UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission file number 000-21827
-------------
AMSCAN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3911462
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
80 Grasslands Road
Elmsford, New York 10523
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 345-2020
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Number of shares of the registrant's Common Stock, par value $0.10 per share,
outstanding as of May 12, 1997: 21,120,476
<PAGE>
AMSCAN HOLDINGS, INC.
FORM 10-Q
MARCH 31, 1997
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION PAGE
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED BALANCE SHEETS AT MARCH 31, 1997
AND DECEMBER 31, 1996 3
CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE
MONTHS ENDED MARCH 31, 1997 AND 1996 4
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1997 5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED MARCH 31, 1997 AND 1996 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 14
SIGNATURES................................................................15
<PAGE>
AMSCAN HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1997 1996
---------- ------------
(UNAUDITED) (NOTE)
ASSETS (IN THOUSANDS)
Cash and cash equivalents $ 2,118 $ 1,589
Accounts receivable, net of allowances 50,814 37,378
Inventories 39,951 45,693
Deposits and other current assets 8,393 11,360
------- ------
Total current assets 101,276 96,020
Property, plant and equipment, net 35,534 34,663
Intangible assets, net 7,380 7,443
Other assets 2,577 2,148
------- -------
Total assets $146,767 $140,274
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Loans and notes payable $ 25,483 $ 29,328
Subordinated and other indebtedness due
to stockholders 1,236 1,393
Accounts payable 5,287 7,128
Accrued expenses 8,352 9,403
Income taxes payable 4,279 822
Current portion of long-term obligations 2,567 2,541
------- -------
Total current liabilities 47,204 50,615
Long-term obligations, excluding current
portion 14,958 15,085
Deferred tax liabilities 5,586 5,662
Other 1,038 963
------- -------
Total liabilities 68,786 72,325
Stockholders' equity:
Preferred Stock ($0.10 par value; 5,000,000
shares authorized; none issued and
outstanding) - -
Common Stock ($0.10 par value; 50,000,000
shares authorized; 21,120,476 and
20,698,076 shares issued and outstanding,
respectively) 2,112 2,070
Additional paid-in capital 66,000 61,503
Retained earnings 10,050 4,748
Foreign currency translation adjustment (181) (372)
------- -------
Total stockholders' equity 77,981 67,949
------- -------
Total liabilities and stockholders'
equity $146,767 $140,274
======= =======
Note: The balance sheet at December 31, 1996 has been derived from the
audited consolidated financial statements at that date.
See accompanying notes to consolidated financial statements.
3
<PAGE>
AMSCAN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
-------- --------
(In thousands, except per share amounts)
Sales, net $ 53,176 $ 47,258
Cost of sales 34,410 30,403
------- ------
Gross profit 18,766 16,855
Operating expenses:
Selling 3,099 2,973
General and administrative 4,364 3,994
Art and development 1,274 1,202
Special bonuses - 1,100
------- ------
Total operating expenses 8,737 9,269
------- ------
Income from operations 10,029 7,586
Interest expense, net 984 1,480
Other income, net (27) (172)
------- ------
Income before income taxes and
minority interests 9,072 6,278
Income taxes 3,728 219
Minority interests 42 266
------- ------
Net income $ 5,302 $ 5,793
======= ======
Pro forma data (Note 6):
Income before income taxes $ 6,012
Pro forma income tax expense 2,484
------
Pro forma net income $ 3,528
======
Net income per share $ 0.25
=======
Weighted average common shares
outstanding 21,082,929
==========
See accompanying notes to consolidated financial statements.
4
<PAGE>
AMSCAN HOLDINGS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FOREIGN
ADDITIONAL CURRENCY
COMMON PAID-IN RETAINED TRANSLATION
STOCK CAPITAL EARNINGS ADJUSTMENT TOTAL
------ ---------- -------- ----------- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance as of December 31, 1996 $2,070 $61,503 $ 4,748 $(372) $67,949
Net income - - 5,302 - 5,302
Net proceeds from sale of Common
Stock (Note 3) 42 4,497 - - 4,539
Net change in translation adjustment - - - 191 191
------ ------- ------- ------ -------
Balance as of March 31, 1997 $2,112 $66,000 $10,050 $(181) $77,981
======= ======= ======= ====== =======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
AMCAN HOLDINGS, INC.
CONSOLIDATED CASH FLOW STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
------ ------
(in thousands)
Cash flows from operating activities:
Net income $ 5,302 $ 5,793
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 1,484 1,248
Provision for doubtful accounts 327 85
Changes in operating assets and
liabilities:
Increase in accounts receivable (13,767) (11,527)
Decrease (increase) in inventories 5,742 (2,237)
Decrease (increase) in deposits
and other current assets 2,967 (3,343)
Increase in accounts payable,
accrued expenses and income
taxes payable 565 2,880
Other, net (448) (1,179)
--------- ---------
Net cash provided by (used in)
operating activities 2,172 (8,280)
Cash flows from investing activities:
Capital expenditures (2,283) (988)
--------- ---------
Net cash used in investing activities (2,283) (988)
Cash flows from financing activities:
Net proceeds from sale of Common Stock 4,539 -
Proceeds from loans, notes payable and
long-term obligations 825 10,052
Repayment of loans, notes payable and
long-term obligations (4,830) (669)
Proceeds from subordinated and other
indebtedness due to stockholders - 25
Repayment of subordinated and other
indebtedness due to stockholders (157) (802)
Subchapter S and other distributions - (151)
--------- ---------
Net cash provided by financing
activities 377 8,455
Effect of exchange rate changes on cash and
cash equivalents 263 84
--------- ---------
Net increase (decrease) in cash and cash
equivalents 529 (729)
Cash and cash equivalents at beginning
of period 1,589 2,492
--------- ---------
Cash and cash equivalents at end of period $2,118 $1,763
========= =========
SUPPLEMENTAL DISCLOSURE:
Interest paid $1,019 $1,746
Taxes paid $ 532 $ 185
Supplemental information on non-cash activities (dollars in thousands):
Capital lease obligations of $59 were incurred during the three months ended
March 31, 1997. There were no capital lease obligations incurred for the
three months ended March 31, 1996.
