<PAGE>
----------------------------------
OMB APPROVAL
----------------------------------
OMB Number: 3235-0145
Expires: October 31, 1997
Estimated average burden
hours per response...........14.90
----------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)*
MEDIA ARTS GROUP, INC.
--------------------------------------------------------
(Name of Issuer)
COMMON STOCK
--------------------------------------------------------
(Title of Class of Securities)
58439 C 10 2
--------------------------------------------------------
(CUSIP Number)
JAMES F. LANDRUM, JR., 521 CHARCOT AVENUE, SAN JOSE, CA 95131 (408) 922-1535
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
SEPTEMBER 17, 1998
--------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
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 Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the statement / /. (A fee
is not required only if the reporting 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 reporing beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on 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).
(Continued on following page(s))
Page 1 of 10 Pages
----
<PAGE>
SCHEDULE 13D
CUSIP No. 58439 C 10 2 Page 2 of 10 Pages
------------ --- ---
- -------------------------------------------------------------------------------
(1) Name of Reporting Person.
S.S. or I.R.S. Identification No. of Above Person
THOMAS KINKADE
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
N/A
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant / /
to Items 2(d) or 2(e) N/A
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
UNITED STATES OF AMERICA
- -------------------------------------------------------------------------------
NUMBER OF SHARES (7) Sole Voting
BENEFICIALLY OWNED Power 600,000
BY EACH REPORTING --------------------------------------------------
PERSON WITH (8) Shared Voting
Power 3,140,651
--------------------------------------------------
(9) Sole Dispositive
Power 600,000
--------------------------------------------------
(10) Shared Dispositive
Power 3,140,651
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,740,651
- -------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain / /
Shares*
N/A
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
27.41%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 58439 C 10 2 Page 3 of 10 Pages
------------ --- ---
- -------------------------------------------------------------------------------
(1) Name of Reporting Person.
S.S. or I.R.S. Identification No. of Above Person
NANETTE KINKADE
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
N/A
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
N/A
- -------------------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant / /
to Items 2(d) or 2(e) N/A
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
UNITED STATES OF AMERICA
- -------------------------------------------------------------------------------
NUMBER OF SHARES (7) Sole Voting
BENEFICIALLY OWNED Power 0
BY EACH REPORTING --------------------------------------------------
PERSON WITH (8) Shared Voting
Power 3,140,651
--------------------------------------------------
(9) Sole Dispositive
Power 0
--------------------------------------------------
(10) Shared Dispositive
Power 3,140,651
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,140,651
- -------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain / /
Shares*
N/A
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
24.07%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
ITEM 1. SECURITY AND ISSUER
Item 1 to Schedule 13D is hereby amended and restated in its entirety
as follows:
This statement relates to shares of Common Stock par value of $0.01
per share, of Media Arts Group, Inc., a Delaware Corporation (the
"Issuer"). The address of Issuer's principal executive offices is 521
Charcot Avenue, San Jose, California 95131.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 to Schedule 13D is hereby amended and restated in its entirety
as follows:
(a) The names of the persons filing are Thomas Kinkade and Nanette
Kinkade (collectively, the "Reporting Persons").
(b) The address of the principal business office of each Reporting
Person is 521 Charcot Avenue, San Jose, California 95131.
(c) Thomas Kinkade is the Creative Director and a member of the Board
of Directors of the Issuer. Nanette Kinkade is a homemaker and
the spouse of Thomas Kinkade.
(d) Neither Reporting Person has been convicted in any criminal
proceedings during the past five (5) years.
(e) Neither Reporting Person has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction
during the past five (5) years.
(f) Thomas Kinkade and Nanette Kinkade are United States citizens.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On December 3, 1997, Thomas Kinkade and the Issuer entered into a License
Agreement (the "License Agreement"). Pursuant to the License Agreement, Thomas
Kinkade granted the Issuer perpetual and exclusive rights to each image produced
by Mr. Kinkade under the License Agreement as well as a library of over 160
existing Thomas Kinkade images. Pursuant to the License Agreement, Mr. Kinkade
was granted, subject to stockholder approval, a 15-year option to purchase up to
600,000 shares of Common Stock at a per share exercise price of $12.375, which
was the
4 of 10
<PAGE>
closing per share price of the Issuer's Common Stock on December 3, 1997.
