<PAGE>
As filed with the Securities and Exchange Commission on August 16, 1999
Registration No. 333-59669
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------
FOTOBALL USA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0614889
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
3738 RUFFIN ROAD
SAN DIEGO, CALIFORNIA 92123
(Address of Principal Executive Offices) (Zip Code)
-----------------
FOTOBALL USA, INC. 1998 STOCK OPTION PLAN
(Full title of the plan)
-----------------
MICHAEL FAVISH CHARLES I. WEISSMAN, ESQ.
PRESIDENT AND CHIEF EXECUTIVE OFFICER SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
FOTOBALL USA, INC. 919 THIRD AVENUE
3738 RUFFIN ROAD NEW YORK, NEW YORK 10022
SAN DIEGO, CALIFORNIA 92123 (212) 758-9500
(619) 467-9900
(Name, address and telephone number, including area code, of agents for service)
<TABLE>
<CAPTION>
==================================================================================================
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1)(2) PER SHARE (3) PRICE (3) FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 200,000 shares $4.34375 $868,750 $241.51
value $.01 per share
==================================================================================================
</TABLE>
(1) Pursuant to Rule 416, this registration statement also covers such
additional securities as may become issuable to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
(2) The securities registered hereby represent an addition to the 500,000
shares of common stock issuable under the Fotoball USA, Inc. 1998 Stock
Option Plan which were registered previously on a registration
statement on Form S-8 (File No. 333-59669, filed on July 23, 1998).
(2) Estimated in accordance with Rule 457(c) and (h) of the Securities Act,
solely for the purpose of calculation of the registration fee. Based on
the average of the high and low sale prices of Fotoball's common stock
as reported by the Nasdaq National Market on August 10, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
----------------------------------------
WE HAVE INCORPORATED CERTAIN IMPORTANT BUSINESS AND FINANCIAL
INFORMATION ABOUT FOTOBALL THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS
DOCUMENT, INCLUDING ANY EXHIBITS THAT ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH INFORMATION. WE WILL PROVIDE TO EACH PERSON, INCLUDING ANY BENEFICIAL
OWNER, TO WHOM THIS DOCUMENT IS DELIVERED, A COPY OF ANY OR ALL OF THE
INFORMATION THAT HAS BEEN INCORPORATED BY REFERENCE IN THIS DOCUMENT, WITHOUT
CHARGE, UPON WRITTEN OR ORAL REQUEST TO FOTOBALL USA, INC., 3738 RUFFIN ROAD,
SAN DIEGO, CALIFORNIA 92123, TELEPHONE (619) 467-9900, ATTENTION: SECRETARY.
The following documents filed by Fotoball with the SEC are hereby
incorporated by reference into this document and made a part hereof:
o our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998
o our Quarterly Reports on Form 10-QSB for the fiscal quarters
ended March 31, 1999 and June 30, 1999
o the description of our securities contained in our
Registration Statement on Form 8-A, filed with the SEC on
August 1, 1994, as amended by Amendment No. 1 thereto filed
with the SEC on October 18, 1996, and our Registration
Statement on Form 8-A, filed with the SEC on August 30, 1996.
All documents and reports filed by Fotoball pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this document and
before the termination of the offering shall be deemed to be incorporated by
reference in this document and to be a part hereof from the dates of filing of
such documents or reports. Any statement contained herein or in a document
incorporated herein by reference will be deemed to be modified or superseded for
the purpose of this document to the extent that a statement contained herein or
in any subsequently filed document which also is incorporated herein by
reference modifies or supersedes such statement. Any such statement so modified
or superseded will not be deemed, except as so modified or superseded, to
constitute a part of this document.
Item 4. Description of Securities.
--------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
Not Applicable.
-2-
<PAGE>
Item 6. Indemnification of Directors and Officers.
------------------------------------------
The indemnification of officers and directors of Fotoball is governed
by Section 145 of the DGCL and the Certificate of Incorporation (the
"Certificate") and By-Laws of Fotoball.
