As filed with the Securities and Exchange Commission on June 27, 1996
Registration No._______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PLAY BY PLAY TOYS & NOVELTIES, INC.
(Exact name of issuer as specified in its charter)
Texas 74-2623760
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4400 Tejasco
San Antonio, Texas 78218-0267
(Address of Principal Executive Offices) (Zip Code)
PLAY BY PLAY TOYS & NOVELTIES, INC. 1994 INCENTIVE PLAN
AND NON-PLAN STOCK OPTION AGREEMENTS
(Full Title of Plan)
Joe M. Guerra
Chief Financial Officer, Secretary & Treasurer
PLAY BY PLAY TOYS & NOVELTIES, INC.
4400 Tejasco
San Antonio, TX 78218-0267
(Name and Address of Agent for Service)
Telephone Number, including area code, of
agent for service: (210) 829-4666
Copy of Communications to:
Joe M. Guerra Gregory B. Klenda, Esq.
Chief Financial Officer, KLENDA, MITCHELL,
Secretary and Treasurer AUSTERMAN & ZUERCHER, L.L.C.
PLAY BY PLAY TOYS & NOVELTIES, INC. 1600 Epic Center
4400 Tejasco 301 North Main Street
San Antonio, TX 78218-0267 Wichita, KS 67202-4888
CALCULATION OF REGISTRATION FEE
Approximate date of commencement of proposed sale to public: From time to
time after the Registration Statement becomes effective.
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum Amount
Title of Amount Offering Aggregate of
Securities to to be Price Per Offering Registration
be Registered Registered(4) Share(5) Price(5) Fee
- ------------- ------------- --------- --------- ------------
Common Stock,
No Par Value(1) 700,000 Shares $15.0625 $10,543,750 $3,635.77
Common Stock,
No Par Value(2) 12,000 Shares $15.0625 $ 180,750 $ 62.33
Common Stock,
No Par Value(3) 50,000 Shares $15.0625 $ 753,125 $ 259.70
Total: 762,000 Shares $3,957.80
- --------------------------------------------------------------------------------
1) Represents Common Stock issuable under the Play By Play Toys & Novelties,
Inc. 1994 Incentive Plan (the "Plan").
2) Represents Common Stock issuable under certain Non-Plan Stock Option
Agreements granted on or about April 13, 1995 (the "April '95 Non-Plan
Options").
3) Represents Common Stock issuable under certain Non-Plan Stock Option
Agreements granted on or about September 29, 1995 (the "September '95
Non-Plan Options").
4) Plus such additional number of shares as may hereafter become issuable
pursuant to the Plan in the event of a stock dividend, split-up of shares,
recapitalization or other similar transaction without receipt of
consideration which results in an increase in the number of shares
outstanding.
5) This estimate is made solely for the purpose of determining the amount of
the registration fee and is based upon the amount of $15.0625 per share,
the average high and low sale prices for the Registrant's stock as traded
on the NASDAQ National Market System on June 21, 1996.
2
REOFFER PROSPECTUS
The material which follows, up to but not including the page beginning
Part II of this Registration Statement, constitutes a Prospectus, prepared on
Form S-3, in accordance with General Instruction C to Form S-8, to be used in
connection with resales of securities acquired under the Registrant's 1994
Incentive Plan (the "Plan") by affiliates of the Registrant, as defined in Rule
405 under the Securities Act of 1933, as amended, and resales of securities
acquired under certain Non-Plan Options granted outside of the Plan by certain
affiliates of the Registrant.
REOFFER PROSPECTUS
762,000 SHARES
COMMON STOCK
(No Par Value)
PLAY BY PLAY TOYS & NOVELTIES, INC.
--------------------
This Reoffer Prospectus ("Prospectus") relates to the offering by PLAY BY
PLAY TOYS & NOVELTIES, INC. (the "Company") and the subsequent resale by
employees, officers, directors and affiliates of the Company (collectively
"Affiliates") of up to 700,000 shares of the Company's no par value common stock
purchasable pursuant to the Company's 1994 Incentive Plan (the "Plan"), and of
up to 62,000 shares of common stock, no par value, issuable upon the exercise of
certain Non-Plan Options granted outside of the Plan. As of April 1, 1996,
209,400 shares were subject to outstanding options under the Plan and 490,600
shares remained available for the granting of options.
--------------------
This Prospectus may be used by persons who are affiliates (as that term is
defined under the Securities Act of 1933, as amended) of the Company to effect
resales of the common stock issuable upon exercise of the above-described
options (the "Shares"). See "Selling Stockholders." The Company will receive no
part of the proceeds of any such sales. Sales will be made at the then current
market prices at the time of sale. Sales may involve the payment of brokers'
commissions by Selling Stockholders.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
--------------------
No person is authorized to give any information or to make any
representation not contained in this Prospectus in connection with the offer
made hereby, and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company. The delivery of this
Prospectus at any time does not imply that the information herein is correct as
of the time subsequent to the date hereof. The expenses of preparing and filing
the Registration Statement of which this Prospectus is a part are being borne by
the Company.
--------------------
The date of this Prospectus is June 27, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission ("Commission"). Reports and other information, including proxy
materials prepared in accordance with Section 14 of the Exchange Act, filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549;
Suite 1400, 500 West Madison Street, Chicago, IL 60661; 7 World Trade Center,
New York, NY 10048; and 5670 Wilshire Boulevard, Los Angeles, CA 90036. Copies
of such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Company's common stock is traded on the NASDAQ National Market System under
the symbol "PBYP."
The Company furnishes annual reports to its shareholders which include
audited financial statements. The Company may also furnish quarterly financial
statements to shareholders and such other reports as may be authorized, from
time to time, by the Board of Directors.
INCORPORATION BY REFERENCE
Certain documents have been incorporated by reference into this
Prospectus, either in whole or in part. The Company will provide without charge
to each person to whom a Prospectus is delivered, upon written or oral request
of such person, (i) a copy of any and all of the information that has been
incorporated by reference (not including exhibits to the information unless such
exhibits are specifically incorporated by reference into the information), and
(ii) documents and information required to be delivered to the Company's
employees pursuant to Rule 428(b). Requests for such information shall be
addressed to the Company, ATTN: Mr. Joe M. Guerra, Chief Financial Officer,
Secretary and Treasurer, at 4400 Tejasco, San Antonio, TX 78218-0267, telephone
(210) 829-4666.
3
TABLE OF CONTENTS
PAGE
----
Introduction......................................................... 5
Selling Stockholders................................................. 5
Use of Proceeds...................................................... 6
Method of Sale....................................................... 6
SEC Position Regarding Indemnification............................... 6
Incorporation of Certain Documents by Reference...................... 7
Legal Matters........................................................ 8
Experts.............................................................. 8
4
INTRODUCTION
Play By Play Toys & Novelties, Inc. (the "Company") designs, develops,
markets and distributes stuffed toys and sculpted toy pillows based upon its
licenses for children's entertainment characters and corporate trademarks, and
non-licensed stuffed toys. The Company also markets and distributes a broad line
of novelty items. The Company markets and distributes its products in both
amusement and retail markets and believes it is a leading supplier of stuffed
toys and novelty items to the amusement industry. The Company was incorporated
in Texas in 1992. Its principal executive offices are located at 4400 Tejasco,
San Antonio, TX 78218 and its telephone number is (210) 829-4666.
SELLING STOCKHOLDERS
This Prospectus relates to possible sales by directors, officers and
employees of the Company of Shares which they may acquire through exercise of
options granted under the Company's 1994 Incentive Plan ("Plan") or through the
exercise of options granted to certain affiliates of the Company outside of the
Plan ("Non-Plan Options"). The names of Affiliates (all of whom are officers or
directors) who may be Selling Stockholders from time to time are listed below,
along with the number of Shares owned. The number of Shares which may be sold by
each such Affiliate from time to time will be updated in supplements to this
Prospectus, which will be filed with the Securities and Exchange Commission in
accordance with Rule 424(b) under the Securities Act of 1933, as amended.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
---------------------- EXERCISE
OPTIONS PRICE EXPIRATION
NAME NUMBER PERCENTAGE** GRANTED ($/SHARE) DATE
- ---- ------ ---------- ------- --------- ----------
<S> <C> <C> <C> <C> <C>
Arturo G. Torres 1,450,990(1) 29.9% 15,000(2)(8) $ 13.475 04/13/00
10,000(3)(8) $ 14.58 09/29/00
Mark A. Gawlik 275,321 5.7% 12,000(4)(8) $ 13.475 04/13/00
10,000(3)(8) $ 14.58 09/29/00
Francisco Saez Moya 264,330 5.5% 12,000(2)(8) $ 13.475 04/13/00
Joe M. Guerra 11,070 * 12,000(4)(8) $ 13.475 04/13/00
3,000(7)(8) $ 14.44 04/01/01
Berto Guerra, Jr. 35,665 * 3,000(4)(8) $ 13.475 04/13/00
10,000(6)(8) $ 14.58 09/29/00
Tomas Duran 12,710 * 3,000(4)(8) $ 13.475 04/13/00
10,000(6)(8) $ 14.58 09/29/00
Ottis W. Byers ---- * 10,000(6)(8) $ 14.58 09/29/00
Steve K.C. Liao 2,500 * 10,000(5)(8) $ 14.58 10/17/00
James F. Place 16,873 * 3,000(4)(8) $ 13.475 04/13/00
10,000(3)(8) $ 14.58 09/29/00
- ------------
</TABLE>
* Less than 1%.
