As filed with the Securities and Exchange Commission on July 29, 1998
Registration No. __________
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------------------------------
AMERICAN CHAMPION ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3261987
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
1694 The Alameda, Suite 100
San Jose, California 95126-2219
(Address of principal executive offices) (Zip Code)
(408) 288-8199
---------------------------------------------
1997 STOCK PLAN
---------------------------------------------
Anthony K. Chan
Chief Executive Officer
1694 The Alameda, Suite 100
San Jose, California 95126-2219
(Name and address of agent for service)
(408) 288-8199
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
-----------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share(1) Price(1) Fee
- ---------- ----------- ------------ ---------- -----------
Common Stock 450,000 $6.375 $2,868,750.00 $869.32
$0.0001 par value shares
- -----------------------------------------------------------------------
(1) Calculated solely for purposes of this offering under Rule 457(h)
of the Securities Act of 1933, as amended, on the basis of the
average of the high and low selling prices per share of Common
Stock of American Champion Entertainment, Inc. on July 27, 1998,
as reported on the Nasdaq SmallCap Market.
Exhibit Index on Page 5
<PAGE>
The contents of the Registrant's earlier registration statement,
No. 333-18967, filed with the Securities and Exchange Commission on
December 24, 1997, are incorporated by reference herein.
PART I
Item 1. Plan Information.
The documents containing the information specified in Item 1 will
be sent or given to participants in the Registrant's 1997 Stock Plan.
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in item 2 will
be sent of given to participants in the Registrant's 1997 Stock Plan.
Item 3. EXHIBITS
EXHIBIT NUMBER EXHIBIT
4.1 1997 Stock Plan, as amended.
5.1 Opinion of Preston, Gates & Ellis LLP.
23.1 Consent of Moore Stephens, P.C.
23.2 Consent of Moss Adams, LLP.
23.3 Consent of Preston, Gates & Ellis LLP is contained in
Exhibit 5.1.
24.1 Power of Attorney (included in the Signature Page).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8,
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in City of
Hayward, State of California, on this 24th day of July, 1998.
AMERICAN CHAMPION ENTERTAINMENT, INC.
By: /s/ Anthony K. Chan
-----------------------------------
Anthony K. Chan
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of American
Champion Entertainment, Inc., a Delaware corporation, do hereby
constitute and appoint Anthony K. Chan the lawful attorney in-fact and
agent with full power and authority to do any and all acts and things
and to execute any and all instruments which said attorney and agent,
determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and
any rules or regulations or requirements of the Securities and Exchange
Commission in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the
powers granted include the power and authority to sign the names of the
undersigned officers and directors in the capacities indicated below to
this Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this Registration
Statement or amendments or supplements thereof, and each of the
undersigned hereby ratifies and confirms that said attorney and agent,
shall do or cause to be done by virtue thereof. This Power of Attorney
may be signed in several counterparts.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed
this Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ George Chung Chairman of the Board July 29, 1998
- ---------------- and Director
George Chung
/s/Anthony K. Chan Chief Executive Officer, July 29, 1998
- ------------------ Secretary and Director
Anthony K. Chan (principal executive
officer and principal
financial officer)
/s/ Don Berryessa Vice President, Assistant July 29, 1998
- ----------------- Secretary and Director
Don Berryessa
/s/ Mae Lyn Woo Vice President and July 29, 1998
- --------------- Chief Financial Officer
Mae Lyn Woo
/s/ Jan D. Hutchins Director July 29, 1998
- ----------------
Jan D. Hutchins
/s/ William T. Duffy Director July 29, 1998
- -----------------
William T. Duffy
/s/ Alan Elkes Director July 29, 1998
- --------------
Alan Elkes
/s/ Ronald M. Lott Director July 29, 1998
- ---------------
Ronald M. Lott
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- -----------------------------------------------------------------------
4.1 1997 Stock Plan, as amended.
5.1 Opinion of Preston, Gates & Ellis LLP.
23.1 Consent of Moore Stephens, P.C.
23.2 Consent of Moss Adams, LLP.
23.3 Consent of Preston, Gates & Ellis
is contained in Exhibit 5.1
24.1 Power of Attorney (included in the Signature
Page).
<PAGE>
Exhibit 4.1
AMERICAN CHAMPION ENTERTAINMENT, INC.