Among other things, the DGCL permits indemnification of a director,
officer, employee or agent in civil, criminal, administrative or investigative
actions, suits or proceedings, other than an action by or in the right of the
corporation, to which such person is a party or is threatened to be made a party
by reason of the fact of such relationship with the corporation or the fact that
such person is or was serving in a similar capacity with another entity at the
request of the corporation against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him if such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, if he had no reasonable cause to
believe his conduct was unlawful. No indemnification may be made in any such
suit to any person adjudged to be liable to the corporation unless and only to
the extent that the Delaware Court of Chancery or the court in which the action
was brought determines that, despite the adjudication of liability, such person
is under all circumstances, fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
Under the DGCL, to the extent that a director, officer, employee or
agent is successful, on the merits or otherwise, in the defense of any action,
suit or proceeding or any claim, issue or matter therein (whether or not the
suit is brought by or in the right of the corporation), he shall be indemnified
against expenses including attorneys' fees actually and reasonably incurred by
him. In all cases in which indemnification is permitted, unless ordered by a
court, it may be made by the corporation only as authorized in the specific case
upon a determination that the applicable standard of conduct has been met by the
party to be indemnified. The determination must be made by a majority vote of a
quorum consisting of the directors who were not parties to the action or, if
such a quorum is not obtainable, or even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or by the stockholders.
The DGCL authorizes the corporation to pay expenses incurred by an
officer or director in advance of a final disposition of a proceeding upon
receipt of an undertaking by or on behalf of the person to whom the advance will
be made, to repay the advances if it shall ultimately be determined that he was
not entitled to indemnification. The DGCL provides that indemnification and
advances of expenses permitted thereunder are not to be exclusive of any rights
to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors, or otherwise. The DGCL also authorizes the corporation to purchase
and maintain liability insurance on behalf of its directors, officers, employees
and agents regardless of whether the corporation would have the statutory power
to indemnify such persons against the liabilities insured.
The Certificate provides that no director of Fotoball shall be
personally liable to Fotoball or its stockholders for monetary damages for
breach of fiduciary duty as a director except for liability
o for any breach of the director's duty of loyalty to Fotoball or
its stockholders
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law
o for paying a dividend or approving a stock repurchase in
violation of Section 174 of the DGCL
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<PAGE>
o for any transaction from which the director derived an improper
personal benefit
The By-Laws provide that directors, officers and others shall be
indemnified to the fullest extent authorized by the DGCL, as now in effect or as
then may be in effect, whichever is more favorable to such persons, against any
and all judgments, fines and amounts paid in settling or otherwise disposing of
threatened, pending or completed actions, suits or proceedings, whether civil,
criminal, administrative or investigative and expenses incurred by such person
in connection therewith. The By-Laws further provide that, to the extent
permitted by law, expenses so incurred by any such person in defending a civil
or criminal action or proceeding shall, at his request, be paid by Fotoball in
advance of the final disposition of such action or proceeding.
The By-Laws provide that the right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition shall not be exclusive of any other right which any person may have
or acquire.
Fotoball maintains directors and officers liability and company
reimbursement insurance which, among other things,
o provides for payment on behalf of its officers and directors
against loss as defined in the policy stemming from acts
committed by directors and officers in their capacity as such
o provides for payment on behalf of Fotoball against such loss but
only when Fotoball shall be required or permitted to indemnify
directors or officers for such loss
Item 7. Exemption from Registration Claimed.
------------------------------------
Not Applicable.
Item 8. Exhibits.
---------
The following exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit Number. Description.
- --------------- ------------
<S> <C>
4.1* Fotoball USA, Inc. 1998 Stock Option Plan, as amended.
4.2* Form of Stock Option Agreement for the Fotoball USA, Inc.
1998 Stock Option Plan (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form S-8
(File No. 333-59669).
5.1 Opinion of Swidler Berlin Shereff Friedman, LLP.
23.1 Consent of Hollander, Lumer & Co. LLP.
23.2 Consent of Swidler Berlin Shereff Friedman, LLP (contained
in Exhibit 5.1).
</TABLE>
- --------------------
* Indicates exhibits relating to executive compensation.
-4-
<PAGE>
Item 9. Undertakings.
-------------
The undersigned small business issuer hereby undertakes that it will:
(1) file, during any period in which it offers or sell securities,
a post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change
in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration; and
Note: Small business issuers do not need to give the
statements in paragraphs (1)(i) and (1)(ii) of this Item if
the registration statement is on Form S-3 or S-8, and the
information required in a post-effective amendment is
incorporated by reference by periodic reports filed by the
small business issuer under the Exchange Act.