See accompanying notes to consolidated financial statements.
6
<PAGE>
AMSCAN HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS
Amscan Holdings, Inc. ("Amscan Holdings") was incorporated on October 3,
1996 for the purpose of becoming the holding company for Amscan Inc. and
certain affiliated entities in connection with an initial public offering of
Common Stock ("IPO") involving the sale of 4,000,000 shares of its Common
Stock at $12.00 per share. The IPO was completed on December 18, 1996
pursuant to which the principal stockholder (the "Principal Stockholder")
and certain affiliates of the Principal Stockholder exchanged shares in
Amscan Inc. and certain affiliates for 15,024,616 and 138,461 shares,
respectively, in Amscan Holdings (the "Organization") and in the case of
the Principal Stockholder, $133,000 in cash. Prior to the IPO, certain
subsidiaries of Amscan Holdings were operated as Subchapter S corporations
for federal and, where available, for state income tax purposes. In
connection with the IPO, such subsidiaries declared a dividend representing
distributions of accumulated Subchapter S corporation profits and a return
of capital. These amounts were reflected as subordinated debt and repaid
from the net proceeds of the IPO.
Amscan Holdings and its subsidiaries (collectively the "Company") design,
manufacture, contract for manufacture and distribute party and novelty goods
principally in the United States, Canada and Europe.
NOTE 2: BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Amscan
Holdings and its majority-owned subsidiaries (or with respect to less than
majority- owned subsidiaries, on the equity basis). In connection with the
IPO, there was a transfer of ownership between the former stockholders of
Amscan Inc. and certain of its affiliates and Amscan Holdings whereby Amscan
Holdings became the holding company for the business conducted by Amscan Inc.
and certain of its affiliates. Such transfer of ownership was accounted for
in a manner similar to a pooling of interests and resulted in Amscan Inc.,
Am-Source, Inc., JCS Realty Corp. and SSY Realty Corp. being taxed as
Subchapter C corporations under federal and certain state income tax
requirements. For the period prior to December 18, 1996, financial statements
are presented on a combined basis. Certain reclassifications have been made
to conform to the current year's presentation.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month period
ended March 31, 1997 are not necessarily indicative of the results that may
be expected for the year ended December 31, 1997. The results of operations
may be affected by seasonal factors such as the timing of holidays or industry
factors that may be specific to a particular period, such as movement in and
the general level of raw material costs. For further information, see the
financial statements and footnotes thereto included in the Amscan Holdings,
Inc. annual report on Form 10-K for the year ended December 31, 1996.
7
<PAGE>
AMSCAN HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 3: COMMON STOCK
On January 8, 1997, an additional 422,400 shares of the Company's Common
Stock were sold at $12.00 per share to cover the over-allotment option as
provided for in the underwriting agreement between the Company and the
underwriters associated with the IPO. The proceeds, net of underwriters'
discount, fees and expenses, of $4,538,984 were used to repay borrowings
outstanding to banks.
NOTE 4: INVENTORIES
Inventories consisted of the following:
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
(IN THOUSANDS)
Finished goods $37,646 $42,127
Raw materials 2,378 3,863
Work-in-process 1,448 1,388
------- -------
41,472 47,378
Less: reserve for slow moving and obsolete
inventory (1,521) (1,685)
------- -------
$39,951 $45,693
======= =======
Substantially all inventories are valued at the lower of cost, determined
on a first in - first out basis, or market.
NOTE 5: NET INCOME PER COMMON SHARE
Net income per common share is computed by dividing net income by the
weighted average number of common shares outstanding for the period.
NOTE 6: INCOME TAXES
The consolidated income tax provision for the three months ended March
31, 1997 was determined based upon an estimate of the Company's consolidated
effective income tax rates for the year ending December 31, 1997. The
differences between the consolidated effective income tax rate and the U.S.
Federal statutory rate are primarily attributable to state income taxes and
the effects of foreign operations.
The amounts shown as income taxes for the three months ended March 31,
1996 consisted principally of foreign taxes.
8
<PAGE>
AMSCAN HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
Pro forma net income for the three months ended March 31, 1996 gives
effect to pro forma income tax provisions at an estimated effective tax rate
(40.5%) assuming Amscan Inc., Am- Source, Inc., JCS Realty Corp., and SSY
Realty Corp. had not elected Subchapter S corporation status for those
periods.
9
<PAGE>
ITEM 2 . MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
PERCENTAGE OF NET SALES
THREE MONTHS ENDED MARCH 31,
-----------------------------
1997 1996
------ ------
Net sales 100.0% 100.0%
Cost of sales 64.7 64.3
------ ------
Gross profit 35.3 35.7
Operating expenses:
Selling 5.8 6.3
General and administrative 8.2 8.5
Art and development 2.4 2.5
Special bonuses - 2.3
------ ------
Total operating expenses 16.4 19.6
------ ------
Income from operations 18.9 16.1
Interest expense, net 1.9 3.1
Other income, net (0.1) (0.4)
------ ------
Income before income taxes
and minority interests 17.1 13.4
Income taxes 7.0 0.5
Minority interests 0.1 0.6
------ ------
Net income 10.0% 12.3%
====== ======
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31,
1996
NET SALES
Net sales for the three months ended March 31, 1997 were $53.2 million, an
increase of 12.5% over the three months ended March 31, 1996 for which net
sales were $47.3 million. Increased sales to national accounts, principally
party superstores, accounted for the majority of the increase. Also,
contributing to this sales increase was the impact of the Company's marketing
strategy of continually offering new products as well as new designs and themes
for existing products.