Pursuant to the License Agreement, a stock option agreement was also entered
into between the Issuer and Thomas Kinkade as of December 3, 1997 (the "Option
Agreement"). The grant of the 15-year option to purchase 600,000 shares of
Common Stock to Thomas Kinkade was duly approved by the stockholders on
September 17, 1998 at the 1998 Annual Stockholders' Meeting.
The information set forth in Item 4, Item 5 and Item 6 and provisions of the
Option Agreement (a copy of which is attached as Exhibit 3 hereto) are
incorporated by reference into this Item 3.
ITEM 4. PURPOSE OF TRANSACTION
On December 3, 1997, Thomas Kinkade and the Issuer entered into a License
Agreement (the "License Agreement"). Pursuant to the License Agreement, Thomas
Kinkade granted the Issuer perpetual and exclusive rights to each image produced
by Mr. Kinkade under the License Agreement as well as a library of over 160
existing Thomas Kinkade images. Pursuant to the License Agreement, Mr. Kinkade
was granted, subject to stockholder approval, a 15-year option to purchase up to
600,000 shares of Common Stock at a per share exercise price of $12.375, which
was the closing per share price of the Issuer's Common Stock on December 3,
1997. Pursuant to the License Agreement, a stock option agreement was also
entered into between the Issuer and Thomas Kinkade as of December 3, 1997 (the
"Option Agreement"). The grant of the 15-year option to purchase 600,000 shares
of Common Stock to Thomas Kinkade was duly approved by the stockholders on
September 17, 1998 at the 1998 Annual Stockholders' Meeting.
The information set forth in Item 3, Item 5 and Item 6 and provisions of the
Option Agreement (a copy of which is attached as Exhibit 3 hereto) are
incorporated by reference into this Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 to Schedule 13D is hereby amended, in pertinent part, as
follows:
(a) (i) The aggregate number of shares of Common Stock
beneficially owned by Thomas Kinkade is 3,740,651 which
represents 27.41% of the Issuer's outstanding Common
Stock.
(ii) The aggregate number of shares of Common Stock
beneficially owned by Nanette Kinkade is 3,140,651, and
represent 24.07% of the Issuer's outstanding Common Stock.
5 of 10
<PAGE>
(b) (i) Thomas Kinkade has:
1) 600,000 shares as to which he has sole power to vote
or to direct the vote
2) 3,140,651 shares as to which he has shared power to
vote or to direct the vote
3) 600,000 shares as to which he has sole power to
dispose or to direct the disposition
4) 3,140,651 shares as to which he has shared power to
dispose or to direct the disposition
(ii) Nanette Kinkade has:
1) 0 shares as to which she has sole power to vote or to
direct the vote
2) 3,140,651 shares as to which she has shared power to
vote or to direct the vote
3) 0 shares as to which she has sole power to dispose or
to direct the disposition
4) 3,140,651 shares as to which she has shared power to
dispose or to direct the disposition
(c) Except as set forth in Item 4, to the best knowledge of the
Reporting Persons, within the past 60 days, none of the
Reporting Persons has engaged in any transaction of the
Issuer's Common Stock.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Item 6 to Schedule 13D is hereby amended, in pertinent part, as follows:
On December 3, 1997, Thomas Kinkade and the Issuer entered into a License
Agreement (the "License Agreement"). Pursuant to the License Agreement, Thomas
Kinkade granted the Issuer perpetual and exclusive rights to each image produced
by Mr. Kinkade under the License Agreement as well as a library of over 160
existing Thomas Kinkade images. Pursuant to the License Agreement, Mr. Kinkade
was granted, subject to stockholder approval, a 15-year option to purchase up to
600,000 shares of Common Stock at a per share exercise price of $12.375, which
was the closing per share price of the Issuer's Common Stock on December 3,
1997. Pursuant to the License Agreement, a stock option agreement was also
entered into between the Issuer and Thomas Kinkade as of December 3, 1997 (the
"Option Agreement"). The grant of the 15-year option to purchase up to 600,000
shares of Common Stock to Thomas Kinkade was duly approved by the stockholders
on September 17, 1998 at the 1998 Annual Stockholders' Meeting.
The principal terms of the Option Agreement are as follows: All options
underlying the Option Agreement are nonqualified stock options (as defined in
the Internal Revenue Code). The Option Agreement provides for appropriate
adjustments in the number and
6 of 10
<PAGE>
kind of shares subject thereto in the event of a stock split, stock dividend or
certain other similar changes in the Issuer's Common Stock and in the event of a
merger, consolidation or certain other types of reorganization.
