to the exercise of any Option (because such option is an
incentive stock option or otherwise), but subsequently it is determined that
the exercise resulted in taxable income as to which withholding is required (as
a result of a disposition of shares or otherwise), the Participant shall
promptly, upon being notified of the withholding requirement, pay to the
Company, by means acceptable to the Company, the amount required to be
withheld; and at its election the Company may condition the transfer of any
shares issued upon exercise of an incentive stock option upon receipt of such
payment.
(d)
1.7 NOTIFICATION OF INQUIRIES AND AGREEMENTS.  Each Participant and each
Permitted Transferee shall notify the Company in writing within 10 days after
the date such Participant or Permitted Transferee (i) first obtains knowledge
of any Internal Revenue Service inquiry, audit, assertion, determination,
investigation, or question relating in any manner to the value of Options
granted hereunder; (ii) includes or agrees (including, without limitation, in
any settlement, closing or other similar agreement) to include in gross income
with respect to any Option granted under this Plan (A) any amount in excess of
the amount reported on Form 1099 or Form W-2 to such Participant by the
Company, or (B) if no such Form was received, any amount; and/or (iii)
exercises, sells, disposes of, or otherwise transfers (other than to a
Permitted Transferee) an Option acquired pursuant to this Plan.  Upon request,
a Participant or Permitted Transferee shall provide to the Company any
information or document relating to any event described in the preceding
sentence which the Company (in its sole discretion) requires in order to
calculate and substantiate any change in the Company's tax liability as a
result of such event.
1.8
1.9 CONDITIONS AND LIMITATIONS ON EXERCISE.  At the discretion of the
Committee, exercised at the time of grant, Options may vest, in one or more
installments, upon (i) the fulfilment of certain conditions, (ii) the passage
of a specified period of time, (iii) the occurrence of certain events and/or
(iv) the achievement by the Company or any Subsidiary of certain performance
goals.  In the event of a Sale of the Company, the Committee may provide, in
its discretion, that the Options shall become immediately vested and that such
Options shall terminate if not exercised as of the date of the Sale of the
Company or any other designated date (the "Designated Date") or that such
Options shall thereafter represent only the right to receive the excess of the
consideration per share of Common Stock offered in such Sale of the Company
over the exercise price of such Options.  The Company shall give all
Participants notice of an impending Sale of the Company at least 15 days prior
to the date of such Sale of the Company or the Designated Date, whichever is
earlier.
1.10

                                       8

<PAGE>   9

1.11 EXPIRATION OF OPTIONS.
1.12
(a) NORMAL EXPIRATION.  In no event shall any part of any Option be exercisable
after the stated date of expiration thereof.

(a) EARLY EXPIRATION UPON TERMINATION OF EMPLOYMENT.  Any part of any Option
that was not vested on a Participant's Termination Date shall expire and be
forfeited on such date, and any part of any Option that was vested on the
Termination Date shall also expire and be forfeited to the extent not
theretofore exercised on the thirtieth (30th) day (one year, if termination is
caused by the Participant's death or disability) following the Termination
Date, but in no event after the stated date of expiration thereof.

1.1 RIGHT TO PURCHASE OPTION SHARES UPON TERMINATION OF EMPLOYMENT.
1.2
     (a) REPURCHASE RIGHT.  In the event a Participant's employment with the
Company is terminated for any reason, the Option Shares (whether held by such
Participant or one or more transferees and including any Option Shares acquired
subsequent to such termination of employment) will be subject to repurchase by
the Company pursuant to the terms and conditions set forth in this Section 5.8
(the "Repurchase Option") at a price per share equal to the Fair Market Value
thereof determined as of the Termination Date.

     (b) REPURCHASE NOTICE.  The Board may elect to purchase all or any portion
of the Option Shares by delivery of written notice (the "Repurchase Notice") to
the holder or holders of the Option Shares within 180 days after the
Termination Date (or if termination is caused by the Participant's death or
disability, 180 days after the expiration of the Options held by such
Participant).  The Repurchase Notice will set forth the number of Option Shares
to be acquired from such holder, the aggregate consideration to be paid for
such shares and the time and place for the closing of the transaction.