(iii) include any additional or changed material information
on the plan of distribution;
(2) for determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of
the securities offered, and the offering of such securities at
that time to be the initial bona fide offering;
(3) file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering;
(4) for purposes of determining any liability under the Securities
Act, treat the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the
small business issuer pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective;
and
(5) for determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities
offered in the registration statement, and that offering of
such securities at that time as the initial bona fide offering
of those securities.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and
-5-
<PAGE>
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer of controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
-6-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California on this 10th day of
August, 1999.
FOTOBALL USA, INC.
By: /s/ Michael Favish
---------------------------
Michael Favish
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Titles Date
- --------- ------ ----
<S> <C> <C>
/s/ Michael Favish President, Chief Executive Officer and
- -------------------------- Director (Principal Executive Officer August 10, 1999
Michael Favish and Principal Financial Officer)
/s/ Salvatore T. DiMascio Director August 10, 1999
- --------------------------
Salvatore T. DiMascio
/s/ Nicholas Giordano Director August 10, 1999
- --------------------------
Nicholas Giordano
/s/ Joel K. Rubenstein Director August 10, 1999
- --------------------------
Joel K. Rubenstein
/s/ John Shea Director August 10, 1999
- --------------------------
John Shea
</TABLE>
-7-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
4.1 Fotoball USA, Inc. 1998 Stock Option Plan, as amended.
5.1 Opinion of Swidler Berlin Shereff Friedman, LLP.
23.1 Consent of Hollander, Lumer & Co. LLP.
</TABLE>
<PAGE>
FOTOBALL USA, INC.
1998 STOCK OPTION PLAN
-----------------------
SECTION 1. PURPOSE
-------
The purposes of this Fotoball USA, Inc. 1998 Stock Option Plan (the
"Plan") are to encourage selected employees and directors of Fotoball USA, Inc.,
a Delaware corporation (together with any successor thereto, the "Company"), or
any present or future Subsidiary Corporation (as defined below) of the Company
to acquire a proprietary interest in the growth and performance of the Company,
to generate an increased incentive to contribute to the Company's future success
and prosperity, thus enhancing the value of the Company for the benefit of its
stockholders, and to enhance the ability of the Company to attract and retain
qualified individuals upon whom, in large measure, the sustained progress,
growth and profitability of the Company depend.
SECTION 2. DEFINITIONS
-----------
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(c) "Committee" shall mean a committee of the Board designated by the
Board to administer the Plan and composed of not less than two (2)
directors.
(d) "Fair Market Value" shall mean, with respect to Shares or other
securities, the fair market value of the Shares or other securities
determined by such methods or procedures as shall be established from
time to time by the Committee in good faith or in accordance with
applicable law. Unless otherwise determined by the Committee, the Fair
Market Value of Shares shall mean (i) the closing price per Share of
the Shares on the principal exchange on which the Shares are then
trading, if any, on such date, or, if the Shares were not traded on
such date, then on the next preceding trading day during which a sale
occurred; or (ii) if the Shares are not traded on an exchange but are
quoted on the Nasdaq Stock Market or a successor quotation system, (1)
the last sales price (if the Shares are then listed as a National
Market Issue on the Nasdaq Stock Market) or (2) the mean between the
closing representative bid and asked prices (in all other cases) for
the Shares on such date as reported by the Nasdaq Stock Market or such
successor quotation system; or (iii) if the Shares are not publicly
traded on an exchange and not quoted on the Nasdaq Stock Market or a
successor quotation system, the mean between the closing bid and asked
prices for the Shares on such date as determined in good faith by the
Committee.
<PAGE>
(e) "Incentive Stock Option" shall mean an option granted under the
Plan that is designated as an incentive stock option within the meaning
of Section 422 of the Code or any successor provision thereto.
(f) "Independent Director" shall mean each member of the Board who
is not an employee of the Company or any Subsidiary Corporation of the
Company.
(g) "Key Employee" shall mean any officer, director or other
employee who is a regular full-time employee of the Company or its
present and future Subsidiary Corporations.
(h) "Non-Qualified Stock Option" shall mean an Option granted under
the Plan that is not designated as an Incentive Stock Option.
