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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ____)
JUST TOYS, INC.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
482133 105
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(CUSIP Number)
Morton J. Levy c/o Just Toys, Inc.
50 West 23rd Street, New York, New York 10010 (212) 645-6335
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of the Rule 13d- (b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this statement |X|.
(A fee is not required only if the filing person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NO. 302747 10 0 PAGE 2 OF 6 PAGES
1. Name Of Reporting Person
S.S. or I.R.S. Identification No. Of Above Person
Morton J. Levy
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2. Check The Appropriate Box If A Member Of A Group*
(a) [ ]
N/A (b) [ ]
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3. Sec Use Only
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4. Source Of Funds*
N/A
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5. Check Box If Disclosure of Legal Proceeding is Required Pursuant to Items
2(c) or 2(d) [ ]
N/A
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6. Citizenship Or Place Of Organization
United States of America
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NUMBER OF SHARES BENEFICIALLY
OWNED BY EACH REPORTING PERSON WITH
7. Sole Voting Power
213,395
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8. Shared Voting Power
0
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9. Sole Dispositive Power
213,395
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10. Shared Dispositive Power
0
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11. Aggregate Amount Beneficially Owned By Each Reporting Person
213,395
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12. Check Box If The Aggregate Amount In Row 9 Excludes Certain
Shares* [ ]
13. Percent Of Class Represented By Amount In Row 9
5.1%
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14. Type Of Reporting Person*
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
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PAGE 3 OF 6 PAGES
SCHEDULE 13D
Item 1. Security and Issuer.
Common Shares, $.01 par value per share
Just Toys, Inc.
50 West 23rd Street
New York, New York 10001
Item 2. Identity and Background.
(a) Morton J. Levy
(b) Just Toys, Inc.
50 West 23rd Street
New York, New York 10010
(c) Chairman of the Board and Chief
Executive Officer of Just Toys, Inc.
50 West 23rd Street
New York, New York 10010
(d) During the last five years, Mr.Levy has not
been convicted in a criminal proceeding
(excluding traffic violations or similar
misdemeanors).
(e) During the last five years, Mr. Levy was not
a party to a civil proceeding of a judicial
or administrative body of competent
jurisdiction and as a result of such
proceeding was or is subject to a judgment,
decree or final order enjoining future
violations of, or prohibiting or mandating
activities subject to, Federal or State
securities laws or finding any violation
with respect to such laws.
(f) United States of America
Item 3. Source and Amount of Funds or Other Consideration.
Mr. Levy was granted options on July 12, 1995 to
purchase 35,000 shares of common stock of Just
Toys, Inc. at a price of $1.625 per share (the
"July 1996 Option"). The options become
exercisable in 20% increments over five years
commencing on July 12, 1996. Pursuant to rule
13d-3(d), as of May 14, 1996, Mr. Levy was deemed
to be the beneficial owner of the 7,000 shares
that Mr. Levy will have the right to purchase
commencing on July 12, 1996. The right to acquire
these shares necessitated this filing.
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PAGE 4 OF 6 PAGES
Item 4. Purpose of Transaction.
If Mr. Levy elects to exercise the options to
purchase the 7,000 shares pursuant to the terms of
the July 1996 Option, Mr. Levy would be acquiring
the shares solely for investment purposes.
(a) In addition to the July 1996 Option, Mr.
Levy also has options to purchase an
additional 75,000 shares of common stock, of
which Mr. Levy can presently exercise
options to purchase 58,000 shares of common
stock.
(b) None
(c) None
(d) None
(e) None
(f) None
(g) None
(h) None
(i) None
(j) None
Item 5. Interest in Securities of the Issuer.
(a) 213,395 shares representing 5.1% of the
total number of outstanding shares. The
213,395 shares includes 65,000 shares
issuable upon exercise of currently
exercisable stock options.
(b) Number of shares as to which such person
has:
(i) sole power to vote or to direct the
vote: 148,395 shares and the 65,000
shares subject to the options, if
acquired
(ii) shared power to vote or to direct
the vote: 0
(iii) sole power to dispose of or to
direct the disposition of: 148,395
shares and the 65,000 shares
subject to the options, if acquired
(iv) shared power to dispose or to
direct the disposition of: 0
(c) None
(d) 1,500 shares are owned by Mr. Levy as
guardian for his grandson under the Uniform
Gifts to Minors Act.
(e) N/A
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PAGE 5 OF 6 PAGES
Item 6 Contracts, Arrangements, Understandings or Relationships with Respect
to the Securities of the Issuer.
Mr. Levy and Just Toys, Inc. are parties to five
different option agreements which are filed
herewith as exhibits. In the aggregate Mr. Levy
has been granted options to purchase 110,000
shares of common stock, of which options to
purchase 65,000 shares of common stock are
presently exercisable. To date, Mr. Levy has not
elected to exercise any of his options.
Item 7. Material to be Filed as Exhibits.
Exhibits
(a) Option Agreement dated November 6, 1992
between Mr. Levy and Just Toys, Inc.
(b) Option Agreement dated October 29, 1993
between Mr. Levy and Just Toys, Inc.
(c) Option Agreement dated November 22, 1994
between Mr. Levy and Just Toys, Inc.
(d) Option Agreement dated May 18, 1995 between
Mr. Levy and Just Toys, Inc.
(e) Option Agreement dated July 12, 1995 between
Mr. Levy and Just Toys, Inc.
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PAGE 6 OF 6 PAGES
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information in this statement is true, complete and correct.
Dated: May 16, 1996
/s/ Morton J. Levy
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Morton J. Levy
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JUST TOYS, INC.
200 FIFTH AVENUE
TOY CENTER NORTH - SUITE 903
NEW YORK, NEW YORK 10010
November 6, 1992
To: Morton J. Levy
We are pleased to confirm that on November 6, 1992, the Stock Option
Committee of the Board of Directors of Just Toys, Inc. (the "Company") granted
to you options, pursuant to the Company's 1992 Incentive and Non-Qualified Stock
Option Plan (the "Plan"), to purchase 5,000 shares of Common Stock, par value
$.01 per share, of the Company, at a price of $14-1/8 per share. The options
issued hereby have been designated by the Stock Option Committee as
non-qualified options.
This option is issued in accordance with and is subject to and
conditioned upon all of the terms and conditions of the Plan (a copy of which is
attached hereto as Exhibit A) as from time to time may be amended, provided,
however that no future amendment or termination of the Plan shall, without your
consent, alter in a manner adverse to you or impair any of your rights or
obligations under this option. Reference is made to the terms and conditions of
the Plan, all of which are incorporated by reference in this option agreement as
if fully set forth herein.
This option may be exercised, as to 20% of the shares covered hereby,
on or after the first anniversary of the date hereof, and as to an additional
20% of the shares covered hereby, on or after each successive anniversary of the
date hereof. This option will expire, to the extent not theretofore exercised,
on November 5, 2002.
Unless at the time of the exercise of this option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such shares, any shares purchased by you upon the exercise of this option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of this option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any shares pursuant to this option, if
in the opinion of counsel to the Company, the shares to be so issued are
required to be registered or otherwise qualified under the Act or under any
other applicable statute, regulation or ordinance affecting the sale of
securities, unless and until such shares have been so registered or otherwise
qualified.
You understand and acknowledge that, under existing law, unless at the
time of the exercise of its option a registration statement under the Act is in
effect as to such shares: (i) any shares purchased by you upon exercise of this
option may be required to be held indefinitely
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unless such shares are subsequently registered under the Act or an exemption
from such registration is available; (ii) any sales of such shares made in
reliance upon Rule 144 promulgated under the Act may be made only in accordance
with the terms and conditions of that Rule (which, under certain circumstances,
restrict the number of shares which may be sold); (iii) in the case of
securities to which Rule 144 is not applicable, compliance with Regulation A
promulgated under the Act or some other disclosure exemption will be required;
(iv) certificates for shares to be issued to you hereunder shall bear a legend
to the effect that the shares have not been registered under the Act and that
the shares may not be sold, hypothecated, or otherwise transferred in the
absence of an effective registration statement under the Act relating thereto or
an opinion of counsel satisfactory to the Company that such registration is not
required; (v) the Company will place an appropriate "stop transfer" order with
its transfer agent with respect to such shares; and (vi) the Company has
undertaken no obligation to register the shares or to include the shares in any
registration statement which may be filed by it subsequent to the issuance of
the shares to you. In addition, you understand and acknowledge that the Company
has no obligation to furnish to you information necessary to enable you to make
sales under Rule 144.
This option (or installment thereof) is to be exercised by delivering
to the Company a written notice of exercise in the form attached hereto as
Exhibit B, together with payment of the purchase price of the shares to be
purchased. The purchase price is to be paid in cash or, at the discretion of the
Stock Option Committee, by delivering shares of the Company's stock already
owned by you and having a fair market value on the date of exercise equal to the
exercise price of the option, or a combination of such shares and cash, or
otherwise in accordance with the Plan.
The Company may establish from time to time, appropriate procedures to
provide for payment or withholding of such income or other taxes as may be
required by law to be paid or withheld in connection with the exercise of an
option. You shall pay the Company all such amounts requested by the Company to
permit the Company to take any deduction available to it resulting from the
exercise of an option. The Company may also establish, from time to time,
appropriate procedures to ensure that the Company receives prompt advice
concerning the occurrence of any event which may create, or affect the timing or
amount of, any obligation to pay or withhold any such taxes or which may make
available to the Company any tax deduction resulting from the occurrence of such
event, and you will comply with all such procedures so established.
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Kindly evidence your acceptance of this option and your agreement to
comply with the provisions hereof and of the Plan by executing this letter under
the words "Accepted and Agreed To."
Sincerely,
JUST TOYS, INC.
By:--------------------------
Rose Evangelista
President
ACCEPTED AND AGREED TO:
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Morton J. Levy
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EXHIBIT A
JUST TOYS, INC.
AMENDED AND RESTATED
1992 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.1 PURPOSE. This Stock Option Plan (the "Plan") is intended to
assist Just Toys, Inc. (the "Company") in attracting and maintaining a strong
management for the Company by encouraging ownership of common stock of the
Company by the Company's officers, directors, independent contractors and
employees. The Plan is also intended to enable the Company to reward the
efforts, abilities and industries of such officers, directors, independent
contractors and employees who render employment and other services which
contribute materially to the success of the Company's business.
1.2 DEFINITIONS. For purposes of the Plan, unless the context
otherwise indicates, the following definitions shall be applicable:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Commission" means the Securities and Exchange Commission.
(d) "Committee" means the Stock Option Committee of the Company which
shall be composed of not less than two persons appointed by the Board of
Directors, each of whom shall be a "disinterested person" as that term is
defined in Rule 16b-3(c)(2)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934.
(e) "Director" means any person who is a member of the Board of
Directors whether or not such person is an Employee.
(f) "Employee" means and includes any person who is an employee of the
Company or any Subsidiary (including officers and directors who are also
employees).
(g) "Fair Market Value" of a Share means (i) if the Shares are quoted on
the NASDAQ National Market System or listed on a national securities exchange,
the closing price on such market or such exchange, (ii) if the Shares are not
quoted on the NASDAQ National Market System or listed on a national securities
exchange, the mean between the closing bid and asked prices of publicly-traded
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Shares in the over-the-counter market as reported on the NASDAQ system or by any
nationally recognized quotation service selected by the Company, or (iii) if the
Shares are not then publicly-traded, as determined, in good faith, by the
Committee.
(h) "Grant Date," as used with respect to a particular option, means the
date as of which such option is granted by the Committee pursuant to the Plan.
(i) "Grantee" means an individual or entity to whom an option is granted
by the Committee pursuant to the Plan.
(j) "Incentive Stock Option" and "ISO" means an option intended to
qualify under Section 422 of the Code.
(k) "Independent Contractor" means any third party retained or engaged
by the Company or any Subsidiary to provide services to the Company or such
Subsidiary, including any employee of such third party providing such services.
(l) "Non-Qualified Stock Option" or "NQO" means an option which does not
qualify as an ISO.
(m) "Option Agreement" means a written agreement between a Grantee and
the Company evidencing an option granted under the Plan, consistent with the
provisions of Article II of the Plan.
(n) "Service", as used herein, means the employment of an Employee by
the Company or any Subsidiary or the service of a Director as a director of the
Company, or the retention of an Independent Contractor (including the retention
of an Independent Contractor by whom a Grantee is employed) by the Company or
any Subsidiary.
(o) "Shares" or "Shares of Stock" means shares of common stock, $.01 par
value, of the Company. Shares may consist of authorized but unissued shares or
shares which have been previously issued and reacquired by the Company.
(p) "Subsidiary" of the Company, if any, means and includes a
"Subsidiary Corporation" as that term is defined in Section 424(f) of the Code.
1.3 ADMINISTRATION. The Plan shall be administered by the
Committee. Subject to the express provisions of the Plan, the Committee, in its
sole discretion, from time to time, shall determine the persons from among those
eligible under the Plan to whom, and the time or times at which, options shall
be granted, and the number of Shares to be subject to each option, whether an
option shall be designated an ISO or a NQO and the manner in, and the price at
which, such option may be exercised. In making such determinations the Committee
may take into account recommendations made by management, the nature and length
of Service rendered by the prospective Grantee, his or her level of
compensation, his or her past, present and potential contributions to the
Company and such other factors as the Committee shall in its discretion deem
relevant. Subject to the express provisions of the Plan and any consents
required by any applicable laws affecting the Plan and options, the Committee
shall have authority to interpret and construe the Plan, to prescribe, amend and
rescind rules and regulations related to it, to determine the terms and
provisions of the respective Option Agreements and to make all other
determinations necessary or advisable for the administration of the Plan.
Nothing contained herein shall be deemed to prevent the Committee in the sound
exercise of business judgment, from canceling
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outstanding options and reissuing new options at a lower exercise price in the
event that the Fair Market Value per share of Common Stock at any time prior to
the date of exercise falls below the exercise price of options granted pursuant
to the Plan. Shares subject to any such canceled options shall be immediately
available for reissuance under the Plan. The determinations of the Committee
under the Plan shall be conclusive and binding on all persons.
1.4 ELIGIBILITY FOR PARTICIPATION. Any Director, Employee or
Independent Contractor providing services to the Company or any Subsidiary or
any employee of such Independent Contractor shall be eligible to receive options
granted under the Plan, except that (i) only Employees shall be eligible to
receive Incentive Stock Options and (ii) members of the Committee are not
eligible to receive options under the Plan during their term of service on the
Committee and for a period of one year thereafter.
1.5 SHARES SUBJECT TO THE PLAN. Subject to adjustment as
hereinafter provided, no more than 600,000 Shares may be issued pursuant to the
exercise of options granted under the Plan. If any option shall expire,
terminate or be canceled for any reason without having been exercised in full,
the unpurchased Shares subject thereto shall again be available for the purposes
of the Plan.
1.6 DURATION OF THE PLAN. Unless previously terminated by the
Committee or the Board of Directors, the Plan will terminate on August 9, 2002.
Such termination will not terminate any option then outstanding.
ARTICLE II
TERMS AND CONDITIONS OF OPTIONS
2.1 OPTIONS AND OPTION AGREEMENTS. Each option granted under the
Plan shall be subject to all of the applicable terms and conditions of the Plan
and shall be evidenced by an Option Agreement. The Option Agreement shall
contain such terms and conditions not inconsistent with the Plan as the
Committee may deem appropriate, including, among other things, when and to what
extent the option is exercisable, the number of Shares that may be purchased
upon exercise of an option, the price at which each Share may be purchased
pursuant to the exercise of an option, the conditions to the exercise of any
option and the Grantee's obligation to remain in the continuous Service of the
Company. The provisions of Option Agreements need not be identical.
2.2 EXERCISABILITY AND TERM. (a) Except as otherwise provided
below, the Committee shall determine the term of each option and whether the
option shall be exercisable in full or in installments and, if in installments,
the number of installments. No option, however, may remain outstanding for more
than ten years after the Grant Date.