All of the options underlying the Option Agreement became fully exercisable upon
grant on December 3, 1997 and expires on the fifteenth year anniversary thereof.
Mr. Kinkade may exercise the option, or any portion thereof, by giving written
notice to the Issuer at its principal executive office, to the attention of the
Secretary of the Issuer, accompanied by a copy of the Stock Purchase Agreement
attached to the Option Agreement executed by Mr. Kinkade (or at the option of
the Issuer such other form of stock purchase agreement as shall then be
acceptable to the Issuer), payment of the exercise price and payment of any
applicable withholding taxes. The date the Issuer receives written notice of an
exercise accompanied by payment will be considered as the date the option was
exercised. Promptly after receipt of written notice of exercise of the option,
the Issuer will, without stock issue or transfer taxes to Mr. Kinkade, deliver
to him or such other person as he directs, a certificate or certificates for the
requisite number of shares. Mr. Kinkade will not have any privileges as a
stockholder with respect to any shares covered by the Option Agreement until the
date of issuance of a stock certificate.
In the event Mr. Kinkade ceases to be an employee of the Issuer or any of its
subsidiaries for any reason other than death or permanent disability, the
options may be exercised at any time within twelve (12) months after the date of
termination (but in no event after the expiration date of the option), but not
thereafter. If Mr. Kinkade's termination is due to death or permanent
disability, or if he dies or becomes disabled within the period that the option
remains exercisable after termination, the option may be exercised by Mr.
Kinkade in the case of disability, by his personal representative or by the
person to whom the option is transferred by will or the laws of descent and
distribution, at any time within two years after the death or two years after
the disability of Mr. Kinkade (but in no event after the expiration of the
option).
Payment in full must be made for all option shares purchased at the time
written notice of exercise of the option is given to the Issuer, and proceeds
of any payment shall constitute general funds of the Issuer. At the time of
exercise of the option (or at such later time(s) as the Issuer may
prescribe), Mr. Kinkade must remit to the Issuer all United States federal
and state withholding taxes determined by the Issuer to be applicable.
The option is not assignable or transferable by Mr. Kinkade except by will or
by the laws of descent and distribution. During Mr. Kinkade's lifetime, the
option is exercisable only by him. Any attempt to assign, pledge, transfer,
hypothecate or otherwise dispose of the option in a manner not permitted by
the Option Agreement, and any levy of execution, attachment or similar
process on the option, will be null and void.
Regardless of whether the sale of the exercised shares has been registered
under the Securities Exchange Act of 1934, as amended (the "Act") or has been
registered or qualified under the securities laws of any state, the Issuer
may impose restrictions upon the sale, pledge or other transfer of exercised
shares if, in the judgment of the Issuer and
7 of 10
<PAGE>
the Issuer's counsel, such restrictions are necessary or desirable in order
to achieve compliance with the provisions of the Act, the securities laws of
any state, or any other law.
The information set forth in Item 4, Item 5 and Item 6 and provisions of the
Option Agreement (a copy of which is attached as Exhibit 3 hereto) are
incorporated by reference into this Item 6.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1. Joint Filing Agreement dated March 5, 1997 by and
between Thomas Kinkade and Nanette Kinkade, which was
filed as Exhibit 1 to Schedule 13D filed on March 5,
1997 and is incorporated herein by reference.
Exhibit 2. License Agreement entered into as of December 3, 1997
by and between Media Arts Group, Inc. and Thomas
Kinkade, filed on December 16, 1997 and is incorporated
herein by reference.
Exhibit 3. Stock Option Agreement dated December 3, 1997 by and
between the Issuer and Thomas Kinkade.
8 of 10
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, each of
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
/s/ Thomas Kinkade September 24, 1998
- -----------------------------
Thomas Kinkade
/s/ Nanette Kinkade September 24, 1998
- -----------------------------
Nanette Kinkade
9 of 10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Document
- ----------- --------
<S> <C>
Exhibit 1. Joint Filing Agreement dated March 5, 1997 by and between Thomas
Kinkade and Nanette Kinkade, which was filed as Exhibit 1 to
Schedule 13D filed on March 5, 1997 and is incorporated herein by
reference.