(i) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(j) "Option Agreement" shall mean a written agreement, contract or
other instrument or document evidencing an Option granted under the
Plan.
(k) "Participant" shall mean a Key Employee or Independent Director
who has been granted an Option under the Plan.
(l) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization or
government or political subdivision thereof.
(m) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, or any successor rule or regulation thereto.
(n) "Shares" shall mean the common stock of the Company, $.01 par
value, and such other securities or property as may become the subject
of Options pursuant to an adjustment made under Section 4(b) of the
Plan.
(o) "Subsidiary Corporation" shall have the meaning ascribed
thereto in Code Section 424(f).
(p) "Ten Percent Stockholder" shall mean a Person, who together
with his or her spouse, children and trusts and custodial accounts for
their benefit, immediately at the time of the grant of an Option and
assuming its immediate exercise, would beneficially own, within the
meaning of Section 424(d) of the Code, Shares possessing more than ten
percent (10%) of the total combined voting power of all of the
outstanding capital stock of the Company or any Subsidiary Corporation
of the Company.
-2-
<PAGE>
SECTION 3. ADMINISTRATION
--------------
(a) Generally. The Plan shall be administered by the Committee.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with
respect to the Plan or any Option shall be within the sole discretion
of the Committee, may be made at any time, and shall be final,
conclusive, and binding upon all Persons, including the Company, any
Participant, any holder or beneficiary of any Option, any stockholder
of the Company and any employee of the Company.
(b) Powers. Subject to the terms of the Plan and applicable law and
except as provided in Section 7 hereof, the Committee shall have full
power and authority to: (i) designate Participants; (ii) determine the
type or types of Options to be granted to each Participant under the
Plan; (iii) determine the number of Shares to be covered by Options;
(iv) determine the terms and conditions of any Option; (v) determine
whether, to what extent, and under what circumstances Options may be
settled or exercised in cash, Shares, other Options, or other property,
or canceled, forfeited, or suspended, and the method or methods by
which Options may be settled, exercised, canceled, forfeited, or
suspended; (vi) interpret and administer the Plan and any instruments
or agreements relating to, or Options granted under, the Plan; (vii)
establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (viii) make any other determination and
take any other action that the Committee deems necessary or desirable
for the administration of the Plan.
SECTION 4. SHARES AVAILABLE FOR OPTIONS
----------------------------
(a) Shares Available. Subject to adjustment as provided in
Section 4(b):
(i) Limitation on Number of Shares. Options issuable under the
Plan are limited such that the maximum aggregate number of Shares which
may issued pursuant to, or by reason of, Options is 700,000. Further,
no Participant shall be granted Options to purchase more than 125,000
Shares in any one fiscal year; provided, however, that the Committee
may adopt procedures for the counting of Shares relating to any grant
of Options to ensure appropriate counting, avoid double counting, and
provide for adjustments in any case in which the number of Shares
actually distributed differs from the number of Shares previously
counted in connection with such grant; provided further, however, that
the options granted under the Company's 1994 Stock Option Plan shall
not be treated as outstanding. To the extent that an Option granted to
a (A) Key Employee or (B) an Independent Director ceases to remain
outstanding by reason of termination of rights granted thereunder,
forfeiture or otherwise, the Shares subject to such Option shall again
become available for award under the Plan to (x) Key Employees and (y)
Independent Directors, respectively.
-3-
<PAGE>
(ii) Sources of Shares Deliverable Under Options. Any Shares
delivered pursuant to an Option may consist, in whole or in part, of
authorized and unissued Shares or of treasury Shares.
(b) Adjustments. In the event that the Committee shall determine
that any change in corporate capitalization, such as a dividend or
other distribution of Shares, or a corporate transaction, such as a
merger, consolidation, reorganization or partial or complete
liquidation of the Company or other similar corporate transaction or
event, affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
necessary to prevent dilution or enlargement of the benefits or
potential benefits intended to be made under the Plan, adjust any or
all of (x) the number and type of Shares which thereafter may be made
the subject of Options, (y) the number and type of Shares subject to
outstanding Options, and (z) the grant, purchase, or exercise price
with respect to any Option or, if deemed appropriate, make provision
for a cash payment to the holder of an outstanding Option; provided,
however, in each case, that (i) with respect to Incentive Stock Options
no such adjustment shall be authorized to the extent that such
adjustment would cause the Plan to violate Section 422 of the Code or
any successor provision thereto; (ii) such adjustment shall be made in
such manner as not to adversely affect the status of any Option as
"performance-based compensation" under Section 162(m) of the Code; and
(iii) the number of Shares subject to any Option denominated in Shares
shall always be a whole number.