(b) Except as otherwise provided herein, an option granted under the
Plan may be exercised from time to time during its term for the full number of
Shares then purchasable upon exercise of the option or from time to time for any
part thereof.
(c) Except as otherwise provided below, options shall terminate
immediately upon the termination of the Service of the Grantee. Options granted
under the Plan shall not, however, be affected by any change of Service so long
as the Grantee continues to be a Director, Employee or Independent Contractor.
(d) If a Grantee dies while he or she is a Director, Employee or
Independent Contractor or within three months after the termination of such
option holder's Service by reason of retirement with
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the written consent of the Company, such option may be exercised within one year
(or such other shorter period as determined by the Committee and specified in
the Option Agreement) from the date of such Grantee's death by his or her
personal representative or representatives, or by the person or persons to whom
the Grantee's rights under the option pass by will or by the applicable laws of
descent and distribution; provided, however, that an option may not be exercised
after its expiration and provided further that such option may only be exercised
for the number of Shares which could have been purchased by the Grantee on the
date of his or her death.
(e) If a Grantee voluntarily retires or quits his or her Service with
the written consent of the Company or a Subsidiary, or if the Service of the
Grantee is terminated by the Company or Subsidiary for reasons other than cause,
such Grantee may exercise his or her option at any time prior to the expiration
of the original option period as specified in the Option Agreement or the
expiration of three months (or such other period as determined by the Committee
and specified in the Option Agreement), whichever shall occur first; provided,
however, that no option may be exercised after its expiration and provided
further that the Grantee may only exercise his or her option for the number of
Shares which he or she could have purchased as of the date such Grantee retired
or quit his or her Service or the date the Service of such Grantee was
terminated.
(f) Notwithstanding Subsections (c), (d) and (e) above, the Committee
may in its sole discretion, with respect to any or all NQOs granted by it,
provide that in the event that the Service of a holder of an NQO shall terminate
for any reason, including without limitation death, disability, termination with
or without cause or retirement with or without the consent of the Company, the
NQOs held by such holder, to the extent of the number of Shares subject to such
NQO which were not purchasable by him or her on the date of termination of his
or her Service, shall forthwith terminate and that any NQOs exercisable on the
date of such termination shall remain exercisable until the expiration of such
NQO unless earlier terminated pursuant to the provisions of this Plan or of the
agreement pursuant to which the NQO is granted.
(g) Options may be terminated at any time by agreement between the
Company and the Grantee.
(h) Nothing herein contained shall impose upon the Company the
obligation to continue the Service of any Grantee. The rights of the Company to
terminate the Service of a Grantee shall not be diminished or affected by reason
of the granting of an Option.
2.3 OPTION PRICE. (a) Except as provided in subsection 2.3(c)
hereof, the option price per Share shall be determined by the Committee at the
time the option is granted, but shall not, in the case of ISOs, be less than
100% of the Fair Market Value of a Share on the Grant Date. In the case of NQOs,
the option price per Share may be less than, equal to or greater than the Fair
Market Value of a Share on the Grant Date. The Committee may modify the option
price of outstanding options or cancel such options and grant new options in
lieu thereof at a new option price, provided that, in the case of ISOs, the
option price of such modified or new option may not be less than 100% of the
Fair Market Value of a Share on the date of such action by the Committee.
(b) To the extent that the aggregate Fair Market Value (determined at
the time an ISO is granted) of the Shares with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year under all
incentive stock option plans of the Company and its Subsidiaries exceeds
$100,000, such ISOs will be treated as NQOs. The foregoing rule shall be applied
by taking ISOs into account in the order in which they were granted. In the
event outstanding ISOs granted to an
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Employee become immediately exercisable under Section 4.1(c) hereof, such ISOs
will, to the extent the aggregate Fair Market Value thereof exceeds $100,000, be
treated as NQOs.
(c) An ISO may be granted to an Employee owning, or who is considered as
owning by applying the rules of ownership set forth in Section 424(d) of the
Code, over ten percent of the total combined voting power of all classes of
capital stock of the Company or any Subsidiary if the option price of such ISO
equals or exceeds 110% of the Fair Market Value of a Share subject to the ISO
and such ISO shall expire not more than five years from the date of grant.
2.4 NONTRANSFERABILITY. No option granted under the Plan shall be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Grantee solely
by such Grantee.
2.5 METHOD OF EXERCISE. A Grantee electing to exercise an option
shall exercise such option by delivering to the Company written notice of such
election to exercise, specifying the number of Shares such Grantee has elected
to purchase, together with the option price for the Shares being purchased in
accordance with the terms of Section 2.6 below.
2.6 PAYMENT FOR SHARES. The option price shall become immediately
due and payable upon exercise of the option and payment thereof shall be made to
the Company as follows: (i) in cash (including check, bank draft or money
order), or (ii) at the discretion of the Committee, by delivering to the Company
Shares of Stock already owned by the Grantee and having a Fair Market Value on
the date of exercise equal to the option price or a combination of such Shares
and cash, or (iii) by any other proper method specifically approved by the
Committee.
ARTICLE III
LOANS AND FINANCIAL ACCOMMODATIONS TO GRANTEES
3.1 PURPOSE. In order to assist the Grantee with the acquisition
of Shares of Stock pursuant to the exercise of an option granted under the Plan,
including the payment of any taxes resulting from such exercise, the Committee
may, in its discretion, whenever, in the judgment of the Committee, such
assistance is permitted by applicable law and may reasonably be expected to
benefit the Company or a Subsidiary, authorize, either at the time of the grant
of the option or thereafter (a) the extension of a loan to the Grantee by the
Company, (b) the payment by the optionee of the purchase price of the Shares of
stock in installments, (c) the guarantee by the Company of a loan obtained by
the Grantee from a third party or (d) make such other reasonable arrangements to
facilitate the exercise of options in accordance with applicable law.
3.2 TERMS OF LOAN OR GUARANTEE. The Committee or Board shall
determine the terms of any loan or guarantee made pursuant to this Article III,
including the interest rate and other terms of repayment thereof, and whether
such loan or guarantee shall be secured or unsecured. Each loan shall be
evidenced by a promissory note having a maximum term to maturity of not more
than sixty (60) months. The maximum amount of any loan or guarantee shall be the
option price for Shares purchased upon exercise of an option plus (a) related
interest payments and (b) the amount of tax liability incurred by the Grantee as
a result of the exercise of an option. In the case of ISOs, the interest rate on
any loan authorized by the Committee shall not be less than the higher of (i)
the "prime" rate as from time to time in effect of a commercial bank of
recognized standing or (ii) the rate of interest from time to time computed
under Section 483 of the Code.
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3.3 USE OF LOANED OR GUARANTEED FUNDS. No amount loaned to a
Grantee and no amount the repayment of which is guaranteed by the Company shall
be used for any purpose other than payment of (i) the purchase price of Shares
acquired on the exercise of an option granted or to be granted under the Plan
and (ii) taxes attributable to such exercise.
ARTICLE IV
GENERAL PROVISIONS
4.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The aggregate
number and class of Shares for which options may be granted under the Plan, the
number and class of Shares covered by each outstanding option and the price per
Share thereof (but not the total price) and each such option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of common stock of the Company resulting from a stock split, split-up or
consolidation of Shares or any like capital adjustment or reclassification of
Shares, or the payment of any stock dividends, or any other increase or decrease
in the number of Shares of the Company, without receipt of consideration by the
Company.
(b) Subject to any required action by its stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, except as
otherwise provided below, any option granted hereunder shall be adjusted so as
to pertain and apply to the securities to which the holder of the number of
Shares of the Company subject to the option would have been entitled in such
merger or consolidation.
(c) Upon the dissolution or liquidation of the Company or upon a merger
or consolidation of the Company in a transaction in which all or substantially
all of the stockholders of the Company receive cash, securities of another
company or other consideration in exchange for their Shares of Stock, whether or
not the Company is the surviving corporation, or upon a sale of all or
substantially all of the assets of the Company, any option granted hereunder
shall terminate, but the Grantee may, immediately prior to any such transaction
exercise his or her option, in whole or in part, as to the full number of Shares
which he or she would otherwise have been entitled to purchase during the
remaining term of the option irrespective of any vesting or installment
features. Notwithstanding the foregoing, the Company may elect not to permit a
Grantee to exercise his or her option immediately prior to such event in
accordance with the foregoing, but in lieu thereof the Company may, in its
discretion and immediately prior to any such dissolution, liquidation, merger,
consolidation or sale substitute or cause to be substituted a new option for his
or her option, such new option to be applicable to the stock of the surviving or
acquiring corporation or any of its affiliates and to be on terms no less
favorable to the Grantee than those contained in his or her prior option.
(d) Adjustments and elections under this Section 4.1 shall be made by
the Committee whose determination as to what adjustments, if any, shall be made
and the extent thereof shall be final, binding and conclusive.
4.2 PRIVILEGES OF STOCK OWNERSHIP. No Grantee shall be entitled
to the privileges of stock ownership as to any Shares of Stock not actually
issued and delivered to him or her.
4.3 SECURITIES REGULATIONS. (a) Each option shall be subject to
the requirement that if at any time the Board shall in its discretion determine
that the listing, registration or qualification of the Shares subject to such
option upon any securities exchange or under any federal or state law, or the
approval or consent of any governmental regulatory body, is necessary or
desirable in connection with the issuance or purchase of Shares thereunder, such
option may not be exercised in whole or in part
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unless such listing, registration, qualification, approval or consent shall have
been effected or obtained free from any conditions not reasonably acceptable to
the Board.
(b) Unless at the time of the exercise of an option and the issuance of
the Shares purchased by a Grantee pursuant thereto there shall be in effect as
to such Shares a Registration Statement under the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations of the Commission, the
Grantee exercising such option shall deliver to the Company at the time of
exercise, a certificate in a form reasonably satisfactory to the Company and/or
counsel to the Company (i) acknowledging that the Shares so acquired may be
"restricted securities" within the meaning of Rule 144 promulgated under the
Act; (ii) certifying that he or she is acquiring the Shares issuable to him or
her upon such exercise for the purpose of investment and not with a view to
their sale or distribution; and (iii) containing such Grantee's agreement that
such Shares may not be sold or otherwise disposed of except in accordance with
applicable provisions of the Act. The Company shall not be required to issue or
deliver certificates for Shares until there shall have been compliance with all
applicable laws, rules and regulations, including rules and regulations of the
Commission.
4.4 SUSPENSION, AMENDMENT AND TERMINATION OF THE PLAN. The
Committee may at any time suspend, amend or terminate the Plan, provided that
the approval of the Board of Directors of the Company will be required for any
amendment which will:
(a) increase the maximum number of Shares which may be issued
pursuant the exercise of options granted under the Plan; or
(b) change the provisions of Section 1.4; or
(c) permit the grant of any ISO under the Plan with an option price
less than 100% of the Fair Market Value of the Shares at the time
such ISO is granted; or
(d) extend the term of options or the period during which options
may be granted under the Plan; or
(e) materially increase the benefits provided under the Plan to the
extent that stockholder approval would then be required pursuant
to Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act").
The power of the Committee to amend the Plan under this Section 4.4 is
subject in certain instances to the requirements of the Exchange Act and other
provisions of applicable law which may require stockholder approval of such
amendments in order to achieve the Company's objectives and the purposes of the
Plan.
Unless the Plan shall theretofore have been terminated by the Committee
or the Board of Directors, the Plan shall terminate August 9, 2002. No option
may be granted during the term of any suspension of the Plan or after
termination of the Plan. The amendment or termination of the Plan shall not,
without the written consent of the Grantee, alter or impair any rights or
obligations of such Grantee under any option theretofore granted under the Plan.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed
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null and void, to the extent permitted by law and deemed advisable by the
Committee.
4.5 EFFECTIVE DATE. The effective date of the Plan shall be
August 10, 1992, subject to the approval by the holders of a majority of the
Company's outstanding stock within one year of such effective date.
Notwithstanding anything in the Plan to the contrary, if the Plan shall have
been approved by the Board prior to such stockholder approval, options may be
granted by the Committee as provided herein subject to such subsequent
stockholder approval.
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Exhibit B
Just Toys, Inc.
50 West 23rd Street
New York, New York 10010
Ladies and Gentlemen:
Notice is hereby given of my election to purchase [ ] shares of Common
Stock, $.01 par value (the "Shares"), of Just Toys, Inc., at a price of $
----
per Share, pursuant to the Company's Stock Option Plan. Enclosed in payment for
the Shares is :
my check in the amount of $ .
------ ---------
* Shares having a total value of $ , such value
------ ---
being based on the closing price(s) of the shares on the date hereof.
The following information is supplied for use in issuing and registering
the Shares purchased hereby:
Number of Certificates and
Denominations
-------------------
Name
-------------------
Address
-------------------
-------------------
Social Security Number
-------------------
Dated:
----------------
Very truly yours,
------------------
- ----------------
* Subject to the approval of the Stock Option Committee.
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JUST TOYS, INC.
50 WEST 23RD STREET
NEW YORK, NEW YORK 10010
October 29, 1993
To: Morton J. Levy
We are pleased to confirm that on October 29, 1993, Just Toys, Inc. (the
"Company") granted to you options, pursuant to Article V of the Company's 1992
Incentive and Non- Qualified Stock Option Plan (the "Plan"), to purchase 5,000
shares of Common Stock, par value $.01 per share, of the Company, at a price of
$12.50 per share. This option shall be effective for a period of ten years
commencing on October 29, 1993 (the "Effective Date") and terminating on October
28. 2003. The options issued hereby have been designated by the Stock Option
Committee as non-qualified options.
This option is issued in accordance with and is subject to and
conditioned upon all of the terms and conditions of the Plan (a copy of which is
attached hereto as Exhibit A) as from time to time may be amended, provided,
however that no future amendment or termination of the Plan shall, without your
consent, alter in a manner adverse to you or impair any of your rights or
obligations under this option. Reference is made to the terms and conditions of
the Plan, all of which are incorporated by reference in this option agreement as
if fully set forth herein.
This option may be exercised according to the following vesting
schedule: 20% of the shares covered by this option may be exercised after the
first anniversary of the Effective Date and an additional 20% of the shares
covered by this option may be exercised after each successive anniversary of the
Effective Date.
Unless at the time of the exercise of this option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such shares, any shares purchased by you upon the exercise of this option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of this option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any shares pursuant to this option, if
in the opinion of counsel to the Company, the shares to be so issued are
required to be registered or otherwise qualified under the Act or under any
other applicable statute, regulation or ordinance affecting the sale of
securities, unless and until such shares have been so registered or otherwise
qualified.
You understand and acknowledge that, under existing law, unless at the
time of the
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exercise of its option a registration statement under the Act is in effect as to
such shares: (i) any shares purchased by you upon exercise of this option may be
required to be held indefinitely unless such shares are subsequently registered
under the Act or an exemption from such registration is available; (ii) any
sales of such shares made in reliance upon Rule 144 promulgated under the Act
may be made only in accordance with the terms and conditions of that Rule
(which, under certain circumstances, restrict the number of shares which may be
sold); (iii) in the case of securities to which Rule 144 is not applicable,
compliance with Regulation A promulgated under the Act or some other disclosure
exemption will be required; (iv) certificates for shares to be issued to you
hereunder shall bear a legend to the effect that the shares have not been
registered under the Act and that the shares may not be sold, hypothecated, or
otherwise transferred in the absence of an effective registration statement
under the Act relating thereto or an opinion of counsel satisfactory to the
Company that such registration is not required; (v) the Company will place an
appropriate "stop transfer" order with its transfer agent with respect to such
shares; and (vi) the Company has undertaken no obligation to register the shares
or to include the shares in any registration statement which may be filed by it
subsequent to the issuance of the shares to you. In addition, you understand and
acknowledge that the Company has no obligation to furnish to you information
necessary to enable you to make sales under Rule 144.
This option (or installment thereof) is to be exercised by delivering to
the Company a written notice of exercise in the form attached hereto as Exhibit
B, together with payment of the purchase price of the shares to be purchased.