1997 STOCK PLAN
Increased to a total of 800,000 shares reserved under the plan,
Approved by the Board of Directors on February 1, 1998, and
Approved by stockholders on May 29, 1998.
1. Purpose. The purposes of the American Champion Entertainment,
Inc. 1997 Stock Plan ("Plan") are to encourage key personnel of American
Champion Entertainment, Inc. (the "Company") and its subsidiaries to increase
their interest in the Company's long-term success, to enhance the
profitability and value of the Company for the benefit of its shareholders and
to assist the Company and its subsidiaries in attracting, retaining and
motivating key personnel by giving suitable recognition for services which
contribute materially to the Company's success.
2. Definitions. The following definitions shall be applicable
throughout the Plan:
"Act" means the Securities Act of 1933, as amended from time to
time.
"Affiliate" means any parent or subsidiary (as defined in Section
424(e) and (f) of the Code) of the Company.
"Award" means an Option, Stock Appreciation Right or Other Stock
Award. "Board" means the Board of Directors of the Company.
"Change of Control" means, unless the Board otherwise directs by
resolution adopted prior thereto, (i) the acquisition by any entity,
person or group (other than the Company or its Affiliates or an employee
benefit plan maintained by the Company or one of its Affiliates) of
beneficial ownership of 20% or more of the outstanding voting stock of
the Company; or (ii) the occurrence of a transaction requiring
shareholder approval for the acquisition of the Company by the purchase
of stock or assets, or by merger, or otherwise; or (iii) the election
during any period of 24 months or less of 50% or more of the members of
the Board without the approval of the nomination of such members by a
majority of the Board consisting of members who were serving at the
beginning of such period.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
<PAGE>
"Committee" means the Committee of the Board consisting of two or
more directors, each of whom (i) is a "disinterested person" within the
meaning of Rule 16b-3, and (ii) is an "outside director" within the
meaning of Section 162(m) of the Code, or successor rule or regulation.
"Consultant" means any consultant or advisor engaged by the
Company who renders bona fide services to the Company or all Affiliate
in connection with its business, provided that such services must not be
in connection with the offer or sale of securities in a capital-raising
transaction.
"Disability" means permanent and total disability as defined in
Section 22(e)(3) of the Code.
"Company" means American Champion Entertainment, Inc., a Delaware
corporation.
"Employee" means any person who is employed by the Company or an
Affiliate.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means for any given day (i) the closing sales
price on such date of a share of Stock as reported on the principal
securities exchange on which such shares of Stock are then listed or
admitted to trading, or as reported by Nasdaq, or (ii) if not so
reported, the average of the bid and ask prices on such date as reported
on the OTC Bulletin Board, or (iii) if no such quotations are available,
as determined by the Committee in good faith in their absolute
discretion.
"Grant Limit" means the total number of shares of Stock that can
be issued to any Participant in any fiscal year pursuant to an Award
granted hereunder.
"Incentive Stock Option" means an Option granted by the Committee
to an Employee Participant under the Plan which is designated by the
Committee as an Incentive Stock Option pursuant to Section 422 of the
Code.
"Non-Qualified Stock Option" means an Option granted by the
Committee to a Participant under the Plan which is not designated by the
Committee as an Incentive Stock Option.
"Option" means an Award granted under Section 6 of the Plan.
<PAGE>
"Other Stock Awards" means an Award granted under Section 8 of the
Plan.
"Participant" means any individual designated by the Committee to
participate in the Plan.
"Performance-Based Compensation" means (i) an Option granted at
less than 100% of the Fair Market Value of the Stock at the time of
grant, (ii) a Restricted Stock Award or (iii) a Stock Bonus, in each
case which has been granted with the intention that such award will be
deductible under Section 162(m) of the Code, or successor provision.
"Plan" means this American Champion Entertainment, Inc. 1997 Stock
Plan.
"Restricted Stock Award" means an Award granted under Section 8(a)
of the Plan.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act,
or any successor rule or regulation.
"Stock" means the common stock of the Company, $.001 par value.
"Stock Appreciation Right" means an Award granted under Section 7
of the Plan.
"Stock Bonus" means an Award granted under Section 8(b) of the
Plan.
"Termination Date" means the date an optionee ceases to be
employed or
engaged by the Company.