SECTION 5. ELIGIBILITY
-----------
In determining the Persons to whom Options shall be granted and the
number of Shares to be covered by each Option, the Committee shall take into
account the nature of the Person's duties, such Person's present and potential
contributions to the success of the Company and such other factors as it shall
deem relevant in connection with accomplishing the purposes of the Plan. A Key
Employee who has been granted an Option or Options under the Plan may be granted
an additional Option or Options, subject to such limitations as may be imposed
by the Code on the grant of Incentive Stock Options. Notwithstanding anything
herein to the contrary, Incentive Stock Options may be granted only to Key
Employees of the Company or any Parent Corporation or Subsidiary Corporation.
SECTION 6. OPTIONS
-------
The Committee is hereby authorized to grant Options to Participants
upon the following terms and the conditions (except to the extent otherwise
provided in Section 7) and with such additional terms and conditions, in either
case not inconsistent with the provisions of the Plan, as the Committee shall
determine:
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<PAGE>
(a) Exercise Price. The exercise price per Share purchasable under
Options shall be determined by the Committee at the time the Option is
granted but generally shall not be less than the Fair Market Value of
the Shares covered thereby at the time the Option is granted.
(b) Option Term. The term of each Non-Qualified Stock Option shall
be fixed by the Committee but generally shall not exceed ten (10) years
from the date of grant.
(c) Time and Method of Exercise. The Committee shall determine the
time or times at which the right to exercise an Option may vest, and
the method or methods by which, and the form or forms in which, payment
of the option price with respect to exercises of such Option may be
made or deemed to have been made (including, without limitation, (i)
cash, Shares, outstanding Options or other consideration, or any
combination thereof, having a Fair Market Value on the exercise date
equal to the relevant option price and (ii) a broker-assisted cashless
exercise program established by the Committee), provided in each case
that such methods avoid "short-swing" profits to the Participant under
Section 16(b) of the Securities Exchange Act of 1934, as amended. The
payment of the exercise price of an Option may be made in a single
payment or transfer, in installments, or on a deferred basis, in each
case in accordance with rules and procedures established by the
Committee.
(d) Incentive Stock Options. All terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code, or any successor provision
thereto, and any regulations promulgated thereunder including that,
(i)(A) in the case of a grant to a Person that is not a Ten Percent
Stockholder the purchase price per Share purchasable under Incentive
Stock Options shall not be less than the Fair Market Value of a Share
on the date of grant and (B) in the case of a grant to a Ten Percent
Stockholder the purchase price per Share purchasable under Incentive
Stock Options shall not be less than 110% of the Fair Market Value of a
Share on the date of grant and (ii) the term of each Incentive Stock
Option shall be fixed by the Committee but shall in no event be more
than ten (10) years from the date of grant, or in the case of an
Incentive Stock Option granted to a Ten Percent Stockholder, five (5)
years from the date of grant..
(e) Limits on Transfer of Options. Subject to Code Section 422, no
Option and no right under any such Option, shall be assignable,
alienable, saleable or transferable by a Participant otherwise than by
will or by the laws of descent and distribution, and such Option, and
each right under any such Option, shall be exercisable during the
Participant's lifetime, only by the Participant or, if permissible
under applicable law (including Code Section 422, in the case of an
Incentive Stock Option), by the Participant's guardian or legal
representative. No Option and no right under any such Option, may be
pledged, alienated, attached, or otherwise encumbered, and any
purported pledge, alienation, attachment, or encumbrance thereof shall
be void and unenforceable against the Company. Notwithstanding the
foregoing, the Committee may, in its discretion, provide that
Non-Qualified Stock Options be transferable, without consideration, to
immediate family members (i.e., children, grandchildren or spouse), to
trusts for the benefit of such immediate
-5-
<PAGE>
family members and to partnerships in which such family members are
the only partners. The Committee may attach to such transferability
feature such terms and conditions as it deems advisable. In addition,
a Participant may, in the manner established by the Committee,
designate a beneficiary (which may be a person or a trust) to exercise
the rights of the Participant, and to receive any distribution, with
respect to any Option upon the death of the Participant. A
beneficiary, guardian, legal representative or other person claiming
any rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Option
Agreement applicable to such Participant, except as otherwise
determined by the Committee, and to any additional restrictions deemed
necessary or appropriate by the Committee.