The purchase price is to be paid in cash or, at the discretion of the Stock
Option Committee, by delivering shares of the Company's stock already owned by
you and having a fair market value on the date of exercise equal to the exercise
price of the option, or a combination of such shares and cash, or otherwise in
accordance with the Plan.
The Company may establish from time to time, appropriate procedures to
provide for payment or withholding of such income or other taxes as may be
required by law to be paid or withheld in connection with the exercise of an
option. You shall pay the Company all such amounts requested by the Company to
permit the Company to take any deduction available to it resulting from the
exercise of an option. The Company may also establish, from time to time,
appropriate procedures to ensure that the Company receives prompt advice
concerning the occurrence of any event which may create, or affect the timing or
amount of, any obligation to pay or withhold any such taxes or which may make
available to the Company any tax deduction resulting from the occurrence of such
event, and you will comply with all such procedures so established.
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Kindly evidence your acceptance of this option and your agreement to
comply with the provisions hereof and of the Plan by executing this letter under
the words "Accepted and Agreed To."
Sincerely,
JUST TOYS, INC.
By:
---------------------------
Name: Allan Rigberg
Title: Chief Executive Officer
ACCEPTED AND AGREED TO:
- ---------------------------------
Morton J. Levy
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EXHIBIT A
JUST TOYS, INC.
AMENDED AND RESTATED
1992 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.1 PURPOSE. This Stock Option Plan (the "Plan") is intended to
assist Just Toys, Inc. (the "Company") in attracting and maintaining a strong
management for the Company by encouraging ownership of common stock of the
Company by the Company's officers, directors, independent contractors and
employees. The Plan is also intended to enable the Company to reward the
efforts, abilities and industries of such officers, directors, independent
contractors and employees who render employment and other services which
contribute materially to the success of the Company's business.
1.2 DEFINITIONS. For purposes of the Plan, unless the context
otherwise indicates, the following definitions shall be applicable:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Commission" means the Securities and Exchange Commission.
(d) "Committee" means the Stock Option Committee of the Company which
shall be composed of not less than two persons appointed by the Board of
Directors, each of whom shall be a "disinterested person" as that term is
defined in Rule 16b-3(c)(2)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934.
(e) "Director" means any person who is a member of the Board of
Directors whether or not such person is an Employee.
(f) "Employee" means and includes any person who is an employee of the
Company or any Subsidiary (including officers and directors who are also
employees).
(g) "Fair Market Value" of a Share means (i) if the Shares are quoted on
the NASDAQ National Market System or listed on a national securities exchange,
the closing price on such market or
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such exchange, (ii) if the Shares are not quoted on the NASDAQ National Market
System or listed on a national securities exchange, the mean between the closing
bid and asked prices of publicly-traded Shares in the over-the-counter market
as reported on the NASDAQ system or by any nationally recognized quotation
service selected by the Company, or (iii) if the Shares are not then
publicly-traded, as determined, in good faith, by the Committee.
(h) "Grant Date," as used with respect to a particular option, means the
date as of which such option is granted by the Committee pursuant to the Plan.
(i) "Grantee" means an individual or entity to whom an option is granted
by the Committee pursuant to the Plan.
(j) "Incentive Stock Option" and "ISO" means an option intended to
qualify under Section 422 of the Code.
(k) "Independent Contractor" means any third party retained or engaged
by the Company or any Subsidiary to provide services to the Company or such
Subsidiary, including any employee of such third party providing such services.
(l) "Non-Qualified Stock Option" or "NQO" means an option which does not
qualify as an ISO.
(m) "Option Agreement" means a written agreement between a Grantee and
the Company evidencing an option granted under the Plan, consistent with the
provisions of Article II of the Plan.
(n) "Service", as used herein, means the employment of an Employee by
the Company or any Subsidiary or the service of a Director as a director of the
Company, or the retention of an Independent Contractor (including the retention
of an Independent Contractor by whom a Grantee is employed) by the Company or
any Subsidiary.
(o) "Shares" or "Shares of Stock" means shares of common stock, $.01 par
value, of the Company. Shares may consist of authorized but unissued shares or
shares which have been previously issued and reacquired by the Company.
(p) "Subsidiary" of the Company, if any, means and includes a
"Subsidiary Corporation" as that term is defined in Section 424(f) of the Code.
1.3 ADMINISTRATION. The Plan shall be administered by the
Committee. Subject to the express provisions of the Plan, the Committee, in its
sole discretion, from time to time, shall determine the persons from among those
eligible under the Plan to whom, and the time or times at which, options shall
be granted, and the number of Shares to be subject to each option, whether an
option shall be designated an ISO or a NQO and the manner in, and the price at
which, such option may be exercised. In making such determinations the Committee
may take into account recommendations made by management, the nature and length
of Service rendered by the prospective Grantee, his or her level of
compensation, his or her past, present and potential contributions to the
Company and such other factors as the Committee shall in its discretion deem
relevant. Subject to the express provisions of the Plan and any consents
required by any applicable laws affecting the Plan and options, the Committee
shall have
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authority to interpret and construe the Plan, to prescribe, amend and rescind
rules and regulations related to it, to determine the terms and provisions of
the respective Option Agreements and to make all other determinations necessary
or advisable for the administration of the Plan. Nothing contained herein shall
be deemed to prevent the Committee in the sound exercise of business judgment,
from canceling outstanding options and reissuing new options at a lower exercise
price in the event that the Fair Market Value per share of Common Stock at any
time prior to the date of exercise falls below the exercise price of options
granted pursuant to the Plan. Shares subject to any such canceled options shall
be immediately available for reissuance under the Plan. The determinations of
the Committee under the Plan shall be conclusive and binding on all persons.
1.4 ELIGIBILITY FOR PARTICIPATION. Any Director, Employee or
Independent Contractor providing services to the Company or any Subsidiary or
any employee of such Independent Contractor shall be eligible to receive options
granted under the Plan, except that (i) only Employees shall be eligible to
receive Incentive Stock Options and (ii) members of the Committee are not
eligible to receive options under the Plan during their term of service on the
Committee and for a period of one year thereafter.
1.5 SHARES SUBJECT TO THE PLAN. Subject to adjustment as
hereinafter provided, no more than 600,000 Shares may be issued pursuant to the
exercise of options granted under the Plan. If any option shall expire,
terminate or be canceled for any reason without having been exercised in full,
the unpurchased Shares subject thereto shall again be available for the purposes
of the Plan.
1.6 DURATION OF THE PLAN. Unless previously terminated by the
Committee or the Board of Directors, the Plan will terminate on August 9, 2002.
Such termination will not terminate any option then outstanding.
ARTICLE II
TERMS AND CONDITIONS OF OPTIONS
2.1 OPTIONS AND OPTION AGREEMENTS. Each option granted under the
Plan shall be subject to all of the applicable terms and conditions of the Plan
and shall be evidenced by an Option Agreement. The Option Agreement shall
contain such terms and conditions not inconsistent with the Plan as the
Committee may deem appropriate, including, among other things, when and to what
extent the option is exercisable, the number of Shares that may be purchased
upon exercise of an option, the price at which each Share may be purchased
pursuant to the exercise of an option, the conditions to the exercise of any
option and the Grantee's obligation to remain in the continuous Service of the
Company. The provisions of Option Agreements need not be identical.
2.2 EXERCISABILITY AND TERM. (a) Except as otherwise provided
below, the Committee shall determine the term of each option and whether the
option shall be exercisable in full or in installments and, if in installments,
the number of installments. No option, however, may remain outstanding for more
than ten years after the Grant Date.
(b) Except as otherwise provided herein, an option granted under the
Plan may be exercised from time to time during its term for the full number of
Shares then purchasable upon exercise of the option or from time to time for any
part thereof.
(c) Except as otherwise provided below, options shall terminate
immediately upon the
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termination of the Service of the Grantee. Options granted under the Plan shall
not, however, be affected by any change of Service so long as the Grantee
continues to be a Director, Employee or Independent Contractor.
(d) If a Grantee dies while he or she is a Director, Employee or
Independent Contractor or within three months after the termination of such
option holder's Service by reason of retirement with the written consent of the
Company, such option may be exercised within one year (or such other shorter
period as determined by the Committee and specified in the Option Agreement)
from the date of such Grantee's death by his or her personal representative or
representatives, or by the person or persons to whom the Grantee's rights under
the option pass by will or by the applicable laws of descent and distribution;
provided, however, that an option may not be exercised after its expiration and
provided further that such option may only be exercised for the number of Shares
which could have been purchased by the Grantee on the date of his or her death.
(e) If a Grantee voluntarily retires or quits his or her Service with
the written consent of the Company or a Subsidiary, or if the Service of the
Grantee is terminated by the Company or Subsidiary for reasons other than cause,
such Grantee may exercise his or her option at any time prior to the expiration
of the original option period as specified in the Option Agreement or the
expiration of three months (or such other period as determined by the Committee
and specified in the Option Agreement), whichever shall occur first; provided,
however, that no option may be exercised after its expiration and provided
further that the Grantee may only exercise his or her option for the number of
Shares which he or she could have purchased as of the date such Grantee retired
or quit his or her Service or the date the Service of such Grantee was
terminated.
(f) Notwithstanding Subsections (c), (d) and (e) above, the Committee
may in its sole discretion, with respect to any or all NQOs granted by it,
provide that in the event that the Service of a holder of an NQO shall terminate
for any reason, including without limitation death, disability, termination with
or without cause or retirement with or without the consent of the Company, the
NQOs held by such holder, to the extent of the number of Shares subject to such
NQO which were not purchasable by him or her on the date of termination of his
or her Service, shall forthwith terminate and that any NQOs exercisable on the
date of such termination shall remain exercisable until the expiration of such
NQO unless earlier terminated pursuant to the provisions of this Plan or of the
agreement pursuant to which the NQO is granted.
(g) Options may be terminated at any time by agreement between the
Company and the Grantee.
(h) Nothing herein contained shall impose upon the Company the
obligation to continue the Service of any Grantee. The rights of the Company to
terminate the Service of a Grantee shall not be diminished or affected by reason
of the granting of an Option.
2.3 OPTION PRICE. (a) Except as provided in subsection 2.3(c)
hereof, the option price per Share shall be determined by the Committee at the
time the option is granted, but shall not, in the case of ISOs, be less than
100% of the Fair Market Value of a Share on the Grant Date. In the case of NQOs,
the option price per Share may be less than, equal to or greater than the Fair
Market Value of a Share on the Grant Date. The Committee may modify the option
price of outstanding options or cancel such options and grant new options in
lieu thereof at a new option price, provided that, in the case of
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ISOs, the option price of such modified or new option may not be less than 100%
of the Fair Market Value of a Share on the date of such action by the Committee.
(b) To the extent that the aggregate Fair Market Value (determined at
the time an ISO is granted) of the Shares with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year under all
incentive stock option plans of the Company and its Subsidiaries exceeds
$100,000, such ISOs will be treated as NQOs. The foregoing rule shall be applied
by taking ISOs into account in the order in which they were granted. In the
event outstanding ISOs granted to an Employee become immediately exercisable
under Section 4.1(c) hereof, such ISOs will, to the extent the aggregate Fair
Market Value thereof exceeds $100,000, be treated as NQOs.
(c) An ISO may be granted to an Employee owning, or who is considered as
owning by applying the rules of ownership set forth in Section 424(d) of the
Code, over ten percent of the total combined voting power of all classes of
capital stock of the Company or any Subsidiary if the option price of such ISO
equals or exceeds 110% of the Fair Market Value of a Share subject to the ISO
and such ISO shall expire not more than five years from the date of grant.
2.4 NONTRANSFERABILITY. No option granted under the Plan shall be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Grantee solely
by such Grantee.
2.5 METHOD OF EXERCISE. A Grantee electing to exercise an option
shall exercise such option by delivering to the Company written notice of such
election to exercise, specifying the number of Shares such Grantee has elected
to purchase, together with the option price for the Shares being purchased in
accordance with the terms of Section 2.6 below.
2.6 PAYMENT FOR SHARES. The option price shall become immediately
due and payable upon exercise of the option and payment thereof shall be made to
the Company as follows: (i) in cash (including check, bank draft or money
order), or (ii) at the discretion of the Committee, by delivering to the Company
Shares of Stock already owned by the Grantee and having a Fair Market Value on
the date of exercise equal to the option price or a combination of such Shares
and cash, or (iii) by any other proper method specifically approved by the
Committee.
ARTICLE III
LOANS AND FINANCIAL ACCOMMODATIONS TO GRANTEES
3.1 PURPOSE. In order to assist the Grantee with the acquisition
of Shares of Stock pursuant to the exercise of an option granted under the Plan,
including the payment of any taxes resulting from such exercise, the Committee
may, in its discretion, whenever, in the judgment of the Committee, such
assistance is permitted by applicable law and may reasonably be expected to
benefit the Company or a Subsidiary, authorize, either at the time of the grant
of the option or thereafter (a) the extension of a loan to the Grantee by the
Company, (b) the payment by the optionee of the purchase price of the Shares of
stock in installments, (c) the guarantee by the Company of a loan obtained by
the Grantee from a third party or (d) make such other reasonable arrangements to
facilitate the exercise of options in accordance with applicable law.
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3.2 TERMS OF LOAN OR GUARANTEE. The Committee or Board shall
determine the terms of any loan or guarantee made pursuant to this Article III,
including the interest rate and other terms of repayment thereof, and whether
such loan or guarantee shall be secured or unsecured. Each loan shall be
evidenced by a promissory note having a maximum term to maturity of not more
than sixty (60) months. The maximum amount of any loan or guarantee shall be the
option price for Shares purchased upon exercise of an option plus (a) related
interest payments and (b) the amount of tax liability incurred by the Grantee as
a result of the exercise of an option. In the case of ISOs, the interest rate on
any loan authorized by the Committee shall not be less than the higher of (i)
the "prime" rate as from time to time in effect of a commercial bank of
recognized standing or (ii) the rate of interest from time to time computed
under Section 483 of the Code.
3.3 USE OF LOANED OR GUARANTEED FUNDS. No amount loaned to a
Grantee and no amount the repayment of which is guaranteed by the Company shall
be used for any purpose other than payment of (i) the purchase price of Shares
acquired on the exercise of an option granted or to be granted under the Plan
and (ii) taxes attributable to such exercise.
ARTICLE IV
GENERAL PROVISIONS
4.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The aggregate
number and class of Shares for which options may be granted under the Plan, the
number and class of Shares covered by each outstanding option and the price per
Share thereof (but not the total price) and each such option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of common stock of the Company resulting from a stock split, split-up or
consolidation of Shares or any like capital adjustment or reclassification of
Shares, or the payment of any stock dividends, or any other increase or decrease
in the number of Shares of the Company, without receipt of consideration by the
Company.
(b) Subject to any required action by its stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, except as
otherwise provided below, any option granted hereunder shall be adjusted so as
to pertain and apply to the securities to which the holder of the number of
Shares of the Company subject to the option would have been entitled in such
merger or consolidation.
(c) Upon the dissolution or liquidation of the Company or upon a merger
or consolidation of the Company in a transaction in which all or substantially
all of the stockholders of the Company receive cash, securities of another
company or other consideration in exchange for their Shares of Stock, whether or
not the Company is the surviving corporation, or upon a sale of all or
substantially all of the assets of the Company, any option granted hereunder
shall terminate, but the Grantee may, immediately prior to any such transaction
exercise his or her option, in whole or in part, as to the full number of Shares
which he or she would otherwise have been entitled to purchase during the
remaining term of the option irrespective of any vesting or installment
features. Notwithstanding the foregoing, the Company may elect not to permit a
Grantee to exercise his or her option immediately prior to such event in
accordance with the foregoing, but in lieu thereof the Company may, in its
discretion and immediately prior to any such dissolution, liquidation, merger,
consolidation or sale substitute or cause to be substituted a new option for his
or her option, such new option to be applicable to the stock of the surviving or
acquiring corporation or any of its affiliates and to be on terms no less
favorable to the Grantee than those contained in his or her prior option.