     (c) CLOSING OF REPURCHASE.  The closing of the repurchase transaction will
take place on the date designated by the Company in the Repurchase Notice,
which date will not be more than 45 days nor less than 10 days after the
delivery of such notice.  The Company will pay for the Option Shares to be
purchased pursuant to the Repurchase Option by delivering, at the option of the
Company to such Participant and/or the other holder(s), (1) a check in the
amount of the aggregate sale price of the Option Shares to be repurchased or
(2) if the aggregate consideration to be paid to such holder(s) of Option
Shares exceeds $50,000, a check in the amount of 20% of the aggregate sale
price of the Option Shares to be repurchased and a subordinated promissory note
in a principal amount equal to the remainder of the aggregate sale price,
bearing interest at a floating rate of interest equal to the prime rate as
stated from time to time by Chemical Bank or any successor thereto, and
payable, as to principal and interest, in four equal annual installments on the
first four anniversaries of the closing of such repurchase; provided that if
the Company determines that withholding tax is required with respect to the
exercise of a Repurchase Option, the Company shall withhold an amount equal to
such

                                       9

<PAGE>   10

withholding tax from the purchase price.  At the closing, the Participant and
each other seller will deliver the certificates representing the Option Shares
to be sold duly endorsed in form for transfer to the Company or its designee,
and the Company will be entitled to receive customary representations and
warranties from the Participant and the other sellers regarding title to the
Option Shares.

1.1 RESTRICTIONS ON TRANSFER.
1.2
(a) RESTRICTIONS.  A Participant may not sell, pledge or otherwise transfer any
interest in any Option Shares except pursuant to the provisions of this Section
5.9.  At least 60 days prior to making any transfer, the Participant proposing
such transfer shall deliver a written notice (the "Sale Notice") to the
Company.  The Sale Notice will disclose in reasonable detail the identity of
the prospective transferee(s) and the terms and conditions of the proposed
transfer.  Such Participant (and such Participant's transferees) shall not
consummate any such transfer until 60 days after the Sale Notice has been
delivered to the Company, unless the Company has notified such Participant in
writing that it will not exercise its rights under this Section 5.9.  (The date
of the first to occur of such events is referred to herein as the
"Authorization Date").

     (b) REPURCHASE OPTION.  The Company may elect to purchase all or any
portion of the Option Shares to be transferred upon the same terms and
conditions as those set forth in the Sale Notice (the "Right of First Refusal")
by delivering a written notice of such election to such Participant within 30
days after the receipt of the Sale Notice by the Company (the "Election
Notice").  If the Company has not elected to purchase all of the Option Shares
specified in the Sale Notice, such Participant may transfer the Option Shares
not purchased by the Company to the prospective transferee(s) as specified in
the Sale Notice at a price and on terms no more favorable to the transferee(s)
thereof than specified in the Sale Notice during the 60-day period immediately
following the Authorization Date.  Any Option Shares not so transferred within
such 60-day period must be reoffered to the Company in accordance with the
provisions of this Section 5.9 in connection with any subsequent proposed
transfer.

     (c) EXCEPTIONS.  The restrictions contained in this Section 5.9 will not
apply with respect to transfers of Option Shares pursuant to applicable laws of
descent and distribution; provided that the restrictions contained in this
paragraph will continue to be applicable to the Option Shares after any such
transfer and the transferees of such Option Shares have agreed in writing to be
bound by the terms and provisions of this Plan and the Option grant, as amended
from time to time.

1.1 TERMINATION OF RESTRICTIONS.  The rights and obligations set forth in
Sections 5.8 and 5.9 hereof will terminate upon the earlier of (A) the
consummation by the Company of a Qualified Initial Public Offering or (B) the
sale of Option Shares in accordance with the terms and conditions of Section
5.9 (except for a transfer pursuant to Section 5.9 (c)); provided that with
respect to clause (B) above, such rights and obligations shall terminate only
with respect to those Option Shares sold.

                                       10

<PAGE>   11

1.2
1 ARTICLE
2
                               GENERAL PROVISIONS

1.1 WRITTEN AGREEMENT.  Each Option granted hereunder shall be embodied in a
written  agreement (the "Option Agreement") which shall be signed by the
Participant to whom the Option is granted and shall be subject to the terms and
conditions set forth herein.