(f) Tax Withholding. The Company or any Subsidiary is authorized to
withhold from any Option granted any payment relating to an Option
under the Plan, including from the exercise of an Option, amounts of
withholding and other taxes due in connection with any transaction
involving an Option, and to take such other action as the Committee may
deem advisable to enable the Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax
obligations relating to any Option. This authority shall include
authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of a Participant's tax
obligations.
(g) Loan Provisions. With the consent of the Committee, and subject
at all times to laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make, guarantee,
or arrange for a loan or loans to a Participant with respect to the
exercise of any Option, including the payment by a Participant of any
or all federal, state, or local income or other taxes due in connection
with the exercise of any Option. Subject to such limitations, the
Committee shall have full authority to decide whether to make a loan or
loans hereunder and to determine the amount, terms, and provisions of
any such loan or loans, including the interest rate to be charged in
respect of any such loan or loans, whether the loan or loans are to be
with or without recourse against the borrower, the terms on which the
loan is to be repaid and the conditions, if any, under which the loan
or loans may be forgiven.
SECTION 7. OPTIONS AWARDED TO INDEPENDENT DIRECTORS
----------------------------------------
Each Independent Director who is a member of the Board on July 1 of a
year during the term of the Plan shall automatically be granted a Non-Qualified
Stock Option to purchase 5,000 Shares on July 1 of each year of service on the
Board as an Independent Director. All Options granted pursuant to this Section 7
shall (a) be at an exercise price per Share equal to 100% of the Fair Market
Value of a Share on the date of the grant; (b) have a term of ten (10) years;
(c) terminate (i) upon termination of an Independent Director's service as a
director of the Company for any reason other than mental or physical disability
or death, (ii) three (3) months after the date the Independent Director ceases
to serve as a director of the Company due to physical or mental disability or
(iii)(A) twelve (12) months after the date the Independent Director ceases to
serve as a director due to the
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death of the Independent Director or (B) three (3) months after the death of the
Independent Director if such death shall occur during the three (3) month period
following the date the Independent Director ceased to serve as a director of the
Company due to physical or mental disability; and (d) be otherwise on the same
terms and conditions as all other Options granted pursuant to the Plan.
SECTION 8. AMENDMENT AND TERMINATION
-------------------------
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Option Agreement or in the Plan:
(a) Amendments to the Plan. The Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board, but no amendment without the approval
of the stockholders of the Company shall be made if such amendment
would be required under Sections 162(m) or 422 of the Code, Rule 16b-3
or any other law or rule of any governmental authority, stock exchange
or other self-regulatory organization to which the Company may then be
subject. Neither the amendment, suspension nor termination of the Plan
shall, without the consent of the holder of such Option, alter or
impair any rights or obligations under any Option theretofore granted.
(b) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option in the manner and to the extent
it shall deem desirable to carry the Plan into effect.
SECTION 9. GENERAL PROVISIONS
------------------
(a) No Rights to Awards. No Key Employee shall have any claim to be
granted any Option under the Plan, and there is no obligation for
uniformity of treatment of Key Employees or holders or beneficiaries of
Options under the Plan. The terms and conditions of Options need not be
the same with respect to each recipient.
(b) No Right to Employment. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the
employ of the Company. Further, the Company may at any time dismiss a
Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in
any Option Agreement.
(c) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware and
applicable Federal law.
(d) Severability. If any provision of the Plan or any Option is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction, or would disqualify the Plan or any Option under any law
deemed applicable by the Committee, such provision shall be construed
or
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deemed amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan, such provision
shall be deemed void, stricken and the remainder of the Plan and any
such Option shall remain in full force and effect.