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(d) Adjustments and elections under this Section 4.1 shall be made by
the Committee whose determination as to what adjustments, if any, shall be made
and the extent thereof shall be final, binding and conclusive.
4.2 PRIVILEGES OF STOCK OWNERSHIP. No Grantee shall be entitled
to the privileges of stock ownership as to any Shares of Stock not actually
issued and delivered to him or her.
4.3 SECURITIES REGULATIONS. (a) Each option shall be subject to
the requirement that if at any time the Board shall in its discretion determine
that the listing, registration or qualification of the Shares subject to such
option upon any securities exchange or under any federal or state law, or the
approval or consent of any governmental regulatory body, is necessary or
desirable in connection with the issuance or purchase of Shares thereunder, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, approval or consent shall have been effected or
obtained free from any conditions not reasonably acceptable to the Board.
(b) Unless at the time of the exercise of an option and the issuance of
the Shares purchased by a Grantee pursuant thereto there shall be in effect as
to such Shares a Registration Statement under the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations of the Commission, the
Grantee exercising such option shall deliver to the Company at the time of
exercise, a certificate in a form reasonably satisfactory to the Company and/or
counsel to the Company (i) acknowledging that the Shares so acquired may be
"restricted securities" within the meaning of Rule 144 promulgated under the
Act; (ii) certifying that he or she is acquiring the Shares issuable to him or
her upon such exercise for the purpose of investment and not with a view to
their sale or distribution; and (iii) containing such Grantee's agreement that
such Shares may not be sold or otherwise disposed of except in accordance with
applicable provisions of the Act. The Company shall not be required to issue or
deliver certificates for Shares until there shall have been compliance with all
applicable laws, rules and regulations, including rules and regulations of the
Commission.
4.4 SUSPENSION, AMENDMENT AND TERMINATION OF THE PLAN. The
Committee may at any time suspend, amend or terminate the Plan, provided that
the approval of the Board of Directors of the Company will be required for any
amendment which will:
(a) increase the maximum number of Shares which may be issued
pursuant the exercise of options granted under the Plan; or
(b) change the provisions of Section 1.4; or
(c) permit the grant of any ISO under the Plan with an option price
less than 100% of the Fair Market Value of the Shares at the time
such ISO is granted; or
(d) extend the term of options or the period during which options may
be granted under the Plan; or
(e) materially increase the benefits provided under the Plan to the
extent that stockholder approval would then be required pursuant
to Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act").
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The power of the Committee to amend the Plan under this Section 4.4 is
subject in certain instances to the requirements of the Exchange Act and other
provisions of applicable law which may require stockholder approval of such
amendments in order to achieve the Company's objectives and the purposes of the
Plan.
Unless the Plan shall theretofore have been terminated by the Committee
or the Board of Directors, the Plan shall terminate August 9, 2002. No option
may be granted during the term of any suspension of the Plan or after
termination of the Plan. The amendment or termination of the Plan shall not,
without the written consent of the Grantee, alter or impair any rights or
obligations of such Grantee under any option theretofore granted under the Plan.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Committee.
4.5 EFFECTIVE DATE. The effective date of the Plan shall be
August 10, 1992, subject to the approval by the holders of a majority of the
Company's outstanding stock within one year of such effective date.
Notwithstanding anything in the Plan to the contrary, if the Plan shall have
been approved by the Board prior to such stockholder approval, options may be
granted by the Committee as provided herein subject to such subsequent
stockholder approval.
ARTICLE V
NON-EMPLOYEE DIRECTORS
5.1 GRANT OF OPTIONS. Each Non-Employee Director shall be
entitled to receive, on the date such Non-Employee Director is first elected as
a Director of the Company and on each anniversary thereof (each, an "Award
Date"), non-qualified stock options to purchase 5,000 Shares. The purchase price
per share of Common Stock under each option shall be one hundred percent (100%)
of the Fair Market Value of the Common Stock on the applicable Award Date. Such
options shall become exercisable as to 20% of the Shares covered thereby one
year after the Award Date and as to an additional 20% of the Shares covered
thereby on each of the four succeeding anniversaries of the Award Date on which
such Non-Employee Director is then a Non-Employee Director and has served
continuously as such since the Award Date. Each option granted under the plan to
Non-Employee Directors shall constitute a non-qualified stock option. All
instruments evidencing options granted to Non-Employee Directors under the Plan
shall be in such form as shall be consistent with the Plan. For purposes of the
Plan, the term Non-Employee Director shall mean any Director of the Company who
is not an Employee and who is not on the Award Date providing and has not at any
time within six months prior thereto provided, legal or consulting services to
the Company.
5.2 AMENDMENT OF THIS ARTICLE. The provisions of this Article 5
shall not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the Rules
thereunder.
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Exhibit B
Just Toys, Inc.
50 West 23rd Street
New York, New York 10010
Ladies and Gentlemen:
Notice is hereby given of my election to purchase [ ] shares of Common
Stock, $.01 par value (the "Shares"), of Just Toys, Inc., at a price of $ per
Share, pursuant to the Company's Stock Option Plan. Enclosed in payment for the
Shares is :
my check in the amount of $ .
------- ---------
* Shares having a total value of $ , such value
------ -------- ---
being based on the closing price(s) of the shares on the date hereof.
The following information is supplied for use in issuing and registering
the Shares purchased hereby:
Number of Certificates and
Denominations
----------------
Name
----------------
Address
----------------
----------------
Social Security Number
----------------
Dated:
----------------------
Very truly yours,
----------------
- ----------------
* Subject to the approval of the Stock Option Committee.
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JUST TOYS, INC.
50 WEST 23RD STREET
NEW YORK, NEW YORK 10010
November 22, 1994
To: Morton Levy
We are pleased to confirm that on November 22, 1994, Just Toys, Inc.
(the "Company") granted to you options, pursuant to the Company's 1992 Incentive
and Non-Qualified Stock Option Plan (the "Plan"), to purchase 5,000 shares of
Common Stock, par value $.01 per share, of the Company, at a price of $3.625 per
share. This option shall be effective for a period of ten years commencing on
November 22, 1994 (the "Effective Date") and terminating on November 22, 2004.
The options issued hereby have been designated by the Stock Option Committee as
non-qualified options.
This option is issued in accordance with and is subject to and
conditioned upon all of the terms and conditions of the Plan (a copy of which is
attached hereto as Exhibit A) as from time to time may be amended, provided,
however that no future amendment or termination of the Plan shall, without your
consent, alter in a manner adverse to you or impair any of your rights or
obligations under this option. Reference is made to the terms and conditions of
the Plan, all of which are incorporated by reference in this option agreement as
if fully set forth herein.
This option may be exercised according to the following vesting
schedule: 20% of the shares covered by this option may be exercised after the
first anniversary of the Effective Date and an additional 20% of the shares
covered by this option may be exercised after each successive anniversary of the
Effective Date.
Unless at the time of the exercise of this option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such shares, any shares purchased by you upon the exercise of this option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of this option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any shares pursuant to this option, if
in the opinion of counsel to the Company, the shares to be so issued are
required to be registered or otherwise qualified under the Act or under any
other applicable statute, regulation or ordinance affecting the sale of
securities, unless and until such shares have been so registered or otherwise
qualified.
You understand and acknowledge that, under existing law, unless at the
time of the
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exercise of its option a registration statement under the Act is in effect as to
such shares: (i) any shares purchased by you upon exercise of this option may be
required to be held indefinitely unless such shares are subsequently registered
under the Act or an exemption from such registration is available; (ii) any
sales of such shares made in reliance upon Rule 144 promulgated under the Act
may be made only in accordance with the terms and conditions of that Rule
(which, under certain circumstances, restrict the number of shares which may be
sold); (iii) in the case of securities to which Rule 144 is not applicable,
compliance with Regulation A promulgated under the Act or some other disclosure
exemption will be required; (iv) certificates for shares to be issued to you
hereunder shall bear a legend to the effect that the shares have not been
registered under the Act and that the shares may not be sold, hypothecated, or
otherwise transferred in the absence of an effective registration statement
under the Act relating thereto or an opinion of counsel satisfactory to the
Company that such registration is not required; (v) the Company will place an
appropriate "stop transfer" order with its transfer agent with respect to such
shares; and (vi) the Company has undertaken no obligation to register the shares
or to include the shares in any registration statement which may be filed by it
subsequent to the issuance of the shares to you. In addition, you understand and
acknowledge that the Company has no obligation to furnish to you information
necessary to enable you to make sales under Rule 144.
This option (or installment thereof) is to be exercised by delivering to
the Company a written notice of exercise in the form attached hereto as Exhibit
B, together with payment of the purchase price of the shares to be purchased.
The purchase price is to be paid in cash or, at the discretion of the Stock
Option Committee, by delivering shares of the Company's stock already owned by
you and having a fair market value on the date of exercise equal to the exercise
price of the option, or a combination of such shares and cash, or otherwise in
accordance with the Plan.
The Company may establish from time to time, appropriate procedures to
provide for payment or withholding of such income or other taxes as may be
required by law to be paid or withheld in connection with the exercise of an
option. You shall pay the Company all such amounts requested by the Company to
permit the Company to take any deduction available to it resulting from the
exercise of an option. The Company may also establish, from time to time,
appropriate procedures to ensure that the Company receives prompt advice
concerning the occurrence of any event which may create, or affect the timing or
amount of, any obligation to pay or withhold any such taxes or which may make
available to the Company any tax deduction resulting from the occurrence of such
event, and you will comply with all such procedures so established.
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Kindly evidence your acceptance of this option and your agreement to
comply with the provisions hereof and of the Plan by executing this letter under
the words "Accepted and Agreed To."
Sincerely,
JUST TOYS, INC.
By:
---------------------------
Name: Allan Rigberg
Title: Chief Executive Officer
ACCEPTED AND AGREED TO:
- ------------------------------
Morton Levy
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EXHIBIT A
JUST TOYS, INC.
AMENDED AND RESTATED
1992 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.1 PURPOSE. This Stock Option Plan (the "Plan") is intended to
assist Just Toys, Inc. (the "Company") in attracting and maintaining a strong
management for the Company by encouraging ownership of common stock of the
Company by the Company's officers, directors, independent contractors and
employees. The Plan is also intended to enable the Company to reward the
efforts, abilities and industries of such officers, directors, independent
contractors and employees who render employment and other services which
contribute materially to the success of the Company's business.
1.2 DEFINITIONS. For purposes of the Plan, unless the context
otherwise indicates, the following definitions shall be applicable:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Commission" means the Securities and Exchange Commission.
(d) "Committee" means the Stock Option Committee of the Company which
shall be composed of not less than two persons appointed by the Board of
Directors, each of whom shall be a "disinterested person" as that term is
defined in Rule 16b-3(c)(2)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934.
(e) "Director" means any person who is a member of the Board of
Directors whether or not such person is an Employee.
(f) "Employee" means and includes any person who is an employee of the
Company or any Subsidiary (including officers and directors who are also
employees).
(g) "Fair Market Value" of a Share means (i) if the Shares are quoted on
the NASDAQ National Market System or listed on a national securities exchange,
the closing price on such market or
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such exchange, (ii) if the Shares are not quoted on the NASDAQ National Market
System or listed on a national securities exchange, the mean between the closing
bid and asked prices of publicly-traded Shares in the over-the-counter market as
reported on the NASDAQ system or by any nationally recognized quotation service
selected by the Company, or (iii) if the Shares are not then publicly-traded, as
determined, in good faith, by the Committee.
(h) "Grant Date," as used with respect to a particular option, means the
date as of which such option is granted by the Committee pursuant to the Plan.
(i) "Grantee" means an individual or entity to whom an option is granted
by the Committee pursuant to the Plan.
(j) "Incentive Stock Option" and "ISO" means an option intended to
qualify under Section 422 of the Code.
(k) "Independent Contractor" means any third party retained or engaged
by the Company or any Subsidiary to provide services to the Company or such
Subsidiary, including any employee of such third party providing such services.
(l) "Non-Qualified Stock Option" or "NQO" means an option which does not
qualify as an ISO.
(m) "Option Agreement" means a written agreement between a Grantee and
the Company evidencing an option granted under the Plan, consistent with the
provisions of Article II of the Plan.
(n) "Service", as used herein, means the employment of an Employee by
the Company or any Subsidiary or the service of a Director as a director of the
Company, or the retention of an Independent Contractor (including the retention
of an Independent Contractor by whom a Grantee is employed) by the Company or
any Subsidiary.
(o) "Shares" or "Shares of Stock" means shares of common stock, $.01 par
value, of the Company. Shares may consist of authorized but unissued shares or
shares which have been previously issued and reacquired by the Company.
(p) "Subsidiary" of the Company, if any, means and includes a
"Subsidiary Corporation" as that term is defined in Section 424(f) of the Code.
1.3 ADMINISTRATION. The Plan shall be administered by the
Committee. Subject to the express provisions of the Plan, the Committee, in its
sole discretion, from time to time, shall determine the persons from among those
eligible under the Plan to whom, and the time or times at which, options shall
be granted, and the number of Shares to be subject to each option, whether an
option shall be designated an ISO or a NQO and the manner in, and the price at
which, such option may be exercised. In making such determinations the Committee
may take into account recommendations made by management, the nature and length
of Service rendered by the prospective Grantee, his or her level of
compensation, his or her past, present and potential contributions to the
Company and such other factors as the Committee shall in its discretion deem
relevant. Subject to the express provisions of the Plan and any consents
required by any applicable laws affecting the Plan and options, the Committee
shall have
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authority to interpret and construe the Plan, to prescribe, amend and rescind
rules and regulations related to it, to determine the terms and provisions of
the respective Option Agreements and to make all other determinations necessary
or advisable for the administration of the Plan. Nothing contained herein shall
be deemed to prevent the Committee in the sound exercise of business judgment,
from canceling outstanding options and reissuing new options at a lower exercise
price in the event that the Fair Market Value per share of Common Stock at any
time prior to the date of exercise falls below the exercise price of options
granted pursuant to the Plan. Shares subject to any such canceled options shall
be immediately available for reissuance under the Plan. The determinations of
the Committee under the Plan shall be conclusive and binding on all persons.
1.4 ELIGIBILITY FOR PARTICIPATION. Any Director, Employee or
Independent Contractor providing services to the Company or any Subsidiary or
any employee of such Independent Contractor shall be eligible to receive options
granted under the Plan, except that (i) only Employees shall be eligible to
receive Incentive Stock Options and (ii) members of the Committee are not
eligible to receive options under the Plan during their term of service on the
Committee and for a period of one year thereafter.
1.5 SHARES SUBJECT TO THE PLAN. Subject to adjustment as
hereinafter provided, no more than 600,000 Shares may be issued pursuant to the
exercise of options granted under the Plan. If any option shall expire,
terminate or be canceled for any reason without having been exercised in full,
the unpurchased Shares subject thereto shall again be available for the purposes
of the Plan.
1.6 DURATION OF THE PLAN. Unless previously terminated by the
Committee or the Board of Directors, the Plan will terminate on August 9, 2002.
Such termination will not terminate any option then outstanding.
ARTICLE II
TERMS AND CONDITIONS OF OPTIONS
2.1 OPTIONS AND OPTION AGREEMENTS. Each option granted under the
Plan shall be subject to all of the applicable terms and conditions of the Plan
and shall be evidenced by an Option Agreement. The Option Agreement shall
contain such terms and conditions not inconsistent with the Plan as the
Committee may deem appropriate, including, among other things, when and to what
extent the option is exercisable, the number of Shares that may be purchased
upon exercise of an option, the price at which each Share may be purchased
pursuant to the exercise of an option, the conditions to the exercise of any
option and the Grantee's obligation to remain in the continuous Service of the
Company. The provisions of Option Agreements need not be identical.
2.2 EXERCISABILITY AND TERM. (a) Except as otherwise provided
below, the Committee shall determine the term of each option and whether the
option shall be exercisable in full or in installments and, if in installments,
the number of installments. No option, however, may remain outstanding for more
than ten years after the Grant Date.
