As filed with the Securities and Exchange Commission on January 26, 2000
Registration No. 333-______
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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
(Address of principal executive offices) (Zip Code)
(408) 288-8199
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1997 STOCK PLAN
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
---------------------------------------------
Anthony K. Chan
Chief Executive Officer
1694 The Alameda, Suite 100
San Jose, California 95126
(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(1)(2) Per Share(3) Price(3) Fee
- ---------- ----------- ------------ ---------- -----------
Common Stock 612,500 $2.2656 $1,387,680.00 $366.35
$0.0001 par value shares
- -----------------------------------------------------------------------
(1) This Registration Statement shall also cover any additional shares
of Common Stock which become issuable under the 1997 Stock Plan
and/or 1997 Non-Employee Directors Stock Option Plan, by reason of
any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which
results in an increase in the number of the outstanding shares of
Common Stock of American Champion Entertainment, Inc.
(2) 550,000 shares for the increase under the 1997 Stock Plan, and
62,500 shares for the increase under the 1997 Non-Employee
Directors Stock Option Plan.
(3) 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 January 11, 2000
as reported on the Nasdaq SmallCap Market.
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,
and the 1997 Non-Employee Directors Stock Option Plan as specified by
Rule 428(b)(1) of the Securities Act of 1933, as amended (the
"Securities Act"). Such documents are not required to be and are not
filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424. These documents and the
documents incorporated by reference in this Registration Statement
pursuant to Item 3 of Part II of this Form S-8, taken together,
constitute a prospectus that meets the requirements of Section 10(a) of
the Securities Act.
Item 2. Registrant Information and Employee Plan and Non-Employee
Directors Plan Annual Information.
Upon written or oral request, any of the documents incorporated by
reference in Item 3 of Part II of this Registration Statement (which
documents are incorporated by reference in this Section 10(a)
Prospectus), other documents required to be delivered to eligible
employees pursuant to Rule 428(b) or additional information about the
1999 Stock Option Plan are available without charge by contacting:
American Champion Entertainment, Inc.
1694 The Alameda, Suite 100
San Jose, California 95126
Attn: Anthony K. Chan
Chief Executive Officer
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference into this
Registration Statement the documents listed below. In addition, all
documents subsequently filed pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), prior
to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the date
of filing of such documents:
* Reference is made to the Registrant's prospectus relating to
its registration statement on Form S-3 (Registration No.
333-90459), as filed with the Commission on January 5, 2000,
as amended, which is hereby incorporated by reference.
* Reference is made to the Registrant's annual report on Form 10-KSB, as filed
with the Commission on March 31, 1999, as amended on November 15, 1999, which
is hereby incorporated by reference.
* Reference is made to the Registrant's quarterly report on Form 10-QSB, as
filed with the Commission on May 17, 1999, as amended on November 15, 1999,
which is hereby incorporated by reference.
* Reference is made to the Registrant's quarterly report on Form 10-QSB, as
filed with the Commission on August 17, 1999, as amended on November 15, 1999,
which is hereby incorporated by reference.
* Reference is made to the Registrant's quarterly report on
Form 10-QSB, as filed with the Commission on November 17,
1999, which is hereby incorporated by reference.
* The description of the Registrant's common stock is
incorporated by reference to the Registrant's registration
statement on Form 8-A, as filed with the Commission on July
14, 1997, as amended.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The balance sheet and financial statements of American Champion
Entertainment, Inc. for the years ended December 31, 1997 and December
31, 1998 have been incorporated by reference herein and in the
registration statement in reliance upon the reports of Moss Adams LLP,
independent certified public accountants, also incorporated by
reference herein, and upon the authority of such firm as experts in
accounting and auditing. The validity of the shares of common stock
offered hereby will be passed upon for the Registrant by Sichenzia, Ross
& Friedman, LLP, 135 West 50th Street, 20th Floor, New York, NY 10020.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation limits, to the
maximum extent permitted by Delaware law, the personal liability of
directors for monetary damages for breach of their fiduciary duties as a
director. The Registrant's Bylaws provided that the Registrant shall
indemnify its officers and directors and may indemnify its employees and
other agents to the fullest extent permitted by Delaware law.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made a party
to an action by reason of that fact that he or she was a director, officer
employee or agent of the corporation or was serving at the request of the
corporation against expenses actually and reasonably incurred by him or her in
connection with such action if he or she acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interests
of the corporation and with respect to any criminal action, had no reasonable
cause to believe his or her conduct was unlawful. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to
directors, officers or persons controlling the Registrant pursuant to the
foregoing provisions, the Registrant has been advised that in the opinion of
the Commission, such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
EXHIBIT
NUMBER EXHIBIT
4.1 1997 Stock Plan, as amended.