(e) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Option, and the Committee shall
determine whether cash, other securities, or other property shall be
paid or transferred in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be cancelled, terminated,
or otherwise eliminated.
(f) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision hereof.
SECTION 10. EFFECTIVE DATE OF THE PLAN
--------------------------
The Plan is effective as of June 1, 1998, subject to stockholder
approval of the Plan prior to such date.
SECTION 11. TERM OF THE PLAN
----------------
The Plan shall continue until the earlier of (i) the date on which all
Options issuable hereunder have been issued, (ii) the termination of the Plan by
the Board or (iii) March 9, 2008. However, unless otherwise expressly provided
in the Plan or in an applicable Option Agreement, any Option theretofore granted
may extend beyond such date and the authority of the Committee to amend, alter,
adjust, suspend, discontinue, or terminate any such Option or to waive any
conditions or rights under any such Option, and the authority of the Board to
amend the Plan, shall extend beyond such date.
[As of May 18, 1999]
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EXHIBIT 5.1
August 13, 1999
Fotoball USA, Inc.
3738 Ruffin Road
San Diego, California 92123
Dear Sirs:
Fotoball USA, Inc., a Delaware corporation (the "Company"), intends to
transmit for filing with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933, as amended, on Form S-8 (the
"Registration Statement") which relates to 200,000 shares of the Company's
common stock, par value $.01 per share (the "Shares"), which are being offered
pursuant to the Company's 1998 Stock Option Plan (the "Plan"). This opinion is
an exhibit to the Registration Statement.
We have acted as counsel to the Company in connection with the proposed
offer and sale of the Shares as contemplated by the Registration Statement.
However, we are not general counsel to the Company and would not ordinarily be
familiar with or aware of matters relating to the Company unless they are
brought to our attention by representatives of the Company. We have examined
copies (in each case signed, certified or otherwise proved to our satisfaction)
of the Company's Certificate of Incorporation and By-Laws as presently in
effect, minutes and other instruments evidencing actions taken by the Company's
directors and stockholders, and such other documents and instruments relating to
the Company and the proposed offering as we have deemed necessary under the
circumstances. In our examination of all such agreements, documents,
certificates and instruments, we have assumed the genuineness of all signatures
and the authenticity of all agreements, documents, certificates and instruments
submitted to us as originals and the conformity with the originals of all
agreements, instruments, documents and certificates submitted to us as copies.
Insofar as this opinion relates to securities to be issued in the future, we
have assumed that all applicable laws, rules and regulations in effect at the
time of such issuance are the same as such laws, rules and regulations in effect
as of the date hereof.
We note that we express no opinion on the laws of any jurisdiction
other than the laws of the State of New York, the federal laws of the United
States and, to the extent set forth in the succeeding sentence, the laws of the
State of Delaware. Insofar as the opinions set forth below relate to the laws of
the State of Delaware, we have relied solely upon our reading of standard
compilations of the Delaware General Corporation Law, as presently in effect.
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Based on the foregoing, and subject to and in reliance on the accuracy
and completeness of the information relevant thereto provided to us, it is our
opinion that:
1. The Company has been duly incorporated under the laws of the
State of Delaware and has an authorized capital stock consisting
of 15,000,000 shares of common stock, par value $.01 per share,
and 1,000,000 shares of preferred stock, par value $.01 per
share.
2. The Shares to be issued upon the exercise of options issued
pursuant to the Plan, have been duly authorized and (subject to
the effectiveness of the Registration Statement and compliance
with applicable state securities laws), when issued and paid for
in accordance with the terms of the option agreements relating
thereto, will be legally and validly issued, fully paid and non-
assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and as an exhibit to any filing made by the Company under
the securities or "Blue Sky" laws of any state.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes, except as expressly provided in the
preceding paragraph.
Very truly yours,
/s/ SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
SBSF, LLP:CIW:GA:JSH:AMF
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the heading "Experts" and
to the incorporation by reference of our report dated February 5, 1999 with
reference to our audit of the financial statements of Fotoball USA, Inc. as of
December 31, 1998 and for the year then ended, in the Registration Statement on
Form S-8 dated August 16, 1999.
/s/ HOLLANDER LUMER & CO. LLP
HOLLANDER LUMER & CO. LLP
Los Angeles, California
August 11, 1999