3. Administration. The Plan shall be administered by the Committee.
The Committee shall have full power, discretion and authority to interpret,
construe and administer the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company and to
make all other determinations necessary or advisable for the administration of
the Plan, to the extent not contrary to the explicit provisions of the Plan.
Determinations, interpretations and other actions by the Committee pursuant to
the Plan shall be final, conclusive and binding on all persons for all
purposes.
The Committee shall have full power, discretion and authority to
establish applicable performance measures for Awards intended to be
Performance-Based Compensation, which performance measures shall include one
or more of the following:
improvements in revenues, earnings per share, profit before taxes, net income
or operating income; return on shareholder equity; return on net assets; and
stock price performance. Further, the Committee shall determine the specific
targets related to each such performance measure and the performance period
for each such Award. The Committee shall establish in writing such performance
measures, specific targets and performance periods as provided in Section
162(m) of the Code and the regulations promulgated thereunder, or successor
provision or regulation.
The Committee's decisions and determinations under the Plan need
not be uniform and may be made selectively among Participants whether or not
such Participants are similarly situated. The Committee may, in its
discretion, delegate to others responsibilities to assist in administering the
Plan.
Prior to the date when securities of the Company are first
registered pursuant to Section 12 of the Exchange Act, the Plan shall be
administered by the Board.
4. Eligibility. Any Employee selected by the Committee, except a
member of the Committee or a director whose principal employment is not with
the Company or an Affiliate, and any Consultant selected by the Committee
shall be eligible for Awards contemplated under the Plan except that
Consultants shall not be eligible for Incentive Stock Option grants.
<PAGE>
5. Stock Subject to Plan and Grant Limit. The total number of shares
of Stock subject to issuance under the Plan may not exceed 800,000 subject to
adjustments as provided in the Plan. Shares to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued shares or shares
purchased by the Company on the open market or by private purchase. The Grant
Limit shall equal the number of shares available for issuance under the Plan,
subject to adjustment as provided in Section 10 hereof.
Except as otherwise provided in the Plan, shares of Stock that are
subject to an Option or Stock Appreciation Right which, for any reason,
expires or is terminated unexercised as to such shares, and shares of Stock
subject to a Restricted Stock Award made under the Plan which are reacquired
by the Company pursuant to the Plan, shall again become available for issuance
under the Plan.
6. Stock Options. The Committee may grant stock Options alone or in
addition to any other Awards granted under the Plan. Options granted under the
Plan may be of two types: (i) Incentive Stock Options; and (ii) Non-Qualified
Stock Options. Subject to the limitations contained herein with respect to
Incentive Stock Options, the Committee may grant Incentive Stock Options, Non-
Qualified Stock Options, or both types of Options to a Participant and the
Committee shall have complete discretion in determining
the number of Options granted to each Participant, subject to the Grant Limit.
To the extent that any Option does not qualify as an Incentive Stock Option,
it shall constitute a separate Non-Qualified Stock Option. The provisions of
Options need not be the same with respect to each Participant granted an
Option.
Each Option shall be set forth in a written agreement, shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions not inconsistent with the terms of the Plan as
the Committee deems appropriate:
(a) The exercise price of shares subject to any Incentive Stock
Option shall not be less than the Fair Market Value of the Stock at the
time the Incentive Stock Option is granted; the exercise price of shares
subject to any Non-Qualified Stock Option shall be such price as the
Committee shall determine on the date on which such Non-Qualified Stock
Option is granted, provided that such exercise price may not be less
than 85% of the Fair Market Value of the Stock at the time the Non-
Qualified Stock Option is granted;
(b) If the exercise price of a Non-Qualified Stock Option is
less than 100% of the Fair Market Value of the Stock at the time the
Non-Qualified Stock Option is granted, the Committee may designate such
award as Performance-Based Compensation in which event the Committee
shall establish performance measures for such award, the specific
targets applicable to such measures and the performance period for such
award;
(c) The exercise price of any shares exercised under any Option
must be paid in full upon such exercise in cash or stock of the Company
held for at least six months, or in such other form as the Committee may
determine;
(d) The term of each Option shall be fixed by the Committee but
no Option may be exercised after the expiration of 10 years from the
date such Option is granted;
(e) In the event that an optionee shall cease to be employed or
engaged by the Company or an Affiliate, the vesting of such optionee's
Options shall immediately and automatically terminate on the Termination
Date and if the cessation of employment or engagement is:
(1) due to any reason other than due to retirement,
Disability or death, such optionee's Options exercisable on the
Termination Date shall remain exercisable for 30 days after the
Termination Date;
<PAGE>
(2) due to retirement, such optionee's Options
exercisable on the Termination Date shall remain exercisable for
three months after the Termination Date;
(3) due to a Disability, such optionee's Options
exercisable on the Termination Date shall remain exercisable for
one year after the Termination Date, or;
(4) due to death while employed or engaged by the Company
or its Affiliate, or during the three month period following
retirement or during the one year period following cessation of
employment due to a Disability, the optionee's Options exercisable
at the time of death shall remain exercisable for one year after
the date of the optionee's death;
provided, however, that notwithstanding anything herein to the
contrary, if any Option would otherwise expire on an earlier date than
described above, such Option shall remain exercisable only until the
earlier expiration date;
(f) Options shall become exercisable at such time or times after
the first six months of their terms and subject to such terms and
conditions (including, without limitation, installment exercise
provisions) as shall be determined by the Committee, and if the
Committee provides that any Option is exercisable only in installments,
the Committee may waive such installment exercise provisions at any time
in whole or in part based on any factors as the Committee may determine;
(g) Incentive Stock Options may be granted only to Employees;
(h) In the case of an Incentive Stock Option, the aggregate Fair
Market Value (determined as of the time the Option is granted) of the
Stock with respect to which Options are exercisable for the first time
by any Employee during any calendar year (under all such plans of the
Company and its Affiliates) shall not exceed $100,000;
(i) No Incentive Stock Option shall be granted to a Participant
who, at the time the Incentive Stock Option is granted, owns (within the
meaning of Section 422 of the Code) Stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company
or any Affiliate unless the exercise price per share of Stock is at
least 110% of the Fair Market Value of the Stock at the time the
Incentive Stock Option is granted and the Incentive Stock Option by its
terms is not exercisable after the expiration of five years from the
date of grant;
<PAGE>
(l) No Option shall be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated otherwise than by will or by the
laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code; and
(k) All Options shall be exercisable during the optionee's
lifetime only by the optionee or by a transferee permitted pursuant to
Section 6(j) above.
Anything in the Plan to the contrary notwithstanding, no term of
this Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participants affected, to disqualify any Incentive
Stock Option under Section 422.
7. Stock Appreciation Rights. The Committee may grant Stock
Appreciation
Rights alone or in conjunction with all or part of any Option granted under
the Plan,
subject to the Grant Limit. In the case of a Non-Qualified Stock Option, such
Stock
Appreciation Rights may be granted either at or after the time of the grant of
such Non-Qualified Stock Option. In the case of an Incentive Stock Option,
such Stock
Appreciation Rights may be granted only at the time of the grant of the
Incentive Stock
Option.
Each Stock Appreciation Right shall be set forth in a written
agreement, shall be subject to the following terms and conditions and shall
contain such additional terms and conditions not inconsistent with the terms
of the Plan as the Committee deems appropriate:
(a) Subject to subparagraphs (b) and (c) below, a Stock
Appreciation Right granted in connection with an Option shall become
exercisable and shall lapse according to the same vesting schedule and
lapse rules that are established for the Option; a Stock Appreciation
Right granted independently of an Option shall become exercisable and
shall lapse in accordance with the vesting schedule and lapse rules
established by the Committee;
(b) A Stock Appreciation Right and any related Option shall not
be exercisable during the first six months of their terms by any
Participant;
(c) A Stock Appreciation Right shall be exercisable only when
the Fair Market Value of the Stock relating to the Stock Appreciation
Right exceeds the exercise price thereof;
<PAGE>
(d) If the exercise price of a Stock Appreciation Right is less
than 100% of the Fair Market Value of the Stock at the time the Stock
Appreciation Right is granted, such award may be designated by the
Committee to be Performance-Based Compensation in which event the
Committee shall establish performance measures for such award, the
specific targets applicable to such measures and the performance period
for such award;
(e) Upon the exercise of a Stock Appreciation Right with
respect to any number of shares of Stock, the holder shall be entitled
to receive payment of an amount (subject to subparagraph (f), below)
determined by multiplying (i) the difference between the Fair Market
Value per share of Stock on the date of exercise and the exercise price
of the related Option (or in the case of an Stock Appreciation Right
granted independent of an Option, the exercise price of the Stock
Appreciation Right as established by the Committee) by (ii) the number
of shares in respect of which the Stock Appreciation Right is exercised.