GROSS PROFIT
Gross profit increased $1.9 million for the three months ended March 31,
1997 compared to the same period in 1996. However, gross profit decreased as a
percentage of sales from 35.7% to 35.3% due to start-up costs associated with
the addition of a new distribution facility and increases in manufacturing
capacity.
SELLING EXPENSES
Selling expenses of $3.1 million for the three months ended March 31, 1997
were comparable to those of the corresponding quarter in 1996. Selling
expenses decreased as a percentage of net sales from 6.3% to 5.8%, primarily
due to the Company's ability to increase sales to its party superstore
customers while not significantly increasing its sales costs associated with
those accounts.
10
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses of $4.4 million increased $0.4 million
for the three months ended March 31, 1997 as compared to the corresponding
period in 1996. This increase is principally attributable to an increase in
the provision for bad debts of $0.3 million or 0.6% of net sales. Also
contributing to this increase are additional personnel costs of $0.1 million or
0.2% of net sales and increased occupancy costs of $0.1 million or 0.2% of net
sales related to the Company's new corporate offices, which are partially
offset by non-recurring corporate office relocation costs incurred in the first
quarter of 1996 of $0.1 million or 0.2% of net sales. As a percentage of net
sales, general and administrative expenses decreased from 8.5% to 8.2%
principally due to the previously mentioned increase in sales.
ART AND DEVELOPMENT COSTS
Art and development costs of $1.3 million for the three months ended March
31, 1997 were comparable to those for the three months ended March 31, 1996.
As a percentage of net sales, art and development costs decreased slightly from
2.5% to 2.4%. In 1996, the Company significantly expanded its creative and new
product development staff and internal development capabilities. The continued
investment in art and development expenditures in 1997 reflects the Company's
strategy to remain a leader in product quality and development.
SPECIAL BONUSES
The employment agreements which gave rise to special bonuses during the
first quarter of 1996 were substantially modified at the time of the IPO in
December 1996 to eliminate future special bonus payments. Such bonuses, which
were based entirely upon the pre-tax income of Amscan Inc. and certain
affiliates, were $1.1 million for the three months ended March 31, 1996.
INTEREST EXPENSE, NET
Interest expense, net decreased by $0.5 million to $1.0 million for the
three months ended March 31, 1997, as the net proceeds received from the
issuance of Common Stock in December 1996 and January 1997 in connection with
the IPO were used to reduce indebtedness under the Company's line of credit and
to repay subordinated debt.
INCOME TAXES
Income taxes were $3.7 million for the three months ended March 31, 1997.
Prior to the IPO, Amscan Inc., Am-Source, Inc., JCS Realty Corp. and SSY Realty
Corp. were taxed as Subchapter S corporations for federal income tax and, where
available, for state income tax purposes. Accordingly, these entities were not
subject to federal and state income taxes except in states which do not
recognize Subchapter S corporation status. In connection with the IPO, the
aforementioned companies, became subject to federal and state income taxes.
The amounts shown as income taxes for the three months ended March 31, 1996
consisted principally of foreign taxes.
MINORITY INTERESTS
Minority interests represent the portion of income of the Company's
subsidiaries attributable to equity ownership not held by Amscan Holdings, Inc.
In addition to the minority interests of certain foreign entities, the amounts
for the three months ended March 31, 1996 include a 50% minority interest in
Am-Source, Inc. On December 18, 1996, the Company acquired the minority
interest in Am-Source, Inc. not previously owned.
LIQUIDITY AND CAPITAL RESOURCES
Management believes that the Company's working capital requirements will
be met for at least the next 12 months by cash flow from operations and
borrowings under its line of credit.
11
<PAGE>
At March 31, 1997, the Company has a revolving line of credit with several
banks which provides the Company with a $55.0 million credit line based upon
the eligible assets of the Company. The amount available under this facility
will increase to $60.0 million on September 20, 1997. The facility expires on
September 20, 2000. The Company and its subsidiaries on a consolidated basis
are also subject to financial covenants which require them to maintain a
certain threshold tangible net worth, limit capital expenditures and require
the Company and its subsidiaries to maintain certain financial ratios. The
Company is not currently in default in respect of any of these restrictive
covenants or financial ratios. The Company may seek to enter into new
arrangements to replace this revolving credit facility which might include both
term debt and revolving credit.
Net cash provided by operating activities increased by $10.5 million to
$2.2 million for the three months ended March 31, 1997 compared to the same
period in 1996 as a result of lower levels of inventories and deposits and
other, partially offset by decreases in accounts payable and accrued expenses.
Net cash used in investing activities of $2.3 million for the three months
ended March 31, 1997 consisted solely of capital expenditures and increased by
$1.3 million from the same period in 1996. Net cash provided by financing
activities decreased by $8.1 million to $0.4 million for the three months ended
March 31, 1997 as the net proceeds of $4.5 million received from the sale of
the Company's Common Stock to cover the exercise of the underwriters' over-
allotment option was substantially offset by the repayment of bank and
subordinated indebtedness and a lower level of borrowings.
Accounts receivable, net increased $13.4 million to $50.8 million on March
31, 1997 from $37.4 million on December 31, 1996. This increase is due to
increased sales and extended terms given to customers in association with new
promotions.
Inventories decreased $5.7 million to $40.0 million on March 31, 1997 from
$45.7 million on December 31, 1996 due to shipments of "everyday" goods to
customers. Inventory is built-up towards the end of the year in preparation of
the new "everyday" line. Improved management of inventory levels has also
contributed to the decrease in inventory levels.
Deposits and other current assets decreased $3.0 million to $8.4 million
on March 31, 1997 from December 31, 1996, principally the result of a net
reduction in deposits related to various operating leases for manufacturing and
warehouse equipment as well as office equipment and computer software.
Property, plant and equipment, net increased $0.9 million to $35.5 million
on March 31, 1997 from $34.7 million on December 31, 1996. This increase is
primarily due to manufacturing and warehouse equipment acquired, partially
offset by depreciation.