(b) Except as otherwise provided herein, an option granted under the
Plan may be exercised from time to time during its term for the full number of
Shares then purchasable upon exercise of the option or from time to time for any
part thereof.
(c) Except as otherwise provided below, options shall terminate
immediately upon the
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termination of the Service of the Grantee. Options granted under the Plan shall
not, however, be affected by any change of Service so long as the Grantee
continues to be a Director, Employee or Independent Contractor.
(d) If a Grantee dies while he or she is a Director, Employee or
Independent Contractor or within three months after the termination of such
option holder's Service by reason of retirement with the written consent of the
Company, such option may be exercised within one year (or such other shorter
period as determined by the Committee and specified in the Option Agreement)
from the date of such Grantee's death by his or her personal representative or
representatives, or by the person or persons to whom the Grantee's rights under
the option pass by will or by the applicable laws of descent and distribution;
provided, however, that an option may not be exercised after its expiration and
provided further that such option may only be exercised for the number of Shares
which could have been purchased by the Grantee on the date of his or her death.
(e) If a Grantee voluntarily retires or quits his or her Service with
the written consent of the Company or a Subsidiary, or if the Service of the
Grantee is terminated by the Company or Subsidiary for reasons other than cause,
such Grantee may exercise his or her option at any time prior to the expiration
of the original option period as specified in the Option Agreement or the
expiration of three months (or such other period as determined by the Committee
and specified in the Option Agreement), whichever shall occur first; provided,
however, that no option may be exercised after its expiration and provided
further that the Grantee may only exercise his or her option for the number of
Shares which he or she could have purchased as of the date such Grantee retired
or quit his or her Service or the date the Service of such Grantee was
terminated.
(f) Notwithstanding Subsections (c), (d) and (e) above, the Committee
may in its sole discretion, with respect to any or all NQOs granted by it,
provide that in the event that the Service of a holder of an NQO shall terminate
for any reason, including without limitation death, disability, termination with
or without cause or retirement with or without the consent of the Company, the
NQOs held by such holder, to the extent of the number of Shares subject to such
NQO which were not purchasable by him or her on the date of termination of his
or her Service, shall forthwith terminate and that any NQOs exercisable on the
date of such termination shall remain exercisable until the expiration of such
NQO unless earlier terminated pursuant to the provisions of this Plan or of the
agreement pursuant to which the NQO is granted.
(g) Options may be terminated at any time by agreement between the
Company and the Grantee.
(h) Nothing herein contained shall impose upon the Company the
obligation to continue the Service of any Grantee. The rights of the Company to
terminate the Service of a Grantee shall not be diminished or affected by reason
of the granting of an Option.
2.3 OPTION PRICE. (a) Except as provided in subsection 2.3(c)
hereof, the option price per Share shall be determined by the Committee at the
time the option is granted, but shall not, in the case of ISOs, be less than
100% of the Fair Market Value of a Share on the Grant Date. In the case of NQOs,
the option price per Share may be less than, equal to or greater than the Fair
Market Value of a Share on the Grant Date. The Committee may modify the option
price of outstanding options or cancel such options and grant new options in
lieu thereof at a new option price, provided that, in the case of
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ISOs, the option price of such modified or new option may not be less than 100%
of the Fair Market Value of a Share on the date of such action by the Committee.
(b) To the extent that the aggregate Fair Market Value (determined at
the time an ISO is granted) of the Shares with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year under all
incentive stock option plans of the Company and its Subsidiaries exceeds
$100,000, such ISOs will be treated as NQOs. The foregoing rule shall be applied
by taking ISOs into account in the order in which they were granted. In the
event outstanding ISOs granted to an Employee become immediately exercisable
under Section 4.1(c) hereof, such ISOs will, to the extent the aggregate Fair
Market Value thereof exceeds $100,000, be treated as NQOs.
(c) An ISO may be granted to an Employee owning, or who is considered as
owning by applying the rules of ownership set forth in Section 424(d) of the
Code, over ten percent of the total combined voting power of all classes of
capital stock of the Company or any Subsidiary if the option price of such ISO
equals or exceeds 110% of the Fair Market Value of a Share subject to the ISO
and such ISO shall expire not more than five years from the date of grant.
2.4 NONTRANSFERABILITY. No option granted under the Plan shall be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Grantee solely
by such Grantee.
2.5 METHOD OF EXERCISE. A Grantee electing to exercise an option
shall exercise such option by delivering to the Company written notice of such
election to exercise, specifying the number of Shares such Grantee has elected
to purchase, together with the option price for the Shares being purchased in
accordance with the terms of Section 2.6 below.
2.6 PAYMENT FOR SHARES. The option price shall become immediately
due and payable upon exercise of the option and payment thereof shall be made to
the Company as follows: (i) in cash (including check, bank draft or money
order), or (ii) at the discretion of the Committee, by delivering to the Company
Shares of Stock already owned by the Grantee and having a Fair Market Value on
the date of exercise equal to the option price or a combination of such Shares
and cash, or (iii) by any other proper method specifically approved by the
Committee.
ARTICLE III
LOANS AND FINANCIAL ACCOMMODATIONS TO GRANTEES
3.1 PURPOSE. In order to assist the Grantee with the acquisition
of Shares of Stock pursuant to the exercise of an option granted under the Plan,
including the payment of any taxes resulting from such exercise, the Committee
may, in its discretion, whenever, in the judgment of the Committee, such
assistance is permitted by applicable law and may reasonably be expected to
benefit the Company or a Subsidiary, authorize, either at the time of the grant
of the option or thereafter (a) the extension of a loan to the Grantee by the
Company, (b) the payment by the optionee of the purchase price of the Shares of
stock in installments, (c) the guarantee by the Company of a loan obtained by
the Grantee from a third party or (d) make such other reasonable arrangements to
facilitate the exercise of options in accordance with applicable law.
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3.2 TERMS OF LOAN OR GUARANTEE. The Committee or Board shall
determine the terms of any loan or guarantee made pursuant to this Article III,
including the interest rate and other terms of repayment thereof, and whether
such loan or guarantee shall be secured or unsecured. Each loan shall be
evidenced by a promissory note having a maximum term to maturity of not more
than sixty (60) months. The maximum amount of any loan or guarantee shall be the
option price for Shares purchased upon exercise of an option plus (a) related
interest payments and (b) the amount of tax liability incurred by the Grantee as
a result of the exercise of an option. In the case of ISOs, the interest rate on
any loan authorized by the Committee shall not be less than the higher of (i)
the "prime" rate as from time to time in effect of a commercial bank of
recognized standing or (ii) the rate of interest from time to time computed
under Section 483 of the Code.
3.3 USE OF LOANED OR GUARANTEED FUNDS. No amount loaned to a
Grantee and no amount the repayment of which is guaranteed by the Company shall
be used for any purpose other than payment of (i) the purchase price of Shares
acquired on the exercise of an option granted or to be granted under the Plan
and (ii) taxes attributable to such exercise.
ARTICLE IV
GENERAL PROVISIONS
4.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The aggregate
number and class of Shares for which options may be granted under the Plan, the
number and class of Shares covered by each outstanding option and the price per
Share thereof (but not the total price) and each such option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of common stock of the Company resulting from a stock split, split-up or
consolidation of Shares or any like capital adjustment or reclassification of
Shares, or the payment of any stock dividends, or any other increase or decrease
in the number of Shares of the Company, without receipt of consideration by the
Company.
(b) Subject to any required action by its stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, except as
otherwise provided below, any option granted hereunder shall be adjusted so as
to pertain and apply to the securities to which the holder of the number of
Shares of the Company subject to the option would have been entitled in such
merger or consolidation.
(c) Upon the dissolution or liquidation of the Company or upon a merger
or consolidation of the Company in a transaction in which all or substantially
all of the stockholders of the Company receive cash, securities of another
company or other consideration in exchange for their Shares of Stock, whether or
not the Company is the surviving corporation, or upon a sale of all or
substantially all of the assets of the Company, any option granted hereunder
shall terminate, but the Grantee may, immediately prior to any such transaction
exercise his or her option, in whole or in part, as to the full number of Shares
which he or she would otherwise have been entitled to purchase during the
remaining term of the option irrespective of any vesting or installment
features. Notwithstanding the foregoing, the Company may elect not to permit a
Grantee to exercise his or her option immediately prior to such event in
accordance with the foregoing, but in lieu thereof the Company may, in its
discretion and immediately prior to any such dissolution, liquidation, merger,
consolidation or sale substitute or cause to be substituted a new option for his
or her option, such new option to be applicable to the stock of the surviving or
acquiring corporation or any of its affiliates and to be on terms no less
favorable to the Grantee than those contained in his or her prior option.
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(d) Adjustments and elections under this Section 4.1 shall be made by
the Committee whose determination as to what adjustments, if any, shall be made
and the extent thereof shall be final, binding and conclusive.
4.2 PRIVILEGES OF STOCK OWNERSHIP. No Grantee shall be entitled
to the privileges of stock ownership as to any Shares of Stock not actually
issued and delivered to him or her.
4.3 SECURITIES REGULATIONS. (a) Each option shall be subject to
the requirement that if at any time the Board shall in its discretion determine
that the listing, registration or qualification of the Shares subject to such
option upon any securities exchange or under any federal or state law, or the
approval or consent of any governmental regulatory body, is necessary or
desirable in connection with the issuance or purchase of Shares thereunder, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, approval or consent shall have been effected or
obtained free from any conditions not reasonably acceptable to the Board.
(b) Unless at the time of the exercise of an option and the issuance of
the Shares purchased by a Grantee pursuant thereto there shall be in effect as
to such Shares a Registration Statement under the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations of the Commission, the
Grantee exercising such option shall deliver to the Company at the time of
exercise, a certificate in a form reasonably satisfactory to the Company and/or
counsel to the Company (i) acknowledging that the Shares so acquired may be
"restricted securities" within the meaning of Rule 144 promulgated under the
Act; (ii) certifying that he or she is acquiring the Shares issuable to him or
her upon such exercise for the purpose of investment and not with a view to
their sale or distribution; and (iii) containing such Grantee's agreement that
such Shares may not be sold or otherwise disposed of except in accordance with
applicable provisions of the Act. The Company shall not be required to issue or
deliver certificates for Shares until there shall have been compliance with all
applicable laws, rules and regulations, including rules and regulations of the
Commission.
4.4 SUSPENSION, AMENDMENT AND TERMINATION OF THE PLAN. The
Committee may at any time suspend, amend or terminate the Plan, provided that
the approval of the Board of Directors of the Company will be required for any
amendment which will:
(a) increase the maximum number of Shares which may be issued
pursuant the exercise of options granted under the Plan; or
(b) change the provisions of Section 1.4; or
(c) permit the grant of any ISO under the Plan with an option price
less than 100% of the Fair Market Value of the Shares at the time
such ISO is granted; or
(d) extend the term of options or the period during which options
may be granted under the Plan; or
(e) materially increase the benefits provided under the Plan to the
extent that stockholder approval would then be required pursuant
to Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act").
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The power of the Committee to amend the Plan under this Section 4.4 is
subject in certain instances to the requirements of the Exchange Act and other
provisions of applicable law which may require stockholder approval of such
amendments in order to achieve the Company's objectives and the purposes of the
Plan.
Unless the Plan shall theretofore have been terminated by the Committee
or the Board of Directors, the Plan shall terminate August 9, 2002. No option
may be granted during the term of any suspension of the Plan or after
termination of the Plan. The amendment or termination of the Plan shall not,
without the written consent of the Grantee, alter or impair any rights or
obligations of such Grantee under any option theretofore granted under the Plan.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Committee.
4.5 EFFECTIVE DATE. The effective date of the Plan shall be
August 10, 1992, subject to the approval by the holders of a majority of the
Company's outstanding stock within one year of such effective date.
Notwithstanding anything in the Plan to the contrary, if the Plan shall have
been approved by the Board prior to such stockholder approval, options may be
granted by the Committee as provided herein subject to such subsequent
stockholder approval.
ARTICLE V
NON-EMPLOYEE DIRECTORS
5.1 GRANT OF OPTIONS. Each Non-Employee Director shall be
entitled to receive, on the date such Non-Employee Director is first elected as
a Director of the Company and on each anniversary thereof (each, an "Award
Date"), non-qualified stock options to purchase 5,000 Shares. The purchase price
per share of Common Stock under each option shall be one hundred percent (100%)
of the Fair Market Value of the Common Stock on the applicable Award Date. Such
options shall become exercisable as to 20% of the Shares covered thereby one
year after the Award Date and as to an additional 20% of the Shares covered
thereby on each of the four succeeding anniversaries of the Award Date on which
such Non-Employee Director is then a Non-Employee Director and has served
continuously as such since the Award Date. Each option granted under the plan to
Non-Employee Directors shall constitute a non-qualified stock option. All
instruments evidencing options granted to Non-Employee Directors under the Plan
shall be in such form as shall be consistent with the Plan. For purposes of the
Plan, the term Non-Employee Director shall mean any Director of the Company who
is not an Employee and who is not on the Award Date providing and has not at any
time within six months prior thereto provided, legal or consulting services to
the Company.
5.2 AMENDMENT OF THIS ARTICLE. The provisions of this Article 5
shall not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the Rules
thereunder.
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Exhibit B
Just Toys, Inc.
50 West 23rd Street
New York, New York 10010
Ladies and Gentlemen:
Notice is hereby given of my election to purchase [ ] shares of Common
Stock, $.01 par value (the "Shares"), of Just Toys, Inc., at a price of $ per
Share, pursuant to the Company's Stock Option Plan. Enclosed in payment for the
Shares is :
my check in the amount of $ .
------ ---------
* Shares having a total value of $ , such value
------ -------- ---
being based on the closing price(s) of the shares on the date hereof.
The following information is supplied for use in issuing and registering
the Shares purchased hereby:
Number of Certificates and
Denominations
---------------
Name
Address
---------------
---------------
Social Security Number
---------------
Dated:
--------------------
Very truly yours,
---------------
- --------------------
* Subject to the approval of the Stock Option Committee.
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JUST TOYS, INC.
50 WEST 23RD STREET
NEW YORK, NEW YORK 10010
May 18, 1995
To: Morton Levy
Just Toys, Inc. (the "Company") and you are parties to a prior
option agreement (the "Prior Agreement") dated April 13, 1995. According to the
Prior Agreement, the Company granted to you options, pursuant to the Company's
1992 Incentive and Non-Qualified Stock Option Plan (the "Plan") to purchase
50,000 shares of Common Stock, par value $.01 per share, of the Company, at a
price of $2.00 per share. Under the Prior Agreement, such options were
immediately exercisable. You and the Company now wish to terminate the Prior
Agreement effective as of the date hereof and to enter into this agreement,
which shall supersede the Prior Agreement and govern the terms and conditions of
your options.
Your options shall be exercisable at a price of $2.00 per share. The
options shall be effective for a period of ten years commencing on May 18, 1995
and terminating on May 18, 2005. The options issued hereby have been designated
by the Stock Option Committee as non-qualified options. These options may not be
exercised, in part or in full, until November 19, 1995 (the "Exercise Date").
This option is issued in accordance with and is subject to and
conditioned upon all of the terms and conditions of the Plan (a copy of which is
attached hereto as Exhibit A) as from time to time may be amended, provided,
however that no future amendment or termination of the Plan shall, without your
consent, alter in a manner adverse to you or impair any of your rights or
obligations under this option. Reference is made to the terms and conditions of
the Plan all of which, except as set forth below, are incorporated by reference
in this option agreement as if fully set forth herein. Notwithstanding anything
to the contrary in Article IV, Section 4.1(b) of the Plan, this option shall not
be exercisable upon the dissolution or liquidation of the Company or upon a
merger or consolidation of the Company in a transaction in which all or
substantially all of the stockholders of the Company receive cash, securities of
another company or other consideration in exchange for their shares of stock,
whether or not the Company is the surviving corporation, or upon a sale of all
or substantially all of the assets of the Company (all such transactions shall
be collectively referred to herein as a "Sale"), if such Sale occurs prior to
the Exercise Date.