** Does not include any unexercised option.
1) Includes 49,200 shares held in trust for the benefit of Mr. Torres'
three minor children (16,400 shares each), for which Mr. Torres is
the trustee.
2) All such options were granted on April 13, 1995, for the number of
shares and at the price indicated. The options are exercisable in
five increments of 20% each commencing on September 13, 1996 and on
each of the four anniversaries of the date of grant and expire ten
years from the date of grant.
5
3) All such options were granted on September 29, 1995, for the number
of shares and at the price indicated. The options are exercisable
commencing on September 29, 1996 and expire five years from the date
of grant.
4) All such options were granted on April 13, 1995, for the number of
shares and at the price indicated. The options are exercisable
commencing on April 13, 1996 and expire five years from the date of
grant.
5) Such options were granted on October 17, 1995, for the number of
shares and the price indicated. The options are exercisable in five
increments of 20% each commencing on April 17, 1996 and on each of
the four anniversaries of the date of grant and expire five years
from the date of grant.
6) Such options were granted in September 29, 1995 for the number of
shares and the price indicated. The options are exercisable in five
increments of 20% each commencing March 29, 1996 and on each of the
four anniversaries of the date of grant and expire five years from
the date of grant.
7) All such options were granted on April 1, 1996, for the number of
shares and at the price indicated. The options are exercisable
commencing on April 1, 1996 and expire five years from the date of
grant.
8) Sales under the Reoffer Prospectus are limited to the number of
shares issuable under the options granted under the Plan or under
the Non-Plan Options.
The address of each Selling Stockholder is the same as the Company's
address. All Shares listed above for sale represent Shares issuable upon
exercise of options granted under the Plan or under the Non-Plan Options.
USE OF PROCEEDS
The Company will not receive any proceeds upon the sale of the Shares
issuable upon the exercise of the stock options.
METHOD OF SALE
The Shares are being sold by the Selling Stockholders for their own
accounts. The Shares may be sold or transferred for value by the Selling
Stockholders, or by pledgees, donees, transferees, or other successors in
interest to the Selling Stockholders, in one or more transactions on the NASDAQ
National Market System, in negotiated transactions or in a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at prices otherwise negotiated. The
Selling Stockholders may effect such transactions by selling the Shares to or
through broker/dealers, and such broker/dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or the purchasers of the Shares for whom such broker/dealers
may act as agent (which compensation may be less than or in excess of customary
commissions).
There can be no assurance that any of the Selling Stockholders will sell
any or all of the Shares offered by them hereunder.
SEC POSITION REGARDING INDEMNIFICATION
As authorized by the Texas Business Corporation Act, the Company's
Articles of Incorporation provide that to the fullest extent permitted by Texas
law, as the same exists or may hereafter be amended, directors and former
directors of the Company will not be liable to the
6
Company or its shareholders for monetary damages for an act or omission
occurring in their capacity as a director. Texas law does not currently
authorize the elimination or limitation of the liability of a director to the
extent the director is found liable (i) for any breach of the director's duty of
loyalty to the Company or its shareholders, (ii) for acts or omissions not in
good faith that constitute a breach of duty of the director of the Company or
that involve intentional misconduct or a knowing violation of law, (iii) for
transactions from which the director received an improper benefit, whether or
not the benefit resulted from action taken within the scope of the director's
office, or (iv) for acts or omissions for which the liability of a director is
expressly provided by law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers or persons
controlling the Company under the provisions described above, the Company has
been informed that in the opinion of the Securities and Exchange Commission that
such indemnification is against public policy as expressed in that Act and is
therefore unenforceable.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference into this Prospectus the
following documents heretofore filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934:
1. The Company's Annual Report on Form 10-K for the year ended July 31,
1995, as filed under Section 13(a) of the Securities Exchange Act of
1934;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
October 31, 1995, as filed under Section 13(a) of the Securities Act
of 1933;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
January 31, 1996, as filed under Section 13(a) of the Securities Act
of 1933;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
April 30, 1996, as filed under Section 13(a) of the Securities Act
of 1933;
5. The Company's Report on Form 8-K dated May 14, 1996, as filed under
Section 13 of the Securities Exchange Act of 1934; and
6. The description of Common Stock included in the Company's
Registration Statement on Form 8-A as filed with the Commission on
or about October 26, 1995.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
after the date of this Registration Statement and prior to the filing of a
post-effective amendment, which indicate that all securities
7
offered hereby have been sold or which deregister all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed on for the
Company by Klenda, Mitchell, Austerman & Zuercher, L.L.C., 1600 Epic Center, 301
North Main Street, Wichita, Kansas 67202-4888.
EXPERTS
The consolidated balance sheets of Play By Play Toys & Novelties, Inc. and
Subsidiaries as of July 31, 1995 and 1994 and the consolidated statements of
income, retained earnings, and cash flows for each of the three years in the
period ended July 31, 1995, incorporated by reference in this Prospectus, have
been incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
8
PART II.
Information Required in the Registration Statement
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference into this Registration
Statement the following documents heretofore filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933 and the
Securities Exchange Act of 1934:
1. The Company's Annual Report on Form 10-K for the year ended July 31,
1995, as filed under Section 13(a) of the Securities Exchange Act of
1934;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
October 31, 1995, as filed under Section 13(a) of the Securities Act
of 1933;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
January 31, 1996, as filed under Section 13(a) of the Securities Act
of 1933;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
April 30, 1996, as filed under Section 13(a) of the Securities Act
of 1933;
5. The Company's Report on Form 8-K dated May 14, 1996, as filed under
Section 13 of the Securities Exchange Act of 1934; and
6. The description of Common Stock included in the Company's
Registration Statement on Form 8-A as filed with the Commission on
or about October 26, 1995.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, after the date of this Registration Statement and prior to the
filing of a post-effective amendment, which indicates that all securities
offered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of
such documents.
Item 4. DESCRIPTION OF SECURITIES
Not Applicable.
Item 5. INTERESTS IN NAMED EXPERTS AND COUNSEL
Not Applicable.
3
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As authorized by the Texas Business Corporation Act, the Company's
Articles of Incorporation provide that to the fullest extent permitted by
Texas law, as the same exists or may hereafter be amended, directors and
former directors of the Company will not be liable to the Company or its
shareholders for monetary damages for an act or omission occurring in
their capacity as a director. Texas law does not currently authorize the
elimination or limitation of the liability of a director to the extent the
director is found liable (i) for any breach of the director's duty of
loyalty to the Company or its shareholders, (ii) for acts or omissions not
in good faith that constitute a breach of duty of the director of the
Company or that involve intentional misconduct or a knowing violation of
law, (iii) for transactions from which the director received an improper
benefit, whether or not the benefit resulted from action taken with the
scope of the director's office, or (iv) for acts or omissions for which
the liability of a director is expressly provided by law.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
The exhibits to this Registration Statement are listed in the Index
to Exhibits on Page 8 of this Registration, which Index is incorporated
herein by reference.
Item 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment
to this Registration Statement to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement.
The undersigned Registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that for the purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's Annual Report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
4
The undersigned Registrant hereby undertakes to deliver or cause to
be delivered with the Registration Statement to each employee to whom the
Registration Statement is sent or given a copy of the Registrant's Annual
Report to Shareholders for its last fiscal year, unless such employee
otherwise has received a copy of such report, in which case the Registrant
shall state in the Registration Statement that it will promptly furnish,
without charge, a copy of such report on written request of the employee.
If the last fiscal year of the Registrant has ended within one hundred
twenty (120) days prior to the use of the Registration Statement, the
Annual Report of the Registrant for the preceding fiscal year may be so
delivered, but within such one hundred twenty (120) day period the Annual
Report for the last fiscal year will be furnished to each such employee.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer, or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
5
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 Form S-8
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Antonio, State of Texas on this 27th day of
June, 1996.