Loans and notes payable decreased $3.8 million and Common Stock and
additional paid-in capital increased by $4.5 million from December 31, 1996 to
March 31, 1997 as net proceeds from the sale of the Company's Common Stock to
cover the exercise of the underwriters' over-allotment option were used
principally to repay bank indebtedness.
Income taxes payable increased $3.5 million to $4.3 million on March 31,
1997 from December 31, 1996. This increase is primarily due to the change in
tax status. In connection with the IPO on December 18, 1996, Amscan Inc., Am-
Source, Inc., JCS Realty Corp. and SSY Realty Corp. terminated their Subchapter
S corporation status and, accordingly, are subject to federal and state income
taxes.
Third party financings for the three months ended March 31, 1997 consisted
primarily of borrowings under credit and long-term loans secured by machinery
and equipment. The Company used $4.5 million of the cash in the first quarter
of 1997 to fund its working capital needs, which consisted primarily of
increases in accounts receivable, partially offset by decreases in inventories
and deposits and other.
12
<PAGE>
Management believes that there is adequate capacity to support its
operations for at least the next 12 months. As of March 31, 1997, the Company
did not have material commitments for capital expenditures other than for
machinery and equipment which will be leased under the operating lease entered
into in 1996.
RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128 - Earnings per
Share, effective for interim and annual periods ending after December 15, 1997.
The Company does not believe that the impact of SFAS 128 will have a
significant impact on its earnings per share calculation.
Other pronouncements issued by the FASB or other authoritative accounting
standards groups with future effective dates are either not applicable or not
significant to the financial statements of the Company.
"SAFE HARBOR" STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements contained in this report, and in particular in this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," statements in other filings with the Securities and Exchange
Commission and statements in other public documents of the Company may be
forward looking and are subject to a variety of risks and uncertainties. Many
factors could cause actual results to differ materially from these statements.
These factors include, but are not limited to, (1) the concentration of sales
by the Company to party goods superstores where the reduction of purchases by a
small number of customers could materially reduce the Company's sales and
profitability, (2) the concentration of the Company's credit risk in the party
goods superstores which are generally privately held and have expanded rapidly
in recent years, (3) the failure by the Company to anticipate tastes and
preferences of party goods retailers and consumers, (4) the introduction of new
products by the Company's competitors, (5) the inability of the Company to
increase prices to recover fully future increases in raw material prices,
especially increases in paper prices, (6) the loss of key employees (including
John A. Svenningsen, the Company's Chairman and Chief Executive Officer, who
has been undergoing treatment for lymphoma) and (7) other factors which might
be described from time to time in the Company's filings with the Securities and
Exchange Commission. In addition, the Company is subject to the effects of
changes in general business conditions.
Although the Company believes that it has the product offerings and
resources needed for continuing success, future revenue and margin trends
cannot be reliably predicted. These trends may cause the Company to adjust its
operations in the future. Factors external to the Company can also affect the
price of the Company's Common Stock. Because of the foregoing and other
factors, recent trends should not be considered reliable indicators of future
financial results or stock prices.
13
<PAGE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
10 1996 Stock Option Plan for Key Employees, as amended to
April 1, 1997
27 Financial Data Schedule
(b) Reports on Form 8 - K
No reports on Form 8 - K were filed during the quarter for
which this report is being filed.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMSCAN HOLDINGS, INC.
By: /s/ James M. Harrison
---------------------------------
James M. Harrison
Chief Financial Officer
(on behalf of the registrant and as
Date: May 13, 1997 principal financial and accounting
officer)
[As amended to April 1, 1997]
Amscan Holdings, Inc.
1996 Stock Option Plan For Key Employees
1. OBJECTIVE OF THE PLAN.
The 1996 Stock Option Plan for Key Employees (the "Plan") is
intended to encourage ownership of the Common Stock of Amscan Holdings,
Inc. (the "Corporation") by key employees of the Corporation and any
subsidiary corporation of the Corporation now existing or hereafter
formed or acquired and to provide incentives for them to put forth
maximum efforts for its successful operations. By extending to key
employees the opportunity to acquire proprietary interests in the
Corporation and to participate in its success, the Plan may be expected
to benefit the Corporation and its stockholders by making it possible for
the Corporation to attract and retain the best available talent and by
rewarding key employees for their part in increasing the value of the
Corporation's stock.
The Options (as hereinafter defined) offered pursuant to the
Plan are a matter of separate inducement and are not in lieu of any
salary or other compensation for the services of any employee or
director.
The Corporation, by means of the Plan, seeks to retain the
services of persons now holding key positions and to secure the services
of persons capable of filling such positions.
The Options granted under the Plan are intended to be either
Incentive Stock Options (as hereinafter defined) or options that do not
meet the requirements for Incentive Stock Options, but the Company makes
no warranty as to the qualification of any Option as an Incentive Stock
Option.
2. DEFINITIONS.
As used herein, the following terms have the meanings
hereinafter set forth unless the context clearly indicates to the
contrary:
2.1. "1934 ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
2.2. "BOARD OF DIRECTORS" shall mean the board of directors of
the Corporation.
<PAGE>
2
2.3. "CAUSE" shall mean incompetence, gross negligence,
insubordination, conviction of a felony, or willful misconduct by an
employee of the Corporation as determined in good faith by the
Corporation.
2.4. "CHANGE IN CONTROL" shall have the meaning specified in
Section 9 hereof.
2.5. "CLOSING DATE" shall mean the closing of the sale of
shares of Common Stock contemplated by the Corporation's Registration
Statement on Form S-1 (No. 333-14107), as such Registration Statement may
be amended (as so amended, the "REGISTRATION STATEMENT").
2.6. "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
2.7. "COMMITTEE" shall mean the committee appointed in
accordance with Section 4 to administer this Plan.