Unless at the time of the exercise of this option a registration
statement under the
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Securities Act of 1933, as amended (the "Act"), is in effect as to such shares,
any shares purchased by you upon the exercise of this option shall be acquired
for investment and not for sale or distribution, and if the Company so requests,
upon any exercise of this option, in whole or in part, you will execute and
deliver to the Company a certificate to such effect. The Company shall not be
obligated to issue any shares pursuant to this option, if in the opinion of
counsel to the Company, the shares to be so issued are required to be registered
or otherwise qualified under the Act or under any other applicable statute,
regulation or ordinance affecting the sale of securities, unless and until such
shares have been so registered or otherwise qualified.
You understand and acknowledge that, under existing law, unless at the
time of the exercise of its option a registration statement under the Act is in
effect as to such shares: (i) any shares purchased by you upon exercise of this
option may be required to be held indefinitely unless such shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold); (iii) in the case of securities to which Rule 144
is not applicable, compliance with Regulation A promulgated under the Act or
some other disclosure exemption will be required; (iv) certificates for shares
to be issued to you hereunder shall bear a legend to the effect that the shares
have not been registered under the Act and that the shares may not be sold,
hypothecated, or otherwise transferred in the absence of an effective
registration statement under the Act relating thereto or an opinion of counsel
satisfactory to the Company that such registration is not required; (v) the
Company will place an appropriate "stop transfer" order with its transfer agent
with respect to such shares; and (vi) the Company has undertaken no obligation
to register the shares or to include the shares in any registration statement
which may be filed by it subsequent to the issuance of the shares to you. In
addition, you understand and acknowledge that the Company has no obligation to
furnish to you information necessary to enable you to make sales under Rule 144.
This option (or installment thereof) is to be exercised by delivering to
the Company a written notice of exercise in the form attached hereto as Exhibit
B, together with payment of the purchase price of the shares to be purchased.
The purchase price is to be paid in cash or, at the discretion of the Stock
Option Committee, by delivering shares of the Company's stock already owned by
you and having a fair market value on the date of exercise equal to the exercise
price of the option, or a combination of such shares and cash, or otherwise in
accordance with the Plan.
The Company may establish from time to time, appropriate procedures to
provide for payment or withholding of such income or other taxes as may be
required by law to be paid or withheld in connection with the exercise of an
option. You shall pay the Company all such amounts requested by the Company to
permit the Company to take any deduction available to it resulting from the
exercise of an option. The Company may also establish, from time to time,
appropriate procedures to ensure that the Company receives prompt advice
concerning the occurrence of any event which may create, or affect the timing or
amount of, any obligation to
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pay or withhold any such taxes or which may make available to the Company any
tax deduction resulting from the occurrence of such event, and you will comply
with all such procedures so established.
Kindly evidence your acceptance of this option and your agreement to
comply with the provisions hereof and of the Plan by executing this letter under
the words "Accepted and Agreed To."
Sincerely,
JUST TOYS, INC.
By:
--------------------------
Name: Barry Shapiro
Title: President
ACCEPTED AND AGREED TO:
- ----------------------------
Morton J. Levy
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EXHIBIT A
JUST TOYS, INC.
AMENDED AND RESTATED
1992 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.1 PURPOSE. This Stock Option Plan (the "Plan") is intended to
assist Just Toys, Inc. (the "Company") in attracting and maintaining a strong
management for the Company by encouraging ownership of common stock of the
Company by the Company's officers, directors, independent contractors and
employees. The Plan is also intended to enable the Company to reward the
efforts, abilities and industries of such officers, directors, independent
contractors and employees who render employment and other services which
contribute materially to the success of the Company's business.
1.2 DEFINITIONS. For purposes of the Plan, unless the context
otherwise indicates, the following definitions shall be applicable:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Commission" means the Securities and Exchange Commission.
(d) "Committee" means the Stock Option Committee of the Company which
shall be composed of not less than two persons appointed by the Board of
Directors, each of whom shall be a "disinterested person" as that term is
defined in Rule 16b-3(c)(2)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934.
(e) "Director" means any person who is a member of the Board of
Directors whether or not such person is an Employee.
(f) "Employee" means and includes any person who is an employee of the
Company or any Subsidiary (including officers and directors who are also
employees).
(g) "Fair Market Value" of a Share means (i) if the Shares are quoted on
the NASDAQ National Market System or listed on a national securities exchange,
the closing price on such market or
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such exchange, (ii) if the Shares are not quoted on the NASDAQ National Market
System or listed on a national securities exchange, the mean between the closing
bid and asked prices of publicly-traded Shares in the over-the-counter market as
reported on the NASDAQ system or by any nationally recognized quotation service
selected by the Company, or (iii) if the Shares are not then publicly-traded, as
determined, in good faith, by the Committee.
(h) "Grant Date," as used with respect to a particular option, means the
date as of which such option is granted by the Committee pursuant to the Plan.
(i) "Grantee" means an individual or entity to whom an option is granted
by the Committee pursuant to the Plan.
(j) "Incentive Stock Option" and "ISO" means an option intended to
qualify under Section 422 of the Code.
(k) "Independent Contractor" means any third party retained or engaged
by the Company or any Subsidiary to provide services to the Company or such
Subsidiary, including any employee of such third party providing such services.
(l) "Non-Qualified Stock Option" or "NQO" means an option which does not
qualify as an ISO.
(m) "Option Agreement" means a written agreement between a Grantee and
the Company evidencing an option granted under the Plan, consistent with the
provisions of Article II of the Plan.
(n) "Service", as used herein, means the employment of an Employee by
the Company or any Subsidiary or the service of a Director as a director of the
Company, or the retention of an Independent Contractor (including the retention
of an Independent Contractor by whom a Grantee is employed) by the Company or
any Subsidiary.
(o) "Shares" or "Shares of Stock" means shares of common stock, $.01 par
value, of the Company. Shares may consist of authorized but unissued shares or
shares which have been previously issued and reacquired by the Company.
(p) "Subsidiary" of the Company, if any, means and includes a
"Subsidiary Corporation" as that term is defined in Section 424(f) of the Code.
1.3 ADMINISTRATION. The Plan shall be administered by the
Committee. Subject to the express provisions of the Plan, the Committee, in its
sole discretion, from time to time, shall determine the persons from among those
eligible under the Plan to whom, and the time or times at which, options shall
be granted, and the number of Shares to be subject to each option, whether an
option shall be designated an ISO or a NQO and the manner in, and the price at
which, such option may be exercised. In making such determinations the Committee
may take into account recommendations made by management, the nature and length
of Service rendered by the prospective Grantee, his or her level of
compensation, his or her past, present and potential contributions to the
Company and such other factors as the Committee shall in its discretion deem
relevant. Subject to the express provisions of the Plan and any consents
required by any applicable laws affecting the Plan and options, the Committee
shall have
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authority to interpret and construe the Plan, to prescribe, amend and rescind
rules and regulations related to it, to determine the terms and provisions of
the respective Option Agreements and to make all other determinations necessary
or advisable for the administration of the Plan. Nothing contained herein shall
be deemed to prevent the Committee in the sound exercise of business judgment,
from canceling outstanding options and reissuing new options at a lower exercise
price in the event that the Fair Market Value per share of Common Stock at any
time prior to the date of exercise falls below the exercise price of options
granted pursuant to the Plan. Shares subject to any such canceled options shall
be immediately available for reissuance under the Plan. The determinations of
the Committee under the Plan shall be conclusive and binding on all persons.
1.4 ELIGIBILITY FOR PARTICIPATION. Any Director, Employee or
Independent Contractor providing services to the Company or any Subsidiary or
any employee of such Independent Contractor shall be eligible to receive options
granted under the Plan, except that (i) only Employees shall be eligible to
receive Incentive Stock Options and (ii) members of the Committee are not
eligible to receive options under the Plan during their term of service on the
Committee and for a period of one year thereafter.
1.5 SHARES SUBJECT TO THE PLAN. Subject to adjustment as
hereinafter provided, no more than 600,000 Shares may be issued pursuant to the
exercise of options granted under the Plan. If any option shall expire,
terminate or be canceled for any reason without having been exercised in full,
the unpurchased Shares subject thereto shall again be available for the purposes
of the Plan.
1.6 DURATION OF THE PLAN. Unless previously terminated by the
Committee or the Board of Directors, the Plan will terminate on August 9, 2002.
Such termination will not terminate any option then outstanding.
ARTICLE II
TERMS AND CONDITIONS OF OPTIONS
2.1 OPTIONS AND OPTION AGREEMENTS. Each option granted under the
Plan shall be subject to all of the applicable terms and conditions of the Plan
and shall be evidenced by an Option Agreement. The Option Agreement shall
contain such terms and conditions not inconsistent with the Plan as the
Committee may deem appropriate, including, among other things, when and to what
extent the option is exercisable, the number of Shares that may be purchased
upon exercise of an option, the price at which each Share may be purchased
pursuant to the exercise of an option, the conditions to the exercise of any
option and the Grantee's obligation to remain in the continuous Service of the
Company. The provisions of Option Agreements need not be identical.
2.2 EXERCISABILITY AND TERM. (a) Except as otherwise provided
below, the Committee shall determine the term of each option and whether the
option shall be exercisable in full or in installments and, if in installments,
the number of installments. No option, however, may remain outstanding for more
than ten years after the Grant Date.
(b) Except as otherwise provided herein, an option granted under the
Plan may be exercised from time to time during its term for the full number of
Shares then purchasable upon exercise of the option or from time to time for any
part thereof.
(c) Except as otherwise provided below, options shall terminate
immediately upon the
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termination of the Service of the Grantee. Options granted under the Plan shall
not, however, be affected by any change of Service so long as the Grantee
continues to be a Director, Employee or Independent Contractor.
(d) If a Grantee dies while he or she is a Director, Employee or
Independent Contractor or within three months after the termination of such
option holder's Service by reason of retirement with the written consent of the
Company, such option may be exercised within one year (or such other shorter
period as determined by the Committee and specified in the Option Agreement)
from the date of such Grantee's death by his or her personal representative or
representatives, or by the person or persons to whom the Grantee's rights under
the option pass by will or by the applicable laws of descent and distribution;
provided, however, that an option may not be exercised after its expiration and
provided further that such option may only be exercised for the number of Shares
which could have been purchased by the Grantee on the date of his or her death.
(e) If a Grantee voluntarily retires or quits his or her Service with
the written consent of the Company or a Subsidiary, or if the Service of the
Grantee is terminated by the Company or Subsidiary for reasons other than cause,
such Grantee may exercise his or her option at any time prior to the expiration
of the original option period as specified in the Option Agreement or the
expiration of three months (or such other period as determined by the Committee
and specified in the Option Agreement), whichever shall occur first; provided,
however, that no option may be exercised after its expiration and provided
further that the Grantee may only exercise his or her option for the number of
Shares which he or she could have purchased as of the date such Grantee retired
or quit his or her Service or the date the Service of such Grantee was
terminated.
(f) Notwithstanding Subsections (c), (d) and (e) above, the Committee
may in its sole discretion, with respect to any or all NQOs granted by it,
provide that in the event that the Service of a holder of an NQO shall terminate
for any reason, including without limitation death, disability, termination with
or without cause or retirement with or without the consent of the Company, the
NQOs held by such holder, to the extent of the number of Shares subject to such
NQO which were not purchasable by him or her on the date of termination of his
or her Service, shall forthwith terminate and that any NQOs exercisable on the
date of such termination shall remain exercisable until the expiration of such
NQO unless earlier terminated pursuant to the provisions of this Plan or of the
agreement pursuant to which the NQO is granted.
(g) Options may be terminated at any time by agreement between the
Company and the Grantee.
(h) Nothing herein contained shall impose upon the Company the
obligation to continue the Service of any Grantee. The rights of the Company to
terminate the Service of a Grantee shall not be diminished or affected by reason
of the granting of an Option.
2.3 OPTION PRICE. (a) Except as provided in subsection 2.3(c)
hereof, the option price per Share shall be determined by the Committee at the
time the option is granted, but shall not, in the case of ISOs, be less than
100% of the Fair Market Value of a Share on the Grant Date. In the case of NQOs,
the option price per Share may be less than, equal to or greater than the Fair
Market Value of a Share on the Grant Date. The Committee may modify the option
price of outstanding options or cancel such options and grant new options in
lieu thereof at a new option price, provided that, in the case of
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ISOs, the option price of such modified or new option may not be less than 100%
of the Fair Market Value of a Share on the date of such action by the Committee.
(b) To the extent that the aggregate Fair Market Value (determined at
the time an ISO is granted) of the Shares with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year under all
incentive stock option plans of the Company and its Subsidiaries exceeds
$100,000, such ISOs will be treated as NQOs. The foregoing rule shall be applied
by taking ISOs into account in the order in which they were granted. In the
event outstanding ISOs granted to an Employee become immediately exercisable
under Section 4.1(c) hereof, such ISOs will, to the extent the aggregate Fair
Market Value thereof exceeds $100,000, be treated as NQOs.
(c) An ISO may be granted to an Employee owning, or who is considered as
owning by applying the rules of ownership set forth in Section 424(d) of the
Code, over ten percent of the total combined voting power of all classes of
capital stock of the Company or any Subsidiary if the option price of such ISO
equals or exceeds 110% of the Fair Market Value of a Share subject to the ISO
and such ISO shall expire not more than five years from the date of grant.
2.4 NONTRANSFERABILITY. No option granted under the Plan shall be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Grantee solely
by such Grantee.
2.5 METHOD OF EXERCISE. A Grantee electing to exercise an option
shall exercise such option by delivering to the Company written notice of such
election to exercise, specifying the number of Shares such Grantee has elected
to purchase, together with the option price for the Shares being purchased in
accordance with the terms of Section 2.6 below.
2.6 PAYMENT FOR SHARES. The option price shall become immediately
due and payable upon exercise of the option and payment thereof shall be made to
the Company as follows: (i) in cash (including check, bank draft or money
order), or (ii) at the discretion of the Committee, by delivering to the Company
Shares of Stock already owned by the Grantee and having a Fair Market Value on
the date of exercise equal to the option price or a combination of such Shares
and cash, or (iii) by any other proper method specifically approved by the
Committee.
ARTICLE III
LOANS AND FINANCIAL ACCOMMODATIONS TO GRANTEES
3.1 PURPOSE. In order to assist the Grantee with the acquisition
of Shares of Stock pursuant to the exercise of an option granted under the Plan,
including the payment of any taxes resulting from such exercise, the Committee
may, in its discretion, whenever, in the judgment of the Committee, such
assistance is permitted by applicable law and may reasonably be expected to
benefit the Company or a Subsidiary, authorize, either at the time of the grant
of the option or thereafter (a) the extension of a loan to the Grantee by the
Company, (b) the payment by the optionee of the purchase price of the Shares of
stock in installments, (c) the guarantee by the Company of a loan obtained by
the Grantee from a third party or (d) make such other reasonable arrangements to
facilitate the exercise of options in accordance with applicable law.
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3.2 TERMS OF LOAN OR GUARANTEE. The Committee or Board shall
determine the terms of any loan or guarantee made pursuant to this Article III,
including the interest rate and other terms of repayment thereof, and whether
such loan or guarantee shall be secured or unsecured. Each loan shall be
evidenced by a promissory note having a maximum term to maturity of not more
than sixty (60) months. The maximum amount of any loan or guarantee shall be the
option price for Shares purchased upon exercise of an option plus (a) related
interest payments and (b) the amount of tax liability incurred by the Grantee as
a result of the exercise of an option. In the case of ISOs, the interest rate on
any loan authorized by the Committee shall not be less than the higher of (i)
the "prime" rate as from time to time in effect of a commercial bank of
recognized standing or (ii) the rate of interest from time to time computed
under Section 483 of the Code.
3.3 USE OF LOANED OR GUARANTEED FUNDS. No amount loaned to a
Grantee and no amount the repayment of which is guaranteed by the Company shall
be used for any purpose other than payment of (i) the purchase price of Shares
acquired on the exercise of an option granted or to be granted under the Plan
and (ii) taxes attributable to such exercise.