At the discretion of the Committee, payment for Stock Appreciation
Rights may be made in cash or stock of the Company held for at least six
months, or in a combination thereof. If payment is made in Stock, the
value of such Stock shall be the Fair Market Value determined as of the
date of exercise;
(f) At the time of grant, the Committee may establish, in its
sole discretion, a maximum amount per share which will be payable upon
exercise of a Stock Appreciation Right;
(g) Notwithstanding any other provisions of the Plan, the
Committee may impose such conditions on exercise of a Stock Appreciation
Right (including, without limitation, the right of the Committee to
limit the time of exercise to specified periods) as may be required to
satisfy the requirements of Rule 16b-3;
(h) The Committee may provide that upon exercise of a Stock
Appreciation Right granted in conjunction with an Option, the number of
shares of Stock for which the related Option shall be exercisable shall
reduce by the number of shares of Stock for which the Stock Appreciation
Right shall have been exercised and the number of shares of Stock for
which a Stock Appreciation Right shall be exercisable shall be reduced
upon any exercise of a related Option by the number of shares of Stock
for which such Option shall have been exercised;
(i) The term of a Stock Appreciation Right granted under the
Plan shall not exceed ten years;
(j) No Stock Appreciation Right granted under the Plan may be
sold, transferred, pledged, signed or otherwise alienated or
hypothecated otherwise than
<PAGE>
by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code, and all
Stock Appreciation Rights shall be exercisable during the Participant's
lifetime only by the Participant or by a transferee permitted pursuant
to Section 7(j) above.
(k) The Committee may provide, at the time of grant, that such
Stock Appreciation Right can be exercised only in the event of a Change
of Control, subject to terms and conditions as the Committee may specify
at grant.
8. Other Stock Awards. In addition to Options and Stock Appreciation
Rights, the Committee may grant Other Stock Awards payable in Stock upon such
terms and conditions as the Committee may determine, subject to the provisions
of the Plan. Other Stock Awards may include, but are not limited to, the
following types of Awards:
(a) Restricted Stock Awards. The Committee may grant Restricted
Stock Awards, each of which consists of a grant of shares of Stock
subject to restrictions, terms and conditions not inconsistent with the
terms of the Plan, including the Grant Limit, as the Committee deems
appropriate, which such restrictions, terms and conditions shall be set
forth in written agreements. The Committee may designate a Restricted
Stock Award as Performance-Based Compensation in which event the
Committee shall establish performance measures for such award, the
specific targets applicable to such measures and the performance period
for such award. Stock certificates evidencing a Restricted Stock Award
shall be issued by the Company in the name of the Participant, and such
Participant shall be entitled to all voting rights, rights to dividends
and other rights of holders of Stock, subject to the provisions of the
Plan. The certificates representing a Restricted Stock Award issued
under the Plan and any dividends paid thereon, shall remain in the
physical custody of the Company or an escrow holder or be placed in
trust until the restrictions imposed under the Plan have lapsed. The
Committee may also require that a legend or legends be placed on any
certificates representing a Restricted Stock Award to reference the
various restrictions imposed on such Stock. If a Restricted Stock Award
is granted which requires the payment of an exercise price by the
Participant, then such Award must be accepted within a period of 60 days
(or such shorter periods as the Committee may specify at grant) after
the date of grant. The shares of Stock granted under a Restricted Stock
Award may not be sold, transferred, assigned, or otherwise alienated or
hypothecated until the lapse or release of restrictions in accordance
with the terms of the Restricted Stock Award agreement and the Plan.
Prior to the lapse or release of restrictions, all shares of Stock are
subject to forfeiture in accordance with conditions as may be determined
by the Committee. The provisions of a Restricted Stock Award need not
be the same with respect to each recipient.
<PAGE>
(b) Stock Bonuses. The Committee may grant Stock Bonuses in
such amounts as it shall determine from time to time, subject to the
Grant Limit. A Stock Bonus shall be paid at such time and be subject to
such conditions as the Committee shall determine at the time of the
grant of such Stock Bonus. The Committee may designate a Stock Bonus as
Performance-Based Compensation in which event the Committee shall
establish performance measures for such award, the specific targets
applicable to such measures and the performance period for such award.