2.8. "COMMON STOCK" shall mean the Common Stock, par value
$0.10 per share, of the Corporation.
2.9. "CONTINUOUS EMPLOYMENT" shall mean continuous regular
employment by the Corporation or by one of its subsidiaries or an
uninterrupted chain of continuous regular employments by the Corporation
and/or one or more of its subsidiaries. A leave of absence granted in
accordance with the Corporation's or its subsidiaries' usual procedures
(such as those attributable to illness, military obligations or
governmental service) shall not be considered a termination of employment
nor an interruption of Continuous Employment hereunder, and an employee
who is granted such a leave of absence shall be considered to be
continuously employed during the period of such leave.
2.10. "EFFECTIVE DATE" shall have the meaning specified in
Section 18 hereof.
2.11. "FAIR MARKET VALUE" of the Common Stock on the Closing
Date shall be equal to the initial public offering price per share of
Common Stock sold pursuant to the Registration Statement. In all other
cases, Fair Market Value shall be determined by the Committee in good
faith as of the last business day for which the prices or quotes
described in this sentence are available preceding the date such Option
is granted and shall mean: (i) the average on that date of the high and
low prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; (ii) the last reported sale
price on that date of the Common Stock reported on The Nasdaq Stock
Market, Inc., if the Common Stock is not then traded on a national
securities exchange; (iii) the closing bid price (or average of bid
prices) last quoted on that date by
<PAGE>
3
an established quotation service for over-the-counter securities, if the
Common Stock is not reported on a national securities exchange or The
Nasdaq Stock Market, Inc. or (iv) if none of clauses (i), (ii) and (iii)
apply, the amount determined in good faith by the Committee. For
purposes of the Plan, the determination by the Committee of the fair
market value of a Share shall be conclusive.
2.12. "INCENTIVE STOCK OPTIONS" shall mean those Options
granted hereunder which are incentive stock options as defined in Section
422(b) of the Code and Treasury Regulations issued pursuant thereto.
2.13. "INCUMBENT BOARD" shall have the meaning specified in
Section 9 hereof.
2.14. "NON-QUALIFIED STOCK OPTIONS" shall mean those Options
granted hereunder which are not Incentive Stock Options.
2.15. "OPTION" shall mean an option to purchase Common Stock
granted pursuant to the provisions of this Plan.
2.16. "OPTION AGREEMENT" shall mean the agreement between the
Optionee and the Corporation setting forth the terms and conditions of an
Option.
2.17. "OPTIONEE" shall mean an individual who receives an
Option pursuant to this Plan.
2.18. "TEN PERCENT STOCKHOLDER" shall mean an individual who
owns, within the meaning of Section 422(b)(6) of the Code, stock
possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Corporation or of any subsidiary
corporation or parent corporation of the Corporation. In determining
stock ownership of an employee, the rules of Section 424(d) of the Code
shall be applied, and the Committee may rely on representations of fact
made to it by the employee and believed to be true. As used in this
Plan, the terms "subsidiary corporation" and "parent corporation" shall
be interpreted in accordance with Sections 424(f) and 424(e) of the Code,
respectively.
2.19. "TERMINATION DATE" shall have the meaning specified in
Section 18 hereof.
3. STOCK RESERVED FOR THE PLAN.
Two Million (2,000,000) shares of the authorized but unissued
Common Stock are reserved for issue and may be issued upon exercise of
Options granted under the Plan.
<PAGE>
4
In lieu of such unissued shares, the Corporation may, in its
discretion, transfer to an Optionee, upon the exercise of Options,
reacquired shares or shares bought in the market for the purposes of the
Plan, provided that (subject to the provisions of Section 15 (Adjustments
Upon Changes in Capitalization)) the total number of Options which may be
granted and shares which may be sold pursuant to Options granted under
the Plan shall not exceed Two Million (2,000,000).
If any Options granted under the Plan shall for any reason
terminate or expire without having been exercised or vested in full, the
Common Stock not issued or delivered under such Options shall be
available again for the purposes of the Plan.
4. ADMINISTRATION OF THE PLAN.
4.1. The Board of Directors shall appoint a Committee to
administer the Plan; PROVIDED, HOWEVER, that following the Closing Date,
the Committee shall be composed of at least two (2) directors who are
Non-Employee Directors (as defined in Rule 16b-3 under the 1934 Act, as
such rule became effective August 15, 1996).
4.2. The Committee shall have plenary authority in its
discretion, but subject to the express provisions of the Plan, to
determine: Optionees, the time or times at which Options shall be
granted, the number of shares to be covered by each Option, the purchase
price of the Common Stock covered by each Option, and whether Options
shall be Incentive Stock Options, Non-Qualified Stock Options, or both.
4.3. The Committee shall further have plenary authority at its
discretion to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to it; to determine the terms (which need not be
identical) of Option Agreements executed and delivered under the Plan,
including such terms and provisions as shall be requisite in the judgment
of the Committee to conform to any change in any law or regulation
applicable thereto and to make all other determinations deemed necessary
or advisable for the administration of the Plan. The Committee's
determination on the foregoing matters shall be conclusive.
4.4. The Committee may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of the Plan
and may rely upon any opinion or computation received from any such legal
counsel, consultant or agent. Expenses incurred by the Board of
Directors or the Committee in the engagement of such counsel, consultant
or agent shall be paid by the Company. No member or former member of the
Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option
granted hereunder.
<PAGE>
5
5. ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING OPTIONS.
5.1. Optionees shall be such key employees of the Corporation
as the Committee, in its sole discretion, shall determine. An Optionee
may be any person who, at the time the Option is granted, is a regular,
salaried employee (which term shall include officers and directors) of
the Corporation or its subsidiaries. A director of the Corporation who
is not also a regular, salaried employee of the Corporation will not be
eligible to receive an Option. Pursuant to Section 422 of the Code, no
Incentive Stock Options may be granted to an individual who, immediately
after such Option is granted, is a Ten Percent Stockholder unless (a) the
option price is at least 110% of the Fair Market Value of such stock on
the date of grant and (b) the Option may not be exercised more than 5
years after the date of grant.