1.1 LISTING, REGISTRATION AND LEGAL COMPLIANCE.  If at any time the Committee
determines, in its discretion, that the listing, registration or qualification
of the shares subject to Options upon any securities exchange or under any
state or federal securities or other law or regulation, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to or in connection with the granting of Options or the purchase or
issuance of shares thereunder, no Options may be granted or exercised, in whole
or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.  The holders of such Options will supply the
Company with such certificates, representations and information as the Company
shall request and shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval.  In the case of
officers and other persons subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended, the Committee may at any time impose any limitations
upon the exercise of Options that, in the Committee's discretion, are necessary
or desirable in order to comply with such Section 16(b) and the rules and
regulations thereunder.  If the Company, as part of an offering of securities
or otherwise, finds it desirable because of federal or state regulatory
requirements to reduce the period during which any Options may be exercised,
the Committee may, in its discretion and without the Participant's consent, so
reduce such period on not less than 15 days' written notice to the holders
thereof.
1.2
1.3 OPTIONS NOT TRANSFERRABLE.  Options may not be transferred other than by
will or the laws of descent and distribution and, during the lifetime of the
Participant to whom they were granted, may be exercised only by such
Participant (or, if such Participant is incapacitated, by such  Participant's
legal guardian or legal representative).  In the event of the death of a
Participant, Options which are not vested on the date of death shall terminate;
exercise of Options granted hereunder to such Participant, which are vested as
of the date of death, may be made only by the executor or administrator of such
Participant's estate or the person or persons to whom such Participant's rights
under the Options will pass by will or the laws of descent and distribution.

                                       11

<PAGE>   12

1.1 ADJUSTMENTS.  In the event of a reorganization, recapitalization, stock
dividend or stock split, or combination or other change in the shares of Common
Stock, the Board or the Committee may, in order to prevent the dilution or
enlargement of rights under the Plan or outstanding Options, adjust (1) the
number and type of shares as to which options may be granted under the Plan,
(2) the number and type of shares covered by outstanding Options, (3) the
exercise prices specified therein and (4) other provisions of this Plan which
specify a number of shares, all as such Board or Committee determines to be
appropriate and equitable.

1.1 RIGHTS OF PARTICIPANTS.  Nothing in the Plan shall interfere with or limit
in any way the right of the Company or any Subsidiary to terminate any
Participant's employment at any time (with or without cause), or confer upon
any Participant any right to continue in the employ of the Company or any
Subsidiary for any period of time or to continue to receive such Participant's
current (or other) rate of compensation.  No employee shall have a right to be
selected as a Participant or, having been so selected, to be selected again as
a Participant.
1.2
1.3 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN.  The Board or the Committee
may suspend or terminate the Plan or any portion thereof at any time and may
amend it from time to time in such respects as the Board or the Committee may
deem advisable; provided, however, that no such amendment shall be made without
shareholder approval to the extent such approval is required by law, agreement
or the rules of any exchange upon which the Common Stock is listed, and no such
amendment, suspension or termination shall impair the rights of Participants
under outstanding Options without the consent of the Participants affected
thereby, except as provided below.  No Options shall be granted hereunder after
the tenth anniversary of the adoption of the Plan.
1.4
1.5 AMENDMENT OF OUTSTANDING OPTIONS.  The Committee may amend or modify any
Option in any manner to the extent that the Committee would have had the
authority under the Plan initially to grant such Option; provided that, except
as expressly contemplated elsewhere herein or in any agreement evidencing such
Option, no such amendment or modification shall impair the rights of any
Participant under any outstanding Option without the consent of such
Participant provided further, that the Committee may accelerate the expiration
of any outstanding option if the Committee determines that such modification is
necessary or desirable in order to facilitate the sale of the Company and any
such acceleration provides the participant reasonable time to exercise
outstanding Options prior to such expiration.
1.6
1.7 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
Committee shall be indemnified by the Company against (i) all costs and
expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted under the Plan, and (ii) 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

                                       12

<PAGE>   13

judgment in any such action, suit or proceeding; provided, however, that any
such Committee member shall be entitled to the indemnification rights set forth
in this Section 6.9 only if such member (1) acted in good faith and in a manner
that such member reasonably believed to be in, and not opposed to, the best
interests of the Company, and (2) with respect to any criminal action or
proceeding, (A) had no reasonable cause to believe that such conduct was
unlawful, and (B) upon the institution of any such action, suit or proceeding a
Committee member shall give the Company written notice thereof and an
opportunity to handle and defend the same before such Committee member
undertakes to handle and defend it on his own behalf.
1.8
1.9 RESTRICTED SECURITIES.  All Common Stock issued pursuant to the terms of
this Plan shall constitute "restricted securities," as that term is defined in
Rule 144 promulgated by the Securities and Exchange Commission pursuant to the
Securities Act, and may not be transferred except in compliance with the
registration requirements of the Securities Act or an exemption therefrom.
1.10
1.11
                             *    *    *    *    *

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