Certificates for shares of Stock granted as a Stock Bonus shall be
issued in the name of the Participant to whom such grant was made and
delivered to such Participant as soon as practicable after the date on
which such Stock Bonus is required to be paid.
9. General Provisions. The grant of any Award under the Plan may
also be subject to such other provisions (whether or not applicable to any
Award granted to any other Participant) as the Committee determines
appropriate including, without limitation, provisions to assist the
Participant in financing the purchase of Stock through the exercise of
Options, provisions for restrictions on resale or other disposition of shares
acquired under any Award, provisions giving the Company the right to
repurchase Stock acquired under any Award in the event the Participant elects
to dispose of such Stock, provisions to comply with compensation expense
deductibility under the Code and provisions to comply with federal and state
securities laws and federal and state income tax withholding requirements.
The obligation of the Company to make payment of Awards in Stock
or otherwise shall be subject to applicable laws, rules and regulations, and
to such approvals by governmental agencies as may be required. The Company
shall be under no obligation to register under the Act any of the shares of
Stock delivered under the Plan. All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed and any
applicable federal or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions. The Committee may require each Participant
acquiring shares pursuant to an Award under the Plan to represent to and agree
with the Company in writing that the Participant is acquiring the Stock
without a view to distribution thereof.
The Company shall have the right to deduct from all Awards, to the
extent paid in cash, all federal state or local taxes as required by law to be
withheld with respect to such Awards and, in the case of Awards paid in Stock,
the Participant or other person receiving such Stock may be required to pay to
the Company prior to delivery of such Stock, the amount of any such tax which
the Company is required to withhold, if any, with respect to such Stock. At
the discretion of the Committee, the Company may accept shares of Stock, or
withhold shares of Stock otherwise issuable upon exercise of an Award, of
equivalent Fair Market Value in payment of such withholding tax obligations or
provide alternative methods of complying with such withholding tax
obligations.
No Employee or other person shall have any claim or right to be
granted an Award under the Plan nor, having been selected for the grant of an
Award, to be selected for a grant of any other Award. Neither this Plan nor
any action taken hereunder shall be construed as giving any Participant any
right to be retained in the employ of the Company or its Affiliates.
Each Participant may file with the Committee a written designation
of one or more persons as the beneficiary who shall be entitled to receive the
amounts payable with respect to the benefits of an Award, if any, due under
the Plan upon such Participant's death. A Participant may, from time to time,
revoke or change the beneficiary designation without the consent of any prior
beneficiary by filing a new designation with the Committee. The last
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation therein shall be effective unless
received by the Committee prior to the Participant's death, and in no event
shall it be effective as of a date prior to such receipt. In the absence of
any such designation, benefits remaining unpaid at the Participant's death
shall be paid to the Participant's estate.
Except as otherwise specifically provided in the Plan, no
Participant shall be entitled to the privileges of stock ownership in respect
of Stock which is subject to an Option, Stock Appreciation Right or Other
Stock Award until such Stock has been issued to that Participant upon exercise
of an Option or Stock Appreciation Right according to its terms or upon sale
or grant of Stock in accordance with an Other Stock Award.
No Participant or other person shall have any right with respect
to this Plan, shares reserved under this Plan, or in any Award, contingent or
otherwise, until written evidence of the Award shall have been delivered to
the Participant and all the terms, conditions and provisions of the Plan
applicable to such Participant have been met.