PLAY BY PLAY TOYS
& NOVELTIES, INC.
Dated: June 27, 1996
By /s/ JOE M. GUERRA
Joe M. Guerra, Chief Financial Officer,
Secretary and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each person whose signature appears below
hereby authorizes Mark A. Gawlik and Joe M. Guerra, or either of them, as
attorneys-in-fact to sign on his behalf individually and in each capacity and as
stated below, and to file any amendments, including post-effective amendments,
to this Registration Statement.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ ARTURO G. TORRES Chairman of the Board and June 27, 1996
Arturo G. Torres Chief Executive Officer
(Principal Executive Officer)
/s/ MARK A. GAWLIK President, Chief Operating June 27, 1996
Mark A. Gawlik Officer and Director
/s/ JOE M. GUERRA Chief Financial Officer, June 27, 1996
Joe M. Guerra Secretary and Treasurer
(Principal Financial Officer)
/s/ TOMAS DURAN Director June 27, 1996
Tomas Duran
/s/ BERTO GUERRA, JR. Director June 27, 1996
Berto Guerra, Jr.
/s/ JAMES F. PLACE Director June 27, 1996
James F. Place
6
/s/ OTTIS W. BYERS Director June 27, 1996
Ottis W. Byers
/s/ STEVE K.C. LIAO Director June 27, 1996
Steve K.C. Liao
7
EXHIBIT INDEX
-------------
EXHIBIT DESCRIPTION SEQUENTIAL
NUMBER OF EXHIBIT PAGE NUMBER
- ------- ----------- -----------
4.1 Specimen of Stock Certificate, Incorporated by
Reference from Company's Registration Statement
on Form S-1 (Commission File No. 33-92204),
Exhibit No. 4.1
4.3 Form of Company's Grant of Incentive Stock Options,
Incorporated by Reference from Company's
Registration Statement on Form S-1 (Commission File
No. 33-92204), Exhibit No. 4.3
4.4 Form of Company's Non-Qualified Stock Option
Agreement, Incorporated by Reference from Company's
Registration Statement on Form S-1 (Commission File
No. 33-92204), Exhibit No. 4.4
4.5 Form of April '95 Non-Plan Stock Option Agreements ........... 12
4.6 Form of September '95 Non-Plan Option Agreements ............. 17
5 Opinion and Consent of Klenda, Mitchell, Austerman &
Zuercher, L.L.C. ............................................. 21
10.1 Play By Play Toys & Novelties, Inc. 1994 Incentive
Plan, as amended ............................................. 23
23 Consent of Coopers & Lybrand L.L.P. .......................... 35
24 Power of Attorney (included on the signature page of this
registration statement)
8
Exhibit 4.5
PLAY BY PLAY TOYS & NOVELTIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Date of Grant:______________________, 1995.
This Non-Qualified Stock Option Agreement (the "Agreement"), dated as of
the date of grant first stated above (the "Date of Grant"), is delivered
BY PLAY BY PLAY TOYS & NOVELTIES, INC.,
a Texas corporation,
hereinafter referred to as
"COMPANY"
TO ___________________________________,
an individual,
hereinafter referred to as
"GRANTEE"
WHEREAS, Grantee is a member of the Board of Directors of Company;
WHEREAS, Company wishes to compensate Grantee for his contributions and
activities on behalf of Company; and
WHEREAS, the Board of Directors of Company adopted a resolution effective
April 13, 1995, to issue non-qualified stock options to certain members of the
Board of Directors who are not otherwise an officer or an employee of the
Company.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the Company and Grantee hereby agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereinafter set
forth, Company hereby grants to Grantee, as of the Date of Grant, an option to
purchase up to shares of common stock of the Company (the "Stock") at a purchase
price per share of one hundred ten percent (110%) of the initial "Price to
Public" per share of the Company's initial public offering. Such option is
hereinafter referred to as the "Option" and the shares of stock purchasable upon
exercise of the Option are hereinafter sometimes referred to as the "Option
Shares."
2. VESTING OF EXERCISE RIGHTS. Subject to the other terms of this
Agreement, the Option shall become exercisable in five (5) installments, Grantee
having the right hereunder to purchase from Company the following number of
Option Shares upon exercise of the Option, on and after the following dates, in
cumulative fashion:
(a) On and after the expiration of six months from the Date of Grant, up
to one-fifth (ignoring fractional shares) of the total number of
Option Shares;
(b) On and after the first anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total
number of Option Shares;
(c) On and after the second anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total
number of Option Shares;
(d) On and after the third anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total
number of Option Shares; and
(e) On and after the fourth anniversary of the Date of Grant, the
remaining Option Shares.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with respect thereto, to the
extent such rights shall not have been exercised, shall terminate
and become null and void after the expiration of five (5) years from
the Date of Grant (the "Option Term").
(b) Upon the occurrence of Grantee's ceasing for any reason to be a
member of the Company's Board of Directors, the Option, to the
extent not previously exercised, shall terminate and become null and
void immediately upon such termination of Grantee's membership on
the Company's Board of Directors, except in a case where the
termination of Grantee's membership on the Company's Board of
Directors is by reason of death. Upon a termination of Grantee's
membership on the Company's Board of Directors by reason death, the
Option may be exercised during the following period, but only to the
extent that the Option was outstanding and exercisable on any such
date of death: the six-month period following the date of issuance
of letters testamentary or letters of administration to the executor
or administrator of Grantee's estate, but not later than one year
after Grantee's death. In no event, however, shall any such period
extend beyond the Option Term.
(c) In the event of the death of Grantee, the Option may be exercised by
Grantee's legal representative, but only to the extent that the
Option would otherwise have been exercisable by Grantee.
2
(d) Notwithstanding anything to the contrary set forth herein or in the
Plan, in the event the effective date of Company's first public
offering of its common stock does not occur on or before July 31,
1995, then the Option and all rights hereunder with respect thereto
shall immediately terminate and become null and void.
4. EXERCISE OF OPTIONS.
(a) Grantee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the
Secretary of the Company at the Company's principal executive office
written notice delivered in person or by mail of Grantee's intent to
exercise. The notice of the exercise shall specify the number of
Option Shares as to which the Option is to be exercised and the date
of exercise thereof, which date shall be at least five (5) days
after the giving of the notice unless an earlier time shall have
been mutually agreed upon.
(b) Full payment (in U.S. dollars) by Grantee of the option price for
the Option Shares purchased shall be made on or before the exercise
date specified in the notice of exercise in cash, or, with the prior
written consent of the Company, in whole or in part through the
surrender of previously acquired shares of Stock at their Fair
Market Value (as defined in Paragraph 12) on the exercise date. On
the exercise date specified in Grantee's notice or as soon
thereafter as is practicable, a certificate or certificates for the
Option Shares then being purchased shall be issued to Grantee upon
full payment of the exercise price for such Option Shares. The
obligation of Company to deliver Stock shall, however, be subject to
the condition that if at any time the Company shall determine in its
sole discretion that the listing, registration or qualification of
the Option or the Option Shares upon any securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or a connection with, the Option or the issuance or
purchase of Stock thereunder, the Option may not be exercised in
whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
(c) If Grantee fails to pay for any of the Option Shares specified in
the notice or fails to accept delivery thereof, Grantee's right to
purchase the Option Shares may be terminated by Company.
5. ADJUSTMENT OF OPTION SHARES AND OPTION PRICE. In the event of any stock
dividend or subdivision of the shares of common stock of Company into a greater
number of shares, the purchase price hereunder shall be proportionately reduced
and the number of shares subject to the Option shall be proportionately
increased; conversely, in the event of any combination of the outstanding shares
of common stock of Company, the purchase price
3
hereunder shall be proportionately increased and the number of shares of Stock
subject to the Option shall be proportionately reduced.
6. INVESTMENT REPRESENTATION. Upon demand by the Company, Grantee shall
deliver to Company, at the time of any exercise of the Option or portion
thereof, a written representation that the Stock to be acquired upon such
exercise are to be acquired for investment and not for resale or with a view to
the distribution thereof. Upon such demand by the Company, delivery of such
representation prior to the delivery of any certificate representing the Stock
issuable upon exercise of the Option and prior to the expiration of the Option
Term shall be a condition precedent to the right of Grantee to purchase any
shares of Stock.