5.2. In determining the Optionees, the number of shares of
Common Stock to be covered by each Option, the vesting period of any
Option, the term of any Option, and whether any such Option shall be an
Incentive Stock Option, a Non-Qualified Stock Option, or both, the
Committee shall take into account the duties of the respective employees,
their present and potential contributions to the success of the
Corporation, and such other factors as the Committee shall deem relevant
in connection with accomplishing the purposes of the Plan. An existing
Optionee may be granted and hold an additional Option or Options if the
Committee shall so determine.
6. OPTION PRICE.
The purchase price of Common Stock covered by each Option shall
be determined by the Committee but shall not be less than 100% (or 110%
in the case of an Incentive Stock Option granted to a Ten Percent
Stockholder pursuant to Section 422(c)(5) of the Code) of the Fair Market
Value of the Common Stock at the time the Option is granted.
7. TERM OF OPTIONS.
The term of each Option shall be for such period as the
Committee shall determine but, notwithstanding the foregoing, the term of
no Option shall be more than ten (10) years from the date of granting
thereof (or five (5) years from the date of granting of the Option in the
case of an Incentive Stock Option granted to a Ten Percent Stockholder
pursuant to Section 422(c)(5) of the Code).
8. EXERCISE OF OPTIONS.
8.1. The method of exercise of Options shall be prescribed by
the Committee; PROVIDED, HOWEVER, that, if no other schedule is
prescribed by the Committee, one-quarter (25%) of the total number of
shares of Common Stock covered by an Option granted to an employee of the
Corporation or its subsidiaries shall become exercisable upon such
employee's completion of one year of Continuous Employment with the
<PAGE>
6
Corporation or its subsidiaries after the grant of the Option;
thereafter, an additional one-quarter (25%) of the total number of shares
of Common Stock covered by the Option shall become exercisable upon such
employee's completion of two, three and four years of Continuous
Employment with the Company or its subsidiaries, respectively. Once an
Option or part thereof becomes exercisable, it shall remain exercisable
until expiration of the Option, unless otherwise specified by the
Committee.
8.2. Unless otherwise provided in the Option Agreement, a
holder of an Option may purchase all, or from time to time any part of,
the shares which the Optionee has become entitled to purchase in
accordance with the terms of the Option by written notice delivered to
the Corporation; PROVIDED, HOWEVER, that an Option shall not be exercised
as to fewer than fifty (50) shares, or the remaining shares covered by
the Option if fewer than fifty (50), at any one time.
8.3. The purchase price of the shares as to which an Option
shall be exercised shall be paid in full at the time of exercise at the
election of the holder of an Option:
(a) in cash or currency of the United States of America;
(b) by tendering to the Corporation shares of the
Corporation's Common Stock, then owned by the holder, having a Fair
Market Value equal to the cash exercise price applicable to the purchase
price of the shares as to which an Option is being exercised; or
(c) partly in cash and partly in shares of the
Corporation's Common Stock valued at Fair Market Value.
Fractional shares of Common Stock will not be issued. Notwithstanding
the foregoing, the Committee shall have the right to modify, amend or
cancel the provisions of clauses (b) and (c) above at any time upon prior
notice to the holders of Options. Except as provided in Sections 10
(Agreement to Serve) and 11 (Nontransferability of Options) hereof, no
Option may be exercised at any time except by an Optionee who is then a
regular employee of the Corporation.
8.4. Except as otherwise provided under the Code, to the extent
that the aggregate Fair Market Value of stock with respect to which
Incentive Stock Options are exercisable for the first time by an employee
during any calendar year (under all stock option plans of the
Corporation) exceeds $100,000, such Options shall be treated as Non-
Qualified Stock Options. For purposes of this limitation, (i) the Fair
Market Value of stock is determined as of the time the Option is granted
and (ii) the limitation will be applied by taking into account Options in
the order in which they were granted.
<PAGE>
7
9. ACCELERATED EXERCISE.
Notwithstanding any other provision of this Plan or any Option
granted hereunder, any Option granted hereunder and then outstanding
shall become immediately exercisable in full: (i) in the event a tender
offer or exchange offer is made by any "person" within the meaning of
Section 14(d) of the 1934 Act or (ii) in the event of a Change in Control
(as hereinafter defined); PROVIDED, HOWEVER, that if in the opinion of
counsel to the Corporation the immediate exercisability of such Option,
when taken into consideration with all other "parachute payments" as
defined in Section 280G(b) of the Code, would result in an "excess
parachute payment" as defined in such section, such Option shall not
become immediately exercisable, except as and to the extent the Committee
in its discretion shall otherwise determine. For purposes of this
Section 9, a "Change in Control" shall have occurred if:
(a) any "person" within the meaning of Section 14(d)
of the 1934 Act (other than any person who is the beneficial
owner of more than 25% of the Common Stock on the Closing Date)
becomes the "beneficial owner" as defined in Rule 13d-3
thereunder, directly or indirectly, of more than 25% of the
Common Stock;
(b) any "person" acquires by proxy or otherwise the
right to vote more than 25% of the Common Stock for the
election of directors, other than solicitation of proxies by
the Incumbent Board, for any merger or consolidation of the
Corporation or for any other matter or question;
(c) during any two-year period, individuals who
constitute the Board of Directors of the Corporation (the
"Incumbent Board") as of the beginning of the period cease for
any reason to constitute at least a majority thereof, PROVIDED
that any person becoming a director during such period whose
election or nomination for election by the Corporation's
stockholders was approved by a vote of at least three-quarters
of the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Corporation in which
such person is named as a nominee for director without
objection to such nomination) shall be, for purposes of this
clause (c), considered as though such person were a member of
the Incumbent Board; or
(d) the Corporation's stockholders have approved the
sale of all or substantially all of the assets of the
Corporation.