<PAGE>
10. Changes in Capital Structure. In the event of changes in the
outstanding Stock or in the capital structure of the Company by reason of any
stock dividend, stock split, exchange of shares, recapitalization,
reorganization, subdivision or consolidation of shares, or other similar
transaction, the aggregate number of shares available under the Plan, the
number of shares subject to each outstanding Award and the price per share of
any Award, shall all be proportionately adjusted. In the event the Company
shall be a party to a transaction involving a sale of substantially all of its
assets, a merger or a consolidation, the Board shall make such adjustment as
shall be necessary or appropriate which may include assumption of Awards by
the surviving Company, for their continuation, for the acceleration of vesting
and expiration, or for settlement in cash. In the case of dissolution of the
Company (other than a dissolution following the sale of substantially all of
the Company's assets), the Awards outstanding hereunder shall terminate;
provided, however, that each Participant shall have 30 days' prior written
notice of such event, during which time the Participant shall have the right
to exercise in full any partly or wholly unexercised Award, including the
portion not yet exercisable pursuant to the vesting schedule set forth in any
Award agreement. In the event of any change in applicable laws or any change
in circumstances which results in or would result in any substantial dilution
or enlargement of the rights granted to or available for Participants in the
Plan, or which otherwise warrants equitable adjustment because it interferes
with the intended operation of the Plan, the Committee may make such
adjustments or substitutions to Awards or agreements evidencing Awards as the
Committee determines appropriate in its sole discretion. Any adjustment in
Incentive Stock Options under this Section 10 shall be made only to the extent
not constituting a "modification" within the meaning of Section 424(h)(3) of
the Code. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustments shall be conclusive and binding
for all purposes.
11. INTENTIONALLY OMITTED.
12. Amendments and Termination. The Board may, from time to time,
amend, suspend or terminate the Plan in whole or in part and, if terminated,
may reinstate any or all of the provisions of the Plan, except that no
amendment, suspension or termination shall be made which would impair the
rights of a Participant under an Award theretofore granted, without such
Participant's consent. The Board shall obtain stockholder approval of any
amendment to this Plan which would be necessary to allow this Plan to continue
to meet the conditions of Rule 16b-3.
13. Effective Date and Term. The Plan shall become effective as of
the closing date of the Company's initial public offering. Unless sooner
terminated by the Committee, the Plan shall continue until the tenth
anniversary of the Plan's effective date, when it shall terminate and no Award
shall be granted under the Plan thereafter. The Plan shall continue in effect,
however, insofar as is necessary to complete all the Company's obligations
under outstanding Awards and to conclude the administration of the Plan.
14. Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and be governed by the laws of the State of
Delaware.
<PAGE>
EXHIBIT 5.1
July 27, 1998
The Board of Directors
American Champion Entertainment, Inc.
1694 The Alameda, Suite 100
San Jose, California 95126-2219
Re: Registration Statement on Form S-8 for the American Champion
Entertainment, Inc.
1997 Stock Plan
Dear Ladies and Gentleman:
We have acted as counsel for American Champion Entertainment, Inc. (the
"Company"), a Deleware corporation, in connection with the preparation and
filing with the Securities and Exchange Commission of a Registration Statement
on Form S-8 under the Securities Act of 1933, as amended (the "Registration
Statement") , relating to an additional 450,000 shares of the Company's common
stock (the "Common Stock", to be offered pursuant to the Company's 1997 Stock
Plan (the "Plan").
We have examined such documents as we deem necessary for the purpose of
this opinion. Based on the foregoing, we are of the opinion that the Common
Stock subject to the Plan covered by the Registration Statement will, when
issued by the Plan, be validly issued, and assuming full payment of the
exercise price or such other consideration required under the Plan and that the
certificates representing the shares of Common Stock subject to the Plan when
issued will be properly executed and delivered, fully paid and non-assessable.
We hereby consent to be named in the Registration Statement and in any
amendments thereto as counsel for the Company, to the statements with reference
to our firm made in the Registration Statement, and to the filing and use of
this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Preston Gates & Ellis LLP
Preston Gates & Ellis LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of American Champion Entertainment, Inc. on Form S-8 of our
report dated February 5, 1997, on our audit of the balance sheet of American
Champion Entertainment, Inc. and of our report dated January 31, 1997 on our
audits of the financial statements of America's Best Karate.
/s/ Moore Stephens, P.C.
MOORE STEPHENS, P.C.
Certified Public Accountants
Cranford, New Jersey
July 28, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference into this Registration
Statement of American Champion Entertainment, Inc. on Form S-8 of our report on
the consolidated financial statements of American Champion Entertainment, Inc.
and its subsidiaries dated February 11, 1998, appearing in the Annual Report
on Form 10-KSB of American Champion Entertainment, Inc. for the year ended
December 31, 1997. We also consent to the reference to us under the caption
"Experts".
/s/ Moss Adams L.L.P.
Moss Adams L.L.P.
San Francisco, California
July 27, 1998
<PAGE>