Exhibit 2. License Agreement entered into as of December 3, 1997 by and
between Media Arts Group, Inc. and Thomas Kinkade, filed on
December 16, 1997 and is incorporated herein by reference.
Exhibit 3. Stock Option Agreement dated December 3, 1997 by and between the
Issuer and Thomas Kinkade.
</TABLE>
10 of 10
<PAGE>
EXHIBIT 3
MEDIA ARTS GROUP, INC.
EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement"), is
made and entered into as of December 3, 1997 between MEDIA ARTS GROUP, INC.,
a Delaware corporation (the "Company"), and Thomas Kinkade ("Optionee").
THE PARTIES AGREE AS FOLLOWS:
1. GRANT OF OPTION; EFFECTIVE DATE.
1.1 GRANT. The Company hereby grants to Optionee a
NONQUALIFIED stock option (the "NQO") to purchase all or any part of an
aggregate of 600,000 shares (the "NQO Shares") of the Company's common stock
("Common Stock") on the terms and conditions set forth herein.
1.2 EFFECTIVE DATE. The effective date of this NQO is
December 3, 1997("Effective Date").
2. EXERCISE PRICE. The exercise price for purchase of the shares
of Common Stock covered by this NQO shall be $12.375 per share.
3. TERM. Subject to Section 5.2, this NQO shall expire on the
fifteenth anniversary of the Effective Date.
4. ADJUSTMENT OF NQOS. The Company shall adjust the number and
kind of shares and the exercise price thereof in the event of any merger,
reorganization, consolidation, recapitalization, stock dividend, stock split,
spin-off, sale of substantial assets, or other change in corporate structure
affecting the Common Stock; provided, that the number of shares subject to
this NQO shall always be rounded down to the nearest whole number.
5. EXERCISE OF OPTIONS.
5.1 TIME OF EXERCISE. This NQO shall be exercisable with
respect to 100% of the NQO Shares commencing on December 3, 1997.
5.2 EXERCISE AFTER TERMINATION OF EMPLOYEE STATUS. In the
event that Optionee ceases to be an employee of the Company or any of its
subsidiaries for any reason other than death or permanent disability, this
NQO may be exercised at any time within twelve (12) months after the date of
termination (but in no event after the expiration date of this NQO), but not
thereafter. If Optionee's termination is due to death or
<PAGE>
permanent disability, or Optionee dies or becomes disabled within the period
that this NQO remains exercisable after termination, this NQO may be
exercised by the Optionee in the case of disability, by the Optionee's
personal representative or by the person to whom this NQO is transferred by
will or the laws of descent and distribution, at any time within two years
after the death or two years after the disability, as the case may be, of
Optionee (but in no event after the expiration of this NQO).
5.3 MANNER OF EXERCISE. Optionee may exercise this NQO, or
any portion of this NQO, by giving written notice to the Company at its
principal executive office, to the attention of the Secretary of the Company,
accompanied by a copy of the Stock Purchase Agreement in substantially the
form attached hereto as Exhibit 1 executed by Optionee (or at the option of
the Company such other form of stock purchase agreement as shall then be
acceptable to the Company), payment of the exercise price and payment of any
applicable withholding taxes. The date the Company receives written notice
of an exercise hereunder accompanied by payment will be considered as the
date this NQO was exercised.
Promptly after receipt of written notice of exercise of the NQO,
the Company shall, without stock issue or transfer taxes to the Optionee or
other person entitled to exercise, deliver to the Optionee or other person a
certificate or certificates for the requisite number of Shares. The Optionee
or transferee of the Optionee shall not have any privileges as a shareholder
with respect to any NQO Shares covered by this NQO until the date of issuance
of a stock certificate.
5.4 PAYMENT. Payment in full, shall be made for all NQO
Shares purchased at the time written notice of exercise of the NQO is given
to the Company, either (i) in cash or (ii) pursuant to a loan evidenced by a
promissory note; provided that the par value of the Common Stock shall be
paid in cash. Proceeds of any payment shall constitute general funds of the
Company. At the time of exercise of the NQO (or at such later time(s) as the
Company may prescribe), the Optionee shall remit to the Company all United
States federal and state withholding taxes determined by the Company to be
applicable.