4.2 1997 Non-Employee Directors Stock Option Plan, as
amended.
5.1 Opinion of Sichenzia Ross & Friedman, LLP
23.1 Consent of Moss Adams, LLP.
23.2 Consent of Sichenzia Ross & Friedman, LLP is contained
in Exhibit 5.1.
24.1 Power of Attorney (included in the Signature Page).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
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 San
Jose, State of California, on this 26th day of January, 2000.
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.
IN WITNESS WHEREOF, each of the undersigned has executed
this Power of Attorney and 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 on January 26,
2000.
Signature
<TABLE>
<CAPTION>
Signature Capacities Date
- --------------------------- ------------------------------------ -------------
<S> <C> <C>
/s/ ANTHONY K. CHAN President, Chief Executive Officer January 26, 2000
- ------------------------- (principal executive officer)
Anthony K. Chan and Director
/s/ ANTHONY K. CHAN Chairman of the Board and Director January 26, 2000
- -------------------------
Anthony K. Chan
(attorney-in-fact) for George Chung
/s/ ANTHONY K. CHAN Director January 26, 2000
- -------------------------
Anthony K. Chan
(attorney-in-fact) for William T. Duffy
/s/ ANTHONY K. CHAN Director January 26, 2000
- -------------------------
Anthony K. Chan
(attorney-in-fact) for Alan Elkes
/s/ ANTHONY K. CHAN Director January 26, 2000
- -------------------------
Anthony K. Chan
(attorney-in-fact) for E. David Gable
/s/ ANTHONY K. CHAN Director January 26, 2000
- -------------------------
Anthony K. Chan
(attorney-in-fact) for Jan D. Hutchins
/s/ ANTHONY K. CHAN Director January 26, 2000
- -------------------------
Anthony K. Chan
(attorney-in-fact) for Ronald M. Lott
/s/ ANTHONY K. CHAN Director January 26, 2000
- -------------------------
Anthony K. Chan
(attorney-in-fact) for Joy M. Tashjian
/s/ ANTHONY K. CHAN Vice President and Chief Financial January 26, 2000
- ------------------------- Officer (principal financial officer)
Anthony K. Chan
(attorney-in-fact) for Mae Lyn Woo
</TABLE>
EXHIBIT 4.1
AMERICAN CHAMPION ENTERTAINMENT, INC.
1997 STOCK PLAN
Increased to a total of 1,750,000 shares reserved under the plan,
Approved by the Board of Directors on October 15, 1999, and
Approved by stockholders on December 10, 1999.
(The number of shares reflects the result of a 1 for 4 reverse split on
January 4, 2000)
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.
"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.
"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, $.0001 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.
5. Stock Subject to Plan and Grant Limit. The total number of
shares of Stock subject to issuance under the Plan may not exceed
1,750,000 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;
(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;
(j) 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;
(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 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 restric-
tions, 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.
(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.
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.
EXHIBIT 4.2
AMERICAN CHAMPION ENTERTAINMENT, INC.
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
Increased to a total of 200,000 shares reserved under the plan,
Approved by the Board of Directors on October 15, 1999, and
Approved by stockholders on December 10, 1999.
(The number of shares reflects the result of a 1 for 4 reverse split on
January 4, 2000)
1. Purpose. American Champion Entertainment, Inc., a Delaware
corporation (the "Company"), hereby establishes its 1997 Non-Employee
Directors Stock Option Plan (the "Plan"). The purpose of the Plan is to
provide non-employee directors with an opportunity to participate in the
growth of the Company through stock ownership.
2. Eligibility. Only non-employee directors of the Company
shall be eligible to participate in the Plan.
3. Stock Available for Options Under the Plan. Subject to
adjustment as provided in Section 5 hereof, the aggregate number of
shares of the common stock of the Company ("Common Stock") as to which
options may be granted under the Plan shall not exceed 200,000 shares.
Any of such shares which may remain unsold and which are not subject to
outstanding options at the termination of the Plan shall cease to be
reserved for the purpose of the Plan, but until termination of the Plan,
the Company shall at all times reserve a sufficient number of shares to
meet the requirements of the Plan.
In the event that any option granted under the Plan shall
expire or terminate for any reason, including termination by the
voluntary surrender thereof for cancellation, without having been
exercised in whole or in part, the unpurchased shares subject thereto
shall again be available for options to be granted under the Plan.