ARTICLE IV
GENERAL PROVISIONS
4.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The aggregate
number and class of Shares for which options may be granted under the Plan, the
number and class of Shares covered by each outstanding option and the price per
Share thereof (but not the total price) and each such option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of common stock of the Company resulting from a stock split, split-up or
consolidation of Shares or any like capital adjustment or reclassification of
Shares, or the payment of any stock dividends, or any other increase or decrease
in the number of Shares of the Company, without receipt of consideration by the
Company.
(b) Subject to any required action by its stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, except as
otherwise provided below, any option granted hereunder shall be adjusted so as
to pertain and apply to the securities to which the holder of the number of
Shares of the Company subject to the option would have been entitled in such
merger or consolidation.
(c) Upon the dissolution or liquidation of the Company or upon a merger
or consolidation of the Company in a transaction in which all or substantially
all of the stockholders of the Company receive cash, securities of another
company or other consideration in exchange for their Shares of Stock, whether or
not the Company is the surviving corporation, or upon a sale of all or
substantially all of the assets of the Company, any option granted hereunder
shall terminate, but the Grantee may, immediately prior to any such transaction
exercise his or her option, in whole or in part, as to the full number of Shares
which he or she would otherwise have been entitled to purchase during the
remaining term of the option irrespective of any vesting or installment
features. Notwithstanding the foregoing, the Company may elect not to permit a
Grantee to exercise his or her option immediately prior to such event in
accordance with the foregoing, but in lieu thereof the Company may, in its
discretion and immediately prior to any such dissolution, liquidation, merger,
consolidation or sale substitute or cause to be substituted a new option for his
or her option, such new option to be applicable to the stock of the surviving or
acquiring corporation or any of its affiliates and to be on terms no less
favorable to the Grantee than those contained in his or her prior option.
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(d) Adjustments and elections under this Section 4.1 shall be made by
the Committee whose determination as to what adjustments, if any, shall be made
and the extent thereof shall be final, binding and conclusive.
4.2 PRIVILEGES OF STOCK OWNERSHIP. No Grantee shall be entitled
to the privileges of stock ownership as to any Shares of Stock not actually
issued and delivered to him or her.
4.3 SECURITIES REGULATIONS. (a) Each option shall be subject to
the requirement that if at any time the Board shall in its discretion determine
that the listing, registration or qualification of the Shares subject to such
option upon any securities exchange or under any federal or state law, or the
approval or consent of any governmental regulatory body, is necessary or
desirable in connection with the issuance or purchase of Shares thereunder, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, approval or consent shall have been effected or
obtained free from any conditions not reasonably acceptable to the Board.
(b) Unless at the time of the exercise of an option and the issuance of
the Shares purchased by a Grantee pursuant thereto there shall be in effect as
to such Shares a Registration Statement under the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations of the Commission, the
Grantee exercising such option shall deliver to the Company at the time of
exercise, a certificate in a form reasonably satisfactory to the Company and/or
counsel to the Company (i) acknowledging that the Shares so acquired may be
"restricted securities" within the meaning of Rule 144 promulgated under the
Act; (ii) certifying that he or she is acquiring the Shares issuable to him or
her upon such exercise for the purpose of investment and not with a view to
their sale or distribution; and (iii) containing such Grantee's agreement that
such Shares may not be sold or otherwise disposed of except in accordance with
applicable provisions of the Act. The Company shall not be required to issue or
deliver certificates for Shares until there shall have been compliance with all
applicable laws, rules and regulations, including rules and regulations of the
Commission.
4.4 SUSPENSION, AMENDMENT AND TERMINATION OF THE PLAN. The
Committee may at any time suspend, amend or terminate the Plan, provided that
the approval of the Board of Directors of the Company will be required for any
amendment which will:
(a) increase the maximum number of Shares which may be issued
pursuant the exercise of options granted under the Plan; or
(b) change the provisions of Section 1.4; or
(c) permit the grant of any ISO under the Plan with an option price
less than 100% of the Fair Market Value of the Shares at the time
such ISO is granted; or
(d) extend the term of options or the period during which options may
be granted under the Plan; or
(e) materially increase the benefits provided under the Plan to the
extent that stockholder approval would then be required pursuant
to Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act").
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The power of the Committee to amend the Plan under this Section 4.4 is
subject in certain instances to the requirements of the Exchange Act and other
provisions of applicable law which may require stockholder approval of such
amendments in order to achieve the Company's objectives and the purposes of the
Plan.
Unless the Plan shall theretofore have been terminated by the Committee
or the Board of Directors, the Plan shall terminate August 9, 2002. No option
may be granted during the term of any suspension of the Plan or after
termination of the Plan. The amendment or termination of the Plan shall not,
without the written consent of the Grantee, alter or impair any rights or
obligations of such Grantee under any option theretofore granted under the Plan.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Committee.
4.5 EFFECTIVE DATE. The effective date of the Plan shall be
August 10, 1992, subject to the approval by the holders of a majority of the
Company's outstanding stock within one year of such effective date.
Notwithstanding anything in the Plan to the contrary, if the Plan shall have
been approved by the Board prior to such stockholder approval, options may be
granted by the Committee as provided herein subject to such subsequent
stockholder approval.
ARTICLE V
NON-EMPLOYEE DIRECTORS
5.1 GRANT OF OPTIONS. Each Non-Employee Director shall be
entitled to receive, on the date such Non-Employee Director is first elected as
a Director of the Company and on each anniversary thereof (each, an "Award
Date"), non-qualified stock options to purchase 5,000 Shares. The purchase price
per share of Common Stock under each option shall be one hundred percent (100%)
of the Fair Market Value of the Common Stock on the applicable Award Date. Such
options shall become exercisable as to 20% of the Shares covered thereby one
year after the Award Date and as to an additional 20% of the Shares covered
thereby on each of the four succeeding anniversaries of the Award Date on which
such Non-Employee Director is then a Non-Employee Director and has served
continuously as such since the Award Date. Each option granted under the plan to
Non-Employee Directors shall constitute a non-qualified stock option. All
instruments evidencing options granted to Non-Employee Directors under the Plan
shall be in such form as shall be consistent with the Plan. For purposes of the
Plan, the term Non-Employee Director shall mean any Director of the Company who
is not an Employee and who is not on the Award Date providing and has not at any
time within six months prior thereto provided, legal or consulting services to
the Company.
5.2 AMENDMENT OF THIS ARTICLE. The provisions of this Article 5
shall not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the Rules
thereunder.
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Exhibit B
Just Toys, Inc.
50 West 23rd Street
New York, New York 10010
Ladies and Gentlemen:
Notice is hereby given of my election to purchase [ ] shares of Common
Stock, $.01 par value (the "Shares"), of Just Toys, Inc., at a price of $
----
per Share, pursuant to the Company's Stock Option Plan. Enclosed in payment for
the Shares is :
my check in the amount of $ .
------- ---------
* Shares having a total value of $ , such value
------ -------- ---
being based on the closing price(s) of the shares on the date hereof.
The following information is supplied for use in issuing and registering
the Shares purchased hereby:
Number of Certificates and
Denominations
-------------
Name
-------------
Address
-------------
-------------
Social Security Number
-------------
Dated:
------------------------
Very truly yours,
-----------------
- ---------------
* Subject to the approval of the Stock Option Committee.
<PAGE>
<PAGE>
JUST TOYS, INC.
50 WEST 23RD STREET
NEW YORK, NEW YORK 10010
July 12, 1995
To: Morton J. Levy
We are pleased to confirm that on July 12, 1995, Just Toys, Inc. (the
"Company") granted to you options, pursuant to the Company's 1992 Incentive and
Non-Qualified Stock Option Plan (the "Plan"), to purchase 35,000 shares of
Common Stock, par value $.01 per share, of the Company, at a price of $1.625 per
share. This option shall be effective for a period of ten years commencing on
July 12, 1995 (the "Effective Date") and terminating on July 12, 2005. The
options issued hereby have been designated by the Stock Option Committee as
non-qualified options.
This option is issued in accordance with and is subject to and
conditioned upon all of the terms and conditions of the Plan (a copy of which is
attached hereto as Exhibit A) as from time to time may be amended, provided,
however that no future amendment or termination of the Plan shall, without your
consent, alter in a manner adverse to you or impair any of your rights or
obligations under this option. Reference is made to the terms and conditions of
the Plan, all of which are incorporated by reference in this option agreement as
if fully set forth herein.
This option may be exercised according to the following vesting
schedule: 20% of the shares covered by this option may be exercised after the
first anniversary of the Effective Date and an additional 20% of the shares
covered by this option may be exercised after each successive anniversary of the
Effective Date.
Unless at the time of the exercise of this option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in effect
as to such shares, any shares purchased by you upon the exercise of this option
shall be acquired for investment and not for sale or distribution, and if the
Company so requests, upon any exercise of this option, in whole or in part, you
will execute and deliver to the Company a certificate to such effect. The
Company shall not be obligated to issue any shares pursuant to this option, if
in the opinion of counsel to the Company, the shares to be so issued are
required to be registered or otherwise qualified under the Act or under any
other applicable statute, regulation or ordinance affecting the sale of
securities, unless and until such shares have been so registered or otherwise
qualified.
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You understand and acknowledge that, under existing law, unless at the
time of the exercise of its option a registration statement under the Act is in
effect as to such shares: (i) any shares purchased by you upon exercise of this
option may be required to be held indefinitely unless such shares are
subsequently registered under the Act or an exemption from such registration is
available; (ii) any sales of such shares made in reliance upon Rule 144
promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number
of shares which may be sold); (iii) in the case of securities to which Rule 144
is not applicable, compliance with Regulation A promulgated under the Act or
some other disclosure exemption will be required; (iv) certificates for shares
to be issued to you hereunder shall bear a legend to the effect that the shares
have not been registered under the Act and that the shares may not be sold,
hypothecated, or otherwise transferred in the absence of an effective
registration statement under the Act relating thereto or an opinion of counsel
satisfactory to the Company that such registration is not required; (v) the
Company will place an appropriate "stop transfer" order with its transfer agent
with respect to such shares; and (vi) the Company has undertaken no obligation
to register the shares or to include the shares in any registration statement
which may be filed by it subsequent to the issuance of the shares to you. In
addition, you understand and acknowledge that the Company has no obligation to
furnish to you information necessary to enable you to make sales under Rule 144.
This option (or installment thereof) is to be exercised by delivering to
the Company a written notice of exercise in the form attached hereto as Exhibit
B, together with payment of the purchase price of the shares to be purchased.
The purchase price is to be paid in cash or, at the discretion of the Stock
Option Committee, by delivering shares of the Company's stock already owned by
you and having a fair market value on the date of exercise equal to the exercise
price of the option, or a combination of such shares and cash, or otherwise in
accordance with the Plan.
The Company may establish from time to time, appropriate procedures to
provide for payment or withholding of such income or other taxes as may be
required by law to be paid or withheld in connection with the exercise of an
option. You shall pay the Company all such amounts requested by the Company to
permit the Company to take any deduction available to it resulting from the
exercise of an option. The Company may also establish, from time to time,
appropriate procedures to ensure that the Company receives prompt advice
concerning the occurrence of any event which may create, or affect the timing or
amount of, any obligation to pay or withhold any such taxes or which may make
available to the Company any tax deduction resulting from the occurrence of such
event, and you will comply with all such procedures so established.
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<PAGE>
Kindly evidence your acceptance of this option and your agreement to
comply with the provisions hereof and of the Plan by executing this letter under
the words "Accepted and Agreed To."
Sincerely,
JUST TOYS, INC.
By:
--------------------------
Name: Barry Shapiro
Title: President
ACCEPTED AND AGREED TO:
- --------------------------------
Morton J. Levy
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EXHIBIT A
JUST TOYS, INC.
AMENDED AND RESTATED
1992 INCENTIVE AND
NON-QUALIFIED STOCK OPTION PLAN
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
1.1 PURPOSE. This Stock Option Plan (the "Plan") is intended to
assist Just Toys, Inc. (the "Company") in attracting and maintaining a strong
management for the Company by encouraging ownership of common stock of the
Company by the Company's officers, directors, independent contractors and
employees. The Plan is also intended to enable the Company to reward the
efforts, abilities and industries of such officers, directors, independent
contractors and employees who render employment and other services which
contribute materially to the success of the Company's business.
1.2 DEFINITIONS. For purposes of the Plan, unless the context
otherwise indicates, the following definitions shall be applicable:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Commission" means the Securities and Exchange Commission.
(d) "Committee" means the Stock Option Committee of the Company which
shall be composed of not less than two persons appointed by the Board of
Directors, each of whom shall be a "disinterested person" as that term is
defined in Rule 16b-3(c)(2)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934.
(e) "Director" means any person who is a member of the Board of
Directors whether or not such person is an Employee.
(f) "Employee" means and includes any person who is an employee of the
Company or any Subsidiary (including officers and directors who are also
employees).
(g) "Fair Market Value" of a Share means (i) if the Shares are quoted on
the NASDAQ National Market System or listed on a national securities exchange,
the closing price on such market or
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such exchange, (ii) if the Shares are not quoted on the NASDAQ National Market
System or listed on a national securities exchange, the mean between the closing
bid and asked prices of publicly-traded Shares in the over-the-counter market as
reported on the NASDAQ system or by any nationally recognized quotation service
selected by the Company, or (iii) if the Shares are not then publicly-traded, as
determined, in good faith, by the Committee.
(h) "Grant Date," as used with respect to a particular option, means the
date as of which such option is granted by the Committee pursuant to the Plan.
(i) "Grantee" means an individual or entity to whom an option is granted
by the Committee pursuant to the Plan.
(j) "Incentive Stock Option" and "ISO" means an option intended to
qualify under Section 422 of the Code.
(k) "Independent Contractor" means any third party retained or engaged
by the Company or any Subsidiary to provide services to the Company or such
Subsidiary, including any employee of such third party providing such services.
(l) "Non-Qualified Stock Option" or "NQO" means an option which does not
qualify as an ISO.
(m) "Option Agreement" means a written agreement between a Grantee and
the Company evidencing an option granted under the Plan, consistent with the
provisions of Article II of the Plan.
(n) "Service", as used herein, means the employment of an Employee by
the Company or any Subsidiary or the service of a Director as a director of the
Company, or the retention of an Independent Contractor (including the retention
of an Independent Contractor by whom a Grantee is employed) by the Company or
any Subsidiary.
(o) "Shares" or "Shares of Stock" means shares of common stock, $.01 par
value, of the Company. Shares may consist of authorized but unissued shares or
shares which have been previously issued and reacquired by the Company.
(p) "Subsidiary" of the Company, if any, means and includes a
"Subsidiary Corporation" as that term is defined in Section 424(f) of the Code.
1.3 ADMINISTRATION. The Plan shall be administered by the
Committee. Subject to the express provisions of the Plan, the Committee, in its
sole discretion, from time to time, shall determine the persons from among those
eligible under the Plan to whom, and the time or times at which, options shall
be granted, and the number of Shares to be subject to each option, whether an
option shall be designated an ISO or a NQO and the manner in, and the price at
which, such option may be exercised. In making such determinations the Committee
may take into account recommendations made by management, the nature and length
of Service rendered by the prospective Grantee, his or her level of
compensation, his or her past, present and potential contributions to the
Company and such other factors as the Committee shall in its discretion deem
relevant. Subject to the express provisions of the Plan and any consents
required by any applicable laws affecting the Plan and options, the Committee
shall have
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authority to interpret and construe the Plan, to prescribe, amend and rescind
rules and regulations related to it, to determine the terms and provisions
of the respective Option Agreements and to make all other determinations
necessary or advisable for the administration of the Plan. Nothing contained
herein shall be deemed to prevent the Committee in the sound exercise of
business judgment, from canceling outstanding options and reissuing new
options at a lower exercise price in the event that the Fair Market Value per
share of Common Stock at any time prior to the date of exercise falls below
the exercise price of options granted pursuant to the Plan. Shares subject to
any such canceled options shall be immediately available for reissuance under
the Plan. The determinations of the Committee under the Plan shall be conclusive
and binding on all persons.