6. NONASSIGNABILITY OF NQO. This NQO is not assignable or
transferable by Optionee except by will, the laws of descent and distribution
and to the extent approved by the Committee, pursuant to a qualified domestic
relations order as defined by the Code or the rules thereunder. Except as
otherwise provided in Section 5.2 in the event of an Optionee's death or
disability, only the Optionee may exercise the NQO. Any attempt to assign,
pledge, transfer, hypothecate or otherwise dispose of this NQO in a manner
not herein permitted, and any levy of execution, attachment or similar
process on this NQO, shall be null and void.
<PAGE>
7. MARKET STANDOFF. Optionee hereby agrees that if so requested
by the Company or any representative of the underwriters in connection with
any registration of the offering of the securities of the Company under the
Securities Act of 1933, as amended (the "Act"), Optionee shall not sell or
otherwise transfer any shares acquired upon exercise of this NQO (the
"Exercised Shares") for a period of up to 365 days following the effective
date of a Registration Statement filed under the Act. The Company may impose
stop-transfer instructions with respect to the Exercised Shares subject to
the foregoing restrictions until the end of each such 365-day period.
8. RESTRICTION ON ISSUANCE OF SHARES.
8.1 LEGALITY OF ISSUANCE. The Company shall not be obligated
to sell or issue any Exercised Shares pursuant to this Agreement if such sale
or issuance, in the opinion of the Company and the Company's counsel, might
constitute a violation by the Company of any provision of law, including
without limitation the provisions of the Act.
8.2 REGISTRATION OR QUALIFICATION OF SECURITIES. The Company
may, but shall not be required to, register or qualify the sale of this NQO
or any Exercised Shares under the Act or any other applicable law. The
Company shall not be obligated to take any affirmative action in order to
cause the grant or exercise of this option or the issuance or sale of any
Exercised Shares pursuant thereto to comply with any law.
9. RESTRICTION ON TRANSFER. Regardless of whether the sale of
the Exercised Shares has been registered under the Act or has been registered
or qualified under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge or other transfer of Exercised Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and the Company's counsel, such restrictions are
necessary or desirable in order to achieve compliance with the provisions of
the Act, the securities laws of any state, or any other law.
10. STOCK CERTIFICATE RESTRICTIVE LEGENDS. Stock certificates
evidencing Exercised Shares may bear such restrictive legends as the Company
and the Company's counsel deem necessary or advisable under applicable law or
pursuant to this Agreement, including, without limitation, the following
legends:
"The offering and sale of the securities represented hereby
have not been registered under the Securities Act of 1933, as
amended (the "Act"). Any transfer of such securities will be
invalid unless a
<PAGE>
Registration Statement under the Act is in effect as to such
transfer or in the opinion of counsel for the Company such
registration is unnecessary in order for such transfer to comply
with the Act."
"The securities represented hereby are subject to restrictions
on transfer for a period of 365 days following the effective date
of a registration statement under the Act for an offering of the
Company's securities as more fully provided in an agreement
relating to the option to purchase such securities."
11. INFORMATION TO OPTIONEE. During the period this NQO is
outstanding, the Company shall provide Optionee on an annual or other
periodic basis financial and other information regarding the Company in
accordance with Rule 260.140.41.2 promulgated under the California Corporate
Securities Law of 1968, if applicable.
12. ASSIGNMENT; BINDING EFFECT. Subject to the limitations set
forth in this Agreement, this Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives
and successors of the parties hereto; provided, however, that Optionee may
not assign any of Optionee's rights under this Agreement.
13. DAMAGES. Optionee shall be liable to the Company for all
costs and damages, including incidental and consequential damages, resulting
from a disposition of shares which is not in conformity with the provisions
of this Agreement.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable
to contracts entered into and wholly to be performed within the State of
California by California residents. The parties agree that the exclusive
jurisdiction and venue of any action with respect to this Agreement shall be
in the Superior Court of California for the County of San Jose or the United
States District Court for the Northern District of California, and each of
the parties hereby submits to the exclusive jurisdiction and venue of such
courts for the purpose of such action. The parties agree that service of
process in any such action may be effected by delivery of the summons to
the parties in the manner provided for delivery of notices set forth in
Section 15.
15. NOTICES. All notices and other communications under this
Agreement shall be in writing. Unless and until the Optionee is notified in
writing to the contrary, all notices, communications and documents directed
to the Company and related
<PAGE>
to the Agreement, if not delivered by hand, shall be mailed, addressed as
follows:
MEDIA ARTS GROUP, INC.
521 Charcot Avenue
San Jose, California 95131
Attn: James F. Landrum, Jr.