4. Stock Option. The options granted under the Plan shall be evidenced by
a written option agreement which shall contain the following terms and
conditions:
a. Option Price. The option price of shares of Common
Stock covered by each option shall be 100% of the fair market
value of the Common Stock on the date such option is granted. The
fair market value shall be equal to (i) the closing sales price on
such date of a share of Common Stock as reported on the principal
securities exchange on which such shares of Common Stock are then
listed or admitted to trading, or as reported on Nasdaq, or (ii)
if not so reported, the average of the closing 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 Board of
Directors of the Company in good faith in their absolute
discretion.
b. Number of Shares.
(i) Each non-employee director shall automatically receive an option to
purchase 1,250 shares of Common Stock on the date of his or her first
election as a director (the "Initial Grant").
(ii) Each year, as of the date of the Annual Meeting
of Stockholders of the Company, each non-employee director who has
been elected or re-elected or who is continuing as a member of the
Board of Directors as of the adjournment of the Annual Meeting
(other than any non-employee director eligible for an initial
grant pursuant to Section 4(b)(i) hereof by reason of first
election at such meeting) shall automatically receive an option to
purchase 500 shares of Common Stock (the " Annual Grant").
c. Expiration and Termination of Options.
(i) Expiration. Each option and all rights and
obligations thereunder shall, subject to the provisions of Section
4(c)(ii) hereof, expire ten (10) years from the date of grant.
(ii) Termination. In the event that an optionee shall
cease to be a director of the Company for any reason, the vesting
of his or her options shall immediately and automatically
terminate. In the event that an optionee shall cease to be a
director of the Company for any reason other than a disability (as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended from time to time, herein "Disability") or death, the
vested portion of the option at the time the optionee ceases to be
a director shall be exercisable for 30 days subsequent to the date
the optionee ceased to be a director unless such option would
expire pursuant to Section 4(c)(i) hereof at an earlier date, in
which case such option shall remain exercisable only until the
earlier expiration date. In the event that the optionee shall
cease to be a director of the Company due to Disability, the
portion of his or her options vested at the date the optionee
ceased to be a director shall remain exercisable for one year
after such cessation unless such options would expire pursuant to
Section 4(c)(i) at an earlier date, in which case such options
shall remain exercisable only until the earlier expiration date.
In the event that the optionee should die while a director of the
Company or during the one year period following resignation as a
director due to Disability, the portion of his or her options
vested at the date the optionee ceased to be a director shall
remain exercisable for one year after the date of the optionee's
death, unless such options would expire pursuant to Section
4(c)(i) at an earlier date, in which case the options shall remain
exercisable only until the earlier expiration date.
d. Non-Transferability of the Options. An option granted
under the Plan may not be transferred otherwise than by will or
the laws of descent and distribution or as permitted by Rule 16b-3
of the Securities Exchange Act of 1934, as amended, or successor
rule or regulation ("Rule 16b-3"). An option granted under the
Plan may, during the lifetime of the optionee to whom granted, be
exercised only by such optionee, his or her guardian or legal
representative, or by a transferee permitted by Rule 16b-3.
e. Exercise of Options.
(i) Subject to the provisions of the Plan, an
Initial Grant pursuant to Section 4(b)(i) of the plan shall be
exercisable as follows:
Percentage
From To Exercisable
Date of Grant Day prior to 1st 0%
Anniversary
1st Anniversary Day prior to 2nd 50%
Anniversary
2nd Anniversary Expiration Date 100%
(ii) Subject to the provisions of the Plan, an Annual
Grant pursuant to Section 4(b)(ii) shall be exercisable in full
beginning on the first anniversary date of the date of grant.
(iii) Options may be exercised by giving written
notice to the Secretary of the Company stating the number of
shares of Common Stock with respect to which the option is being
exercised and tendering payment therefor. Payment for shares of
Common Stock shall be made in full at the time that an option or
any part thereof is exercised. Payment may be made (i) in cash, or
(ii) by delivery of shares of stock of the Company held by
optionee for at least six months, which shares shall be valued,
for purposes of payment, at their fair market value on the date of
payment, determined in accordance with procedures established in
Subsection 4(a).
5. Capital Adjustments and Changes in the Company. In the
event of any stock dividend, stock split, exchange of shares,
recapitalization, 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 option and the
option price per share, shall all be proportionately adjusted.