The Committee may provide for the acceleration of the vesting
of Options under such other circumstances as the Committee shall
determine in its discretion.
The Committee may adopt such procedures as to notice and
exercise as may be necessary to effectuate the acceleration of the
exercisability of Options as described above.
<PAGE>
8
10. AGREEMENT TO SERVE.
Each Optionee shall agree, as one of the terms of the Option
Agreement and during the course of employment by the Corporation or its
subsidiaries, to devote such Optionee's entire time, energy and skill to
the service of the Corporation and the promotion of its interests,
subject to vacations, sick leave and other absences in accordance with
the regular policies of the Corporation or its subsidiaries. If an
Optionee shall at any time not be an employee of the Corporation or one
of its subsidiaries, the Option shall at once terminate subject to
possible exercise as provided in Section 12 (Termination of Employment).
Nothing in this Plan or in any Option granted pursuant to this Plan shall
constitute an obligation for the Company or any subsidiary to continue
the employment of the Optionee.
11. NONTRANSFERABILITY OF OPTIONS.
An Option granted under the Plan shall not be transferable
otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order (as defined in the
Code), and an Option may be exercised, during the lifetime of an
Optionee, only by the Optionee.
12. TERMINATION OF EMPLOYMENT.
12.1. Options granted under the Plan shall not be affected by
any change of duties or position so long as the Optionee continues to be
an employee of the Corporation or one of its subsidiaries. In the event
that the employment of an Optionee shall be terminated (other than by
reason of retirement, disability or death) such Option may, subject to
the provisions of Sections 8 (Exercise of Options), 10 (Agreement to
Serve) and 13 (Retirement, Disability or Death), be exercised, to the
extent that the Optionee was entitled to do so at the date of termination
of employment unless the Committee otherwise determines, at any time
within thirty (30) days after such termination, but in no event after the
expiration of the term of the Option unless the Committee otherwise
determines.
12.2. Notwithstanding the foregoing and except as otherwise
provided by the Committee, in the event an Optionee is discharged for
Cause, the unexercised portion of an Option shall terminate immediately.
If the Optionee has exercised all or part of an Option within fifteen
(15) days of notice of discharge for Cause and the Corporation has not
yet delivered Common Stock pursuant to such exercise, such exercise shall
be deemed invalid and any purchase price tendered by the Optionee for
Common Stock shall be refused or, if previously paid, shall be returned
to the Optionee.
<PAGE>
9
13. RETIREMENT, DISABILITY OR DEATH.
13.1. If an Optionee shall retire from the Corporation at
normal retirement date pursuant to any pension plan provided by the
Corporation or its subsidiaries, or if such retirement is earlier than
the Optionee's normal retirement date and such retirement is with the
prior consent of the Corporation, then notwithstanding the provisions of
Sections 8 (Exercise of Options) and 10 (Agreement to Serve), such
Optionee may exercise an Option in full, without regard to the period of
Continuous Employment after the Option was granted, at any time within 90
days after such retirement or for such other period as may be specified
by the Committee, but in no event after the expiration of the term of the
Option.
13.2. If the employment of any Optionee shall terminate by
reason of the Optionee's disability (within the meaning of Section
22(e)(3) of the Code) and while such Optionee is entitled to exercise
such Option as herein provided, such Optionee shall have the right to
exercise such Option, to the extent not theretofore exercised, in respect
of any or all such number of shares of Common Stock which such Optionee
would have been entitled to purchase under the Option at the date of such
termination of such employment, at any time up to and including 90 days
after the date of such termination or for such other period as may be
specified by the Committee, but in no event after the expiration of the
term of the Option.
13.3. If an Optionee shall die while employed by the
Corporation or any of its subsidiaries or during either the 90-day period
specified in Section 13.1 or the 90-day period specified in Section 13.2
hereof, such Option may be exercised, subject to the provisions of
Section 8 (Exercise of Options) hereof, to the extent that the Optionee
was entitled to do so at the date of death unless otherwise determined by
the Committee, by the representative of the Optionee's estate or other
person at the time entitled by law to exercise such Option, at any time
within such period (not exceeding one year after the Optionee's death or
for such other period as may be specified by the Committee) as shall be
prescribed in the Option Agreement, but in no event after the expiration
of the term of the Option.
13.4. Notwithstanding the provisions of Sections 12.1, 12.2,
13.1, 13.2 or 13.3 hereof, the Committee shall be entitled to prescribe
other exercise periods for an Option, but in no event shall any Option be
exercisable after the expiration of the term of the Option.
14. NO LOANS TO HOLDERS OF OPTIONS.
Except as otherwise specifically provided in an agreement
between the Corporation, any company with which it is affiliated or any
of its subsidiaries which has been approved by the Board of Directors of
the Corporation or the entity which is a party to such employment
agreement and an Optionee, neither the Corporation, any company with
which it is affiliated, nor any of its subsidiaries may directly or
indirectly lend
<PAGE>
10
money to any person for the purpose of assisting such person to acquire
or carry shares of Common Stock issued upon the exercise of Options.
15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of any change in the outstanding shares of Common
Stock through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, split-off, spin-off, combination of shares,
exchange of shares, or other like change in the capital structure of the
Corporation, an adjustment shall be made to each outstanding Option such
that each such Option shall thereafter be exercisable for such
securities, cash and/or other property as would have been received in
respect of the shares of Common Stock subject to such Option had such
Option been exercised in full immediately prior to such change, and such
an adjustment shall be made successively each time any such change shall
occur. The term "Common Stock" shall after any such change refer to the
securities, cash and/or property then receivable upon exercise of an
Option. In addition, in the event of any such change, the Committee
shall make any further adjustment as may be appropriate to the maximum
number of shares of Common Stock which may be acquired under the Plan
pursuant to the exercise of Options and the number of shares of Common
Stock and price per share subject to outstanding Options as shall be
equitable to prevent dilution or enlargement of rights under such
Options, and the determination of the Committee as to these matters shall
be conclusive. Notwithstanding the foregoing, (i) each such adjustment
with respect to an Incentive Stock Option shall comply with the rules of
Section 424(a) of the Code and (ii) in no event shall any adjustment be
made which would render any Incentive Stock Option granted hereunder not
an incentive stock option for purposes of Section 422 of the Code without
the consent of the Optionee holding such Incentive Stock Option.