7. RIGHTS AS A SHAREHOLDER. Neither Grantee nor any personal
representative shall be, or shall have any of the rights and privileges of, a
shareholder of Company with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part, prior to the date
of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION. During Grantee's lifetime, the Option
hereunder shall be exercisable only by Grantee or any guardian or legal
representative of Grantee, and the Option shall not be transferrable otherwise
by will or the laws of descent and distribution (but shall be exercisable by
Grantee's executor or administrator pursuant to Paragraph 3(b) hereof) or
pursuant to a qualified domestic relations order, nor shall the Option be
subject to attachment, execution or other similar process. In the event of (a)
any attempt by Grantee to alienate, assign, pledge, hypothecate or otherwise
dispose of the Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or interests hereby
conferred, then Company may terminate the Option by notice to Grantee and the
Option shall thereupon become null and void.
9. RIGHTS AS BOARD MEMBER. The granting of the Option nor its exercise
shall not be construed as conferring upon Grantee any right with respect to the
directorship held by Grantee or to any continuance of membership on the Board of
Directors of the Company or any subsidiary, nor shall it interfere in any way
with the right of the Company or any subsidiary to terminate his directorship at
any time in accordance with Texas law.
10. DISPOSITION OF SHARES. No share of Stock acquired by the exercise of
an option granted hereunder shall be transferable, other than by will or by the
laws of descent and distribution, within two (2) years of the Date of Grant or
within one (1) year after the transfer of shares pursuant to exercise of the
Option. Each certificate representing shares of Stock acquired by the exercise
of the Option shall bear a legend to that effect. Grantee hereby further
acknowledges that the transfer of the shares of Stock acquired by the exercise
of the Option may be limited by Rule 144 of the General Rules and Regulations
promulgated under the Securities Act of 1933, as amended.
11. AMENDMENT OF OPTION. The Option may be amended by the Board of
Directors of the Company or by a committee appointed by the Board of Directors
(the "Committee") at any
4
time (a) if the Board of Directors or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light of any
addition to or change in the Code, or in the regulations issued thereunder, or
any federal or state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the Option; or (b)
other than in the circumstances described in clause (a), with the consent of
Grantee.
12. FAIR MARKET VALUE. For purposes of this Agreement, the term "Fair
Market Value" of a share of Stock shall mean the Fair Market Value of the Stock
as determined in good faith by the Company; provided, however, that (a) if the
shares of Stock are admitted to trading on a national securities exchange, Fair
Market Value on any date shall be the last sale price reported for the shares of
Stock on such exchange on such date or, if no sale was reported on such date, on
the last date preceding such date on which a sale was reported, (b) if the
shares of Stock are admitted to quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") and have been
designated as a National Market System ("NMS") security, Fair Market Value on
any date shall be the last sale price reported for the shares of Stock on such
system on such date or on the last day preceding such date on which a sale was
reported, or (c) if the shares of Stock are admitted to quotation on NASDAQ and
have not been designated a NMS security or are listed on another comparable
quotation system, Fair Market Value on any date shall be the average of the
highest bid and lowest asked prices of the shares of Stock on such system on
such date.
IN WITNESS WHEREOF, Company and Grantee have executed this Agreement in a
manner appropriate to each as of the day and year first above written.
PLAY BY PLAY TOYS & NOVELTIES, INC.
By _______________________________
Title ____________________________
"COMPANY"
ACCEPTED AND AGREED TO:
By _______________________________
"GRANTEE"
5
Exhibit 4.6
PLAY BY PLAY TOYS & NOVELTIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Date of Grant:_____________________, 1995.
This Non-Qualified Stock Option Agreement (the "Agreement"), dated as of
the date of grant first stated above (the "Date of Grant"), is delivered
BY PLAY BY PLAY TOYS & NOVELTIES, INC.,
a Texas corporation,
hereinafter referred to as
"COMPANY"
TO ____________________________,
an individual,
hereinafter referred to as
"GRANTEE"
WHEREAS, Grantee is a member of the Board of Directors of Company;
WHEREAS, Company wishes to compensate Grantee for his contributions and
activities on behalf of Company; and
WHEREAS, the Board of Directors of Company adopted a resolution effective
August 29, 1995, to issue non-qualified stock options to certain members of the
Board of Directors who are not otherwise an officer or an employee of the
Company.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the Company and Grantee hereby agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereinafter set
forth, Company hereby grants to Grantee, as of the Date of Grant, an option to
purchase up to shares of common stock of the Company (the "Stock") at a purchase
price per share of Fourteen and 58/100/ Dollars ($14.58), the same being one
hundred ten percent (110%) of the Fair Market Value per share on the Date of
Grant. Such option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter sometimes referred
to as the "Option Shares."
2. VESTING OF EXERCISE RIGHTS. Subject to the other terms of this
Agreement, the Option shall become exercisable in five (5) installments, Grantee
having the right hereunder to purchase from Company the following number of
Option Shares upon exercise of the Option, on and after the following dates, in
cumulative fashion:
(a) On and after the expiration of six months from the Date of Grant, up
to one-fifth (ignoring fractional shares) of the total number of
Option Shares;
(b) On and after the first anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total
number of Option Shares;
(c) On and after the second anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total
number of Option Shares;
(d) On and after the third anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total
number of Option Shares; and
(e) On and after the fourth anniversary of the Date of Grant, the
remaining Option Shares.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with respect thereto, to the
extent such rights shall not have been exercised, shall terminate
and become null and void after the expiration of five (5) years from
the Date of Grant (the "Option Term").
(b) Upon the occurrence of Grantee's ceasing for any reason to be a
member of the Company's Board of Directors, the Option, to the
extent not previously exercised, shall terminate and become null and
void immediately upon such termination of Grantee's membership on
the Company's Board of Directors, except in a case where the
termination of Grantee's membership on the Company's Board of
Directors is by reason of death. Upon a termination of Grantee's
membership on the Company's Board of Directors by reason death, the
Option may be exercised during the following period, but only to the
extent that the Option was outstanding and exercisable on any such
date of death: the six-month period following the date of issuance
of letters testamentary or letters of administration to the executor
or administrator of Grantee's estate, but not later than one year
after Grantee's death. In no event, however, shall any such period
extend beyond the Option Term.
(c) In the event of the death of Grantee, the Option may be exercised by
Grantee's legal representative, but only to the extent that the
Option would otherwise have been exercisable by Grantee.
2
4. EXERCISE OF OPTIONS.
(a) Grantee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the
Secretary of the Company at the Company's principal executive office
written notice delivered in person or by mail of Grantee's intent to
exercise. The notice of the exercise shall specify the number of
Option Shares as to which the Option is to be exercised and the date
of exercise thereof, which date shall be at least five (5) days
after the giving of the notice unless an earlier time shall have
been mutually agreed upon.
(b) Full payment (in U.S. dollars) by Grantee of the option price for
the Option Shares purchased shall be made on or before the exercise
date specified in the notice of exercise in cash, or, with the prior
written consent of the Company, in whole or in part through the
surrender of previously acquired shares of Stock at their Fair
Market Value (as defined in Paragraph 12) on the exercise date. On
the exercise date specified in Grantee's notice or as soon
thereafter as is practicable, a certificate or certificates for the
Option Shares then being purchased shall be issued to Grantee upon
full payment of the exercise price for such Option Shares. The
obligation of Company to deliver Stock shall, however, be subject to
the condition that if at any time the Company shall determine in its
sole discretion that the listing, registration or qualification of
the Option or the Option Shares upon any securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or a connection with, the Option or the issuance or
purchase of Stock thereunder, the Option may not be exercised in
whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
(c) If Grantee fails to pay for any of the Option Shares specified in
the notice or fails to accept delivery thereof, Grantee's right to
purchase the Option Shares may be terminated by Company.
5. ADJUSTMENT OF OPTION SHARES AND OPTION PRICE. In the event of any stock
dividend or subdivision of the shares of common stock of Company into a greater
number of shares, the purchase price hereunder shall be proportionately reduced
and the number of shares subject to the Option shall be proportionately
increased; conversely, in the event of any combination of the outstanding shares
of common stock of Company, the purchase price hereunder shall be
proportionately increased and the number of shares of Stock subject to the
Option shall be proportionately reduced.
6. INVESTMENT REPRESENTATION. Upon demand by the Company, Grantee shall
deliver to Company, at the time of any exercise of the Option or portion
thereof, a written representation that the Stock to be acquired upon such
exercise are to be acquired for investment and not for resale or with a view to
the distribution thereof. Upon such demand by the Company, delivery
3
of such representation prior to the delivery of any certificate representing the
Stock issuable upon exercise of the Option and prior to the expiration of the
Option Term shall be a condition precedent to the right of Grantee to purchase
any shares of Stock.