In the event the Company shall be a party to a transaction
involving a sale of substantially all its assets, a merger or a
consolidation, all then outstanding options under the Plan may be
cancelled by the Company as of the effective date of any such
transaction by giving notice to each optionee of its intention to do so
and by permitting the exercise, during the 30-day period preceding the
effective date of such transaction, of all partly or wholly unexercised
options in full, including the portion not yet exercisable pursuant to
the vesting schedule set forth in Subsection 4( e) above.
In the case of dissolution of the Company (other than a
dissolution following a sale of substantially all of the Company's
assets), every option outstanding hereunder shall terminate; provided,
however, that each optionee shall have 30 days' prior written notice of
such event, during which time the optionee shall have a right to
exercise any partly or wholly unexercised option in full, including the
portion not yet exercisable pursuant to the vesting schedule set forth
in Subsection 4(e) above.
6. No Obligation. The granting of an option shall impose no
obligation on the Company to continue optionee's service as a director
for any period.
7. Legal and Other Requirements. The obligation of the Company
to issue or transfer shares of Common Stock under options granted under
the Plan shall be subject to all applicable laws, regulations, rules and
approvals including, but not by way of limitation, the effectiveness of
a registration statement under the Securities Act of 1933, as amended,
the qualification of the options and the shares of Common Stock reserved
for issuance upon exercise of options under applicable state securities
laws, the satisfaction of applicable listing requirements of the
principal securities exchange on which the Company's Common Stock is
listed or admitted to trading, if deemed necessary or appropriate by the
Company, and the payment by the optionee to the Company, upon its
demand, of such amount or in lieu thereof, of such number of shares of
Common Stock of the Company as may be requested by the Company for the
purpose of satisfying any liability to withhold federal, state or local
income or other taxes incurred by reason of the exercise of such options
or the delivery of shares of Common Stock incident thereto.
8. Termination and Amendment of Plan. The Board of Directors,
without further action on the part of the stockholders, may suspend or
terminate the Plan except that no such action may materially and
adversely affect any outstanding option without the consent of the
optionee. Only if and to the extent stockholder approval is necessary to
allow this Plan to meet the conditions of Rule 16b-3, the Board of
Directors shall obtain stockholder approval of any amendments to this
Plan which would: (a) materially increase the benefits accruing to
participants under the Plan, (b) materially increase the number of
securities which may be issued under the Plan, or (c) materially modify
the requirements as to eligibility for participation in the Plan. This
Plan may not be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act or the rules thereunder.
9. Effective Date and Duration of Plan. This Plan shall become
effective as of the closing date of the Company's initial public
offering ("Effective Date"). Unless sooner terminated by the Committee,
the Plan shall continue until the tenth anniversary of the Effective
Date, when it shall terminate and no options 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
options and to conclude the administration of the Plan.
10. 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.
EXHIBIT 5.1
SICHENZIA, ROSS & FRIEDMAN LLP
Attorneys At Law
135 West 50th Street, 20th Floor
New York, New York 10020
_____________________
Telephone: (212) 664-1200
Facsimile: (212) 664-7329
E-Mail: [email protected]
January 19, 2000
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: American Champion Entertainment, Inc.
Form S-8 Registration Statement
Ladies and Gentlemen:
We refer to the above-captioned registration statement on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), filed by American Champion Entertainment, Inc., a
Delaware corporation (the "Company"), with the Securities and Exchange
Commission.
We have examined the originals, photocopies, certified copies or
other evidence of such records of the Company, certificates of officers
of the Company and public officials, and other documents as we have
deemed relevant and necessary as a basis for the opinion hereinafter
expressed. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
certified copies or photocopies and the authenticity of the originals of
such latter documents.
Based on our examination mentioned above, we are of the opinion
that the securities being registered to be sold pursuant to the
Registration Statement are duly authorized and will be, when sold in the
manner described in the Registration Statement, legally and validly
issued, and fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to
the Registration Statement and to the reference to our firm under "Legal
Matters" in the related Prospectus. In giving the foregoing consent, we
do not hereby admit that we are in the category of persons whose consent
is required under Section 7 of the Act, or the rules and regulations of
the Securities and Exchange Commission.
Very truly yours,
/s/ Sichenzia, Ross & Friedman, LLP
Sichenzia, Ross & Friedman, LLP
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of American Champion Entertainment, Inc. on Form S-8 of our
reports on the consolidated financial statements of American Champion
Entertainment, Inc. and its subsidiaries dated February 11, 1998 and
March 11, 1999 (except for note 21, as to which the date is November 11,
1999), appearing in the Annual Reports on Form 10-KSB and 10-KSB/A of
American Champion Entertainment, Inc. for the years ended December 31,
1997 and December 31, 1998. 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
January 25, 2000