Snr. Vice President & General Counsel
Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for the Optionee and related
to this Agreement, if not delivered by hand, shall be mailed to Optionee's
last known address as shown on the Company's books. Notices and
communications shall be mailed by first class mail, postage prepaid;
documents shall be mailed by registered mail, return receipt requested,
postage prepaid. All mailings and deliveries related to this Agreement shall
be deemed received only when actually received.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the Effective Date.
MEDIA ARTS GROUP, INC.
By:
-----------------------------------
Chief Executive Officer & President
The Optionee hereby accepts and agrees to be bound by all of the
terms and conditions of this Agreement.
-----------------------------------
Thomas Kinkade
Optionee's spouse indicates by the execution of this NONQUALIFIED
Stock Option Agreement his/her consent to be bound by the terms thereof as to
his/her interests, whether as community property or otherwise, if any, in the
options granted hereunder, and in any Exercised Shares purchased pursuant to
this Agreement.
-----------------------------------
Nanette N. Kinkade
EXHIBITS
Exhibit 1 from Section 5.3 Stock Purchase Agreement
<PAGE>
EXHIBIT 1 FROM SECTION 5.3 OF THE
MEDIA ARTS GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
MEDIA ARTS GROUP, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of _________________, 199_, between MEDIA ARTS GROUP, INC., a
California corporation doing business in the State of California under the
name MAGI (the "Company"), and ___________ ("Purchaser").
THE PARTIES AGREE AS FOLLOWS:
1. PURCHASE OF SHARES. Pursuant to an NONQUALIFIED stock option
agreement ("Option Agreement") between the parties attached hereto as Exhibit
1, the Company hereby sells to Purchaser, and Purchaser hereby buys from the
Company, ______________ shares (the "Exercised Shares") of the Company's
Common Stock ("Common Stock") on the terms and conditions set forth herein
and in the Option Agreement, the terms and conditions of the Option Agreement
being hereby incorporated into this Agreement by reference.
2. PURCHASE PRICE. Purchaser shall purchase the Exercised Shares
from the Company, and the Company shall sell the Exercised Shares to
Purchaser, at a price of $_______ per share (the "Exercise Price"), for a
total purchase price of $_____ (the "Purchase Price").
3. MANNER OF PAYMENT. Purchaser shall pay the Purchase Price of
the Exercised Shares in cash.
4. STOCK CERTIFICATE RESTRICTIVE LEGENDS. Stock certificates
evidencing Exercised Shares may bear such restrictive legends as the Company
and the Company's counsel deem necessary or advisable under applicable law or
pursuant to this Agreement, including without limitation, the following
legends:
"The offering and sale of the securities represented hereby
have not been registered under the Securities Act of 1933, as
amended (the "Act"). Any transfer of such securities will be
invalid unless a Registration Statement under the Act is in effect
as to such transfer or in the opinion of counsel for the Company
such registration is unnecessary in order for such transfer to
comply with the Act."
<PAGE>
"The securities represented hereby are subject to restrictions
on transfer for a period of 365 days following the effective date
of a registration statement under the Act for an offering of the
Company's securities as more fully provided in an agreement
relating to the option to purchase such securities."
5. REPRESENTATIONS, WARRANTIES, COVENANTS, AND ACKNOWLEDGMENTS OF
PURCHASER. Purchaser hereby represents, warrants, covenants, acknowledges
and agrees that:
5.1 INVESTMENT. Purchaser is acquiring the Exercised Shares
for Purchaser's own account, and not for the account of any other person.
Purchaser is acquiring the Exercised Shares for investment and not with a
view to distribution or resale thereof except in compliance with applicable
laws regulating securities.
5.2 BUSINESS EXPERIENCE. Purchaser is capable of evaluating
the merits and risks of Purchaser's investment in the Company evidenced by
the purchase of the Exercised Shares.
5.3 RELATION OF COMPANY. Purchaser is presently an employee
or advisor to, the Company and in such capacity has become personally
familiar with the business, affairs, financial condition and results of
operations of the Company.
5.4 ACCESS TO INFORMATION. Purchaser has had the opportunity
to ask questions of, and to receive answers from, appropriate executive
officers of the Company with respect to the terms and conditions of the
transactions contemplated hereby and with respect to the business, affairs,
financial condition, and results of operations of the Company. Purchaser has
had access to such financial and other information as is necessary in order
for Purchaser to make a fully-informed decision as to investment in the
Company by way of purchase of the Exercised Shares, and has had the
opportunity to obtain any additional information necessary to verify any of
such information to which Purchaser has had access.