7. RIGHTS AS A SHAREHOLDER. Neither Grantee nor any personal
representative shall be, or shall have any of the rights and privileges of, a
shareholder of Company with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part, prior to the date
of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION. During Grantee's lifetime, the Option
hereunder shall be exercisable only by Grantee or any guardian or legal
representative of Grantee, and the Option shall not be transferrable otherwise
by will or the laws of descent and distribution (but shall be exercisable by
Grantee's executor or administrator pursuant to Paragraph 3(b) hereof) or
pursuant to a qualified domestic relations order, nor shall the Option be
subject to attachment, execution or other similar process. In the event of (a)
any attempt by Grantee to alienate, assign, pledge, hypothecate or otherwise
dispose of the Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or interests hereby
conferred, then Company may terminate the Option by notice to Grantee and the
Option shall thereupon become null and void.
9. RIGHTS AS BOARD MEMBER. The granting of the Option nor its exercise
shall not be construed as conferring upon Grantee any right with respect to the
directorship held by Grantee or to any continuance of membership on the Board of
Directors of the Company or any subsidiary, nor shall it interfere in any way
with the right of the Company or any subsidiary to terminate his directorship at
any time in accordance with Texas law.
10. DISPOSITION OF SHARES. No share of Stock acquired by the exercise of
an option granted hereunder shall be transferable, other than by will or by the
laws of descent and distribution, within two (2) years of the Date of Grant or
within one (1) year after the transfer of shares pursuant to exercise of the
Option. Each certificate representing shares of Stock acquired by the exercise
of the Option shall bear a legend to that effect. Grantee hereby further
acknowledges that the transfer of the shares of Stock acquired by the exercise
of the Option may be limited by Rule 144 of the General Rules and Regulations
promulgated under the Securities Act of 1933, as amended.
11. AMENDMENT OF OPTION. The Option may be amended by the Board of
Directors of the Company or by a committee appointed by the Board of Directors
(the "Committee") at any time (a) if the Board of Directors or the Committee
determines, in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Code, or in the regulations issued
thereunder, or any federal or state securities law or other law or regulation,
which change occurs after the Date of Grant and by its terms applies to the
Option; or (b) other than in the circumstances described in clause (a), with the
consent of Grantee.
4
12. FAIR MARKET VALUE. For purposes of this Agreement, the term "Fair
Market Value" of a share of Stock shall mean the Fair Market Value of the Stock
as determined in good faith by the Company; provided, however, that (a) if the
shares of Stock are admitted to trading on a national securities exchange, Fair
Market Value on any date shall be the last sale price reported for the shares of
Stock on such exchange on such date or, if no sale was reported on such date, on
the last date preceding such date on which a sale was reported, (b) if the
shares of Stock are admitted to quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") and have been
designated as a National Market System ("NMS") security, Fair Market Value on
any date shall be the last sale price reported for the shares of Stock on such
system on such date or on the last day preceding such date on which a sale was
reported, or (c) if the shares of Stock are admitted to quotation on NASDAQ and
have not been designated a NMS security or are listed on another comparable
quotation system, Fair Market Value on any date shall be the average of the
highest bid and lowest asked prices of the shares of Stock on such system on
such date.
IN WITNESS WHEREOF, Company and Grantee have executed this Agreement in a
manner appropriate to each as of the day and year first above written.
PLAY BY PLAY TOYS & NOVELTIES, INC.
By _______________________________
Title ____________________________
"COMPANY"
ACCEPTED AND AGREED TO:
By _______________________________
"GRANTEE"
5
June 27, 1996
Play By Play Toys & Novelties, Inc.
4400 Tejasco
San Antonio, TX 78218-0267
RE: Play By Play Toys & Novelties, Inc.
Registration Statement on Form S-8
Gentlemen:
We have acted as securities counsel for Play By Play Toys & Novelties, Inc. (the
"Company") in connection with the preparation of a registration statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933 to be
filed with the Securities and Exchange Commission (the "Commission") on June 27,
1996, in connection with the registration of seven hundred thousand (700,000)
shares of Common Stock, no par value, to be issued under the Play By Play Toys &
Novelties, Inc. 1994 Incentive Plan, as amended (the "Plan"), and of sixty-two
thousand (62,000) shares issuable upon the exercise of certain Non-Plan Options
granted outside of the Plan (the "Non-Plan Options") (the aggregate of such
seven hundred sixty-two thousand [762,000] shares of Common Stock referred to
herein as the "Shares").
In connection with the preparation of the Registration Statement and the
proposed issuance and sale of the Shares in accordance with the Plan and the
Non-Plan Options, and the Form S-8 prospectus to be delivered thereunder, we
have made certain legal and factual examinations and inquiries and examined,
among other things, such documents, records, instruments, agreements,
certificates and matters as we have considered appropriate and necessary for the
rendering of this opinion. We have assumed for the purpose of this opinion the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies, and the
genuineness of the signatures thereon. As to various questions of fact material
to this opinion, we have, when relevant facts were not independently
established, relied, to the extent deemed proper by us, upon certificates and
statements of officers and representatives of the Company.
Based on the foregoing and in reliance thereon, it is our opinion that the
Shares have been duly authorized and, after the Registration Statement becomes
effective and after any post-effective amendment required by law is duly
completed, filed and becomes effective, and when the applicable provisions of
"Blue Sky" and other state securities laws shall have been complied with, and
when the Shares are issued and sold in accordance with the Plan or the Non-Plan
Options, as the case may be, and the Form S-8 prospectus to be delivered to
participants in the Plan and/or the participating non-plan option holders, the
Shares will be legally issued, fully paid and non-assessable.
We hereby consent to the inclusion of our opinion as Exhibit "5" to the
Registration Statement and further consent to the reference to this firm in the
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the rules and regulations of the Commission
thereunder.
This opinion is rendered solely for your benefit in accordance with the subject
transaction and is not to be otherwise used, circulated, quoted or referred to
without our prior written consent. We are opining herein as to the effect on the
subject transaction only of United States federal law, the Texas Business
Corporation Act and the General Corporation Law of the State of Kansas, without
regard for choice of law principles, and we assume no responsibility as to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction.
Yours very truly,
KLENDA, MITCHELL, AUSTERMAN & ZUERCHER, L.L.C.
By /s/ MICHAEL R. BIGGS
Michael R. Biggs, a Member
MRB:bll
Exhibit 10.1
PLAY BY PLAY TOYS & NOVELTIES, INC.
1994 INCENTIVE PLAN
1. PURPOSE. The purposes of the Play By Play Toys & Novelties, Inc. 1994
Incentive Plan (the "Plan") are to provide additional incentives to those
officers and key employees of Play By Play Toys & Novelties, Inc. and its
Subsidiaries (as hereinafter defined) whose substantial contributions are
essential to the continued growth and success of the Company's business, to
strengthen their commitment to the Company and its Subsidiaries, to motivate
those officers and employees to perform their assigned responsibilities
faithfully and diligently, and to attract and retain competent and dedicated
individuals whose efforts will result in the long-term growth and profitability
of the Company. To accomplish these purposes, the Plan provides that the Company
may grant Incentive Stock Options, Nonqualified Stock Options, and Restricted
Stock (as each term is hereinafter defined).
2. DEFINITIONS. For purposes of the Plan:
(A) "ADJUSTED FAIR MARKET VALUE" means, in the event of a Change in
Control, the greater of (i) the highest price per Share paid to holders of
the Shares in any transaction (or series of transactions) constituting or
resulting in a Change in Control or (ii) the highest Fair Market Value of
a Share during the ninety (90) day period ending on the date of a Change
in Control.
(B) "AGREEMENT" means the written agreement between the Company and
an Optionee or Grantee evidencing the grant of an Option or Award and
setting forth the terms and conditions thereof.
(C) "AWARD" means a grant of Restricted Stock.
(D) "BOARD" means the Board of Directors of the Company.
(E) "CHANGE IN CAPITALIZATION" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a
change in value) or exchange of Shares for a different number or kind of
shares or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property
dividend, combination or exchange of shares, repurchase of shares, public
offering, private placement, change in corporate structure or otherwise,
which in the judgment of the Committee is material or significant.