16. SATISFACTION OF WITHHOLDING TAXES.
The Corporation may require an Optionee exercising a Non-
Qualified Stock Option granted hereunder, or disposing of Shares acquired
pursuant to the exercise of an Incentive Stock Option in a disqualifying
disposition (within the meaning of Section 421(b) of the Code), to
reimburse the corporation that employs such Optionee for any taxes
required by any government to be withheld or otherwise deducted and paid
by such corporation in respect of the issuance or disposition of such
Shares. In lieu thereof, the corporation that employs such Optionee
shall have the right to withhold the amount of such taxes from any other
sums due or to become due from such corporation to the Optionee upon such
terms and conditions as the Committee shall prescribe. The corporation
that employs such Optionee may, in its discretion, hold the stock
certificate to which such Optionee is entitled upon the exercise of an
Option as security for the payment of such withholding tax liability,
until cash sufficient to pay that liability has been accumulated. In
addition, the Corporation shall be authorized to effect any such
withholding upon exercise of a Non-Qualified Stock Option by retention of
Shares deliverable upon such exercise having a Fair Market Value at the
date of exercise which is equal to the amount to be withheld.
<PAGE>
11
17. RIGHT TO CONTINUED EMPLOYMENT.
Nothing in the Plan or in any Option Agreement shall confer
upon any employee the right to continue in the employ of the Corporation
or any of its subsidiaries or interfere with the right of the Corporation
or any such subsidiary to terminate the employment of such employee at
any time.
18. TIME OF GRANTING OPTIONS.
Nothing in the Plan or in any resolution to be adopted by the
Board of Directors or the holders of Common Stock of the Corporation
shall constitute the granting of an Option, which shall be deemed to have
been granted only on the date on which the identity of the Optionee and
the terms of the Option are determined by the Committee. Except as
provided in Sections 19 and 23, the Corporation may, from time to time
during the period beginning on the date (the "Effective Date") the Plan
is adopted by the Board of Directors and ending on the date ten (10)
years thereafter (the "Termination Date"), grant to certain key employees
of the Corporation or any of its subsidiaries now existing or hereafter
formed or acquired Options under the terms herein set forth.
19. TERMINATION AND AMENDMENT OF THE PLAN.
The Board of Directors may at any time prior to the Termination
Date terminate the Plan or make such modification or amendment of the
Plan as it shall deem advisable; PROVIDED, HOWEVER, that except as
provided in Section 15 (Adjustments Upon Changes in Capitalization), no
amendment may be made without approval by the holders of Common Stock if
such amendment would: (a) increase the maximum number of shares for which
Options may be granted under the Plan, either in the aggregate or to any
individual, (b) change the manner of determining the minimum option
prices, (c) extend the period during which Options may be granted or
extend the period during which an Option may be exercised beyond the
maximum term provided in Section 7 (Term of Options) or (d) amend the
requirements as to the class of employees eligible to receive Options.
No termination, modification or amendment of the Plan may, without the
consent of an Optionee, adversely affect the rights of such Optionee.
20. GOVERNMENT REGULATIONS.
The Plan, the granting and exercising of Options hereunder and
the obligation of the Corporation to issue, sell and deliver shares, as
applicable, under such Options, shall be subject to the effectiveness of
the Registration Statement and to the approval of any governmental
authority required in connection with the authorization, issuance or sale
of such shares, including any applicable Blue Sky laws.
<PAGE>
12
21. NO RIGHTS IN OPTION STOCK
No Optionee shall have any rights as a stockholder with respect
to shares of Common Stock of the Corporation as to which the Option shall
not have been exercised and payment made as herein provided, and an
Optionee shall have no rights with respect to such shares of Common Stock
not expressly conferred by the Plan.
22. EFFECTIVE DATE.
The Plan shall become effective on the Effective Date;
PROVIDED, HOWEVER, that if the Plan is not approved by a vote of the
stockholders of the Company at an annual meeting or any special meeting
or by unanimous consent within twelve (12) months before or after the
Effective Date, the Plan and any Options granted under the Plan shall
terminate.
23. GOVERNING LAW.
The validity and construction of the Plan and the instruments
evidencing Options shall be governed by the laws of Delaware.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF AMSCAN
HOLDINGS, INC. AS OF MARCH 31, 1997 AND FOR THE THREE
MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,118
<SECURITIES> 0
<RECEIVABLES> 54,884
<ALLOWANCES> 4,070
<INVENTORY> 39,951
<CURRENT-ASSETS> 101,276
<PP&E> 61,659
<DEPRECIATION> (26,125)
<TOTAL-ASSETS> 146,767
<CURRENT-LIABILITIES> 47,204
<BONDS> 14,558
0
0
<COMMON> 2,112
<OTHER-SE> 75,869
<TOTAL-LIABILITY-AND-EQUITY> 146,767
<SALES> 53,176
<TOTAL-REVENUES> 53,176
<CGS> 34,410
<TOTAL-COSTS> 34,410
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 327
<INTEREST-EXPENSE> 984
<INCOME-PRETAX> 9,072
<INCOME-TAX> 3,728
<INCOME-CONTINUING> 5,302
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,302
<EPS-PRIMARY> 0.25
<EPS-DILUTED> 0
</TABLE>