1.4 ELIGIBILITY FOR PARTICIPATION. Any Director, Employee or
Independent Contractor providing services to the Company or any Subsidiary or
any employee of such Independent Contractor shall be eligible to receive options
granted under the Plan, except that (i) only Employees shall be eligible to
receive Incentive Stock Options and (ii) members of the Committee are not
eligible to receive options under the Plan during their term of service on the
Committee and for a period of one year thereafter.
1.5 SHARES SUBJECT TO THE PLAN. Subject to adjustment as
hereinafter provided, no more than 600,000 Shares may be issued pursuant to the
exercise of options granted under the Plan. If any option shall expire,
terminate or be canceled for any reason without having been exercised in full,
the unpurchased Shares subject thereto shall again be available for the purposes
of the Plan.
1.6 DURATION OF THE PLAN. Unless previously terminated by the
Committee or the Board of Directors, the Plan will terminate on August 9, 2002.
Such termination will not terminate any option then outstanding.
ARTICLE II
TERMS AND CONDITIONS OF OPTIONS
2.1 OPTIONS AND OPTION AGREEMENTS. Each option granted under the
Plan shall be subject to all of the applicable terms and conditions of the Plan
and shall be evidenced by an Option Agreement. The Option Agreement shall
contain such terms and conditions not inconsistent with the Plan as the
Committee may deem appropriate, including, among other things, when and to what
extent the option is exercisable, the number of Shares that may be purchased
upon exercise of an option, the price at which each Share may be purchased
pursuant to the exercise of an option, the conditions to the exercise of any
option and the Grantee's obligation to remain in the continuous Service of the
Company. The provisions of Option Agreements need not be identical.
2.2 EXERCISABILITY AND TERM. (a) Except as otherwise provided
below, the Committee shall determine the term of each option and whether the
option shall be exercisable in full or in installments and, if in installments,
the number of installments. No option, however, may remain outstanding for more
than ten years after the Grant Date.
(b) Except as otherwise provided herein, an option granted under the
Plan may be exercised from time to time during its term for the full number of
Shares then purchasable upon exercise of the option or from time to time for any
part thereof.
(c) Except as otherwise provided below, options shall terminate
immediately upon the
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termination of the Service of the Grantee. Options granted under the Plan shall
not, however, be affected by any change of Service so long as the Grantee
continues to be a Director, Employee or Independent Contractor.
(d) If a Grantee dies while he or she is a Director, Employee or
Independent Contractor or within three months after the termination of such
option holder's Service by reason of retirement with the written consent of the
Company, such option may be exercised within one year (or such other shorter
period as determined by the Committee and specified in the Option Agreement)
from the date of such Grantee's death by his or her personal representative or
representatives, or by the person or persons to whom the Grantee's rights under
the option pass by will or by the applicable laws of descent and distribution;
provided, however, that an option may not be exercised after its expiration and
provided further that such option may only be exercised for the number of Shares
which could have been purchased by the Grantee on the date of his or her death.
(e) If a Grantee voluntarily retires or quits his or her Service with
the written consent of the Company or a Subsidiary, or if the Service of the
Grantee is terminated by the Company or Subsidiary for reasons other than cause,
such Grantee may exercise his or her option at any time prior to the expiration
of the original option period as specified in the Option Agreement or the
expiration of three months (or such other period as determined by the Committee
and specified in the Option Agreement), whichever shall occur first; provided,
however, that no option may be exercised after its expiration and provided
further that the Grantee may only exercise his or her option for the number of
Shares which he or she could have purchased as of the date such Grantee retired
or quit his or her Service or the date the Service of such Grantee was
terminated.
(f) Notwithstanding Subsections (c), (d) and (e) above, the Committee
may in its sole discretion, with respect to any or all NQOs granted by it,
provide that in the event that the Service of a holder of an NQO shall terminate
for any reason, including without limitation death, disability, termination with
or without cause or retirement with or without the consent of the Company, the
NQOs held by such holder, to the extent of the number of Shares subject to such
NQO which were not purchasable by him or her on the date of termination of his
or her Service, shall forthwith terminate and that any NQOs exercisable on the
date of such termination shall remain exercisable until the expiration of such
NQO unless earlier terminated pursuant to the provisions of this Plan or of the
agreement pursuant to which the NQO is granted.
(g) Options may be terminated at any time by agreement between the
Company and the Grantee.
(h) Nothing herein contained shall impose upon the Company the
obligation to continue the Service of any Grantee. The rights of the Company to
terminate the Service of a Grantee shall not be diminished or affected by reason
of the granting of an Option.
2.3 OPTION PRICE. (a) Except as provided in subsection 2.3(c)
hereof, the option price per Share shall be determined by the Committee at the
time the option is granted, but shall not, in the case of ISOs, be less than
100% of the Fair Market Value of a Share on the Grant Date. In the case of NQOs,
the option price per Share may be less than, equal to or greater than the Fair
Market Value of a Share on the Grant Date. The Committee may modify the option
price of outstanding options or cancel such options and grant new options in
lieu thereof at a new option price, provided that, in the case of
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ISOs, the option price of such modified or new option may not be less than 100%
of the Fair Market Value of a Share on the date of such action by the Committee.
(b) To the extent that the aggregate Fair Market Value (determined at
the time an ISO is granted) of the Shares with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year under all
incentive stock option plans of the Company and its Subsidiaries exceeds
$100,000, such ISOs will be treated as NQOs. The foregoing rule shall be applied
by taking ISOs into account in the order in which they were granted. In the
event outstanding ISOs granted to an Employee become immediately exercisable
under Section 4.1(c) hereof, such ISOs will, to the extent the aggregate Fair
Market Value thereof exceeds $100,000, be treated as NQOs.
(c) An ISO may be granted to an Employee owning, or who is considered as
owning by applying the rules of ownership set forth in Section 424(d) of the
Code, over ten percent of the total combined voting power of all classes of
capital stock of the Company or any Subsidiary if the option price of such ISO
equals or exceeds 110% of the Fair Market Value of a Share subject to the ISO
and such ISO shall expire not more than five years from the date of grant.
2.4 NONTRANSFERABILITY. No option granted under the Plan shall be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Grantee solely
by such Grantee.
2.5 METHOD OF EXERCISE. A Grantee electing to exercise an option
shall exercise such option by delivering to the Company written notice of such
election to exercise, specifying the number of Shares such Grantee has elected
to purchase, together with the option price for the Shares being purchased in
accordance with the terms of Section 2.6 below.
2.6 PAYMENT FOR SHARES. The option price shall become immediately
due and payable upon exercise of the option and payment thereof shall be made to
the Company as follows: (i) in cash (including check, bank draft or money
order), or (ii) at the discretion of the Committee, by delivering to the Company
Shares of Stock already owned by the Grantee and having a Fair Market Value on
the date of exercise equal to the option price or a combination of such Shares
and cash, or (iii) by any other proper method specifically approved by the
Committee.
ARTICLE III
LOANS AND FINANCIAL ACCOMMODATIONS TO GRANTEES
3.1 PURPOSE. In order to assist the Grantee with the acquisition
of Shares of Stock pursuant to the exercise of an option granted under the Plan,
including the payment of any taxes resulting from such exercise, the Committee
may, in its discretion, whenever, in the judgment of the Committee, such
assistance is permitted by applicable law and may reasonably be expected to
benefit the Company or a Subsidiary, authorize, either at the time of the grant
of the option or thereafter (a) the extension of a loan to the Grantee by the
Company, (b) the payment by the optionee of the purchase price of the Shares of
stock in installments, (c) the guarantee by the Company of a loan obtained by
the Grantee from a third party or (d) make such other reasonable arrangements to
facilitate the exercise of options in accordance with applicable law.
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3.2 TERMS OF LOAN OR GUARANTEE. The Committee or Board shall
determine the terms of any loan or guarantee made pursuant to this Article III,
including the interest rate and other terms of repayment thereof, and whether
such loan or guarantee shall be secured or unsecured. Each loan shall be
evidenced by a promissory note having a maximum term to maturity of not more
than sixty (60) months. The maximum amount of any loan or guarantee shall be the
option price for Shares purchased upon exercise of an option plus (a) related
interest payments and (b) the amount of tax liability incurred by the Grantee as
a result of the exercise of an option. In the case of ISOs, the interest rate on
any loan authorized by the Committee shall not be less than the higher of (i)
the "prime" rate as from time to time in effect of a commercial bank of
recognized standing or (ii) the rate of interest from time to time computed
under Section 483 of the Code.
3.3 USE OF LOANED OR GUARANTEED FUNDS. No amount loaned to a
Grantee and no amount the repayment of which is guaranteed by the Company shall
be used for any purpose other than payment of (i) the purchase price of Shares
acquired on the exercise of an option granted or to be granted under the Plan
and (ii) taxes attributable to such exercise.
ARTICLE IV
GENERAL PROVISIONS
4.1 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The aggregate
number and class of Shares for which options may be granted under the Plan, the
number and class of Shares covered by each outstanding option and the price per
Share thereof (but not the total price) and each such option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of common stock of the Company resulting from a stock split, split-up or
consolidation of Shares or any like capital adjustment or reclassification of
Shares, or the payment of any stock dividends, or any other increase or decrease
in the number of Shares of the Company, without receipt of consideration by the
Company.
(b) Subject to any required action by its stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, except as
otherwise provided below, any option granted hereunder shall be adjusted so as
to pertain and apply to the securities to which the holder of the number of
Shares of the Company subject to the option would have been entitled in such
merger or consolidation.
(c) Upon the dissolution or liquidation of the Company or upon a merger
or consolidation of the Company in a transaction in which all or substantially
all of the stockholders of the Company receive cash, securities of another
company or other consideration in exchange for their Shares of Stock, whether or
not the Company is the surviving corporation, or upon a sale of all or
substantially all of the assets of the Company, any option granted hereunder
shall terminate, but the Grantee may, immediately prior to any such transaction
exercise his or her option, in whole or in part, as to the full number of Shares
which he or she would otherwise have been entitled to purchase during the
remaining term of the option irrespective of any vesting or installment
features. Notwithstanding the foregoing, the Company may elect not to permit a
Grantee to exercise his or her option immediately prior to such event in
accordance with the foregoing, but in lieu thereof the Company may, in its
discretion and immediately prior to any such dissolution, liquidation, merger,
consolidation or sale substitute or cause to be substituted a new option for his
or her option, such new option to be applicable to the stock of the surviving or
acquiring corporation or any of its affiliates and to be on terms no less
favorable to the Grantee than those contained in his or her prior option.
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(d) Adjustments and elections under this Section 4.1 shall be made by
the Committee whose determination as to what adjustments, if any, shall be made
and the extent thereof shall be final, binding and conclusive.
4.2 PRIVILEGES OF STOCK OWNERSHIP. No Grantee shall be entitled
to the privileges of stock ownership as to any Shares of Stock not actually
issued and delivered to him or her.
4.3 SECURITIES REGULATIONS. (a) Each option shall be subject to
the requirement that if at any time the Board shall in its discretion determine
that the listing, registration or qualification of the Shares subject to such
option upon any securities exchange or under any federal or state law, or the
approval or consent of any governmental regulatory body, is necessary or
desirable in connection with the issuance or purchase of Shares thereunder, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, approval or consent shall have been effected or
obtained free from any conditions not reasonably acceptable to the Board.
(b) Unless at the time of the exercise of an option and the issuance of
the Shares purchased by a Grantee pursuant thereto there shall be in effect as
to such Shares a Registration Statement under the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations of the Commission, the
Grantee exercising such option shall deliver to the Company at the time of
exercise, a certificate in a form reasonably satisfactory to the Company and/or
counsel to the Company (i) acknowledging that the Shares so acquired may be
"restricted securities" within the meaning of Rule 144 promulgated under the
Act; (ii) certifying that he or she is acquiring the Shares issuable to him or
her upon such exercise for the purpose of investment and not with a view to
their sale or distribution; and (iii) containing such Grantee's agreement that
such Shares may not be sold or otherwise disposed of except in accordance with
applicable provisions of the Act. The Company shall not be required to issue or
deliver certificates for Shares until there shall have been compliance with all
applicable laws, rules and regulations, including rules and regulations of the
Commission.
4.4 SUSPENSION, AMENDMENT AND TERMINATION OF THE PLAN. The
Committee may at any time suspend, amend or terminate the Plan, provided that
the approval of the Board of Directors of the Company will be required for any
amendment which will:
(a) increase the maximum number of Shares which may be issued
pursuant the exercise of options granted under the Plan; or
(b) change the provisions of Section 1.4; or
(c) permit the grant of any ISO under the Plan with an option price
less than 100% of the Fair Market Value of the Shares at the time
such ISO is granted; or
(d) extend the term of options or the period during which options may
be granted under the Plan; or
(e) materially increase the benefits provided under the Plan to the
extent that stockholder approval would then be required pursuant
to Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act").
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The power of the Committee to amend the Plan under this Section 4.4 is
subject in certain instances to the requirements of the Exchange Act and other
provisions of applicable law which may require stockholder approval of such
amendments in order to achieve the Company's objectives and the purposes of the
Plan.
Unless the Plan shall theretofore have been terminated by the Committee
or the Board of Directors, the Plan shall terminate August 9, 2002. No option
may be granted during the term of any suspension of the Plan or after
termination of the Plan. The amendment or termination of the Plan shall not,
without the written consent of the Grantee, alter or impair any rights or
obligations of such Grantee under any option theretofore granted under the Plan.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Committee.
4.5 EFFECTIVE DATE. The effective date of the Plan shall be
August 10, 1992, subject to the approval by the holders of a majority of the
Company's outstanding stock within one year of such effective date.
Notwithstanding anything in the Plan to the contrary, if the Plan shall have
been approved by the Board prior to such stockholder approval, options may be
granted by the Committee as provided herein subject to such subsequent
stockholder approval.
ARTICLE V
NON-EMPLOYEE DIRECTORS
5.1 GRANT OF OPTIONS. Each Non-Employee Director shall be
entitled to receive, on the date such Non-Employee Director is first elected as
a Director of the Company and on each anniversary thereof (each, an "Award
Date"), non-qualified stock options to purchase 5,000 Shares. The purchase price
per share of Common Stock under each option shall be one hundred percent (100%)
of the Fair Market Value of the Common Stock on the applicable Award Date. Such
options shall become exercisable as to 20% of the Shares covered thereby one
year after the Award Date and as to an additional 20% of the Shares covered
thereby on each of the four succeeding anniversaries of the Award Date on which
such Non-Employee Director is then a Non-Employee Director and has served
continuously as such since the Award Date. Each option granted under the plan to
Non-Employee Directors shall constitute a non-qualified stock option. All
instruments evidencing options granted to Non-Employee Directors under the Plan
shall be in such form as shall be consistent with the Plan. For purposes of the
Plan, the term Non-Employee Director shall mean any Director of the Company who
is not an Employee and who is not on the Award Date providing and has not at any
time within six months prior thereto provided, legal or consulting services to
the Company.
5.2 AMENDMENT OF THIS ARTICLE. The provisions of this Article 5
shall not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the Rules
thereunder.
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<PAGE>
Exhibit B
Just Toys, Inc.
50 West 23rd Street
New York, New York 10010
Ladies and Gentlemen:
Notice is hereby given of my election to purchase [ ] shares of Common
Stock, $.01 par value (the "Shares"), of Just Toys, Inc., at a price of $
----
per Share, pursuant to the Company's Stock Option Plan. Enclosed in payment for
the Shares is :
my check in the amount of $ .
------ ---------
* Shares having a total value of $ , such value
------ -------- ---
being based on the closing price(s) of the shares on the date hereof.
The following information is supplied for use in issuing and registering
the Shares purchased hereby:
Number of Certificates and
Denominations
-------------
Name
-------------
Address
-------------
-------------
Social Security Number
-------------
Dated:
------------------------
Very truly yours,
-------------
- ---------------
* Subject to the approval of the Stock Option Committee.
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