(F) "CHANGE IN CONTROL" means any of the following events:
(i) The acquisition (other than from the Company) by any
"Person" (as the term is used for purposes of Sections 13(d) or
14(d) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty
percent (20%) or more of the combined voting power of the Company's
then outstanding voting securities; or
(ii) The individuals who, as of October 21, 1994, are members
of the Board (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the Board; provided, however, that
if the election, or nomination for election by the Company's
stockholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered as a member of the
Incumbent Board; or
(iii) Approval by stockholders of the Company of (a) a merger
or consolidation involving the Company if the stockholders of the
Company, immediately before such merger or consolidation do not, as
a result of such merger or consolidation, own, directly or
indirectly, more than seventy percent (70%) of the combined voting
power of the then outstanding voting securities of the corporation
resulting from such merger or consolidation in substantially the
same proportion as their ownership of the combined voting power of
the voting securities of the Company outstanding immediately before
such merger or consolidation or (b) a complete liquidation or
dissolution of the Company or an agreement for the sale or other
disposition of all or substantially all of the assets of the
Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur pursuant to Section 2(f)(i), solely because twenty percent (20%) or
more of the combined voting power of the Company's then outstanding
securities is acquired by (i) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained by the
Company or any Subsidiary or (ii) any corporation which, immediately prior
to such acquisition, is owned directly or indirectly by the stockholders
of the Company in the same proportion as their ownership of stock in the
Company immediately prior to such acquisition.
(G) "CODE" means the Internal Revenue Code of 1986, as amended.
(H) "COMMITTEE" means a committee consisting of at least three (3)
Disinterested Persons appointed by the Board to administer the Plan and to
perform the functions set forth herein.
(I) "COMPANY" means Play By Play Toys & Novelties, Inc., a Texas
corporation.
(J) "DISINTERESTED PERSON" means a disinterested administrator with
respect to the Company or any Subsidiary as described in Rule 16b-3(b)(2)
under the Exchange Act.
2
(K) "DIVISION" means any of the operating units or Divisions of the
Company designated as a Division by the Committee.
(L) "ELIGIBLE EMPLOYEE" means any officer or other designated
employees of the Company or a Subsidiary designated by the Committee as
eligible to receive Options or Awards subject to the conditions set forth
herein.
(M) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(N) "FAIR MARKET VALUE" means the fair market value of the Shares as
determined in good faith by the Committee; provided, however, that (i) if
the Shares are admitted to trading on a national securities exchange, Fair
Market Value on any date shall be the last sale price reported for the
Shares on such exchange on such date or, if no sale was reported on such
date, on the last date preceding such date on which a sale was reported,
(ii) if the Shares are admitted to quotation on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") and have been
designated as a National Market System ("NMS") security, Fair Market Value
on any date shall be the last sale price reported for the Shares on such
system on such date or on the last day preceding such date on which a sale
was reported, or (iii) if the Shares are admitted to quotation on NASDAQ
and have not been designated a NMS security or are listed on another
comparable quotation system, Fair Market Value on any date shall be the
average of the highest bid and lowest asked prices of the Shares on such
system on such date.
(O) "GRANTEE" means a person to whom an Award has been granted under
the Plan.
(P) "INCENTIVE STOCK OPTION" means an Option within the meaning of
Section 422 of the Code.
(Q) "NONQUALIFIED STOCK OPTION" means an Option which is not an
Incentive Stock Option.
(R) "OPTION" means an Incentive Stock Option, a Nonqualified Stock
Option, or either or both of them.
(S) "OPTIONEE" means a person to whom an Option has been granted
under the Plan.
(T) "RESTRICTED STOCK" means Shares issued or transferred to an
Eligible Employee which are subject to restrictions. Restricted Stock may
be subject to restrictions which lapse over time without regard to the
performance of the Company, a Subsidiary or a Division, pursuant to
Section 7 hereof.
3
(U) "SHARES" means the common stock, no par value, of the Company
(including any new, additional or different stock or securities resulting
from a Change in Capitalization).
(V) "SUBSIDIARY" means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations,
other than the last corporation in the unbroken chain, owns stock
possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
(W) "TEN-PERCENT STOCKHOLDER" means an Eligible Employee, who, at
the time an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company, or of a parent or a Subsidiary within the
meaning of Section 422(b)(6) of the Code.
3. ADMINISTRATION.
(a) The Plan shall be administered by the Committee which shall hold
meetings at such times as may be necessary for the proper administration
of the Plan. A quorum shall consist of not less than three members of the
Committee and a majority of a quorum may authorize any action. Each member
of the Committee shall be a Disinterested Person. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan, Agreements,
Options or Awards, and all members of the Committee shall be fully
indemnified by the Company with respect to any such action, determination
or interpretation.
(b) Subject to the express terms and conditions set forth herein,
the Committee or the Board shall have the power from time to time:
(i) to determine those Eligible Employees to whom Options
shall be granted under the Plan and the number of Incentive Stock
Options and/or Nonqualified Stock Options to be granted to each
Eligible Employee and to prescribe the terms and conditions (which
need not be identical) of each Option, including the purchase price
per Share subject to each Option, and make any amendment or
modification to any Agreement consistent with the terms of the Plan;
(ii) to select those Eligible Employees to whom Awards shall
be granted under the Plan and to determine the number of Shares of
Restricted Stock to be granted pursuant to each Award, the terms and
conditions of each Award, including the restrictions relating to
such Shares, and make any amendment or modification to any Agreement
consistent with the terms of the Plan;
4
(c) Subject to the express terms and conditions set forth herein,
the Committee shall have the power from time to time:
(i) to construe and interpret the Plan and the Options and
Awards granted thereunder and to establish, amend and revoke rules
and regulations for the administration of the Plan, including, but
not limited to, correcting any defect or supplying any omission, or
reconciling any inconsistency in the Plan or in any Agreement, in
the manner and to the extent it shall deem necessary or advisable to
make the Plan fully effective, and all decisions and determinations
by the Committee in the exercise of this power shall be final,
binding and conclusive upon the Company, a Subsidiary, and the
Optionees and Grantees, as the case may be;
(ii) to determine the duration and purposes for leave of
absence which may be granted to an Optionee or Grantee on an
individual basis without constituting a termination of employment or
service for purposes of the Plan;
(iii) to exercise its discretion with respect to the powers
and rights granted to it as set forth in the Plan; and
(iv) generally, to exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan;
provided, however, that the Committee may delegate to senior members
of the management of the Company the right to exercise those powers
described in Sections (b)(i) and (ii) with respect to Eligible
Employees who are not employed in the Company's corporate
headquarters (and staff vice presidents and assistant officers).
4. STOCK SUBJECT TO PLAN.
(a) The maximum number of Shares that may be issued or transferred
pursuant to Options and Awards under the Plan is three hundred thousand
(300,000) Shares (or the number and kind of shares of stock or other
securities to which such Shares are adjusted upon a Change in
Capitalization pursuant to Section 8) and the Company shall reserve for
the purposes of the Plan, out of its authorized but unissued Shares or out
of Shares held in the Company's treasury, or partly out of each, such
number of Shares as shall be determined by the Board.
(b) Not more than 66 2/3% of the Shares referred to in Section 4(a)
may be issued or transferred in connection with Awards of Restricted Stock
made pursuant to Section 7.
5
(c) Whenever any outstanding Option or Award or portion thereof
expires, is cancelled or is otherwise terminated for any reason (other
than by exercise of the Option), the Shares allocable to the cancelled or
otherwise terminated portion of such Option or Award may again be the
subject of Options and Awards hereunder.
(d) Whenever any Shares subject to an Award or Option are forfeited
for any reason pursuant to the terms of the Plan, such Shares may again be
the subject of Options and Awards hereunder.
5. ELIGIBILITY. Subject to the provisions of the Plan, the Committee shall
have full and final authority to select those Eligible Employees who will
receive Options and/or Awards; provided, however, that no Eligible Employee
shall receive any Incentive Stock Options unless he or she is an employee of the
Company, a parent or a Subsidiary (within the meaning of Section 422 of the
Code) at the time the Incentive Stock Option is granted.
6. OPTIONS. The Committee may grant Options in accordance with the Plan
and the terms and conditions of the Option shall be set forth in an Agreement.
Each Option and Agreement shall be subject to the following conditions:
(A) PURCHASE PRICE. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Option shall be
set forth in the Agreement, provided that the purchase price per Share
under each Incentive Stock Option shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share at the time the
Incentive Stock Option is granted (one hundred ten percent (110%) in the
case of an Incentive Stock Option granted to a Ten-Percent Stockholder).
(B) DURATION. Options granted hereunder shall be for such term as
the Committee shall determine, provided that no Incentive Stock Option
shall be exercisable after the expiration of ten (10) years from the date
it is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder). The Committee may, subsequent to
the granting of any Option, extend the term thereof but in no event shall
the term as so extended exceed the maximum term provided for in the
preceding sentence.
(C) NON-TRANSFERABILITY. No Option hereunder shall be transferable
by the Optionee to whom granted otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his guardian or legal representative. The
terms of such Option shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the
Optionee.