5.5 SPECULATIVE INVESTMENT. Purchaser's investment in the
Company represented by the Exercised Shares is highly speculative in nature
and is subject to a high degree of risk of loss in whole or in part. The
amount of such investment is within Purchaser's risk capital means and is not
so great in relation to Purchaser's total financial resources as would
jeopardize the personal financial needs of Purchaser or Purchaser's family in
the event such investment were lost in whole or in part.
<PAGE>
5.6 REGISTRATION. Purchaser may bear the economic risk of
investment for an indefinite period of time in the event the sale to
Purchaser of the Exercised Shares is not registered under the Securities Act
of 1933, as amended (the "Act"), and the Exercised Shares cannot be
transferred by Purchaser unless such transfer is registered under the Act or
an exemption from such registration is available. The Company has made no
agreements or covenants to register the transfer of any of the Shares under
the Act. The Company has made no representations, warranties, or covenants
whatsoever as to whether any exemption from the Act, including without
limitation any exemption for limited sales in routine brokers' transactions
pursuant to Rule 144, will be available; if the exemption under Rule 144 is
available at all, it will not be available until at least two years after
payment of cash for the Exercised Shares and not then unless: (a) a public
trading market then exists in the Company's common stock; (b) adequate
information as to the Company's financial and other affairs and operations is
then available to the public; and (c) all other terms and conditions of Rule
144 have been satisfied.
5.7 PUBLIC TRADING. The Company has made no representation,
covenant or agreement as to whether there will continue to be a public market
for its Common Stock.
5.8 TAX ADVICE. The Company has made no warranties or
representations to Purchaser with respect to the income tax consequences of
the transactions contemplated by this Agreement or the Option Agreement and
Purchaser is in no manner relying on the Company or its representatives for
an assessment of such tax consequences.
6. BINDING EFFECT. Subject to the limitations set forth in this
Agreement, this Agreement shall be binding upon, and inure to the benefit of,
the executors, administrators, heirs, legal representatives, successors and
assigns of the parties hereto.
7. TAXES. The Company may require Purchaser to pay to the
Company, any applicable withholding taxes resulting from the purchase of
Exercised Shares hereunder or from the lapse of any restrictions imposed on
the Exercised Shares.
8. DAMAGES. Purchaser shall be liable to the Company for all
costs and damages, including incidental and consequential damages, resulting
from a disposition of Exercised Shares which is not in conformity with the
provisions of this Agreement.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable
to contracts entered into and wholly to be
<PAGE>
performed within the State of California by California residents. The
parties agree that the exclusive jurisdiction and venue of any action with
respect to this Agreement shall be in the Superior Court of California for
the County of San Jose or the United States District Court for the Northern
District of California, and each of the parties hereby submits to the
exclusive jurisdiction and venue of such courts for the purpose of such
action. The parties agree that service of process in any such action may be
effected by delivery of the summons to the parties in the manner provided for
delivery of notices set forth in Section 10.
10. NOTICES. All notices and other communications under this
Agreement shall be in writing. Unless and until Purchaser is notified in
writing to the contrary, all notices, communications and documents directed
to the Company and related to the Agreement, if not delivered by hand, shall
be mailed, addressed as follows:
MEDIA ARTS GROUP, INC.
521 Charcot Ave.
San Jose, California 95131
Attn: James F. Landrum, Jr.
Snr. Vice President & General Counsel
Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for Purchaser and related to
this Agreement, if not delivered by hand, shall be mailed to Purchaser's last
known address as shown on the Company's books. Notices and communications
shall be mailed by registered mail, return receipt requested, postage
prepaid. All mailings and deliveries related to this Agreement shall be
deemed received only when actually received.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MEDIA ARTS GROUP, INC.
By
------------------------------------
Title
---------------------------------
Purchaser hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement.
-----------------------------------
Purchaser's spouse indicates by the execution of this Agreement her
consent to be bound by the terms herein as to her interests, whether as
community property or otherwise, if any, in the Exercised Shares hereby
purchased.
-----------------------------------
Purchaser's Spouse
EXHIBITS
Exhibit 1 from Section 1 Option Agreement