(D) VESTING. Subject to Section 6(i) hereof, each Option shall be
exercisable in such installments (which need not be equal) and at such
times as may be designated by the Committee and set forth in the
Agreement. To the extent not exercised,
6
installments shall accumulate and be exercisable, in whole or in part, at
any time after becoming exercisable, but not later than the date the
Option expires. The Committee may accelerate the exercisability of any
Option or portion thereof at any time.
(E) METHOD OF EXERCISE. The exercise of any Option shall be made
only by a written notice delivered in person or by mail to the Secretary
of the Company at the Company's principal executive office, specifying the
number of Shares to be purchased and accompanied by payment therefor and
otherwise in accordance with the Agreement pursuant to which the Option
was granted. The purchase price for any Shares purchased pursuant to the
exercise of an Option shall be paid in full upon such exercise, as
determined by the Committee in its discretion, in cash, by check, or by
transferring Shares to the Company upon such terms and conditions as
determined by the Committee. The written notice pursuant to this Section
6(e) may also provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or
dealer, designated as such on the written notice, in payment for any
Shares purchased pursuant to the exercise of an Option, the Company shall
issue such Shares directly to the designated broker or dealer. Any Shares
transferred to the Company as payment of the purchase price under an
Option shall be valued at their Fair Market Value on the day preceding the
date of exercise of such Option. If requested by the Committee, the
Optionee shall deliver the Agreement evidencing the Option to the
Secretary of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Optionee. No fractional Shares
shall be issued upon exercise of an Option and the number of Shares that
may be purchased upon exercise shall be rounded to the nearest number of
whole Shares.
(F) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i)
the Option shall have been exercised pursuant to the terms thereof, (ii)
the Company shall have issued and delivered the shares to the Optionee and
(iii) the Optionee's name shall have been entered as a stockholder of
record on the books of the Company. Thereupon, the Optionee shall have
full voting, dividend and other ownership rights with respect to such
Shares.
(G) TERMINATION OF EMPLOYMENT. The Agreement shall set forth the
terms and conditions of the Option upon the termination of the Optionee's
employment with the Company, Subsidiary or a Division (including a
Grantee's ceasing to be employed by a Subsidiary or Division as a result
of the sale of such Subsidiary or Division or an interest in such
Subsidiary or Division) as the Committee may, in its discretion, determine
at the time the Option is granted or thereafter; provided, however, that
no Option shall be exercisable beyond its maximum term as described in
Section 6(b) hereof.
(H) MODIFICATION OR SUBSTITUTION. Subject to the terms of the Plan,
the Committee may, in its discretion, modify outstanding Options or accept
the surrender of outstanding Options (to the extent not exercised) and
grant new Options in substitution for them. Notwithstanding the foregoing,
no modification of an Option shall adversely
7
alter or impair any rights or obligations under any Agreement without the
Optionee's consent.
(I) EFFECT OF CHANGE IN CONTROL. Notwithstanding anything contained
in the Plan or any Agreement to the contrary, in the event of a Change in
Control, (i) all Options outstanding on the date of such Change in Control
shall become immediately and fully exercisable and (ii) an Optionee will
be permitted to surrender for cancellation within sixty (60) days after
such Change in Control, any Option or portion of an Option to the extent
not yet exercised and the Optionee will be entitled to receive a cash
payment in an amount equal to the excess, if any, of (x)(A) in the case of
Nonqualified Stock Options, the greater of (1) the Fair Market Value, on
the date preceding the date of surrender, of the Shares subject to the
Option or portion thereof surrendered or (2) the Adjusted Fair Market
Value of the Shares subject to the Option or portion thereof surrendered
or (B) in the case of an Incentive Stock Option, the Fair Market Value, at
the time of surrendered, of the Shares subject to the Option or portion
thereof surrendered, over (y) the aggregate purchase price for such Shares
under the Option; provided, however, that in the case of an Option granted
within six (6) months prior to the Change in Control to any Optionee who
may be subject to liability under Section 16(b) of the Exchange Act, such
Optionee shall be entitled to surrender for cancellation his or her Option
during the sixty (60) day period commencing upon the expiration of six (6)
months from the date of grant of any such Option.
7. RESTRICTED STOCK. The Committee may grant Awards of Restricted Stock
which shall be evidenced by an Agreement between the Company and the Grantee.
Awards of Restricted Stock may be granted at no cost or at a specified price to
the Grantee. Each Agreement shall contain such restrictions, price, terms and
conditions as the Committee may, in its discretion, determine and (without
limiting the generality of the foregoing) such Agreements may require that an
appropriate legend be placed on Share certificates. Awards of Restricted Stock
shall be subject to the following terms and provisions:
(A) RIGHTS OF GRANTEE. Shares of Restricted Stock granted pursuant
to an Award hereunder shall be issued in the name of the Grantee as soon
as reasonably practicable after the Award is granted provided that the
Grantee has executed an Agreement evidencing the Award, the appropriate
blank stock powers and, in the discretion of the Committee, an escrow
agreement and any other documents which the Committee may require as a
condition to the issuance of such Shares. If a Grantee shall fail to
execute the Agreement evidencing a Restricted Stock Award, the appropriate
blank stock powers and, in the discretion of the Committee, an escrow
agreement and any other documents which the Committee may require within
the time period prescribed by the Committee at the time the Award is
granted, the Award shall be null and void. At the discretion of the
Committee, Shares issued in connection with a Restricted Stock Award shall
be deposited together with the applicable stock powers with an escrow
agent designated by the Committee. Unless the Committee determines
otherwise, and as set forth in the Agreement, upon delivery of the Shares
to the escrow agent, the Grantee shall
8
have all of the rights of a stockholder with respect to such Shares,
including the right to vote the Shares.
(B) PURCHASE PRICE. The Committee, in its sole discretion, shall
determine the purchase price, if any, at which Shares of Restricted Stock
shall be sold to a Grantee hereunder, provided that such purchase price
shall in any event be payable in cash by Grantee at the time the Shares of
Restricted Stock are sold.
(C) NON-TRANSFERABILITY. Until any restrictions imposed upon the
Shares of Restricted Stock awarded to a Grantee shall have lapsed in the
manner set forth in Section 7(d), such Shares shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee.
(D) LAPSE OF RESTRICTIONS.
(I) GENERALLY. Restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times and on such
terms and conditions as the Committee may determine.
(II) EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
contained in the Plan to the contrary, in the event of a Change in
Control, all restrictions upon any Shares of Restricted Stock shall
lapse immediately and all such Shares shall become fully vested in
the Grantee.
(E) TERMINATION OF EMPLOYMENT. Each Agreement shall set forth the
terms and conditions of the Award of Shares of Restricted Stock upon the
termination of the Grantee's employment with the Company, a Subsidiary or
a Division (including a Grantee's ceasing to be employed by a Subsidiary
or a Division as a result of the sale of such Subsidiary or Division or an
interest in such Subsidiary or Division) as the Committee may, in its
discretion, determine at the time the Award is granted or thereafter.
(F) MODIFICATION OR SUBSTITUTION. Subject to the terms of the Plan,
the Committee may modify outstanding Awards of Restricted Stock or accept
the surrender of outstanding Awards of Restricted Stock (to the extent not
exercised) and grant new Awards in substitution for them. Notwithstanding
the foregoing, no modification of an Award shall adversely alter or impair
any rights or obligations under any Agreement without the Grantee's
consent.
(G) TREATMENT OF DIVIDENDS. At the time the Award of Shares of
Restricted Stock is granted, the Committee may, in its discretion,
determine that the payment to the Grantee of dividends, or a specified
portion thereof, declared or paid on such Shares by the Company shall be
(i) deferred until the lapsing of the restrictions imposed upon such
Shares and (ii) held by the Company for the account of the Grantee until
such time. In the event of such deferral, there shall be credited at the
end of each year (or portion thereof) interest on the amount of the
account at the beginning of the year at a rate per
9
annum as the Committee, in its discretion, may determine. Payment of
deferred dividends, together with interest accrued thereon, shall be made
upon the lapsing of restrictions imposed on such Shares, and any dividends
deferred (together with any interest accrued thereon) in respect of any
Shares of Restricted Stock shall be forfeited upon the forfeiture of such
Shares of Restricted Stock pursuant to Section 7(e) or otherwise.
(H) DELIVERY OF SHARES. Upon the lapse of the restrictions on Shares
of Restricted Stock, the Committee shall promptly cause a stock
certificate to be delivered to the Grantee with respect to such Shares,
free of all restrictions hereunder.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to the maximum
number and class of Shares or other stock or securities with respect to
which Options or Awards may be granted under the Plan, the number and
class of Shares or other stock or securities which are subject to
outstanding Options or Awards granted under the Plan, and the purchase
price therefor, if applicable.
(b) Any such adjustment in the Shares or other stock or securities
subject to outstanding Incentive Stock Options (including any adjustments
in the purchase price) shall be made in such manner as not to constitute a
modification as defined by Section 424(h)(3) of the Code and only to the
extent otherwise permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, a Grantee of an
Award shall be entitled to, or an Optionee shall be entitled to exercise
an Option with respect to, new, additional or different shares of stock or
securities (other than rights or warrants to purchase securities), such
new additional or different shares shall thereupon be subject to all of
the conditions, restrictions and performance criteria which were
applicable to the Shares subject to the Option prior to such Change in
Capitalization.
9. EFFECT OF CERTAIN TRANSACTIONS. Subject to Sections 6(i) and 7(d)(ii),
in the event of (i) the liquidation or dissolution of the Company or (ii) a
merger or consolidation of the Company (a "Transaction"), all Options and Awards
issued hereunder shall continue in effect in accordance with their respective
terms and each Optionee and Grantee shall be entitled to receive in respect of
each Share subject to any outstanding Options or Awards, as the case may be,
upon exercise of any Option or Award or upon payment or transfer in respect of
any Award, the same number and kind of stock, securities, cash, property, or
other consideration that each holder of a Share was otherwise entitled to
receive in the Transaction in respect of a Share.
10. RELEASE OF FINANCIAL INFORMATION. A copy of the Company's annual
report to stockholders shall be delivered to each Optionee and Grantee at the
time such report is distributed to the Company's stockholders.
10
11. TERMINATION AND AMENDMENT OF THE PLAN.
(a) The Plan shall terminate on the day preceding the tenth (10th)
anniversary of its effective date and no Option or Award may be granted
thereafter. The Board may sooner terminate or amend the Plan (other than
to reduce the rights of Optionees and Grantees, as the case may be, under
Sections 6(i) and 7(d)(ii)), at any time and from time to time; provided,
however, that to the extent necessary under Section 16(b) of the Exchange
Act and the rules and regulations promulgated thereunder, no amendment
shall be effective unless approved by the stockholders of the Company in
accordance with applicable law and regulations at an annual or special
meeting held within twelve (12) months before or after the date of
adoption of such amendment.
(b) Except as provided in Sections 8 and 9 hereof, rights and
obligations under any Option or Award granted before any amendment of the
Plan shall not be adversely altered or impaired by such amendment, except
with the consent of the Optionee or Grantee, as the case may be.
12. NON-EXCLUSIVITY OF THE PLAN. The adoption of the Plan by the Board
shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable.
13. LIMITATION OF LIABILITY. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:
(a) give any person any right to be granted an Option or Award other
than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
(c) limit in any way the right of the Company to terminate the
employment of any person at any time; or
(d) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person in any particular
position at any particular rate of compensation or for any particular
period of time.
14. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.
(a) This Plan and the rights of all persons claiming hereunder shall
be construed and determined in accordance with the laws of the State of
Texas without giving effect to the conflicts of laws principles thereof,
except to the extent that such law is preempted by federal law.
11
(b) The obligation of the Company to sell or deliver Shares with
respect to Options and Awards granted under the Plan shall be subject to
all applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals
by governmental agencies as may be deemed necessary or appropriate by the
Committee.
(c) The Plan is intended to comply with Rule 16b-3 promulgated under
the Exchange Act and the Committee shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith.
Any provisions inconsistent with such Rule shall be inoperative and shall
not affect the validity of the Plan.
(d) The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Employees granted Incentive Stock
Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
(e) Each Option and Award is subject to the requirement that, if at
any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body is necessary
or desirable as a condition of, or in connection with, the grant of an
Option or the issuance of Shares, no Options shall be granted or payment
made or Shares issued, in whole or in part, unless listing, registration,
qualification, consent or approval has been effected or obtained free of
any conditions as acceptable to the Committee.
(f) Notwithstanding anything contained in the Plan to the contrary,
in the event that the disposition of Shares acquired pursuant to the Plan
is not covered by a then current registration statement under the
Securities Act of 1933, as amended, and is not otherwise exempt from such
registration, such Shares shall be restricted against transfer to the
extent required by the Securities Act of 1933, as amended, and Rule 144 or
other regulations thereunder. The Committee may require any individual
receiving Shares pursuant to the Plan, as a condition precedent to receipt
of such Shares (including upon exercise of an Option), to represent and
warrant to the Company in writing that the Shares acquired by such
individual are acquired without a view to any distribution thereof and
will not be sold or transferred other than pursuant to an effective
registration thereof under said Act or pursuant to an exemption applicable
under the Securities Act of 1933, as amended, or the rules and regulations
promulgated thereunder. The certificates evidencing any of such Shares
shall be appropriately legended to reflect their status as restricted
securities as aforesaid.
15. MISCELLANEOUS.
(A) MULTIPLE AGREEMENTS. The terms of each Option or Award may
differ from other Options or Awards granted under the Plan at the same
time, or at some other time. The Committee may also grant more than one
Option or Award to a given Eligible
12
Employee during the term of the Plan, either in addition to, or in
substitution for, one or more Options or Awards previously granted to that
Eligible Employee. The grant of multiple Options and/or Awards may be
evidenced by a single Agreement or multiple Agreements, as determined by
the Committee.
(B) WITHHOLDING OF TAXES.
(1) The Company shall have the right to deduct from any
distribution of cash to any Optionee or Grantee, an amount equal to
the federal, state and local income taxes and other amounts as may
be required by law to be withheld (the "Withholding Taxes") with
respect to any Option or Award. If an Optionee or Grantee is
entitled to receive Shares upon exercise of an Option or pursuant to
an Award, the Optionee or Grantee shall pay the Withholding Taxes to
the Company prior to the issuance, or release from escrow, of such
Shares. In satisfaction of the Withholding Taxes to the Company, the
Optionee or Grantee may make a written election (the "Tax
Election"), which may be accepted or rejected in the discretion of
the Committee, to have withheld a portion of the Shares issuable to
him or her upon exercise of the Option or pursuant to an Award
having an aggregate Fair Market Value equal to the Withholding
Taxes, provided that (i) in respect of an Optionee or Grantee who
may be subject to liability under Section 16(b) of the Exchange Act
(unless his or her employment was terminated due to disability or
death), the Tax Election is made either at least six (6) months
prior to the date that the amount of the Withholding Taxes are
determined (the "Tax Date") or during the ten (10) day period
beginning on the third (3rd) business day and ending on the twelfth
(12th) business day following the release for publication of the
Company's quarterly or annual statements of earnings, (ii) the Tax
Election is made prior to the Tax Date, and (iii) the Tax Election
is irrevocable; provided, however, in the event that the Tax Date
occurs subsequent to the exercise of the Option or issuance of
Shares, the Optionee or Grantee shall tender back to the Company on
the Tax Date that number of Shares having a Fair Market Value on the
date preceding the Tax Date at least equal to the Withholding Taxes.
(2) If an Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder,
of any Share or Shares issued to Optionee pursuant to Optionee's
exercise of an Option within the two (2) year period commencing on
the day after the date of the grant or within the one (1) year
period commencing on the day after the date of transfer of such
Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the
Company thereof, by delivery of written notice to the Company at its
principal executive office, and immediately deliver to the Company
the amount of Withholding Taxes.
(C) DESIGNATION OF BENEFICIARY. Each Optionee and Grantee may
designate a person or persons to receive, in the event of his or her
death, any Option or Award or any amount payable pursuant thereto, to
which he or she would then be entitled. Such
13
designation will be made upon forms supplied by and delivered to the
Company and may be revoked in writing. If an Optionee fails effectively to
designate a beneficiary, then his or her estate will be deemed to be the
beneficiary.
16. EFFECTIVE DATE. The effective date of the Plan shall be the date of
its adoption by the Board, subject only to the approval by the affirmation votes
of the holders of a majority of the securities of the Company present, or
represented, and entitled to vote a at a meeting of stockholders duly held in
accordance with the applicable laws of the State of Texas within twelve (12)
months of such adoption.
PLAY BY PLAY TOYS & NOVELTIES, INC.
ATTEST: By /s/ MARK A. GAWLIK
Mark A. Gawlik, President
By /s/ JOE M. GUERRA
Joe M. Guerra, Secretary
14
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated October 2, 1995, on our audits of the consolidated
financial statements and financial statement schedule of Play By Play Toys &
Novelties, Inc. and Subsidiaries. We also consent to the reference to our firm
under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Austin, Texas
June 27, 1996
